<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 9, 1999
REGISTRATION NO.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TEAM HEALTH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
TENNESSEE 8099 62-1562558
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
1900 WINSTON ROAD
KNOXVILLE, TENNESSEE 37919
(800) 342-2898
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
C/O DAVID JONES
CHIEF FINANCIAL OFFICER
1900 WINSTON ROAD, SUITE 300
KNOXVILLE, TENNESSEE 37919
(800) 342-2898
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPY TO:
JOSHUA KORFF, ESQ.
KIRKLAND & ELLIS
153 EAST 53RD STREET
NEW YORK, NEW YORK 10022-4675
TELEPHONE: (212) 446-4800
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Team Health, Inc. 12% Senior Subordinated Notes $100,000,000 $1,000 $100,000,000 $27,800.00
due 2009.......................................
- ---------------------------------------------------------------------------------------------------------------------------------
Guarantees(2).................................... N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(2) based upon the book value of the securities
as of June 9, 1999.
(2) The Guarantee by each of Alliance Corporation, Charles L. Springfield, Inc.,
Clinic Management Services, Inc., Daniel & Yeager Inc., Drs. Sheer, Ahearn
and Associates, Inc., Emergency Coverage Corporation, Emergency Management
Specialists, Inc., Emergency Physician Associates, Inc., Emergency
Physicians of Manatee, Inc., Emergency Professional Services, Inc.,
Emergicare Management, Incorporated, Fischer Mangold Partnership, Herschel
Fisher, Inc., Hospital Based Physician Services, Inc., IMBS, Inc., InPhyNet
Anesthesia of West Virginia, Inc., InPhyNet Contracting Services, Inc.,
InPhyNet Hospital Services, Inc., InPhyNet Joliet, Inc., InPhyNet Louisiana
Inc., InPhyNet Medical Management Institute, Inc., InPhyNet South Broward,
Inc., Karl G. Mangold, Inc., Med:Assure Systems, Inc., MetroAmerican
Radiology, Inc., Mt. Diablo Emergency Physicians, Neo-Med, Inc., Northwest
Emergency Physicians Incorporated, Paragon Anesthesia, Inc., Paragon
Contracting Services, Inc., Paragon Healthcare Limited Partnership, Paragon
Imaging Consultants, Inc., Quantum Plus, Inc., Reich, Seidelman & Janicki
Co., Rosendorf, Margulies, Borushok & Schoenbaum Radiology Associates of
Hollywood, Inc., Sarasota Emergency Medical Consultants, Inc., Southeastern
Emergency Physicians of Memphis, Inc., Southeastern Emergency Physicians,
Inc., Team Health Billing Services, L.P., Team Health Financial Services,
Inc., Team Health Southwest, L.P., Team Radiology, Inc., THBS, Inc., The
Emergency Associates for Medicine, Inc., and Virginia Emergency Physicians,
Inc. of the payment of principal and interest on the Notes is being
registered hereby. Pursuant to Rule 457(g), no registration fee is required
with respect to the Guarantees.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C> <C>
ALLIANCE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
WEST VIRGINIA 8099 55-0739050
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
CHARLES L. SPRINGFIELD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 94-2713012
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
CLINIC MANAGEMENT SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1453392
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
DANIEL & YEAGER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
ALABAMA 8099 63-1009913
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 59-1237521
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
EMERGENCY COVERAGE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1130266
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
EMERGENCY MANAGEMENT SPECIALISTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
WEST VIRGINIA 8099 55-0632298
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
EMERGENCY PHYSICIAN ASSOCIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NEW JERSEY 8099 22-2213199
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
EMERGENCY PHYSICIANS OF MANATEE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0051890
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
EMERGENCY PROFESSIONAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OHIO 8099 94-2460636
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
EMERGICARE MANAGEMENT, INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-0881710
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
FISCHER MANGOLD PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 94-1731121
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
HERSCHEL FISCHER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 94-3262291
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
HOSPITAL BASED PHYSICIAN SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1535401
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
IMBS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0622847
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
WEST VIRGINIA 8099 65-0746470
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
INPHYNET CONTRACTING SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0622862
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET HOSPITAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0622855
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET JOLIET, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0086608
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET LOUISIANA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0125286
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET MEDICAL MANAGEMENT INSTITUTE
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0652251
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
INPHYNET SOUTH BROWARD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0726225
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
KARL G. MANGOLD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 91-1775707
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
MED: ASSURE SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1304911
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
METROAMERICAN RADIOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NORTH CAROLINA 8099 56-1657199
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
MT. DIABLO EMERGENCY PHYSICIANS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 68-0049611
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
NEO-MED, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0456767
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
NORTHWEST EMERGENCY PHYSICIANS INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
WASHINGTON 8099 91-1753075
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
PARAGON ANESTHESIA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 59-2092416
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
PARAGON CONTRACTING SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0622859
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
PARAGON HEALTHCARE LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0426893
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
PARAGON IMAGING CONSULTANTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0410357
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
QUANTUM PLUS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
CALIFORNIA 8099 94-3259635
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
REICH, SEIDELMAN, & JANICKI CO.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OHIO 8099 34-1245634
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
ROSENDORF, MARGULIES, BORUSHOK & SHOENBAUM RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 59-1226776
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
SARASOTA EMERGENCY MEDICAL
CONSULTANTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 65-0195332
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1453389
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1266047
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
TEAM HEALTH BILLING SERVICES, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1727916
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
TEAM HEALTH FINANCIAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
TENNESSEE 8099 62-1727919
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
TEAM HEALTH SOUTHWEST, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 8099 63-1201377
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
TEAM RADIOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
NORTH CAROLINA 8099 56-1844186
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
THBS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 8099 62-1727916
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
FLORIDA 8099 59-2862461
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
VIRGINIA EMERGENCY PHYSICIANS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
VIRGINIA 8099 54-1629761
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
<PAGE> 8
SUBJECT TO COMPLETION -- DATED , 1999
PROSPECTUS
, 1999
TEAM HEALTH, INC.
OFFER FOR ALL OUTSTANDING 12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009 IN
EXCHANGE FOR 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009.
THIS EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME ON
[ ], 1999 UNLESS EXTENDED.
We will not receive any proceeds from the exchange of these notes.
TEAM HEALTH:
- - We are the largest national provider of outsourced physician staffing and
administrative services to hospitals and clinics in the United States.
- - Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
1-800-342-2898
THE EXCHANGE OFFER:
- - Offer for $100,000,000 in principal amount of outstanding 12% Series A Senior
Subordinated notes due 2009 in exchange for $100,000,000 in principal amount
of Series B Senior Subordinated notes due 2009.
- - The terms of the exchange notes are identical in all material respects to the
terms of the outstanding old notes, except for certain transfer restrictions
and registration rights pertaining to the old notes.
- - This exchange offer will expire at 5 p.m., New York City time on
[ ], 1999, unless extended.
PROPOSED TRADING FORMAT:
- - The PORTAL market or directly with qualified buyers.
TERMS OF THE EXCHANGE NOTES:
- - MATURITY:
March 15, 2009.
- - INTEREST PAYMENTS:
- Fixed annual rate of 12%
- Paid every six months on March 15 and September 15.
- - GUARANTEES:
- If we cannot make payments on the exchange notes when due, our subsidiary
guarantors must make them instead.
- - SECURITY:
- The exchange notes and the guarantees by our subsidiary guarantors are
unsecured.
- - REDEMPTION:
- We can redeem the exchange notes at any time on or after March 15, 2004.
- Prior to March 15, 2002, we can redeem up to 33 1/3% of the exchange notes
with the net proceeds from certain sales of our equity.
- Holders of the exchange notes may also require us to redeem all or part of
such holder's exchange notes if we experience specific kinds of changes in
the control of our company or if we sell certain of our assets.
- - RANKING: these exchange notes and the subsidiary guarantees rank:
1. behind all of our and our guarantor subsidiaries' current and future senior
indebtedness (other than trade payables);
2. behind any other indebtedness that we or our subsidiary guarantors are
permitted to incur under the terms of the indenture with the United States
Trust Company of New York, as trustee, unless such indebtedness expressly
provides that it is not senior to the exchange notes;
3. equal with all of our subsidiary guarantors other senior subordinated
indebtedness and
4. ahead of our and our subsidiary guarantors other current and future
indebtedness that expressly provides that it is not senior to the exchange
notes and the subsidiary guarantees.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 10.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the exchange notes or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE> 9
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary............... 1
Risk Factors..................... 10
The Transactions................. 22
Use of Proceeds.................. 24
Capitalization................... 24
Selected Historical Financial
Data........................... 25
Management's Discussion and
Analysis of Financial Condition
and Results of Operations...... 27
Business......................... 38
Management....................... 52
Ownership of Securities.......... 57
Relationships and Related
Transactions................... 58
Description of Capital Stock..... 61
</TABLE>
<TABLE>
<CAPTION>
PAGE
<S> <C>
Description of Senior Bank
Facilities..................... 62
Description of Exchange Notes.... 65
The Exchange Offer............... 103
United States Federal Income Tax
Considerations................. 111
Plan of Distribution............. 111
Legal Matters.................... 112
Experts.......................... 112
Available Information............ 113
Index to Unaudited Pro Forma
Condensed Financial
Information.................... P-1
Index to Audited Financial
Statements..................... F-1
Index to Unaudited Financial
Statements..................... F-20
</TABLE>
<PAGE> 10
PROSPECTUS SUMMARY
The following summary contains basic information about this exchange offer.
It probably does not contain all the information that is important to you. For a
more complete understanding of this exchange offer, we encourage you to read
this entire document and the documents we have referred you to.
In addition, our management has estimated the market share percentages
provided in this prospectus. We believe these estimates to be reliable, but
these numbers have not been verified by an independent source.
References to the words "Team Health," "we," "our," and "us" refer only to
Team Health, Inc., its predecessors, its subsidiaries and its affiliates. As
used below, "ED" refers to a hospital emergency department or urgent care
center.
THE OLD NOTE OFFERING
Old Notes..................... We sold the old notes to Donaldson, Lufkin &
Jenrette, an investment banking firm, on March
5, 1999. DLJ subsequently resold the old notes
to qualified institutional buyers under Rule
144A of the Securities Act of 1933.
Registration Rights
Agreement..................... We and Donaldson, Lufkin & Jenrette entered
into a registration rights agreement on March
12, 1999. This agreement grants the holder of
the old notes exchange and registration rights.
The exchange offer is intended to satisfy these
exchange rights which terminate upon the
consummation of the exchange offer.
THE EXCHANGE OFFER
Securities Offered............ Up to $100,000,000 of 12% series B senior
subordinated notes due 2009. The terms of the
exchange notes and old notes are identical in
all material respects, except for certain
transfer restrictions and registration rights
relating to the old notes.
The Exchange Offer............ We are offering to exchange the old notes for
exchange notes that are equal in principal
amount. Old notes may be exchanged only in
integral principal multiples of $1000.
Expiration Date; Withdrawal
of Tender................... Our exchange offer will expire on 5:00 p.m.,
New York City time, on , 1999, or
such later date and time as we may extend. You
may withdraw your tender of old notes at any
time prior to the expiration date. Any old
notes not accepted by us for exchange for any
reason will be returned to you without expense
as promptly as possible after the expiration or
termination of our exchange offer.
Conditions to the Exchange
Offer......................... Based on an interpretation by the staff of the
Securities and Exchange Commission set forth in
no-action letters issued to third parties, we
believe that you may offer for resale, resell
or otherwise transfer the exchange notes
without complying with the registration and
prospectus delivery provisions of the
Securities Act of 1933, provided that:
- such exchange notes are acquired in the
ordinary course of your business,
- you do not intend to participate and
have no arrangement or understanding
with any person to participate in the
distribution of such exchange notes and
1
<PAGE> 11
- you are not our "affiliate" within the
meaning of Rule 405 under the Securities
Act of 1933.
Our obligation to accept for exchange, or to
issue the exchange notes in exchange for, any
old notes is subject to:
- customary conditions relating to
compliance with any applicable law,
- any applicable interpretation by any
staff of the Securities and Exchange
Commission, or
- any order of any governmental agency or
court of law.
We currently expect that each of the conditions
will be satisfied and that no waivers will be
necessary. See "The Exchange
Offer -- Conditions."
Procedures for Tendering Old
Notes......................... Each holder of old notes wishing to accept the
exchange offer must complete, sign and date the
accompanying letter of transmittal, or a
facsimile thereof, in accordance with the
instructions. The holder must mail or otherwise
deliver the letter of transmittal, or the
facsimile, together with the old notes and any
other required documentation to the exchange
agent at the address set forth in the section
"The Exchange Offer" under the heading
"Procedures for Tendering Old Notes."
Use of Proceeds............... We will not receive any cash proceeds from the
exchange of notes pursuant to our exchange
offer.
Exchange Agent................ United States Trust Company of New York is
serving as the exchange agent in connection
with our exchange offer.
Federal Income Tax
Consequences.................. The exchange of old notes in accordance with
the terms of the exchange offer should not be a
taxable event to you for federal income tax
purposes. See "United States Federal Income Tax
Considerations."
THE EXCHANGE NOTES
The terms of the exchange notes are identical in all material respects to
the terms of the old notes, except that the old notes differed with respect to
their restrictions and their registration rights.
Issuer........................ Team Health, Inc.
Total Amount of Exchange Notes
Offered..................... Up to $100.0 million in principal amount of 12%
series B senior subordinated notes, referred to
throughout this document as the "exchange
notes."
Maturity Date................. March 15, 2009.
Interest...................... Annual Rate: 12%
Payment Frequency: every six months on March 15
and September 15.
First Payment: September 15, 1999
Optional Redemption........... After March 15, 2004, we may redeem some or all
of the exchange notes and any outstanding old
notes at any time at
2
<PAGE> 12
the redemption prices described in the section
"Description of Exchange Notes" under the
heading "Optional Redemption."
Before March 15, 2002, we may be able to redeem
up to 33 1/3% of the exchange notes and old
notes with the proceeds of offerings of our
equity at the price listed in the section
"Description of Exchange Notes" under the
heading "Optional Redemption." If less than
66 2/3% of the exchange notes and old notes
will remain outstanding immediately after such
redemption, we may not effect such redemption.
Change of Control
Repurchase.................... If we sell certain of our assets or experience
specific kinds of changes in control, we must
offer to repurchase the exchange notes at a
price equal to 101% of the aggregate principal
amount of any exchange notes purchased plus
accrued and unpaid interest on the exchange
notes purchased.
Subsidiary Guarantees......... The exchange notes will be fully guaranteed on
an unsecured, senior subordinated basis by each
subsidiary guarantor. Each subsidiary guarantor
is our wholly owned subsidiary and a principal
operating subsidiary. Certain of our future
domestic subsidiaries will also guarantee the
exchange notes.
If we cannot make payments on the exchange
notes when they are due, the subsidiary
guarantors must make them instead.
The subsidiary guarantors are also guarantors
of our senior bank facilities and are jointly
and severally liable with us on a senior basis
for such obligations.
To secure the obligations under our senior bank
facilities, we pledged the capital stock of
Team Health and our guarantor subsidiaries. We
and the guarantor subsidiaries also granted
security interests in, or liens on,
substantially all other tangible and intangible
assets of Team Health and our guarantor
subsidiaries.
Ranking of the Exchange
Notes......................... These exchange notes and the subsidiary
guarantees will be senior subordinated debts
(as are the old notes).
They rank:
- behind all of our and our guarantor
subsidiaries' current and future senior
indebtedness (other than trade
payables);
- behind any other indebtedness that we or
our subsidiary guarantors are permitted
to incur under the terms of the
indenture, unless such indebtedness
expressly provides that it is not senior
to the exchange notes;
- equal with all of our and our subsidiary
guarantors' other senior subordinated
indebtedness; and
- ahead of our and our subsidiary
guarantors' other current and future
indebtedness that expressly provides
3
<PAGE> 13
that it is not senior to the exchange
notes and the subsidiary guarantees.
Assuming we had completed this offering on
March 31, 1999 and applied the proceeds as
intended, the exchange notes and the subsidiary
guarantees would have been subordinated to
approximately $147.5 million of senior
indebtedness. No debt of ours having an equal
ranking with the exchange notes and the
subsidiary guarantees or which is subordinate
to the exchange notes and the subsidiary
guarantees would have been outstanding at such
date.
Basic Covenants of the
Indenture..................... We will issue the exchange notes under an
indenture with United States Trust Company of
New York, as trustee. The indenture will, among
other things, place certain limitations on our
ability, and the ability of some of our
subsidiaries, to:
- borrow money or make certain restricted
payments,
- pay dividends on stock or repurchase
stock,
- make investments,
- enter into transactions with
affiliates,
- use assets as security in other
transactions,
- create liens,
- sell certain assets or merge with or
into other companies,
- enter into sale and leaseback
transactions, and
- change the nature of our business.
For a more details, see the section
"Description of Exchange Notes" under the
heading "Certain Covenants and Asset Sales."
Transfer Restrictions......... The exchange notes are new securities, and
there is currently no established market for
them. We do not intend to list the exchange
notes on any securities exchange.
YOU SHOULD REFER TO THE SECTION ENTITLED "RISK FACTORS" FOR AN EXPLANATION
OF CERTAIN RISKS OF INVESTING IN THE EXCHANGE NOTES.
4
<PAGE> 14
TEAM HEALTH, INC.
We are the largest national provider of outsourced physician staffing and
administrative services to hospitals and clinics in the United States, with 375
hospital contracts in 25 states. Our regional operating model includes
comprehensive programs for emergency medicine, radiology, inpatient care,
pediatrics and other hospital departments. We provide a full range of physician
staffing and administrative services, including the:
- staffing, recruiting and credentialing of clinical and non-clinical
medical professionals;
- provision of administrative support services, such as payroll, insurance
coverage and continuing education services; and
- billing and collection of fees for services provided by the medical
professionals.
Since our inception in 1979, we have focused primarily on providing outsourced
services to EDs, which accounted for approximately 80% of our net revenue in
1998. We generally target larger hospitals with high volume EDs (more than
15,000 patient visits per year), where we believe we can generate attractive
margins, establish stable long-term relationships, obtain attractive payor mixes
and recruit and retain high quality physicians. When we refer to our earnings
before interest, taxes, depreciation and amortization ("EBITDA"), we are
referring to a measure of internal cash flow combining operating income before
interest and income taxes with non-cash charges for depreciation and
amortization. In 1998, we generated net revenue and pro forma EBITDA of $547.8
million and $54.3 million, respectively.
The healthcare environment is becoming increasingly complex due to changes
in regulations, reimbursement policies and the evolving nature of managed care.
As a result, hospitals are under significant pressure to improve the quality and
reduce the cost of care. In response, hospitals have increasingly outsourced the
staffing and management of multiple clinical areas to contract management
companies with specialized skills and standardized models to improve service,
increase the quality of care and reduce administrative costs. Specifically,
hospitals have become increasingly challenged to manage EDs effectively due to
increasing patient volume, complex billing and collection procedures, and the
legal requirement that EDs examine and treat all patients.
We believe we are well positioned to continue to capitalize on the current
outsourcing trends as a result of our:
- national presence;
- sophisticated information systems and standardized procedures that enable
us to efficiently manage our staffing and administrative services as well
as the complexities of the billing and collections process;
- demonstrated ability to improve productivity, patient satisfaction and
quality of care while reducing overall cost to the hospital; and
- successful record of recruiting and retaining high quality physicians.
In addition, our regional operating model allows us to deliver locally focused
services while benefitting from the operating efficiencies, infrastructure and
capital resources of a large national provider.
We believe we are well positioned to capitalize on the growth of the
overall healthcare industry as well as the growth of the ED sector. According to
the Health Care Financing Administration, national healthcare spending is
expected to increase from 13.6% of gross domestic product, or $1.0 trillion, in
1996 to 16.4% of GDP, or $2.1 trillion, by the year 2007, representing a 6.8%
compound annual growth rate. Hospital services have historically represented the
single largest component of these costs, accounting for approximately 34% of
total healthcare spending in 1997. According to industry sources, in 1997,
approximately 5,000 U.S. hospitals operated EDs and 80% of these hospitals
outsourced their EDs. In the same year, ED expenditures were approximately $20
billion, with ED physician services accounting for approximately $7 billion.
According to the American Hospital Association, EDs handle approximately 100
5
<PAGE> 15
million patient visits annually and nearly 40% of all hospital inpatient
admissions originate in the ED. In addition, the average number of patient
visits per ED increased at a CAGR of approximately 3.0% between 1988 and 1996.
THE TRANSACTIONS
Team Health was recapitalized in a transaction providing aggregate
consideration to MedPartners, Inc. of $344.5 million, consisting of $335.2
million in cash, $6.8 million in equity retained by MedPartners, Inc.'s
wholly-owned subsidiary, Pacific Physician Services, Inc., and the assumption of
$2.5 million of existing indebtedness of MedPartners, Inc. In addition, Team
Health assumed liability for some contingent earnout payments, which we believe
will not exceed a total of $19.8 million. The recapitalization was funded by:
(1) the net proceeds from the offering of our series A 12% senior
subordinated notes referred to herein as the old notes;
(2) $150.0 million of borrowings by us under the term loan facilities of a
senior credit facility;
(3) a $99.7 million cash equity investment in Team Health by affiliates of
each of Cornerstone Equity Investors, LLC, Madison Dearborn Partners,
Inc. and Beecken Petty & Company, LLC;
(4) a cash equity investment in Team Health by our senior management of
approximately $8.5 million; and
(5) the equity of Team Health retained by Pacific Physician Services, Inc.
with a fair market value of $6.8 million.
The recapitalization and the transactions described above in clauses (1)
through (5) are collectively referred to throughout this prospectus as the
"Transactions." See "The Transactions."
THE EQUITY SPONSORS
The recapitalization was jointly sponsored by Madison Dearborn Partners,
Inc., Cornerstone Equity Investors, LLC and Beecken Petty & Company, LLC.
Affiliates of Madison Dearborn and Cornerstone each contributed 45% of the
equity capital invested by the equity sponsors in the recapitalization, and an
affiliate of Beecken Petty provided 10%. The investment by the equity sponsors
represents an indirect ownership interest in our common equity of approximately
78.7%. The equity sponsors have a history of investing together in healthcare
services companies, including investments in such companies as Health Management
Associates and Spectrum Healthcare Services, Inc.
Madison Dearborn Partners, Inc. is a private equity firm that focuses on
investments in private companies primarily in the healthcare, communications,
natural resources, consumer and industrial sectors. Madison Dearborn
professionals currently manage three funds, with aggregate committed capital of
over $3.5 billion. Prior to forming Madison Dearborn in 1993, its principals
managed the $2.4 billion management buyout and venture capital portfolio of
First Chicago Corporation. Since 1980, Madison Dearborn professionals have
invested in more than 120 management buyout and equity transactions, including
investments in such healthcare services companies as Health Management
Associates, Spectrum Healthcare Services, Inc., Cerner Corporation and Genesis
Health Ventures. In other industries, Madison Dearborn has made investments in
such companies as Nextel Communications, Inc., Buckeye Cellulose Corporation,
General Nutrition Companies, Inc., Allegiance Telecom, Inc. and Tuesday Morning
Corporation. The funds for Madison Dearborn's equity investment in Team Health
Holdings, L.L.C. came from its second private equity fund, Madison Dearborn
Capital Partners II, L.P., a fund with $925 million of committed capital.
Cornerstone Equity Investors, LLC is a private equity firm that focuses on
investments in middle-market companies, primarily in the healthcare services,
business services, consumer and technology industries. Since 1984, Cornerstone
has managed four funds with aggregate committed capital of $1.2
6
<PAGE> 16
billion and has invested in over 80 companies through management buyouts and
expansion financings. Cornerstone has invested in a number of healthcare
services companies, such as Health Management Associates, Spectrum Healthcare
Services, Inc., VIPS Healthcare Information Solutions, Inc., Interim Healthcare,
Inc., and Guardian Care. In other industries, Cornerstone has invested in such
companies as Dell Computer, Card Establishment Services, Crossland Mortgage and
True Temper Sports, Inc. The funds for Cornerstone's equity investment in Team
Health Holdings, L.L.C. came from its fourth private equity fund, Cornerstone
Equity Investors IV, L.P., a fund with $555 million of committed capital.
Beecken Petty & Company, LLC is a private equity firm that focuses
exclusively on the healthcare services industry. Since 1995, Beecken Petty has
invested in a wide range of healthcare services companies, including Spectrum
Healthcare Services, Inc., DentalCare Partners, and Alternative Living Services.
The funds for Beecken Petty's equity investment in Team Health Holdings, L.L.C.
came from Healthcare Equity Partners, L.P. and Healthcare Equity Q.P. Partners,
L.P., which together represent $150 million of committed capital.
7
<PAGE> 17
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA
Set forth below are our summary historical and pro forma financial data.
(1) The historical financial data for the three months ended March 31, 1999
and 1998 have been derived from, and should be read in conjunction
with, our unaudited financial statements and related notes thereto
included elsewhere in this prospectus. Results for the interim periods
are not necessarily indicative of the results to be expected for the
full year or any other future period.
(2) The historical financial data for each of the three fiscal years ended
December 31, 1998 have been derived from, and should be read in
conjunction with, our audited financial statements and related notes
thereto included elsewhere in this prospectus.
(3) The historical financial data for the fiscal year ended December 31,
1995 has been derived from our audited financial statements and the
notes thereto not included in this prospectus.
(4) The historical financial data for the fiscal year ended December 31,
1994 is derived from our unaudited financial statements.
(5) The unaudited pro forma financial data have been derived from the
Unaudited Pro Forma Financial Information and the related notes thereto
included elsewhere in this prospectus. The pro forma data as of and for
the periods presented give effect to the Transactions as if they were
consummated at the beginning of the period indicated.
See "The Transactions," "Unaudited Pro Forma Financial Information," "Selected
Historical Financial Data," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and the historical financial statements
and the related notes thereto included elsewhere in this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -----------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- -------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenue............ $351,857 $411,695 $463,380 $511,236 $547,785 $133,026 $137,877
Professional
expenses............. 278,585 316,526 353,593 398,738 430,362 104,886 108,388
-------- -------- -------- -------- -------- -------- --------
Gross profit........... 73,272 95,169 109,787 112,498 117,423 28,140 29,489
General and
administrative
expenses............. 48,479 52,241 62,441 61,642 58,362 15,127 15,744
Depreciation and
amortization......... 3,673 4,808 5,628 6,455 9,740 2,038 2,351
-------- -------- -------- -------- -------- -------- --------
Operating income....... 21,120 38,120 41,718 44,401 49,321 10,975 11,394
Net income (loss)...... $ 19,272 $ 21,560 $ 18,955 $ 2,266 $ 20,526 $ 5,534 $ (7,460)
OTHER DATA:
EBITDA(1).............. $ 24,793 $ 42,928 $ 47,346 $ 50,856 $ 59,061 $ 13,013 $ 13,745
Net cash provided by
(used in):
Operating
Activities......... 23,777 7,560 12,405 43,342 43,370 13,016 8,330
Investing
Activities......... (14,440) (6,241) (11,423) (34,339) (22,864) (10,719) (1,799)
Financing
Activities......... (5,545) 17,414 (3,432) (9,122) (22,080) 5,932 10,324
Capital expenditures... 2,504 6,620 6,854 7,474 5,015 1,112 1,537
Ratio of earnings to
fixed charges(5)..... 10.0x 13.6x 10.9x 3.8x 17.2x 10.0x (4.6x)
THREE MONTHS
ENDED
MARCH 31,
1999
--------
PRO FORMA DATA:
EBITDA (2)......................................................... $ 54,268 12,506
Net cash provided by (used in):
Operating Activities............................................. 30,726 5,123
Investing Activities............................................. (22,864) (1,799)
Financing Activities............................................. (27,643) 10,324
Cash interest expense (3).......................................... 24,932 6,234
</TABLE>
8
<PAGE> 18
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
------------ ---------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................. $ 3,894 $ 20,327
Working capital........................................... 99,469 102,877
Total assets.............................................. 229,956 370,671
Total debt................................................ 2,544 247,508
Total shareholders' equity................................ 99,953 37,147
</TABLE>
- ------------------------------
(1) EBITDA represents operating income plus depreciation and amortization. We
have included information concerning EBITDA because we believe that EBITDA
is generally accepted as providing useful information regarding a company's
ability to service and/or incur debt. EBITDA is not intended to represent
cash flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles
("GAAP") in the United States and is not indicative of operating income or
cash flow from operations as determined under GAAP. We understand that while
EBITDA is frequently used by securities analysts in the evaluation of
companies, EBITDA, as used herein, is not necessarily comparable to other
similarly titled captions of other companies due to potential
inconsistencies in the method of calculation.
(2) Pro forma EBITDA represents EBITDA less estimated stand-alone costs plus the
effects of certain non-recurring transactions in 1998. Pro forma EBITDA has
not been reduced by a management fee payable pursuant to the Management
Services Agreement, which is contractually subordinated to all obligations
under the exchange notes and the senior bank facilities.
(3) Cash interest expense excludes amortization of deferred financing fees and
other non-cash interest expenses.
(4) Net debt represents total debt minus cash and cash equivalents.
(5) The ratio of earnings to fixed charges is computed by dividing fixed charges
into earnings from continuing operations before income taxes plus fixed
charges. For purposes of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expensed or capitalized and the portion of
rental expenses we believe is representative of the interest component of
rental expenses.
9
<PAGE> 19
RISK FACTORS
An investment in the exchange notes is subject to a number of risks. You
should carefully consider the following factors, as well as the more detailed
descriptions cross-referenced to the body of the prospectus and the other
matters described in this prospectus.
SUBSTANTIAL LEVERAGE -- OUR SUBSTANTIAL INDEBTEDNESS COULD HAVE A
SIGNIFICANT NEGATIVE EFFECT ON THE FINANCIAL HEALTH OF OUR COMPANY AND PREVENT
US FROM FULFILLING OUR OBLIGATIONS UNDER THESE EXCHANGE NOTES. We have a
significant amount of indebtedness. The following chart is presented assuming we
had completed the Transactions as of the dates or at the beginning of the
periods specified below and applied the proceeds as intended:
<TABLE>
<CAPTION>
AT MARCH 31, 1999
(IN MILLIONS)
<S> <C>
Total indebtedness.......................................... $247.5
Indebtedness senior to the exchange notes................... 147.5
</TABLE>
Our substantial indebtedness could have important consequences to you. For
example, it could:
- make it more difficult to pay our debts as they become due during general
adverse economic and market industry conditions;
- increase our vulnerability to general adverse economic and industry
conditions;
- require a substantial portion of our cash flow from operations for debt
payments, thereby reducing the availability of our cash flow to fund
working capital, capital expenditures, acquisitions and other general
corporate purposes; and
- limit our ability to borrow additional funds.
ABILITY TO SERVICE DEBT -- WE MAY NOT HAVE SUFFICIENT CASH FROM CASH FLOW
FROM OPERATIONS, AVAILABLE CASH AND AVAILABLE BORROWINGS UNDER OUR SENIOR BANK
FACILITIES TO SERVICE OUR INDEBTEDNESS, WHICH WILL REQUIRE A SIGNIFICANT AMOUNT
OF CASH. Our ability to make payments on and to refinance our indebtedness,
including these exchange notes, and to fund planned capital expenditures will
depend on our ability to generate cash in the future as well as general
economic, financial, competitive, legislative, regulatory and other factors that
are beyond our control. We cannot assure you that our cash flow from operations,
available cash and available borrowings under our senior bank facilities will be
adequate to meet our future liquidity needs for at least the next few years.
In addition, we may need to refinance all or a portion of our indebtedness,
including these exchange notes on or before maturity. We might not be able to
refinance any of our indebtedness, including our senior bank facilities and
these exchange notes, on commercially reasonable terms or at all.
SUBORDINATION -- YOUR RIGHT TO RECEIVE PAYMENTS ON THESE EXCHANGE NOTES IS
JUNIOR TO MOST OF OUR EXISTING INDEBTEDNESS AND POSSIBLY MOST OF OUR FUTURE
BORROWINGS. FURTHER, THE GUARANTEES OF THESE EXCHANGE NOTES ARE JUNIOR TO MOST
OF OUR SUBSIDIARY GUARANTORS' EXISTING INDEBTEDNESS AND POSSIBLY TO ALL THEIR
FUTURE BORROWINGS. These exchange notes and the subsidiary guarantees rank
behind all of our and the subsidiary guarantors' existing indebtedness (other
than trade payables) and all of our and their future borrowings, except any
future indebtedness that expressly provides that it ranks equal with, or
subordinated in right of payment to, the exchange notes and the guarantees. As a
result, upon any distribution to our creditors or the creditors of the
subsidiary guarantors in a bankruptcy or similar proceeding relating to us or
the guarantors, the holders of senior debt of our company and the subsidiary
guarantors will be entitled to be paid in full in cash before any payment may be
made with respect to these exchange notes or the subsidiary guarantees.
In the event of a bankruptcy, liquidation or reorganization or similar
proceeding relating to Team Health or the subsidiary guarantors, holders of the
exchange notes will participate with all other holders of our subordinated
indebtedness and the subsidiary guarantors in the assets remaining after we and
the subsidiary guarantors have paid all of the senior debt. Because our senior
debt must be paid first, you may
10
<PAGE> 20
receive proportionately less than trade creditors in any such proceeding. In any
of these cases, we and the subsidiary guarantors may not have sufficient funds
to pay all of our creditors, therefore, holders of these exchange notes may
receive ratably less than trade creditors.
RESTRICTIONS IMPOSED BY THE SENIOR BANK FACILITIES AND THE INDENTURE -- WE
ARE SUBJECT TO RESTRICTIONS CONTAINED IN OUR SENIOR BANK FACILITIES AND IN THE
INDENTURE. FAILURE TO COMPLY WITH ANY OF THE RESTRICTIONS COULD RESULT IN
ACCELERATION OF OUR DEBT. Our senior bank facilities and the indenture restrict
our ability to take various actions and enter into various types of transactions
commonly undertaken by business entities.
In addition, we must maintain minimum debt service and maximum leverage
ratios under the senior bank facilities. A failure to comply with the
restrictions contained in the senior bank facilities could lead to an event of
default which could result in an acceleration of such indebtedness and we may
not have enough available cash to immediately repay such indebtedness. Such an
acceleration would also constitute an event of default under the indenture
relating to these exchange notes.
RISKS RELATING TO EXPOSURE TO PROFESSIONAL LIABILITY; LIABILITY
INSURANCE -- WE COULD BE SUBJECT TO MEDICAL MALPRACTICE LAWSUITS, SOME OF WHICH
WE MAY NOT BE FULLY INSURED AGAINST. In recent years, physicians, hospitals and
other participants in the healthcare industry have become subject to an
increasing number of lawsuits alleging medical malpractice and related legal
theories. Many of these lawsuits involve large claims and substantial defense
costs. Although we do not principally engage in the practice of medicine or
provide medical services nor control the practice of medicine by our affiliated
physicians or the compliance with regulatory requirements applicable to the
physicians and physician groups with which we contract, there can be no
assurance that we will not become involved in such litigation in the future. In
addition, through our management of hospital departments and provision of
non-physician healthcare personnel, we could be named in actions involving care
rendered to patients by physicians employed by or contracting with medical
organizations and physician groups with which we contract. We maintain
professional and general liability insurance and other coverage deemed necessary
by us. Nevertheless, certain types of risks and liabilities are not covered by
insurance and there can be no assurance that the limits of coverage will be
adequate to cover losses in all instances.
We are liable for claims against our physicians for incidents incurred but
not reported during periods for which the related risk was covered by
claims-made insurance. Under GAAP, the cost of medical malpractice claims, which
includes costs associated with litigating or settling claims, is accrued when
the incidents that give rise to the claims occur. The accrual includes an
estimate of the losses that will result from incidents which occurred during the
claims-made period, but were not reported during such period. Such claims are
referred to as incurred-but-not-reported claims. We provide insurance to cover
such incurred-but-not-reported claims. This type of insurance is generally
referred to as "tail coverage". With respect to those physicians for whom we
provide tail coverage, we accrue professional insurance expenses based on
estimates of the cost of procuring tail coverage. There can be no assurance that
a future claim will not exceed the limits of available insurance coverage or
such accrual will be sufficient to cover any risks assumed by our company.
FUTURE LEGISLATION, REGULATION AND INTERPRETATION -- CHANGES IN THE CURRENT
REGULATORY ENVIRONMENT COULD ADVERSELY AFFECT OUR OPERATIONS. Numerous
proposals have been or may be introduced into the United States Congress and
state legislatures relating to healthcare reform in response to various
healthcare issues. There can be no assurance as to the ultimate content, timing
or effect of any healthcare reform legislation, nor is it possible at this time
to estimate the impact of potential legislation. Further, although we exercise
care in structuring our arrangements with physicians to comply in all material
respects with the above-referenced laws, there can be no assurance that
(1) government officials charged with responsibility for enforcing such
laws will not assert that we or certain transactions into which we have
entered are in violation of such laws or
(2) such laws will ultimately be interpreted by the governmental entities
or courts in a manner consistent with our interpretation. The continual
flux of healthcare rules and regulations at the federal, state and
local level, could revise the future of our relationships with the
hospitals and
11
<PAGE> 21
physicians with whom we contract as well as have a significant negative effect
on our financial condition.
In addition to the regulations referred to above, aspects of our operations
are also subject to state and federal statutes and regulations governing
workplace health and safety and, to a small extent, the disposal of medical
waste. Our operations may also be affected by changes in ethical guidelines and
operating standards of professional and trade associations and private
accreditation commissions such as the American Medical Association and the Joint
Commission on Accreditation of Healthcare Organizations. Accordingly, changes in
existing laws and regulations, adverse judicial or administrative
interpretations of such laws and regulations or enactment of new legislation
could have a significant negative effect on our operating results and financial
condition. Moreover, if we are required to modify our structure and organization
to comply with these laws, such modifications may not be permitted under the
terms of our financing agreements, including the indenture governing these
exchange notes and the senior bank facilities, thereby requiring us to obtain
the consent of the holders of such indebtedness or requiring the refinancing of
such indebtedness.
COLLECTION RISK -- WE MAY BE UNABLE TO COLLECT A PORTION OF OUR
REVENUE. Our revenue is derived from fees that are either billed and collected
by the hospital, which remits a negotiated amount to us monthly, or, with
respect to our fee-for-service contracts, fees that are billed and collected
separately by us directly or indirectly through our affiliated physicians. Under
fee-for-service contracts, we assume the financial risks related to changes in
patient volume, payor mix and third party reimbursement rates. Our
fee-for-service contractual arrangements also involve a credit risk related to
services provided to uninsured individuals -- a risk exacerbated in the ED
physician staffing context by federal law which requires EDs to treat all
patients regardless of the severity of illness or injury. In 1998, 76% of our
net revenue was generated from fee-for-service contracts. See Notes 2 and 3 of
Notes to Consolidated Financial Statements for information concerning historical
allowance for uncollectibles related in large part to fee-for-service business.
In addition, fee-for-service contracts also have less favorable cash flow
characteristics in the start-up phase than traditional flat-rate contracts due
to longer collection periods. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
GOVERNMENT REGULATION -- REGULATORY MATTERS COULD IMPACT OUR ABILITY TO
CONDUCT OUR BUSINESS. Our operations and arrangements with healthcare providers
are subject to extensive government regulation, including numerous laws directed
at preventing fraud and abuse and laws regulating billing and collection of
reimbursement from governmental programs, such as the Medicare and Medicaid
programs. Of particular importance are:
(1) provisions of the Omnibus Budget Reconciliation Act of 1993 (commonly
known as "Stark II") that, subject to limited exceptions, prohibit the
referral of Medicare patients by a physician to an entity for the
provision of certain "designated health services" if the physician or a
member of such physician's immediate family has a direct or indirect
financial relationship (including a compensation arrangement) with the
entity;
(2) provisions of the Social Security Act, commonly referred to as the
"anti-kickback statute," that prohibit the offering or payment of any
bribe, kickback, rebate or other remuneration in return for the
referral or recommendation of patients for items and services covered
by federal health care programs, such as Medicare and Medicaid;
(3) the federal False Claims Act that imposes civil and criminal liability
on individuals or entities that submit false or fraudulent claims for
payment to the government;
(4) reassignment of payment rules that prohibit certain types of billing
and collection practices in connection with claims payable by the
Medicare and Medicaid programs; and
(5) similar state law provisions pertaining to anti-kickback, self-referral
and false claims issues.
Violations of these laws could subject us to severe fines, civil monetary
penalties and possible exclusion from participation in government sponsored
programs such as Medicare and Medicaid. Any such
12
<PAGE> 22
penalties, if applied to us or our affiliated physicians, could have a
significant negative effect on our operating results and financial condition.
Moreover, if we are required to modify our structure and organization to comply
with these laws, such modifications may not be permitted under the terms of our
financing agreements, including the indenture or the senior bank facilities,
thereby requiring us to obtain the consent of the holders of such indebtedness
or requiring the refinancing of such indebtedness.
DEBT COLLECTION REGULATION -- OUR INTERNAL COLLECTION AGENCY AND OUR DEBT
COLLECTION PRACTICES COULD BE AFFECTED BY LAWS REGULATING DEBT COLLECTION
PRACTICES. Certain of our operations are subject to compliance with the federal
Fair Debt Collection Practices Act and comparable statutes in many states. Under
the Fair Debt Collection Practices Act, a third-party collection company is
restricted in the methods it uses in contacting consumer debtors and eliciting
payments with respect to placed accounts. Requirements under state collection
agency statutes vary, with most requiring compliance similar to that required
under the Fair Debt Collection Practices Act. In addition, most states and
certain municipalities require collection agencies to be licensed with the
appropriate regulatory body before operating in such jurisdictions. Although we
believe that we are in substantial compliance with the Fair Debt Collection
Practices Act and comparable state and municipal statutes and we maintain
licenses in all jurisdictions in which our operations require us to be licensed,
there can be no assurance that our debt collection practices, including
operation of our internal collection agency, will not violate such statutes in
the future.
REIMBURSEMENT RISK -- OUR REVENUE COULD BE ADVERSELY AFFECTED BY LAWS
REGULATING PAYMENTS FOR MEDICAL SERVICES BY GOVERNMENT SPONSORED HEALTHCARE
PROGRAMS. In 1998, approximately 30% of the net revenue of our affiliated
physician groups was derived from payments made by government sponsored
healthcare programs (principally, Medicare and state reimbursed programs). There
are increasing public and private sector pressures to restrain healthcare costs
and to restrict reimbursement rates for medical services. Any change in
reimbursement policies, practices, interpretations, regulations or legislation
that places limitations on reimbursement amounts or practices could materially
adversely affect hospitals, and consequently affect our operations unless we are
able to renegotiate satisfactory contractual arrangements with our hospital
clients and contracted physicians. See "Business -- Regulatory Matters." In
addition, while we seek to comply substantially with applicable Medicare and
Medicaid reimbursement regulations, there can be no assurance that we would be
found to be in compliance in all respects with such regulations. A determination
that we are in violation of such regulations could have a significant negative
effect on us if we were unable to cure any such condition or if the violation
results in a determination that a substantial amount of money must be repaid by
us.
We believe that regulatory trends in cost containment will continue to
result in a reduction from historical levels in per-patient revenue for
physician services. The federal government has implemented, through the Medicare
program, a payment methodology for physician services that sets physician fees
according to a fee schedule that, except for certain geographical and other
adjustments, pays similarly situated physicians the same amount for the same
services. The fee schedule used is known as the "Resource Based Relative Value
System." The Resource Based Relative Value System is adjusted each year and is
subject to increases or decreases at the discretion of Congress. To date, the
implementation of the Resource Based Relative Value System has reduced payment
rates for certain of the procedures historically provided by ED physicians and
radiologists. Effective January 1, 1999, new Medicare regulations were adopted
to provide for reductions in the rate of growth for payments for physician
services over a four-year period ending in 2002. The new regulations provide for
the implementation of a resource-based methodology for payment of physician
practice expenses under the physician fee schedule. With respect to services
provided in EDs, there may be a cumulative reduction of between 6% and 8% over
the phase-in period. Similar reductions will apply to radiology services. There
can be no assurance that we will be able to offset reduced operating margins
through cost reductions, increased volume, the introduction of additional
procedures or otherwise. In addition, there can be no assurance that there will
not be further reductions in the Medicare physician fee schedule in the future
and such reductions could have an significant negative effect on our overall
financial condition.
Subject to some exceptions, the Medicare program prohibits the reassignment
of Medicare payments due to a physician or other healthcare provider to any
other person or entity. For example, if a hospital
13
<PAGE> 23
contracts with an ED physician or physician group to staff the hospital's ED,
the hospital must comply with the requirements of an applicable exception to the
reassignment prohibition in order to receive directly Medicare payments for the
services of such ED physicians. In certain states where we are not otherwise
prohibited, we utilize a "lockbox" model that we believe is in compliance with
the Medicare reassignment prohibition. However, there can be no assurance that
the lockbox model utilized by us will not be subject to challenge or scrutiny as
a result of changes in the applicable statutes and regulations or new
interpretations of existing statutes and regulations. Further, as of January 1,
1998, we implemented a program for compliance with the reassignment regulation
and Medicare carriers have been notified regarding the content of the compliance
program.
FACILITY RULES AND REGULATIONS -- OUR OPERATIONS COULD BE ADVERSELY
AFFECTED BY CHANGES IN THE FACILITY RULES AND REGULATIONS TO WHICH MANY OF OUR
CLIENTS ARE SUBJECT. Because we perform services at hospitals, outpatient
facilities and other types of healthcare facilities, we and our affiliated
physicians may be subject to certain laws which are applicable to such entities.
For example, we are subject to the provisions of the Emergency Medical Treatment
and Active Labor Act of 1986. The Emergency Medical Treatment and Active Labor
Act of 1986 addresses the issue of hospital ED "patient dumping"-- in effect
requiring the hospital and ED physicians to provide care to any patient
presenting to the ED in an emergent condition regardless of the patient's
ability to pay. Many states in which we operate, including California, also have
similar state law provisions concerning patient-dumping. In addition to the
Emergency Medical Treatment and Active Labor Act of 1986 and its state law
equivalents, our operations and performance of services are subject to any and
all state and federal statutes and regulations governing workplace health and
safety. Our operations are subject to the American Medical Association's and the
Joint Commission Accreditation of Healthcare Organizations' guidelines.
Accordingly, if any of these laws, regulations or guidelines are amended or a
new enactment occurs or standards in the community change, these changes could
have a material adverse effect on the performance of services by us and our
relationship with future and present clients; therefore, this could have an
effect on our overall financial condition. Moreover, if we are required to
modify its structure and organization to comply with any of these changes, such
modifications may not be permitted under the terms of the indenture or the
senior bank facilities, thereby requiring us to obtain the consent of the
holders of such indebtedness or requiring the refinancing of such indebtedness.
ANTITRUST -- OUR CONTRACTS WITH PHYSICIANS COULD BE ADVERSELY AFFECTED BY
CERTAIN ANTITRUST LAWS. Our contracts with physicians include contracts with
physicians organized as separate legal professional entities (e.g. professional
medical corporations) and as individuals. As such, each such physician/practice
is deemed to be separate, both from our company and from each other, under the
antitrust laws and, accordingly, subject to a wide range of laws that prohibit
anti-competitive conduct among separate legal entities or individuals. A review
or action by regulatory authorities or the courts which is negative in nature as
to the relationship between our company and the physicians/practices with which
we contract could adversely change our operations and our relationships with
clients. Moreover, if we are required to modify our structure and organization
to comply with such action or review, such modifications may not be permitted
under the terms of the indenture or the senior bank facilities, thereby
requiring us to obtain the consent of the holders of such indebtedness or
requiring the refinancing of such indebtedness.
ADVERSE TAX OR OTHER CONSEQUENCES IF INDEPENDENT CONTRACTOR PHYSICIANS ARE
RECLASSIFIED AS EMPLOYEES -- WE COULD BE FORCED TO PAY RETROACTIVE TAXES AND
PENALTIES IF TAX AUTHORITIES RECLASSIFY OUR INDEPENDENT CONTRACTOR
PHYSICIANS. We contract with many affiliated physicians as independent
contractors to fulfill our contractual obligations to clients. Because we
consider many of the physicians with whom we contract to be independent
contractors, as opposed to employees, we do not withhold federal or state income
or other employment related taxes, make federal or state unemployment tax or
Federal Insurance Contributions Act ("FICA") payments (except as described
below), or provide workers' compensation insurance with respect to such
affiliated physicians. Rather, the payment of taxes is a contractual
responsibility of such physicians. The classification of physicians as
independent contractors depends upon the facts and circumstances of the
relationship. In the event of a determination by federal or state taxing
authorities that the physicians engaged as independent contractors are
employees, we may be adversely affected and subject to retroactive taxes and
penalties. Under current federal tax law, a "safe
14
<PAGE> 24
harbor" from reclassification, and consequently retroactive taxes and penalties,
is available if our current treatment is consistent with a long-standing
practice of a significant segment of our industry and if we meet certain other
requirements. If challenged, we may not prevail in demonstrating the
applicability of the safe harbor to our operations. Further, proposals have been
made in the recent past, and could be made in the future, to eliminate the safe
harbor.
LOSS OF CONTRACTS -- OUR REVENUE COULD BE ADVERSELY AFFECTED BY A NET LOSS
OF CONTRACTS. The average term of our contracts with clients is approximately 3
years. These contracts are generally renewable automatically under the same
terms and conditions unless either party gives notice of an intent not to renew
and are generally terminable by either of the parties thereto upon notice of as
little as 30 days. These contracts may not be renewed or, if renewed, may
contain terms that are not as favorable to us as our current contracts. In 1998,
we experienced a net loss of contracts. Sixty-one of our contracts were either
not renewed or were terminated in that year. There can be no assurance that we
will not experience a net loss of contracts in the future and that any such net
loss would not have a material adverse effect on our operating results and
financial condition.
EXECUTION OF GROWTH STRATEGY; INTEGRATION OF NEW CONTRACTS AND
ACQUISITIONS -- WE MAY NOT BE ABLE TO FIND SUITABLE ACQUISITION CANDIDATES OR
SUCCESSFULLY INTEGRATE COMPLETED ACQUISITIONS INTO OUR CURRENT OPERATIONS IN
ORDER TO PROFITABLY OPERATE OUR CONSOLIDATED COMPANY. Obtaining new contracts
with hospitals and managed care companies, which increasingly involves a
competitive bidding process, requires that we accurately assess the costs we
will incur in providing services in order to realize adequate profit margins or
otherwise meet our objectives. The integration of new contracts, as well as the
maintenance of existing contracts, is made more difficult by increasing
pressures from healthcare payors to restrict or reduce reimbursement rates at a
time when the costs of providing medical services continue to increase.
A significant portion of our growth in net revenue has resulted from, and
is expected to continue to result from, the acquisition of healthcare
businesses. We engage in evaluations of potential acquisitions and are in
various stages of discussion regarding possible acquisitions, certain of which,
if consummated, could be significant to us. There are currently no definitive
agreements or letters of intent with respect to any material acquisition.
Acquisitions by us may result in significant transaction expenses, increased
interest and amortization expense, increased depreciation expense and decreased
operating income, any of which could have a material adverse effect on our
operating results. As we grow by acquisitions, we must be able to integrate and
manage the contracts of new groups of affiliated physicians to realize economies
of scale and control costs. In addition, acquisitions involve other risks,
including increases in pricing due to competition, diversion of management
resources and risks associated with entering new markets. We may not be able to
identify suitable acquisition candidates in the future, we may not be able to
obtain acceptable financing or we may not be able to consummate any future
acquisitions. In addition, acquisitions may require the consent of third parties
who have contracts with the entity to be acquired, such as managed care
companies or hospitals contracting with the entity. Such consents may not be
obtained in a potential acquisition. Any failure by us to integrate acquired
operations, manage the cost of providing our services or price our services
appropriately may have a material adverse effect on our operating results. In
addition, as a result of our acquisitions of other healthcare businesses, we may
be subject to the risk of unanticipated business uncertainties or legal
liabilities relating to such acquired businesses for which we may not be
indemnified by the sellers of the acquired businesses.
COMPETITION FOR MEDICAL PERSONNEL -- WE MAY NOT BE ABLE TO CONTINUE TO
SUCCESSFULLY RECRUIT AND RETAIN QUALIFIED PHYSICIANS TO SERVE AS OUR INDEPENDENT
CONTRACTORS OR EMPLOYEES. Our performance is significantly affected by our
ability to recruit and retain affiliated physicians and qualified personnel. The
demand for physicians and other healthcare professionals presently exceeds the
supply of qualified personnel. As a result, we experience competitive pressures
for the recruitment and retention of qualified physicians and other healthcare
professionals to deliver clinical services. Our future success depends on our
ability to continue to recruit and retain competent physicians to serve as our
employees or independent contractors. We may not be able to attract and retain a
sufficient number of competent physicians and other healthcare professionals to
continue to expand our operations. In addition, there can be no assurance that
our non-competition contractual arrangements with affiliated physicians and
professional corporations
15
<PAGE> 25
will not be successfully challenged in certain states as unenforceable. In such
event, we would be unable to prevent former affiliated physicians and
professional corporations from competing with us -- potentially resulting in the
loss of some of our hospital contracts and other business.
DEPENDENCE UPON KEY PERSONNEL -- A LOSS OF KEY PERSONNEL MAKE IT MORE
DIFFICULT FOR US TO GENERATE CASH FLOW FROM OPERATIONS AND SERVICE OUR
INDEBTEDNESS. Our success depends in large part on the services of our senior
management team. The loss of any of our key executives could materially
adversely affect our company and seriously impair our ability to implement our
strategy. Our ability to manage our anticipated growth will depend on our
ability to identify, hire and retain additional qualified management personnel.
We may be unsuccessful in attracting and retaining such personnel and such
failure could have a significant negative effect on our company.
COMPETITION -- THE HIGH LEVEL OF COMPETITION IN OUR INDUSTRY COULD
ADVERSELY AFFECT OUR CONTRACT AND REVENUE BASE. The provision of outsourced
physician staffing and administrative services to hospitals and clinics is
characterized by a high degree of competition. Such competition could adversely
affect our ability to obtain new contracts, retain existing contracts and
increase our profit margins. We compete with both national and regional
enterprises, certain of which have substantially greater financial and other
resources available to them. In addition, certain of these firms may have
greater access than us to physicians and potential clients. We also compete
against local physician groups and self-operated EDs for satisfying staffing and
scheduling needs. See "Business -- Strategy."
CONTROL BY PRINCIPAL STOCKHOLDERS -- THE INTERESTS OF OUR CONTROLLING
SHAREHOLDERS MAY BE IN CONFLICT WITH YOUR INTERESTS AS A HOLDER OF EXCHANGE
NOTES. THIS COULD RESULT IN CORPORATE DECISION MAKING THAT INVOLVES
DISPROPORTIONATE RISKS TO THE HOLDERS OF THE EXCHANGE NOTES, INCLUDING OUR
ABILITY TO SERVICE OUR INDEBTEDNESS OR PAY THE PRINCIPAL AMOUNT OF INDEBTEDNESS
WHEN DUE. The holding company through which the equity sponsors invested in our
company owns securities representing approximately 92.0% of the voting power of
our outstanding common stock immediately after giving effect to the Transactions
and indirectly controls the affairs and policies of our company. This holding
company is controlled by the equity sponsors. Consequently, the equity sponsors
indirectly control the affairs and policies of our company. Circumstances may
occur in which the interests of the equity sponsors could be in conflict with
the interests of the holders of these exchange notes. In addition, the equity
sponsors may have an interest in pursuing acquisitions, divestitures or other
transactions that, in their judgment, could enhance their equity investment,
even though such transactions might involve risks to the holders of these
exchange notes.
RISKS RELATING TO TRANSITION SERVICES -- AFTER THE RECAPITALIZATION, WE MAY
BE UNABLE TO ADEQUATELY REPLACE CERTAIN SERVICES PROVIDED TO US BY
MEDPARTNERS. Prior to the recapitalization we operated within and were
controlled by MedPartners Corporate Compliance Program, which was designed to
reduce the likelihood of noncompliant activities by us. Now, we must implement
our own compliance program. MedPartners also provided us with certain corporate
services, including legal services, risk management, administration of certain
employment benefits, tax advice and preparation of tax returns, software support
services, and certain financial and other services. No long-term agreement for
the supply of certain of these services by MedPartners currently exists. The
failure to obtain replacement services in a timely manner or the failure of such
services to adequately replace existing systems could have a significant
negative effect on our operating results and financial condition.
In connection with the recapitalization, MedPartners and Physician Services
agreed to indemnify us and Team Health Holdings, subject to some limitations, in
respect of some types of losses relating to:
- breaches of representations and warranties and covenants made by each of
MedPartners and Physician Services in connection with the
Recapitalization;
- some claims or audits by governmental authorities; and
- some litigation to the extent such litigation is not covered by third
party insurance, including some medical malpractice litigation.
16
<PAGE> 26
A significant negative change in the financial condition of MedPartners
could prevent MedPartners from fulfilling its indemnification obligations. As
such, with respect to the indemnification rights granted to us in connection
with the recapitalization, we are subject to MedPartners' credit risk.
STATE LAWS REGARDING PROHIBITION OF CORPORATE PRACTICE OF MEDICINE AND FEE
SPLITTING ARRANGEMENTS -- OUR OPERATIONS ARE SUBJECT TO CERTAIN STATE LAWS AND
REGULATIONS, WHICH RESTRICT THE MANNER IN WHICH WE CONDUCT OUR BUSINESS AND VARY
FROM STATE TO STATE. We currently provide outsourced physician staffing and
administrative services to hospitals and clinics in 25 states. The laws and
regulations relating to our operations vary from state to state. The laws of
many states, including California (from which approximately 8% of our net
revenue was derived in 1998), prohibit general business corporations (such as
us) from practicing medicine, exercising control over physicians who practice
medicine or engaging in certain practices such as fee splitting with physicians.
The laws of other states, including Florida (from which approximately 26% of our
net revenue was derived in 1998) do not prohibit non-physician entities from
practicing medicine but generally retain a ban on certain types of fee
splitting.
Our current operating practice is to contract directly with hospitals,
physician groups and independent physicians to provide staffing of physicians
and other administrative services. In states where we employ physicians to
service our contracts with hospital-clients, payment for such services is made
directly to us or one of our regional operating units. In states such as
California that prohibit non-physician entities from practicing medicine, the
physicians providing services to our clients are either independent contractors
of our company or employees or independent contractors of physician-controlled
professional corporations with which we contract to provide certain clinical
management and administrative services. With respect to independently contracted
physicians, the payment for the physician services are paid into a "lockbox"
account under the control of the physician and subsequently directed into a
company account in exchange for our provision of management and administrative
services to or on behalf of the physician or physician group. With respect to
physicians employed by physician-controlled professional corporations, the
payment for physician services are paid to a group account under our control.
Although we believe our operations as currently conducted are in material
compliance with existing applicable laws relating to the practice of medicine
and fee splitting, there can be no assurance that our existing organization and
our contractual arrangements with physicians and professional corporations
(including non-competition agreements) will not be successfully challenged in
certain states as unenforceable or as constituting the unlicensed practice of
medicine or prohibited fee-splitting. In the event of action by any regulatory
authority limiting or prohibiting us from carrying on our business as presently
conducted or from expanding our operations to certain jurisdictions, structural
and organizational modifications of Team Health and/or its contractual
arrangements with physicians, professional corporations and hospitals may be
required. Such an action could result in significant increased operational
costs, or the loss of certain hospital contracts. The occurrence of any of the
above results could have a significant negative effect on our operating results,
financial condition and our ability to pay the principal and interest of the
exchange notes when due. Moreover, such structural and organizational
modifications may not be permitted under the terms of the indenture or the
senior bank facilities, thereby requiring us to obtain the consent of the
holders of such indebtedness or requiring the refinancing of such indebtedness.
We have not obtained an opinion of counsel with regard to our compliance with
applicable state laws and regulations, and information contained herein
regarding our compliance with applicable state laws and regulations should not
be construed as being based on an opinion of counsel.
STATE AND FEDERAL FRAUD AND ABUSE, ANTI-KICKBACK AND ANTI-REFERRAL
LAWS -- OUR CONTRACTUAL RELATIONSHIPS WITH HOSPITALS AND PHYSICIANS COULD BE
AFFECTED BY STATE AND FEDERAL LAWS REGULATING BILLING PRACTICES FOR PHYSICIAN
SERVICES AND FORBIDDING REMUNERATION FROM BEING PAID FOR PATIENT REFERRALS.
A failure by us to comply with any of the legal requirements discussed
below could have a significant negative effect on our business. Moreover, if as
a result of these legal requirements, we are required to modify our structure or
organization, such modification may not be permitted under the terms of the
indenture or the senior bank facilities. Consequently, we could be required to
obtain the consent of the holders of such indebtedness or be forced to refinance
it.
17
<PAGE> 27
Anti-Kickback Statutes. We are subject to the Medicare and Medicaid fraud
and abuse laws including the federal anti-kickback statute. The federal
anti-kickback statute prohibits the offering or payment of any bribe, kickback,
rebate or other remuneration in return for the referral or recommendation of
patients for items and services covered by federal healthcare programs. Federal
healthcare programs have been defined to include plans and programs that provide
health benefits funded by the United States government including Medicare,
Medicaid, and the Civilian Health and Medical Program of the Uniformed Services,
among others. Violations of the anti-kickback statute may result in civil and
criminal penalties and exclusion from participation in federal and state
healthcare programs. In addition, an increasing number of states in which we
operate have laws that prohibit certain direct or indirect payments (similar to
the anti-kickback statute) if such arrangements are designed to induce or
encourage the referral of patients to a particular provider. Possible sanctions
for violation of these restrictions include exclusion from state funded
healthcare programs, loss of licensure and civil and criminal penalties. Such
statutes vary from state to state, are often vague and have seldom been
interpreted by the courts or regulatory agencies.
The Health Insurance Portability and Accountability Act of 1996 created a
mechanism for a provider to obtain written interpretative advisory opinions
under the federal anti-kickback statute from the Department of Health and Human
Services regarding existing or contemplated transactions. Such advisory opinions
are binding as to the Department of Health and Human Services (but no other
agency is bound, e.g. the Department of Justice) but only with respect to the
requesting party or parties. The advisory opinions are not binding as to other
governmental agencies. Recently, the Department of Health and Human Services
issued an advisory opinion in which it concluded that a proposed management
services contract between a medical practice management company and a physician
practice, which provided that the management company would be reimbursed for its
costs and paid a percentage of net practice revenues, might constitute illegal
remuneration under the federal anti-kickback statute. The Department of Health
and Human Services' analysis was apparently based on a determination that the
proposed management services arrangement included financial incentives to
increase patient referrals, contained no safeguards against overutilization, and
included financial incentives that increased the risk of abusive billing
practices. We believe that our contractual relationships with hospitals and
physicians are distinguishable from the arrangement described in this advisory
opinion with regard to both the types of services provided and the risk factors
identified by the Department of Health and Human Services. Nevertheless, there
can be no assurance that the Department of Health and Human Services will not
challenge our arrangements under the federal anti-kickback statute in the
future.
In sum, although we believe that our physician staffing arrangements and
other operations are in material compliance with the federal anti-kickback
statute and state law equivalents, there can be no assurance that our existing
organization and our contractual arrangements with affiliated physicians,
professional corporations and hospitals will not be successfully challenged by
the government under such laws.
Physician Self-Referral Laws. Our contractual arrangements with physicians
and hospitals likely implicate the federal physician self-referral statute
commonly known as Stark II. In addition, a number of the states in which we
operate have similar prohibitions on physician self-referrals. In general, these
state prohibitions closely track Stark II's prohibitions and exceptions. Stark
II prohibits the referral of Medicare patients by a physician to an entity for
the provision of certain "designated health services" if the physician or a
member of such physician's immediate family has a "financial relationship" with
the entity. Stark II provides that the entity which renders the "designated
health services" may not present or cause to be presented a claim to the
Medicare program for "designated health services" furnished pursuant to a
prohibited referral. A person who engages in a scheme to circumvent Stark II's
prohibitions may be fined up to $100,000 for each such arrangement or scheme. In
addition, anyone who presents or causes to be presented a claim to the Medicare
program in violation of Stark II is subject to monetary penalties of up to
$15,000 per service, an assessment of up to twice the amount claimed, and
possibly exclusion from participation in federal healthcare programs. Generally,
these penalties are assessed against the entity that submitted the prohibited
bill to Medicare; the government has, however, indicated that such penalties
18
<PAGE> 28
would also apply to the referring physician because the physician "causes" the
claim to be submitted by making the referral. The term "designated health
services" includes several services commonly performed or supplied by hospitals
with which we provide physician staffing. In addition, "financial relationship"
is broadly defined to include any direct or indirect ownership or investment
interest or compensation arrangement pursuant to which a physician receives
remuneration from the provider at issue. Stark II is broadly written and at this
point, only proposed regulations have been issued to clarify its meaning and
application. Regulations for a predecessor law, Stark I, which is applicable
only to clinical laboratory services, were published in August 1995 and remain
in effect. However, neither the final Stark I regulations nor the proposed Stark
II regulations provide definitive guidance as to the application of certain key
exceptions to Stark I and Stark II as they relate to our arrangements with
physicians and hospitals. We believe that reasonable arguments can be advanced
that our staffing arrangements with physicians and hospitals meet the
requirements of an exception to Stark II. In addition, we believe that such
arrangements do not subvert the intent of Stark II as indicated by comments made
by Congress in connection with the enactment of Stark II's predecessor
legislation. Likewise, we believe that such arrangements materially comply with
similar state physician self-referral statutes. However, there can be no
assurance that our existing organizational structure and our contractual
arrangements with affiliated physicians, professional corporations and hospitals
will not be successfully challenged by the government as inconsistent with Stark
II or its state law equivalents.
Other Fraud and Abuse Laws. The federal False Claims Act imposes civil and
criminal liability on individuals and entities that submit false or fraudulent
claims for payment to the government. Violations of the False Claims Act may
result in civil monetary penalties and exclusion from the Medicare and Medicaid
programs. In addition, the Health Insurance Portability and Accountability Act
of 1996 created two new federal crimes: "Health Care Fraud" and "False
Statements Relating to Health Care Matters." The Health Care Fraud statute
prohibits knowingly and willfully executing a scheme or artifice to defraud any
healthcare benefit program (including private payors). A violation of this
statute is a felony and may result in fines, imprisonment and/or exclusion from
government sponsored programs. The False Statements statute prohibits knowingly
and willfully falsifying, concealing or covering up a material fact by any
trick, scheme or device or making any materially false, fictitious or fraudulent
statement in connection with the delivery of or payment for healthcare benefits,
items or services. A violation of this statute is a felony and may result in
fines and/or imprisonment. Civil monetary penalties under the False Claims Act
and certain other similar statutes may include treble damages and penalties of
up to $10,000 per false or fraudulent claim. Recently, the federal government
has made a policy decision to significantly increase the financial resources
allocated to enforcing the general fraud and abuse laws. In addition, private
insurers and various state enforcement agencies have increased their level of
scrutiny of healthcare claims in an effort to identify and prosecute fraudulent
and abusive practices in the healthcare area. The False Claims Act also allows a
private individual with direct knowledge of fraud to bring a "whistleblower" or
qui tam suit on behalf of the government against a healthcare provider for
violations of the False Claims Act. In such event, the "whistleblower" is
responsible for initiating a lawsuit that sets in motion a chain of events that
may eventually lead to the government recovering money. After the
"whistleblower" has initiated the lawsuit, the government must decide whether to
intervene in the lawsuit and to become the primary prosecutor. In the event the
government declines to join the lawsuit, the "whistleblower" plaintiff may
choose to pursue the case alone, in which case the "whistleblower's" counsel
will have primary control over the prosecution (although the government must be
kept apprised of the progress of the lawsuit and will still receive at least 70%
of any recovered amounts). In return for bringing a "whistleblower" suit on the
government's behalf, the "whistleblower" plaintiff receives a statutory amount
(up to 30% of the recovered amount) from the government's litigation proceeds if
the litigation is successful. Recently, the number of "whistleblower" suits
brought against healthcare providers has increased dramatically. In addition, at
least five states -- California, Illinois, Florida, Tennessee, and Texas -- have
enacted laws modeled after the False Claims Act that allow these states to
recover money which was fraudulently obtained by a healthcare provider from the
state (e.g., Medicaid funds provided by the state). We, along with a number of
other industry participants, are named as defendants in a "whistleblower" suit,
which alleges that we had inappropriate financial relationships with physicians
and engaged in inappropriate
19
<PAGE> 29
billing practices in violation of the False Claims Act and provisions of the
Medicare Statute. It is our position that assertions made in the complaint are
unwarranted. However, no assurance can be provided as to the outcome of this
litigation. See "Business -- Legal Proceedings."
In addition to the federal statutes discussed above, we are also subject to
state statutes and regulations that prohibit, among other things, payments for
referral of patients and referrals by physicians to healthcare providers with
whom the physicians have a financial relationship. Violations of these state
laws may result in prohibition of payment for services rendered, loss of
licenses and fines and criminal penalties. State statutes and regulations
require physicians or other healthcare professionals to disclose to patients any
financial relationship the physicians or healthcare professionals have with a
healthcare provider that is recommended to the patients. These laws and
regulations vary significantly from state to state, are often vague, and, in
many cases, have not been interpreted by courts or regulatory agencies.
Exclusions and penalties, if applied to us, could result in significant loss of
reimbursement to us, thereby significantly affecting our financial condition.
YEAR 2000 ISSUE -- WE COULD BE ADVERSELY AFFECTED IF THE YEAR 2000 PROBLEMS
ARE SIGNIFICANT. The "Year 2000 Issue" refers generally to the problems that
some software may have in determining the correct century for the year. For
example, software with date-sensitive functions that is not Year 2000 compliant
may not be able to distinguish whether "00" means 1900 or 2000, which may result
in failures or the creation of erroneous results. Currently, many computer
systems and software products are coded to accept only two-digit entries in the
date code field. These date code fields will need to accept four digit entries
to distinguish between dates before and after January 1, 2000. As a result, many
companies' software and computer systems may need to be upgraded or replaced in
order to comply with such "Year 2000" requirements. If we, or third parties with
which we do business, fail to make each of our software systems Year 2000
compliant in a timely manner, our company could be negatively and significantly
impacted.
FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE
THE FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE
INDENTURE. Upon the occurrence of certain specific kinds of change of control
events described in the section entitled "Description of Exchange Notes --
Change of Control," we will be required to offer to repurchase all outstanding
exchange notes. However, it is possible that we will not have sufficient funds
at the time of the change of control to make the required repurchase of exchange
notes or that restrictions in our senior bank facilities will not allow such
repurchases.
FRAUDULENT CONVEYANCE MATTERS -- FEDERAL AND STATE STATUTES ALLOW COURTS,
UNDER SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES, SUBORDINATE CLAIMS IN RESPECT
OF THE EXCHANGE NOTES AND REQUIRE EXCHANGE NOTE HOLDERS TO RETURN PAYMENTS
RECEIVED FROM GUARANTORS. Under the federal bankruptcy law and comparable
provisions of state fraudulent transfer laws, the guarantees of our subsidiary
guarantors could be voided, or claims in respect of the exchange notes or the
subsidiary guarantees could be subordinated to all of our other debts or all
other debts of a subsidiary guarantor or a subsidiary guarantee could be voided
and required to be returned if, generally speaking,
(1) we or the subsidiary guarantor, at the time it incurred the
indebtedness evidenced by its guarantee, received less than fair
consideration for the issuance of such guarantee, and we or the
guarantor was insolvent or rendered insolvent by reason of such
incurrence, or we or the guarantor were engaged in a business or
transaction for which our or the guarantor's remaining assets
constituted unreasonably small capital, or
(2) we or the subsidiary guarantor intended to incur or believed that we or
it would incur, debts beyond our or its ability to pay such debts as
they mature.
20
<PAGE> 30
The measures of insolvency for purposes of these fraudulent transfer laws
will vary depending upon the law applied in any proceeding to determine whether
a fraudulent transfer has occurred. Generally, however, a subsidiary guarantor
would be considered insolvent if:
(1) the sum of its debts, including contingent liabilities, were greater
than the fair saleable value of all of its assets,
(2) if the present fair saleable value of its assets were less than the
amount that would be required to pay its probable liability on its
existing debts, including contingent liabilities, as they become
absolute and mature, or
(3) it could not pay its debts as they become due.
We cannot assure you as to what standard a court would apply in making such
determinations or that a court would agree with our conclusions as to the
legality of the subsidiary guarantees.
NO PRIOR MARKET FOR EXCHANGE NOTES -- YOU CANNOT BE SURE THAT AN ACTIVE
TRADING MARKET WILL DEVELOP FOR THESE EXCHANGE NOTES WHICH COULD LIMIT THE
LIQUIDITY OF YOUR EXCHANGE NOTES. Prior to this offering, there was no public
market for these exchange notes. We have been informed by the underwriter that
it intends to make a market in these exchange notes after this offering is
completed. However, the underwriter may cease its market-making at any time. In
addition, the liquidity of the trading market in these exchange notes, and the
market price quoted for these exchange notes, may be adversely affected by
changes in the overall market for high yield securities and by changes in our
financial performance or prospects or in the prospects for companies in our
industry generally.
This prospectus includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including, in particular, the statements about Team
Health's plans, strategies, and prospects under the headings "Prospectus
Summary," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and "Business." Although we believe that our plans,
intentions and expectations reflected in or suggested by such forward-looking
statements are reasonable, we cannot assure you that we will achieve the plans,
intentions or expectations. Important factors that could cause actual results to
differ materially from the forward-looking statements we make in this prospectus
are set forth below and elsewhere in this prospectus. All forward-looking
statements attributable to Team Health or persons acting on our behalf are
expressly qualified in their entirety by the cautionary statements contained in
this "Risk Factors" section. As used in this "Risk Factors" section, unless the
context otherwise requires, the terms "Team Health," "we," "our," "ours," and
"us" refer to Team Health, Inc. and all of its subsidiaries.
21
<PAGE> 31
THE RECAPITALIZATION OF TEAM HEALTH, INC.
AND THE TRANSACTIONS CONSUMMATED BY TEAM HEALTH, INC.
IN CONNECTION WITH THE FUNDING OF THE RECAPITALIZATION
THE RECAPITALIZATION
Under a recapitalization agreement that was executed on January 25, 1999 by
and among us, MedPartners, Inc., Pacific Physician Services, Inc., a wholly
owned subsidiary of MedPartners, and Team Health Holdings, L.L.C., the holding
company through which Madison Dearborn Partners, Inc., Cornerstone Equity
Investors, LLC and Beecken Petty & Company, LLC., and some members of our
management invested in Team Health, Team Health was recapitalized in a
transaction which closed on March 12, 1999 in which:
(1) prior to the closing of the recapitalization, MedPartners caused some
of its subsidiaries to become our subsidiaries;
(2) Physician Services contributed to us 100 shares of our existing common
stock in exchange for 100,000 shares of our class A preferred stock and
a number of shares of our common stock;
(3) Team Health Holdings purchased from Physician Services 94,299.1 shares
of class A preferred stock and 9,267,273 shares of common stock for
consideration of $108.2 million; and
(4) Team Health used the net proceeds of the offering of the old notes and
borrowings under the senior bank facilities to redeem a portion of the
equity interests of Team Health held by Physician Services.
As a result of the recapitalization, Team Health Holdings owns securities
representing approximately 92.0% of the voting power of our outstanding capital
stock and Physician Services owns securities representing approximately 8.0% of
the voting power of our outstanding capital stock. In addition, in connection
with the recapitalization, some members of our senior management made an equity
investment of approximately $8.5 million, which, together with performance
options held by those members of management, represents an indirect fully
diluted ownership interest in our common equity of approximately 18.5%. In
connection with the recapitalization, MedPartners received aggregate
consideration of $344.5 million, consisting of $335.2 million in cash, $6.8
million in equity retained by Physician Services and the assumption of $2.5
million of existing indebtedness of MedPartners. In addition, we assumed some
contingent earnout payments. These earnout payments may be paid over the next 5
years to the sellers of various acquired groups in the event that those acquired
groups achieve designated financial targets. We believe these earnout payments
will not exceed a total of $19.8 million. The transactions that occurred under
the recapitalization agreement were funded by:
(1) the net proceeds from the offering of the old notes;
(2) $150.0 million of borrowings by us under the senior bank facilities;
(3) a $99.7 million cash equity investment by affiliates of each of
Cornerstone Equity Investors, LLC, Madison Dearborn Partners, Inc. and
Beecken Petty & Company, LLC (the "Equity Sponsor Contribution");
(4) a contribution by some of our members of management of approximately
$8.5 million (the "Management Contribution"); and
(5) equity of Team Health retained by Physician Services having a fair
market value of $6.8 million (the "Retained Equity" and, together with
the Equity Sponsor Contribution and the Management Contribution, the
"Equity Contribution").
22
<PAGE> 32
SENIOR BANK FACILITIES
As part of the Transactions, we entered into a credit agreement (the
"senior bank facilities") with a syndicate of financial institutions for which
Fleet National Bank and NationsBanc Montgomery Securities LLC act as
co-arrangers, Donaldson, Lufkin & Jenrette Securities Corporation acts as
documentation agent, NationsBanc Montgomery Securities LLC acts as syndication
agent and Fleet National Bank acts as administrative agent. The senior bank
facilities are comprised of a five-year revolving credit facility of up to $50.0
million, including a swing line sub-facility of $5.0 million and a letter of
credit sub-facility of $5.0 million, none of which was drawn at closing, and a
term loan facility of up to $150.0 million, consisting of a $60.0 million 5-year
tranche A term loan facility and a $90.0 million 6-year tranche B term loan
facility. The senior bank facilities will provide financing for future working
capital, acquisitions, capital expenditures and other general corporate
purposes. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and "Description of
Senior Bank Facilities."
SOURCES AND USES
The sources and uses of proceeds in connection with the recapitalization
were as follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
-----------------------
(DOLLARS IN MILLIONS)
<S> <C>
SOURCES OF FUNDS:
Senior bank facilities(1):
Revolving credit facility(2).......................... $ --
Term loan facility.................................... 150.0
Series A 12% senior subordinated notes.................. 100.0
Equity Contribution(3).................................. 115.0
Assumption of existing debt............................. 2.5
------
Total sources................................. $367.5
======
USES OF FUNDS:
Recapitalization(4)..................................... $344.5
Transaction expenses(5)................................. 15.9
Excess cash............................................. 7.1
------
Total uses.................................... $367.5
======
</TABLE>
- ---------------
(1) The senior bank facilities are comprised of a five-year revolving credit
facility of up to $50.0 million, including a swing-line facility of $5.0
million and a letter of credit facility of $5.0 million and a term loan
facility, consisting of a $60.0 million 5-year tranche A term loan facility
and a $90.0 million 6-year tranche B term loan facility.
(2) Following the Transactions, the revolving credit facility had total
availability of $50.0 million, subject to satisfaction of certain customary
conditions. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" and
"Description of Senior Credit Facilities."
(3) Comprised of gross proceeds from the Equity Sponsor Contribution of $99.7
million, the Management Contribution of $8.5 million and the Retained Equity
having an imputed fair market value of $6.8 million.
(4) Includes an equity valuation of $342.0 million plus $2.5 million of assumed
indebtedness.
(5) Reflects fees and expenses related to the Transactions.
23
<PAGE> 33
USE OF PROCEEDS
The net proceeds from the sale of the old notes, after deducting expenses
of the offering, including discounts to Donaldson, Lufkin & Jenrette were
approximately $97.0 million. The net proceeds from the offering of the old
notes, together with borrowings under the senior bank facilities and the Equity
Contribution was used to consummate the recapitalization and to pay fees and
expenses in connection therewith.
CAPITALIZATION
The following table sets forth our historical capitalization as of March
31, 1999. This table should be read in conjunction with the "Selected Historical
Financial Data," our financial statements and related notes and our Unaudited
Pro Forma Financial Information and related notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1999
-----------------------
(DOLLARS IN MILLIONS)
<S> <C>
Cash and cash equivalents................................... $ 20.3
=======
Total debt:
Senior bank facilities(1):
Revolving credit facility(2).............................. $ --
Term loan facility........................................ 145.0
Series A 12% senior subordinated notes...................... 100.0
Other debt.................................................. 2.5
-------
Total debt........................................ 247.5
Shareholders' equity........................................ 37.1
-------
Total capitalization.............................. $ 284.6
=======
</TABLE>
- ---------------
(1) The senior bank facilities are comprised of a five-year revolving credit
facility of up to $50.0 million, including a swing-line facility of $5.0
million and a letter of credit facility of $5.0 million and a term loan
facility, consisting of a $60.0 million 5-year tranche A term loan facility
and a $90.0 million 6-year tranche B term loan facility.
(2) As of March 31, 1999, the revolving credit facility had total availability
of $50.0 million, subject to satisfaction of customary conditions to
borrowing.
24
<PAGE> 34
SELECTED HISTORICAL FINANCIAL DATA
Set forth below are selected historical financial data of Team Health for
the five fiscal years ended December 31, 1998 and the three months ended March
31, 1998 and 1999.
(1) The historical financial data for the three months ended March 31, 1999
and 1998 have been derived from, and should be read in conjunction
with, our unaudited financial statements and related notes thereto
included elsewhere in this prospectus. Results for the interim periods
are not necessarily indicative of the results to be expected for the
full year or any other future period.
(2) The historical financial information for each of the three fiscal years
ended December 31, 1998 have been derived from, and should be read in
conjunction with, our audited financial statements and related notes
thereto included elsewhere in this prospectus.
(3) The historical financial information for the fiscal year ended December
31, 1995 has been derived from our audited financial statements and
related notes thereto not included in this prospectus.
(4) The historical financial information for the fiscal year ended December
31, 1994 is derived from unaudited financial statements.
See "The Transactions," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the historical financial statements and
the related notes thereto included elsewhere in this prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
--------------- --------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenue............... $ 351,857 $ 411,695 $ 463,380 $ 511,236 $ 547,785
Professional expenses..... 278,585 316,526 353,593 398,738 430,362
--------------- --------------- --------------- --------------- ---------------
Gross profit.............. 73,272 95,169 109,787 112,498 117,423
General and administrative
expenses................ 48,479 52,241 62,441 61,642 58,362
Depreciation and
amortization............ 3,673 4,808 5,628 6,455 9,740
--------------- --------------- --------------- --------------- ---------------
Operating income.......... 21,120 38,120 41,718 44,401 49,321
Novation program expense
allocation.............. -- -- -- 11,000 --
Merger expenses........... -- 519 11,525 22,927 --
MedPartners' management
fees.................... -- 594 1,055 1,660 2,941
Interest expense, net..... -- 2,256 535 886 5,301
Goodwill impairment
charge.................. -- -- -- -- 2,992
Recapitalization
expenses................ -- -- -- -- --
Other expenses (income)... 1,194 392 (204) 768 871
--------------- --------------- --------------- --------------- ---------------
Income (loss) before
income taxes............ 19,926 34,358 28,807 7,160 37,216
Income tax expense
(benefit)............... 654 12,798 9,852 4,894 15,778
--------------- --------------- --------------- --------------- ---------------
Income (loss) before
cumulative effect of a
change in accounting
principle............... 19,272 21,560 18,955 2,266 21,438
Cumulative effect of a
change in accounting
principle............... -- -- -- -- 912
--------------- --------------- --------------- --------------- ---------------
Net income (loss)......... $ 19,272 $ 21,560 $ 18,955 $ 2,266 $ 20,526
=============== =============== =============== =============== ===============
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------
1998 1999
--------------- ---------------
<S> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net revenue............... $ 133,026 $ 137,877
Professional expenses..... 104,886 108,388
--------------- ---------------
Gross profit.............. 28,140 29,489
General and administrative
expenses................ 15,127 15,744
Depreciation and
amortization............ 2,038 2,351
--------------- ---------------
Operating income.......... 10,975 11,394
Novation program expense
allocation.............. -- --
Merger expenses........... -- --
MedPartners' management
fees.................... 735 25
Interest expense, net..... 505 1,572
Goodwill impairment
charge.................. -- --
Recapitalization
expenses................ -- 21,513
Other expenses (income)... 218 105
--------------- ---------------
Income (loss) before
income taxes............ 9,517 (11,821)
Income tax expense
(benefit)............... 3,983 (4,361)
--------------- ---------------
Income (loss) before
cumulative effect of a
change in accounting
principle............... 5,534 (7,460)
Cumulative effect of a
change in accounting
principle............... -- --
--------------- ---------------
Net income (loss)......... $ 5,534 $ (7,460)
=============== ===============
</TABLE>
25
<PAGE> 35
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
--------------- --------------- --------------- --------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA(1)................. $ 24,793 $ 42,928 $ 47,346 $ 50,856 $ 59,061
Net cash provided by
(used in):
Operating Activities.... 23,777 7,560 12,405 43,342 43,370
Investing Activities.... (14,440) (6,241) (11,423) (34,339) (22,864)
Financing Activities.... (5,545) 17,414 (3,432) (9,122) (22,080)
Capital expenditures...... 2,504 6,620 6,854 7,474 5,015
Ratio of earnings to fixed
charges(2).............. 10.0x 13.6x 10.9x 3.8x 17.2x
BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash
equivalents............. $ (12,238) $ 6,458 $ 5,550 $ 5,468 $ 3,894
Working capital........... 21,672 64,276 86,703 91,987 99,469
Total assets.............. 89,655 131,160 161,364 199,534 229,956
Total debt................ 15,096 12,074 2,303 7,820 2,544
Total shareholders'
equity.................. 26,747 73,288 101,378 97,893 99,953
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------
1998 1999
--------------- ---------------
<S> <C> <C>
OTHER DATA:
EBITDA(1)................. $ 13,013 $ 13,745
Net cash provided by
(used in):
Operating Activities.... 13,016 8,330
Investing Activities.... (10,719) (1,799)
Financing Activities.... 5,932 10,324
Capital expenditures...... 1,112 1,537
Ratio of earnings to fixed
charges(2).............. 10.0x (4.6x)
BALANCE SHEET DATA (AT END
OF PERIOD):
Cash and cash
equivalents............. $ 20,327
Working capital........... 102,877
Total assets.............. 370,671
Total debt................ 247,508
Total shareholders'
equity.................. 37,147
</TABLE>
- ---------------
(1) EBITDA represents operating income plus depreciation and amortization. We
have included information concerning EBITDA because we believe that EBITDA
is generally accepted as providing useful information regarding a company's
ability to service and/or incur debt. EBITDA is not intended to represent
cash flows for the period, nor has it been presented as an alternative to
operating income as an indicator of operating performance and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with GAAP in the United States and is not indicative
of operating income or cash flow from operations as determined under GAAP.
We understand that while EBITDA is frequently used by securities analysts in
the evaluation of companies, EBITDA, as used herein, is not necessarily
comparable to other similarly titled captions of other companies due to
potential inconsistencies in the method of calculation.
(2) The ratio of earnings to fixed charges is computed by dividing fixed charges
into earnings from continuing operations before income taxes plus fixed
charges. For purposes of computing the ratio of earnings to fixed charges,
earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expensed or capitalized and the portion of
rental expense we believe is representative of the interest component of
rental expenses.
26
<PAGE> 36
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the more
detailed information in the historical financial statements and unaudited pro
forma financial information, including the related notes thereto, appearing
elsewhere in this prospectus.
INTRODUCTION
We are the largest national provider of outsourced physician staffing and
administrative services to hospitals and clinics in the United States, with 375
hospital contracts in 25 states. Our regional operating model includes
comprehensive programs for emergency medicine, radiology, inpatient care,
pediatrics and other hospital departments. We provide a full range of physician
staffing and administrative services, including the:
- staffing, recruiting and credentialing of clinical and non-clinical
medical professionals;
- provision of administrative support services, such as payroll, insurance
coverage and continuing education services; and
- billing and collection of fees for services provided by the medical
professionals.
Since our inception in 1979, we have focused primarily on providing
outsourced services to EDs, which accounted for approximately 80% of our net
revenue in 1998. We generally target larger hospitals with high volume EDs (more
than 15,000 patient visits per year), where we believe we can generate
attractive margins, establish stable long-term relationships, obtain attractive
payor mixes and recruit and retain high quality physicians. When we refer to
EBITDA, we are referring to a measure of internal cash flow combining operating
income before interest and income taxes with non-cash charges for depreciation
and amortization. In 1998, we generated net revenue and pro forma EBITDA of
$547.8 million and $54.3 million, respectively.
CONTRACTS. Our growth has historically resulted from increases in the
number of patient visits and fees for services provided under existing contracts
and the addition and acquisition of new contracts. Our 375 hospital contracts
with hospitals typically have terms of three years with evergreen renewal
clauses. Our average contract tenure exceeds 6.8 years.
Approximately 76% of our net revenue is generated from fee-for-service
contracts under which we bill and collect the professional fees for the services
provided at a particular hospital department. Conversely, under our flat-rate
contracts, hospitals pay us a fee based on the hours of physician coverage
provided, but the hospital is responsible for its own billing and collection.
Because of our billing and collection expertise, our fee-for-service contracts
typically result in higher margins. In states where physician employees service
our contracts directly because there is no prohibition against such
arrangements, Medicare payments for such services are made directly to us. In
states where the physician providing services are independent contractors of us,
Medicare payments for such services are paid into a lockbox account in the name
of the independent contractor physician and subsequently directed into a company
account.
ACQUISITIONS. Since 1996, we have successfully acquired and integrated the
contracts of 17 hospital-based physician groups. Those contracts acquired from
ED physician groups were generally with hospitals in large markets with an
average patient volume exceeding 15,000 per year.
Prior to June 1997, acquisitions were financed primarily with MedPartners'
stock. Subsequent acquisitions were financed through a combination of cash and
earnouts. Eight of our acquisitions were accounted for using the purchase method
of accounting. As such, operating results of those eight acquired businesses are
included in our consolidated and combined financial statements as of their
respective dates of acquisitions. The remaining acquisitions, however, have been
accounted for using the pooling method of accounting whereby the historical
results of the acquired company are included in our consolidated and combined
financial statements. Following each acquisition, we have converted the acquired
group's financial accounting systems to our systems infrastructure.
27
<PAGE> 37
Strategic acquisitions continue to be a core component of our growth
strategy. The market for outsourced medical services is highly fragmented and
served primarily by small, local and regional physician groups which represent
over 75% of the market and generally lack the resources and depth of services
necessary to compete with national providers. Our acquisition strategy is to
target those companies with strong clinical reputations and quality contracts
with larger hospitals.
NET REVENUES. Revenues are recorded in the period the services are
rendered as determined by the respective contract with the healthcare providers.
As is standard in the healthcare industry, revenue is reported on an accrual
basis, net of estimated third party contractual adjustments. Further adjustments
are recorded to reflect amounts estimated to be uncollectible based upon
individual contract experience. As a result, gross and net revenue differ
considerably. Our revenue recognition policy is based largely on historical
receipts of gross receivables. We update and record reserves on an ongoing basis
based on the age of receivables and our experience with payors depending on the
location and service provided. Revenue in all of our financial statements is
reported on a net basis. See Notes 2 and 3 to the Consolidated and Combined
Audited Financial Statements.
Approximately 30% of our net revenue from fee-for-service contracts is
derived from payments made by government sponsored healthcare programs
(principally, Medicare and Medicaid). These programs are subject to substantial
regulation by the federal and state governments. Funds received under Medicare
and Medicaid are subject to audit, accordingly, retroactive adjustments of these
revenues may occur. We, however, have never had any substantial retroactive
adjustment due to a Medicare or Medicaid audit. Reimbursable fee payments for
Medicare and Medicaid patients for certain services are defined and limited by
Health Care Financing Administration and some state laws and regulations.
PROFESSIONAL EXPENSES. Professional expenses primarily consist of fees
paid to physicians under contract with us, outside collection fees relating to
independent billing contracts, operating expenses of our internal billing
centers and professional liability insurance premiums for physicians under
contract. Approximately 67% of our physicians are independently contracted
physicians who are not employed by us, and the remainder are our employees. We
typically pay ED physicians a flat hourly rate for each hour of coverage
provided. We pay radiologists and primary care physicians an annual salary. The
hourly rate varies depending on whether the physician is independently
contracted or an employee. Independently contracted physicians are required to
pay a self-employment tax, social security and expenses that we pay for employed
physicians. As such, employed physicians typically receive a lower flat hourly
rate.
Medical malpractice liability expenses are recorded under professional
expenses. Under GAAP, the cost of medical malpractice claims, which includes
costs associated with litigating or settling claims, is accrued when the
incidents that give rise to the claims occur. Estimated losses from asserted and
unasserted claims are accrued either individually or on a group basis, based on
the best estimates of the ultimate costs of the claims and the relationship of
past reported incidents to eventual claim payments. The accrual includes an
estimate of the losses that will result from incidents which occurred during the
claims made period, but were not reported during such period. Such claims are
referred to as incurred-but-not-reported claims. Our historical statements of
operations include a medical malpractice liability expense that is comprised of
three components including insurance premiums, incurred-but-not-reported claims
estimates, and self-insurance costs.
MedPartners agreed as a condition of the Transactions to purchase insurance
policies covering all liabilities and obligations for any claim for medical
malpractice arising at any time in connection with our operation, our
subsidiaries and any of the affiliated physicians or other healthcare providers
prior to the closing date of the Transactions for which we or any of our
subsidiaries become liable. This has resulted in our being insured for any
malpractice liabilities originating prior to the Transactions. As a result, our
cash expense for medical malpractice in 1999 is expected to be substantially
less than our accrued expense of approximately $21.3 million. See "Relationships
and Related Transactions." Additionally, medical malpractice expense under GAAP
includes estimates of non-cash expenses relating to incurred-but-not-reported
claims and self-insured costs. To the extent that any such estimates are
included, our 1999 cash medical malpractice expense will likely be less than our
1999 GAAP medical malpractice expense.
28
<PAGE> 38
We have entered into an agreement with a major national provider of medical
malpractice insurance, for a medical malpractice expense insurance policy that
will cover us for all claims made during the term of the agreement, which is a
minimum of two years. The policy does not cover incidents that occur during such
term, but for which no claim is made during the term. In March 2001, we will
have the option to purchase a policy from the insurer that will cover the
liability for all medical malpractice claims relating to incidents that occur
during the term of the policy but for which no claim is made during such period.
To the extent that we purchase such a tail policy, our cash and GAAP medical
malpractice expense in 1999 and 2000 will be essentially equivalent. To the
extent that we do not purchase such a tail policy, our cash medical malpractice
expense will continue to be substantially less than its GAAP medical malpractice
expense until such a policy is purchased or future medical malpractice claims
estimated in our incurred-but-not-reported claims are actually payable.
NOVATION PROGRAM. Prior to closing the InPhyNet Medical Management, Inc.
("InPhyNet") merger, MedPartners and InPhyNet developed a program (the "Novation
Program") to provide a form of medical malpractice insurance for InPhyNet's
physician services, government services and hospital-based businesses. The
program was designed to protect MedPartners from InPhyNet's malpractice exposure
for all periods prior to the MedPartners merger and to allow InPhyNet to begin
with new first-year claims made insurance coverage as of the effective date of
the merger. Reserves for liabilities within the Novation Program are recorded on
MedPartners balance sheet and not on our balance sheet. A related non-cash
charge of $11.0 million, however, was allocated to us in the year ended December
31, 1997 and is included in the line item for Novation Program expense
allocation on the consolidated and combined statements of operations. These
liabilities were not be assumed by us in the recapitalization. Moreover, under
the recapitalization agreement, MedPartners agreed to purchase, at its sole cost
and expense, for the benefit of Team Health Holdings, insurance policies
covering all liabilities and obligations for any claims for medical malpractice
arising at any time in connection with our operations and those of our
subsidiaries prior to the closing date of the Transactions for which we or any
of our subsidiaries or physicians become liable.
PARENT MANAGEMENT FEE. Prior to the recapitalization, MedPartners provided
us with certain corporate services, including legal services, risk management,
administration of certain employment benefits, tax advice and preparation of tax
returns, software support services and some financial and other services. These
fees were allocated to us based on MedPartners' estimate of the approximate
costs incurred. The amounts recorded by us for these allocations on the
consolidated and combined financial statements were $1.1 million, $1.7 million
and $2.9 million for the years ended December 31, 1996, 1997 and 1998,
respectively. The amounts allocated are not necessarily indicative of the actual
costs which may have been incurred. These expenses are expected to be
significantly higher on a stand-alone basis. Management and independent
consultants have carefully examined the costs we expect to incur as a stand-
alone entity and estimates those costs would have been approximately $5.9
million in 1998.
MERGER COSTS. We incurred non-recurring merger costs that were included in
income from operations in association with the pooling acquisitions that
occurred in 1996 and 1997. These costs included:
(1) investment banking and professional fees;
(2) severance costs and related benefits;
(3) impairment of assets;
(4) conforming accounting policies;
(5) operational restructuring; and
(6) other related charges.
OPERATIONS IMPROVEMENT PROGRAM. In 1998, we engaged an independent
consulting firm to coordinate a process improvement study, which focused largely
on our billing and collections services and on controllable costs. The process
improvement study indicated opportunities for improvement through, among other
things, a combination of insourcing all billing and collections functions and
improving productivity. In order to capitalize on these opportunities, we are
implementing a comprehensive program to maximize
29
<PAGE> 39
productivity and improve profitability. The three primary initiatives of the
operations improvement program include:
- integrating our twelve billing locations into a national network of four
billing centers operating on the uniform IDX billing system;
- consolidating call centers from four locations to one central location;
and
- reducing controllable costs.
In the past two years, we have experienced a 22% increase in collection
rates on delinquent accounts receivable and a 220% increase in the rate paid to
us by third party factoring agents on closed accounts receivable. We began the
operations improvement program in the second half of 1998, and we expect
substantially all of the initiatives to be fully implemented by the end of 1999.
INCOME TAXES. Prior to the recapitalization, we were included as a part of
some state and local tax returns and the consolidated federal tax return of
MedPartners. As a result, the provision for income taxes was calculated and
allocated to us from MedPartners. The amounts allocated are not necessarily
indicative of the actual costs which may have been incurred by us on a
stand-alone basis.
338(h)(10) ELECTION. In conjunction with the recapitalization, we made an
election under section 338(h)(10) of the Internal Revenue Code of 1986, as
amended. As a result, we will realize an increase in our deferred tax assets as
the recapitalization is expected to be treated as a taxable business combination
for federal and state income tax purposes, which results in a step-up in our tax
basis. This higher basis will result in an anticipated cash tax benefit of
approximately $6.7 million per year over each of the next 15 years, if fully
utilized.
RESULTS OF OPERATIONS
The following discussion provides an analysis of our results of operations
and should be read in conjunction with our consolidated and combined financial
statements and notes included elsewhere in this prospectus. The operating
results of the periods presented were not significantly affected by inflation.
The following table sets forth the components of net income and EBITDA as a
percentage of net revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------- --------------
1996 1997 1998 1998 1999
<S> <C> <C> <C> <C> <C>
Net revenue................................ 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
Professional expenses...................... 76.3 78.0 78.6 78.9 78.6
General and administrative expenses........ 13.5 12.1 10.7 11.4 11.4
Depreciation and amortization.............. 1.2 1.3 1.8 1.5 1.7
Operating income........................... 9.0 8.7 9.0 8.3 8.3
Novation program expense................... -- 2.2 -- -- --
Merger expenses............................ 2.5 4.5 -- -- --
MedPartners' management fee................ 0.2 0.3 0.5 0.6 --
Interest expense, net...................... 0.1 0.2 1.0 0.4 1.2
Goodwill impairment charge................. -- -- 0.5 -- --
Other expenses............................. -- 0.2 0.2 -- --
Income tax expense (benefit)............... 2.1 1.0 2.9 3.0 (3.2)
Net income (loss)..................... 4.1 0.4 3.7 4.2 (5.4)
EBITDA..................................... 10.2 9.9 10.8 9.8 10.0
</TABLE>
30
<PAGE> 40
FIRST QUARTER ENDED MARCH 31, 1999 COMPARED TO THE FIRST QUARTER ENDED MARCH 31,
1998
NET REVENUE. Revenues for 1999 increased $4.9 million or 3.7% to $137.9
million from $133.0 million in 1998. Same contract revenue increased $7.7
million, or 7.0% to $118.4 million in 1999 from $110.7 million in 1998. Same
contract revenue consists of revenue derived from contracts under management
from the beginning of the prior period through the end of the subsequent period.
Acquisitions contributed $9.5 million of the increase in net revenue. Revenue
generated from new contracts obtained through internal sales contributed $6.8
million. The increase in revenues was partially offset by a net decrease of
$16.0 million associated with contracts terminated during the period.
Additionally, revenue growth is offset by a decline of $3.2 million attributable
to the adoption of a new accounting rule that restricts our ability to
consolidate the revenue of an affiliate operation beginning in 1999.
PROFESSIONAL EXPENSES. Professional expenses for 1999 increased 3.3% to
$108.4 million from $104.9 million in 1998. This increase was due primarily to
normal expected cost increases in professional and medical support costs. As a
percentage of net revenue, professional expenses declined slightly from 78.6% in
1999 from 78.9% in 1998.
GROSS PROFIT. Gross profit increased to $29.5 million in 1999 from $28.1
million in 1998. Gross profit as a percentage of revenues was 21.4% during 1999
and 21.2% during 1998 due to the factors described above.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for 1999 increased slightly to $15.7 million from $15.1 million in 1998. General
and administrative expenses as a percent of revenues remained flat at 11.4% in
the 1999 and the 1998 periods.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for 1999
increased 15.4% to $2.4 million from $2.0 million in 1998. The increase was due
primarily to additional depreciation associated with equipment purchases and
goodwill associated with acquisitions during 1998.
RECAPITALIZATION EXPENSES AND MANAGEMENT FEES. Recapitalization expenses
and management fees for 1999 were $21.5 million compared to $0.7 million in
1998. This increase was primarily due to expenses of $21.5 million incurred in
1999 to effect the recapitalization.
INTEREST EXPENSE. Interest expense in 1999 increased to $1.6 million from
$0.6 million in 1998. The increase in interest expense is due to the senior bank
facility and old notes issued during 1999.
INCOME TAX BENEFIT/EXPENSE. Income tax benefit in 1999 was $4.4 million as
compared to income tax expense in 1998 of $4.0 million. The benefit in 1999 was
due primarily to the expenses incurred in the recapitalization.
NET LOSS/INCOME. Net loss for 1999 was $7.5 million as compared to net
income of $5.5 million in 1998. This change was primarily due to the factors
described above.
EBITDA. EBITDA for 1999 increased 5.4% to $13.7 million from $13.0 million
in 1998. EBITDA margin increased to 10.0% in the 1999 period from 9.8% in the
1998 period. The increase in EBITDA and EBITDA margin were due to the factors
described above.
YEAR ENDED DECEMBER 31, 1998 COMPARED TO THE YEAR ENDED DECEMBER 31, 1997
NET REVENUE. Net revenue for 1998 increased 7.1% to $547.8 million from
$511.2 million for 1997. Same contract revenue increased $22.9 million, or 5.7%
to $424.8 million in 1998 from $401.9 million in 1997. Same contract revenue
consists of revenue derived from contracts under management from the beginning
of the prior period throughout the end of the subsequent period. Acquisitions
contributed $40.3 million of the increase in net revenue. Revenue generated from
new contracts obtained through incremental sales contributed $29.0 million. The
increase in revenues was partially offset by a net decrease of $55.6 million
associated with contracts terminated in 1998. We believe the net loss of
contracts during 1998 is primarily attributable to issues related to the
perceived financial condition of MedPartners,
31
<PAGE> 41
uncertainty regarding our potential sale, and the termination of a number of low
margin contracts associated with InPhyNet.
PROFESSIONAL EXPENSES. Professional expenses for 1998 increased 7.9% to
$430.4 million from $398.7 million in 1997. This increase was due primarily to
the net growth in contracts requiring additional medical professionals as well
as expected cost increases in professional and medical support costs. As a
percentage of net revenue, professional expenses increased to 78.6% in 1998 from
78.0% in 1997.
GROSS PROFIT. Gross profit for 1998 increased 4.4% to $117.4 million from
$112.5 million in 1997. Gross profit as a percentage of revenue decreased to
21.4% in 1998 from 22% in 1997, primarily due to the factors described above.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for 1998 decreased 5.3% to $58.4 million from $61.6 million in 1997. General and
administrative expenses as a percentage of revenues decreased to 10.7% in 1998
from 12.1% in 1997. The decrease in general and administrative expenses was due
primarily to the ability to grow revenue while eliminating duplicative corporate
overhead expenses.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for 1998
increased 50.9% to $9.7 million from $6.5 million in 1997. The increase was due
primarily to additional depreciation associated with equipment purchases and
increases in goodwill amortization associated with acquisitions.
MERGER EXPENSES, NOVATION PROGRAM EXPENSE ALLOCATION, AND PARENT'S
MANAGEMENT FEES. Merger expenses, Novation program expense allocation, and
parent's management fees for 1998 decreased to $2.9 million from $35.6 million
in 1997. This decrease was primarily due to a combination of the following:
- a decrease in merger expenses of $22.9 million from 1997 to 1998
associated with acquisitions;
- an $11.0 million non-recurring charge in 1997 from MedPartners for the
Novation program associated with InPhyNet's professional liability
insurance coverage; and
- an increase of $1.3 million in parent's management fees from 1997 to
1998.
NET INCOME. Net income for 1998 increased to $20.5 million from $2.3
million in 1997. This increase was primarily due to the factors described above
with an offset from an increase of $4.4 million in interest expense from 1997 to
1998. The increase in interest expense was the result of our parent company
internally assessing interest on the balance of the intercompany account during
1998 which was not a consistent practice by our parent in 1997. Also offsetting
the increase in net income was an increase in income tax expense of $10.9
million from 1997 to 1998.
EBITDA. EBITDA for 1998 increased 16.1% to $59.1 million from $50.9
million for 1997. EBITDA margin increased to 10.8% in 1998 from 9.9% in 1997.
The increase in EBITDA and EBITDA margin were due to the factors described
above.
YEAR ENDED DECEMBER 31, 1997 COMPARED TO THE YEAR ENDED DECEMBER 31, 1996
NET REVENUE. Net revenue for 1997 increased 10.3% to $511.2 million from
$463.4 million in 1996. Same contract revenue increased $20.4 million, or 4.9%
to $436.0 million in 1997 from $415.6 million in 1996. Same contract revenue
consists of revenue derived from contracts under management from the beginning
of the prior period through the end of the subsequent period. Acquisitions
contributed $19.6 million of the increase in net revenue. Revenue generated from
new contracts obtained through incremental sales contributed $21.2 million. The
increase in revenues was partially offset by a net decrease of $13.4 million
associated with contracts terminated in 1997.
PROFESSIONAL EXPENSES. Professional expenses for 1997 increased 12.8% to
$398.7 million from $353.6 million in 1996. This increase was due primarily to
the net growth in contracts requiring additional medical professionals as well
as normal expected cost increases in professional and medical support costs. As
a percentage of net revenue, professional expenses increased to 78.0% in 1997
from 76.3% in 1996.
32
<PAGE> 42
GROSS PROFIT. Gross profit for 1997 increased 2.5% to $112.5 million from
$109.8 million for 1996. Gross profit as a percentage of revenues decreased to
22.0% in 1997 from 23.7% in 1996. Gross profit increased primarily due to
additional staffing contracts. Gross profit as a percentage of revenues
decreased primarily due to the factors described above.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for 1997 decreased 1.3% to $61.6 million from $62.4 million in 1996. As a
percentage of revenue, general and administrative expenses decreased 12.1% in
1997 from 13.5% in 1996. The decrease in general and administrative expenses was
due primarily to the ability to grow revenue while eliminating duplicative
corporate overhead expenses.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for 1997
increased 14.7% to $6.5 million from $5.6 million in 1996. The increase was due
primarily to additional depreciation associated with equipment purchases and
increases in goodwill amortization associated with acquisitions.
MERGER EXPENSES, NOVATION PROGRAM EXPENSE ALLOCATION, AND PARENT'S
MANAGEMENT FEES. Merger expenses, novation program expense allocation and
parent's management fees for 1997 increased to $35.6 million from $12.6 million
in 1996. This increase was due primarily to a combination of an increase in
merger expenses of $11.4 million from 1996 to 1997 associated with acquisitions
and an $11.0 million non-recurring charge in 1997 from MedPartners for the
Novation program associated with InPhyNet's professional liability insurance
coverage.
NET INCOME. Net income for 1997 decreased to $2.3 million from $19.0
million in 1996. This decrease was due primarily to the factors described above
with an offset from a decrease of $5.0 million in income tax expense from 1996
to 1997.
EBITDA. EBITDA for 1997 increased 7.4% to $50.9 million from $47.3 million
for 1996, and EBITDA margin decreased to 9.9% in 1997 from 10.2% in 1996. The
decreases in EBITDA and EBITDA margin were due to the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
HISTORICAL
Historically, funds generated from operations, together with funds
available from MedPartners, have been sufficient to meet our working capital
requirements and debt obligations and to finance any necessary capital
expenditures. Expansion of our business through acquisitions may require
additional funds, which to the extent not provided by internally generated
sources, cash and the senior bank facilities, will require us to seek additional
external financing.
As of March 31, 1999, we had $102.9 million in working capital, as compared
to $99.5 million as of December 31, 1998. Our principal sources of liquidity
consisted of:
(1) cash, cash equivalents, and marketable equity securities aggregating
$20.3 million as of March 31, 1999 and $3.9 million as of December 31,
1998,
(2) accounts receivable totaling $151.5 million as of March 31, 1999 and
$148.4 million as of December 31, 1998 and
(3) $50.0 million of borrowing capacity under the revolving credit facility
of the senior bank facility.
For the three months ended March 31, 1999, $8.3 million in cash was
provided by operations resulting from a net loss and negative change in
operating assets and liabilities offset by recapitalization expenses. The
negative change in operating assets and liabilities consists of an increase in
accounts receivable and income tax receivable offset by an increase in accounts
payable and other liabilities. Cash of $1.8 million was used in investing
activities for the three months ended March 31, 1999 related to purchases of
property and equipment. Cash of $10.3 million was provided by financing
activities for the three months ended March 31, 1999 as proceeds from borrowings
under the senior bank facilities and old notes exceeded
33
<PAGE> 43
payments made to MedPartners in connection with recapitalization and the
transaction costs thereof. Additionally, we repaid $5.0 million of the term
loans shortly after closing the recapitalization.
For the three months ended March 31, 1998, $13.0 million in cash was
provided by operations due to net income, non-cash charges such as depreciation
and amortization, and a positive change in operating assets and liabilities. The
positive change in operating assets was driven by growth in malpractice reserves
and accrued compensation offset by growth in accounts receivable resulting from
acquisitions during the quarter. Cash of $10.7 million was used in investing
activities for the three months ended March 31, 1998 related to payments for
business acquisitions and purchases of property and equipment. Cash of $5.9
million was provided by financing activities for the three months ended March
31, 1999 due to working capital transfers from MedPartners offset by the
repayment of long-term debt.
As of December 31, 1998 and 1997, we had $99.5 million and $92.0 million in
working capital, as compared to $86.7 million as of December 31, 1996. Our
principal sources of liquidity consisted of:
(1) cash and cash equivalents of $3.9 million as of December 31, 1998, $5.5
million as of December 31, 1997 and $5.6 million as of December 31,
1996,
(2) accounts receivable totaling $148.4 million as of December 31, 1998,
$130.8 million as of December 31, 1997 and $110.3 million as of
December 31, 1996 and
(3) the ability to access working capital through transfers from
MedPartners.
For the year ended December 31, 1998, $43.4 million in cash was provided by
operations due to positive net income combined with non-cash charges such as
depreciation, amortization, goodwill impairment charge, parent's management
fees, the cumulative effect of an accounting change, and a positive change in
operating assets and liabilities. During this period, we began to liquidate the
accounts receivable that were built up in prior periods due to independent
contractor physician provider application issues. Cash of $22.9 million was used
in investing activities for the year ended December 31, 1998 related to payments
for merger activities, business acquisitions, and purchases of property and
equipment. Cash of $22.1 million was used in financing activities for the year
ended December 31, 1998 as a result of working capital transfers to MedPartners
offset by a positive change in tax accounts.
For the year ended December 31, 1997, $43.3 million in cash was provided by
operations due to positive net income combined with non-cash charges such as
depreciation and amortization, merger charges, Novation program expense
allocation, and parent's management fees that more than offset the negative
change in operating assets and liabilities. The negative change in operating
assets and liabilities of $1.9 million was primarily due to an increase in
accounts receivable, resulting from the start up of several new billing
contracts during 1997, as well as a continuation of the delay in fee-for-service
reimbursement due to the Health Care Financing Administration's temporary
moratorium on issuing provider numbers for independent contractor physicians
which began in the middle of 1996. Cash of $34.3 million was used in investing
activities for the year ended December 31, 1997 related to payments for merger
charges, business acquisitions, and purchases of property and equipment. Cash of
$9.1 million was used in financing activities for the year ended December 31,
1997 due to working capital transfers to MedPartners and the repayment of
long-term debt.
For the year ended December 31, 1996, $12.4 million in cash was provided by
operations as net income and non-cash charges such as amortization and
depreciation, merger charges, and parents' management fees were greater than the
significant negative change in operating assets and liabilities. A primary
component of the negative change in operating assets and liabilities of $25.0
million related to an increase in accounts receivable resulting from the start
up of several new billing contracts during 1996, as well as a slowdown in
fee-for-service reimbursement due to the Health Care Financing Administration's
temporary moratorium on issuing provider numbers for independent contractor
physicians. Cash of $11.4 million was used in investing activities for the year
ended December 31, 1996 related to payments for merger activities and purchases
of property and equipment. Cash of $3.4 million was used in financing activities
for the year ended December 31, 1996 as the repayment of long-term debt and
negative change in tax accounts combined to exceed the working capital transfers
from MedPartners.
34
<PAGE> 44
FOLLOWING THE RECAPITALIZATION
We have and following the offering of the exchange notes will continue to
have significant amounts of scheduled debt payments, including interest and
principal repayments on the exchange notes and under the senior bank facilities.
In addition, we may be required to make earnout payments assumed by us in
connection with the recapitalization. We believe that the aggregate amount of
such earnout payments will not exceed $19.8 million. We intend to fund our
future working capital, capital expenditures and debt service requirements
through cash flow generated from operations and borrowings under the senior bank
facilities. For the year ended December 31, 1998, we generated cash from
operations of approximately $43.4 million and made net capital expenditures of
approximately $5.0 million.
We believe that cash flow from operations and availability under the senior
bank facilities will provide adequate funds for our foreseeable working capital
needs, planned capital expenditures, potential earnout payments and debt service
obligations. Any future acquisitions, joint ventures or similar transactions
will likely require additional capital and there can be no assurance that any
such capital will be available to us on acceptable terms or at all. Our ability
to fund our working capital needs, planned capital expenditures and debt service
obligations, to refinance indebtedness and to comply with all of the financial
covenants under our debt agreements, depends on our future operating performance
and cash flow, which in turn are subject to prevailing economic conditions and
to financial, business and other factors, some of which are beyond our control.
MANAGEMENT INFORMATION SYSTEMS AND THE IMPACT OF THE YEAR 2000
Our information technology department consists of an in-house staff of 56
professionals. This department provides support for all of the regional
operating units through a centralized, integrated network. For selected regional
operating units with more complex needs, members of our professional staff are
located on site to provide support.
We support our business operations through a wide area network. Based on
the commonality of functions across the business units, the wide area network
enhances the support of the business applications, facilitates communication
across the enterprise and allows flexibility in addressing changing business
needs and technology advancements. In addition, we are in the process of
upgrading our core applications to enhance the integration of the business
units.
We are in the process of formulating and implementing a plan designed to
ensure that all application software and hardware used in connection with our
management information systems, including internally developed systems and
software purchased from outside vendors, will manage and manipulate data
involving the transition of dates from 1999 to 2000 without functional or data
abnormality and without inaccurate results related to such dates. Due to the
fact that existing software often defines each year with two digits rather than
four digits, our computers that have date-sensitive software may recognize a
date using "00" as occurring in the year 1900 rather than the year 2000. This
phenomenon could result in abnormalities and inaccuracies and cause a disruption
of our operations, including a temporary inability to process customer orders,
send invoices or engage in other normal business activities.
We are making satisfactory progress with our year 2000 compliance plan,
which consists of the following stages:
(1) Production of an inventory of our hardware and software systems.
(2) Identification of where problems exist.
(3) Diagnosis of solutions to problems.
(4) Implementation of solutions.
(5) Confirmation from major suppliers and customers that they will be year
2000 compliant by the end of 1999.
35
<PAGE> 45
We have completed the production of an inventory of our hardware and
software systems and identified several areas in which either our software or
hardware is not year 2000 compliant. In most instances, we will replace
noncompliant systems with compliant ones. We have established project timetables
for our remediation efforts and hold weekly progress meetings to review progress
made on such remediation efforts. Our project timetables project completion of
our remediation efforts in October 1999. Our remediation efforts are on schedule
with the project timetables.
Pursuant to the recapitalization agreement, MedPartners agreed to provide
us with some transition services. Some of these transition services will involve
our use of MedPartners' hardware and software systems. Thus, we will be subject
to the risk that these MedPartners systems are not Year 2000 compliant. In
February 1999, we mailed a letter to MedPartners requesting such compliance.
In addition to identifying and remedying our own noncompliant systems, we
have requested that each of our customers and suppliers take steps to ensure
that their own systems are year 2000 compliant. In February 1999, letters
requesting such compliance were mailed to each of our customers and suppliers.
The total cost of achieving year 2000 compliance is forecast to be $1.9
million. As of March 31, 1999, we have spent approximately $827,000 in
connection with our year 2000 compliance plan.
Implementation of our remediation efforts is reviewed on a weekly basis. If
it becomes apparent that automated processes cannot be made year 2000 compliant,
we will resort to manual processes, utilizing temporary staffing in order to
perform the additional workload resulting from year 2000 related malfunctions.
Risks from Year 2000 Issues
We believe that we have an effective plan to address and remediate the year
2000 issues for systems of our company. Although we believe that we will
complete our action plan by September, 1999, as noted above, we have not yet
completed all the necessary phases of our year 2000 systems program.
In the event we do not successfully complete our internal year 2000
program, we may experience disruptions in our ability to provide services to our
clients and support for our independent contractors and employee physicians. If
these disruptions are significant, they could cause a material adverse effect to
the results of our operations. However, based upon our current assessment of our
year 2000 program, Team Health does not expect to experience any significant
disruptions to its ability to conduct normal business activities that would have
a material long term affect on the results of its business operations.
In addition to our own internal risk factors, we, like most companies, are
subject to a wide variety of external risk factors associated with the year 2000
issue. In the opinion of management, these risk factors are so numerous and
nebulous that management cannot provide a meaningful and quantifiable estimate
of how these external risk factors may impact our company. Although we have no
reason to believe that this will occur, in a "worst case scenario," a wide scale
downturn in the domestic and/or international economies could occur if year 2000
problems caused significant disruptions to banking services, and power and
communication utilities, or shipping and transit systems. Should this occur, it
would probably have a significant negative effect on our business operations.
Although we do not subscribe to this "worst case scenario," we could
experience some degree of adverse impact to our business operations if key
clients or service providers suffer year 2000 problems. Team Health has 375
contracts with clients, and in 1998 our largest contract accounted for less than
1.5% of our net revenue. With such a diverse contract base, the risk for an
adverse impact on our business operations resulting from the year 2000 problems
of a single customer is reduced, but not eliminated. In addition, there can be
no guarantee that several of our key customers will not have year 2000 problems
despite their own internal remediation efforts.
In summary, we may or may not incur a material adverse impact to our
business operations depending on the magnitude and duration of any disruptions
to our internal systems and/or the systems of
36
<PAGE> 46
our trading partners. We believe that the diversity of our contract base reduces
the overall exposure and expects that the consequences of any unsuccessful
remediation will not be significant. However, there can be no assurance that our
efforts or those of other entities will be successful, or that any potential
failure would not have a significant negative effect on our operating results or
financial condition.
Contingency Plans
We are in the process of developing contingency plans and actions for year
2000 issues related to both internal and external systems. As part of this
planning, we are evaluating the incremental cost of the contingency alternatives
as compared to the perceived level of risk for year 2000 problems. In some cases
we have determined that the perceived level of risk does not justify the cost of
the contingency alternative. Contingency plans involve consideration of a number
of possible actions, including, to the extent necessary or justified, the
selection of alternative service providers and adjustments to staffing
strategies. We plan to continue developing and modifying our contingency plans
throughout 1999 as we monitor and evaluate the progress of our internal and
external year 2000 compliance program.
SEASONALITY
Historically, our sales and operating results have reflected minimal
seasonal variations due to our geographic diversification.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information."
SFAS No. 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 is effective for financial
statements for fiscal years beginning after December 15, 1997. SFAS No. 131 will
have no effect on our results of operations, financial position or cash flows.
In February 1998, the Financial Accounting Standards Board issued SFAS No.
132, "Employers' Disclosures About Pensions and Other Post-retirement Benefits."
SFAS No. 132 revises employers' disclosures about pension and other
post-retirement benefits, requires additional information on changes in the
benefit obligations and fair values of plan assets that will facilitate
financial analysis, and eliminates certain disclosures that no longer are
useful. SFAS No. 132 is effective for financial statements for fiscal years
beginning after December 15, 1997. SFAS No. 132 has no impact on our results of
operations, financial position, or cash flows.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
requires all derivatives to be measured at fair value and recognized as either
assets or liabilities on the balance sheet. Changes in such fair value are
required to be recognized immediately in net income (loss) to the extent the
derivatives are not effective as hedges. SFAS No. 133 is effective for fiscal
years beginning after June 15, 2000 and is effective for interim periods in the
initial year of adoption. At the present time, we do not feel the adoption of
SFAS No. 133 will have a significant effect on our results of operations,
financial position, or cash flows.
In March 1998, the EITF concluded its discussion on Issue No. 97-2 related
to the Application of APB Opinion No. 16, Business Combinations, and FASB
Statement No. 94, Consolidation of All Majority-Owned Subsidiaries, to Physician
Practice Management Entities. The Task Force established the criteria for
determining when a Physician Practice Management Entity could consolidate or
combine with a physician's practice. We have considered all implications, and
does not feel this issue will have a significant effect on our results of
operations, financial position, or cash flows.
37
<PAGE> 47
BUSINESS
The market and industry data we present in this prospectus are based upon
third party data or have been derived from sources of industry data. While we
believe that such estimates are reasonable and reliable, in some cases, these
estimates cannot be verified by information available from independent sources.
Accordingly, we cannot assure you that the market share data are accurate in all
significant respects.
VBS(TM), WaitLoss(TM) and TeamWorks(TM) are our trademarks. Team Health(R),
InPhyNet Medical Management(R), InPhyNet(R), MetroAmerican Radiology(R), M and
Design(R), Park Med(R), SEP(R), Southeastern Emergency Physicians(R), Emergency
Coverage Corporation(R) and ECC(R) are our service marks. TeamWorks(TM) and
VBS(TM) are our proprietary software systems. Tradenames and trademarks of other
companies appearing in this prospectus are the property of their respective
holders.
INTRODUCTION
We are the largest national provider of outsourced physician staffing and
administrative services to hospitals and clinics in the United States, with 375
hospital contracts in 25 states. Our regional operating model includes
comprehensive programs for emergency medicine, radiology, inpatient care,
pediatrics and other hospital departments. We provide a full range of physician
staffing and administrative services, including the:
- staffing, recruiting and credentialing of clinical and non-clinical
medical professionals;
- provision of administrative support services, such as payroll, insurance
coverage and continuing education services; and
- billing and collection of fees for services provided by the medical
professionals.
Since our inception in 1979, we have focused primarily on providing
outsourced services to EDs, which accounted for approximately 80% of our net
revenue in 1998. We generally target larger hospitals with high volume EDs (more
than 15,000 patient visits per year), where we believe we can generate
attractive margins, establish stable long-term relationships, obtain attractive
payor mixes and recruit and retain high quality physicians. In 1998, we
generated net revenue and pro forma EBITDA of $547.8 million and $54.3 million,
respectively.
The healthcare environment is becoming increasingly complex due to changes
in regulations, reimbursement policies and the evolving nature of managed care.
As a result, hospitals are under significant pressure to improve the quality and
reduce the cost of care. In response, hospitals have increasingly outsourced the
staffing and management of multiple clinical areas to contract management
companies with specialized skills and standardized models to improve service,
increase the quality of care and reduce administrative costs. Specifically,
hospitals have become increasingly challenged to manage EDs effectively due to:
- increasing patient volume;
- complex billing and collection procedures; and
- the legal requirement that EDs examine and treat all patients.
We believe we are well positioned to continue to capitalize on the current
outsourcing trends as a result of our:
- national presence;
- sophisticated information systems and standardized procedures that enable
us to efficiently manage our staffing and administrative services as well
as the complexities of the billing and collections process;
38
<PAGE> 48
- demonstrated ability to improve productivity, patient satisfaction and
quality of care while reducing overall cost to the hospital; and
- successful record of recruiting and retaining high quality physicians.
In addition, our regional operating model allows us to deliver locally focused
services while benefitting from the operating efficiencies, infrastructure and
capital resources of a large national provider.
We believe we are well positioned to capitalize on the growth of the
overall healthcare industry as well as the growth of the ED sector. According to
the Health Care Financing Administration, national healthcare spending is
expected to increase from 13.6% of gross domestic product, or $1.0 trillion, in
1996 to 16.4% of gross domestic product, or $2.1 trillion, by the year 2007,
representing a 6.8% compound annual growth rate. Hospital services have
historically represented the single largest component of these costs, accounting
for approximately 34% of total healthcare spending in 1997. According to
industry sources, in 1997, approximately 5,000 U.S. hospitals operated EDs and
80% of these hospitals outsourced their EDs. In the same year, ED expenditures
were approximately $20 billion, with ED physician services accounting for
approximately $7 billion. According to the American Hospital Association, EDs
handle approximately 100 million patient visits annually and nearly 40% of all
hospital inpatient admissions originate in the ED. In addition, the average
number of patient visits per ED increased at a compound annual growth rate of
approximately 3.0% between 1988 and 1996.
COMPETITIVE STRENGTHS
We believe we are able to compete effectively due to the following
strengths:
LEADING MARKET POSITION. We are the largest national provider of
outsourced emergency physician staffing and administrative services in the
United States. In addition, we are the second largest provider of outsourced
radiology staffing and administrative services and have a growing presence in
other hospital departments. We believe our ability to spread the relatively
fixed costs of our corporate infrastructure over a broad national contract and
revenue base generates significant cost efficiencies that are generally not
available to smaller competitors. As a full-service provider with a
comprehensive understanding of changing healthcare regulations and policies and
the management information systems that provide support to manage these changes,
we believe we are well positioned to gain market share from less sophisticated
local and regional service providers. Furthermore, we have a geographically
diverse base of 375 hospital contracts, with an average contract tenure of
approximately 6.8 years. In 1998, no single contract accounted for more than
1.5% of our net revenue, and as a result, the loss of any contract would not
significantly impact our financial performance.
REGIONAL OPERATING MODEL SUPPORTED BY A NATIONAL INFRASTRUCTURE. We
service our client hospitals from 13 regional operating units, which allows us
to deliver locally focused services with the resources and sophistication of a
national provider. Our local presence creates closer relationships with
hospitals, resulting in responsive service and high physician retention rates.
Our strong relationships in local markets enable us to effectively market our
services to local hospital administrators, who generally make decisions
regarding contract awards and renewals. Our regional operating units are
supported by our national infrastructure, which includes integrated information
systems and standardized procedures that enable us to efficiently manage the
operations and billing and collections processes. We also provide each of our
regional operating units with centralized staffing support, purchasing economies
of scale, payroll administration, coordinated marketing efforts and risk
management. We believe our regional operating model supported by our national
infrastructure improves productivity and quality of care while reducing the cost
of care.
SIGNIFICANT INVESTMENT IN INFORMATION SYSTEMS AND PROCEDURES. Our
proprietary information systems link our billing, collection, recruiting,
scheduling, credentialing and payroll functions among our regional operating
units, allowing our best practices and procedures to be delivered and
implemented nationally while retaining the familiarity and flexibility of a
locally-based service provider. Over the last five years, we have spent over $10
million to develop and maintain integrated, advanced systems to facilitate the
exchange of information among our regional operating units and clients. These
systems include our IDX
39
<PAGE> 49
Billing System, our VBS(TM) patient information system, our WaitLoss(TM) process
improvement program, our TeamWorks(TM) physician database and software package
and the company-wide application of best practices. As a result of this
investment, we believe our average cost per patient billed and average cost per
physician recruited are among the lowest in the industry. The strength of our
information systems has enhanced our ability to collect patient payments and
reimbursements in an orderly and timely fashion and has increased our billing
and collections productivity. In the past two years, we have experienced a 22%
increase in collection rates on delinquent accounts and a 220% increase in the
rates paid to us by third party factoring agents on closed accounts receivable.
ABILITY TO RECRUIT AND RETAIN HIGH QUALITY PHYSICIANS. A key to our
success has been our ability to recruit and retain high quality physicians to
service our contracts. While our local presence gives us the knowledge to
properly match physicians and hospitals, our national presence and
infrastructure enable us to provide physicians with a variety of attractive
hospital locations, advanced information and reimbursement systems and
standardized procedures. Furthermore, we offer physicians substantial
flexibility in terms of geographic location, type of facility, scheduling of
work hours, benefits packages and opportunities for relocation and career
development. This flexibility, combined with fewer administrative burdens,
improves physician retention rates and stabilizes our contract base. We believe
we have among the highest physician retention rates in the industry.
EXPERIENCED MANAGEMENT TEAM WITH SIGNIFICANT EQUITY OWNERSHIP. Our senior
management team has extensive experience in the outsourced physician staffing
and administrative services industry. Our Chief Executive Officer, Lynn
Massingale, M.D., has been with us since our inception in 1979. Our top 23
executives have an average of over 20 years experience in the outsourced
physician staffing and medical services industry. Twenty members of our
management team contributed an aggregate of $8.5 million in connection with the
recapitalization, which, together with performance based options, represents an
indirect fully diluted ownership interest of approximately 18.5%. As a result of
its substantial equity interest, we believe our management team will have
significant incentive to continue to increase our sales and profitability.
GROWTH STRATEGY
The key elements of our growth strategy are as follows:
INCREASE REVENUE FROM EXISTING CUSTOMERS. We have a strong record of
increasing revenue from existing customers. In 1997 and 1998, net revenue from
continuing contracts grew by approximately 5% and 6%, respectively. We plan to
continue to increase revenue from existing customers by
- improving documentation of care delivered, capturing full reimbursement
for services provided;
- implementing fee schedule increases, where appropriate;
- capitalizing on increasing patient volumes;
- increasing the scope of services offered within contracted departments;
and
- cross-selling services to other hospital departments.
CAPITALIZE ON INDUSTRY TRENDS TO WIN NEW CONTRACTS. We seek to obtain new
contracts by
- replacing contract management companies at hospitals that currently
outsource their services and
- winning new contracts from hospitals that do not currently outsource.
We believe the number of high volume EDs will grow as patient visits increase
and hospital consolidation continues.
40
<PAGE> 50
Furthermore, we believe that our market share of larger volume EDs is
likely to increase as a result of our
- national presence;
- sophisticated information systems and standardized procedures that enable
us to efficiently manage our core staffing and administrative services as
well as the complexities of the billing and collections process;
- demonstrated ability to improve productivity, patient satisfaction and
quality of care while reducing overall cost to the hospital; and
- successful record of recruiting and retaining high quality physicians.
Since 1996, we have won 89 new outsourced contracts.
GROW THROUGH ACQUISITIONS. We intend to continue to pursue strategic
acquisitions of contracts currently held by local and regional physician groups.
Many of these physician groups are faced with increasing pressure to provide the
systems and services of a larger organization. The market for outsourced ED
physician staffing services is highly fragmented. Approximately 75% of the
market is served primarily by small, local and regional physician groups who
generally lack the resources and depth of services necessary to compete with
national providers. We have developed and implemented a disciplined acquisition
methodology utilized by our dedicated in-house mergers and acquisitions team.
Since 1996, we have completed 17 acquisitions. We expect to continue to fund
acquisitions with a combination of cash and earnout payments based on future
operating performance.
IMPLEMENT OPERATIONS IMPROVEMENT PROGRAM. We have recently initiated a
comprehensive program to maximize productivity and improve profitability in our
administrative areas. The three primary initiatives of the operations
improvement program include:
- integrating our twelve billing locations into a national network of four
billing centers operating on the uniform IDX billing system;
- consolidating call centers from four locations to one central location;
and
- reducing controllable costs.
We have already experienced increased profitability where our operations
improvement program has been implemented. In the past two years, we have
experienced a 22% increase in collection rates on delinquent accounts receivable
and a 220% increase in the rate paid to us by third party factoring agents on
closed accounts receivable. We began the operations improvement program in the
second half of 1998. We expect substantially all of the initiatives to be fully
implemented by the end of 1999.
INDUSTRY
According to Health Care Financing Administration, national healthcare
spending is expected to increase from 13.6% of gross domestic product, or $1.1
trillion, in 1997 to 15.9% of gross domestic product, or $1.8 trillion, by the
year 2005, representing a 6.4% compound annual growth rate. Hospital services
have historically represented the single largest component of these costs,
accounting for more than 40% of total healthcare spending. In the increasingly
complex healthcare regulatory, managed care and reimbursement environment,
hospitals are under significant pressure from the government and private payors
both to improve the quality and reduce the cost of care. In response, hospitals
have increasingly outsourced the staffing and management of multiple clinical
areas to contract management companies with specialized skills and a
standardized model to improve service, increase the overall quality of care and
reduce administrative costs.
In addition, the healthcare industry is experiencing an increasing trend
towards outpatient therapy rather than the traditional inpatient treatment.
Healthcare reform, such as the Health Care Financing Administration
reimbursement code reforms and the advent of managed care, places an increasing
41
<PAGE> 51
emphasis on reducing the time patients spend in hospitals. As a result, the
severity of illnesses and injuries treated in the ED is likely to increase when
these patients require emergency medical attention.
EDS. According to industry sources, in 1997 approximately 5,000 U.S.
hospitals operated EDs and 80% of these hospitals had outsourced their ED
departments. According to the American Hospital Association, EDs handle nearly
100 million patient visits annually, and nearly 40% of all hospital inpatient
admissions originate in the ED. According to the American Hospital Association,
the average number of patient visits per ED increased at a compound annual
growth rate of 3.0% between 1988 and 1996. The market for outsourced ED medical
services is highly fragmented. Approximately 80% of the market is served by a
large number of small, local and regional physician groups. These local
providers generally lack the depth of services and administrative and systems
infrastructure necessary to compete with national providers in the increasingly
complex healthcare business and regulatory environment.
RADIOLOGY. According to the 1998-1999 Medical and Healthcare Marketplace
Guide, total spending on radiology services in the U.S. in 1998 was estimated at
$69 billion or approximately 5% of annual healthcare expenditures, with 70% of
this spending in hospital settings. According to the American College of
Radiology, there were approximately 3,200 radiology groups in the U.S. in 1996,
representing approximately 27,000 radiologists who performed approximately 350
million radiological procedures in 1995. As with outsourced ED medical services,
the market for outsourced radiology services is highly fragmented and served by
a large number of small local and regional radiology groups. Competition for
outsourced radiology services contracts is intense and based on the ability of
the radiology group to provide a high level of medical and non-medical services.
Smaller radiology groups are often at a competitive disadvantage since they
often lack the capital, range of medical equipment and information systems
required to meet the increasingly complex needs of hospitals.
INPATIENT SERVICES. Hospitalists, physicians whose practice is solely
hospital based, care for admitted patients who lack a private physician or whose
private physician practices solely in the outpatient setting. According to
industry sources, less than 10% of inpatient care services are outsourced by
hospitals, and there are only 3,000 hospitalists practicing today. Hospitalists,
however, have demonstrated an ability to reduce inpatient costs while
maintaining high quality care and patient satisfaction, and industry sources
have projected a potential need for 34,000 hospitalists by the year.
CONTRACTUAL ARRANGEMENTS
HOSPITALS. We provide outsourced physician staffing and administrative
services to hospitals under fee-for-service contracts and flat-rate contracts.
Hospitals entering into fee-for-service contracts agree, in exchange for
granting our affiliated physicians medical staff privileges and exclusivity for
services, to authorize us to bill and collect the professional component of the
charges for medical services rendered by our contracted and employed physicians.
Under the fee-for-service arrangements, we receive direct or indirect
disbursements from patients and payors of the amounts collected. Depending on
the magnitude of services provided to the hospital and payor mix, we may also
receive supplemental revenue from the hospital. In a fee-for service
arrangement, we accept responsibility for billing and collection.
Under flat-rate contracts, the hospital performs the billing and collection
services of the professional component and assumes the risk of uncollectibility.
In return for providing the physician staffing and administrative services, the
hospital pays a contractually negotiated fee for physician coverage.
In 1998, approximately 76% of our net revenue was generated from
fee-for-service contracts. Our contracts with hospitals do not require any
material financial outlay, investment obligation or equipment purchase by us
other than the professional expenses associated with staffing the contracts.
Contracts with hospitals generally have terms of three years and are
generally automatically renewable under the same terms and conditions unless
either party gives notice of an intent not to renew. While most contracts are
terminable by either of the parties upon notice of as little as 30 days, the
average tenure of our contracts is approximately 6.8 years.
42
<PAGE> 52
PHYSICIANS. We contract with physicians as independent contractors or
employees to provide services to fulfill our contractual obligations to our
hospital clients. We typically pay the physicians a flat hourly rate for each
hour of coverage provided at rates comparable to the market in which they work,
with the exception of those radiologists and primary care physicians employed by
us, who are paid a base salary. The hourly rate varies if the physician is
independently contracted or an employee. Independently contracted physicians are
required to pay a self-employment tax, social security, and workers'
compensation insurance premiums. In contrast, we pay these taxes and expenses
for employed physicians. As such, employed physicians typically receive a lower
flat hourly rate.
Our contracts with physicians are generally perpetual and can be terminated
at any time under certain circumstances by either party without cause, typically
upon 180 days notice. In addition, we generally require the physician to sign a
two-year non-compete and non-solicitation agreement. Under these agreements, the
physician is restricted from divulging confidential information, soliciting or
hiring our physicians, inducing termination and competing for or soliciting our
clients. As of March 31, 1999, we had working relationships with over 2,160
physicians, of which over 1,450 were independently contracted, and over 230
other healthcare professionals.
SERVICE LINES
We provide a full range of outsourced physician staffing and administrative
services for EDs, radiology, inpatient services, pediatrics, and other
departments of the hospital. As hospitals experience growing pressure from
managed care companies and other payors to reduce costs while maintaining or
improving the quality of service, we believe hospitals will increasingly turn to
single-source providers of outsourced physician staffing and administrative
services with an established track record of success. As the outsourcing trend
grows, we believe our delivery platform of regional operating units supported by
a national infrastructure will result in higher customer satisfaction and a more
stable contract base than many of our competitors.
EMERGENCY DEPARTMENT. We are one of the largest providers of outsourced
physician staffing and administrative services for the ED in the United States.
Approximately 80% of our net revenue in 1998 came from ED contracts. As of March
31, 1999, we independently contracted with or employed approximately 1,940 ED
physicians. We contract with the hospital to provide qualified emergency
physicians and other healthcare providers for the ED. In addition to the core
services of contract management, recruiting, credentialing, staffing and
scheduling, we provide our client hospitals with enhanced services designed to
improve the efficiency and effectiveness of the ED. Specific programs like
WaitLoss(TM) apply proven process improvement methodologies to departmental
operations. Publications such as the Emergency Physician Legal Bulletin(TM) and
Case Studies of Customer Service in the Emergency Department(TM) are delivered
to all client hospitals and physicians on a quarterly basis. Information systems
such as the VBS(TM) documentation and billing information system are installed
in certain client EDs to improve physician documentation and to track
utilization of clinical resources. Physician documentation templates ensure
compliance with federal documentation guidelines and allow for more accurate
patient billing. By providing these enhanced services, we believe we increase
the value of services we provide to our clients and improve client relations.
Additionally, we believe these enhanced services also differentiate us in sales
situations and improve the chances of being selected in a contract bidding
process.
Since 1996, Team Health has merged with or acquired the contracts of 13 ED
physician groups. The acquired ED contracts were generally with hospitals in
large markets with an average patient volume exceeding 15,000 per year. Since
1996, we have also successfully negotiated 71 new outsourced ED physician
staffing and administrative services contracts. These contracts have been
obtained either through direct selling or through a competitive bidding process
initiated by hospitals.
Partially offsetting the growth in the number of ED contracts attributed to
acquisitions and direct sales are contract terminations. Since 1996, 85 ED
contracts in total were terminated. Our cancellations can be attributed
primarily to the elimination of low margin contracts obtained in connection with
acquisitions. Hospital cancellations can be attributed to consolidation among
hospitals, medical staff
43
<PAGE> 53
politics and pricing. In 1998, we had a net loss of approximately 25 ED
contracts. We believe the net loss of contracts during 1998 is primarily
attributable to issues related to the perceived financial condition of
MedPartners, uncertainty regarding the potential sale of Team Health, and the
termination of a number of low margin contracts associated with InPhyNet.
RADIOLOGY. We believe we are the second largest provider of outsourced
radiology physician staffing and administrative services in the United States.
We contract directly or through the regional operating units with selected
radiologists to provide radiology physician staffing and administrative
services. A typical radiology management team consists of clinical
professionals, board certified radiologists that are trained in all modalities,
and non-clinical professionals and support staff that are responsible for the
scheduling, purchasing, billing and collections functions. As of March 31, 1999,
we employed over 105 radiologists. We have traditionally focused on the
hospital-based radiology market, although we also maintain contracts with
outpatient diagnostic imaging centers. We believe the advantages of contracting
with us include our ability to provide 24-hour radiology coverage through a
combination of on-site services and/or teleradiology coverage (a means of
electronically transmitting patient images and consultative text from one
location to another).
INPATIENT SERVICES. We are one of the largest providers of outsourced
physician staffing and administrative services for inpatient services which
include hospitalist services and house coverage services. Our inpatient services
contracts with hospitals are generally on a cost plus or flat-rate basis. As of
March 31, 1999, we independently contracted with or employed over 63 inpatient
physicians. Since 1996, we experienced net revenue and contract growth in our
inpatient services business primarily due to new contract sales, acquisitions,
and to a lesser extent, rate increases on existing contracts.
PEDIATRICS. We are one of the largest providers of outsourced pediatrics
physician staffing and administrative services for general and pediatrics
hospitals. We provide these services on a cost plus or flat-rate basis. These
services include pediatrics emergency medicine and radiology, neonatal intensive
care, pediatric intensive care, urgent care centers, primary care centers,
observation units and inpatient services. As of March 31, 1999, we independently
contracted with or employed over 51 pediatrics physicians. Since 1996, we have
experienced net revenue and contract growth in our outsourced pediatrics
physician staffing and administrative services business due primarily to new
contract sales and acquisitions, and to a lesser extent, rate increases on
existing contracts.
PRIMARY CARE CLINICS AND OCCUPATIONAL MEDICINE. We provide primary care
staffing and administrative services in stand-alone primary clinics and in
clinics located within the work-site of industrial clients. While such clinics
are not a major focus of our business, they are complementary to our hospital
client's interests. The primary care clinics are typically a joint venture with
a local hospital and serve as an extension of the hospitals' primary care
services. We generally contract with the hospital to provide cost-effective,
high quality primary care physician staffing and administrative services. We
generally contract with an industrial employer to provide physician staffing and
administrative services for the occupational medicine clinic.
SERVICES
We provide a full range of outsourced physician staffing and administrative
services for EDs, radiology, inpatient services, pediatrics, and other areas of
the hospital.
Our outsourced physician staffing and administrative services include:
<TABLE>
<S> <C>
- - Contract Management
- - Staffing
- - Recruiting
- - Credentialing
- - Scheduling
- - Payroll Administration and
Benefits
- - Information Systems
- - Consulting Services
- - Billing and Collection
- - Risk Management
- - Continuing Education Services
</TABLE>
44
<PAGE> 54
CONTRACT MANAGEMENT. Our delivery of outsourced physician staffing and
administrative services for a clinical area of the hospital is led by an
experienced contract management team of clinical and other healthcare
professionals. The team includes a Regional Medical Director, an on-site Medical
Director and a Client Services Manager. The Medical Director is a physician with
the primary responsibility of managing the physician component of a clinical
area of the hospital. The Medical Director works with the team, in conjunction
with the nursing staff and private medical staff, to improve clinical quality
and operational effectiveness. Additionally, the Medical Director works closely
with the regional operating unit operations staff to meet the clinical area's
ongoing recruiting and staffing needs.
STAFFING. We provide a full range of staffing services to meet the unique
needs of each hospital and clinic. Our dedicated clinical teams include
qualified, career-oriented physicians and other healthcare professionals
responsible for the delivery of high quality, cost-effective care. These teams
also rely on managerial personnel, many of whom have clinical experience, who
oversee the administration and operations of the clinical area. As a result of
our staffing services, hospitals can focus their efforts on improving their core
business of providing healthcare services for their communities as opposed to
recruiting and managing physicians. We also provide temporary staffing services
of physicians and other healthcare professionals to hospitals and clinics in 25
states.
RECRUITING. Many hospitals lack the resources necessary to identify and
attract specialized, career-oriented physicians. We have a staff of over 25
professionals dedicated to the recruitment of qualified physicians. These
professionals are regionally located and are focused on matching qualified,
career-oriented physicians with hospitals. Common recruiting methods include the
use of our proprietary national physician database, attending trade shows,
placing website and professional journal advertisements and telemarketing.
We have committed significant resources to the development of a proprietary
national physician database to be shared among our regional operating units.
This database is currently in operation at all but one of the operating units,
with final rollout scheduled to be completed over the next six months. The
database uses the American Medical Association Masterfile of over 700,000
physicians as the raw data source on potential candidates. Recruiters contact
potential prospects through telemarketing, direct mail, conventions, journal
advertising and our internet site to confirm and update the information.
Prospects expressing interest in one of our practice opportunities provide more
extensive information on their training, experience, and references, all of
which is added to our database. Our goal is to ensure that the practitioner is a
good match with both the facility and the community before proceeding with an
interview.
CREDENTIALING. We conduct a comprehensive review of a candidate's
background, academic records and previous medical experience. Once a candidate's
application is complete, it is loaded into our proprietary credentials software
program. While the hospital has the ultimate responsibility for verifying
credentials prior to granting medical staff privileges, we conduct this
extensive review prior to presenting the candidate, ensuring that only qualified
candidates are presented to the client.
SCHEDULING. Our scheduling department assists the Medical Directors in
scheduling physicians and other healthcare professionals within the clinical
area on a monthly basis.
PAYROLL ADMINISTRATION AND BENEFITS. We provide payroll administration
services for the physicians and other healthcare professionals with whom we
contract to provide physician staffing and administrative services. Our clinical
employees benefit significantly by our ability to aggregate physicians and other
healthcare professionals to negotiate more favorable employee benefit packages
and professional liability coverage than many hospitals or physicians could
negotiate on a stand-alone basis. Additionally, hospitals benefit from the
elimination of the overhead costs associated with the administration of the
payroll and, where applicable, employee benefits.
INFORMATION SYSTEMS. We have invested in advanced information systems and
proprietary software packages designed to assist hospitals in lowering
administrative costs while improving the efficiency and productivity of a
clinical area. These systems include VBS, a system that facilitates the
documentation, utilization review, coding and billing of the professional
services of the emergency physicians to ensure
45
<PAGE> 55
appropriate reimbursement and TeamWorks(TM), a national physician database and
software package that facilitates the recruitment and retention of physicians
and supports our contract requisition, credentialing, automated application
generation, scheduling, and payroll operations.
CONSULTING SERVICES. We have a long history of providing outsourced
physician staffing and administrative services to hospitals and, as a result,
have developed extensive knowledge in the operations of certain areas of the
hospital. As such, we provide consulting services to hospitals to improve the
productivity, quality and cost of care delivered by the hospital.
Process Improvement. We have developed a number of utilization review
programs designed to track patient flow and identify operating inefficiencies.
To rectify such inefficiencies, we have developed a Fast Track system to
expedite patient care in the ED by separating patients who can be treated in a
short period of time from patients who have more serious or time-consuming
problems. Fast Track patients, once identified through appropriate triage
categorization, are examined and treated in a separate area of the ED,
controlled by its own staff and operational system. We have substantial
experience in all phases of development and management of Fast Track programs,
including planning, equipping, policy and procedure development, and staffing.
In addition, we employ WaitLoss(TM), a proprietary process improvement system
designed to assist the hospital in improving the efficiency and productivity of
a department.
Quality Improvement. We provide a quality improvement program designed
to assist the hospital in maintaining a consistent level of high quality care.
It periodically measures the performance of the hospital, based on a variety of
benchmarks, including patient volume, quality indicators and patient
satisfaction. This program is typically integrated into our process improvement
program to ensure seamless delivery of high quality, cost-effective care.
Managed Care Contracting. We have developed extensive knowledge of the
treatment protocols, and related documentation requirements, of a variety of
managed care payors. As a result, we often participate in the negotiation of
managed care contracts to make those managed care relationships effective for
the patients, the payors, the physicians and the hospitals. We provide managed
care consulting services in the areas of contracting, negotiating, reimbursement
analysis/projections, payor/hospital relations, communications and marketing. We
have existing managed care agreements with health maintenance organizations,
preferred provider organizations and integrated delivery systems for commercial,
Medicaid and Medicare products. While the majority of our agreements with payors
continue to be traditional fee-for-service contracts, we are experienced in
providing managed, prepaid healthcare to enrollees of managed care plans.
Nursing Services. We maintain highly regarded, experienced nurse
consultants on our client support staff. These nurse consultants provide
assistance to nurse managers and Medical Directors of the client hospital on
issues regarding risk management and total quality management. In addition, the
nurse consultants are available to make site visits to client hospitals on
request to assess overall operations, utilization of personnel and patient flow.
BILLING AND COLLECTION. Our billing and collection services are a critical
component of our business. We are in the process of consolidating all billing
and collections operations into four core billing facilities, each of which has
already been converted into our uniform billing system -- the IDX software
system. Two sites have been on the IDX system for several years, a third site
was converted in June 1998, and the last site was converted in February 1999.
The IDX system has proven to be a powerful billing and accounts receivable
software package, with strong reporting capabilities and a proven record of
improving collections while reducing billing expenses. We have interfaced a
number of other software systems with the IDX system to further improve
productivity and efficiency. Foremost among these is the electronic registration
interface that gathers registration information directly from the hospitals'
management information systems. Additionally, we have invested in electronic
submission of claims, as well as electronic remittance posting. These programs
have markedly diminished labor and postage expenses. At the present time,
approximately 3.7 of 5.0 million billed annual patient encounters are being
processed by the four billing facilities. The remaining 1.3 million billed
annual patient encounters, which are being processed by third-party billing
companies will be transitioned to one of the four billing facilities, with the
46
<PAGE> 56
transition expected to be completed by the end of the fourth quarter of 1999.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Operations Improvement Program."
We use a patient information system known as VBS(TM), which is presently
installed in 46 EDs that we staff and manage. Using purchased software which has
the capability to recognize the spoken voice, we have installed personal
computers in these EDs and have modified the software to enable the physician to
generate the clinical note. This note is interfaced with demographic information
from the hospital information system. Each day, the combined clinical
note/demographic information is transmitted to our Plantation, Florida operation
center, where the information is scanned and electronically loaded into the
billing system and into a data warehouse for production of sophisticated
utilization and practice management reports.
We also operate an internal collection agency, called IMBS, to handle our
outstanding receivables deemed uncollectible. This agency utilizes an advanced
collection agency software package linked to a predictive dialer. Presently,
approximately 75% of all collection placements generated from our billing
facilities are sent to the IMBS agency. Over the next six months, this is
expected to increase to 100%. Comparative analysis has shown that the internal
collection agency has markedly decreased expenses previously paid to outside
agencies and improved the collectibilty of existing placements. By combining the
VBS(TM) system, the regional Team Health billing operation centers (on a common
platform) and the IMBS collection agency, we have built an integrated system
combining the generation of clinical information with the electronic capture of
billing information which passes unpaid accounts into an internal collection
agency. This advanced comprehensive billing and collection system allows us to
have full control of accounts receivable at each step of the process.
RISK MANAGEMENT. Our risk management function is designed to prevent or
minimize medical professional liability claims and includes:
- incident reporting systems,
- tracking/trending the cause of accidents and claims,
- physician education and service programs (including peer review and
pre-deposition review),
- loss prevention information (audio tapes and risk alert bulletins) and
- early intervention of malpractice claims.
Through our risk management staff, the quality assurance staff and the
Medical Director, we conduct an aggressive claims management program for loss
prevention and early intervention. We have a proactive role in promoting early
reporting, evaluation and resolution of serious incidents that may evolve into
claims or suits.
CONTINUING EDUCATION SERVICES. Our internal continuing education services
are fully accredited by the Accreditation Council for Continuing Medical
Education. This allows us to grant our physicians and nurses continuing
education credits for internally developed educational programs at a lower cost
than if such credits were earned through external programs. We have designed a
series of customer relations seminars entitled Successful Customer Relations for
physicians, nurses and other personnel to learn specific techniques for becoming
effective communicators and delivering top-quality customer service. These
seminars help the clinical team sharpen its customer service skills, further
develop communication skills and provide techniques to help deal with people in
many critical situations.
SALES AND MARKETING
Contracts with hospitals for outsourced physician staffing and
administrative services are generally obtained either through direct selling
efforts or requests for proposals. We have a team of five sales professionals
located throughout the country. Each sales professional is responsible for
developing sales and acquisition opportunities for the operating unit in their
territory. In addition to direct selling, the sales
47
<PAGE> 57
professionals are responsible for working in concert with the regional operating
unit president and corporate development personnel to respond to a request for
proposal.
Although practices vary from hospital to hospital, hospitals generally
issue a request for proposal with demographic information of the hospital
department, a list of services to be performed, the length of the contract, the
minimum qualifications of bidders, the selection criteria and the format to be
followed in the bid. Supporting the sales professionals is a fully integrated
marketing campaign comprised of a telemarketing program, internet website,
journal advertising, and a direct mail and lead referral program.
OPERATIONS
We currently operate through 13 regional operating units which are listed
in the table below. The operating units are managed semi-autonomously by senior
physician leaders and are operated as profit centers with the responsibility for
pricing new contracts, recruiting and scheduling physicians and other healthcare
professionals, marketing locally and conducting day to day operations. The
management of such corporate functions as accounting, payroll, billing and
collection, capital spending, information systems and legal are centralized.
<TABLE>
<CAPTION>
NAME LOCATION PRINCIPAL SERVICES
- ---- ---------------------- ------------------
<S> <C> <C>
The Emergency Associates for Medicine............ Tampa, FL ED
Emergency Coverage Corporation................... Knoxville, TN ED
Emergency Physician Associates................... Woodbury, NJ ED
Emergency Professional Services.................. Middleburg Heights, OH ED
InPhyNet Medical Management...................... Ft. Lauderdale, FL ED
Northwest Emergency Physicians................... Seattle, WA ED
Radiology Associates of Hollywood................ Hollywood, FL Radiology
Reich, Seidelmann, and Janicki................... Solon, OH Radiology
Sheer, Ahearn & Associates....................... Tampa, FL Radiology
Southeastern Emergency Physicians................ Knoxville, TN ED
Team Health Southwest............................ Houston, TX ED
Team Radiology................................... Knoxville, TN Radiology
Team Health West................................. Pleasanton, CA ED
</TABLE>
COMPETITION
The healthcare services industry is highly competitive and, especially in
recent years, has been subject to continuing changes in how services are
provided and how providers are selected and paid. Competition for outsourced
physician staffing and administrative service contracts is based primarily on
- the ability to improve department productivity and patient satisfaction
while reducing overall costs;
- the breadth of staffing and management services offered;
- the ability to recruit and retain qualified physicians; and
- billing and reimbursement expertise.
Our national competitors in the provision of staffing and administrative
services to EDs include EmCare, Inc. and Spectrum Emergency Care, Inc., both of
which are subsidiaries of Laidlaw, Inc., Sheridan Healthcare, Inc., Coastal
Physician Group, Inc., National Emergency Services and Sterling Healthcare
Group, a subsidiary of FPA Medical Management. American Physician Partners, Inc.
is our principal national competitor in the provision of radiology staffing and
administrative services. There are also many local and regional companies which
provide physician staffing and administrative services. We also compete against
the traditional structure of hospital management for its physician staffing and
scheduling needs.
48
<PAGE> 58
We believe that evolution of the healthcare industry will tend to blur
traditional distinctions among industry segments. We expect that other companies
in other healthcare industry segments, such as managers of other hospital-based
specialties and large physician group practices, some of which have financial
and other resources greater than ours, may become competitors in the delivery of
physician staffing and administrative services.
PROPERTIES
We lease 38,141 square feet at 1900 Winston Road, Knoxville, Tennessee for
our corporate headquarters. We also lease or sublease facilities for the
operations of the clinics, billing centers, and certain regional operations. We
believe our present facilities are adequate to meet our current and projected
needs. The leases and subleases have various terms ranging from one to seven
years and monthly rents ranging from $510 to $60,000. We expect to be able to
renew each of our leases or to lease comparable facilities on terms commercially
acceptable to us.
INSURANCE
We require the physicians with whom we contract to obtain professional
liability insurance coverage. For both our independently contracted and employed
physicians, we currently arrange the provision of claims-made coverage of
$1,000,000 per incident and $3,000,000 annual aggregate per physician and
$1,000,000 per incident and $25,000,000 annual aggregate with respect to Team
Health and our operating units and other healthcare practitioners. These limits
are deemed appropriate by management based upon historical claims, the nature
and risks of the business and standard industry practice.
We are usually obligated to arrange for the provision of "tail" coverage
for claims against our physicians for incidents which are incurred but not
reported during periods for which the related risk was covered by claims-made
insurance. With respect to those physicians for whom we are obligated to provide
tail coverage, we accrue professional insurance expenses based on estimates of
the cost of procuring tail coverage. See "Risk Factors -- Risks Relating to
Exposure to Professional Liability; Liability Insurance."
We also maintain general liability, vicarious liability, automobile
liability, property and other customary coverages in amounts deemed appropriate
by management based upon historical claims and the nature and risks of the
business.
EMPLOYEES
As of March 31, 1998, we had over 2,400 employees, of which 1,340 worked in
billings and collections, operations and support and over 110 of which worked in
clinics providing clinical support functions. Our employees are not covered by
any labor agreements nor affiliated with any unions.
LEGAL PROCEEDINGS
We are party to various pending legal actions arising in the ordinary
operation of our business such as contractual disputes, employment disputes and
general business actions as well as malpractice actions. We believe that any
payment of damages resulting from these types of lawsuits would be covered by
insurance, exclusive of deductibles, would not be in excess of the reserves and
such liabilities, if incurred, should not have a significant negative effect on
the operating results and financial condition of our company. Moreover, in
connection with the recapitalization, subject to certain limitations,
MedPartners and Physician Services have jointly and severally agreed to
indemnify us against some losses relating to litigation arising out of incidents
occurring prior to the recapitalization to the extent those losses are not
covered by third party insurance. With respect to some litigation matters, we
are only indemnified if our losses from all indemnification claims exceed a
total of $3.7 million and do not exceed a total of $50 million. With respect to
other litigation matters, we are indemnified for all losses. Finally, also in
connection with the recapitalization, MedPartners agreed to purchase, at its
sole cost and expense, for the benefit of Team Health Holdings, insurance
policies covering all liabilities and obligations for any claim for medical
malpractice arising at any time in connection with the operation of Team Health
and its
49
<PAGE> 59
subsidiaries prior to the closing date of the Transactions for which Team Health
or any of its subsidiaries or physicians becomes liable.
In July 1998, a lawsuit was filed against EmCare, Inc. and InPhyNet Medical
Management, Inc. and several other unrelated defendants in the United States
District Court for the District of Kansas. The case is captioned United States
ex rel. George R. Schwartz v. EmCare, Inc. and InPhyNet Management, Inc. et al.
The plaintiff in that case, George R. Schwartz, alleges that, based on
Management Services contracts, InPhyNet and others had inappropriate financial
relationships with ED physicians and engaged in inappropriate billing practices
in violation of the False Claims Act and the Medicare Anti-kickback Law as well
as various other statutes. If the plaintiff's challenge to our contractual
arrangements is successful, we may be forced to modify the current structure of
our relationships with physicians and clients. This modification could have a
significant negative impact on our operations and financial condition. See "Risk
Factors -- State and Federal Fraud and Abuse, Anti-Kickback and Anti-referral
Laws." In connection with the recapitalization, subject to some limitations,
MedPartners and Physician Services have jointly and severally agreed to
indemnify us against any and all losses relating to this lawsuit.
REGULATORY MATTERS
General. As a participant in the healthcare industry, our operations and
relationships with healthcare providers such as hospitals are subject to
extensive and increasing regulations by numerous federal and state governmental
entities as well as local governmental entities. The management services
provided by us under contracts with hospitals and other clients include
(collectively, "Management Services"):
- the identification and recruitment of physicians and other healthcare
professionals for the performance of emergency, medicine, radiology and
other services at hospitals, out-patient imaging facilities and other
facilities;
- utilization and review of services and administrative overhead;
- scheduling of staff physicians and other healthcare professionals who
provide clinical coverage in designated areas of hospitals; and
- administrative services such as billing and collection of fees for
professional services.
All of the above services are subject to scrutiny and review by federal,
state and local governmental entities and are subject to the rules and
regulations promulgated by such governmental entities. Specifically, but without
limitation, the following laws and regulations related to these laws may affect
the operations and contractual relationships of Team Health:
State Laws Regarding Prohibition of Corporate Practice of Medicine and Fee
Splitting Arrangements. Team Health is a general business corporation which
derives a significant portion of its revenues from business transacted in
California. The laws of many states, including California, prohibit general
business corporations from practicing medicine, exercising control over
physicians who practice medicine or engaging in certain practices such as
fee-splitting with physicians. These laws and their interpretations vary from
state to state and are enforced by the courts and by regulatory authorities with
broad discretion. For the reasons discussed above, we believe our operations as
currently conducted are in substantial compliance with these laws. See "Risk
Factors -- State Laws Regarding Prohibition of Corporate Practice of Medicine
and Fee-Splitting Arrangements."
Debt Collection Regulation. Some of our operations are subject to
compliance with the Fair Debt Collection Practices Act and comparable statutes
in many states. Under the Fair Debt Collection Practices Act, a third-party
collection company is restricted in the methods it uses in contacting consumer
debtors and eliciting payments with respect to placed accounts. Requirements
under state collection agency statutes vary, with most requiring compliance
similar to that required under the Fair Debt Collection Practices Act. In
addition, most states and some municipalities require collection agencies to be
licensed with the appropriate regulatory body before operating in those
jurisdictions. We believe that we are in substantial compliance with the Fair
Debt Collection Practices Act and comparable state statutes and that we maintain
licenses in all jurisdictions in which our operations require us to be licensed.
Anti-Kickback Statutes. We are subject to the Medicare and Medicaid fraud
and abuse laws including the federal anti-kickback statute. In addition, an
increasing number of states in which we operate
50
<PAGE> 60
have laws that prohibit some direct or indirect payments (similar to the
anti-kickback statute) if those arrangements are designed to induce or encourage
a particular provider. These statutes vary from state to state, are often vague
and have seldom been interpreted by the courts or regulatory agencies. For the
reasons discussed above, we believe our operations as currently conducted are in
substantial compliance with these laws. See "Risk Factors -- State and Federal
Fraud and Abuse, Anti-Kickback and Anti-Referral Laws."
Physician Self-Referral Laws. Our contractual arrangements with physicians
and hospitals may be subject to provisions of the Omnibus Budget Reconciliation
Act of 1993 that, subject to limited exceptions, prohibit the referral of
Medicare patients by a physician to an entity for the provision of certain
"designated health services" if the physician or a member of the physician's
family has a direct or indirect financial relationship with the entity. In
addition, a number of the states in which we operate have similar prohibitions
on physician self-referrals. In general, these states prohibitions closely track
the prohibitions and exceptions of the provisions of the Omnibus Budget
Reconciliation Act of 1993 noted above. We believe that our staffing
arrangements with physicians and hospitals meet the requirements of an exception
to the provisions of the Omnibus Budget Reconciliation Act of 1993. In addition,
we believe that our arrangements do not subvert the intent of the provisions of
the Omnibus Budget Reconciliation Act of 1993, as indicated by comments made by
the Congress in connection with the enactment of predecessor legislation to the
provisions of the Omnibus Budget Reconciliation Act of 1993. Likewise, we
believe that our arrangements substantially comply with similar state physician
self-referral statutes. See "Risk Factors -- State and Federal Fraud and Abuse,
Anti-Kickback and Anti-Referral Laws."
Other Fraud and Abuse Laws. We are also subject to a number of other fraud
and abuse laws. Of particular importance is the federal False Claims Act which
imposes civil and criminal liability on individuals or entities that submit
false or fraudulent claims for payment to the government. In addition, we are
subject to the Health Insurance Portability and Accountability Act of 1996
provisions concerning to "Health Care Fraud" and "False Statements Relating to
Health Care Matters." The Health Care Fraud statute prohibits knowingly and
willfully executing a scheme or artifice to defraud any healthcare benefit
program, including private payors. The False Statements statute prohibits
knowingly and willfully falsifying, concealing or covering up a material fact by
any trick, scheme or device or making any false, fictitious or fraudulent
statement in connection with the delivery of or payment for healthcare benefits,
items or services. For the reasons discussed above, we believe our operations as
currently conducted are in substantial compliance with these laws. See "Risk
Factors -- State and Federal Fraud and Abuse, Anti-Kickback and Anti-Referral
Laws."
Facility Rules and Regulations. Because we perform services at hospitals,
outpatient facilities and other types of healthcare facilities, we and our
affiliated physicians may be subject to certain laws which are applicable to
such entities. For example, we are subject to the Emergency Medical Treatment
and Active Labor Act of 1986 which prohibits "patient dumping" by requiring
hospitals and ED physicians to provide care to any patient presenting to the
hospital's ED in an emergent condition regardless of the patient's ability to
pay. Many states in which we operate, including California, have similar state
law provisions concerning patient-dumping. In addition to the Emergency Medical
Treatment and Active Labor Act of 1986 and its state law equivalents,
significant aspects of our operations are subject to state and federal statutes
and regulations governing workplace health and safety, dispensing of controlled
substances and the disposal of medical waste. Our operations may also be
affected by changes in ethical guidelines and operating standards of
professional and trade associations and private accreditation commissions such
as the American Medical Association and the Joint Commission on Accreditation of
Health Care Organizations. For the reasons discussed above, we believe our
operations as currently conducted are in substantial compliance with these laws
and guidelines. See "Risk Factors -- Facility Rules and Regulations."
We currently operate under MedPartners' compliance program that is designed
to assure that every effort is made to comply with federal, state and other laws
which regulate the healthcare industry, including debt collection. Following the
recapitalization, we will implement our own compliance program which will be
structured so as to reduce the likelihood of any noncompliant activities. See
"Risk Factors -- Risks Related to Transition Services."
51
<PAGE> 61
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Our directors and executive officers are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Lynn Massingale, M.D................. 46 President, Chief Executive Officer and Director
Michael Hatcher...................... 48 Chief Operating Officer
Jeffrey Bettinger, M.D............... 49 Executive Vice President, Billing and Reimbursement
Stephen Sherlin...................... 53 Executive Vice President, Finance and Administration
David Jones.......................... 31 Chief Financial Officer
Nicholas W. Alexos................... 35 Director
Dana J. O'Brien...................... 43 Director
Kenneth W. O'Keefe................... 32 Director
Timothy P. Sullivan.................. 40 Director
Tyler J. Wolfram..................... 32 Director
</TABLE>
LYNN MASSINGALE, M.D. has been President, Chief Executive Officer and
Director of Team Health since its founding in 1994. Prior to that, Dr.
Massingale served as President and Chief Executive Officer of Southeastern
Emergency Physicians, a major provider of emergency physician services to
hospitals in the Southeast and the predecessor of Team Health which Dr.
Massingale co-founded in 1979. Dr. Massingale served as the director of
Emergency Services for the state of Tennessee from 1989 to 1993. Dr. Massingale
is a graduate of the University of Tennessee Medical Center for Health Services.
MICHAEL HATCHER joined Team Health in 1990 and currently serves as Chief
Operating Officer. Mr. Hatcher has served as Chief Financial Officer and
President of Nutritional Support Services, Ltd. in Knoxville; and as Chief
Financial Officer for Cherokee Textile Mills, Inc. in Sevierville, Tennessee and
Spindale Mills, Inc. in Spindale, N.C. Mr. Hatcher is a member of the American
Institute of Certified Public Accountants and has served as a Board Member for
the Center for Services Marketing at the Owen School of Business at Vanderbilt
University. Mr. Hatcher is responsible for the Company's operations, including
development activities. Mr. Hatcher is a graduate of the University of Tennessee
and Vanderbilt University.
JEFFREY BETTINGER, M.D. has been Executive Vice President, Billing and
Reimbursement for Team Health since MedPartners' acquisition of InPhyNet in June
1997. For InPhyNet, Dr. Bettinger directed the Healthcare Financial Services
Division since 1992. Dr. Bettinger is a board certified emergency physician and
is a fellow of the American College of Emergency Physicians. Dr. Bettinger
received an M.D. from Hahnemann Medical College.
STEPHEN SHERLIN joined Team Health in January 1997 as Senior Vice
President, Finance and Administration, and was promoted to Executive Vice
President, Finance and Administration in July 1998. Prior to joining Team
Health, Mr. Sherlin served as Vice President and Chief Financial Officer of the
Tennessee Division of Columbia/HCA. Mr. Sherlin has also served as Chief
Financial Officer for the Athens Community Hospital in Athens, Tennessee; Park
West Medical Center in Knoxville, Tennessee; and Doctors Hospital in Little
Rock, Arkansas. Mr. Sherlin has operations responsibility for accounting,
finance, human resources, information technology and risk management. Mr.
Sherlin is a graduate of Indiana University.
DAVID JONES has been our Chief Financial Officer since May 1996. From 1994
to 1996, Mr. Jones was our Controller. Prior to that, Mr. Jones worked at
Pershing, Yoakley and Associates, a regional healthcare audit and consulting
firm, as a Supervisor. Before joining Pershing, Yoakley and Associates, Mr.
Jones worked at KPMG Peat Marwick as an Audit Senior. Mr. Jones is a certified
public accountant and is a member of the American Institute of Certified Public
Accountants. Mr. Jones received a B.S. in Business Administration from The
University of Tennessee in Knoxville.
52
<PAGE> 62
NICHOLAS W. ALEXOS became a director in connection with the
recapitalization. Prior to co-founding Madison Dearborn Partners, Inc., Mr.
Alexos was with First Chicago Venture Capital for four years. Previously, he was
with The First National Bank of Chicago. Mr. Alexos concentrates on investments
in the healthcare and food manufacturing industries and currently serves on the
Boards of Directors of Milnot Holding Company and Spectrum Healthcare Services,
Inc. Mr. Alexos received a B.B.A. from Loyola University and an M.B.A. from the
University of Chicago Graduate School of Business.
DANA J. O'BRIEN became a director in connection with the recapitalization.
Mr. O'Brien co-founded Prudential Equity Investors, Inc. in 1984. He and the
other principals of Prudential Equity Investors, Inc. co-founded Cornerstone
Equity Investors, LLC in 1996. He currently serves on the Boards of Directors of
Guardian Care, Inc., International Language Engineering Corp., Interim
Healthcare, Inc., Regent Assisted Living, Inc., Specialty Hospital of America,
Inc., Spectrum Healthcare Services and VIPS Healthcare Information Solutions.
Mr. O'Brien received a B.A. from Hobart College and an M.B.A. from the Wharton
School of the University of Pennsylvania.
KENNETH W. O'KEEFE became a director in connection with the
recapitalization. Prior to co-founding Beecken Petty & Company, LLC, Mr. O'Keefe
was with ABN AMRO Incorporated and an affiliated entity, the Chicago Dearborn
Company, for four years. Previously, he was with the First National Bank of
Chicago. Mr. O'Keefe currently serves on the Boards of Directors of Spectrum
Healthcare Services, Inc., Same Day Surgery, LLC, Component Software
International, Inc. and UroTherapies, Inc. Mr. O'Keefe received a B.A. from
Northwestern University and an M.B.A. from the University of Chicago Graduate
School of Business.
TIMOTHY P. SULLIVAN became a director in connection with the
recapitalization. Prior to co-founding Madison Dearborn Partners, Inc. Mr.
Sullivan was with First Chicago Venture Capital for three years after having
served in the U.S. Navy. Mr. Sullivan concentrates on investments in the
healthcare industry and currently serves on the Boards of Directors of Milnot
Holding Corporation, Path Lab Holdings, Inc. and Spectrum Healthcare Services,
Inc. Mr. Sullivan received a B.S. from the United States Naval Academy, an M.S.
from the University of Southern California and an M.B.A. from Stanford
University Graduate School of Business.
TYLER J. WOLFRAM became a director in connection with the recapitalization.
Mr. Wolfram has served as a Managing Director of Cornerstone Equity Investors,
LLC since March 1998. From 1993 to March 1998, Mr. Wolfram held various
positions in the High Yield Group of Donaldson, Lufkin & Jenrette Securities
Corporation. Mr. Wolfram currently serves on the Board of Directors of True
Temper Sports, Inc. Mr. Wolfram received an A.B. from Brown University and an
M.B.A. from the Wharton School of the University of Pennsylvania.
53
<PAGE> 63
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to us for 1998 of those
persons who served as
(1) the chief executive officer during 1998 and
(2) our other four most highly compensated executive officers for 1998
(collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES ALL OTHER TOTAL
-------------------------- UNDERLYING COMPEN- COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(1) SATION SATION
- --------------------------- ---- -------- -------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Lynn Massingale, M.D............ 1998 $400,000 $150,000 60,000 $107,237(2) $657,237
President and Chief Executive
Officer
Jeffrey Bettinger, M.D.......... 1998 219,985 25,000 7,500 3,331(3) 248,316
Executive Vice President,
Billing and Reimbursement
Michael Hatcher................. 1998 239,154 80,000 32,400 20,865(4) 340,020
Chief Operating Officer
Stephen Sherlin................. 1998 143,608 30,000 3,000 5,595(5) 179,203
Executive Vice President,
Finance and Administration
David Jones..................... 1998 137,231 55,919 13,500 16,032(6) 209,182
Chief Financial Officer
</TABLE>
- ---------------
(1) Represents options to acquire shares of MedPartners' common stock
("MedPartners Shares") granted during 1998.
(2) Amounts shown reflect premiums paid for life insurance coverage ($52,428),
medical insurance ($1,885), dental insurance ($224) and long term disability
insurance ($1,400) and matching contributions under our 401(k) plan
($4,800), automobile allowance ($9,000) and deferred compensation ($37,500).
(3) Amounts shown reflect premiums paid for life insurance coverage ($384),
medical insurance ($2,023) and dental insurance ($224) and long term
disability insurance ($700).
(4) Amounts shown reflect premiums paid for life insurance coverage ($480),
medical insurance ($2,827), dental insurance ($309) and long-term disability
insurance ($4,149) and automobile allowance ($6,000), matching contributions
under our 401(k) plan ($4,800) and estate and financial planning benefits
($2,300).
(5) Amounts shown reflect premiums paid for life insurance coverage ($336),
medical insurance ($1,885), dental insurance ($224) and long term disability
insurance ($612) and automobile allowance ($2,538).
(6) Amounts shown reflect premiums paid for life insurance coverage ($269),
health insurance ($5,655), dental insurance ($618) and long term disability
insurance ($490) and automobile allowance ($4,200) and matching
contributions under our 401(k) plan ($4,800).
54
<PAGE> 64
The following table sets forth options granted to the Named Executive
Officers for 1998:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(3)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR PRICE DATE 5% 10%
- ---------------------------------- ---------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Lynn Massingale, M.D. ............ 60,000 --(2) $3.000 9/21/08 $113,201 $286,873
Jeffrey Bettinger, M.D. .......... 7,500 --(2) 3.000 9/21/08 14,150 35,859
Michael Hatcher................... 32,400 --(2) 3.000 9/21/08 61,129 154,912
Stephen Sherlin................... 3,000 --(2) 3.000 9/21/08 5,660 14,344
David Jones....................... 13,500 --(2) 3.000 9/21/08 25,470 64,547
</TABLE>
- ---------------
(1) Represents options to acquire MedPartners Shares.
(2) Percent of options granted represents less than 1% of options granted by
MedPartners to its and its subsidiaries' employees.
(3) Realizable Value is the product of the number of MedPartners Shares into
which options are exercisable and the difference between
(A) an assumed price per MedPartners Share determined by applying annual
rates of appreciation to the price per MedPartners Share as of the date
of option grant and
(B) the exercise price. The price per MedPartners Share as of the date of
grant of each option listed above was $3.00. At assumed annual rates of
appreciation of 5% and 10%, the price per MedPartners Share at
expiration will be $4.87 and $7.78, respectively, resulting in a
realizable value per MedPartners Share of $1.87 and $4.78, respectively.
No stock options were exercised by any of the Named Executive Officers
during 1998. The following table sets forth the number of securities underlying
unexercised options held by each of the Named Executive Officers and the value
of such options at the end of 1998:
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBERS OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL
OPTIONS AT FISCAL YEAR-END YEAR-END($)(1)EXERCISABLE/
NAME (#)EXERCISABLE/UNEXERCISABLE UNEXERCISABLE
- --------------------------------------------- ---------------------------- ----------------------------
<S> <C> <C>
Lynn Massingale, M.D. ....................... 32,400/47,600 45,900/89,100
Jeffrey Bettinger, M.D. ..................... 3,550/6,450 5,738/11,138
Michael Hatcher.............................. 17,496/25,704 24,786/48,114
Stephen Sherlin.............................. 1,420/2,580 2,295/4,455
David Jones.................................. 7,290/10,710 10,328/20,048
</TABLE>
- ---------------
(1) Value of unexercised options at fiscal year-end represents the difference
between the exercise price of any outstanding-in-the-money options and
$5.25, the fair market value of MedPartners Shares on December 31, 1998. At
the closing of the Recapitalization, all options will become fully vested
and immediately exercisable.
PENSION PLANS
Substantially all of the salaried employees, including our executive
officers, participate in a 401(k) savings plan established by us. Prior to the
Transactions, such employees participated in a 401(k) plan sponsored by Pacific
Physician Services. As part of the Transactions, Pacific Physician Services
permitted these employees to participate under the Pacific Physician Services'
401(k) plan for a transitional period
55
<PAGE> 65
of time, not to exceed six months, until we established our own 401(k) plan.
Employees are permitted to defer a portion of their income under our 401(k) plan
and we will match such contribution. The matching contribution is consistent
with that under the Pacific Physician Services' 401(k) plan which provided a
matching contribution equal to 50% of the first 6% of the employee's
contribution.
EMPLOYMENT AGREEMENTS
In connection with the Transactions, we entered into employment agreements
with some members of our senior management. The terms of such agreements are
customary for the positions held by such executive officers.
STOCK OPTION PLAN
The Board of Directors has adopted a stock option plan (the "Stock Plan"),
which provides for the grant to some of our key employees and/or directors of
stock options that are non-qualified options for federal income tax purposes.
The Stock Plan is administered by the Compensation Committee of the Board of
Directors. The Compensation Committee has broad powers under the Stock Plan,
including exclusive authority (except as otherwise provided in the Stock Plan)
to determine:
(1) who will receive awards;
(2) the type, size and terms of awards;
(3) the time when awards will be granted; and
(4) vesting criteria, if any, of the awards.
COMPENSATION OF DIRECTORS
We will reimburse directors for any out-of-pocket expenses incurred by them
in connection with services provided in such capacity. In addition, we may
compensate directors who are not our employees for services provided in such
capacity.
56
<PAGE> 66
OWNERSHIP OF SECURITIES
Team Health Holdings owns 92.7% of our outstanding common stock and voting
interests and 94.3% of our outstanding preferred stock. Physician Services owns
the remaining 7.3% of our outstanding common stock and voting interests and the
remaining 5.7% of our outstanding preferred stock. The following table sets
forth certain information regarding the actual beneficial ownership of Team
Health Holdings' ownership units by:
(1) each person (other than the directors and executive officers of Team
Health Holdings) known to Team Health Holdings to own more than 5% of
the outstanding membership units of Team Health Holdings and
(2) certain executive officers and members of the Board of Team Health
Holdings.
Except as otherwise indicated below, each of the following individuals can be
reached care of Team Health at 1900 Winston Road, Suite 300, Knoxville,
Tennessee 37919.
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
OUTSTANDING OUTSTANDING COMMON PERCENTAGE OF
BENEFICIAL OWNER PREFERRED UNITS UNITS VOTING UNITS
- ---------------- --------------- ------------------ -------------
<S> <C> <C> <C>
Cornerstone Equity Investors IV, L.P................ 42.0% 38.1% 38.1%
c/o Cornerstone Equity Investors, LLC
717 Fifth Avenue, Suite 1100
New York, New York 10022
Attention: Dana J. O'Brien
Madison Dearborn Capital Partners II, L.P........... 42.0 38.1 38.1
c/o Madison Dearborn Partners
Three First National Plaza, Suite 3800
Chicago, Illinois 60602
Attention: Timothy P. Sullivan
Healthcare Equity Partners, L.P..................... 2.3 2.1 2.1
c/o Beecken Petty & Company, L.L.C
901 Warranville Road, Suite 205
Lisle, Illinois 60532
Attention: Kenneth W. O'Keefe
Healthcare Equity Q.P. Partners, L.P................ 7.0 6.4 6.4
c/o Beecken Petty & Company, L.L.C
901 Warranville Road, Suite 205
Lisle, Illinois 60532
Attention: Kenneth W. O'Keefe
Certain members of management....................... 6.8 15.2 15.2
</TABLE>
57
<PAGE> 67
RELATIONSHIPS AND RELATED TRANSACTIONS
RECAPITALIZATION AGREEMENT
The Recapitalization Agreement contains customary provisions for such
agreements, including representations and warranties with respect to the
condition and operations of the business, covenants with respect to the conduct
of the business prior to the closing date of the recapitalization and various
closing conditions, including the execution of a registration rights agreement
and stockholders agreement, the obtaining of financing, and the continued
accuracy of the representations and warranties.
Pursuant to the recapitalization agreement, each of MedPartners and
Physician Services have indemnified, jointly and severally, subject to certain
limitations, Team Health Holdings and Team Health against losses resulting from:
(1) any misrepresentation or breach of any warranty or covenant of
MedPartners or Physician Services contained in the recapitalization
agreement, a claim for which is made in most cases within the 18 months
following the closing of the recapitalization;
(2) some claims or audits by governmental authorities; and
(3) some litigation matters, including some medical malpractice claims to
the extent not covered by third-party insurance.
With respect to some matters, we are only indemnified if our losses from
all indemnification claims exceed $3.7 million and do not exceed a total of $50
million. There is no basket or limit on the total payments with respect to some
other specified misrepresentations or breaches of warranties and some litigation
matters.
In addition, each of MedPartners and Physician Services have agreed for a
period of five years after March 12, 1999 not to compete with us in any business
that provides outsourced staffing and related billing services. Each of
MedPartners and Physician Services have also agreed for a period of five years
after March 12, 1999 not to solicit employment of our employees.
Under the recapitalization agreement, MedPartners has agreed to purchase,
at its sole cost and expense, for the benefit of Team Health Holdings, insurance
policies covering all liabilities and obligations for any claim for medical
malpractice arising at any time in connection with the operation of Team Health
and its subsidiaries prior to the closing date of the Transactions for which
Team Health or any of its subsidiaries or physicians becomes liable. Such
insurance policies are for amounts and contain terms and conditions mutually
acceptable to MedPartners and Team Health Holdings.
Pursuant to the recapitalization agreement, MedPartners agreed to provide
us certain transition services. These services include
(1) use of certain existing phone systems;
(2) access to MedPartners' wide area network via MCI frame-relay circuits;
and
(3) some accounting, finance and related support services.
These services will, in most cases, be provided for six months following the
recapitalization at a cost to us consistent with the cost of such services
charged to us immediately prior to the recapitalization.
SECURITYHOLDERS AGREEMENTS
In connection with the recapitalization, both Team Health and our
stockholders, Team Health Holdings and Physician Services, and Team Health
Holdings and all of its unitholders, entered into two separate securityholders
agreements. The securityholders agreements:
(1) restrict the transfer of the equity interests of Team Health and Team
Health Holdings, respectively; and
58
<PAGE> 68
(2) grant tag-along rights on certain transfers of equity interests of Team
Health and Team Health Holdings, respectively.
Some of the foregoing provisions of the securityholders agreements will
terminate upon the consummation of an initial public offering.
REGISTRATION RIGHTS AGREEMENT
In connection with the recapitalization, both Team Health and our
stockholders, Team Health Holdings and Physician Services, and Team Health
Holdings and all of its unitholders, entered into two separate registration
rights agreements. Under the registration rights agreements, some of the holders
of capital stock owned by Team Health Holdings (with respect to our shares) and
Cornerstone, Madison Dearborn and Beecken Petty (with respect to units of Team
Health Holdings), respectively, have the right, subject to various conditions,
to require us or Team Health Holdings, as the case may be, to register any or
all of their common equity interests under the Securities Act of 1933 at our or
Team Health Holdings' expense. In addition, all holders of registrable
securities are entitled to request the inclusion of any common equity interests
of Team Health or Team Health Holdings covered by the registration rights
agreements in any registration statement at our or Team Health Holdings'
expense, whenever we or the Team Health Holdings propose to register any of our
common equity interests under the Securities Act of 1933. In connection with all
such registrations, we or the Team Health Holdings have agreed to indemnify all
holders of registrable securities against some liabilities, including
liabilities under the Securities Act of 1933.
CORPORATE PASS-THROUGH CHARGES
MedPartners provided certain common services for us and other MedPartners
affiliates, including group insurance programs. Many of these services represent
services provided by third parties whereby MedPartners incurred the cost of the
service on behalf of us. MedPartners charged us for the estimated cost of these
services. The costs for these services and/or expenses have been allocated to us
by MedPartners based upon certain allocation methodologies determined by
MedPartners. Accordingly, there is no assurance that the amounts allocated for
such items provided by MedPartners would be indicative of the actual amounts
that we would have incurred on a stand-alone basis.
MANAGEMENT SERVICES AGREEMENT
In connection with the recapitalization, we entered into a management
services agreement with Cornerstone, Madison Dearborn and Beecken Petty under
which each of Cornerstone, Madison Dearborn and Beecken Petty will agree to
provide us with:
(1) general management services;
(2) assistance with the identification, negotiation and analysis of
acquisitions and dispositions;
(3) assistance with the negotiation and analysis of financial alternatives;
and
(4) other services agreed upon by us and each of Cornerstone, Madison
Dearborn and Beecken Petty.
In exchange for such services, Cornerstone, Madison Dearborn and Beecken
Petty will collectively receive an annual advisory fee of $500,000, plus
reasonable out-of-pocket expenses (payable quarterly). Additionally,
Cornerstone, Madison Dearborn and Beecken Petty also received a one time
transaction fee and reasonable out of pocket expenses in connection with the
closing of the recapitalization. The management services agreement has an
initial term of 3 years, subject to automatic one-year extensions unless we or
Cornerstone, Madison Dearborn or Beecken Petty provides written notice of
termination. The management services agreement will automatically terminate upon
the consummation of an initial public offering.
NET TRANSFERS TO/FROM PARENTS TO PARENTS' SUBSIDIARIES
MedPartners and Physician Services have paid some of our third party
liabilities. MedPartners and Physician Services have made advances to us to fund
operating and investing activities, including
59
<PAGE> 69
acquisitions, net of amounts advanced to MedPartners and Physician Services from
operating cash flows generated by us. Such net transfers are included as part of
MedPartners' and Physician Services' equity because we were not required to
settle these amounts as part of the recapitalization.
CORPORATE EXPENSE ALLOCATION
Prior to the recapitalization, MedPartners and Physician Services provided
some corporate services to us, including legal services, risk management, some
employment benefit administration, tax advice and preparation of tax returns,
software support services and some financial and other services. These fees were
allocated by MedPartners and Physician Services to us and approximate costs
incurred. The amounts recorded by us for these allocations in the consolidated
and combined financial statements were approximately $1.0 million, $1.7 million
and $2.9 million for the years ended December 31, 1996, 1997 and 1998,
respectively. The amounts allocated by MedPartners and Physician Services were
not necessarily allocated on a basis which approximated our estimated usage of
such services, and consequently, were not necessarily indicative of the actual
costs which may have been incurred had we operated as an entity unaffiliated
with MedPartners or Physician Services. However, our management believes that
the allocation is reasonable and in accordance with the Securities and Exchange
Commission's Staff Accounting Bulletin No. 55.
TEAM HEALTH HOLDINGS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
Cornerstone, Madison Dearborn, Beecken Petty and some of the members of our
management (collectively, the "Members") entered into an Amended and Restated
Limited Liability Company Agreement. The Limited Liability Company Agreement
governs the relative rights and duties of the Members.
Membership Interests. The ownership interests of the members in Team
Health Holdings consist of preferred units and common units. The common units
represent the common equity of Team Health Holdings and the preferred units
represent the preferred equity of Team Health Holdings. Holders of the preferred
units are entitled to return of capital contributions prior to any distributions
made to holders of the common units.
Distributions. Subject to any restrictions contained in any financing
agreements to which Team Health Holdings or any of its affiliates is a party,
the board of managers of Team Health Holdings may make distributions, whether in
cash, property or securities of Team Health Holdings at any time or from time to
time in the following order of priority:
First, to the holders of preferred units, the aggregate unpaid amount
accrued on such preferred units on a daily basis, at a rate of 10% per annum.
Second, to the holders of preferred units, an amount determined by the
aggregate Unreturned Capital (as defined and described in the Limited Liability
Company Agreement).
Third, to the holders of common units, an amount equal to the amount of
such distribution that has not been distributed pursuant to clauses First
through Second above.
Team Health Holdings may distribute to each holder of units within 75 days
after the close of each fiscal year such amounts as determined by the board of
managers of Team Health Holdings to be appropriate to enable each holder of
units to pay estimated income tax liabilities.
OTHER RELATED PARTY TRANSACTIONS.
We lease office space for our corporate headquarters from Winston Road
Properties, an entity which is owned 50% by Park Med Properties. Two of our
executive officers, Dr. Massingale and Mr. Hatcher, each own 20% of Park Med
Properties. We paid $432,000 to Winston Properties in connection with the lease
agreement. In addition, Park Med Properties owns a building which houses a
medical clinic that is operated by Park Med Ambulatory Care, PC, a joint venture
of the Company. In 1998, Park Med Ambulatory Care, PC paid $72,000 to Park Med
Properties in connection with the lease agreement.
60
<PAGE> 70
DESCRIPTION OF CAPITAL STOCK
The issued and outstanding capital stock of the Company consists of common
stock and class A preferred stock.
Holders of class A preferred stock have no voting rights, except as
required by Delaware law. The holders of common stock are entitled to one vote
per share on all matters to be voted upon by the stockholders of Team Health,
including the election of directors.
As, if and when declared by our board of directors, holders of class A
preferred stock are entitled to receive from us cumulative preferential
dividends from the date of issuance of such shares accruing at 10% per annum per
share of class A preferred stock. The class A preferred stock contains terms
requiring us to pay to the holders thereof the liquidation preference per share
of class A preferred stock plus all accrued and unpaid dividends thereon if the
class A preferred stock is redeemed, whether voluntarily or involuntarily.
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Team Health, holders of class A preferred stock are entitled to be paid, out of
the assets of Team Health available for distribution to shareholders of Team
Health, the liquidation preference per share of class A preferred stock, plus,
an amount in cash equal to all accrued, whether or not declared, and unpaid
dividends thereon to the date fixed for liquidation, dissolution or winding up
before any distribution is made on any stock junior to the preferred stock,
including, without limitation, our common stock.
61
<PAGE> 71
DESCRIPTION OF SENIOR BANK FACILITIES
As part of the Transactions, we entered into the senior bank facilities
with a syndicate of financial institutions for which Fleet National Bank and
NationsBanc Montgomery Securities LLC act as Co-Arrangers, Donaldson, Lufkin &
Jenrette Securities Corporation acts as Documentation Agent, NationsBanc
Montgomery Securities LLC acts as the Syndication Agent and Fleet National Bank
acts as Administrative Agent. The following is a summary of the material terms
and conditions of the senior bank facilities and is subject to the detailed
provisions of the senior bank facilities and the various related documents to be
entered into in connection therewith.
Loans; Interest Rates. The senior bank facilities consist of up to a $50.0
million five-year revolving credit facility including a swing line sub-facility
of $5.0 million and a letter of credit sub-facility of $5.0 million, and a term
loan facility consisting of a 5 year $60.0 million tranche A term loan facility
and a 6 year $90.0 million tranche B term loan facility. The borrowings under
the senior bank facilities, together with the aggregate gross proceeds from the
offering of the old notes, the Equity Sponsor Contribution, the Management
Contribution and the Retained Equity, were used to consummate the
recapitalization and pay fees and expenses related to the Transactions. In
addition, the senior bank facilities will provide financing for future working
capital, capital expenditures and other general corporate purposes.
The revolving credit facility is available on a revolving basis during the
period from March 12, 1999 until March 12, 2004. At our option, loans made under
the revolving bank facility and the tranche A term loan facility bear interest
at either
(1) the Alternate Base Rate, defined as the higher of
(A) the NationsBank prime rate and
(B) the Federal Funds rate plus 0.5% plus a margin of 2.25% or
(2) the reserve-adjusted LIBO rate plus a margin of 3.25%.
At our option, the tranche B term loan facility bears interest at either
(1) the reserve-adjusted LIBO rate plus a margin of 3.75% or
(2) the Alternate Base Rate plus a margin of 2.75%.
Repayment. Revolving loans may be borrowed, repaid and reborrowed from
time to time until March 12, 2004. The tranche A term loan facility is repayable
in equal quarterly installments at the end of March, June, September and
December of each year, commencing September 30, 1999, with the aggregate amount
payable in each year as set forth in the table below. The tranche B term loan
facility is repayable
(1) during the first five years of the tranche B term loan facility, in
annual installments payable at the end of December of each year,
commencing December 31, 1999 with the aggregate amount payable in each
year as set forth in the table below, and
62
<PAGE> 72
(2) in the sixth year of the tranche B term loan facility in equal
quarterly installments payable at the end of March, June, September and
December of such year with the aggregate amount payable in such year as
set forth in the table below.
<TABLE>
<CAPTION>
AGGREGATE AMOUNT
PAYABLE UNDER
----------------------
TRANCHE A TRANCHE B
TERM TERM
YEAR LOAN LOAN
- ---- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C>
1999................................................. $ 4.8 $ 0.9
2000................................................. $ 9.6 $ 0.9
2001................................................. $11.4 $ 0.9
2002................................................. $14.7 $ 0.9
2003................................................. $15.6 $ 0.9
2004................................................. $ 3.9 $85.5
----- -----
$60.0 $90.0
===== =====
</TABLE>
Security. The revolving credit facility and the term loan facility are
secured by a first-priority lien on
(1) 100% of our issued and outstanding capital stock held by Team Health
Holdings and Physician Services;
(2) 100% of the issued and outstanding capital stock of our direct and
indirect domestic subsidiaries;
(3) 65% of the issued and outstanding voting capital stock (or such greater
percentage which would not result in material adverse tax consequences)
and 100% of the issued and outstanding non-voting capital stock of each
direct foreign subsidiary of the Team Health and
(4) all other present and future assets and properties of the Team Health
and its domestic subsidiaries.
Guarantors. The senior bank facilities are guaranteed by Team Health
Holdings and all existing and later acquired direct and indirect subsidiaries of
Team Health Holdings, other than Team Health. All guarantees are guarantees of
payment and not of collection. The guaranty by Team Health Holdings is limited
to the value of our capital stock held by the Team Health Holdings.
Prepayments. In addition, the senior bank facilities provide for mandatory
repayments, subject to certain exceptions, of the term loan facility, and
reductions in the revolving credit facility, based on certain net asset sales
outside of the ordinary course of business, the net proceeds of certain debt and
equity issuances, and excess cash flow. Outstanding loans under the senior bank
facilities are voluntarily pre-payable without penalty; provided, however, that
LIBO rate breakage costs, if any, shall be borne by us.
Conditions and Covenants. The obligations of the lenders under the senior
bank facilities are subject to the satisfaction of certain conditions precedent,
customary for similar credit facilities or otherwise appropriate under the
circumstances. We and each of our subsidiaries are subject to certain negative
covenants contained in the senior bank facilities, including without limitation
covenants that restrict:
- the incurrence of additional indebtedness and other obligations and the
granting of additional liens;
- mergers, consolidations, amalgamations, liquidations, dissolutions and
dispositions of assets;
- investments, loans and advances;
- dividends, stock repurchases and redemptions;
- prepayment or repurchase of subordinated indebtedness and amendments to
some agreements governing indebtedness, including the indenture and the
exchange notes; and
- engaging in transactions with our affiliates.
63
<PAGE> 73
The senior bank facilities also contain customary affirmative covenants,
including compliance with environmental laws, year 2000 compliance, maintenance
of corporate existence and rights, maintenance of insurance, property and
interest rate protection, financial reporting, inspection of property, books and
records, and the pledge of additional collateral and guarantees from new
subsidiaries. In addition, the senior bank facilities require us to maintain
(each as defined in the senior bank facilities):
- a minimum fixed charge coverage ratio;
- a maximum leverage ratio;
- a minimum EBITDA and
- a minimum interest coverage ratio.
Also, in the event we have less than $150 million in fixed rate
indebtedness, we must enter into interest rate protection agreements. Certain of
these financial, negative and affirmative covenants are more restrictive than
those set forth in the indenture.
Events of Default. The senior bank facilities also include events of
default that are typical for senior credit facilities and appropriate in the
context of the Transactions, including, without limitation, nonpayment of
principal, interest, fees or reimbursement obligations with respect to letters
of credit, violation of covenants, inaccuracy of representations and warranties
in any material respect, actual or asserted invalidity of any loan documents,
cross default to certain other indebtedness and agreements, bankruptcy and
insolvency events, material judgments and liabilities, defaults or judgements
under ERISA and change of control. The occurrence of any of such events of
default could result in acceleration of our obligations under the senior bank
facilities and foreclosure on the collateral securing such obligations, which
could have significant negative results to holders of the exchange notes.
64
<PAGE> 74
DESCRIPTION OF EXCHANGE NOTES
You can find the definitions of some of the terms used in this description
under the subheading "Definitions." In this description, the words "we," "us,"
and "our" refer only to Team Health, Inc. and not to any of our subsidiaries.
We will issue the exchange notes under an indenture dated March 12, 1999
among Team Health, Inc., our subsidiary guarantors and United States Trust
Company of New York, as trustee. See "Notice to Investors." The terms of the
exchange notes include those stated in the indenture and those made part of the
indenture by reference to the Trust Indenture Act of 1939, as amended.
The following description is a summary of the material provisions of the
indenture. It does not restate that agreement in its entirety. We urge you to
read the indenture because it, and not this description, defines your rights as
holders of these exchange notes. Copies of the indenture are available as set
forth below under the subheading "Additional Information."
BRIEF DESCRIPTION OF THE EXCHANGE NOTES AND THE SUBSIDIARY GUARANTEES
THE EXCHANGE NOTES
These exchange notes:
- are our general unsecured obligations;
- are subordinated in right of payment to all of our senior debt;
- are ahead of or equal in right of payment to all of our existing and
future subordinated indebtedness; and
- are unconditionally guaranteed by our subsidiary guarantors.
THE SUBSIDIARY GUARANTEES
These exchange notes are guaranteed by each of our Domestic Restricted
Subsidiaries.
The subsidiary guarantees of these exchange notes:
- are general unsecured obligations of each subsidiary guarantor;
- are subordinated in right of payment to all senior debt of each
subsidiary guarantor; and
- are ahead of or equal in right of payment to all existing and future
subordinated indebtedness of each subsidiary guarantor.
As of March 31, 1999, we and our subsidiary guarantors had total senior
debt of approximately $147.5 million. As indicated above and as discussed in
detail below under the subheading "Subordination," payments on the exchange
notes and under the subsidiary guarantees will be subordinated to the payment of
senior debt. The indenture will permit us and our subsidiary guarantors to incur
additional senior debt.
As of March 31, 1999, all of our subsidiaries were "Restricted
Subsidiaries." However, under the circumstances described below under the
subheading "Covenants -- Designation of Restricted and Unrestricted
Subsidiaries," we will be permitted to designate certain of our subsidiaries as
"Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants in the indenture. Unrestricted Subsidiaries
will not guarantee the exchange notes.
PRINCIPAL, MATURITY AND INTEREST
We will issue the exchange notes with a maximum aggregate principal amount
of $225.0 million, of which $100.0 million will be issued on the date of
original issuance. We will issue the exchange notes in denominations of $1,000
and integral multiples of $1,000. The exchange notes will mature on March 15,
2009.
65
<PAGE> 75
Interest on these exchange notes will accrue at the rate of 12% per annum
and will be payable semi-annually in arrears on March 15 and September 15,
commencing on September 15, 1999. We will make each interest payment to the
holders of record of these exchange notes on the immediately preceding March 1
and September 1.
Interest on these exchange notes will accrue from the date of original
issuance or, if interest has already been paid, from the date it was most
recently paid. Additional exchange notes may be issued from time to time after
the offering, subject to the provisions of the indenture described below under
the caption "Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock." The exchange notes offered hereby and any additional exchange notes
subsequently issued under the indenture would be treated as a single class for
all purposes under the indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
METHODS OF RECEIVING PAYMENTS ON THE EXCHANGE NOTES
If a holder has given wire transfer instructions to us, we will make all
principal, premium and interest payments on those exchange notes in accordance
with those instructions. All other payments on these exchange notes will be made
at the office or agency of the paying agent and registrar within the City and
State of New York unless we elect to make interest payments by check mailed to
the holders at their address set forth in the register of holders.
PAYING AGENTS AND REGISTRAR FOR THE EXCHANGE NOTES
The trustee will initially act as paying agent and registrar. We may change
the paying agent or registrar without prior notice to the holders of the
exchange notes, and we or any of our subsidiaries may act as paying agent or
registrar.
TRANSFER AND EXCHANGE
A holder may transfer or exchange exchange notes in accordance with the
indenture. The registrar and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and we may
require a holder to pay any taxes and fees required by law or permitted by the
indenture. We are not required to transfer or exchange any exchange note
selected for redemption. Also, we are not required to transfer or exchange any
exchange note for a period of 15 days before a selection of exchange notes to be
redeemed.
The registered holder of an exchange note will be treated as the owner of
it for all purposes.
SUBSIDIARY GUARANTEES
Our subsidiary guarantors will jointly and severally guarantee, on a senior
subordinated basis, our obligations under these exchange notes. Each subsidiary
guarantee will be subordinated to the prior payment in full of all senior debt
of that subsidiary guarantor. The obligations of each subsidiary guarantor under
its subsidiary guarantee will be limited as necessary to prevent that subsidiary
guarantee from constituting a fraudulent conveyance under applicable law. See
"Risk Factors -- Fraudulent Conveyance Matters."
66
<PAGE> 76
A subsidiary guarantor may not sell or otherwise dispose of all or
substantially all of its assets, or consolidate with or merge with or into
(whether or not such subsidiary guarantor is the surviving person), another
person unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either:
(a) the person acquiring the property in any such sale or disposition or
the person formed by or surviving any such consolidation or merger
assumes all the obligations of that subsidiary guarantor pursuant to
a supplemental indenture satisfactory to the trustee; or
(b) the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the indenture.
The subsidiary guarantee of a subsidiary guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that subsidiary guarantor (including
by way of merger or consolidation), if we apply the Net Proceeds of
that sale or other disposition, in accordance with the applicable
provisions of the indenture; or
(2) in connection with the sale of all of the capital stock of a subsidiary
guarantor, if we apply the Net Proceeds of that sale, in accordance
with the applicable provisions of the indenture; or
(3) if we designate any Restricted Subsidiary that is a subsidiary
guarantor as an Unrestricted Subsidiary.
See "Repurchase at Option of Holders -- Asset Sales."
SUBORDINATION
The payment of principal of, premium, if any, and interest on these
exchange notes will be subordinated to the prior payment in full of all of our
senior debt.
The holders of senior debt will be entitled to receive payment in full in
cash of all amounts due or to become due in respect of senior debt before the
holders of exchange notes will be entitled to receive any payment with respect
to the exchange notes (except that holders of exchange notes may receive
Reorganization Securities), in the event of any distribution to our creditors in
any Insolvency or Liquidation Proceeding with respect to us. Upon any such
Insolvency or Liquidation Proceeding, any payment or distribution of our assets
of any kind or character, whether in cash, property or securities (other than
Reorganization Securities), to which the holders of the exchange notes or the
trustee would be entitled will be paid by us or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, or by the holders of the exchange notes or by the trustee if
received by them, directly to the holders of senior debt (pro rata to such
holders on the basis of the amounts of senior debt held by such holders) or
their Representative or Representatives, as their interests may appear, for
application to the payment of the senior debt remaining unpaid until all such
senior debt has been paid in full in cash, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of senior
debt.
We also may not make any payment in respect of the exchange notes (except
in Reorganization Securities) if:
(1) a payment default on Designated Senior Debt occurs and is continuing;
or
(2) any other default occurs and is continuing on Designated Senior Debt
that permits holders of the Designated Senior Debt to accelerate its
maturity and the trustee receives a notice of such default (a "Payment
Blockage Notice") from the Credit Agent or the holders or the
Representative of any Designated Senior Debt.
67
<PAGE> 77
\Payments on the exchange notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such default
is cured or waived; and
(2) in case of a nonpayment default, the earlier of
(A) the date on which such nonpayment default is cured or waived,
(B) 179 days after the date on which the applicable Payment Blockage
Notice is received or
(C) the date on which the trustee receives written notice from the
Credit Agent or the Representative for such Designated Senior Debt,
as the case may be, rescinding the applicable Payment Blockage
Notice, unless the maturity of any Designated Senior Debt has been
accelerated.
No new Payment Blockage Notice may be delivered unless and until 181 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice.
No event of default that existed or was continuing on the date of delivery
of any Payment Blockage Notice to the trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default shall have been
cured or waived for a period of not less than 90 days.
As a result of the subordination provisions described above, in the event
of our bankruptcy, liquidation or reorganization, holders of these exchange
notes may recover less ratably than our creditors who are holders of senior
debt. See "Risk Factors -- Subordination," which describes how the right of
holders of exchange notes to receive payments on the exchange notes is junior to
all of our existing and future senior indebtedness. We and our restricted
subsidiaries will be subject to certain financial tests limiting the amount of
additional indebtedness, including senior debt, that we and our restricted
subsidiaries can incur. See "-- Covenants -- Incurrence of Indebtedness and
Issuance of Preferred Stock" for a more detailed description of the types of
Indebtedness that we may and may not incur.
OPTIONAL REDEMPTION
At any time prior to March 15, 2002, we may on one or more occasions redeem
up to 33 1/3% of the aggregate principal amount of exchange notes originally
issued under the indenture at a redemption price of 112.0% of the principal
amount thereof, plus accrued and unpaid interest to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided that:
(1) at least 66 2/3% of the aggregate principal amount of exchange notes
remains outstanding immediately after the occurrence of such redemption
(excluding notes held by us and our subsidiaries); and
(2) the redemption must occur within 90 days of the date of the closing of
such Equity Offering.
Except pursuant to the preceding paragraphs, we will not have the option of
redeeming the exchange notes prior to March 15, 2004.
After March 15, 2004, we may redeem all or a part of these exchange notes,
upon not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest thereon, to the applicable redemption date, if redeemed during
the twelve-month period beginning on March 15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2004............................................ 108.000%
2005............................................ 106.000%
2006............................................ 104.000%
2007............................................ 102.000%
2008 and thereafter............................. 100.000%
</TABLE>
68
<PAGE> 78
SELECTION AND NOTICE
If less than all of the exchange notes are to be redeemed at any time, the
trustee will select exchange notes for redemption as follows:
(1) if the exchange notes are listed, in compliance with the requirements
of the principal national securities exchange on which the exchange
notes are listed; or
(2) if the exchange notes are not so listed, on a pro rata basis, by lot or
by such method as the trustee shall deem fair and appropriate.
No exchange notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than 60
days before the redemption date to each holder of exchange notes to be redeemed
at its registered address. Notices of redemption may not be conditional.
If any exchange note is to be redeemed in part only, the notice of
redemption that relates to that exchange note shall state the portion of the
principal amount thereof to be redeemed. A new exchange note in principal amount
equal to the unredeemed portion of the original exchange note will be issued in
the name of the holder thereof upon cancellation of the original exchange note.
Exchange notes called for redemption become due on the date fixed for
redemption. On and after the redemption date, interest ceases to accrue on
exchange notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "Repurchase at the Option of Holders," we
are not required to make mandatory redemption or sinking fund payments with
respect to the exchange notes.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each holder of exchange notes will have the
right to require us to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of that holder's exchange notes pursuant to the
Change of Control Offer. In the Change of Control Offer, we will offer a Change
of Control Payment in cash equal to 101% of the aggregate principal amount of
exchange notes repurchased plus accrued and unpaid interest thereon, if any, to
the date of purchase. Within 60 days following any Change of Control, we will
mail a notice to each holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase exchange notes on
the Change of Control Payment Date, pursuant to the procedures required by the
indenture and described in such notice. We will comply with the requirements of
Rule 14e-1 under the Securities Exchange Act of 1934 and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the exchange notes as a result
of a Change of Control. To the extent that the provisions of any securities laws
or regulations conflict with the provisions of the indenture relating to such
Change of Control Offer, we will comply with the applicable securities laws and
regulations and shall not be deemed to have breached our obligations described
in the indenture by virtue thereof.
On the Change of Control Payment Date, we will, to the extent lawful:
(1) accept for payment all exchange notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the Change of Control
Payment in respect of all exchange notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the trustee the exchange notes so
accepted together with an officers' certificate stating the aggregate
principal amount of exchange notes or portions thereof being purchased
by us.
69
<PAGE> 79
The paying agent will promptly mail to each holder of exchange notes so
tendered the Change of Control Payment for such exchange notes, and the trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each holder a new exchange note equal in principal amount to any unpurchased
portion of the exchange notes surrendered, if any; provided that each such new
exchange note will be in a principal amount of $1,000 or an integral multiple
thereof.
Prior to complying with any of the provisions of this "Change of Control"
covenant, but in any event within 90 days following a Change of Control, we will
either repay all outstanding senior debt or obtain the requisite consents, if
any, under all agreements governing outstanding senior debt to permit the
repurchase of exchange notes required by this covenant. We will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
The provisions described above that require us to make a Change of Control
Offer following a Change of Control will be applicable regardless of whether or
not any other provisions of the indenture are applicable. Except as described
above with respect to a Change of Control, the indenture does not contain
provisions that permit the holders of the exchange notes to require that we
repurchase or redeem the exchange notes in the event of a takeover,
recapitalization or similar transaction.
Our outstanding senior debt currently prohibits us from purchasing any
exchange notes, and also provides that certain change of control events with
respect to us would constitute a default under the agreements governing the
senior debt. Any future credit agreements or other agreements relating to senior
debt to which we become a party may contain similar restrictions and provisions.
In the event a Change of Control occurs at a time when we are prohibited from
purchasing exchange notes, we could seek the consent of our senior lenders to
the purchase of exchange notes or could attempt to refinance the borrowings that
contain such prohibition. If we do not obtain such a consent or repay such
borrowings, we will remain prohibited from purchasing exchange notes. In such
case, our failure to purchase tendered exchange notes would constitute an event
of default under the indenture which would, in turn, constitute a default under
such senior debt. In such circumstances, the subordination provisions in the
indenture would likely restrict payments to the holders of exchange notes.
We will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in the
indenture applicable to a Change of Control Offer made by us and purchases all
exchange notes validly tendered and not withdrawn under such Change of Control
Offer.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of Team Health and our subsidiaries taken as a whole. Although
there is a limited body of case law interpreting the phrase "substantially all,"
there is no precise established definition of the phrase under applicable law.
Accordingly, the ability of a holder of exchange notes to require us to
repurchase such exchange notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of the assets of us and those
of our Subsidiaries taken as a whole to another Person or group may be
uncertain.
ASSET SALES
We will not, and will not permit any of our Restricted Subsidiaries to,
consummate an Asset Sale unless:
(1) we (or the Restricted Subsidiary, as the case may be) receive
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) such fair market value is determined by our board of directors and
evidenced by a resolution of the board of directors set forth in an
officers' certificate delivered to the trustee provided that the board
of directors' determination must be based on an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of
national standing if such fair market value exceeds $25 million; and
70
<PAGE> 80
(3) at least 80% of the consideration therefor received by us or such
Restricted Subsidiary is in the form of cash or Cash Equivalents. For
purposes of this provision, each of the following shall be deemed to be
cash:
(a) any liabilities (as shown on our or such Restricted Subsidiary's
most recent balance sheet), of us or any Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their
terms subordinated to the exchange notes or any Subsidiary
Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases us or such
Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations received by us or any
such Restricted Subsidiary from such transferee that are converted
by us or such Restricted Subsidiary into cash or Cash Equivalents
within 180 days (to the extent of the cash received in that
conversion).
The 80% limitation referred to in clause (3) above will not apply to any
Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in accordance with the preceding proviso, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 80% limitation.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
we or any such Restricted Subsidiary may apply such Net Proceeds, at our or its
option:
(1) to repay or repurchase senior debt of us or any Restricted Subsidiary;
(2) to acquire a controlling interest in another Permitted Business;
(3) to make a capital expenditure in a Permitted Business; or
(4) to acquire other assets in a Permitted Business.
Pending the final application of any such Net Proceeds, we may temporarily
reduce the revolving indebtedness under the senior bank facilities or otherwise
invest such Net Proceeds in any manner that is not prohibited by the indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph will constitute Excess Proceeds. When the
aggregate amount of Excess Proceeds exceeds $15.0 million, we will be required
to make an offer to all holders of exchange notes (an "Asset Sale Offer") to
purchase the maximum principal amount of exchange notes that may be purchased
out of the Excess Proceeds. The offer price in any Asset Sale Offer will be
equal to 100% of principal amount plus accrued and unpaid interest, if any, to
the date of purchase, and will be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, we may use such Excess Proceeds for
general corporate purposes. If the aggregate principal amount of exchange notes
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
trustee shall select the exchange notes to be purchased on a pro rata basis.
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
COVENANTS
RESTRICTED PAYMENTS
We will not, and will not permit any of our Restricted Subsidiaries to,
directly or indirectly:
(1) declare or pay any dividend or make any other payment or distribution
on account of our or any of our Restricted Subsidiaries' Equity
Interests (including, without limitation, any payment on such Equity
Interests in connection with any merger or consolidation involving us)
or to the direct or indrect holders of our or any of our Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than our
Disqualified Stock);
(2) purchase, redeem or otherwise acquire or retire for value (including
without limitation, in connection with any merger or consolidation
involving Team Health) any of our Equity Interests or those of any
direct or indirect parent of Team Health (other than any such Equity
Interests owned by us or any of our Restricted Subsidiaries);
71
<PAGE> 81
(3) make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any indebtedness that is
subordinated to the exchange notes or the Subsidiary Guarantees, except
scheduled payments of interest or principal at Stated Maturity thereof;
or
(4) make any Restricted Investment (all such payments and other actions set
forth in clauses (1) through (4) above being collectively referred to
as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof;
(2) we would, after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in the first paragraph of the covenant described below under the
caption "Incurrence of Indebtedness and Issuance of Preferred Stock;"
and
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by us and our Restricted Subsidiaries
after the date of the indenture (excluding Restricted Payments
permitted by clauses (1), (2), (3), (4), (8) (other than those
permitted by clause (6) of the definition of "Permitted Investments")
(11) and (12) of the next succeeding paragraph), is less than the sum,
without duplication, of:
(a) 50% of our Consolidated Net Income for the period (taken as one
accounting period) from the beginning of the first full fiscal
quarter commencing after the date of the indenture to the end of our
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus
(b) 100% of the aggregate net proceeds (including the fair-market value
of property other than cash, provided, that fair market value of
property other than cash shall be determined in good faith by the
board of directors whose resolution with respect thereto shall be
delivered to the trustee and such determination must be based upon
an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market
value exceeds $15.0 million) received by us as a contribution to our
capital or received by us from the issue or sale since the date of
the indenture of our Equity Interests (other than Disqualified
Stock) or of our Disqualified Stock or debt securities that have
been converted into such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to our
Restricted Subsidiary and other than Disqualified Stock or
convertible debt securities that have been converted into
Disqualified Stock), plus
(c) to the extent that any Restricted Investment that was made after the
date of the indenture is sold for cash or otherwise liquidated or
repaid for cash, the lesser of
(1) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and
(2) the initial amount of such Restricted Investment, plus
(d) if any Unrestricted Subsidiary
(1) is redesignated as a Restricted Subsidiary, the fair market
value of such redesignated Subsidiary (as determined in good
faith by our board of directors) as of the date of its
redesignation or
(2) pays any cash dividends or cash distributions to us or any of
our Restricted Subsidiaries, 100% of any such cash dividends or
cash distributions made after the date of the indenture.
72
<PAGE> 82
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the indenture;
(2) the redemption, repurchase, retirement, defeasance or other acquisition
of any of our subordinated indebtedness or Equity Interests or those of
any Restricted Subsidiary in exchange for, or out of the net cash
proceeds of the substantially concurrent sale or issuance (other than
to one of our Restricted Subsidiaries) of, other Equity Interests of
Team Health (other than Disqualified Stock); provided that the amount
of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of our
subordinated indebtedness or that of any Restricted Subsidiary with the
net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary to the holders
of its Equity Interests on a pro rata basis;
(5) the repurchase, redemption or other acquisition or retirement for
value of any of our Equity Interests held by any member or former
member of our (or any of our Restricted Subsidiaries') management or
affiliated physician pursuant to any management equity subscription
agreement, stockholders agreement or stock option agreement or other
similar agreements in effect as of the date of the indenture;
provided, however, the aggregate price paid shall not exceed
(a) $2.5 million in any calendar year (with unused amounts in any
calendar year being carried over to succeeding calendar years
subject to a maximum (without giving effect to clause (b)) of $5.0
million in any calendar year, plus
(b) the aggregate cash proceeds received by us from any issuance or
reissuance of Equity Interests to members of our management or our
affiliated physicians and those of our Restricted Subsidiaries and
the proceeds to us of any "key man" life insurance policies;
provided that the cancellation of indebtedness owing to us from
members of management or our affiliated physicians or those of any
of our Restricted Subsidiaries in connection with such repurchase
of Equity Interests will not be deemed to be a Restricted Payment;
(6) Investments in any Person (other than us or a Restricted Subsidiary)
engaged in a Permitted Business in an amount not to exceed $7.5
million;
(7) other Investments in unrestricted subsidiaries having an aggregate
fair market value, taken together with all other Investments made
pursuant to this clause (7) that are at that time outstanding, not to
exceed $6.0 million;
(8) Permitted Investments;
(9) so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of dividends on Disqualified
Stock, the incurrence of which satisfied the covenant set forth in
"-- Incurrence of Indebtedness and Issuance of Preferred Stock" below;
(10) repurchases of Equity Interests deemed to occur upon the exercise of
stock options if such Equity Interests represent a portion of the
exercise price thereof; and
(11) distributions to fund the Transactions. See "The Transactions."
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by us or such subsidiary, as the case may
be, pursuant to the Restricted Payment. The fair market value of any non-cash
Restricted Payment shall be determined in good faith by the board of directors
whose resolution with respect thereto shall be delivered to the trustee. The
board of directors' determination must be based upon
73
<PAGE> 83
an opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value exceeds $15.0 million. Not
later than the date of making any Restricted Payment, we shall deliver to the
trustee an officers' certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this "Restricted Payments" covenant were computed, together with a copy of any
fairness opinion or appraisal required by the indenture.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
We will not, and will not permit any of our subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any indebtedness (including Acquired Debt) and we will not issue any
Disqualified Stock and will not permit any of our Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that we may incur
indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred
stock and our Restricted Subsidiaries may incur Indebtedness (including Acquired
Debt) and issue Disqualified Stock or preferred stock if the Fixed Charge
Coverage Ratio for our most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, if such incurrence or issuance is on
or prior to the second anniversary of the Issue Date, or 2.25 to 1 if such
incurrence or issuance is after the second anniversary of the Issue Date but on
or prior to the fourth anniversary of the Issue Date, or 2.5 to 1 if such
incurrence or issuance is after the fourth anniversary of the Issue Date, in
each case, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The first paragraph of this covenant will not prohibit the incurrence of
any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by us or any of our Restricted Subsidiaries of
Indebtedness and letters of credit pursuant to the senior bank
facilities; provided that the aggregate amount of all indebtedness then
classified as having been incurred in reliance upon this clause (1)
that remains outstanding under the senior bank facilities after giving
effect to such incurrence does not exceed an amount equal to $190
million.
(2) the incurrence by us or our Restricted Subsidiaries of Existing
Indebtedness;
(3) the incurrence by us and the subsidiary guarantors of indebtedness
represented by the exchange notes and the subsidiary guarantees;
(4) the incurrence by us or any of our Restricted Subsidiaries of
indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in our
business or that of such Restricted Subsidiary (whether through the
direct purchase of assets or the Capital Stock of any Person owning
such Assets), in an aggregate principal amount or accreted value, as
applicable, not to exceed $15.0 million;
(5) the incurrence by us or any of our Restricted Subsidiaries of
indebtedness in connection with the acquisition of assets or a new
Restricted Subsidiary; provided that such indebtedness was incurred by
the prior owner of such assets or such Restricted Subsidiary prior to
such acquisition by us or one of our subsidiaries and was not incurred
in connection with, or in contemplation of, such acquisition by our or
one of our subsidiaries; provided further that the principal amount (or
accreted value, as applicable) of such indebtedness, together with any
other outstanding indebtedness incurred pursuant to this clause (5),
does not exceed $20.0 million;
74
<PAGE> 84
(6) the incurrence by us or any of our Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to refund, refinance or replace Indebtedness that was
permitted by the indenture to be incurred;
(7) the incurrence by us or any of our Restricted Subsidiaries of
intercompany Indebtedness between or among us and any of our Restricted
Subsidiaries; provided, however, that:
(a) if we or any subsidiary guarantor is the obligor on such
indebtedness, such indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations with respect to
the exchange notes, in the case of us, or the subsidiary guarantee
of such subsidiary guarantor, in the case of a subsidiary guarantor;
and
(b) (1) any subsequent issuance or transfer of Equity Interests that
results in any such indebtedness being held by a Person other
than us or a Restricted Subsidiary and
(2) any sale or other transfer of any such Indebtedness to a Person
that is not either us or a Restricted Subsidiary shall be
deemed, in each case, to constitute an incurrence of such
indebtedness by us or such Restricted Subsidiary, as the case
may be;
(8) the incurrence by us or any of our Restricted Subsidiaries of Hedging
Obligations that are incurred for the purpose of fixing or hedging:
(a) interest rate risk with respect to any floating rate indebtedness
that is permitted by the terms of this indenture to be outstanding;
(b) exchange rate risk with respect to any agreement or indebtedness of
such Person payable in a currency other than U.S. dollars; or
(c) commodities risk relating to commodities agreements, entered into in
the ordinary course of business, for the purchase of raw material
used by us and our Restricted Subsidiaries;
(9) the Guarantee by us or any of our Restricted Subsidiaries of our
indebtedness or that of one of our Restricted Subsidiaries that was
permitted to be incurred by another provision of this covenant;
(10) the incurrence by our Unrestricted Subsidiaries of Non-Recourse Debt;
provided, however, that if any such indebtedness ceases to be
Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of indebtedness by our Restricted
Subsidiary;
(11) indebtedness incurred by us or one of our Restricted Subsidiaries
constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including without
limitation to letters of credit in respect to workers' compensation
claims or self-insurance, or other indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims;
provided, however, that upon the drawing of such letters of credit or
the incurrence of such indebtedness, such obligations are reimbursed
within 30 days following such drawing or incurrence;
(12) indebtedness arising from agreements of us or one of our Restricted
Subsidiaries providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, asset or subsidiary,
other than guarantees of indebtedness incurred by any person acquiring
all or any portion of such business, assets or subsidiary for the
purpose of financing such acquisition; provided that
(a) such indebtedness is not reflected on our balance sheet or that
of any Restricted Subsidiary (contingent obligations referred to
in a footnote or footnotes to financial statements and not
otherwise reflected on the balance sheet will not be deemed to be
reflected on such balance sheet for purposes of this clause (a))
and
(b) the maximum assumable liability in respect of such Indebtedness
shall at no time exceed the gross proceeds including non-cash
proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any
such
75
<PAGE> 85
subsequent changes in value) actually received by us and/or such
Restricted Subsidiary in connection with such disposition;
(13) indebtedness incurred by us or any of our Restricted Subsidiaries
which is subordinated to the exchange notes and the subsidiary
guarantees; provided that such indebtedness matures after the date on
which the exchange notes mature and that no cash interest is payable
with respect to such indebtedness until after the date on which the
exchange notes mature;
(14) obligations in respect of performance and surety bonds and completion
guarantees provided by us or any of our Restricted Subsidiaries in the
ordinary course of business;
(15) guarantees incurred in the ordinary course of business in an aggregate
principal amount not to exceed $10.0 million at any time outstanding;
and
(16) the incurrence by us or any of our Restricted Subsidiaries of
additional indebtedness, including Attributable Debt incurred after
the date of the indenture, in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any other indebtedness incurred pursuant to this clause (16),
not to exceed $25.0 million.
For purposes of determining compliance with this "Incurrence of
Indebtedness and Issuance of Preferred Stock" covenant, in the event that an
item of proposed indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, we
will be permitted to classify such item of indebtedness in any manner that
complies with this covenant. In addition, we may, at any time, change the
classification of an item of indebtedness (or any portion thereof) to any other
clause or to the first paragraph hereof provided that we would be permitted to
incur such item of indebtedness (or portion thereof) pursuant to such other
clause or the first paragraph hereof, as the case may be, at such time of
reclassification. Accrual of interest, accretion or amortization of original
issue discount and the accretion of accreted value will not be deemed to be an
incurrence of indebtedness for purposes of this covenant.
LIENS
We will not, and will not permit any of our Restricted Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing trade payables or indebtedness that does not
constitute senior debt (other than Permitted Liens) upon any of our or our
Restricted Subsidiaries' property or assets, now owned or hereafter acquired
unless:
(1) in the case of Liens securing indebtedness that is expressly
subordinated or junior in right of payment to the exchange notes, the
exchange notes are secured on a senior basis to the obligations so
secured until such time as such obligations are no longer secured by a
Lien; and
(2) in all other cases, the exchange notes are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES
We will not, and will not permit any of our Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to:
(1) (a) pay dividends or make any other distributions to us or any of our
Restricted Subsidiaries
(1) on our Capital Stock or
(2) with respect to any other interest or participation in, or
measured by, our profits; or
(b) pay any indebtedness owed to us or any of our Restricted
Subsidiaries;
(2) make loans or advances to us or any of our Restricted Subsidiaries; or
76
<PAGE> 86
(3) transfer any of its properties or assets to us or any of our Restricted
Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) Existing Indebtedness as in effect on the date of the indenture;
(2) the senior bank facilities as in effect as of the date of the
indenture, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive, taken as a whole (as determined
in the good faith judgment of our board of directors), with respect to
such dividend and other payment restrictions than those contained in
the senior bank facilities as in effect on the date of the indenture;
(3) the indenture and the exchange notes;
(4) any applicable law, rule, regulation or order;
(5) any instrument of a Person acquired by us or any of our Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired, provided
that, in the case of indebtedness, such indebtedness was permitted by
the terms of the indenture to be incurred;
(6) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(7) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of the preceding
paragraph;
(8) Permitted Refinancing Indebtedness, provided that the material
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, in the good faith
judgment of our board of directors, taken as a whole, to the holders
of exchange notes than those contained in the agreements governing the
indebtedness being refinanced;
(9) contracts for the sale of assets, including without limitation
customary restrictions with respect to a Subsidiary pursuant to an
agreement that has been entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
subsidiary;
(10) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business; and
(11) other indebtedness or Disqualified Stock of Restricted Subsidiaries
permitted to be incurred subsequent to the Issue Date pursuant to the
provisions of the covenant described under the caption "-- Incurrence
of Indebtedness and Issuance of Preferred Stock."
MERGER, CONSOLIDATION, OR SALE OF ASSETS
We may not:
(A) consolidate or merge with or into another person (whether or not we are
the surviving corporation); or
77
<PAGE> 87
(B) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of our properties or assets, in one or more related
transactions, to another person unless:
(1) either:
(a) we are the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than us) or to which such sale, assignment, transfer,
conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia;
(2) the entity or Person formed by or surviving any such consolidation or
merger (if other than us) or the entity or Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made assumes all of our obligations under the exchange notes and the
indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) we or the entity or Person formed by or surviving any such
consolidation or merger (if other than us), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made:
(a) will, after giving pro forma effect thereto as if such transaction
had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption
"Incurrence of Indebtedness and Issuance of Preferred Stock"; or
(b) would (together with our Restricted Subsidiaries) have a higher
Fixed Charge Coverage Ratio immediately after such transaction
(after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period)
than our Fixed Charge Coverage Ratio and that of our subsidiaries
immediately prior to the transaction.
The preceding clause (4) will not prohibit:
(a) a merger between us and one of our Wholly Owned Subsidiaries; or
(b) a merger between us and one of our Affiliates incorporated solely for
the purpose of reincorporating us in another state of the United
States;
so long as, in each case, the amount of our indebtedness and that of our
Restricted Subsidiaries is not increased thereby.
In addition, we may not, directly or indirectly, lease all or substantially
all of our properties or assets, in one or more related transactions, to any
other person. This "Merger, Consolidation, or Sale of Assets" covenant will not
be applicable to a sale, assignment, transfer, conveyance or other disposition
of assets between or among us and any of our Wholly Owned Restricted
Subsidiaries.
TRANSACTIONS WITH AFFILIATES
We will not, and will not permit any of our Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each, an
"Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less favorable to us
or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by us or such Restricted
Subsidiary with an unrelated Person; and
78
<PAGE> 88
(2) we deliver to the trustee:
(a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $3.0 million, a resolution of the board of directors set forth in
an officers' certificate certifying that such Affiliate Transaction
complies with clause (1) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the
board of directors; and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess
of $15.0 million, an opinion as to the fairness to the holders of
such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national
standing.
The following items shall not be deemed to be Affiliate Transactions and,
therefore, will not be subject to the provisions of the prior paragraph:
(1) customary directors' fees, indemnification or similar arrangements or
any employment agreement or other compensation plan or arrangement
entered into by us or any of our Restricted Subsidiaries in the
ordinary course of business and consistent with our past practice or
the past practice of such Restricted Subsidiary;
(2) transactions between or among us and/or our Restricted Subsidiaries;
(3) Permitted Investments and Restricted Payments that are permitted by the
provisions of the indenture described above under the caption
"Restricted Payments";
(4) customary loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, our or any of our Restricted Subsidiaries'
officers, directors, employees or consultants;
(5) transactions pursuant to any contract or agreement in effect on the
date of the indenture as the same may be amended, modified or replaced
from time to time so long as any such amendment, modification or
replacement is no less favorable to us and our Restricted Subsidiaries
than the contract or agreement as in effect on the Issue Date;
(6) transactions pursuant to management contracts with affiliated
physicians entered into in the ordinary course of business consistent
with past practice (or as such practice may be modified to comply with
regulations governing our operations); and
(7) payments in connection with the Transactions (including the payment of
fees and expenses with respect thereto).
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The board of directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by us and our Restricted Subsidiaries (except to
the extent repaid in cash) in the subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation (to the extent not
designated a Permitted Investment) and will reduce the amount available for
Restricted Payments under the first paragraph of the covenant described above
under the caption "Restricted Payments." All such outstanding Investments will
be valued at their fair market value at the time of such designation, as
determined in good faith by the board of directors. That designation will only
be permitted if such Restricted Payment would be permitted at that time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
79
<PAGE> 89
ANTI-LAYERING
We will not incur, create, issue, assume, guarantee or otherwise become
liable for any indebtedness that is both:
(1) subordinate or junior in right of payment to any senior debt; and
(2) senior in any respect in right of payment to the exchange notes.
No subsidiary guarantor will incur, create, issue, assume, guarantee or
otherwise become liable for any indebtedness that is both:
(1) subordinate or junior in right of payment to any senior debt of such
subsidiary guarantor; and
(2) senior in any respect in right of payment to the subsidiary guarantees.
SALE AND LEASEBACK TRANSACTIONS
We will not, and will not permit any of our Restricted Subsidiaries to,
enter into any sale and leaseback transaction; provided that we or any of our
Restricted Subsidiaries may enter into a sale and leaseback transaction if:
(1) we or such Restricted Subsidiary could have
(a) incurred indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to the
covenant described above under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock" and
(b) incurred a Lien to secure such indebtedness pursuant to the covenant
described above under the caption "Liens";
(2) the gross cash proceeds of that sale and leaseback transaction are at
least equal to the fair market value, as determined in good faith by
the board of directors and set forth in an officers' certificate
delivered to the trustee, of the property that is the subject of such
sale and leaseback transaction; and
(3) the transfer of assets in such sale and leaseback transaction is
permitted by, and we apply the proceeds of such transaction in
compliance with, the covenant described above under the caption "Asset
Sales."
LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS
We will not permit any Domestic Restricted Subsidiary, directly or
indirectly, to incur indebtedness or guarantee or pledge any assets to secure
the payment of any other of our indebtedness or that of any Restricted
Subsidiary unless either such Restricted Subsidiary
(1) is a subsidiary guarantor or
(2) simultaneously executes and delivers a supplemental indenture to the
indenture and becomes a subsidiary guarantor, which guarantee shall
(a) with respect to any guarantee of senior debt, be subordinated in
right of payment on the same terms as the exchange notes are
subordinated to such senior debt and
(b) with respect to any guarantee of any other indebtedness, be senior
to or pari passu with such Restricted Subsidiary's other
indebtedness or guarantee of or pledge to secure such other
indebtedness.
Notwithstanding the preceding paragraph, any such guarantee by a Restricted
Subsidiary of the exchange notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not our Affiliate, of all of our stock in,
or all
80
<PAGE> 90
or substantially all the assets of, such Restricted Subsidiary, which sale,
exchange or transfer is made in compliance with the applicable provisions of the
indenture.
ADDITIONAL GUARANTEES
If we acquire or create a Domestic Restricted Subsidiary after the date of
the indenture, or if any of our subsidiaries become a Domestic Restricted
Subsidiary, then such newly acquired or created Domestic Restricted Subsidiary
shall become a subsidiary guarantor and execute a Supplemental Indenture and
deliver an opinion of counsel, in accordance with terms of the indenture.
BUSINESS ACTIVITIES
We will not, and will not permit any Restricted Subsidiary to, engage in
any business other than a Permitted Business, except to such extent as would not
be material to us and our Restricted Subsidiaries taken as a whole.
REPORTS
Whether or not required by the Securities and Exchange Commission, so long
as any exchange notes are outstanding, we will furnish to the holders of
exchange notes, within the time periods specified in the Securities and Exchange
Commission's rules and regulations:
(1) all quarterly and annual financial information that would be required
to be contained in a filing with the Securities and Exchange Commission
on Forms 10-Q and 10-K if we were required to file such forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report on the annual financial statements by our
certified independent accountants; and
(2) all current reports that would be required to be filed with the
Securities and Exchange Commission on Form 8-K if we were required to
file such reports.
In addition, following the consummation of this exchange offer, whether or
not required by the Securities and Exchange Commission, we will file a copy of
all the information and reports referred to in clauses (1) and (2) above with
the Securities and Exchange Commission for public availability within the time
periods specified in the Securities and Exchange Commission's rules and
regulations (unless the Securities and Exchange Commission will not accept such
a filing) and make such information available to securities analysts and
prospective investors upon request. In addition, we have agreed that, for so
long as any exchange notes remain outstanding, we will furnish to the holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act of 1933.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on the exchange
notes whether or not prohibited by the subordination provisions of the
indenture;
(2) default in payment when due of the principal of or premium, if any, on
the exchange notes, whether or not prohibited by the subordination
provisions of the indenture;
(3) our failure to comply with the provisions described under the caption
"-- Change of Control;"
(4) our failure for 30 days after notice from the trustee or holders of at
least 25% in principal amount of the exchange notes then outstanding to
comply with the provisions described under the captions "-- Asset
Sales," "-- Restricted Payments" or "-- Incurrence of Indebtedness and
Issuance of Preferred Stock;"
81
<PAGE> 91
(5) our failure for 60 days after notice from the trustee or holders of at
least 25% in principal amount of the exchange notes then outstanding
voting as a single class to comply with any of its other agreements in
the indenture or the exchange notes;
(6) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by us or any of our Restricted
Subsidiaries (or the payment of which is guaranteed by us or any of our
Restricted Subsidiaries) whether such indebtedness or guarantee now
exists, or is created after the date of the indenture, if that default:
(a) is caused by a failure to pay principal of or premium, if any, on
such indebtedness prior to the expiration of the grace period
provided in such indebtedness on the date of such default (a
"Payment Default"); or
(b) results in the acceleration of such indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such indebtedness,
together with the principal amount of any other such indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more;
(7) failure by us or any of our subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(8) except as permitted by the indenture, any subsidiary guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any subsidiary
guarantor, or any Person acting on behalf of any subsidiary guarantor,
shall deny or disaffirm its obligations under its subsidiary guarantee;
and
(9) certain events of bankruptcy or insolvency with respect to us or any of
our Restricted Subsidiaries that are Significant Subsidiaries.
In the event of a declaration of acceleration of the exchange notes because
an Event of Default has occurred and is continuing as a result of the
acceleration of any indebtedness described in clause (6) of the preceding
paragraph, the declaration of acceleration of the exchange notes shall be
automatically annulled if the holders of any indebtedness described in clause
(6) of the preceding paragraph have rescinded the declaration of acceleration in
respect of such indebtedness within 30 days of the date of such declaration and
if:
(1) the annulment of the acceleration of exchange notes would not conflict
with any judgment or decree of a court of competent jurisdiction; and
(2) all existing Events of Default, except nonpayment of principal or
interest on the exchange notes that became due solely because of the
acceleration of the exchange notes, have been cured or waived.
If any Event of Default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the then outstanding exchange
notes may declare all the exchange notes to be due and payable immediately;
provided, that so long as any indebtedness permitted to be incurred pursuant to
the senior bank facilities shall be outstanding, such acceleration shall not be
effective until the earlier of:
(1) an acceleration of any such indebtedness under the senior bank
facilities, or
(2) five business days after receipt by us of written notice of such
acceleration.
Notwithstanding the preceding paragraph, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to us or
any of our Subsidiaries, all outstanding exchange notes will become due and
payable without further action or notice.
Holders of the exchange notes may not enforce the indenture or the exchange
notes except as provided in the indenture. Subject to certain limitations,
holders of a majority in principal amount of the
82
<PAGE> 92
then outstanding exchange notes may direct the trustee in its exercise of any
trust or power. The trustee may withhold from holders of the exchange notes
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal or interest) if it determines
that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action or inaction taken or not taken by or on behalf of us with the intention
of avoiding payment of the premium that we would have had to pay if we then had
elected to redeem the exchange notes pursuant to the optional redemption
provisions of the indenture, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the exchange notes. If an Event of Default occurs prior to March 15, 2004 by
reason of any willful action (or inaction) taken (or not taken) by or on behalf
of us with the intention of avoiding the prohibition on redemption of the
exchange notes prior to March 15, 2004, then the premium specified in the
indenture shall also become immediately due and payable to the extent permitted
by law upon the acceleration of the exchange notes.
The holders of a majority in aggregate principal amount of the exchange
notes then outstanding by notice to the trustee may on behalf of the holders of
all of the exchange notes waive any existing Default or Event of Default and its
consequences under the indenture except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the exchange notes.
We are required to deliver to the trustee annually a statement regarding
compliance with the indenture. Upon becoming aware of any Default or Event of
Default, we are required to deliver to the trustee a statement specifying such
Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
None of our directors, officers, employees, incorporators or stockholders,
or those of any subsidiary guarantor, as such, shall have any liability for any
of our obligations or those of the subsidiary guarantors under the exchange
notes, the indenture, the subsidiary guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each holder of
exchange notes by accepting a exchange note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the exchange notes. The waiver may not be effective to waive liabilities under
the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
We may, at our option and at any time, elect to have all of our obligations
discharged with respect to the outstanding exchange notes and all obligations of
the subsidiary guarantors discharged with respect to their subsidiary guarantees
("Legal Defeasance") except for:
(1) the rights of holders of outstanding exchange notes to receive payments
in respect of the principal of, premium, if any, and interest on such
exchange notes when such payments are due from the trust referred to
below;
(2) our obligations with respect to the exchange notes concerning issuing
temporary exchange notes, registration of exchange notes, mutilated,
destroyed, lost or stolen exchange notes and the maintenance of an
office or agency for payment and money for security payments held in
trust;
(3) the rights, powers, trusts, duties and immunities of the trustee, and
our obligations in connection therewith; and
(4) the Legal Defeasance provisions of the indenture.
In addition, we may, at our option and at any time, elect to have our
obligations and the obligations of the subsidiary guarantors released with
respect to certain covenants that are described in the indenture ("Covenant
Defeasance") and thereafter any omission to comply with those covenants shall
not constitute a Default or Event of Default with respect to the exchange notes.
In the event Covenant Defeasance occurs, certain events (not including
non-payment, bankruptcy, receivership, rehabilitation and insolvency
83
<PAGE> 93
events) described under "Events of Default" will no longer constitute an Event
of Default with respect to the exchange notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) we must irrevocably deposit with the trustee, in trust, for the benefit
of the holders of the exchange notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium, if any, and interest on the outstanding exchange notes on
the stated maturity or on the applicable redemption date, as the case
may be, and we must specify whether the exchange notes are being
defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, we shall have delivered to the trustee
an opinion of counsel in the United States reasonably acceptable to the
trustee confirming that
(a) we have received from, or there has been published by, the Internal
Revenue Service a ruling or
(b) since the date of the indenture, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such opinion of counsel shall confirm that,
subject to customary assumptions and exclusions, the holders of the
outstanding exchange notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance
and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, we shall have delivered to the
trustee an opinion of counsel in the United States reasonably
acceptable to the trustee confirming that, subject to customary
assumptions and exclusions, the holders of the outstanding exchange
notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had
not occurred;
(4) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(5) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than the indenture) to which we or any
of our subsidiaries are a party or by which we or any of our
subsidiaries are bound;
(6) we must deliver to the trustee an officers' certificate stating that
the deposit was not made by us with the intent of preferring the
holders of exchange notes over our other creditors with the intent of
defeating, hindering, delaying or defrauding our creditors or others;
and
(7) we must deliver to the trustee an officers' certificate and an opinion
of counsel, which opinion may be subject to customary assumptions and
exclusions, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
With the consent of the holders of not less than a majority in principal
amount of the exchange notes at the time outstanding, we and the trustee are
permitted to amend or supplement the indenture or any supplemental indenture or
modify the rights of the holders; provided that without the consent of each
84
<PAGE> 94
holder affected, no amendment, supplement, modification or waiver may (with
respect to any exchange notes held by a non-consenting holder):
(1) reduce the principal amount of exchange notes whose holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any exchange
note or alter the provisions with respect to the redemption of the
exchange notes (other than provisions relating to the covenants
described above under the caption "Repurchase at the Option of
Holders");
(3) reduce the rate of or change the time for payment of interest on any
exchange note;
(4) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest on the exchange notes (except a rescission
of acceleration of the exchange notes by the holders of at least a
majority in aggregate principal amount of the exchange notes and a
waiver of the payment default that resulted from such acceleration);
(5) make any exchange note payable in money other than that stated in the
exchange notes;
(6) make any change in the provisions of the indenture relating to waivers
of past Defaults or the rights of holders of exchange notes to receive
payments of principal of or premium, if any, or interest on the
exchange notes;
(7) waive a redemption payment with respect to any exchange note (other
than a payment required by one of the covenants described above under
the caption "Repurchase at the Option of Holders");
(8) make any change in the preceding amendment and waiver provisions; or
(9) release any guarantor from any of its obligations under its guarantee
of the exchange notes or the indenture, except in accordance with the
terms of the indenture.
In addition, any amendment to, or waiver of the provisions of Article 10 of
the indenture relating to subordination that adversely affects the rights of the
holders of the exchange notes will require the consent of the holders of at
least 75% in aggregate principal amount of the exchange notes then outstanding.
Notwithstanding the preceding, without the consent of any holder of
exchange notes, we and the trustee may amend or supplement the indenture or the
exchange notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated exchange notes in addition to or in place
of certificated exchange notes;
(3) to provide for the assumption of our obligations to holders of exchange
notes in the case of a merger or consolidation or the sale of all or
substantially all of our assets;
(4) to make any change that would provide any additional rights or benefits
to the holders of exchange notes or that does not adversely affect the
legal rights under the indenture of any such holder; or
(5) to comply with requirements of the Securities and Exchange Commission
in order to effect or maintain the qualification of the indenture under
the Trust Indenture Act of 1939, to provide for the issuance of
Additional Notes in accordance with the limitations set forth in the
indenture or to allow any subsidiary to guarantee the exchange notes.
CONCERNING THE TRUSTEE
If the trustee becomes our creditor or that of any subsidiary guarantor,
the indenture limits the trustee's right to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such claim
as security or otherwise. The trustee will be permitted to engage in other
85
<PAGE> 95
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Securities and Exchange Commission
for permission to continue or resign.
The holders of a majority in principal amount of the then outstanding
exchange notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the trustee,
subject to certain exceptions. The indenture provides that in case an Event of
Default shall occur and be continuing, the trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the trustee will be under no
obligation to exercise any of its rights or powers under the indenture at the
request of any holder of exchange notes, unless such holder shall have offered
to the trustee security and indemnity satisfactory to it against any loss,
liability or expense.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the indenture
without charge by writing to Team Health, Inc., P.O. Box 30698, Knoxville,
Tennessee 37919; Attention: Chief Financial Officer.
BOOK-ENTRY, DELIVERY AND FORM
The exchange notes sold to Qualified Institutional Buyers initially will be
in the form of one or more registered global notes without interest coupons
(collectively, the "Global Notes"). Upon issuance, the Global Notes will be
deposited with the trustee, as custodian for The Depository Trust Company, in
New York, New York, and registered in the name of The Depository Trust Company
or its nominee for credit to the accounts of The Depository Trust Company's
Direct or Indirect Participants (as defined below).
Beneficial interests in all Global Notes, if any, will be subject to
certain restrictions on transfer and will bear a restrictive legend as described
under "Notice to Investors."
In addition, transfer of beneficial interests in the Global Notes will be
subject to the applicable rules and procedures of The Depository Trust Company
and its Direct or Indirect Participants (including, if applicable, those of
Euroclear and CEDEL), which may change from time to time.
The Global Notes may be transferred, in whole and not in part, only to
another nominee of The Depository Trust Company or to a successor of The
Depository Trust Company or its nominee in certain limited circumstances.
Beneficial interests in the Global Notes may be exchanged for exchange notes in
certificated form in certain limited circumstances. See "-- Transfer of
Interests in Global Notes for Certificated Notes."
The exchange notes may be presented for registration of transfer and
exchange at the offices of the registrar.
DEPOSITORY PROCEDURES
The Depository Trust Company has advised us that The Depository Trust
Company is a limited-purpose trust company created to hold securities for its
participating organizations (collectively, the "Direct Participants") and to
facilitate the clearance and settlement of transactions in those securities
between Direct Participants through electronic book-entry changes in accounts of
Direct Participants. The Direct Participants include securities brokers and
dealers (including the underwriters), banks, trust companies, clearing
corporations and certain other organizations. Access to The Depository Trust
Company's system is also available to other entities that clear through or
maintain a direct or indirect custodial relationship with a Direct Participant
(collectively, the "Indirect Participants"). Persons who are not Direct
Participants may beneficially own securities held by or on behalf of The
Depository Trust Company only through the Direct Participants or Indirect
Participants. The ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of The Depository Trust
Company are recorded on the records of the Direct Participants and Indirect
Participants.
86
<PAGE> 96
The Depository Trust Company has also advised us that pursuant to
procedures established by it, ownership of interests in the Global Notes will be
shown on, and the transfer ownership thereof will be effected only through,
records maintained by The Depository Trust Company (with respect to Direct
Participants) or by Direct Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Notes).
Investors in the Global Notes may hold their interests therein directly
through The Depository Trust Company or indirectly through organizations such as
Euroclear and CEDEL. All interests in a Global Note, including those held
through Euroclear or CEDEL, may be subject to the procedures and requirements of
The Depository Trust Company. Those interests held by Euroclear or CEDEL may
also be subject to the procedures and requirements of such system.
The laws of some states require that certain persons take physical delivery
in definitive, certificated form of securities they own. This may limit or
curtail the ability to transfer beneficial interest in a Global Note to such
persons. Because The Depository Trust Company can act only on behalf of Direct
Participants, which in turn act on behalf of Indirect Participants and others,
the ability of a person having a beneficial interest in a Global Note to pledge
such interest to persons or entities that are not Direct Participants in The
Depository Trust Company, or to otherwise take actions in respect of such
interests, may be affected by the lack of physical certificate evidencing such
interests. For certain other restrictions on the transferability of the exchange
notes, see "-- Book-Entry, Delivery and Form -- Transfer of Interests in Global
Notes for Certificated Notes" and "-- Book-Entry, Delivery and Form -- Exchanges
of Global Notes."
EXCEPT AS DESCRIBED IN "-- TRANSFER OF INTERESTS IN GLOBAL NOTES FOR
CERTIFICATED NOTES," OWNERS OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE EXCHANGE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL
DELIVERY OF EXCHANGE NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE
REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Under the terms of the indenture, we and the trustee will treat the persons
in whose names the exchange notes are registered (including exchange notes
represented by Global Notes) as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Payments in respect
of the principal and premium, if any, and interest on Global Notes registered in
the name of The Depository Trust Company or its nominee will be payable by the
trustee to The Depository Trust Company or its nominee as the registered holder
under the indenture. Consequently, neither we, nor the trustee nor any agent of
us or the trustee has or will have any responsibility or liability for:
(1) any aspect of The Depository Trust Company's records or any Direct
Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any of The Depository
Trust Company's records or any Direct Participant's or Indirect
Participant's records relating to the beneficial ownership interests in
any Global Note, or
(2) any other matter relating to the actions and practices of The
Depository Trust Company or any of its Direct Participants or Indirect
Participants.
The Depository Trust Company has advised us that its current practice, upon
receipt of any payment in respect of securities such as the exchange notes is to
credit the accounts of the relevant Direct Participants with the payment on the
payment date, in amounts proportionate to such Direct Participant's respective
ownership interests in the Global Notes as shown on The Depository Trust
Company's records. Payments by Direct Participants and Indirect Participants to
the beneficial owners of exchange notes will be governed by standing
instructions and customary practices between them and will not be the
responsibility of The Depository Trust Company, the trustee or us. Neither we
nor the trustee will be liable for any delay by The Depository Trust Company or
its Direct Participants in identifying the beneficial owners of the exchange
notes, and we and the trustee may conclusively rely on and will be protected in
relying on instructions from The Depository Trust Company or its nominee as the
registered owner of the exchange notes for all purposes.
87
<PAGE> 97
The Global Notes will trade in The Depository Trust Company's Same-Day
Funds Settlement System and therefore, transfers between Direct Participants in
The Depository Trust Company will be effected in accordance with The Depository
Trust Company's procedures, and will be settled in immediately available funds.
Transfers between Indirect Participants who hold interests in the exchange notes
through Euroclear and CEDEL will be effected in the ordinary way in accordance
with their respective rules and operating procedures.
Subject to compliance with the transfer restrictions applicable to the
exchange notes described herein, cross-market transfers between Direct
Participants in The Depository Trust Company, on the one hand, and Indirect
Participants, who hold interests in the exchange notes through Euroclear and
CEDEL, on the other hand, will be effected by Euroclear's or CEDEL's respective
nominee through The Depository Trust Company in accordance with The Depository
Trust Company's rules on behalf of Euroclear or CEDEL; however, delivery of
instructions relating to cross-market transactions must be made directly to
Euroclear or CEDEL, as the case may be, by the counterparty in accordance with
the rules and procedures of Euroclear or CEDEL and within their established
deadlines (Brussels time for Euroclear and UK time for CEDEL). Euroclear or
CEDEL, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depositary to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant Global Note in The Depository Trust Company, and making or
receiving payment in accordance with normal procedures for same-day fund
settlement applicable to The Depository Trust Company. Euroclear Participants
and CEDEL Participants may not deliver instructions directly to the depositaries
for Euroclear or CEDEL.
Because of time zone differences, the securities accounts of an Indirect
Participant who holds interests in the exchange notes through Euroclear or CEDEL
purchasing an interest in a Global Note from a Direct Participant in The
Depository Trust Company will be credited, and any such crediting will be
reported to Euroclear or CEDEL during the European business day immediately
following the settlement date of The Depository Trust Company in New York.
Although recorded in The Depository Trust Company's accounting records as of The
Depository Trust Company's settlement date in New York, Euroclear and CEDEL
customers will not have access to the cash amount credited to their accounts as
a result of a sale of an interest in a Global Note to a The Depository Trust
Company Participant until the European business day for Euroclear or CEDEL
immediately following The Depository Trust Company's settlement date.
The Depository Trust Company has advised us that it will take any action
permitted to be taken by a holder of exchange notes only at the direction of one
or more Direct Participants to whose account The Depository Trust Company
interests in the Global Notes are credited and only in respect of such portion
of the aggregate principal amount of the exchange notes to which such Direct
Participant or Direct Participants have given direction. However, if there is an
Event of Default under the exchange notes, The Depository Trust Company reserves
the right to exchange Global Notes for legended notes in certificated form, and
to distribute such exchange notes to its Direct Participants.
The information in this section concerning The Depository Trust Company,
Euroclear and CEDEL and their book-entry systems has been obtained from sources
that we believe to be reliable, but we take no responsibility for the accuracy
thereof.
Although The Depository Trust Company, Euroclear and CEDEL have agreed to
the foregoing procedures to facilitate transfers of interests in the Global
Notes among Direct Participants, including Euroclear and CEDEL, they are under
no obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of us, the initial purchasers
or the trustee will have any responsibility for the performance by The
Depository Trust Company, Euroclear or CEDEL or their respective Direct
Participants and Indirect Participants of their respective obligations under the
rules and procedures governing any of their operations.
88
<PAGE> 98
TRANSFER OF INTERESTS IN GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive exchange notes in registered
certificated form if:
(1) The Depository Trust Company
(x) notifies us that it is unwilling or unable to continue as depositary
for the Global Note and we thereupon fail to appoint a successor
depositary or
(y) has ceased to be a clearing agency registered under the Securities
Exchange Act of 1934,
(2) we, at our option, notify the trustee in writing that we elect to cause
the issuance of Certificated Notes, or
(3) there shall have occurred and be continuing to occur a Default or an
Event of Default with respect to the exchange notes.
In addition, beneficial interests in a Global Note may be exchanged for
certificated exchange notes upon request but only upon at least 20 days' prior
written notice given to the trustee by or on behalf of The Depository Trust
Company in accordance with customary procedures. In all cases, certificated
exchange notes delivered in exchange for any Global Note or beneficial interest
therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures) and will bear, in the case of the Global Notes, the
restrictive legend referred to in "Notice to Investors" unless we determine
otherwise, in compliance with applicable law.
EXCHANGES OF GLOBAL NOTES
Any beneficial interest in one of the Global Notes that is transferred to a
person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note, and accordingly, will thereafter be subject
to all transfer restrictions and other procedures applicable to beneficial
interests in such other Global Note for as long as it remains such an interest.
Transfers involving an exchange of a beneficial interest in a Global Note
for a beneficial interest in another Global Note will be effected by The
Depository Trust Company by means of an instruction originated by the trustee
through The Depository Trust Company/Deposit Withdraw at Custodian system.
Accordingly, in connection with such transfer, appropriate adjustments will be
made to reflect a decrease in the principal amount of the one Global Note and a
corresponding increase in the principal amount of the other Global Note, as
applicable.
CERTIFICATED NOTES
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the trustee, exchange such beneficial
interest for exchange notes in the form of Certificated Notes. Upon any such
issuance, the trustee is required to register such Certificated Notes in the
name of, and cause the same to be delivered to, such person or persons (or the
nominee of any thereof). All such certificated exchange notes would be subject
to the legend requirements described herein under "Notice to Investors." In
addition, if:
(1) we notify the trustee in writing that the Depositary is no longer
willing or able to act as a depositary and we are unable to locate a
qualified successor within 90 days, or
(2) we, at our option, notify the trustee in writing that we elect to cause
the issuance of exchange notes in the form of Certificated Notes under
the indenture,
then, upon surrender by the Global Note Holder of its Global Note, exchange
notes in such form will be issued to each person that the Global Note Holder and
the Depositary identify as being the beneficial owner of the related exchange
notes.
89
<PAGE> 99
Neither we nor the trustee will be liable for any delay by the Global Note
Holder or the Depositary in identifying the beneficial owners of exchange notes
and we and the trustee may conclusively rely on, and will be protected in
relying on, instructions from the Global Note Holder or the Depositary for all
purposes.
SAME DAY SETTLEMENT AND PAYMENT
The indenture requires that payments in respect of the exchange notes
represented by the Global Note (including principal, premium, if any, and
interest) be made by wire transfer of immediately available next day funds to
the accounts specified by the Global Note Holder. With respect to Certificated
Notes, we will make all payments of principal, premium, if any, and interest, by
wire transfer of immediately available funds to the accounts specified by the
holders thereof or, if no such account is specified, by mailing a check to each
such holder's registered address. We expect that secondary trading in the
Certificated Notes will also be settled in immediately available funds.
DEFINITIONS
Set forth below are defined terms used in the indenture. Reference is made
to the indenture for a full disclosure of all such terms, as well as any other
terms used herein for which no definition is provided.
"Acquired Debt" means, with respect to any specified Person:
(1) indebtedness of any other Person existing at the time such other Person
is merged with or into or became a subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
subsidiary of such specified Person, and
(2) indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition (a "Disposition") of
any assets or rights (including, without limitation, by way of a sale
and leaseback) (provided that the sale, lease, conveyance or other
disposition of all or substantially all of our assets and those of our
Restricted Subsidiaries taken as a whole will be governed by the
provisions of the indenture described above under the caption "Change
of Control" and/or the provisions described above under the caption
"Merger, Consolidation or Sale of Assets" and not by the provisions of
the Asset Sale covenant); and
(2) the issue or sale by us or any of our Restricted Subsidiaries of Equity
Interests of any of our Restricted Subsidiaries, in the case of either
clause (1) or (2), whether in a single transaction or a series of
related transactions:
(a) that have a fair market value in excess of $1.0 million, or
(b) for net proceeds in excess of $1.0 million.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) a disposition of assets by us to a Restricted Subsidiary or by a
Restricted Subsidiary to us or to another Restricted Subsidiary;
90
<PAGE> 100
(2) an issuance of Equity Interests by a Restricted Subsidiary to us or to
another Restricted Subsidiary;
(3) a Restricted Payment that is permitted by the covenant described above
under the caption "Restricted Payments";
(4) a disposition in the ordinary course of business;
(5) the sale and leaseback of any assets within 90 days of the acquisition
thereof;
(6) foreclosures on assets;
(7) any exchange of property pursuant to Section 1031 on the Internal
Revenue Code of 1986, as amended, for use in a Permitted Business; and
(8) the licensing of intellectual property.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) Government Securities having maturities of not more than six months
from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances
with maturities not exceeding six months and overnight bank deposits,
in each case with any lender party to the senior bank facilities or
with any domestic commercial bank having capital and surplus in excess
of $500 million and a Thompson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the rating of "P-2" (or higher) from Moody's
Investors Service, Inc. or "A-3" (or higher) from Standard & Poor's
Corporation and in each case maturing within six months after the date
of acquisition; and
91
<PAGE> 101
(6) any fund investing exclusively in investments of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of our assets and those of
our subsidiaries taken as a whole to any "person" (as such term is used
in Section 13(d)(3) of the Securities Exchange Act of 1934) other than
the Principals or a Related Party of any of the Principals;
(2) the adoption of a plan relating to our liquidation or dissolution;
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
defined above), other than the Principals and their Related Parties,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of our Voting Stock (measured by voting
power rather than number of shares); or
(4) the first day on which a majority of the members of our board of
directors are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period, plus:
(1) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its Subsidiaries for
such period, whether paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill and
other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash charges (excluding
any such non-cash charge to the extent that it represents an accrual of
or reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such person
and its subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus
(5) our expenses and charges related to the Transactions which are paid,
taken or otherwise accounted for within 90 days of the consummation of
the Transactions, plus
(6) any non-capitalized transaction costs incurred in connection with
actual or proposed financings, acquisitions or divestitures (including,
but not limited to, financing and refinancing fees and costs incurred
in connection with the Transactions), plus
(7) any extraordinary and non-recurring charges for such period to the
extent that such charges were deducted in computing such Consolidated
Net Income, plus
92
<PAGE> 102
(8) amounts paid pursuant to the Management Services Agreement to the
extent such amounts were deducted in computing such Consolidated Net
Income.
Notwithstanding the preceding, the provision for taxes on the income or
profits of, and the depreciation and amortization and other non-cash charges of,
a Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that Net Income of such Subsidiary was included in calculating Consolidated Net
Income of such person.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication:
(1) the interest expense of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with
GAAP (including amortization of original issue discount, non-cash
interest payments, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations;
provided that in no event shall any amortization of deferred financing
costs be included in Consolidated Interest Expense); plus
(2) the consolidated capitalized interest of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued.
Notwithstanding the preceding, the Consolidated Interest Expense with
respect to any Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary shall be included only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(4) the cumulative effect of a change in accounting principles shall be
excluded; and
(5) the Net Income of any Unrestricted Subsidiary shall be excluded,
whether or not distributed to us or one of our Restricted Subsidiaries
for purposes of the covenant described under the caption "Incurrence of
Indebtedness and Issuance of Preferred Stock" and shall be included for
purposes of the covenant described under the caption "Restricted
Payments" only to the extent of the amount of dividends or
distributions paid in cash to us or one of our Restricted Subsidiaries.
93
<PAGE> 103
"Continuing Directors" means, as of any date of determination, any member
of our board of directors who:
(1) was a member of such board of directors on the date of the indenture;
(2) was nominated for election or elected to such board of directors with
the approval of a majority of the Continuing Directors who were members
of such board at the time of such nomination or election; or
(3) was nominated by the Principals pursuant to the Stockholders Agreement.
"Credit Agent" means Fleet National Bank, in its capacity as Administrative
Agent for the lenders party to the senior bank facilities, or any successor
thereto or any person otherwise appointed.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the senior bank facilities; and
(2) any other senior debt permitted under the indenture the principal
amount of which is $25.0 million or more and that has been designated
by us as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the exchange notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would not qualify
as Disqualified Stock but for change of control or asset sale provisions shall
not constitute Disqualified Stock if the provisions are not more favorable to
the holders of such Capital Stock than the provisions described under "-- Change
of Control" and "-- Asset Sales."
"Domestic Restricted Subsidiary" means, with respect to us, any of our
Wholly Owned Subsidiaries that was formed under the laws of the United States of
America.
"Earn-out Obligation" means any contingent consideration based on future
operating performance of the acquired entity or assets payable following the
consummation of an acquisition based on criteria set forth in the documentation
governing or relating to such acquisition.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of our Equity Interests (other than
Disqualified Stock) that results in net proceeds to us of at least $25,000,000.
"Existing Indebtedness" means our Indebtedness and that of our subsidiaries
(other than indebtedness under the senior bank facilities) in existence on the
date of the indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of:
(1) the Consolidated Interest Expense of such Person for such period; plus
(2) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such guarantee or Lien is called upon;
plus
(3) the product of
(a) all dividend payments, whether or not in cash, on any series of
preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests
payable solely in our Equity Interests, times
94
<PAGE> 104
(b) a fraction, the numerator of which is one and the denominator of
which is one minus the then current combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any person for any
period, the ratio of the Consolidated Cash Flow of such person for such period
to the Fixed Charges of such Person for such period. In the event that we or any
of our Restricted Subsidiaries incur, assume, guarantee or redeem any
indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, guarantee or redemption of indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by us or any of our Restricted
Subsidiaries, including through mergers or consolidations and including
any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date shall be calculated to include the Consolidated Cash
Flow of the acquired entities on a pro forma basis (to be calculated in
accordance with Article 11-02 of Regulation S-X, as in effect on the
Issue Date) after giving effect to cost savings resulting from employee
terminations, facilities consolidations and closings, standardization
of employee benefits and compensation policies, consolidation of
property, casualty and other insurance coverage and policies,
standardization of sales and distribution methods, reductions in taxes
other than income taxes and other cost savings reasonably expected to
be realized from such acquisition, shall be deemed to have occurred on
the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving
effect to clause (3) of the proviso set forth in the definition of
Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified person or any of its
Restricted Subsidiaries following the Calculation Date.
"Foreign Subsidiary" means any subsidiary of us that is not organized under
the laws of a state or territory of the United States or the District of
Columbia.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the indenture, except that
calculations made for purposes of determining compliance with the terms of the
covenants and with other provisions of the indenture shall be made without
giving effect to depreciation, amortization or other expenses recorded as a
result of the application of purchase accounting in accordance with Accounting
Principles Board Opinion Nos. 16 and 17.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, issued in accordance with
certain sections of the indenture.
95
<PAGE> 105
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
indebtedness.
"Hedging Obligations" means, with respect to any person, the obligations of
such person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such person
against fluctuations in interest rates or currency exchange rates.
"indebtedness" means, with respect to any specified person, any
indebtedness of such person, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) bankers' acceptances;
(4) representing Capital Lease Obligations; or
(5) the balance deferred and unpaid of the purchase price of any property
or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable,
if and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of the specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by such Person of any indebtedness of any other Person; provided that
Indebtedness shall not include
(1) our pledge of the Capital Stock of one of our Unrestricted Subsidiaries
to secure Non-Recourse Debt of such Unrestricted Subsidiary or
(2) any Earn-out Obligation.
The amount of any indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any indebtedness that does
not require current payments of interest; and
(2) the principal amount thereof, together with any interest thereon that
is more than 30 days past due, in the case of any other indebtedness.
"Insolvency or Liquidation Proceedings" means:
(1) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding,
relative to us or to our creditors, as such, or to our assets;
(2) any liquidation, dissolution, reorganization or winding up of us,
whether voluntary or involuntary, and involving insolvency or
bankruptcy; or
(3) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of us.
96
<PAGE> 106
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If we or any of our Restricted Subsidiaries sell or otherwise dispose of any
Equity Interests of any of our direct or indirect Restricted Subsidiaries such
that, after giving effect to any such sale or disposition, such Person is no
longer our Restricted Subsidiary, we shall be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair market value of
the Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of the covenant described
above under the caption "Restricted Payments."
"Issue Date" means the date on which the initial $100.0 million in
aggregate principal amount of the notes was originally issued under the
indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Management Services Agreement" means the Management Services Agreement
dated on the date of the indenture, between us and each of the Principals.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for taxes
on such gain (but not loss), realized in connection with:
(a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary or nonrecurring gain (but not loss), together with
any related provision for taxes on such extraordinary or nonrecurring
gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by us or any of
our Restricted Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and any relocation expenses incurred as a
result thereof, taxes paid or payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), the amounts required to be applied to the payment of indebtedness
(other than indebtedness incurred pursuant to the senior bank facilities)
secured by a Lien on the asset or assets that were the subject of the Asset
Sale, and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Recourse Debt" means indebtedness:
(1) as to which neither we nor any of our Restricted Subsidiaries:
(a) provide credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness),
97
<PAGE> 107
(b) are directly or indirectly liable as a guarantor or otherwise, or
(c) constitute the lender;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder
of any of our other indebtedness (other than the exchange notes) of or
that of any of our Restricted Subsidiaries to declare a default on such
other indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that they will
not have any recourse to the stock (other than stock of an Unrestricted
Subsidiary pledged by us to secure debt of such Unrestricted
Subsidiary) or assets of us or those of any of our Restricted
Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any indebtedness.
"Permitted Business" means any business in which we and our Restricted
Subsidiaries are engaged on the date of the indenture or any business reasonably
related, incidental or ancillary thereto.
"Permitted Investments" means:
(1) any Investment in us or in one of our Restricted Subsidiaries;
(2) any Investment in Cash Equivalents;
(3) any Investment by us or any of our Restricted Subsidiaries in a person,
if as a result of such Investment:
(a) such Person becomes our Restricted Subsidiary; or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, us or one of our Restricted Subsidiaries;
(4) any Restricted Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described above under the caption
"Repurchase at the Option of Holders -- Asset Sales";
(5) any acquisition of assets solely in exchange for the issuance of our
Equity Interests (other than Disqualified Stock); and
(6) other Investments made after the date of the indenture in any Person
having an aggregate fair market value (measured on the date each such
Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to
this clause (6) since the date of the indenture, not to exceed $12.5
million.
"Permitted Liens" means:
(1) Liens securing senior debt (including, without limitation,
indebtedness under the senior bank facilities) permitted by the terms
of the indenture to be incurred or other indebtedness allowed to be
incurred under clause (1) of the second paragraph of the covenant
described above under the caption "Incurrence of Indebtedness and
Issuance of Preferred Stock";
(2) Liens in favor of us or any Restricted Subsidiary;
(3) Liens on property of a person existing at the time such person is
merged into or consolidated with us or any of our Restricted
Subsidiaries, provided that such Liens were not incurred in
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
us or any of our Restricted Subsidiaries;
(4) Liens on property existing at the time of acquisition thereof by us or
any of our Restricted Subsidiaries, provided such Liens were not
incurred in contemplation of such acquisition;
98
<PAGE> 108
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens existing on the date of the indenture;
(7) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(8) Liens to secure indebtedness (including Capital Lease Obligations)
permitted by clause (4) of the second paragraph of the covenant
entitled "Incurrence of Indebtedness and Issuance of Preferred Stock;"
(9) Liens securing Permitted Refinancing Indebtedness where the Liens
securing the indebtedness being refinanced were permitted under the
indenture;
(10) Liens incurred in the ordinary course of business of us or any of our
Restricted Subsidiaries with respect to obligations that do not exceed
$7.5 million at any one time outstanding and that:
(a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the
ordinary course of business) and
(b) do not in the aggregate materially detract from the value of the
property or materially impair the use thereof in the operation of
business by us or such Restricted Subsidiary;
(11) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse
Debt of Unrestricted Subsidiaries;
(12) easements, rights-of-way, zoning and similar restrictions and other
similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with
industry practices;
(13) any interest or title of a lessor under any Capital Lease Obligation;
(14) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating
to such letters of credit and products and proceeds thereof;
(15) Liens encumbering deposits made to secure obligations arising from our
statutory, regulatory, contractual or warranty requirements or those
of any of our Restricted Subsidiaries, including rights of offset and
set-off;
(16) Liens securing Hedging Obligations which Hedging Obligations relate to
indebtedness that is otherwise permitted under the indenture;
(17) leases or subleases granted to others that do not materially interfere
with our ordinary course of business and that of any of our Restricted
Subsidiaries;
(18) Liens arising from filing Uniform Commercial Code financing statements
regarding leases.
"Permitted Refinancing Indebtedness" means any of our indebtedness or that
of any of our Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund our other indebtedness or that of any of our Restricted Subsidiaries;
provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
of (or accreted value, if applicable), plus accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith) except, in
99
<PAGE> 109
the case of the senior bank facilities, the principal amount of such
Permitted Refinancing Indebtedness does not exceed the greater of
(a) the principal amount of indebtedness permitted (whether or not
borrowed) under clause (1) of the covenant described above under
the caption "Incurrence of Indebtedness and Issuance of Preferred
Stock" or
(b) the amount actually borrowed under the senior bank facilities.
(2) such Permitted Refinancing Indebtedness has a final maturity date no
earlier than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(3) if the indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes,
such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and is subordinated in right of
payment to, the notes on terms at least as favorable to the holders of
notes as those contained in the documentation governing the
indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Principals" means Cornerstone Equity Investors, LLC, Madison Dearborn
Partners, Inc. and Beecken Petty & Company LLC and their respective affiliates.
"Related Party" with respect to any Principal means:
(1) any controlling stockholder or partner, 80% (or more) owned subsidiary,
or spouse or immediate family member (in the case of an individual) of
such Principal; or
(2) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a 51% or
more controlling interest of which consist of such Principal and/or
such other Persons referred to in the immediately preceding clause (1).
"Reorganization Securities" means securities distributed to holders of the
notes in an Insolvency or Liquidation Proceeding pursuant to a plan of
reorganization consented to by each class of the senior debt, but only if all of
the terms and conditions of such securities including, without limitation, term,
tenor, interest, amortization, subordination, standstills, covenants and
defaults are at least as favorable (and provide the same relative benefits) to
the holders of senior debt and to the holders of any security distributed in
such Insolvency or Liquidation Proceeding on account of any such senior debt as
the terms and conditions of the notes and the indenture are, and provide to the
holders of senior debt.
"Representative" means the trustee, agent or representative for any senior
debt.
"Restricted Investment" means an investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act of 1933.
"Senior Bank Facilities" means the senior bank facilities dated on the date
of the indenture between us and Fleet National Bank and NationsBanc Montgomery
Securities LLC, as co-arrangers, NationsBanc Montgomery Securities LLC, as
syndication agent and Fleet National Bank, as administrative agent, providing
for revolving credit borrowings and term loans, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time including increases in principal
amount.
"Senior Debt" means:
(1) all indebtedness outstanding under the senior bank facilities,
including any guarantees thereof and all Hedging Obligations with
respect thereto;
100
<PAGE> 110
(2) any other indebtedness permitted to be incurred by us under the terms
of the indenture, unless the instrument under which such indebtedness
in incurred expressly provides that it is on a parity with or
subordinated in right of payment to the notes; and
(3) all Obligations with respect to the preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt will
not include:
(1) any liability for federal, state, local or other taxes owed or owing by
us;
(2) any of our indebtedness to any of our subsidiaries or other Affiliates;
(3) any trade payables;
(4) any Earn-out Obligations; or
(5) any indebtedness that is incurred in violation of the indenture.
"Significant Subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as such Regulation is in effect on the
date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or
more of the other subsidiaries of that person (or a combination
thereof); and
(2) any partnership or limited liability company
(a) the sole general partner or the managing general partner or managing
member of which is such person or a subsidiary of such person or
(b) the only general partners of which are such person or of one or more
subsidiaries of such person (or any combination thereof).
"subsidiary guarantors" means each subsidiary of us that executes a
subsidiary guarantee in accordance with the provisions of the indenture, and
their respective successors and assigns.
"Unrestricted Subsidiary" means any subsidiary that is designated by the
board of directors as an Unrestricted Subsidiary pursuant to a Board Resolution,
but only to the extent that such subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with us or any of our Restricted Subsidiaries unless the terms of any
such agreement, contract, arrangement or understanding are no less
favorable to us or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not our Affiliates;
(3) is a person with respect to which neither we nor any of our Restricted
Subsidiaries has any direct or indirect obligation
(a) to subscribe for additional Equity Interests or
101
<PAGE> 111
(b) to maintain or preserve such person's financial condition or to
cause such person to achieve any specified levels of operating
results; and
(4) has not guaranteed or otherwise directly or indirectly provided credit
support for any indebtedness of us or any of our Restricted
Subsidiaries.
Any designation of our subsidiaries as an Unrestricted Subsidiary shall be
evidenced to the trustee by filing with the trustee a certified copy of the
Board Resolution giving effect to such designation and an officers' certificate
certifying that such designation complied with the preceding conditions and was
permitted by the covenant described above under the caption
"Covenants--Restricted Payments." If, at any time, any Unrestricted Subsidiary
would fail to meet the preceding requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
indenture and any indebtedness of such subsidiary shall be deemed to be incurred
by our Restricted Subsidiary as of such date and, if such indebtedness is not
permitted to be incurred as of such date under the covenant described under the
caption "Incurrence of Indebtedness and Issuance of Preferred Stock," we shall
be in default of such covenant. Our board of directors may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by one of our
Restricted Subsidiaries of any outstanding indebtedness of such Unrestricted
Subsidiary and such designation shall be permitted only if:
(1) such indebtedness is permitted under the covenant described under the
caption "Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock," and
(2) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of such
person that is at the time entitled to vote in the election of the board of
directors of such person.
"Weighted Average Life to Maturity" means, when applied to any indebtedness
at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying:
(a) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest one-twelfth) that
will elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such indebtedness.
"Wholly Owned Subsidiary" of any Person means a subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person and/or by one or more Wholly Owned Subsidiaries of such Person.
102
<PAGE> 112
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
We originally sold the old notes on March 5, 1999 to Donaldson, Lufkin &
Jenrette. Donaldson, Lufkin & Jenrette subsequently resold the old notes to
qualified institutional buyers in reliance on Rule 144A under the Securities Act
of 1933 and to a limited number of institutional accredited investors that
agreed to comply with transfer restrictions and other conditions. As a condition
to the purchase agreement, we entered into a registration rights agreement with
Donaldson, Lufkin & Jenrette pursuant to which we have agreed to:
(1) file a registration statement within 90 days after the date on which
the old notes were issued with respect to registered offers to exchange
the old notes for the exchange notes; and
(2) use our best efforts to cause the exchange offer registration statement
to be declared effective under the Securities Act of 1933 within 180
days after the date on which the old notes were originally issued.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept any and all old notes validly
tendered and not withdrawn prior to 5:00 p.m., New York City time, on the
expiration date. We will issue $1,000 principal amount of exchange notes in
exchange for each $1,000 principal amount of outstanding old notes accepted in
the exchange offer. Holders may tender some or all of their old notes pursuant
to the exchange offer. However, old notes may be tendered only in integral
multiples of $1,000.
The form and terms of the exchange notes are the same as the form and terms
of the old notes except that:
(1) the exchange notes have been registered under the Securities Act of
1933 and hence will not bear legends restricting their transfer
thereof; and
(2) the holders of the exchange notes will not be entitled to rights under
the registration rights agreement. These rights include the provisions
for an increase in the interest rate on the old notes in some
circumstances relating to the timing of the exchange offer. All of
these rights will terminate when the exchange offer is terminated. The
exchange notes will evidence the same debt as the old notes. Holders of
exchange notes will be entitled to the benefits of the indenture.
As of the date of this prospectus, $100.0 million aggregate principal
amount of old notes was outstanding. We have fixed the close of business on
, 1999 as the record date for the exchange offer for purposes of
determining the persons to whom this prospectus and the letter of transmittal
will be mailed initially.
We intend to conduct the exchange offer in accordance with the applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
We shall be deemed to have accepted validly tendered old notes when, as and
if we have given oral or written notice to the exchange agent. The exchange
agent will act as agent for the tendering holders for the purpose of receiving
the exchange notes from the issuers.
If any tendered old notes are not accepted for exchange because of an
invalid tender, the occurrence of other events set forth in this prospectus or
otherwise, we will return the certificates for any unaccepted old notes, at our
expense, to the tendering holder as promptly as practicable after the expiration
date.
Holders who tender old notes in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the
103
<PAGE> 113
exchange of notes. We will pay all charges and expenses, other than transfer
taxes in some circumstances, in connection with the exchange offer as described
under the subheading "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "expiration date" shall mean 5:00 p.m., New York City time, on
, 1999, unless we extend the exchange offer. In that case, the term
"expiration date" shall mean the latest date and time to which the exchange
offer is extended. Notwithstanding the foregoing, we will not extend the
expiration date beyond , 1999.
In order to extend the exchange offer, prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled expiration date,
we will:
(1) notify the exchange agent of any extension by oral or written notice
and
(2) mail to the registered holders an announcement of any extension.
We reserve the right, in our sole discretion,
(1) if any of the conditions set forth below under the heading "Conditions"
shall not have been satisfied,
(A) to delay accepting any old notes,
(B) to extend the exchange offer or
(C) to terminate the exchange offer, or
(2) to amend the terms of the exchange offer in any manner.
Any delay in acceptance, extension, termination or amendment will be followed as
promptly as practicable by oral or written notice of delay to the registered
holders. We will give oral or written notice of any delay, extension or
termination to the exchange agent.
INTEREST ON THE EXCHANGE NOTES
The exchange notes will bear interest from their date of issuance. Holders
of old notes that are accepted for exchange will receive, in cash, accrued
interest on the exchange notes to, but not including, the date of issuance of
the exchange notes. We will make the first interest payment on the exchange
notes on September 15, 1999. Interest on the old notes accepted for exchange
will cease to accrue upon issuance of the exchange notes.
Interest on the exchange notes is payable semi-annually on each March 15
and September 15, commencing on September 15, 1999.
PROCEDURES FOR TENDERING OLD NOTES
Only a holder of old notes may tender old notes in the exchange offer. To
tender in the exchange offer, a holder must
- complete, sign and date the letter of transmittal, or a facsimile of the
letter of transmittal,
- have the signatures guaranteed if required by the letter of transmittal,
and
- mail or otherwise deliver the letter of transmittal or such facsimile,
together with the old notes and any other required documents, to the
exchange agent prior to 5:00 p.m., New York City time, on the expiration
date.
To tender old notes effectively, the holder must complete the letter of
transmittal and other required documents and the exchange agent must receive all
the documents prior to 5:00 p.m., New York City time, on the expiration date.
Delivery of the old notes may be made by book-entry transfer in accordance with
the procedures described below. The exchange agent must receive confirmation of
book-entry transfer prior to the expiration date.
104
<PAGE> 114
The tender by a holder and the acceptance of the tender by us will
constitute agreement between the holder and us under the terms and subject to
the conditions set forth in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK
OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO
CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO US. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner whose old notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should promptly instruct the registered holder to tender on the
beneficial owner's behalf. See "Instruction to Registered Holder and/or Book-
Entry Transfer Facility Participant from Owner" included with the letter of
transmittal.
An institution that is a member firm of the Medallion system must guarantee
signatures on a letter of transmittal or a notice of withdrawal unless the old
notes are tendered:
(1) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the
letter of transmittal; or
(2) for the account of member firm of the Medallion system.
If the letter of transmittal is signed by a person other than the
registered holder of any old notes listed in that letter of transmittal, the old
notes must be endorsed or accompanied by a properly completed bond power, signed
by the registered holder as the registered holder's name appears on the old
notes. An institution that is a member firm of the Medallion System must
guarantee the signature.
Trustees, executors, administrators, guardians, attorneys-in-fact, offices
of corporations or others acting in a fiduciary or representative capacity
should indicate their capacities when signing the letter of transmittal or any
old notes or bond powers. Evidence satisfactory to us of their authority to so
act must be submitted with the letter of transmittal.
We understand that the exchange agent will make a request promptly after
the date of this prospectus to establish accounts with respect to the exchange
notes at the book-entry transfer facility, The Depository Trust Company, for the
purpose of facilitating the exchange offer. Subject to the establishment of the
accounts, any financial institution that is a participant in The Depository
Trust Company's system may make book-entry delivery of old notes. To do so, the
financial institution should cause the book-entry transfer facility to transfer
the old notes into the exchange agent's account with respect to the old notes
following the book-entry transfer facility's procedures for transfer. Delivery
of the old notes may be effected through book-entry transfer into the exchange
agent's account at the book-entry transfer facility. However, the holder must
transmit and the exchange agent must receive or confirm an appropriate letter of
transmittal properly completed and duly executed with any required signature
guarantee and all other required documents on or prior to the expiration date,
or, if the guaranteed delivery procedures described below are complied with,
within the time period provided under such procedures. Delivery of documents to
the book-entry transfer facility does not constitute delivery to the exchange
agent.
The Depositary and The Depository Trust Company have confirmed that the
exchange offer is eligible for The Depository Trust Company Automated Tender
Offer Program. Accordingly, The Depository Trust Company participants may
electronically transmit their acceptance of the exchange offer by causing The
Depository Trust Company to transfer old notes to the depositary in accordance
with The Depository Trust Company's Automated Tender Offer Program procedures
for transfer. The Depository Trust Company will then send an "agent's message"
to the Depositary.
The term "agent's message" means a message transmitted by The Depository
Trust Company, received by the Depositary and forming part of the confirmation
of a book-entry transfer, which states that
105
<PAGE> 115
(1) The Depository Trust Company has received an express acknowledgment
from the participant in The Depository Trust Company tendering old
notes subject of the book-entry confirmation,
(2) the participant has received and agrees to be bound by the terms of the
letter of transmittal and
(3) we may enforce such agreement against such participant.
In the case of an agent's message relating to guaranteed delivery, the term
means a message transmitted by The Depository Trust Company and received by the
Depositary, which states that The Depository Trust Company has received an
express acknowledgment from the participant in The Depository Trust Company
tendering old notes that such participant has received and agrees to be bound by
the notice of guaranteed delivery.
Notwithstanding the foregoing, in order to validly tender in the exchange
offer with respect to securities transferred through the Automated Tender Offer
Program, a The Depository Trust Company participant using Automated Tender Offer
Program must also properly complete and duly execute the applicable letter of
transmittal and deliver it to the Depositary.
By the authority granted by The Depository Trust Company, any The
Depository Trust Company participant which has old notes credited to its The
Depository Trust Company account at any time (and held of record by The
Depository Trust Company's nominee) may directly provide a tender as though it
were the registered holder by completing, executing and delivering the
applicable letter of transmittal to the Depositary. DELIVERY OF DOCUMENTS TO THE
DEPOSITORY TRUST COMPANY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
All questions as to the
- validity,
- form,
- eligibility (including time of receipt),
- acceptance of tendered old notes and
- withdrawal of tendered old notes
will be determined by us in our sole discretion. Our determination will be final
and binding. We reserve the absolute right to reject any and all old notes not
properly tendered. We reserve the absolute right to reject any old notes which
would be unlawful if accepted, in the opinion of our counsel. We also reserve
the right in our sole discretion to waive any defects, irregularities or
conditions of tender as to particular old notes. Our interpretation of the terms
and conditions of the exchange offer, including the instructions in the letter
of transmittal, will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of old notes must be cured
within such time as we shall determine. We intend to notify holders of defects
or irregularities with respect to tenders of old notes. However, neither we, the
exchange agent nor any other person shall incur any liability for failure to
give such notification. Tenders of old notes will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any old
notes received by the exchange agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the exchange agent to the tendering holders, unless otherwise
provided in the letter of transmittal, as soon as practicable following the
expiration date.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their old notes and:
(1) whose old notes are not immediately available;
(2) who cannot deliver their old notes, the letter of transmittal or any
other required documents to the exchange agent; or
106
<PAGE> 116
(3) who cannot complete the procedures for book-entry transfer, prior to
the expiration date
may effect a tender if:
(1) they tender through an institution that is a member firm of the
Medallion system;
(2) prior to the expiration date, the exchange agent receives from an
institution that is a member firm of the Medallion system a properly
completed and duly executed notice of guaranteed delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address
of the holder, the certificate number(s) of such old notes and the
principal amount of old notes tendered, stating that the tender is
being made and guaranteeing that, within five New York Stock Exchange
trading days after the expiration date, the letter of transmittal (or
facsimile thereof) together with the certificate(s) representing the
old notes (or a confirmation of book-entry transfer of such old notes
into the exchange agent's account at the book-entry transfer facility),
and any other documents required by the letter of transmittal will be
deposited by the firm with the exchange agent; and
(3) the exchange agent receives
(A) such properly completed and executed letter of transmittal (of
facsimile thereof),
(B) the certificate(s) representing all tendered old notes in proper
form for transfer (or a confirmation of book-entry transfer of such
old notes into the exchange agent's account at the book-entry
transfer facility), and
(C) all other documents required by the letter of transmittal
upon five New York Stock Exchange trading days after the expiration date.
Upon request to the exchange agent, we will send a notice of guaranteed
delivery to holders who wish to tender their old notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, holders may withdraw
tenders of old notes at any time prior to 5:00 p.m., New York City time, on the
expiration date. To withdraw a tender of old notes in the exchange offer, the
exchange agent must receive a telegram, telex, letter or facsimile transmission
notice of withdrawal at its address set forth in this prospectus prior to 5:00
p.m., New York City time, on the expiration date. Any such notice of withdrawal
must:
(1) specify the name of the person having deposited the old notes to be
withdrawn;
(2) identify the old notes to be withdrawn (including the certificate
number(s) and principal amount of such old notes, or, in the case of
old notes transferred by book-entry transfer, the name and number of
the account at the book-entry transfer facility to be credited);
(3) be signed by the holder in the same manner as the original signature on
the letter of transmittal by which such old notes were tendered
(including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the trustee with respect to
the old notes register the transfer of old notes into the name of the
person withdrawing the tender; and
(4) specify the name in which any old notes are to be registered, if
different from that of the person who deposited the old notes.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of such notices. Our determination shall be final and
binding on all parties. We will not deem old notes so withdrawn to have been
validly tendered for purposes of the exchange offer. We will not issue exchange
notes for withdrawn old notes unless you validly retender the withdrawn old
notes. We will return any old notes which have been tendered but which are not
accepted for exchange to the holder of the old notes at our cost as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer.
107
<PAGE> 117
You may retender properly withdrawn old notes by following one of the procedures
described above under the heading "Procedures for Tendering Old Notes" at any
time prior to the expiration date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we shall not be
required to accept for exchange, or exchange exchange notes for, any old notes,
and may terminate or amend the exchange offer as provided in this prospectus
before the acceptance of the old notes, if:
(1) any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our sole judgment, might materially impair our ability to
proceed with the exchange offer or any development has occurred in any
existing action or proceeding which may be harmful to us or any of our
subsidiaries; or
(2) any law, statute, rule, regulation or interpretation by the staff of
the Securities and Exchange Commission is proposed, adopted or enacted,
which, in our sole judgment, might impair our ability to proceed with
the exchange offer or impair the contemplated benefits of the exchange
offer to us; or
(3) any governmental approval has not been obtained, which we believe, in
our sole discretion, is necessary for the consummation of the exchange
offer as outlined in this prospectus.
If we determine in our sole discretion that any of the conditions are not
satisfied, we may:
(1) refuse to accept any old notes and return all tendered old notes to the
tendering holders;
(2) extend the exchange offer and retain all old notes tendered prior to
the expiration of the exchange offer, subject, however, to the rights
of holders to withdraw their old notes; or
(3) waive such unsatisfied conditions of the exchange offer and accept all
properly tendered old notes which have not been withdrawn.
EXCHANGE AGENT
United States Trust Company of New York has been appointed as the exchange
agent for the exchange offer. You should direct all
- executed letters of transmittal,
- questions,
- requests for assistance,
- requests for additional copies of this prospectus or of the letter of
transmittal and
- requests for Notices of Guaranteed Delivery
to the exchange agent addressed as follows:
<TABLE>
<S> <C> <C>
By Overnight Courier and By Hand: By Registered or
by Hand after 4:30 pm United States Trust Certified Mail:
on the Expiration Date: Company of New York United States Trust
United States Trust 111 Broadway, Lower Level Company of New York
Company of New York New York, New York 10006 P.O. Box 844
770 Broadway, 13th Floor Attn: Corporate Trust Services Cooper Station
New York, New York 10003 Via Facsimile: New York, New York 10276-0844
Attn: Corporate (212) 780-0592 Attn: Corporate
Trust Services Attn: Corporate Trust Services Trust Services
Confirm by Telephone:
(800) 548-6565
</TABLE>
DELIVERY OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
108
<PAGE> 118
FEES AND EXPENSES
We will bear the expenses of soliciting tenders. We are mailing the
principal solicitation. However, our officers and regular employees and those of
our affiliates may make additional solicitation by telegraph, telecopy,
telephone or in person.
We have not retained any dealer-manager in connection with the exchange
offer. We will not make any payments to brokers, dealers, or others soliciting
acceptances of the exchange offer. However, we will pay the exchange agent
reasonable and customary fees for its services. We will reimburse the exchange
agent for its reasonable out-of-pocket expenses.
We will pay the cash expenses incurred in connection with the exchange
offer. These expenses include fees and expenses of the exchange agent and
trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The exchange notes will be recorded at the same carrying value as the old
notes. The carrying value is face value, as reflected in our accounting records
on the date of exchange. Accordingly, we will recognize no gain or loss for
accounting purposes. The expenses of the exchange offer will be expensed over
the term of the exchange notes.
TRANSFER TAXES
Holders who tender their old notes for exchange will not be obligated to
pay any transfer taxes in connection with the exchange. However, holders who
instruct us to register exchange notes in the name of, or request that old notes
not tendered or not accepted in the exchange offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax on that transfer.
CONSEQUENCES OF FAILURE TO EXCHANGE; RESALES OF EXCHANGE NOTES
The old notes that are not exchanged for exchange notes under the exchange
offer will remain restricted securities. Accordingly, those old notes may be
resold only:
(1) to us (upon redemption of the old notes or otherwise);
(2) so long as the old notes are eligible for resale pursuant to Rule 144A,
to a person inside the United States who is a qualified institutional
buyer according to Rule 144A under the Securities Act of 1933 or
pursuant to another exemption from the registration requirements of the
Securities Act of 1933, based upon an opinion of counsel reasonably
acceptable to us;
(3) outside the United States to a foreign person in a transaction meeting
the requirements of Rule 904 under the Securities Act of 1933; or
(4) under an effective registration statement under the Securities Act of
1933
in each case in accordance with any applicable securities laws of any state of
the United States.
SHELF REGISTRATION STATEMENT
If either of the following occur:
(1) the exchange offer is not permitted by applicable law or policy of the
Securities and Exchange Commission; or
(2) a holder of old notes notifies us that:
(A) the holder was prohibited by law or Securities Exchange Commission
policy from participating in the exchange offer,
109
<PAGE> 119
(B) the holder cannot resell the exchange notes acquired by it in the
exchange offer to the public without delivering a prospectus and the
prospectus contained herein is not appropriate or available for such
resales by the holder, or
(C) the holder is a broker-dealer and holds old notes acquired directly
from us or any of our affiliates
then, we will take the following actions:
(1) we will file a shelf registration statement under Rule 415 of the
Securities Act of 1933, relating to the notes, and
(2) use our best efforts to cause such shelf registration statement to
become effective on or prior to the date that is 360 days after March
12, 1999.
RESALES OF THE EXCHANGE NOTES
Based on interpretations by the staff of the Securities and Exchange
Commission set forth in no-action letters issued to third parties, we believe
that a holder or other person who receives exchange notes will be allowed to
resell the exchange notes to the public without further registration under the
Securities Act of 1933 and without delivering a prospectus that satisfies the
requirements of Section 10 of the Securities Act of 1933. The holder (other than
a person that is our "affiliate" within the meaning of Rule 405 under the
Securities Act of 1933) who receives exchange notes in exchange for old notes in
the ordinary course of business and who is not participating, need not intend to
participate or have an arrangement or understanding with any person to
participate in the distribution of the exchange notes. However, if any holder
acquires exchange notes in the exchange offer for the purpose of distributing or
participating in a distribution of the exchange notes, the holder cannot rely on
the position of the staff of the Securities and Exchange Commission enunciated
in the no-action letters or any similar interpretive letters. A holder who
acquires exchange notes in order to distribute them must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale transaction, unless an exemption from registration
is otherwise available. Further, each broker-dealer that receives exchange notes
for its own account in exchange for notes as a result of market-making
activities or other trading activities must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes.
110
<PAGE> 120
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion, including the opinion of counsel described below,
is based upon current provisions of the Internal Revenue Code of 1986, as
amended, applicable Treasury regulations, judicial authority and administrative
rulings and practice. The Internal Revenue Service may take a contrary view, and
no ruling from the Internal Revenue Service has been or will be sought.
Legislative judicial or administrative changes or interpretations may be
forthcoming that could alter or modify the following statements and conditions.
Any changes or interpretations may or may not be retroactive and could affect
the tax consequences to holders. Some holders (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
may be subject to special rules not discussed below. We recommend that each
holder consult his own tax advisor as to the particular tax consequences of
exchanging such holder's old notes for exchange notes, including the
applicability and effect of any state, local or foreign tax laws.
Kirkland & Ellis, counsel to Team Health, has advised us that in its
opinion, the exchange of the old notes for exchange notes pursuant to the
exchange offer will not be treated as an "exchange" for federal income tax
purposes because the exchange notes will not be considered to differ materially
in kind or extent from the old notes. Rather, the exchange notes received by a
holder will be treated as a continuation of the old notes in the hands of such
holder. As a result, there will be no federal income tax consequences to holders
exchanging old notes for exchange notes pursuant to the exchange offer.
PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act of 1933 in connection
with any resale of exchange notes.
This prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of exchange notes
received in exchange for old notes if the old notes were acquired as a result of
market-making activities or other trading activities. We and our subsidiary
guarantors have agreed to make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until , 1999, all dealers effecting transactions in the
exchange notes may be required to deliver a prospectus.
Neither we nor our subsidiary guarantors will receive any proceeds from any
sales of the exchange notes by broker-dealers. Exchange notes received by
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions
- in the over-the-counter market,
- in negotiated transactions,
- through the writing of options on the exchange notes or a combination of
such methods of resale,
- at market prices prevailing at the time of resale,
- at prices related to such prevailing market prices or
- at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers
or dealers. Brokers or dealers may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such exchange notes. Any broker-dealer that resells the exchange notes that
were received by it for its own account pursuant to the exchange offer and any
broker or dealer that participates in a distribution of such exchange notes may
be deemed to be an "underwriter" within the meaning of the Securities Act of
1933 and any profit on any such resale of exchange notes and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act of 1933. The letter of transmittal states
that by acknowledging that it will deliver
111
<PAGE> 121
and by delivering a prospectus meeting the requirements of the Securities Act of
1933, a broker-dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act of 1933.
Based on interpretations by the staff of the Securities and Exchange
Commission set forth in no-action letters issued to third parties, we believe
that a holder or other person who receives exchange notes will be allowed to
resell the exchange notes to the public without further registration under the
Securities Act of 1933 and without delivering to the purchasers of the exchange
notes a prospectus that satisfies the requirements of Section 10 of the
Securities Act of 1933. The holder (other than a person that is an "affiliate"
of Team Health within the meaning of Rule 405 under the Securities Act of 1933)
who receives exchange notes in exchange for old notes in the ordinary course of
business and who is not participating, need not intend to participate or have an
arrangement or understanding with person to participate in the distribution of
the exchange notes.
However, if any holder acquires exchange notes in the exchange offer for
the purpose of distributing or participating in a distribution of the exchange
notes, the holder cannot rely on the position of the staff of the Securities and
Exchange Commission enunciated in such no-action letters or any similar
interpretive letters. The holder must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933 in connection
with any resale transaction. A secondary resale transaction should be covered by
an effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K under
the Securities Act of 1933, unless an exemption from registration is otherwise
available.
Further, each broker-dealer that receives exchange notes for its own
account in exchange for old notes, where the old notes were acquired by such
participating broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of any exchange notes. We and each of our subsidiary
guarantors have agreed, for a period of not less than one year from the
consummation of the exchange offer, to make this prospectus available to any
broker-dealer for use in connection with any such resale.
For a period of not less than one year after the expiration date we will
promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests those documents
in the letter of transmittal. We and each of our guarantor subsidiaries have
jointly and severally agreed to pay all expenses incident to the exchange offer,
including the expenses of one counsel for the holders of the old notes, other
than commissions or concessions of any brokers or dealers. We will indemnify the
holders of the old notes against liabilities under the Securities Act of 1933,
including any broker-dealers.
LEGAL MATTERS
Kirkland & Ellis, New York, New York will issue an opinion for us and the
guarantor subsidiaries with respect to the issuance of the exchange notes
offered hereby, including
(1) our existence and good standing under our state of incorporation,
(2) our authorization of the sale and issuance of the exchange notes and
(3) the enforceability of the exchange notes.
EXPERTS
The consolidated and combined financial statements of Team Health, Inc. at
December 31, 1997 and 1998, and for each of the three years in the period ended
December 31, 1998, appearing in this prospectus and registration statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon appearing elsewhere herein, and are included in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
112
<PAGE> 122
AVAILABLE INFORMATION
We and our subsidiary guarantors have filed with the Securities and
Exchange Commission a Registration Statement on Form S-4, the "Exchange Offer
Registration Statement," which term shall encompass all amendments, exhibits,
annexes and schedules thereto, pursuant to the Securities Act of 1933, and the
rules and regulations promulgated thereunder, covering the exchange notes being
offered. This prospectus does not contain all the information set forth in the
exchange offer registration statement. For further information with respect to
Team Health, the subsidiary guarantors and the exchange offer, reference is made
to the exchange offer registration statement. Statements made in this prospectus
as to the contents of any contract, agreement or other document referred to are
not necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the exchange offer registration statement,
reference is made to the exhibit for a more complete description of the document
or matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
The exchange offer registration statement, including the exhibits thereto,
can be inspected and copied at the public reference facilities maintained by the
Securities and Exchange Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Regional Offices of the Securities and
Exchange Commission at Seven World Trade Center, Suite 1300, New York, New York
10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials can be obtained from the Public Reference Section of
the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, the Securities and Exchange
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Securities and Exchange Commission. The address of such Web site is:
http://www.sec.gov.
As a result of the filing of the exchange offer registration statement, we
will become subject to the informational requirements of the Securities Exchange
Act of 1934, and in accordance therewith will be required to file periodic
reports and other information with the Securities and Exchange Commission. Our
obligation to file periodic reports and other information with the Securities
and Exchange Commission will be suspended if the exchange notes are held of
record by fewer than 300 holders as of the beginning of our fiscal year other
than the fiscal year in which the exchange offer registration statement is
declared effective.
We will nevertheless be required to continue to file reports with the
Securities and Exchange Commission if the exchange notes are listed on a
national securities exchange. In the event we cease to be subject to the
informational requirements of the Securities Exchange Act of 1934, we will be
required under the indenture to continue to file with the Securities and
Exchange Commission the annual and quarterly reports, information, documents or
other reports, including, without limitation, reports on Forms 10-K, 10-Q and
8-K, which would be required pursuant to the informational requirements of the
Securities Exchange Act of 1934.
Under the indenture, we will furnish the holders of exchange notes with
annual, quarterly and other reports after we files such reports with the
Securities and Exchange Commission. Annual reports delivered to the trustee and
the holders of exchange notes will contain financial information that has been
examined and reported upon, with an opinion expressed by an independent public
accountant. We will also furnish such other reports as may be required by law.
113
<PAGE> 123
(This page intentionally left blank.)
<PAGE> 124
TEAM HEALTH, INC.
INDEX TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
<TABLE>
<S> <C>
Unaudited Pro Forma Condensed Statement of Income for the
Year Ended December 31, 1998.............................. P-3
Unaudited Pro Forma Condensed Statement of Income for the
Three Months Ended March 31, 1999......................... P-4
Notes to Unaudited Pro Forma Condensed Statements of
Income.................................................... P-5
</TABLE>
P-1
<PAGE> 125
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information of the Company has
been prepared to give effect to the following transactions (together, the
"Transactions"):
(1) the Recapitalization;
(2) the Offering,
(3) the contribution of the capital stock of certain subsidiaries to the
Company by MedPartners;
(4) $150.0 million of borrowings by the Company under the Term Loan portion
of a Senior Credit Facilities;
(5) a $99.7 million cash equity investment in the Company by the Equity
Sponsors;
(6) a Management Contribution of $8.5 million;
(7) equity of Physician Services held by MedPartners having a fair market
value of $6.8 million;
(8) $2.5 million in the assumption of existing debt and
(9) the assumption of certain contingent earnout payments which the Company
believes have a maximum value of $19.8 million.
For purposes of the Unaudited Pro Forma Financial Information, the Equity
Investment is necessary to determine the total imputed value of the Company for
purposes of the calculation of deferred tax assets. The unaudited pro forma
adjustments presented are based upon available information and certain
assumptions that the Company believes are reasonable under the circumstances.
The unaudited pro forma condensed statements of income of the Company for
the year ended December 31, 1998 and the three months ended March 31, 1999 give
effect to the Transactions as if they had occurred at the beginning of the
respective periods.
The Recapitalization has been accounted for as a leveraged
recapitalization, which will have no impact on the historical basis of the
Company's assets and liabilities. The unaudited pro forma financial information
should be read in conjunction with "Use of Proceeds," "Selected Historical
Financial Data," "Management's Discussion and Analysis of Financial Condition
and Results of Operations," and the Financial Statements of the Company and
notes thereto all included elsewhere in this Offering Memorandum. The Unaudited
Pro Forma Financial Information and related notes are provided for informational
purposes only and do not purport to be indicative of the Company's financial
condition or results of operations that would have actually been obtained had
the Transactions been consummated as of the assumed date and for the periods
presented, nor are they indicative of the Company's financial condition or
results of operations of any future period.
The unaudited pro forma adjustments to operations exclude approximately
$7.5 million of estimated transaction fees and expenses incurred in connection
with the Transactions. These fees and expenses are nonrecurring and were
recorded in the Company's statement of income during the period in which the
Transactions are consummated. There were $8.4 million of estimated financing
expenses capitalized by the Company in connection with the Transactions.
P-2
<PAGE> 126
TEAM HEALTH, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
Net revenue................................................. $547,785 $ -- $547,785
Professional expenses....................................... 430,362 -- 430,362
-------- -------- --------
Gross profit................................................ 117,423 -- 117,423
General and administrative.................................. 58,362 5,948(a) 64,810
500(b)
Depreciation and amortization............................... 9,740 -- 9,740
-------- -------- --------
Operating income............................................ 49,321 6,448 42,873
MedPartners' management fees................................ 2,941 (2,941)(c) --
Interest expense, net....................................... 5,301 20,473(d) 25,774
Goodwill impairment charge.................................. 2,992 -- 2,992
Other expenses.............................................. 871 (871)(e) --
Cumulative effect of change in accounting principle, net.... 912 -- 912
-------- -------- --------
Income before income taxes.................................. 36,304 (23,109) 13,195
Income tax expense.......................................... 15,778 (8,781)(f) 6,997
-------- -------- --------
Net income.................................................. $ 20,526 $(14,328) $ 6,198
======== ======== ========
OTHER FINANCIAL DATA
EBITDA(g)............................................................................. $ 54,268
Net cash provided by (used in):
Operating activities................................................................ 30,726
Investing activities................................................................ (22,864)
Financing activities................................................................ (27,643)
Cash interest expense................................................................. 24,932
</TABLE>
P-3
<PAGE> 127
TEAM HEALTH, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO
HISTORICAL ADJUSTMENTS FORMA
---------- ----------- --------
<S> <C> <C> <C>
Net Revenue............................................... $137,877 $ -- $137,877
Professional expenses..................................... 108,388 -- 108,388
-------- -------- --------
Gross profit.............................................. 29,489 -- 29,489
General and administrative................................ 15,744 1,239(a) 16,983
Depreciation and amortization............................. 2,351 -- 2,351
-------- -------- --------
Operating Income.......................................... 11,394 -- 10,155
MedPartners' management Fee............................... 25 (25)(c) --
Interest Income........................................... (59) -- (59)
Interest Expense.......................................... 1,631 4,814(d) 6,445
Recapitalization Expense.................................. 21,513 -- 21,513
Other expenses............................................ 105 -- 105
-------- -------- --------
(Loss) before income taxes................................ (11,821) (6,028) (17,849)
Income tax (benefit)...................................... (4,361) (2,291)(f) (6,652)
-------- -------- --------
Net (loss)................................................ $ (7,460) $ (3,737) $(11,197)
======== ======== ========
OTHER FINANCIAL DATA
EBITDA(g)............................................................................ $ 12,506
Net cash provided by (used in):
Operating Activities............................................................... 5,123
Investing Activities............................................................... (1,799)
Financing Activities............................................................... 10,324
Cash Interest Expense................................................................ 6,234
</TABLE>
P-4
<PAGE> 128
TEAM HEALTH, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS)
(a) To record management's estimate of incremental stand-alone costs to replace
services formerly provided by MedPartners:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1998 1999
------------ ---------------
<S> <C> <C>
Accounting and finance........................ $ 1,550 $ 323
Additional insurance costs.................... 1,234 257
Risk management............................... 900 187
Information technology........................ 802 167
Intercompany charges.......................... 764 159
Legal......................................... 300 62
Lobbying...................................... 200 42
Human resources............................... 77 16
Other......................................... 121 26
------- ------
Pro forma adjustment..................... $ 5,948 $1,239
======= ======
</TABLE>
(b) To record the management fee payable by the Company, in the amount of $500
per annum.
(c) To remove management fee for services formerly provided by MedPartners. The
incremental stand-alone costs to replace these services are described in
note (a) above.
(d) To record the increase in interest expense as a result of the
Recapitalization as follows:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1998 1999
------------ ---------------
<S> <C> <C>
Senior Subordinated Notes(1).................. $12,000 $ 3,000
Term Loans:
Term A Loan ($60,000 at 8.25% per
annum)(2)................................ 4,950 1,238
Term B Loan ($90,000 at 8.75% per
annum)(2)................................ 7,875 1,969
Amortization of deferred financing costs...... 842 211
Interest on debt assumed...................... 107 27
------- -------
Total pro forma interest expense.............. 25,774 6,445
Less historical interest expense.............. (5,301) (1,631)
------- -------
Pro forma adjustment..................... $20,473 $ 4,814
======= =======
</TABLE>
- ---------------
(1) Interest expense was calculated at an interest rate of 12.00%.
(2) Represents 3 month LIBOR @ 5.00% plus 3.25% and 3.75% for Term A and Term B
Loans, respectively.
P-5
<PAGE> 129
TEAM HEALTH, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
STATEMENTS OF INCOME -- (CONTINUED)
(IN THOUSANDS)
(e) To remove other expenses of $871 for MedPartners' internal expense
allocations.
(f) To record the difference between the historical tax expense and unaudited
pro forma expense at the statutory rate of 38% as follows:
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1998 1999
------------ ---------------
<S> <C> <C>
Pro forma pretax income (loss).................... $ 13,195 $(17,849)
Adjustments to pretax income...................... 5,218 344
-------- --------
Taxable income (loss)............................. 18,413 (17,505)
Statutory rate.................................... 38% 38%
-------- --------
Pro forma tax expense (benefit)................... 6,997 (6,652)
Historical tax (expense) benefit.................. (15,778) 4,361
-------- --------
Pro forma adjustment.............................. $ (8,781) $ (2,291)
======== ========
</TABLE>
(g) EBITDA represents operating income plus depreciation and amortization. Pro
Forma EBITDA represents EBITDA less estimated stand-alone costs plus the
effects of certain non-recurring transactions in 1998. Pro forma EBITDA has
not been reduced by a management fee payable pursuant to the Management
Services Agreement, which is contractually subordinated to all obligations
under the Notes and the Senior Credit Facilities.
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
1998 1999
------------ ---------------
<S> <C> <C>
EBITDA............................................ $59,061 $13,745
Estimated stand-alone costs....................... (5,948) (1,239)
Non-recurring transactions........................ 1,155 --
------- -------
Pro forma EBITDA............................. $54,268 $12,506
======= =======
</TABLE>
P-6
<PAGE> 130
TEAM HEALTH, INC.
INDEX TO AUDITED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Auditors.............................. F-2
Consolidated and Combined Balance Sheets.................... F-3
Consolidated and Combined Statements of Income.............. F-4
Consolidated and Combined Statements of Net Invested
Capital................................................... F-5
Consolidated and Combined Statements of Cash Flows.......... F-6
Notes to Consolidated and Combined Financial Statements..... F-7
</TABLE>
F-1
<PAGE> 131
REPORT OF INDEPENDENT AUDITORS
Board of Directors
MedPartners, Inc.
3000 Galleria Tower
Birmingham, Alabama 35244
We have audited the accompanying consolidated and combined balance sheets
of Team Health, Inc. (an operating unit of MedPartners, Inc.) as of December 31,
1997 and 1998, and the related consolidated and combined statements of income,
net invested capital and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated and combined financial position of
Team Health, Inc. at December 31, 1998 and 1997, and the consolidated and
combined results of operations and cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles.
As discussed in Note 17, the Company changed its method of accounting for
the costs of start-up activities.
Birmingham, Alabama Ernst & Young LLP
January 29, 1999
F-2
<PAGE> 132
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 5,468 $ 3,894
Marketable securities..................................... 242 --
Accounts receivable, net.................................. 130,777 148,447
Prepaid expenses.......................................... 4,580 904
Other receivables......................................... 9,219 4,106
Other current assets...................................... 557 269
-------- --------
Total current assets........................................ 150,843 157,620
Property and equipment, net................................. 14,863 14,886
Intangibles, net............................................ 31,698 56,457
Other....................................................... 2,130 993
-------- --------
Total assets................................................ $199,534 $229,956
======== ========
LIABILITIES AND NET INVESTED CAPITAL
Current liabilities:
Accounts payable.......................................... $ 7,889 $ 6,495
Accrued compensation and physician payable................ 36,234 42,043
Other accrued liabilities................................. 9,568 9,449
Current portion of long-term debt......................... 5,165 164
-------- --------
Total current liabilities................................... 58,856 58,151
Long-term debt, less current portion........................ 2,655 2,380
Professional liability insurance reserves................... 38,280 49,697
Deferred payment obligations................................ 1,850 19,775
Net invested capital........................................ 97,893 99,953
-------- --------
Total liabilities and net invested capital.................. $199,534 $229,956
======== ========
</TABLE>
See accompanying notes.
F-3
<PAGE> 133
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Net revenue.............................................. $463,380 $511,236 $547,785
Professional expenses.................................... 353,593 398,738 430,362
-------- -------- --------
Gross profit............................................. 109,787 112,498 117,423
General and administrative............................... 62,441 61,642 58,362
Depreciation and amortization............................ 5,628 6,455 9,740
-------- -------- --------
Operating income......................................... 41,718 44,401 49,321
Novation program expense allocation...................... -- 11,000 --
Merger expenses.......................................... 11,525 22,927 --
MedPartners' management fee.............................. 1,055 1,660 2,941
Interest expense, net.................................... 535 886 5,301
Goodwill impairment charge............................... -- -- 2,992
Other expenses (income).................................. (204) 768 871
-------- -------- --------
Income before income taxes............................... 28,807 7,160 37,216
Income tax expense....................................... 9,852 4,894 15,778
-------- -------- --------
Income before cumulative effect of a change in accounting
principle.............................................. 18,955 2,266 21,438
Cumulative effect of a change in accounting principle,
net of taxes of $559................................... -- -- 912
-------- -------- --------
Net income............................................... $ 18,955 $ 2,266 $ 20,526
======== ======== ========
</TABLE>
See accompanying notes.
F-4
<PAGE> 134
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF NET INVESTED CAPITAL
(IN THOUSANDS)
<TABLE>
<S> <C>
BALANCE AT DECEMBER 31, 1995................................ $ 73,288
Net income.................................................. 18,955
Parents' management fees.................................... 1,055
Net income of Team Health, Inc. for two months ended
December 31, 1995......................................... 203
Unrealized loss on marketable securities.................... (152)
Beginning balance of immaterial poolings of interests
entities.................................................. 1,195
Changes in tax accounts, included in net invested capital... (6,604)
Net transfers from parents and parents' subsidiaries........ 13,438
--------
BALANCE AT DECEMBER 31, 1996................................ 101,378
Net income.................................................. 2,266
Parents' management fees.................................... 1,660
Beginning balance of immaterial poolings of interests
entities.................................................. 377
Unrealized gain on marketable securities.................... 91
Changes in tax accounts, included in net invested capital... 259
Net transfers to parents and parents' subsidiaries.......... (8,138)
--------
BALANCE AT DECEMBER 31, 1997................................ 97,893
Net income.................................................. 20,526
Parents' management fees.................................... 2,941
Change in unrealized gain in marketable securities.......... (93)
Changes in tax accounts, included in net invested capital... 18,987
Net transfers to parents and parents' subsidiaries.......... (40,301)
--------
BALANCE AT DECEMBER 31, 1998................................ $ 99,953
========
</TABLE>
See accompanying notes.
F-5
<PAGE> 135
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 18,955 $ 2,266 $ 20,526
Net income of Team Health, Inc. for two months ended
December 31, 1995......................................... 203 -- --
Adjustments to reconcile net income:
Depreciation and amortization............................. 5,628 6,455 9,740
Goodwill impairment charge................................ -- -- 2,992
Novation program expense allocation....................... -- 11,000 --
(Gain) loss on sale of equipment.......................... 20 947 (463)
Merger expenses........................................... 11,525 22,927 --
Parents' management fees.................................. 1,055 1,660 2,941
Cumulative effect of change in accounting principle....... -- -- 1,471
Changes in operating assets and liabilities, net of
effects of acquisitions................................ (24,981) (1,913) 6,163
-------- -------- --------
Net cash provided by operating activities................... 12,405 43,342 43,370
INVESTING ACTIVITIES
Cash paid for merger expense................................ (5,681) (12,711) (1,071)
Purchases of equipment, net of disposals and transfers to
other divisions........................................... (5,937) (3,837) (3,931)
Net cash paid for acquisitions.............................. (180) (15,726) (16,658)
Additions to intangibles.................................... (466) (2,065) (605)
Other investing activities.................................. 841 -- (599)
-------- -------- --------
Net cash used in investing activities....................... (11,423) (34,339) (22,864)
FINANCING ACTIVITIES
Payments on notes payable................................... (10,266) (1,396) (766)
Additions to notes payable.................................. -- 153 --
Net transfers (to) from parents' and parents subsidiaries... 13,438 (8,138) (40,301)
Change in tax accounts, included in net invested capital.... (6,604) 259 18,987
-------- -------- --------
Net cash used in financing activities....................... (3,432) (9,122) (22,080)
-------- -------- --------
Decrease in cash and cash equivalents....................... (2,450) (119) (1,574)
Cash and cash equivalents, beginning of year................ 6,495 5,550 5,468
Cash and cash equivalents, beginning of year for immaterial
poolings of interests entities............................ 1,505 37 --
-------- -------- --------
Cash and cash equivalents, end of year...................... $ 5,550 $ 5,468 $ 3,894
======== ======== ========
</TABLE>
See accompanying notes.
F-6
<PAGE> 136
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
1. ORGANIZATION AND BASIS OF PRESENTATION
Team Health is the largest national provider of outsourced physician
staffing and administrative services to hospitals and clinics in the United
States. The Company's regional operating model includes comprehensive programs
for emergency medicine, radiology, inpatient care, pediatrics and other hospital
departments. Team Health provides a full range of physician staffing and
administrative services, including the: (i) staffing, recruiting and
credentialing of clinical and non-clinical medical professionals; (ii) provision
of administrative support services, such as payroll, insurance coverage and
continuing education services; and (iii) billing and collection of fees for
services provided by the medical professionals.
Team Health, Inc. was incorporated in March 1994 in order to provide
outsourced physician staffing and administrative services to hospitals and
clinics. On June 30, 1995, Team Health, Inc. merged with Pacific Physician
Services.
In February 1996 and June 1997, MedPartners, Inc. ("MedPartners") combined
with Pacific Physician Services, Inc. ("Physician Services") and InPhyNet
Medical Management, Inc. ("InPhyNet"), respectively. These business combinations
were accounted for as poolings-of-interests by MedPartners. During the second
half of 1997, MedPartners combined the operations of the Hospital Services
Division ("Hospital Services") of InPhyNet with Team Health, Inc. a wholly-owned
subsidiary of Physician Services.
The accompanying consolidated and combined financial statements are
presented on a carve-out basis and include the historical operations of Team
Health, Inc., and Hospital Services. These operations are collectively referred
to herein as the "Company" or "Team Health."
MedPartners and its subsidiaries' net investment in Team Health ("net
invested capital") is shown in lieu of stockholder's equity in the accompanying
consolidated and combined financial statements. The consolidated and combined
financial statements have been prepared from both Team Health's and MedPartners'
historical accounting records.
The consolidated and combined financial statements include the accounts of
the Company and its subsidiaries. Consolidation is necessary to present fairly
the financial position and results of operations of the Company. All significant
intercompany and inter-affiliate accounts and transactions have been eliminated.
2. SIGNIFICANT ACCOUNTING POLICIES
REVENUE
Revenue is recorded in the period services are rendered as determined by
the respective contract with the health care providers. Revenue is reported on
an accrual basis, net of estimated third-party contractual adjustments. Further
adjustments are recorded to reflect amounts estimated to be uncollectible based
upon individual contract experience.
The Company's revenue is derived from the provision of outsourced physician
staffing and administrative services to hospitals under fee-for-service
contracts and flat-rate contracts. Hospitals entering into fee-for-service
contracts agree, in exchange for granting the Company's affiliated physicians
medical staff privileges and exclusivity for services, to authorize the Company
to bill and collect the professional component of the charges for medical
services rendered by the Company's contracted and employed physicians. Under the
fee-for-service arrangements, the Company receives direct or indirect
disbursements from patients and payors of the amounts collected and, depending
on the magnitude of services provided to the hospital and payor mix, may also
receive supplemental revenue from the hospital.
F-7
<PAGE> 137
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Pursuant to such arrangement, the Company accepts responsibility for billing and
collection. Under flat-rate contracts, the hospital performs the billing and
collection services of the professional component and assumes the risk of
uncollectibility. In return for providing the physician staffing and
administrative services, the hospital pays a contractually negotiated fee for
physician coverage. In 1998, approximately 76% of net revenue was generated from
fee-for-service contracts.
PROFESSIONAL EXPENSES
Professional expenses primarily consist of fees paid to physicians and
other clinicians under contract with the Company, collection fees relating to
fee-for-service contracts billed by vendors, operating expenses for the
Company's billing subsidiaries and professional liability insurance expense.
The Company contracts with physicians as independent contractors of our
Company or employees or independent contractors of physician-controlled
professional corporations to provide services to fulfill their contractual
obligations to its hospital clients. The Company typically pays the physicians a
flat hourly rate for each hour of coverage provided at rates comparable to the
market in which they work, with the exception of those radiologists and primary
care physicians employed by the Company, who are paid a base salary. The hourly
rate varies if the physician is independently contracted or an employee.
Independently contracted physicians are required to pay a self-employment tax,
social security, and workers' compensation insurance premiums. In contrast, the
Company will pay these taxes and expenses for employed physicians. As such,
employed physicians typically receive a lower flat hourly rate. In select
markets physicians receive supplemental incentive-based compensation based on
the patient volume of the hospital, the intensity of the cases, improvements in
documentation and patient satisfaction.
The Company's contracts with physicians are generally perpetual and can be
terminated at any time under certain circumstances by either party without
cause, typically upon 180 days notice. In addition, the Company generally
requires the physician to sign a two-year non-compete and non-solicitation
agreement. Under these agreements, the physician is restricted from divulging
confidential information, soliciting or hiring our physicians, inducing
termination and competing for or soliciting the Company's clients.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists primarily of funds on deposit in
commercial banks.
MARKETABLE SECURITIES
Under Statement of Financial Accounting Standard ("SFAS") 115, "Accounting
for Certain Investments in Debt and Equity Securities," investments in equity
securities that have readily determinable fair values and investments in debt
securities are classified in three categories: held-to-maturity, trading and
available-for-sale. Based on the nature of the assets held by the Company and
management's investment strategy, the Company's investments have been classified
as available-for-sale.
Available-for-sale securities are carried at fair value, with the
unrealized gains and losses, net of tax, reported as a separate component of net
invested capital unless a decline in value is judged other than temporary. When
this is the case, unrealized losses are reflected in the results of operations.
ACCOUNTS RECEIVABLE
Accounts receivable are primarily amounts due from hospitals, amounts due
from third-party payors, such as insurance companies, self-insured employers and
government-sponsored health care programs (Medicare and Medicaid), and amounts
due from patients.
F-8
<PAGE> 138
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Accounts receivable from fee-for-service contracts include an allowance for
contractual adjustments, bad debt and other adjustments, which is charged to
operations based on an evaluation of potential losses. Contractual adjustments
result from the difference between the rates for physician services performed
and amounts allowed by third-party payors for such services. Bad debt and other
adjustments represent services provided to patients that are not expected to be
collected at the time service is provided.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over estimated useful lives generally ranging from 3 to
10 years for furniture and equipment, from 3 to 5 years for software and 10 to
40 years for buildings and leasehold improvements. Property under capital lease
is amortized using the straight-line method over the life of the respective
lease. Such amortization is included with depreciation expense in the
accompanying financial statements.
INTANGIBLES
The majority of intangible assets relate to goodwill incurred in the
acquisition of medical groups. Goodwill, which represents costs in excess of net
assets acquired is being amortized on a straight-line basis over periods ranging
between 8 and 20 years, depending upon the nature of the transaction. The
carrying value of goodwill is reviewed if the facts and circumstances suggest
that it may be impaired. If this review indicates that goodwill will not be
recoverable, as determined based on the undiscounted cash flows of the entity
acquired over the remaining amortization period, the carrying value of the
goodwill is reduced by the estimated shortfall of discounted cash flows.
PROFESSIONAL LIABILITY INSURANCE
Professional liability insurance expense consists of premium cost, an
accrual to establish reserves for future payments under the self-insured
retention component, and an accrual to establish a reserve for future claims
incurred but not reported.
INCOME TAXES
The Company files as part of the consolidated federal tax return of
MedPartners. As a result, the provision for income taxes are calculated and
allocated to the Company from MedPartners. All tax accounts have been included
as a component of net invested capital for this presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. ACCOUNTS RECEIVABLE AND NET REVENUE
Accounts receivable consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1997 1998
--------- ---------
<S> <C> <C>
Gross accounts receivable................................... $ 414,835 $ 512,747
Less allowance for contractual adjustments, bad debt and
other adjustments......................................... (284,058) (364,300)
--------- ---------
$ 130,777 $ 148,447
========= =========
</TABLE>
F-9
<PAGE> 139
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
Concentration of credit risk relating to accounts receivable is limited by
the diversity and number of contracting hospitals, patients, payors and the
geographic dispersion of the Company's operations. The Company's most
significant payor, Medicare, represents approximately 18.4% and 17.2% of gross
accounts receivable as of December 31, 1997 and 1998, respectively.
Net revenue consists of the following (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Gross revenue.................................. $ 925,694 $1,035,259 $1,210,252
Less provision for contractual adjustments, bad
debt and other adjustments................... (462,314) (524,023) (662,467)
---------- ---------- ----------
Net revenue.................................... $ 463,380 $ 511,236 $ 547,785
========== ========== ==========
</TABLE>
4. PROPERTY AND EQUIPMENT
Property and equipment consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1997 1998
-------- --------
<S> <C> <C>
Buildings and leasehold improvements........................ $ 3,660 $ 2,149
Furniture and equipment..................................... 36,024 38,686
Software.................................................... 1,774 1,714
Less accumulated depreciation............................... (26,595) (27,663)
-------- --------
$ 14,863 $ 14,886
======== ========
</TABLE>
The Company leases office space for primary terms of one to seven years
with options to renew for additional periods. Future minimum payments due on
these non-cancelable operating leases are as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
1999........................................................ $ 4,400
2000........................................................ 3,610
2001........................................................ 3,171
2002........................................................ 1,958
2003........................................................ 781
Thereafter.................................................. 4,709
-------
$18,629
=======
</TABLE>
Rent expense under operating leases for 1996, 1997 and 1998 was
approximately $4.5 million, $5.8 million and $5.7 million, respectively.
F-10
<PAGE> 140
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
The following table provides a detail listing of amounts included in the
"Other accrued liabilities" account in the consolidated and combined balance
sheets (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1997 1998
------ ------
<S> <C> <C>
Accrued professional fees................................... $2,753 $3,112
Insurance payable........................................... 2,144 247
Accrued merger costs........................................ 2,328 327
Other accrued expenses...................................... 2,343 5,763
------ ------
$9,568 $9,449
====== ======
</TABLE>
6. LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1997 1998
------- ------
<S> <C> <C>
Notes payable............................................... $ 5,630 $2,379
Other....................................................... 2,190 165
Less current portion........................................ (5,165) (164)
------- ------
$ 2,655 $2,380
======= ======
</TABLE>
The majority of notes payable relate to acquisitions, payable in varying
amounts through 2000, with effective interest rates ranging from 7.50% to
10.80%.
The maturities of long-term debt were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1998
------------
<S> <C>
1999........................................................ $ 164
2000........................................................ 2,380
------
$2,544
======
</TABLE>
Interest payments were $1.4 million, $0.6 million and $0.4 million in 1996,
1997 and 1998, respectively.
7. EMPLOYEE BENEFIT PLANS
The Company's employees participated in various employee benefit plans
sponsored by the Company and the Company's parent affiliates. The plans
primarily are defined contribution plans. The various entities acquired or
merged into the Company have various retirement plans that have been terminated,
frozen or amended with terms consistent with the Company's and the Company's
parent affiliate plans.
The Company's contributions to the plans for the years ended December 31,
1996, 1997 and 1998 were approximately $1.2 million, $0.5 million, and $1.2
million, respectively.
Effective January 1, 1998, the Board of Directors of MedPartners approved a
retirement savings plan for employees and affiliates. The plan is a defined
benefit contribution plan in accordance with the provisions of Section 401(k) of
the Internal Revenue Code. Full-time employees and affiliates are eligible to
enroll in the plan in the first quarter following two months of service.
Individuals on a part-time and per
F-11
<PAGE> 141
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
diem basis are eligible to participate in the quarter following completion of
one year of service. For employees, the Company makes a matching contribution of
50% of the employee's pre-tax contribution, up to 6% of the employee's
compensation, in any calendar year.
8. DEFERRED COMPENSATION PLAN
A Team Health affiliate, Emergency Professional Services, Inc. ("EPS"),
created a deferred compensation plan in 1987 for the purpose of compensating key
individuals within EPS. Under the plan, the Company is obligated to certain key
employees who have completed five years of service. The plan provides a vesting
schedule of 10% at six years and 100% after fifteen years of service. Effective
with the EPS and MedPartners merger, the plan was frozen. Participants are
eligible for benefit payments following the month in which the sum of their age
and years of service equals 65. Exceptions to this requirement exist for
disability and death of a participant. Account balances remaining at the time of
death of a participant becomes payable to the participant's beneficiary.
Any forfeitures are allocated on the last day of the year to active
participants that have not commenced to receive benefit payments. As of December
31, 1997 and 1998, the aggregate deferred compensation payable was approximately
$4.6 million and $4.1 million, respectively. Charges to expense were
approximately $0.5 million in 1996. There was no charge to expense during 1997
as a result of a merger related accrual established in 1996 for future
non-discounted deferred compensation payments. In addition, there was no charge
to expense during 1998.
9. NET INVESTED CAPITAL
NET TRANSFERS TO/FROM PARENTS AND PARENTS' SUBSIDIARIES
Net transfers to/from parents and parents' subsidiaries includes
third-party liabilities paid on behalf the Company by MedPartners and Physician
Services ("parent companies"). In addition, transfers include advances from
parent companies to fund operating and investing activities, including
acquisitions, net of amounts advanced to parent companies from operating cash
flows generated by the Company. Net transfers are included as part of net
invested capital as Team Health is not required to settle these amounts on a
current basis.
MANAGEMENT FEES
The parent companies provide certain corporate services to the Company,
including legal services, risk management, certain employment benefit
administration, tax advice and preparation of tax returns, software support
services and certain financial and other services. These fees are allocated by
the parent companies to the Company and approximate costs incurred. The amounts
recorded by the Company for these allocations in the accompanying consolidated
and combined statements of income were approximately $1.1 million, $1.7 million
and $2.9 million for the years ended December 31, 1996, 1997 and 1998,
respectively. The amounts allocated by the parent companies are not necessarily
indicative of the actual costs which may have been incurred had the Company
operated as an entity unaffiliated with MedPartners or Physician Services;
however, management of the Company believes that the allocation is reasonable
and in accordance with the Securities and Exchange Commission's Staff Accounting
Bulletin No. 55.
INTEREST EXPENSE
During 1997 and 1998, Team Health and MedPartners had an agreement whereby
MedPartners charged the Company interest earned on a portion of the Company's
net balance payable to MedPartners. Interest expense charged to Team Health by
MedPartners was $0.8 and $5.2 million for the years ended
F-12
<PAGE> 142
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
December 31, 1997 and December 31, 1998, respectively. No interest expense was
charged during the year ended December 31, 1996.
INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities, included in net invested
capital, were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1997 1998
------- -------
<S> <C> <C>
Deferred tax assets:
Accounts receivable....................................... $ 200 $10,923
Accrual and other reserves................................ 514 373
Merger/acquisition costs.................................. 2,272 3,945
Net operating loss carryforward........................... 708 5,294
Deferred compensation accrual............................. 849 649
Accrued compensation...................................... 658 1,687
Malpractice............................................... 8,448 4,639
Other..................................................... 266 1,351
------- -------
Total deferred tax assets................................... 13,915 28,861
Deferred tax liabilities:
Book over tax amortization and depreciation............... (520) --
Change in accounting method from cash to accrual.......... (7,508) (1,375)
Other..................................................... (956) (3,071)
------- -------
Total deferred tax liabilities.............................. (8,984) (4,446)
------- -------
Net deferred tax assets (liabilities)....................... $ 4,931 $24,415
======= =======
</TABLE>
Significant components of the federal income tax expense were as follows
(in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal.......................................... $ 9,647 $ 14,562 $ 27,590
State............................................ 1,617 2,762 4,500
-------- -------- --------
Total current...................................... 11,264 17,324 32,090
Deferred:
Federal.......................................... (1,291) (10,423) (14,025)
State............................................ (121) (2,007) (2,287)
-------- -------- --------
Total expense...................................... $ 9,852 $ 4,894 $ 15,778
======== ======== ========
</TABLE>
F-13
<PAGE> 143
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The reconciliation of income tax expense computed at the federal statutory
tax rate to income tax expense is as follows for the years ended December 31 (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1996 1997 1998
-------- ------ -------
<S> <C> <C> <C>
Tax at statutory rate................................... $ 10,082 $2,506 $12,707
State income tax (net of federal tax benefit)........... 972 491 1,438
Tax expense from conversion to C corporation............ 892 -- --
Amortization and goodwill write-off..................... -- -- 1,480
Merger expense.......................................... 242 2,711 --
Income not taxed at corporate level..................... (2,490) (935) --
Other................................................... 154 121 153
-------- ------ -------
$ 9,852 $4,894 $15,778
======== ====== =======
</TABLE>
Income taxes paid during 1996, 1997 and 1998 were $17.3 million, $4.7
million and $11.1 million, respectively.
10. PROFESSIONAL LIABILITY INSURANCE
Although Team Health does not principally engage in the practice of
medicine or provide medical services, the Company requires the physicians with
whom it contracts to obtain professional liability insurance coverage and makes
this insurance available to these physicians. Team Health typically provides
claims-made coverage of $1,000,000 per incident and $3,000,000 annual aggregate
per physician to affiliated physicians and other healthcare practitioners. In
addition, Team Health and its affiliates obtain claims-made coverage of
$1,000,000 per incident and $10,000,000 annual aggregate. These limits are
deemed appropriate by management based upon historical claims, the nature and
risks of the business and standard industry practice.
During the period immediately preceding the InPhyNet merger, MedPartners
and InPhyNet developed a program to provide malpractice exposure management for
InPhyNet's physician practice management, government services and hospital-based
businesses. The program was designed to "encapsulate" InPhyNet's malpractice
exposure for all periods prior to the MedPartners merger and to allow InPhyNet
to begin with new first-year claims made insurance coverage as of the effective
date of the merger.
The new program, called the Novation program, involved a payment from
MedPartners to an insurance carrier not previously associated with InPhyNet in
exchange for a guaranteed amount of future payments to MedPartners. These future
payments were actuarially determined by independent third-party actuaries and
were designed to be sufficient to cover the likely future liabilities associated
with the known InPhyNet cases and ones likely to arise in the future from events
occurring in the years covered by the program.
Additional reserves for liabilities within the Novation program are
recorded on Team Health's balance sheets and a related charge was allocated to
Team Health in 1997 and is included in the novation program expense allocation
line item on the consolidated and combined statements of income.
In connection with the proposed recapitalization transaction (as discussed
in Note 19), MedPartners will purchase insurance to cover the liability of
existing claims as of the closing date and the additional liability related to
the Novation program.
F-14
<PAGE> 144
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
11. FAIR VALUES OF FINANCIAL INSTRUMENTS
The carrying amounts of the Company's financial instruments at December 31,
1998 and 1997 approximate fair value. The following methods and assumptions were
used by the Company in estimating its fair value disclosures for financial
instruments:
Cash and cash
equivalents: The carrying amount reported in the balance
sheets for cash and cash equivalents
approximates its fair value.
Marketable securities: The fair values for marketable securities are
based on quoted market prices.
Long-term debt: The fair values of the Company's long-term debt
are estimated using discounted cash flow
analyses, based on the Company's current
incremental borrowing rates for similar types
of borrowing arrangements.
12. ACQUISITIONS
In August 1997, Team Health acquired the operating assets of two emergency
department staffing companies. The acquisition was financed with two promissory
notes of $4.5 million and $0.6 million. The notes payable are included in
long-term debt (see Note 6).
In November 1997, the Company purchased certain operating assets of an
emergency department staffing company. The consideration given for the net
assets was $3.6 million. Of this amount, $1.7 million was paid in cash at
closing and up to $1.9 in future contingent payments or earnouts. The contingent
payments are classified as deferred payment obligations on the balance sheets
and are recorded as a liability of the Company based on management's expectation
that the earnout provisions in the acquisition agreement will be achieved. In
addition, in November 1997, the Company acquired the operating assets of a
radiology group for total consideration of $9.0 million. The consideration paid
was financed by capital transfers from MedPartners and cash flows from
operations. During 1998, the Company recognized a future contingent payment of
$2.5 million related to this acquisition and allocated it as part of the
purchase price.
The excess of the purchase price over net assets acquired in 1997 for these
and other entities acquired approximated $18.7 million. The goodwill balances
are being amortized over the expected life of the contractual arrangement which
range from 8 to 20 years.
In 1998, the Company acquired the stock of two emergency department
staffing companies. The first acquisition closed in January 1998 with a total
consideration of $5.1 million. Of this amount, $3.0 million was paid in cash at
the closing date and up to $2.1 million in future and contingent payments. The
second acquisition closed in June 1998, and had a total consideration of $5.9
million. Of this amount, $3.5 million was paid at closing with $2.4 million in
future and contingent payments.
In March 1998, the Company purchased certain operating assets of an
emergency department staffing company. The consideration given for the net
assets was $13.0 million. Of this amount, $5.0 million was paid in cash at
closing and up to $8.0 million in future contingent payments. In August 1998,
the Company made a second asset acquisition with total consideration of $6.8
million in which $3.6 million was paid at closing and up to $3.2 million in
future contingent payments.
The excess of the purchase price over net assets acquired in 1998 for these
and other entities approximated $34.1 million. The goodwill balances are being
amortized over the expected life of the contractual arrangement which range from
8 to 20 years.
F-15
<PAGE> 145
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
All of the aforementioned acquisitions have been accounted for by the
purchase method of accounting. As such, operating results of acquired businesses
are included in the Company's consolidated and combined financial statements as
of their respective dates of acquisition. The operating results of the
acquisitions prior to the respective dates of acquisition are not material to
the Company.
The following unaudited pro forma summary for the three years ended
December 31, 1998 present the results of operations of the Company as if the
acquisitions that occurred during those three years had occurred at the
beginning of each of the fiscal years presented. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of what would have occurred had the acquisitions been made at the beginning of
the respective fiscal years, or results which may occur in the future.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Net revenue................................................. 513,791 551,262 562,889
Income before income taxes.................................. 28,260 12,384 39,708
Net income.................................................. 18,616 5,505 21,531
</TABLE>
13. MERGERS
MedPartners merged with several physician groups that have been combined
with Team Health operations during 1996 and 1997 in transactions that were
accounted for as poolings of interests. The following chart summarizes these
transactions:
<TABLE>
<CAPTION>
NUMBER OF
EFFECTIVE DATE MEDPARTNERS'
ACQUIRED ENTITY OF POOLING SHARES ISSUED
--------------- ---------------- -------------
<S> <C> <C>
Emergency Physician Associates ("EPA").............. July 1, 1996 1.2 million
Emergency Professional Services ("EPS")............. October 1, 1996 2.1 million
Sheer, Ahearn and Associates ("SAA")................ December 1, 1996 2.3 million
Fischer Mangold ("FM").............................. June 30, 1997 2.0 million
InPhyNet Medical Management, Inc. ("InPhyNet")...... June 30, 1997 19.4 million
</TABLE>
During the second half of 1997, MedPartners combined the Hospital Services
operations of InPhyNet with Team Health operations.
Included in income from operations for the year ended December 31, 1996 and
1997 are merger costs totaling $11.5 million and $22.9 million, respectively.
There were no merger costs for the year ended December 31, 1998. The components
of these costs are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Investment banking and professional fees.............. $ 4,495 $ 5,198 $ --
Other transition costs................................ 2,077 1,042 --
Severance costs and related benefits.................. 123 6,735 --
Impairment of assets.................................. -- 2,846 --
Conforming accounting policies........................ 500 4,741 --
Operational restructuring............................. -- 280 --
Other charges......................................... 4,330 2,085 --
------- ------- -------
$11,525 $22,927 $ --
======= ======= =======
</TABLE>
F-16
<PAGE> 146
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
14. CONTINGENCIES
Team Health is a party to various pending legal actions arising in the
ordinary operation of its business such as contractual disputes, employment
disputes and general business actions as well as malpractice actions. Team
Health does not believe that the result of such legal actions, individually or
in the aggregate, will have a material adverse effect on the Company's business
or its results of operations, cash flows or financial condition.
Recently, a lawsuit was filed against InPhynet Medical Management, Inc. and
several other unrelated defendants in the United States District Court for the
District of Kansas which basically alleges that InPhynet had inappropriate
financial relationships with emergency room physicians and engaged in
inappropriate billing practices in violation of the False Claims Act and
provisions of the Medicare statute. The complaint lacks specificity and a
specific claim for damages. The Company intends to defend this case vigorously.
Although management believes, based on information currently available, that the
ultimate resolution is not likely to have a material adverse effect on the
operating results and financial condition of the Company, there can be no
assurance that the ultimate resolution of the matter, if adversely determined,
would not have a material adverse effect on the operating results and financial
condition of the Company.
15. RELATED PARTY TRANSACTIONS
The Company leases office space from several partnerships that are
partially or entirely owned by employees of the Company. The leases were assumed
by the Company as part of merger or purchase transactions. Total rent paid was
approximately $1.9 million, $2.0 million and $1.3 million in 1996, 1997 and
1998, respectively.
The Company has contractual arrangements with billing and collection
service companies that are owned or partially owned by employees of the Company.
The majority of these arrangements were assumed as part of merger or purchase
transactions. Billing fees paid for these services were $1.9 million, $2.2
million and $3.5 million in 1996, 1997 and 1998, respectively.
16. YEAR 2000 -- UNAUDITED
The Company is in the process of formulating and implementing a plan
designed to ensure that all application software and hardware used in connection
with the Company's management information systems will recognize a date using
"00" as the year 2000, rather than the year 1900.
The company is making satisfactory progress with its Year 2000 compliance
plan, which consists of the following stages:
1. Production of an inventory of the Company's hardware and software
systems.
2. Identification of where problems exist.
3. Diagnosis of solutions to problems.
4. Implementation of solutions.
5. Confirmation from major suppliers and customers that they will be year
2000 compliant by the year of 1999.
The Company has substantially completed the first three stages of its plan,
and has established timetables for its remediation of the problems that exist.
The Company estimates that its remediation efforts will be complete by September
1999 and at the present time, the remediation efforts are proceeding on schedule
with project timetables.
F-17
<PAGE> 147
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The total cost of achieving Year 2000 compliance is forecast to be
approximately $1.9 million in connection with its compliance plan.
17. INTANGIBLES
Goodwill totaling $4.3 million was recorded in connection with the
Company's purchase of the Telerad Group in April 1994. During 1998, the Company
deemed that a portion of Telerad's goodwill totaling $3.0 million was impaired
based upon the provision of SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be disposed of." The impairment
was indicated by a loss of contracts resulting in recurring losses from
operations. Accordingly, the goodwill was reduced to fair value by discounting
estimated future cash flows at a discount rate of the Company's projected cost
of capital. The impairment charge is reflected in the consolidated and combined
statement of income for the year ended December 31, 1998. The Company will
continue to evaluate any remaining goodwill for potential impairment.
Effective January 1, 1998, the Company prospectively changed its policy of
determining useful life of goodwill based on criteria that addresses the number
of contracts in each acquisition. This change in policy reduced the amortization
periods from a range of 20 to 40 years to a range of 8 to 20 years.
Effective January 1, 1998, the Company wrote off approximately $1.5 million
in organizational and development costs in accordance with SOP 98 -- 5,
"Reporting on the Costs of Start-Up Activities." This is accounted for as a
cumulative effect of change in accounting principle.
18. PRO FORMA INCOME TAXES
For periods prior to the respective mergers and acquisitions, the acquired
entities were taxed as partnerships and S Corporations and, therefore, federal
and state taxes were assessed to the shareholders. The following reflects the
combined entities' additional tax expense had they been taxed at the Company's
effective rate during those periods. (in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1996 1997 1998
------ ------ ----
<S> <C> <C> <C>
Pro forma income taxes:
Federal.................................................. $1,931 $1,985 $616
State.................................................... 246 209 65
------ ------ ----
$2,177 $2,194 $681
====== ====== ====
</TABLE>
19. SUBSEQUENT EVENTS
Effective March 16, 1999, Team Health will be recapitalized in a
transaction providing aggregate consideration to MedPartners, Inc. of $344.5
million, consisting of $335.2 million in cash, $6.8 million in equity retained
by MedPartners, Inc.'s wholly-owned subsidiary, Physician Services, and the
assumption of $2.5 million of existing indebtedness of MedPartners, Inc. In
addition, Team Health will assume the potential liability for certain future
earnout payments valued at approximately $19.8 million. The recapitalization
will be funded by the net proceeds from the $100.0 million Senior Subordinated
Notes due 2009, $150.0 million of borrowings by the Company under the term loan
facilities of a senior credit facility, $99.7 million in a cash equity
investment in the Company by an affiliate of different equity sponsors, a cash
equity investment of $8.5 million by senior management of the Company and the
equity of the Company retained by Pacific Physician Services, Inc. with a fair
market value of $6.8 million.
F-18
<PAGE> 148
TEAM HEALTH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
In conjunction with the Recapitalization, the Company will make an election
under section 338(h)(10) of the Internal Revenue Code of 1986, as amended. As a
result, the Company will realize an increase in its deferred tax assets as the
Recapitalization is expected to be treated as a taxable business combination for
federal and state income tax purposes, which results in a step-up in the
Company's tax basis. This step-up in basis will result in an anticipated cash
tax benefit of approximately $6.7 million per year over each of the next 15
years, if fully utilized.
F-19
<PAGE> 149
TEAM HEALTH, INC.
INDEX TO UNAUDITED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated and Combined Balance Sheets.................... F-21
Consolidated and Combined Statements of Income (Loss)....... F-22
Consolidated and Combined Statements of Cash Flows.......... F-23
Notes to Consolidated and Combined Financial Statements..... F-24
</TABLE>
F-20
<PAGE> 150
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1998 1999
(NOTE 1) (UNAUDITED)
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and Cash equivalents................................. $ 3,894 $ 20,327
Accounts receivable, net.................................. 148,447 151,502
Prepaid expenses and other current assets................. 2,678 3,657
-------- ---------
Total current assets........................................ 155,019 175,486
Property and equipment, net................................. 14,886 15,089
Intangibles, net............................................ 56,457 66,324
Deferred tax asset.......................................... -- 108,472
Other....................................................... 3,594 5,300
-------- ---------
Total assets................................................ $229,956 $ 370,671
======== =========
LIABILITIES AND STOCKHOLDERS EQUITY/NET INVESTED CAPITAL
Current liabilities:
Accounts payable.......................................... $ 6,495 $ 9,335
Accrued compensation and physician payable................ 38,631 39,173
Other accrued liabilities................................. 9,449 13,061
Income tax payable........................................ -- 432
Current portion of long-term debt......................... 164 10,608
-------- ---------
Total current liabilities................................... 54,739 72,609
Long-term debt, less current portion........................ 2,380 236,900
Professional liability insurance reserves................... 49,697 1,015
Deferred payment obligations................................ 19,775 19,757
Deferred compensation....................................... 3,412 3,218
Other long-term liabilities................................. -- 25
Stockholders' equity/net invested capital:
Preferred stock........................................... -- 100,521
Common stock.............................................. -- 1,505
Additional paid in capital................................ -- 8,799
Shares held in trust...................................... -- (5,537)
Deferred compensation..................................... -- 5,537
Treasury stock (at cost).................................. -- (210,739)
Retained earnings/net invested capital.................... 99,953 137,061
-------- ---------
Total stockholders' equity/net invested capital............. 99,953 37,147
-------- ---------
Total liabilities and stockholders' equity/net invested
capital................................................... $229,956 $ 370,671
======== =========
</TABLE>
See accompanying notes.
F-21
<PAGE> 151
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS)
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1999
-------- --------
<S> <C> <C>
Net revenue................................................. $133,026 $137,877
Professional expenses....................................... 104,886 108,388
-------- --------
Gross profit................................................ 28,140 29,489
General and administrative.................................. 15,127 15,744
Depreciation and amortization............................... 2,038 2,351
-------- --------
Operating income............................................ 10,975 11,394
Management fee.............................................. 735 25
Interest income............................................. (85) (59)
Interest expense............................................ 590 1,631
Recapitalization expense.................................... -- 21,513
Other expenses (income)..................................... 218 105
-------- --------
Income (loss) before income taxes........................... 9,517 (11,821)
Income tax expense (benefit)................................ 3,983 (4,361)
-------- --------
Net income (loss)........................................... $ 5,534 $ (7,460)
======== ========
</TABLE>
See accompanying notes.
F-22
<PAGE> 152
TEAM HEALTH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1998 1999
-------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss)........................................... $ 5,534 $ (7,460)
Adjustments to reconcile net income:
Depreciation and amortization............................. 2,038 2,351
Amortization of deferred financing costs.................. -- 125
Gain on sale of equipment................................. (15) (10)
Parents' management fees.................................. 735 25
Recapitalization expense.................................. -- 21,513
Changes in operating assets and liabilities, net of effects
of acquisitions........................................... 4,724 (8,214)
-------- ---------
Net cash provided by operating activities................... 13,016 8,330
INVESTING ACTIVITIES
Cash paid for merger expense................................ (625) (128)
Purchases of equipment, net of disposals and transfers to
other divisions........................................... (507) (1,529)
Net cash paid for acquisitions.............................. (9,502) (18)
Additions to intangibles.................................... (196) --
Other investing activities.................................. 111 (124)
-------- ---------
Net cash used in investing activities....................... (10,719) (1,799)
FINANCING ACTIVITIES
Payments on notes payable................................... (184) (5,052)
Additions to notes payable.................................. -- 250,000
Additions to deferred financing costs....................... -- (10,876)
Purchase of treasury stock.................................. -- (210,739)
Cash paid for recapitalization.............................. -- (15,587)
Net transfers from parents and parents' subsidiaries........ 2,086 2,578
Change in tax accounts, included in net invested capital.... 4,030 --
-------- ---------
Net cash provided by financing activities................... 5,932 10,324
-------- ---------
Change in cash and cash equivalents......................... 8,229 16,855
Cash and cash equivalents, beginning of period.............. 5,468 3,894
-------- ---------
Cash and cash equivalents, non-consolidating 1999........... -- (422)
-------- ---------
Cash and cash equivalents, end of period.................... $ 13,697 $ 20,327
======== =========
</TABLE>
See accompanying notes.
F-23
<PAGE> 153
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
NOTE 1. BASIS OF PRESENTATION
The consolidated and combined financial statements include the accounts of
Team Health, Inc. ("the Company") and its wholly owned subsidiaries and have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting and in accordance with Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and notes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, the accompanying unaudited consolidated and
combined financial statements contain all adjustments (consisting of normal
recurring items) necessary for a fair presentation of results for the interim
periods presented. The results of operations for any interim period are not
necessarily indicative of results for the full year. The consolidated and
combined balance sheet of the Company at December 31, 1998 has been derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles. These financial statements and
footnote disclosures should be read in conjunction with the December 31, 1998
audited consolidated and combined financials statements and the notes thereto.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the accompanying consolidated
financial statements and notes. Actual results could differ from those
estimates.
NOTE 2. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures About Segments of an Enterprise and Related Information."
SFAS No. 131 establishes standards for the way that public business enterprises
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 is effective for financial
statements for fiscal years beginning after December 15, 1997. SFAS No. 131 will
have no effect on the Company's results of operations, financial position or
cash flows.
In February 1998, FASB issued SFAS No. 132, "Employers' Disclosures About
Pensions and Other Postretirement Benefits." SFAS No. 132 revises employers'
disclosures about pension and other postretirement benefits, requires additional
information on changes in the benefit obligations and fair values of plan assets
that will facilitate financial analysis, and eliminates certain disclosures that
no longer are useful. SFAS No. 132 is effective for financial statements for
fiscal years beginning after December 15, 1997. SFAS No. 132 has no impact on
the Company's results of operations, financial position, or cash flows.
In June 1998, FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 requires all derivatives to be
measured at fair value and recognized as either assets or liabilities on the
balance sheet. Changes in such fair value are required to be recognized
immediately in net income (loss) to the extent the derivatives are not effective
as hedges. SFAS No. 133 is effective for fiscal years beginning after June 15,
2000 and is effective for interim periods in the initial year of adoption. At
the present time, the Company does not feel the adoption of SFAS No. 133 will
have a material effect on the results of operations, financial position, or cash
flows of the Company.
In March 1998, the EITF concluded its discussion on Issue No. 97-2 related
to the Application of APB Opinion No. 16, "Business Combinations", and FASB
Statement No. 94, "Consolidation of All Majority-Owned Subsidiaries to Physician
Practice Management Entities." The Task Force established the criteria for
determining when a Physician Practice Management Entity ("PPM") could
consolidate or combine with a physician's practice. The Company has considered
all implications and does not feel this
F-24
<PAGE> 154
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
issue will have a material effect on the results of operations, financial
position, or cash flows of the Company.
NOTE 3. RECAPITALIZATION TRANSACTION
Effective March 12, 1999, Team Health was recapitalized in a transaction
providing aggregate consideration to MedPartners, Inc. ("MedPartners") of $344.5
million, consisting of $335.2 million in cash, $6.8 million in equity retained
by MedPartners wholly-owned subsidiary, Pacific Physician Services, and the
assumption of $2.5 million of existing indebtedness of MedPartners. In addition,
Team Health assumed the potential liability for certain future earnout payments
valued at approximately $19.8 million. The Recapitalization was funded by the
net proceeds from the $100.0 million Senior Subordinated Notes (the "Notes") due
2009, $150.0 million of borrowings by the Company under the term loan facilities
of a Senior Credit Facility, $99.7 million in a cash equity investment in the
Company by an affiliate of Madison Dearborn Partners, Inc., Cornerstone Equity
Investors, LLC, and Beecken Petty and Company, LLC, a cash equity investment of
$8.5 million by senior management of the Company and the equity of the company
retained by Pacific Physician Services, Inc. with a fair market value of $6.8
million.
In conjunction with the Recapitalization, the Company will make an election
under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended. As a
result, the Company will realize an increase in its deferred tax assets as the
Recapitalization is expected to be treated as a taxable business combination for
federal and state tax purposes, which results in a step-up in the Company's tax
basis. This step-up in basis will result in an anticipated cash tax benefit of
approximately $6.7 million per year over each of the next 15 years, if fully
utilized.
Total financing fees and legal, accounting, and other related costs of the
Recapitalization amounted to approximately $32.7 million. Of these costs, $21.5
million were expensed at the date of the Recapitalization. Financing costs of
$11.2 million associated with the Senior Credit Facility and Senior Subordinated
Notes were capitalized and will be amortized over the term of the Senior Credit
Facility and Notes.
NOTE 4. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
--------- ------------
<S> <C> <C>
12% Senior Subordinated Notes............................... $100,000 --
Senior Credit Facilities:................................... --
Revolving Credit Facility................................. --
Term Loan Facility........................................ 145,000
Other long-term debt........................................ 2,508 2,544
-------- ------
247,508 2,544
Less current portion........................................ (10,608) (164)
-------- ------
$236,900 $2,380
======== ======
</TABLE>
In Conjunction with the Recapitalization, the Company entered into the
Senior Credit Facilities agreement with a syndicate of financial institutions.
The Senior Credit Facilities are comprised of a five-year Revolving Credit
Facility of up to $50.0 million, including a Swing-Line sub-facility of $5.0
million and Letter of Credit sub-facility of $5.0 million and a Term Loan
Facility, consisting of a $60.0 million 5-year tranche A term loan facility and
a $90.0 million 6-year tranche B term loan facility. No funds have
F-25
<PAGE> 155
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
been borrowed under the Revolving Credit Facility as of March 31, 1999. The
Senior Credit Facilities are secured by stock and assets of the Company and its
subsidiaries.
Borrowings under the Senior Credit Facilities bear interest at variable
rates based, at the Company's option, on prime or the eurodollar rate. Interest
rates as of March 31, 1999 were as follows:
<TABLE>
<S> <C>
Revolving Credit Facility -- Commitment..................... 0.50%
Revolving Credit Facility -- Interest....................... 8.31%
Term Loan A Facility........................................ 8.31%
Term Loan B Facility........................................ 8.81%
</TABLE>
Borrowings under the Senior Credit Facilities were used to consummate the
Recapitalization and pay fees and expenses related to the transaction.
Additionally, the Senior Credit Facilities will provide financing for future
working capital, capital expenditures, and other general corporate purposes. The
credit facility contains affirmative and negative covenants which include
requirements that the Company maintain certain financial ratios and a minimum
level of EBITDA.
Additionally, as part of the Recapitalization, the Company issued $100
million of Senior Subordinated Notes due March 15, 2009. The Notes are
subordinated in right of payment to all Senior Debt of the Company and are
senior in right of payment to all existing and future subordinated indebtedness
of the Company. Interest on the Notes will accrue at the rate of 12% per annum,
payable semi-annually in arrears on March 15 and September 15 of each year
commencing September 15, 1999.
Prior to March 15, 2002, the Company may redeem a portion of the Notes with
the proceeds of certain offerings of the Company's equity. Beginning March 15,
2004, the Company may redeem some or all of the Notes at any time at various
redemption prices. The Notes were issued under an indenture with a Trustee that
contains affirmative and negative covenants.
The other long-term debt relates to acquisitions, payable in varying
amounts through 2000, with effective interest rates ranging from 7.50% to
10.80%.
Aggregate maturities of long-term debt at March 31, 1999 are as follows:
<TABLE>
<S> <C>
1999....................................................... 10,608
2000....................................................... 10,500
2001....................................................... 12,900
2002....................................................... 16,500
2003....................................................... 14,500
Thereafter................................................. 182,500
-------
247,508
=======
</TABLE>
NOTE 5. PROFESSIONAL LIABILITY INSURANCE
Although Team Health does not principally engage in the practice of
medicine or provide medical services, the Company requires the physicians with
whom it contracts to obtain professional liability insurance coverage and makes
this insurance available to these physicians. Team Health typically provides
claims-made coverage of $1,000,000 per incident and $3,000,000 annual aggregate
per physician to affiliated physicians and other healthcare practitioners. In
addition, Team Health and its affiliates obtain claims-made coverage of
$1,000,000 per incident and $10,000,000 annual aggregate. These limits are
deemed appropriate by management based upon historical claims, the nature and
risks of the business and standard industry practice.
F-26
<PAGE> 156
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
As part of the Recapitalization transaction, MedPartners retained the
liability for all medical malpractice claims originating prior to the
Recapitalization and purchased insurance coverage to cover such claims. As a
result, approximately $49.5 million of professional liability reserves were
transferred to MedPartners at closing.
NOTE 6. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities were as follows (in
thousands):
<TABLE>
<CAPTION>
MARCH 31,
1999
---------
<S> <C>
Deferred tax assets:
Amortization & Depreciation.............................. 100,297
Recapitalization Expense................................. 8,175
-------
Net deferred tax asset..................................... 108,472
=======
</TABLE>
Significant components of federal income tax expense were as follows (in
thousands):
<TABLE>
<CAPTION>
QUARTER ENDED
MARCH 31, 1999
--------------
<S> <C>
Current:
Federal.............................................. 2,213
State................................................ 306
------
Total current.......................................... 2,519
Deferred:
Federal.............................................. (6,044)
State................................................ (836)
------
Total deferred......................................... (6,880)
------
Total expense.......................................... (4,361)
======
</TABLE>
The reconciliation of income tax expense computed at the federal statutory
tax rate to income tax expense is as follows for the years ended December 31 (in
thousands):
<TABLE>
<CAPTION>
QUARTER ENDED
MARCH 31, 1999
--------------
<S> <C>
Tax at statutory rate.................................. (4,129)
State income tax (net of federal tax benefit).......... (345)
Meals and Entertainment................................ 112
Other.................................................. 1
------
(4,361)
======
</TABLE>
NOTE 7. STOCKHOLDERS' EQUITY
Effective March 12, 1999, in conjunction with the Recapitalization, the
Company exchanged with MedPartners all outstanding common stock for 100,000 new
shares of 10% cumulative preferred stock ($.01 par) and 150,492,442.67 new
shares of common stock ($.01 par) in the Company.
F-27
<PAGE> 157
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(UNAUDITED) -- (CONTINUED)
The Company purchased from MedPartners 140,492,442.67 shares of outstanding
common stock for $210.7 million. These shares have been recorded as Treasury
Stock and are carried at cost.
As part of the Recapitalization, the Company established a deferred
compensation plan and related Rabbi Trust for the benefit of certain members of
the Company's senior management. The Company funded the Rabbi Trust with $5.5
million as of the closing. The Rabbi Trust used these funds to purchase
preferred stock in the parent company of the Company. The deferred compensation
liability under this newly created plan as well as the investments of the Rabbi
Trust are carried as components of the stockholders' equity in the consolidated
and combined financial statements of the Company.
Prior to the Recapitalization, all equity accounts of the Company were
combined and reported as Net Invested Capital on the consolidated and combined
financial statements due to the Company's status as a subsidiary of MedPartners.
NOTE 8. RECLASSIFICATIONS
Certain reclassifications have been made to the consolidated and combined
balance sheet as of December 31, 1998 to conform to the March 31, 1999
presentation.
F-28
<PAGE> 158
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
, 1999 CONFIDENTIAL
TEAM HEALTH, INC.
$100,000,000
12% SENIOR SUBORDINATED NOTES DUE 2009
----------------------------------------------------------------------
PROSPECTUS
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO
MATTERS NOT STATED IN THIS OFFERING MEMORANDUM. YOU MUST NOT RELY ON
UNAUTHORIZED INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES OR OUR SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THAT WOULD NOT BE PERMITTED OR LEGAL. THE INFORMATION IN THIS
PROSPECTUS IS CURRENT AS OF , 1999.
- --------------------------------------------------------------------------------
<PAGE> 159
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Tennessee Business Corporation Act ("TBCA") provides that a corporation
may indemnify any of its directors and officers against liability incurred in
connection with a proceeding if (i) the director or officer acted in good faith,
(ii) in the case of conduct in his or her official capacity with the
corporation, the director or officer reasonably believed such conduct was in the
corporation's best interests, (iii) in all or other cases, the director or
officer reasonably believed that his or her conduct was not opposed to the best
interest of the corporation, and (iv) in connection with any criminal
proceeding, the director or officer had no reasonable cause to believe that his
or her conduct was unlawful. In actions brought by or in the right of the
corporation, however, the TBCA provides that no indemnification may be made if
the director or officer was adjudged to be liable to the corporation. In cases
where the director or officer is wholly successful, on the merits or otherwise,
in the defense of any proceeding instigated because of his or her status as an
officer or director of a corporation, the TBCA mandates that the corporation
indemnify the director or officer against reasonable expenses incurred in the
proceeding. The TBCA also provides that in connection with any proceeding
charging improper personal benefit to an officer or director, no indemnification
may be made if such officer or director is adjudged liable on the basis that
personal benefit was improperly received. Notwithstanding the foregoing, the
TBCA provides that a court of competent jurisdiction, upon application, may
order that an officer or director be indemnified if, in consideration of all
relevant circumstances, the court determines that such individual is fairly and
reasonably entitled to indemnification, whether or not the director met the
standard of conduct set forth above or was adjudged liable, provided that if
such officer or director was adjudged liable, indemnification is limited to
reasonable expenses.
The Company's Charter provides that the Company may indemnify expenses to
persons who are or were directors or officers of the Company. Additionally, the
Charter provides that no director of the Company shall be personally liable to
the Company or any of its shareholders, and no such person may be sued by the
Company or its shareholders, for monetary damages for breach of any fiduciary
duty as a director except for liability arising from (i) any breach of a
director's duty of loyalty to the Company or its shareholders, (ii) acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, or (iii) any unlawful distributions.
[Directors' and officers' liability insurance has also been obtained by the
Company, the effect of which is to indemnify certain directors and officers of
the Company against certain damages and expenses because of certain claims made
against them caused by their negligent act, error or omission.]
The above discussion of the Charter and the TBCA is not intended to be
exhaustive and is qualified in its entirety by reference thereto.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<C> <S> <C>
(A) EXHIBITS
2.1 Recapitalization Agreement dated January 25, 1999 by and
among Team Health, Inc., MedPartners, Inc., Pacific
Physician Services, Inc. and Team Health Holdings, L.L.C.*
3.1 Articles of Amendment to the Articles of Incorporation of
Alliance Corporation dated January 15, 1997.*
3.2 By-laws of Alliance Corporation.*
3.3 Articles of Incorporation of Emergency Management
Specialists, Inc. dated August 12, 1983.*
3.4 By-laws of Emergency Management Specialists, Inc.*
3.5 Articles of Incorporation of EMSA South Broward, Inc. dated
December 3, 1996.*
</TABLE>
II-1
<PAGE> 160
<TABLE>
<C> <S> <C>
3.6 By-laws of EMSA South Broward, Inc.*
3.7 Articles of Incorporation of Herschel Fischer, Inc. dated
February 18, 1997.*
3.8 By-laws of Herschel Fischer, Inc. dated February 21, 1997.*
3.9 Articles of Incorporation of IMBS, Inc. dated November 30,
1995.*
3.10 By-laws of IMBS, Inc.*
3.11 Articles of Incorporation of InPhyNet Hospital Services,
Inc. dated November 30, 1995.*
3.12 By-laws of InPhyNet Hospital Services, Inc.*
3.13 Certificate of Amendment of Certificate of Incorporation of
InPhyNet Medical Management Institute, Inc. dated February
28, 1996.*
3.14 By-laws of InPhyNet Medical Management Institute, Inc.*
3.15 Articles of Incorporation of Karl G. Mangold, Inc. dated
February 14, 1997.*
3.16 By-laws of Karl G. Mangold, Inc. dated February 20, 1997.*
3.17 Amended and Restated Articles of Incorporation of Charles L.
Springfield, Inc. dated November 21, 1997.*
3.18 Amendment to By-laws of Charles L. Springfield, Inc. dated
November 20, 1997.*
3.19 Articles of Amendment to the Charter of Clinic Management
Services, Inc. dated March 25, 1994.*
3.20 By-laws of Clinic Management Services, Inc.*
3.21 Articles of Incorporation of Daniel & Yeager, Inc. dated
October 25, 1989.*
3.22 By-laws of Daniel & Yeager, Inc. dated October 6, 1989.*
3.23 Articles of Incorporation of Drs. Sheer, Ahearn &
Associates, Inc. dated March 31, 1969.*
3.24 Amended and Restated By-laws of Drs. Sheer, Ahearn &
Associates, Inc. dated February 15, 1989.*
3.25 Articles of Amendment to the Charter of Emergency Coverage
Corporation dated February 15, 1993.*
3.26 Amendment to By-laws of Emergency Coverage Corporation dated
June 12, 1995.*
3.27 Restated Certificate of Incorporation of Emergency Physician
Associates, Inc. dated June 25, 1996.*
3.28 By-laws of Emergency Physician Associates, Inc.*
3.29 Articles of Incorporation of Emergency Physicians of
Manatee, Inc. dated June 1, 1988.*
3.30 By-laws of Emergency Physicians of Manatee, Inc.*
3.31 Certificate to Amend the Articles of Incorporation of
Emergency Professional Services, Inc. dated September 30,
1997.*
3.32 Code Regulations of Emergency Professional Services, Inc.
amended June 22, 1987.*
3.33 Amended and Restated Charter of Emergicare Management,
Incorporated dated February 28, 1995.*
3.34 By-laws of Emergicare Management, Incorporated dated
December 29, 1972.*
3.35 Articles of Incorporation of EMSA Contracting Service, Inc.
dated November 30, 1995.*
3.36 By-laws of EMSA Contracting Service, Inc.*
3.37 Articles of Amendment of EMSA Louisiana, Inc. dated May 28,
1989.*
3.38 By-laws of EMSA Louisiana, Inc.*
3.39 Articles of Amendment to the Charter of Hospital Based
Physician Services, Inc. dated March 25, 1994.*
3.40 By-laws of Hospital Based Physician Services, Inc. dated
July 18, 1993.*
</TABLE>
II-2
<PAGE> 161
<TABLE>
<C> <S> <C>
3.41 Articles of Incorporation of InPhyNet Anesthesia of West
Virginia, Inc. dated February 28, 1997.*
3.42 By-laws of InPhyNet Anesthesia of West Virginia, Inc.*
3.43 Articles of Amendment to the Charter of Med: Assure Systems,
Inc. dated October 28, 1992.*
3.44 By-laws of Med: Assure Systems, Inc. dated February 25,
1987.*
3.45 Articles of Incorporation of MetroAmerican Radiology, Inc.
dated April 19, 1989.*
3.46 By-laws of MetroAmerican Radiology, Inc. dated April 23,
1989.*
3.47 Articles of Incorporation of Neo-Med, Inc. dated November
15, 1993.*
3.48 By-laws of Neo-Med, Inc.*
3.49 Articles of Incorporation of Northwest Emergency Physicians,
Incorporated dated June 4, 1985.*
3.50 By-laws of Northwest Emergency Physicians, Incorporated.*
3.51 Certificate of Amendment of Certificate of Incorporation of
Paragon Anesthesia, Inc. dated September 20, 1994.*
3.52 By-laws of Paragon Anesthesia, Inc.*
3.53 Articles of Incorporation of Paragon Contracting Services,
Inc. dated November 30, 1995.
3.54 By-laws of Paragon Contracting Services, Inc.*
3.55 Certificate of Amendment of Certificate of Incorporation of
Paragon Imaging Consultants, Inc. dated May 7, 1993.*
3.56 By-laws of Paragon Imaging Consultants, Inc.*
3.57 Articles of Incorporation of Quantum Plus, Inc. dated
January 27, 1997.*
3.58 By-laws of Quantum Plus, Inc. dated February 1, 1997.*
3.59 Amendment and Restated Articles of Incorporation of Reich,
Seidelmann & Janicki Co. dated November 7, 1997.*
3.60 Code Regulations of Reich, Seidelmann & Janicki Co.*
3.61 Articles of Incorporation of Rosendorf, Marguiles, Borushok
& Shoenbaum Radiology Associates of Hollywood, Inc. dated
October 25, 1968.*
3.62 By-laws of Rosendorf, Marguiles, Borushok & Shoenbaum
Radiology Associates of Hollywood, Inc.*
3.63 Articles of Amendment to the Articles of Incorporation of
Sarasota Emergency Medical Consultants, Inc. dated August
7, 1997.*
3.64 By-laws of Sarasota Emergency Medical Consultants, Inc.*
3.65 Articles of Amendment to the Charter of Southeastern
Emergency Physicians, Inc. dated November 25, 1992.*
3.66 By-laws of Southeastern Emergency Physicians, Inc. dated
July 1, 1986.*
3.67 Articles of Amendment to the Charter of Southeastern
Emergency Physicians of Memphis, inc. dated June 15,
1992.*
3.68 By-laws of Southeastern Emergency Physicians of Memphis,
Inc.*
3.69 Charter of Team Health Financial Services, Inc. dated
October 9, 1997.*
3.70 By-laws of Team Health Financial Services, Inc.*
3.71 Articles of Incorporation of Team Radiology, Inc. dated
October 6, 1993.*
3.72 By-laws of Team Radiology, Inc. dated November 5, 1993.*
3.73 Certificate of Incorporation of THBS, Inc. dated October 20,
1997.*
3.74 By-laws of THBS, Inc.*
</TABLE>
II-3
<PAGE> 162
<TABLE>
<C> <S> <C>
3.75 Amended and Restated Articles of Incorporation of The Emergency Associates for Medicine, Inc. dated
August 30, 1996.*
3.76 By-laws of The Emergency Associates for Medicine, Inc.*
3.77 Articles of Incorporation of Virginia Emergency Physicians, Inc. dated June 25, 1992.*
3.78 Amended and Restated By-laws of Virginia Emergency Physicians, Inc.*
3.79 Articles of Incorporation of EMSA Joilet, Inc. dated December 30, 1988.*
3.80 By-laws of EMSA Joilet, Inc.*
3.81 Certificate of limited Partnership of Paragon Healthcare Limited Partnership, dated August 3, 1993.*
3.82 Certificate of Limited Partnership of Team Health Southwest, L.P., dated May 20, 1998.*
3.83 Certificate of Limited Partnership of Team Health Billing Services, L.P., dated October 21, 1997.*
3.84 Partnership Agreement of Fischer Mangold Group Partnership, dated February 21, 1996.*
3.85 Partnership Agreement of Mt. Diablo Emergency Physicians, a California General Partnership, dated June 1,
1997.*
4.1 Indenture dated as of March 12, 1999 by and among Team Health, Inc. the Guarantors listed on the
signature pages thereto and the United States Trust Company of New York.*
5.1 Opinion of Kirkland & Ellis.*
9.1 Stockholders Agreement dated as of March 12, 1999 by and among Team Health, Inc., Team Health Holdings,
L.L.C., Pacific Physicians Services, Inc., and certain other stockholders of the Team Health, Inc. who
are from time to time party hereto.*
9.2 Securityholders Agreement dated as of March 12, 1999 by and among Team Health Holdings, L.L.C., each of
the persons listed on Schedule A thereto and certain other securityholders of Team Health Holdings,
L.L.C. who are from time to time party thereto.*
10.1 Registration Rights Agreement dated as of March 12, 1999 by and among Team Health, Inc., the guarantors
listed on the signature pages thereto and Donaldson, Lufkin & Jenrette Securities Corporation,
NationsBanc Montgomery Securities LLC and Fleet Securities, Inc.*
10.2 Purchase Agreement dated as of March 5, 1999 by and among Team Health, Inc. and the guarantors listed on
the signature pages thereto and Donaldson, Lufkin & Jenrette Securities Corporation, NationsBanc
Montgomery Securities LLC and Fleet Securities, Inc.*
10.3 Equity Deferred Compensation Plan of Team Health, Inc. effective January 25, 1999.*
10.4 Management Services Agreement dated as of March 12, 1999 by and among Team Health, Inc., Madison Dearborn
Partners II, L.P., Beecken, Petty & Company, L.L.C. and Cornerstone Equity Investors LLC.*
10.5 Registration Agreement dated as of March 12, 1999 by and among Team Health, Inc., Team Health Holdings,
L.L.C., Pacific Physician Services, Inc. and certain other stockholders of Team Health, Inc. who are
from time to time party thereto.*
10.6 Registration Agreement dated as of March 12, 1999 by and among Team Health Holdings, L.L.C., each of the
persons listed on Schedule A thereto and certain other securityholders of Team Health, Inc. who are
from time to time party thereto.*
10.7 Trust Agreement dated as of January 25, 1999 by and among Team Health, Inc. and The Trust Company of
Knoxville.*
10.8 Credit Agreement dated as of March 12, 1999 by and among Team Health, Inc., the banks, financial
institutions and other institutional lenders named herein, Fleet National Bank, NationsBank, N.A.,
NationsBanc Montgomery Securities LLC and Donaldson, Lufkin & Jenrette Securities Corporation.*
</TABLE>
II-4
<PAGE> 163
<TABLE>
..9 10 Sheer Ahearn & Associates Plan Provision Nonqualified Excess Deferral Plan effective
September 1, 1998.*
<C> <S> <C>
10.10 Amendment and Restatement of Emergency Professional Services, Inc. Deferred
Compensation Plan effective January 31, 1996.*
10.11 Lease Agreement dated August 27, 1992 between Med: Assure Systems and Winston Road
Properties for our corporate headquarters located at 1900 Winston Road, Knoxville,
TN.*
10.12 Lease Agreement dated August 27, 1999 between Americare Medical Services, Inc. and
Winston Road Properties for space located at 1900 Winston Road, Knoxville, TN.*
12.1 Statement of Ratio of Earnings to Fixed Charges.*
21.1 Subsidiaries of the Registrant.*
23.1 Consent of Ernst & Young, LLP.*
23.2 Consent of Kirkland & Ellis (included in Exhibit 5.1).
24.1 Powers of Attorney (included in signature pages).*
25.1 Statement of Eligibility of Trustee on Form T-1.*
27.1 Financial Data Schedule.*
99.1 Form of Letter of Transmittal.*
99.2 Form of Letter of Notice of Guaranteed Delivery.*
99.3 Form of Tender Instructions.*
</TABLE>
- ---------------
* Filed herewith.
ITEM 21(B). FINANCIAL STATEMENT SCHEDULES.
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
ALLOWANCE FOR DOUBTFUL ACCOUNTS
<TABLE>
<CAPTION>
ADDITIONS CHARGED TO
BALANCE AT -------------------- BALANCE AT
BEGINNING COSTS AND END OF
FISCAL YEAR END OF PERIOD EXPENSES OTHER DEDUCTIONS PERIOD
- --------------- ---------- ---------- ------ ---------- ----------
<S> <C> <C> <C> <C> <C>
December 31, 1996....................... $181,525 $462,314 $-- $376,361 $267,478
December 31, 1997....................... 267,478 524,023 -- 507,443 284,058
December 31, 1998....................... 284,058 662,467 -- 582,225 364,300
</TABLE>
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission, except for Schedule II
above, have been omitted because they are not required under the related
instructions, or are inapplicable, or because the information has been provided
in the Consolidated and Combined Financial Statements or the Notes thereto.
ITEM 22. UNDERTAKINGS.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
II-5
<PAGE> 164
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 20 or otherwise, each
undersigned registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
Each undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
<PAGE> 165
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Team Health, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Team
Health, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President, Chief Executive Officer, Assistant
- --------------------------------------------- Secretary and Director (principal executive
H. Lynn Massingale, M.D. officer)
/s/ MICHAEL HATCHER Chief Operating Officer
- ---------------------------------------------
Michael Hatcher
/s/ DAVID JONES Chief Financial Officer, Treasurer and
- --------------------------------------------- Assistant Secretary (principal financial
David Jones officer and accounting officer)
/s/ STEPHEN SHERLIN Executive Vice President, Finance and
- --------------------------------------------- Administration
Stephen Sherlin
/s/ DANA J. O'BRIEN Director
- ---------------------------------------------
Dana J. O'Brien
/s/ TIMOTHY P. SULLIVAN Director
- ---------------------------------------------
Timothy P. Sullivan
/s/ TYLER WOLFRAM Director
- ---------------------------------------------
Tyler Wolfram
</TABLE>
II-7
<PAGE> 166
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NICHOLAS W. ALEXOS Director
- ---------------------------------------------
Nicholas W. Alexos
/s/ TIMOTHY P. SULLIVAN Director
- ---------------------------------------------
Timothy P. Sullivan
</TABLE>
II-8
<PAGE> 167
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Alliance Corporation
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Alliance Corporation), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-9
<PAGE> 168
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Charles L. Springfield, Inc.
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Charles L. Springfield, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President (principal executive officer)
- ---------------------------------------------
Richard Gillespie, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-10
<PAGE> 169
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Clinic Management Services, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Clinic
Management Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-11
<PAGE> 170
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Daniel & Yeager, Inc.
By: /s/ JOHN DANIEL
------------------------------------
Name: John Daniel
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Daniel
& Yeager, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JOHN DANIEL President (principal executive officer)
- ---------------------------------------------
John Daniel
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-12
<PAGE> 171
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Drs. Sheer, Ahearn & Associates, Inc.
By:/s/ H. KIRBY BLANKENSHIP, M.D.
------------------------------------
Name: H. Kirby Blankenship, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Drs.
Sheer, Ahearn & Associates, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. KIRBY BLANKENSHIP, M.D. President (principal executive officer)
- ---------------------------------------------
H. Kirby Blankenship, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-13
<PAGE> 172
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergency Coverage Corporation
By: /s/ JOHN STALEY, M.D.
------------------------------------
Name: John Staley, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergency Coverage Corporation), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JOHN STALEY, M.D. President (principal executive officer)
- ---------------------------------------------
John Staley, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-14
<PAGE> 173
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergency Management Specialists, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergency Management Specialists, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-15
<PAGE> 174
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergency Physician Associates, Inc.
By: /s/ JAMES E. GEORGE, M.D.
------------------------------------
Name: James E. George, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergency Physician Associates, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JAMES E. GEORGE, M.D. President (principal executive officer)
- ---------------------------------------------
James E. George, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-16
<PAGE> 175
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergency Physicians of Manatee, Inc.
By: /s/ JAMES V. HILLMAN, M.D.
------------------------------------
Name: James V. Hillman, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergency Physicians of Manatee, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JAMES V. HILLMAN, M.D. President (principal executive officer)
- ---------------------------------------------
James V. Hillman, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-17
<PAGE> 176
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergency Professional Services, Inc.
By: /s/ JAMES L. RYBACK, M.D.
------------------------------------
Name: James L. Ryback, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergency Professional Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JAMES L. RYBACK, M.D. President (principal executive officer)
- ---------------------------------------------
James L. Ryback, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-18
<PAGE> 177
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Emergicare Management, Incorporated
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Emergicare Management, Incorporated), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-19
<PAGE> 178
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Fischer Mangold Partnership
By: Herschel Fischer, Inc.,
Its General Partner
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
By: Karl G. Mangold, Inc.,
Its General Partner
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Fischer Mangold Partnership), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President of each of Herschel Fischer, Inc. and Karl
- --------------------------------------------- G. Mangold, Inc. (principal executive officer)
Richard Gillespie, M.D.
/s/ DAVID JONES Vice President and Treasurer of each of Herschel
- --------------------------------------------- Fischer, Inc. and Karl G. Mangold, Inc. (principal
David Jones financial officer and accounting officer)
/s/ H. LYNN MASSINGALE Vice President and Director of each of Herschel
- --------------------------------------------- Fischer, Inc. and Karl G. Mangold, Inc.
H. Lynn Massingale
/s/ MICHAEL HATCHER Vice President, Secretary and Director of each of
- --------------------------------------------- Herschel Fischer, Inc. and Karl G. Mangold, Inc.
Michael Hatcher
</TABLE>
II-20
<PAGE> 179
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Herschel Fischer, Inc.
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Herschel Fischer, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President (principal executive officer)
- ---------------------------------------------
Richard Gillespie, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE Vice President and Director
- ---------------------------------------------
H. Lynn Massingale
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-21
<PAGE> 180
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Hospital Based Physician Services,
Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Hospital Based Physician Services, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-22
<PAGE> 181
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
IMBS, Inc.
By: /s/ JEFFREY BETTINGER, M.D.
------------------------------------
Name: Jeffrey Bettinger, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of IMBS,
Inc.), to sign any or all amendments (including post-effective amendments) to
this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JEFFREY BETTINGER, M.D. President (principal executive officer)
- ---------------------------------------------
Jeffrey Bettinger, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-23
<PAGE> 182
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Anesthesia of West Virginia,
Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Anesthesia of West Virginia, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-24
<PAGE> 183
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Contracting Services, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Contracting Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-25
<PAGE> 184
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Hospital Services, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Hospital Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-26
<PAGE> 185
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Joliet, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Joliet, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-27
<PAGE> 186
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Louisiana, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Louisiana, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-28
<PAGE> 187
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet Medical Management Institute,
Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet Medical Management Institute, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-29
<PAGE> 188
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
InPhyNet South Broward, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
InPhyNet South Broward, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-30
<PAGE> 189
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Karl G. Mangold, Inc.
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Karl
G. Mangold, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President (principal executive officer)
- ---------------------------------------------
Richard Gillespie, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-31
<PAGE> 190
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Med: Assure Systems, Inc.
By: /s/ JEFFREY BETTINGER, M.D.
------------------------------------
Name: Jeffrey Bettinger, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Med:
Assure Systems, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JEFFREY BETTINGER, M.D. President (principal executive officer)
- ---------------------------------------------
Jeffrey Bettinger, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-32
<PAGE> 191
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
MetroAmerican Radiology, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale,M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
MetroAmerican Radiology, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-33
<PAGE> 192
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
MT. DIABLO EMERGENCY PHYSICIANS
By: Herschel Fischer, Inc.,
its general partner
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
By: Karl G. Mangold, Inc.,
its general partner
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Mt.
Diablo Emergency Physicians), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President (principal executive officer) of each
- --------------------------------------------------- of Herschel Fischer, Inc. and Karl G.
Richard Gillespie, M.D. Mangold, Inc.
/s/ DAVID JONES Vice President and Treasurer (principal
- --------------------------------------------------- financial officer
David Jones and accounting officer) of each of Herschel
Fischer, Inc. and Karl G. Mangold, Inc.
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director of each of Herschel
- --------------------------------------------------- Fischer, Inc. and Karl G. Mangold, Inc.
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director of each
- --------------------------------------------------- of Herschel Fischer, Inc. and Karl G.
Michael Hatcher Mangold, Inc.
</TABLE>
II-34
<PAGE> 193
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Neo-Med, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Neo-Med, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-35
<PAGE> 194
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Northwest Emergency Physicians,
Incorporated
By: /s/ GERARD LASALLE, M.D.
------------------------------------
Name: Gerard LaSalle, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Northwest Emergency Physicians, Incorporated), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ GERARD LASALLE, M.D. President (principal executive officer)
- ---------------------------------------------
Gerard LaSalle, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-36
<PAGE> 195
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Paragon Anesthesia, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Paragon Anesthesia, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-37
<PAGE> 196
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Paragon Contracting Services, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Paragon Contracting Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-38
<PAGE> 197
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Paragon Healthcare Limited Partnership
By: InPhyNet Hospital Services, Inc.,
its general partner
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Paragon Healthcare Limited Partnership), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer) of
- --------------------------------------------------- InPhyNet Hospital Services, Inc.
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------------- officer and accounting officer) of InPhyNet
David Jones Hospital Services, Inc.
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director of InPhyNet Hospital
- --------------------------------------------------- Services, Inc.
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director of
- --------------------------------------------------- InPhyNet Hospital Services, Inc.
Michael Hatcher
</TABLE>
II-39
<PAGE> 198
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Paragon Imaging Consultants, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Paragon Imaging Consultants, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-40
<PAGE> 199
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Quantum Plus, Inc.
By: /s/ RICHARD GILLESPIE, M.D.
------------------------------------
Name: Richard Gillespie, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Quantum Plus, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RICHARD GILLESPIE, M.D. President (principal executive officer)
- ---------------------------------------------
Richard Gillespie, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-41
<PAGE> 200
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Reich, Seidelman & Janicki Co.
By: /s/ NORBERT REICH, D.O.
------------------------------------
Name: Norbert Reich, D.O.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Reich,
Seidelman & Janicki Co.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NORBERT REICH, D.O. President (principal executive officer)
- ---------------------------------------------
Norbert Reich, D.O.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-42
<PAGE> 201
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Rosendorf, Margulies, Borushok &
Schoenbaum
Radiology Associates of
Hollywood, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale,M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Rosendorf, Margulies, Borushor & Schoenbaum Radiology Associates of Hollywood,
Inc.), to sign any or all amendments (including post-effective amendments) to
this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-43
<PAGE> 202
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Sarasota Emergency Medical
Consultants, Inc.
By: /s/ JAMES HILLMAN, M.D.
------------------------------------
Name: James Hillman, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Sarasota Emergency Medical Consultants, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JAMES HILLMAN, M.D. President (principal executive officer)
- ---------------------------------------------
James Hillman, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-44
<PAGE> 203
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Southeastern Emergency Physicians of
Memphis,
Inc.
By: /s/ RANDAL DABBS, M.D.
------------------------------------
Name: Randal Dabbs, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Southeastern Emergency Physicians of Memphis, Inc.), to sign any or all
amendments (including post-effective amendments) to this registration statement
and any subsequent registration statement filed pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RANDAL DABBS, M.D. President (principal executive officer)
- ---------------------------------------------
Randal Dabbs, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-45
<PAGE> 204
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Southeastern Emergency Physicians Inc.
By: /s/ RANDAL DABBS, M.D.
------------------------------------
Name: Randal Dabbs, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Southeastern Emergency Physicians, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ RANDAL DABBS, M.D. President (principal executive officer)
- ---------------------------------------------
Randal Dabbs, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial and
- --------------------------------------------- accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-46
<PAGE> 205
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Team Health Billing Services, L.P.
By: Team Health, Inc., its general
partner
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Team
Health Billing Services, L.P.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President, Chief Executive Officer, Assistant
- --------------------------------------------- Secretary and Director of Team Health, Inc.
H. Lynn Massingale, M.D. (principal executive officer)
/s/ DAVID JONES Vice President and Treasurer of Team Health, Inc.
- --------------------------------------------- (principal financial officer and accounting officer)
David Jones
/s/ DANA J. O'BRIEN Director of Team Health, Inc.
- ---------------------------------------------
Dana J. O'Brien
/s/ TIMOTHY P. SULLIVAN Director of Team Health, Inc.
- ---------------------------------------------
Timothy P. Sullivan
/s/ TYLER WOLFRAM Director of Team Health, Inc.
- ---------------------------------------------
Tyler Wolfram
</TABLE>
II-47
<PAGE> 206
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NICHOLAS W. ALEXOS Director of Team Health, Inc.
- ---------------------------------------------
Nicholas W. Alexos
/s/ KENNETH O'KEEFE Director of Team Health, Inc.
- ---------------------------------------------
Kenneth O'Keefe
</TABLE>
II-48
<PAGE> 207
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Team Health Financial Services, Inc.
By: /s/ JEFFREY BETTINGER, M.D.
------------------------------------
Name: Jeffrey Bettinger, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Team
Health Financial Services, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JEFFREY BETTINGER, M.D. President (principal executive officer)
- ---------------------------------------------
Jeffrey Bettinger, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-49
<PAGE> 208
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
TEAM HEALTH SOUTHWEST, L.P.
By: Team Radiology, Inc., its general
partner
By:
/s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Team
Health Southwest, L.P.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director of
- --------------------------------------------------- of Team Radiology, Inc.
H. Lynn Massingale, M.D. (principal executive officer)
/s/ DAVID JONES Vice President and Treasurer of Team Radiology,
- --------------------------------------------------- Inc. (principal financial officer and
David Jones accounting officer)
/s/ MICHAEL HATCHER Vice President, Secretary and Director of Team
- --------------------------------------------------- Radiology, Inc.
Michael Hatcher
</TABLE>
II-50
<PAGE> 209
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Team Radiology, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of Team
Radiology, Inc.), to sign any or all amendments (including post-effective
amendments) to this registration statement and any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-51
<PAGE> 210
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
THBS, Inc.
By: /s/ H. LYNN MASSINGALE, M.D.
------------------------------------
Name: H. Lynn Massingale, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of THBS,
Inc.), to sign any or all amendments (including post-effective amendments) to
this registration statement and any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ H. LYNN MASSINGALE, M.D. President and Director (principal executive officer)
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-52
<PAGE> 211
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
The Emergency Associates for Medicine,
Inc.
By: /s/ JAMES V. HILLMAN
------------------------------------
Name: James V. Hillman
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of The
Emergency Associates for Medicine, Inc.), to sign any or all amendments
(including post-effective amendments) to this registration statement and any
subsequent registration statement filed pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ JAMES V. HILLMAN President (principal executive officer)
- ---------------------------------------------
James V. Hillman
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-53
<PAGE> 212
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement on Form S-4 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Knoxville,
State of Tennessee, on June 9, 1999.
Virginia Emergency Physicians, Inc.
By: /s/ NEIL J. PRINCIPE, M.D.
------------------------------------
Name: Neil J. Principe, M.D.
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person who signature appears
below constitutes and appoints David Jones his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or officer of
Virginia Emergency Physicians, Inc.), to sign any or all amendments (including
post-effective amendments) to this registration statement and any subsequent
registration statement filed pursuant to Rule 462(b) under the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-4 has been signed by the following persons in
the capacities indicated on June 9, 1999.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<C> <S>
/s/ NEIL J. PRINCIPE, M.D. President (principal executive officer)
- ---------------------------------------------
Neil J. Principe, M.D.
/s/ DAVID JONES Vice President and Treasurer (principal financial
- --------------------------------------------- officer and accounting officer)
David Jones
/s/ H. LYNN MASSINGALE, M.D. Vice President and Director
- ---------------------------------------------
H. Lynn Massingale, M.D.
/s/ MICHAEL HATCHER Vice President, Secretary and Director
- ---------------------------------------------
Michael Hatcher
</TABLE>
II-54
<PAGE> 213
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Recapitalization Agreement dated January 25, 1999 by and
among Team Health, Inc., MedPartners, Inc., Pacific
Physician Services, Inc. and Team Health Holdings, L.L.C.*
3.1 Articles of Amendment to the Articles of Incorporation of
Alliance Corporation dated January 15, 1997.*
3.2 By-laws of Alliance Corporation.*
3.3 Articles of Incorporation of Emergency Management
Specialists, Inc. dated August 12, 1983.*
3.4 By-laws of Emergency Management Specialists, Inc.*
3.5 Articles of Incorporation of EMSA South Broward, Inc. dated
December 3, 1996.*
3.6 By-laws of EMSA South Broward, Inc.*
3.7 Articles of Incorporation of Herschel Fischer, Inc. dated
February 18, 1997.*
3.8 By-laws of Herschel Fischer, Inc. dated February 21, 1997.*
3.9 Articles of Incorporation of IMBS, Inc. dated November 30,
1995.*
3.10 By-laws of IMBS, Inc.*
3.11 Articles of Incorporation of InPhyNet Hospital Services,
Inc. dated November 30, 1995.*
3.12 By-laws of InPhyNet Hospital Services, Inc.*
3.13 Certificate of Amendment of Certificate of Incorporation of
InPhyNet Medical Management Institute, Inc. dated February
28, 1996.*
3.14 By-laws of InPhyNet Medical Management Institute, Inc.*
3.15 Articles of Incorporation of Karl G. Mangold, Inc. dated
February 14, 1997.*
3.16 By-laws of Karl G. Mangold, Inc. dated February 20, 1997.*
3.17 Amended and Restated Articles of Incorporation of Charles L.
Springfield, Inc. dated November 21, 1997.*
3.18 Amendment to By-laws of Charles L. Springfield, Inc. dated
November 20, 1997.*
3.19 Articles of Amendment to the Charter of Clinic Management
Services, Inc. dated March 25, 1994.*
3.20 By-laws of Clinic Management Services, Inc.*
3.21 Articles of Incorporation of Daniel & Yeager, Inc. dated
October 25, 1989.*
3.22 By-laws of Daniel & Yeager, Inc. dated October 6, 1989.*
3.23 Articles of Incorporation of Drs. Sheer, Ahearn &
Associates, Inc. dated March 31, 1969.*
3.24 Amended and Restated By-laws of Drs. Sheer, Ahearn &
Associates, Inc. dated February 15, 1989.*
3.25 Articles of Amendment to the Charter of Emergency Coverage
Corporation dated February 15, 1993.*
3.26 Amendment to By-laws of Emergency Coverage Corporation dated
June 12, 1995.*
3.27 Restated Certificate of Incorporation of Emergency Physician
Associates, Inc. dated June 25, 1996.*
3.28 By-laws of Emergency Physician Associates, Inc.*
3.29 Articles of Incorporation of Emergency Physicians of
Manatee, Inc. dated June 1, 1988.*
3.30 By-laws of Emergency Physicians of Manatee, Inc.*
3.31 Certificate to Amend the Articles of Incorporation of
Emergency Professional Services, Inc. dated September 30,
1997.*
</TABLE>
<PAGE> 1
EXHIBIT 2.1
Execution Copy
================================================================================
RECAPITALIZATION AGREEMENT
BY AND AMONG
TEAM HEALTH, INC.,
MEDPARTNERS, INC.,
PACIFIC PHYSICIAN SERVICES, INC.,
AND
TEAM HEALTH HOLDINGS, L.L.C.
DATED AS OF JANUARY 25, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I -- DEFINITIONS..........................................................................................1
Section 1.1 Definitions...................................................................1
Section 1.2 Cross Reference. ............................................................8
ARTICLE II -- THE RECAPITALIZATION...............................................................................10
Section 2.1 Pre-Closing Estimates of Certain Amounts. ..................................10
Section 2.2 Exchange of Common Stock.....................................................10
Section 2.3 Purchase of Preferred Stock and Common Stock.................................11
Section 2.4 Redemption of Certain Common Stock...........................................11
Section 2.5 Closing......................................................................12
Section 2.6 Post-Closing Adjustments. ...................................................12
ARTICLE III -- CONDITIONS TO CLOSING.............................................................................15
Section 3.1 Conditions to the Purchaser's Obligations. .................................15
Section 3.2 Conditions to the Company's, the Parent's
and the Existing Stockholder's Obligations............................................19
ARTICLE IV -- COVENANTS BEFORE CLOSING...........................................................................21
Section 4.1 Affirmative Covenants of the Company.........................................21
Section 4.2 Negative Covenants of the Company............................................23
Section 4.3 Covenants of Purchaser. ....................................................23
Section 4.4 Intercompany Accounts. .....................................................24
Section 4.5 Distributions................................................................24
Section 4.6 Financial Information........................................................25
Section 4.7 Parent Board Approval........................................................25
Section 4.8 Cash Management from Measurement Date to Closing Date........................25
ARTICLE V -- REPRESENTATIONS AND WARRANTIES
OF THE EXISTING STOCKHOLDER.............................................................................26
Section 5.1 Organization and Corporate Power.............................................26
Section 5.2 Authorization of Transactions................................................27
Section 5.3 Absence of Conflicts. ......................................................27
Section 5.4 Capitalization...............................................................28
Section 5.5 Financial Statements and Related Matters. ..................................28
Section 5.6 Absence of Undisclosed Liabilities. ........................................28
Section 5.7 Absence of Certain Developments. ...........................................29
Section 5.8 Real Property................................................................30
Section 5.9 Assets. ....................................................................31
Section 5.10 Taxes. .....................................................................32
Section 5.11 Contracts and Commitments....................................................33
Section 5.12 Proprietary Rights...........................................................35
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 5.13 Litigation; Proceedings......................................................35
Section 5.14 Brokerage. .................................................................36
Section 5.15 Governmental Licenses and Permits............................................36
Section 5.16 Employees....................................................................36
Section 5.17 Employee Benefit Plans. ....................................................36
Section 5.18 Insurance. .................................................................37
Section 5.19 Officers and Directors; Bank Accounts........................................38
Section 5.20 Affiliate Transactions. ....................................................38
Section 5.21 Compliance with Laws. ......................................................38
Section 5.22 Health Care Matters. ........................................................38
Section 5.23 Environmental Matters. .....................................................39
Section 5.24 Disclosure...................................................................40
Section 5.25 Closing Date. ..............................................................40
ARTICLE VI -- REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER........................................................................................41
Section 6.1 Organization. ...............................................................41
Section 6.2 Authorization of Transactions. .............................................41
Section 6.3 Absence of Conflicts.........................................................41
Section 6.4 Litigation. ................................................................42
Section 6.5 Investigation by the Purchaser. ............................................42
Section 6.6 Financing. .................................................................42
Section 6.7 Hart-Scott-Rodino............................................................43
Section 6.8 Brokerage. ..................................................................43
Section 6.9 Investment...................................................................43
Section 6.10 Closing Date.................................................................43
ARTICLE VII -- TERMINATION.......................................................................................43
Section 7.1 Termination..................................................................43
Section 7.2 Effect of Termination. .....................................................44
ARTICLE VIII -- INDEMNIFICATION AND RELATED MATTERS..............................................................44
Section 8.1 Survival. ..................................................................44
Section 8.2 Indemnification..............................................................45
Section 8.3 Certain Tax Matters..........................................................52
Section 8.4 Employees; Employee Benefits.................................................56
ARTICLE IX -- ADDITIONAL AGREEMENTS..............................................................................60
Section 9.1 Legend for the Restricted Securities.........................................60
Section 9.2 Press Releases and Announcements. ..........................................60
Section 9.3 Further Transfers. .........................................................61
Section 9.4 Specific Performance.........................................................61
Section 9.5 Expenses. ..................................................................61
Section 9.6 Exclusivity..................................................................61
Section 9.7 Books and Records. .........................................................62
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 9.8 Noncompetition, Nonsolicitation, and Confidentiality. ......................62
Section 9.9 Nonsolicitation by the Purchaser. .........................................64
Section 9.10 Use of Parent's Names and Logos..............................................64
Section 9.11 Medical Malpractice Matters..................................................65
Section 9.12 Transition Services..........................................................65
Section 9.13 EMSA Limited Partnership.....................................................67
Section 9.14 Certain Vendors..............................................................67
Section 9.15 IDX..........................................................................67
ARTICLE X -- MISCELLANEOUS.......................................................................................67
Section 10.1 Amendment and Waiver. ......................................................67
Section 10.2 Notices......................................................................68
Section 10.3 Binding Agreement; Assignment. .............................................68
Section 10.4 Severability. ..............................................................69
Section 10.5 No Strict Construction. ....................................................69
Section 10.6 Captions.....................................................................69
Section 10.7 Entire Agreement. ..........................................................69
Section 10.8 Counterparts. ..............................................................70
Section 10.9 Governing Law................................................................70
Section 10.10 Jurisdiction and Consent to Service..........................................70
Section 10.11 Parties in Interest..........................................................70
Section 10.12 Schedules. .................................................................70
</TABLE>
INDEX OF EXHIBITS
Exhibit A - List of TH Entities
Exhibit B - Earn-Out Obligations
Exhibit C - "Knowledge" Individuals
Exhibit D - Net Working Capital Determination
Exhibit E - Preferred Stock Rights and Preferences
Exhibit F - Required Consents
Exhibit G - Form of Opinion of King & Spalding
Exhibit H - Debt and Equity Commitment Letters
Exhibit I - Form of Opinion of Kirkland & Ellis
Exhibit J - Farmers Insurance Proposal
Exhibit K - Special Bonus Payments
Exhibit L - Medical Malpractice Liability Insurance
Exhibit M - Certain Vendors
Exhibit N - IDX Allocation
iii
<PAGE> 5
RECAPITALIZATION AGREEMENT
THIS RECAPITALIZATION AGREEMENT, dated as of January 25, 1999,
is made by and among Team Health, Inc., a Tennessee corporation (the "Company"),
Pacific Physician Services, Inc., a Delaware corporation (the "Existing
Stockholder"), MedPartners, Inc., a Delaware corporation (the "Parent"), and
Team Health Holdings, L.L.C., a Delaware limited liability company (the
"Purchaser"). The Company, the Existing Stockholder, the Parent, and the
Purchaser are referred to herein collectively as the "Parties" and individually
as a "Party." Certain capitalized terms used herein are defined in Article I
below.
WHEREAS, the Parent is the ultimate parent to the Existing
Stockholder, the Company, and the other entities that collectively constitute
what is commonly known as the "Team Health business," a list of which is
attached hereto as Exhibit A (the "TH Entities");
WHEREAS, as of the date hereof, certain of the TH Entities are
not Subsidiaries of the Company;
WHEREAS, prior to the Closing, the Parent will take such
actions as are necessary to cause all of the TH Entities to become Subsidiaries
of the Company (the "Internal Reorganization");
WHEREAS, the Existing Stockholder is the sole stockholder of
the Company, holding 100 shares of the Company's Common Stock, no par value (the
"Existing Common Stock"); and
WHEREAS, the Parties desire to consummate a recapitalization
of the Company on the terms and subject to the conditions set forth in this
Agreement, and desire that the transactions contemplated by this Agreement be
treated as a "recapitalization" for accounting purposes.
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties, and covenants which are to be made and
performed by the respective Parties, the Parties hereby agree as follows:
ARTICLE I -- DEFINITIONS
SECTION 1.1 DEFINITIONS. When used in this Agreement, the following
terms have the meanings set forth below:
"Acquired Companies" means the Company, each of the TH
Entities, and each of the Related Professional Corporations.
"Affiliate" of any particular Person means any other Person
controlling, controlled by, or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract, or otherwise.
1
<PAGE> 6
"Affiliated Group" means any affiliated group as defined in
Code Section 1504 that has filed a consolidated return for federal income tax
purposes (or any similar group under state, local, or foreign law).
"Agreement" means this Recapitalization Agreement, including
the Disclosure Letter and all Exhibits and Schedules hereto, as it may be
amended from time to time in accordance with its terms.
"Baseline Capital Expenditures Amount" means $10,000,000.
"Baseline Net Working Capital Amount" means $102,900,000
"Bottom Collar" means $100,900,000.
"Capital Expenditures Amount" means all expenditures made
during the period from January 1, 1998 through the close of business on the
Measurement Date for assets which, in accordance with GAAP, are required to be
capitalized and shown on the Company's consolidated balance sheet (after taking
the Internal Reorganization into account), as long as such asset is purchased
for Cash or financed by the incurrence of Indebtedness (i.e., assets which are
financed by accounts payable will not count towards the Capital Expenditures
Amount unless and then only to the extent that such accounts payable are paid
off with Cash prior to the close of business on the Measurement Date).
"Capital Stock" means (i) in the case of a corporation, any
and all shares of capital stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of a
partnership or limited liability company, any and all partnership or membership
interests (whether general or limited), (iv) in any case, any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person, and
(v) in any case, any right to acquire any of the foregoing.
"Cash" means all cash, cash equivalents, and marketable
securities.
"Cash Amount" means the book value of the Company's Cash as of
the close of business on the Measurement Date, determined on a consolidated
basis (after taking the Internal Reorganization into account) in accordance with
GAAP.
"Code" means the Internal Revenue Code of 1986, as amended,
and any reference to any particular Code section shall be interpreted to include
any revision of or successor to that section regardless of how numbered or
classified.
"Common Stock" means the Company's Common Stock, no par value.
"Earn-Out Obligations" means those payment obligations of the
Acquired Companies set forth on Exhibit B to former owners of businesses which
were acquired by the Acquired
2
<PAGE> 7
Companies prior to the Closing which are in the nature of deferred purchase
prices for such businesses and are expressly contingent on the financial or
operating performance of such businesses for periods after the Closing.
"Environmental and Safety Requirements" means all federal,
state, local and foreign statutes, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and administrative
orders and determinations and all common law concerning public health and
safety, worker health and safety and pollution or protection of the environment,
including all such standards of conduct and bases of obligations relating to the
presence, use, production, generation, handling, transport, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or by-products, asbestos,
polychlorinated biphenyls (or PCBs), noise or radiation.
"Excluded Liabilities" means all liabilities and obligations
reflected on the books and records of the Acquired Companies relating to (i)
self-funded medical claims and the related tail liability incurred prior to the
Closing Date by current or former employees of InPhyNet Medical Management Inc.
and its Subsidiaries which relate to the government services or managed
healthcare divisions (or their covered dependents) and (ii) self-funded workers'
compensation claims and the related tail liability with respect to injuries
incurred prior to July 1, 1997 by current or former employees of InPhyNet
Medical Management Inc. and its Subsidiaries which relate to the government
services or managed healthcare divisions.
"GAAP" means generally accepted accounting principles of the
United States, consistently applied.
"Indebtedness" of any Person means, without duplication: (i)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor or otherwise (other than trade payables and other current
liabilities incurred in the Ordinary Course of Business), including without
limitation all Earn-Out Obligations, and any commitment by which such Person
assures a creditor against loss, including contingent reimbursement obligations
with respect to letters of credit; (ii) indebtedness guaranteed in any manner by
such Person, including a guarantee in the form of an agreement to repurchase or
reimburse; and (iii) obligations under capitalized leases in respect of which
such Person is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person assures a creditor
against loss. Without limiting the generality of the foregoing, (i) the
promissory note payable to Edison Emergency Associates, P.A. dated August 1,
1997 will be treated as Indebtedness for purposes of this Agreement but will not
be treated as an Earn-Out Obligation for purposes of this Agreement and (ii) the
deferred compensation payable with respect to the EPA Deferred Compensation Plan
reflected on the Company's balance sheet and the deferred compensation
arrangements referred to in Section 8.4(i) will not be treated as Indebtedness
for purposes of this Agreement.
"Indebtedness Amount" means the book value of the Company's
Indebtedness as of the close of business on the Measurement Date, determined on
a consolidated basis (after taking the
3
<PAGE> 8
Internal Reorganization into account) in accordance with GAAP; provided that for
purposes of such calculation (i) all interest, prepayment penalties, premiums,
fees and expenses (if any) which would be payable if such Indebtedness was paid
in full on the Measurement Date shall be treated as Indebtedness and (ii) the
aggregate amount of Earn-Out Obligations included as Indebtedness shall be
deemed to be $13,487,000, regardless of the actual book value or expected value
of the Earn-Out Obligations at such time.
"Insider" means, any officer, director, executive employee,
stockholder, partner or Affiliate, as applicable, of any Acquired Company or any
spouse or dependent (whether natural or adopted) of any such individual or any
entity in which any of the foregoing Persons owns a 5% or greater direct or
indirect beneficial interest.
"knowledge" and "aware" and terms of similar import mean, with
respect to a Person, the actual knowledge of such Person (and if such Person is
an entity, this means the actual knowledge of the officers and directors of such
Person; provided that if the Person is the Parent, actual knowledge also shall
mean the actual knowledge of the officers and directors of the Existing
Stockholder and the Company, and for purposes of Section 5.13 only, it shall
also mean the actual knowledge of those individuals listed on Exhibit C attached
hereto), after making reasonable inquiry and exercising reasonable diligence
with respect to the particular matter in question.
"Leased Real Property" means all land, building, fixtures or
other real property in which any Acquired Company has a leasehold, subleasehold,
license, concession or other real property right or interest under the Real
Property Leases.
"Leasehold Improvements" means all buildings, fixtures and
other improvements located on each Leased Real Property which are owned by any
Acquired Company, regardless of whether such improvements are subject to
reversion to the landlord or other third party upon the expiration or
termination of the Real Property Lease for such Leased Real Property.
"Licenses" means all permits, licenses, franchises,
certificates, approvals, and other authorizations of third parties or foreign,
federal, state, or local governments or other similar rights.
"Liens" means any mortgage, pledge, security interest,
encumbrance, lien, or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Acquired Companies,
any filing or agreement to file a financing statement as debtor under the
Uniform Commercial Code or any similar statute other than to reflect ownership
by a third party of property leased to any Acquired Company under a lease which
is not in the nature of a conditional sale or title retention agreement, or any
subordination arrangement in favor of another Person (other than any
subordination arising in the Ordinary Course of Business).
"Loss" means, with respect to any Person, any damage,
liability, diminution in value, demand, claim, action, cause of action, cost,
damage, deficiency, imposed Tax, penalty, fine or other loss or expense, whether
or not arising out of a third party claim, including all interest, penalties,
reasonable attorneys' fees and expenses and all amounts paid or incurred in
connection with any
4
<PAGE> 9
action, demand, proceeding, investigation or claim by any third party (including
any governmental entity or any department, agency or political subdivision
thereof) against or affecting such Person or which, if determined adversely to
such Person, would give rise to, evidence the existence of, or relate to, any
other Loss and the investigation, defense or settlement of any of the foregoing.
"Material Adverse Effect" means any material adverse effect on
the business, financial condition, operations, results of operations, or
prospects of the Acquired Companies, taken as a whole.
"Medical Malpractice Claim" means any claim for medical
malpractice arising at any time, in connection with the operation of the
business of the Acquired Companies on or prior to the Closing, for which any of
the Acquired Companies is liable, whether pursuant to law, the terms of any
contract between any of the Acquired Companies and any third party, or
otherwise.
"Measurement Date" means February 28, 1999.
"Net Working Capital Amount" means the book value of the
Company's consolidated current assets (excluding Cash, assets with respect to
Taxes, intercompany receivables and the deferred restructuring charge asset
referred to in item 4 on the Assets Schedule) minus the book value of the
Company's consolidated current liabilities (excluding Indebtedness, intercompany
payables, liabilities with respect to Taxes, and Excluded Liabilities), in each
case as of the close of business on the Measurement Date (after taking the
Internal Reorganization into account), in accordance with the procedures set
forth in Exhibit D.
"Ordinary Course of Business" means the ordinary course of
business consistent with past practice (including, without limitation, with
respect to collection of accounts receivable, purchases of supplies, repairs and
maintenance, payment of accounts payable and accrued expenses, terms of sale,
levels of capital expenditures, and operation of cash management practices
generally).
"Owned Real Property" means all land, together with all
buildings, fixtures and other improvements located thereon, and all easements
and other rights appurtenant thereto, owned by any of the Acquired Companies.
"Permitted Liens" means (i) real estate taxes, assessments and
other governmental fees or other charges levied with respect to the Real
Property not yet due and payable as of the Closing Date; (ii) mechanics and
similar statutory liens arising or incurred in the Ordinary Course of Business
for amounts which are not delinquent and which would not, individually or in the
aggregate, have a Material Adverse Effect; (iii) zoning, entitlement, building
and other land use and similar laws or regulations imposed by any governmental
authority having jurisdiction over such parcel which are not violated by the
current use and operation thereof; (iv) easements, covenants, conditions,
restrictions and other similar matters of record affecting title to such Real
Property Leases which would not materially impair the use or occupancy of such
parcel in the operation of the Acquired Companies' businesses; and (v) liens or
encumbrances placed by a landlord or other third party with respect to any
Leased Real Property.
5
<PAGE> 10
"Person" means and includes an individual, a partnership, a
joint venture, a limited liability company, a corporation or trust, an
unincorporated organization, a group, or a government or other department or
agency thereof, or any other entity.
"Proprietary Rights" means any and all (i) patents, patent
applications, patent disclosures, as well as any reissues, continuations,
continuations-in-part, divisions, extensions or reexaminations thereof, (ii)
trademarks, service marks, trade dress, trade names, logos, and corporate names
and registrations and applications for registration thereof, together with all
of the goodwill associated therewith, (iii) copyrights (registered or
unregistered) and copyrightable works and registrations and applications for
registration thereof, (iv) mask works and registrations and applications for
registration thereof, (v) computer software, data, data bases, and documentation
thereof, (vi) trade secrets and other confidential information (including,
without limitation, ideas, formulas, compositions, inventions (whether
patentable or unpatentable and whether or not reduced to practice), know-how,
manufacturing and production processes and techniques, if any, research and
development information, drawings, specifications, designs, plans, proposals,
technical data, financial and marketing plans, and customer and supplier lists
and information), (vii) other intellectual property rights, (viii) copies and
tangible embodiments thereof (in whatever protectable form or medium), and (ix)
license agreements related thereto.
"Real Property Leases" means all leases, subleases, licenses,
concessions and other agreements (written or oral), including, without
limitation, all amendments, extensions, renewals, guaranties and other
agreements with respect thereto, together with all security deposits thereunder,
held by the Acquired Companies for the use and occupancy of any real property or
interests therein.
"Related Professional Corporation" means each professional
corporation which has entered into a management or services agreement with the
Company, any TH Entity or any other Related Professional Corporation, other than
a professional corporation with respect to which (i) neither the Parent nor the
Company has the right to designate or replace the sole shareholder (or a
majority of the shareholders, if applicable) pursuant to an agreement between
such professional corporation and/or its shareholders, and the Parent or the
Acquired Company and (ii) neither the Parent nor the Company has the right to
participate, directly or indirectly, in the profits or losses of such
professional corporation in accordance with the management or services
agreement, provided, that in any event, it includes the entities listed as a
"Related Professional Corporation" on the Organizational Schedule included in
the Disclosure Letter.
"Restricted Securities" means the Preferred Stock and Common
Stock issued to the Existing Stockholder pursuant to Section 2.2(a) below
(including, without limitation, the Purchased Securities) and any securities
issued with respect to such securities by way of a conversion, stock dividend,
or stock split or in connection with a combination of shares, refinancing,
merger, consolidation, or other reorganization. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (i) been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (ii) been distributed
to the public through a broker, dealer, or market maker pursuant to Rule 144 (or
any similar provision then in force) under the Securities Act or become eligible
for sale pursuant to Rule
6
<PAGE> 11
144(k) (or any similar provision then in force) under the Securities Act, or
(iii) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in Section 9.1 have been delivered by the
Company. Whenever any particular securities of the Company cease to be
Restricted Securities, the holder thereof shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing a Securities
Act legend of the character set forth in Section 9.1.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal law then in force.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof,
or (ii) if a limited liability company, partnership, association, or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more Subsidiaries of such Person or a combination thereof.
For purposes hereof, a Person shall be deemed to have a majority ownership
interest in a limited liability company, partnership, association, or other
business entity if such Person shall be allocated a majority of limited
liability company, partnership, association, or other business entity gains or
losses or shall be or control any managing director or general partner of such
limited liability company, partnership, association, or other business entity.
"Tail Malpractice Liability" means all liabilities and
obligations for Medical Malpractice Claims which arise out of or relate to, or
have arisen out of or relate to, events that occur in connection with the
operations of the Acquired Companies on or prior to Closing.
"Tax" or "Taxes" means federal, state, county, local, foreign,
or other income, gross receipts, ad valorem, franchise, profits, sales or use,
transfer, registration, excise, utility, environmental, communications, real or
personal property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated, and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto, and also including, without limitation, any Tax or Taxes of another
Person for which any Acquired Company is liable as a successor or as a
transferee or by contract).
"Tax Return" means returns, declarations, reports, claims for
refund, information returns or other documents (including any related or
supporting schedules, statements, or information) filed or required to be filed
in connection with the determination, assessment, or collection of Taxes of any
party or the administration of any laws, regulations, or administrative
requirements relating to any Taxes.
7
<PAGE> 12
"TH JV's" means those TH Entities designated as "TH JV's" on
the Organization Schedule included in the Disclosure Letter in which neither
Parent, the Existing Stockholder nor any Acquired Company owns an interest
greater than fifty percent (50%).
"Top Collar" means $104,900,000.
"Transaction Documents" means this Agreement, and all other
agreements, instruments, certificates, and other documents to be entered into or
delivered by any Party in connection with the consummation of the transactions
contemplated by this Agreement, including, without limitation, the Stockholders
Agreement and the Registration Agreement.
"Treasury Regulations" means the United States Treasury
Regulations promulgated pursuant to the Code.
SECTION 1.2 CROSS REFERENCE. The following terms are defined in the
following Sections of this Agreement:
Term Section
Accounts Receivable 5.5(b)
Acquisition Proposal 9.6
Actual Capital Expenditures Amount 2.6(a)
Actual Cash Amount 2.6(a)
Actual Indebtedness Amount 2.6(a)
Actual Net Working Capital Amount 2.6(a)
Akron Premises 9.12(c)
Akron Subtenant 9.12(c)
Akron Tenant 9.12(c)
Allocation 8.3(b)
Applicable Limitation Date 8.1
Bank Accounts 4.8(b)
Basket 8.2(b)(iii)
Bonds 4.6(b)
Bonus Participants 8.4(i)
Cap 8.2(b)(ii)
Cash Management Period 4.8(a)
CERCLA 5.23(e)
Closing 2.5
Closing Date 2.5
Closing Review 2.6(a)
Company Preface
Company 401(k) Plan 8.4(f)
Computer Systems 5.12(c)
Confidential Information 9.8(c)
8
<PAGE> 13
Confidentiality Agreement 4.1
Consolidated Subsidiaries 8.3(b)
Debt and Equity Commitment Letters 6.6
Debt Commitment Letters 6.6
Disclosure Letter Article V
Employee 8.4(a)
Draft Computations 2.6(a)
ERISA 5.17(a)
Estimated Capital Expenditures Amount 2.1
Estimated Cash Amount 2.1
Estimated Closing Common Value 2.1
Estimated Indebtedness Amount 2.1
Estimated Redemption Consideration 2.4(b)
Existing Common Stock Recitals
Existing Stockholder Preface
Expense Letter 10.7
E&Y 1998 Audit Fees 4.6(a)
Farmers Policy 4.1(l)
Financial Statements 5.5(a)
Firm 2.6(a)
Fundamental Representations and Warranties 8.1
HSR Act 3.1(d)
Indemnification Statement 8.3(c)
Indemnified Party 8.2(f)
Indemnifying Party 8.2(f)
Internal Reorganization Recitals
Joint Defense Proceeding 8.2(f)
Latest Balance Sheet 5.5(a)
1998 Financials 4.6(a)
Noncompete Period 9.8(a)
Objection Notice 2.6(a)
Parent Preface
Parent Board Approval 4.7
Parent Health Plan 8.4(d)
Parent's 401(k) 8.4(f)
Parties Preface
Party Preface
Plans 5.17(a)
Plantation Premises 9.12(a)
Plantation Subtenant 9.12(a)
Plantation Tenant 9.12(a)
Pre-Closing Period 8.3(a)
Pre-Closing Period Returns 8.3(c)
Preferred Stock 2.2(a)
9
<PAGE> 14
Prime Rate 2.6(b)
Purchased Securities 2.3(a)
Purchased Securities Purchase Price 2.3(a)
Purchaser Preface
Purchaser Parties 8.2(a)
Purchaser Tax Group 8.3(a)
Real Property 5.8(d)
Redeemed Securities 2.4(a)
Redemption Consideration 2.6
Registration Agreement 3.1(n)
Retirement Benefit Transition Period 8.4(f)
Schedule Update 5.25, 6.10
Section 338(h)(10) Election 8.3(b)
Seller Group 8.3(a)
Seller Parties 8.2(c)
Seller Trademarks and Logos 9.10
Senior Managers 7.1(b)
Senior Management Agreements 7.1(b)
Solvency Opinion 3.1(o)
Stark Act 5.22(b)
Stockholders Agreement 3.1(m)
Straddle Period 8.3(a)
Straddle Period Returns 8.3(c)
Tampa Premises 9.12(b)
Tampa Subtenant 9.12(b)
Tampa Tenant 9.12(b)
Tax Benefit 8.3(c)
TH Entities Recitals
Transaction Expenses 9.5
Transition Cash Inflows 4.8(b)
Transition Cash Outflows 4.8(b)
Unregistered Proprietary Rights 5.12(a)
WARN Act 8.4(c)
Welfare Benefit Transition Period 8.4(d)
Year 2000 Compliant 5.12(c)
ARTICLE II -- THE RECAPITALIZATION
SECTION 2.1 PRE-CLOSING ESTIMATES OF CERTAIN AMOUNTS. Not later than
three days before the Closing, the Existing Stockholder, subject to the
Purchaser's reasonable approval, shall provide the Purchaser with a good faith
estimate of the Cash Amount (such estimate is referred to as the "Estimated Cash
Amount"), the Indebtedness Amount (such estimate is referred to as the
10
<PAGE> 15
"Estimated Indebtedness Amount"), and the Capital Expenditures Amount
(such estimate is referred to as the "Estimated Capital Expenditures Amount").
For purposes of Section 2.2 below, the "Estimated Closing Common Value" means an
amount equal to (A) $349,419,750, (B) plus the Estimated Cash Amount (whether
negative or positive), (C) less the Estimated Indebtedness Amount, (D) plus the
excess of the Estimated Capital Expenditures Amount over the Baseline Capital
Expenditures Amount or minus the excess of the Baseline Capital Expenditures
Amount over the Estimated Capital Expenditures Amount, (E) plus an amount equal
to $76,800.00 multiplied by the number of calendar days after the Measurement
Date through but not including the Closing Date, and (F) minus an amount equal
to all Cash swept by or otherwise transferred to the Parent or any of its
Affiliates or lenders (other than the Acquired Companies) during the Cash
Management Period referred to in Section 4.8 below.
SECTION 2.2 EXCHANGE OF COMMON STOCK.
(a) Exchange. On the basis of the representations, warranties,
covenants, and agreements herein, and subject to the satisfaction or waiver of
the conditions set forth herein and the terms hereof, at the Closing the
Existing Stockholder will contribute all of the Existing Common Stock to the
Company in exchange for the Company's issuance to the Existing Stockholder of
100,000 shares of the Company's Class A Preferred Stock, par value $.01 per
share, having the rights and preferences set forth on Exhibit E attached hereto
(the "Preferred Stock") and a number of shares of Common Stock equal to (i)(A)
the Estimated Closing Common Value minus (B) $100,000,000, divided by (ii)
$1.50.
(b) Delivery of Certificates by Existing Stockholder. At the
Closing, the Existing Stockholder will deliver to the Company, free and clear of
any Liens, one or more certificates representing the Existing Common Stock, duly
endorsed in blank or accompanied by stock powers or other instruments of
transfer duly executed in blank.
(c) Delivery of Certificates by Company. At the Closing, upon
delivery by the Existing Stockholder of the certificates representing the
Existing Common Stock, the Company will deliver to the Existing Stockholder,
free and clear of any Liens, one or more certificates representing the number of
shares of Preferred Stock and Common Stock referenced in Section 2.2(a) above.
SECTION 2.3 PURCHASE OF PREFERRED STOCK AND COMMON STOCK.
(a) Purchase. On the basis of the representations, warranties,
covenants, and agreements herein, and subject to the satisfaction or waiver of
the conditions set forth herein and the terms hereof, at the Closing the
Existing Stockholder will sell to the Purchaser, and the Purchaser will purchase
from the Existing Stockholder, 94,299.091 shares of Preferred Stock for a
purchase price of $1,000.00 per share and 9,267,273 shares of Common Stock for a
purchase price of $1.50 per share (collectively, the "Purchased Securities").
The aggregate purchase price for the Purchased Securities is hereinafter
referred to collectively as the "Purchased Securities Purchase Price."
11
<PAGE> 16
(b) Payment by the Purchaser. At the Closing, the Purchaser
shall pay to the account or accounts designated by the Existing Stockholder, by
wire transfer of immediately available funds, an amount in cash equal to the
Purchased Securities Purchase Price.
(c) Delivery of Certificates by Existing Stockholder. At the
Closing, upon delivery by the Purchaser of the Purchased Securities Purchase
Price, the Existing Stockholder will deliver to the Purchaser, free and clear of
any Liens, two or more certificates representing the Purchased Securities, duly
endorsed in blank or accompanied by stock powers or other instruments of
transfer duly executed in blank.
SECTION 2.4 REDEMPTION OF CERTAIN COMMON STOCK.
(a) Redemption. On the basis of the representations,
warranties, covenants, and agreements herein, and subject to the satisfaction or
waiver of the conditions set forth herein and the terms hereof, at the Closing
the Company will redeem and purchase from the Existing Stockholder, and the
Existing Stockholder will sell to the Company, all shares of Common Stock held
by the Existing Stockholder after taking into account the transactions in
Sections 2.2 and 2.3 above, minus 732,727 shares of Common Stock, for a purchase
price of $1.50 per share (the "Redeemed Securities"). As a result of the
transactions in Sections 2.2 and 2.3 above and this Section 2.4, the Existing
Stockholder will hold 5,700.909 shares of Preferred Stock and 732,727 shares of
Common Stock as of immediately following the Closing.
(b) Payment to Existing Stockholder. At the Closing, the
Company shall pay to the account or accounts designated by the Existing
Stockholder, by wire transfer of immediately available funds, an amount in cash
equal to the aggregate purchase price for the Redeemed Securities as set forth
in Section 2.4(a) above. The aggregate amount paid by the Company to the
Existing Stockholder under this Section 2.4(b) is referred to herein as the
"Estimated Redemption Consideration."
(c) Delivery of Certificates by Existing Stockholder. At the
Closing, upon payment by the Company of the Estimated Redemption Consideration,
the Existing Stockholder will deliver to the Company, free and clear of any
Liens, one or more certificates representing the Redeemed Securities, duly
endorsed in blank or accompanied by stock powers or other instruments of
transfer duly executed in blank.
SECTION 2.5 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Kirkland &
Ellis, 200 East Randolph Drive, Chicago, Illinois 60601, commencing at 10:00
a.m. on the third business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself), or at such other place or
on such other date as may be mutually agreeable to the Purchaser and the
Existing Stockholder; provided that in any event, if the Purchaser's senior
lenders require that the Closing take place at the offices of their attorneys,
the Parties agree that the Closing
12
<PAGE> 17
shall take place at such offices. The date and time of the Closing are herein
referred to as the "Closing Date."
SECTION 2.6 POST-CLOSING ADJUSTMENTS.
(a) Post-Closing Determination. Within 90 days after the
Closing Date, the Company and its auditors will conduct a review (the "Closing
Review") of the Cash Amount, the Indebtedness Amount, the Net Working Capital
Amount and the Capital Expenditures Amount and will prepare and deliver to the
Existing Stockholder a computation of such amounts (the "Draft Computations").
The Company and its auditors will make available to the Existing Stockholder and
its auditors all records and work papers used in preparing the Draft
Computations. If the Existing Stockholder disagrees with the computation of the
Cash Amount, the Indebtedness Amount, the Net Working Capital Amount or the
Capital Expenditures Amount reflected in the Draft Computations, the Existing
Stockholder may, within 30 days after receipt of the Draft Computations, deliver
a notice (an "Objection Notice") to the Company setting forth the Existing
Stockholder's calculation of the Cash Amount, the Indebtedness Amount, the Net
Working Capital Amount and the Capital Expenditures Amount. The Company and the
Existing Stockholder will use reasonable best efforts to resolve any
disagreements as to the computation of the Cash Amount, the Indebtedness Amount,
the Net Working Capital Amount and the Capital Expenditures Amount, but if they
do not obtain a final resolution within 30 days after the Company has received
the Objection Notice, the Company and the Existing Stockholder will jointly
retain an independent accounting firm of recognized national standing (the
"Firm") to resolve any remaining disagreements. If the Company and the Existing
Stockholder are unable to agree on the choice of the Firm, then the Firm will be
a "big-five" accounting firm (or a successor) selected by lot (after excluding
one firm designated by the Company and one firm designated by the Existing
Stockholder). The Company and the Existing Stockholder will direct the Firm to
render a determination within 30 days of its retention and the Company, the
Existing Stockholder, and their respective agents will cooperate with the Firm
during its engagement. The Firm will consider only those items and amounts in
the Draft Computations set forth in the Objection Notice which the Company and
the Existing Stockholder are unable to resolve. The Company and the Existing
Stockholder shall each submit a binder to the Firm promptly (and in any event
within 20 days after the Firm's engagement), which binder shall contain such
Party's computation of the Cash Amount, the Indebtedness Amount, the Net Working
Capital Amount and the Capital Expenditures Amount and information, arguments,
and support for such Party's position. The Firm shall review such binders and
base its determination solely on them. In resolving any disputed item, the Firm
may not assign a value to any item greater than the greatest value for such item
claimed by either party or less than the smallest value for such item claimed by
either party. The Firm's determination will be based on the definition of the
Cash Amount, the Indebtedness Amount, the Net Working Capital Amount and the
Capital Expenditures Amount included herein. The determination of the Firm will
be conclusive and binding upon the Parties. The Existing Stockholder shall bear
a percentage of the costs and expenses of the Firm equal to the difference
between the aggregate amount contested by the Existing Stockholder as set forth
on the Objection Notice and amounts actually paid to (or by) the Existing
Stockholder with respect to contested items, as a percentage of the aggregate
amount so contested. The Company shall bear the remainder of such costs and
expenses. The Cash Amount, the Indebtedness Amount, the Net Working Capital
13
<PAGE> 18
Amount and the Capital Expenditures Amount, as finally determined pursuant to
this Section 2.6(a), is referred to herein as the "Actual Cash Amount," the
"Actual Indebtedness Amount," the "Actual Net Working Capital Amount" and the
"Actual Capital Expenditures Amount," respectively.
(b) Post-Closing Adjustment.
(i) Payments by the Company.
(A) If the Actual Cash Amount is greater
than the Estimated Cash Amount, the Company will, within five
(5) business days after the determination thereof, pay to the
Existing Stockholder an amount equal to the sum of (A) the
Actual Cash Amount minus the Estimated Cash Amount plus (B)
interest on such difference from the Closing Date to the date
of payment at an interest rate equal to the "Prime Rate" as
listed in The Wall Street Journal (Midwest Edition) on the
Closing Date (the "Prime Rate"). Such payment will be made by
wire transfer or delivery of other immediately available
funds.
(B) If the Actual Indebtedness Amount is
less than the Estimated Indebtedness Amount, the Company will,
within five (5) business days after the determination thereof,
pay to the Existing Stockholder an amount equal to the sum of
(A) the Estimated Indebtedness Amount minus the Actual
Indebtedness Amount plus (B) interest on such difference from
the Closing Date to the date of payment at an interest rate
equal to the Prime Rate. Such payment will be made by wire
transfer or delivery of other immediately available funds.
(C) If the Actual Net Working Capital Amount
is greater than the Top Collar, the Company will, within five
(5) business days after the determination thereof, pay to the
Existing Stockholder an amount equal to the sum of (A) the
Actual Net Working Capital Amount minus the Top Collar plus
(B) interest on such difference from the Closing Date to the
date of payment at an interest rate equal to the Prime Rate.
Such payment will be made by wire transfer or delivery of
other immediately available funds.
(D) If the Actual Capital Expenditures
Amount is greater than the Estimated Capital Expenditures
Amount, the Company will, within five (5) business days after
the determination thereof, pay to the Existing Stockholder an
amount equal to the sum of (A) the Actual Capital Expenditures
Amount minus the Estimated Capital Expenditures Amount plus
(B) interest on such difference from the Closing Date to the
date of payment at an interest rate equal to the Prime Rate.
Such payment will be made by wire transfer or delivery of
other immediately available funds.
(ii) Payments by the Existing Stockholder.
14
<PAGE> 19
(A) If the Actual Cash Amount is less than
the Estimated Cash Amount, the Existing Stockholder will,
within five (5) business days after the determination thereof,
pay to the Company an amount equal to the sum of (A) the
Estimated Cash Amount minus the Actual Cash Amount plus (B)
interest on such difference from the Closing Date to the date
of payment at an interest rate equal to the Prime Rate. Such
payment will be made by wire transfer or delivery of other
immediately available funds.
(B) If the Actual Indebtedness Amount is
greater than the Estimated Indebtedness Amount, the Existing
Stockholder will, within five (5) business days after the
determination thereof, pay to the Company an amount equal to
the sum of (A) the Actual Indebtedness Amount minus the
Estimated Indebtedness Amount plus (B) interest on such
difference from the Closing Date to the date of payment at an
interest rate equal to the Prime Rate. Such payment will be
made by wire transfer or delivery of other immediately
available funds.
(C) If the Actual Net Working Capital Amount
is less than the Bottom Collar, the Existing Stockholder will,
within five (5) business days after the determination thereof,
pay to the Company an amount equal to the sum of (A) the
Bottom Collar minus the Actual Net Working Capital Amount plus
(B) interest on such difference from the Closing Date to the
date of payment at an interest rate equal to the Prime Rate.
Such payment will be made by wire transfer or delivery of
other immediately available funds.
(D) If the Actual Capital Expenditures
Amount is less than the Estimated Capital Expenditures Amount,
the Existing Stockholder will, within five (5) business days
after the determination thereof, pay to the Company an amount
equal to the sum of (A) the Estimated Capital Expenditures
Amount minus the Actual Capital Expenditures Amount plus (B)
interest on such difference from the Closing Date to the date
of payment at an interest rate equal to the Prime Rate. Such
payment will be made by wire transfer or delivery of other
immediately available funds.
(iii) Dispute. If, pursuant to Section 2.6(a) above,
there is a dispute as to the final determination of the Actual Cash
Amount, the Actual Indebtedness Amount, the Actual Net Working Capital
Amount or the Actual Capital Expenditures Amount, the Company and the
Existing Stockholder shall promptly pay to the other, as appropriate,
such amounts as are not in dispute, pending final determination of such
dispute pursuant to Section 2.6(a).
The Estimated Redemption Consideration, as finally adjusted pursuant to this
Section 2.6, is referred to herein as the "Redemption Consideration."
15
<PAGE> 20
ARTICLE III -- CONDITIONS TO CLOSING
SECTION 3.1 CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligation
of the Purchaser to consummate the transactions contemplated by this Agreement
is subject to the satisfaction of the following conditions as of the Closing
Date:
(a) The representations and warranties set forth in Article V
hereof taken in their entirety shall be true and correct in all material
respects at and as of the Closing Date as though then made and as though the
Closing Date were substituted for the date of this Agreement throughout such
representations and warranties, without giving effect to any Schedule Updates
thereto other than those approved by the Purchaser pursuant to Section 5.25;
provided that, for purposes of this Section 3.1(a), those representations and
warranties that are qualified by references to "material" or "Material Adverse
Effect" shall be deemed not to include such qualifications;
(b) The Company, the Existing Stockholder and the Parent shall
have performed and complied in all material respects with all of the covenants
and agreements required to be performed by each of them under this Agreement on
or before the Closing;
(c) All third party consents listed on Exhibit F attached
hereto shall have been obtained on terms reasonably satisfactory to the
Purchaser (which consents will include, to the extent required by the Company's
lenders with respect to material Real Property Leases, consents to leasehold
mortgages, collateral assignments of leases, and/or waivers of landlord liens
from the landlords thereof or any other parties whose consent is required under
such Real Property Leases);
(d) All governmental filings, authorizations, and approvals
that are required for the consummation of the transactions contemplated hereby
shall have been duly made and obtained on terms reasonably satisfactory to the
Purchaser;
(e) Pursuant to a general assignment and assumption agreement
in form and substance reasonably satisfactory to the Purchaser and the Parent,
(i) the Parent and its Affiliates which are not Acquired Companies shall have
assigned to the Acquired Companies all right, title and interest of the Parent
and such Affiliates in and to any contracts, agreements, arrangements or
understandings which (A) exclusively relate to the business of the Acquired
Companies or (B) are listed on the Assigned Contracts Schedule included in the
Disclosure Letter and (ii) the Acquired Companies shall have assumed and agreed
to discharge and pay in full all liabilities and obligations arising under all
such contracts, agreements, arrangements and understandings; provided that any
assignment contemplated pursuant to this Section 3.1(e) which would have the
effect of rendering invalid any provisions of the contract, agreement,
arrangement or understanding to be assigned shall be void and of no effect with
respect to such provisions; and with respect to the Real Property Lease for the
Leased Real Property located at 100 West 70th Avenue, Fort Lauderdale, Florida,
the tenant under such Real Property Lease shall have entered into an Assignment
and Assumption of Lease in form and substance reasonably satisfactory to the
Purchaser;
16
<PAGE> 21
(f) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable judgment, decree, injunction, order, or ruling would prevent the
performance of this Agreement or any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement, cause such
transactions to be rescinded, or materially and adversely affect the right of
the Purchaser to own, operate, or control any Acquired Company, and no judgment,
decree, injunction, order, or ruling shall have been entered which has any of
the foregoing effects;
(g) Since the date hereof, there shall have been no Material
Adverse Effect (without limiting the generality of the foregoing, since the date
hereof, there shall have been no modification or change (or threat of
modification or change) of any Medicare or Medicaid law, rule, regulation or
payment policy, or any rule or policy of any third-party payor, or any other
applicable law or regulation, which has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect; provided that
the implementation or effectiveness of the final rule entitled "Medicare
Program: Revisions to Payment Policies and Adjustments to the Relative Value
Units under the Physician Fee Schedule for Calendar Year 1999" published at 63
Fed. Reg. 58814 et seq. (November 2, 1998) shall not be deemed to have a
Material Adverse Effect);
(h) Except as otherwise specified in writing by the Purchaser
to the Existing Stockholder prior to the Closing Date, all of the directors of
each TH Entity that is not a TH JV shall have resigned and such resignations
shall be effective as of the Closing Date;
(i) The Internal Reorganization shall have occurred on terms
and pursuant to documents reasonably satisfactory to the Purchaser;
(j) The Company's charter shall have been amended to include
the provisions set forth in Exhibit E attached hereto, shall be in full force
and effect under the laws of the State of Tennessee as of the Closing as so
amended and shall not have been further amended or modified;
(k) The Purchaser shall have received an opinion, dated the
Closing Date, of King & Spalding, counsel to the Company, the Existing
Stockholder and the Parent, with respect to the matters set forth on Exhibit G
attached hereto, and the lenders providing debt financing in connection with the
transactions contemplated by this Agreement shall be entitled to rely thereon;
(l) On or before the Closing Date, the Existing Stockholder
shall have delivered to Purchaser all of the following:
(i) a certificate from the Company in a form
reasonably satisfactory to the Purchaser, dated the Closing Date,
stating that the preconditions specified in Sections 3.1(a) through (j)
have been satisfied;
(ii) a copy of the resolutions of the board of
directors of the Company, the Existing Stockholder and the Parent,
respectively, approving the transactions contemplated
17
<PAGE> 22
by this Agreement, certified by the Company, the Existing Stockholder
and the Parent, respectively;
(iii) a copy of the certificate of incorporation or
equivalent document for each Acquired Company, certified by the
appropriate authority in the jurisdiction in which such entity was
incorporated or organized;
(iv) a copy of the bylaws or equivalent document for
each Acquired Company, certified by such Acquired Company;
(v) certificates from appropriate authorities, dated
as of or about the Closing Date, as to the good standing and
qualification to do business of each Acquired Company in each
jurisdiction where they are so qualified;
(vi) all stock certificates and other instruments
evidencing ownership of each of the Company's Subsidiaries;
(vii) all minute books, stock books, ledgers and
registers, corporate seals and other corporate records relating to the
organization, ownership and maintenance of each Acquired Company;
(viii) copies of the consents, filings,
authorizations and approvals described in Sections 3.1(c) and (d) to
the extent applicable to the Company, the Existing Stockholder or the
Parent;
(ix) copies of the resignations described in Section
3.1(h); and
(x) such other documents or instruments as the
Purchaser may reasonably request to effect the transactions
contemplated hereby;
(m) The Company, the Parent, the Purchaser and the Existing
Stockholder shall have entered into a stockholders agreement in form and
substance reasonably acceptable to all parties thereto (the "Stockholders
Agreement"), and the Stockholders Agreement shall be in full force and effect as
of the Closing;
(n) The Company, the Parent, the Purchaser and the Existing
Stockholder shall have entered into a registration agreement in form and
substance reasonably acceptable to all parties thereto (the "Registration
Agreement"), and the Registration Agreement shall be in full force and effect as
of the Closing;
(o) The Purchaser shall have received an opinion from
Valuation Research, Inc. or another reputable investment banking or valuation
firm mutually acceptable to the Parties, regarding the solvency and liquidity of
the Company immediately upon consummation of the transactions contemplated
herein (the "Solvency Opinion");
18
<PAGE> 23
(p) The Company shall have received (i) at least $250.0
million of cash proceeds from senior and subordinated debt financings and (ii)
at least $40.0 million of unused availability under revolving loan commitments,
each on the terms and conditions set forth in the Debt Commitment Letters
attached hereto as Exhibit H;
(q) The Parent shall have obtained for the Company insurance
covering the Tail Malpractice Liability in accordance with Section 9.11 hereof;
(r) All proceedings to be taken by the Company, the Existing
Stockholder and the Parent in connection with the consummation of the
transactions contemplated by this Agreement and all certificates, opinions,
instruments, and other documents required to be delivered by the Company, the
Existing Stockholder and the Parent to effect the transactions contemplated
hereby reasonably requested by the Purchaser shall be reasonably satisfactory in
form and substance to the Purchaser;
(s) The Company shall have extended the term of the existing
contract with La Habre Clinic for at least 12 months beyond the expiration date
of the existing contract (it being understood that the expiration date of the
existing contract is March 2000);
(t) The Parent shall have received the consent of applicable
insurance providers for the provision of the transitional benefits required to
be provided by it pursuant to Section 8.4 hereof for the periods set forth
therein; and
(u) The Company shall have paid the full year's 1998 bonus to
the Company's management team prior to the Measurement Date, and the Parent
shall have fully vested and made immediately exercisable all stock options under
the Parent's 1998 Employee Stock Option Plan held by any officer or employee of
the Acquired Companies, the exercisability of which, and the sale of the
underlying stock of which, will not be restricted except to the extent required
by applicable law or the Parent's written trading policy, and in the case of any
person who is subject to such policy on the date hereof, such options will
remain exercisable until at least the fifth business day after the date on which
such exercisability and sale of the underlying stock is permitted, and such
exercisability and sale of the underlying stock will be permitted (unless
otherwise prohibited by law) commencing 72 hours after the public release of the
Parent's quarterly financial results for the quarter ended March 31, 1999 and
expiring 27 days after such commencement, and the Parent will use commercially
reasonable efforts to expeditiously facilitate such exercise and sale upon
request consistent with the level and speed of facilitation provided by other
publicly traded companies under similar circumstances.
Any condition specified in this Section 3.1 may be waived by the Purchaser in
its sole discretion; provided that no such waiver shall be effective unless it
is set forth in a writing executed by the Purchaser.
19
<PAGE> 24
SECTION 3.2 CONDITIONS TO THE COMPANY'S, THE PARENT'S AND THE EXISTING
STOCKHOLDER'S OBLIGATIONS. The obligation of the Company, the Existing
Stockholder and the Parent to consummate the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions as of the
Closing Date:
(a) The representations and warranties set forth in Article VI
hereof taken in their entirety shall be true and correct in all material
respects at and as of the Closing Date as though then made and as though the
Closing Date were substituted for the date of this Agreement throughout such
representations and warranties, without giving effect to any Schedule Updates
thereto other than those approved by the Existing Shareholder or the Parent
pursuant to Section 6.9; provided that, for purposes of this Section 3.2(a),
those representations and warranties that are qualified by references to
"material" shall be deemed not to include such qualifications;
(b) The Purchaser shall have performed and complied in all
material respects with all of the covenants and agreements required to be
performed by it under this Agreement on or before the Closing;
(c) All governmental filings, authorizations, and approvals
that are required for the consummation of the transactions contemplated hereby
shall have been duly made and obtained on terms reasonably satisfactory to the
Existing Stockholder;
(d) Pursuant to a general assignment and assumption agreement
in form and substance reasonably satisfactory to the Purchaser and the Parent,
(i) the Parent and its Affiliates which are not Acquired Companies shall have
assigned to the Acquired Companies all right, title and interest of the Parent
and such Affiliates in and to any contracts, agreements, arrangements or
understandings which (A) exclusively relate to the business of the Acquired
Companies or (B) are listed on the Assigned Contracts Schedule included in the
Disclosure Letter and (ii) the Acquired Companies shall have assumed and agreed
to discharge and pay in full all liabilities and obligations arising under all
such contracts, agreements, arrangements and understandings; provided that any
assignment contemplated pursuant to this Section 3.2(d) which would have the
effect of rendering invalid any provisions of the contract, agreement,
arrangement or understanding to be assigned shall be void and of no effect with
respect to such provisions; and with respect to the Real Property Lease for the
Leased Real Property located at 100 West 70th Avenue, Fort Lauderdale, Florida,
the tenant under such Real Property Lease shall have entered into an Assignment
and Assumption of Lease in form and substance reasonably satisfactory to the
Purchaser;
(e) No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable judgment, decree, injunction, order, or ruling would prevent the
performance of this Agreement or any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement, cause such
transactions to be rescinded, or materially and adversely affect the right of
the Parent or the Existing Stockholder to receive benefits to be enjoyed by it
under this Agreement, and no judgment, decree, injunction, order, or ruling
shall have been entered which has any of the foregoing effects;
20
<PAGE> 25
(f) The Existing Stockholder shall have received an opinion,
dated the Closing Date, of Kirkland & Ellis, counsel to the Purchaser, with
respect to the matters set forth on Exhibit I attached hereto, and the lenders
providing debt financing in connection with the transactions contemplated by
this Agreement shall be entitled to rely thereon;
(g) On or before the Closing Date, the Purchaser shall have
delivered to the Existing Stockholder all of the following:
(i) a certificate from the Purchaser in a form
reasonably satisfactory to the Existing Stockholder, dated the Closing
Date, stating that the preconditions specified in Sections 3.2(a)
through (e) have been satisfied;
(ii) a copy of the resolutions of the board of
directors of the Purchaser approving the transactions contemplated by
this Agreement, certified by the Purchaser;
(iii) a copy of the certificate of formation for the
Purchaser, certified by the Secretary of State of the State of
Delaware;
(iv) a copy of the limited liability company
agreement for the Purchaser, certified by the Purchaser;
(v) a certificate from the Secretary of State of the
State of Delaware, dated as of or about the Closing Date, as to the
good standing of the Purchaser;
(vi) copies of the consents, filings, authorizations
and approvals described in Section 3.2(c) to the extent applicable to
the Purchaser; and
(vii) such other documents or instruments as the
Existing Stockholder may reasonably request to effect the transactions
contemplated hereby;
(h) The Company, the Parent, the Purchaser and the Existing
Stockholder shall have entered into the Stockholders Agreement, and the
Stockholders Agreement shall be in full force and effect as of the Closing;
(i) The Company, the Parent, the Purchaser and the Existing
Stockholder shall have entered into the Registration Agreement, and the
Registration Agreement shall be in full force and effect as of the Closing;
(j) The Parent and the Existing Stockholder shall have
received the Solvency Opinion which shall either be addressed to the Parent and
the Existing Stockholder or permit them to rely on it;
21
<PAGE> 26
(k) All proceedings to be taken by the Purchaser in connection
with the consummation of the transactions contemplated by this Agreement and all
certificates, opinions, instruments, and other documents required to be
delivered by the Purchaser to effect the transactions contemplated hereby
reasonably requested by the Existing Stockholder shall be reasonably
satisfactory in form and substance to the Existing Stockholder; and
(l) The Parent shall have received the consent of applicable
insurance providers for the provision of the transitional benefits required to
be provided by it pursuant to Section 8.4 hereof for the periods set forth
therein.
Any condition specified in this Section 3.2 may be waived by the Existing
Stockholder in its sole discretion; provided that no such waiver shall be
effective unless it is set forth in a writing executed by the Existing
Stockholder.
ARTICLE IV -- COVENANTS BEFORE CLOSING
SECTION 4.1 AFFIRMATIVE COVENANTS OF THE COMPANY. Except as otherwise
contemplated by this Agreement or by the Internal Reorganization, between the
date hereof and the Closing, unless the Purchaser otherwise agrees in writing,
the Existing Stockholder shall cause each TH Entity which is not a TH JV and
shall use its reasonable best efforts as permitted under applicable management
agreements and stock transfer restriction agreements to cause each Related
Professional Corporation and TH JV to:
(a) conduct each Acquired Company's businesses and operations
only in the Ordinary Course of Business, including, without limitation, paying
accounts payable in the Ordinary Course of Business including, without
limitation, running weekly check runs;
(b) keep in full force and effect each Acquired Company's
corporate existence and use its reasonable best efforts to cause its current
insurance (or reinsurance) policies (including, without limitation, those
relating to malpractice claims) not to be canceled or terminated or any of the
coverage thereunder to lapse;
(c) manage each Acquired Company's malpractice claims in the
Ordinary Course of Business and not materially alter the Acquired Companies'
malpractice claims program;
(d) use their reasonable best efforts to carry on the business
of each Acquired Company in the same manner as presently conducted and to keep
each Acquired Company's business organization and properties intact, including
its present business operations, physical facilities, working conditions, and
employees and including each Acquired Company's present relationships with
lessors, licensors, suppliers, customers, and others having business relations
with each such Acquired Company, respectively;
(e) maintain the Real Property and other material assets of
each Acquired Company in good repair, order, and condition (normal wear and tear
excepted) consistent with
22
<PAGE> 27
current needs and replace in accordance with prudent practices each Acquired
Company's inoperable, worn out, or obsolete material assets with assets of
comparable quality consistent with the Ordinary Course of Business;
(f) maintain the books, accounts, and records of each Acquired
Company in accordance with GAAP, consistent with the custom and practice as used
in the preparation of the Financial Statements;
(g) promptly (once the Parent obtains knowledge thereof)
inform the Purchaser in writing of any material breaches from the
representations and warranties contained in Article V or any material breach of
any covenant hereunder by the Company, the Existing Stockholder or the Parent;
(h) cooperate with the Purchaser and use reasonable best
efforts to cause the conditions to the Purchaser's obligation to close to be
satisfied (including, without limitation, the execution and delivery of all
agreements contemplated hereunder to be so executed and delivered and the making
and obtaining of all third party and governmental notices, filings,
authorizations, approvals, consents, releases, and terminations);
(i) permit the Purchaser to conduct a reasonable due diligence
investigation concerning the financial capability, resources and condition and
creditworthiness of the Parent;
(j) cooperate with the Purchaser in the Purchaser's
investigation of the business and properties of the Acquired Companies, to
permit the Purchaser and its employees, agents, accounting, legal, and other
authorized representatives to (i) have full access to the premises, books, and
records of each Acquired Company at reasonable hours, (ii) visit and inspect any
of the properties of each Acquired Company, and (iii) discuss the affairs,
finances, and accounts of each Acquired Company with the directors, officers,
partners, key employees, key customers, key sales representatives, key
suppliers, and independent accountants of such Acquired Company, respectively;
(k) with respect to any officer or employee of any of the
Acquired Companies, if such individual is also an officer, director or
shareholder of any professional corporation (other than a Related Professional
Corporation) which is party to a management agreement with the Parent or any of
its Affiliates, accommodate such officers' or directors' resignations from such
position(s) with, and facilitate the transfer of such shareholders' shares of,
such professional corporation; and
(l) at the direction of the Purchaser, pay the non-refundable
advance deposit of $500,000 contemplated by the medical malpractice Proposal of
Insurance (the "Farmers Policy") attached hereto as Exhibit J.
All information concerning the Parent, the Existing Stockholder or any Acquired
Company furnished or provided by the Parent, the Existing Stockholder or any
Acquired Company or any of their representatives to the Purchaser or its
representatives (whether furnished before or after the date of
23
<PAGE> 28
this Agreement) shall be held subject to the confidentiality agreement
previously executed by and between the Parent and the Purchaser (the
"Confidentiality Agreement").
SECTION 4.2 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly
contemplated by this Agreement, by the Internal Reorganization or as set forth
in the Disclosure Letter, between the date hereof and the Closing, unless the
Purchaser otherwise agrees in writing, the Existing Stockholder shall cause each
TH Entity which is not a TH JV and shall use its reasonable best efforts as
permitted under applicable management agreements and stock transfer restriction
agreements to cause each Related Professional Corporation and TH JV not to:
(a) take any action that would require disclosure under
Section 5.7;
(b) make any loans or enter into any transaction with any
Insider other than transactions entered into in the Ordinary Course of Business;
(c) establish, amend or contribute to any pension, retirement,
profit sharing, or stock bonus plan or multiemployer plan covering any of the
employees of any Acquired Company, except as required by law or in accordance
with past practice;
(d) take any action designed or intended to encourage
employees of the Acquired Companies to leave their employment or otherwise not
to continue employment with such Acquired Companies;
(e) declare, pay, make, or otherwise effectuate any dividends
or distributions (other than in Cash), redemptions, equity repurchases, or other
transactions involving the Company's Capital Stock or equity securities; or
(f) commit, or enter into any agreement to do, any of the
foregoing.
SECTION 4.3 COVENANTS OF PURCHASER. Between the date hereof and the
Closing, the Purchaser shall:
(a) promptly (once it obtains knowledge thereof) inform the
Existing Stockholder in writing of any material breaches from the
representations and warranties contained in Article VI or any material breach of
any covenant hereunder by Purchaser;
(b) provide the Parent with such documentation as the Parent
may reasonably request to confirm, to the Parent's reasonable satisfaction, the
accuracy of the representations made by the Purchaser in Section 6.6, and the
Purchaser shall permit the Parent to conduct a reasonable due diligence
investigation concerning the financial capability, resources and condition and
creditworthiness of the Purchaser;
(c) cooperate with the Existing Stockholder and use its
reasonable best efforts to cause the conditions to the Existing Stockholder's
obligation to close to be satisfied (including,
24
<PAGE> 29
without limitation, the execution and delivery of all agreements contemplated
hereunder to be so executed and delivered and the making and obtaining of all
third party and governmental filings, authorizations, approvals, consents,
releases, and terminations);
(d) use good faith commercially reasonable efforts to assist
the Company to obtain the debt financing contemplated by Section 6.6 below. In
this regard, and without limiting the generality of the foregoing, the Purchaser
shall take all action within its control which is necessary or appropriate and
consistent with good faith commercially reasonable efforts to secure the debt
financing contemplated by the Debt Commitment Letters referred in Section 6.6
below so as to allow the Closing to occur on or prior to March 16, 1999. The
Purchaser will not amend or otherwise modify the Debt Commitment Letters (or any
term or condition thereof) in any respect that would materially and adversely
affect the ability of the Company to obtain such financing without the prior
written consent of the Parent. If the senior subordinated note offering
contemplated by the Debt Commitment Letter from DLJ Bridge Finance, Inc.,
NationsBridge, L.L.C. and Fleet Corporate Finance, Inc. is not available but the
bridge financing contemplated by such Debt Commitment Letter is available, the
Purchaser agrees to cause the Company to utilize such bridge financing so as to
allow the Closing to occur on or prior to March 16, 1999;
(e) pay or reimburse the Parent for the $500,000
non-refundable advance deposit for the Farmers Policy, which obligation to pay
or reimburse the Parent shall arise upon the Parent's payment of such
non-refundable deposit and shall be satisfied by the Purchaser within two
business days of the Purchaser's receipt of written notice from the Parent of
the payment by the Parent of such non-refundable advance deposit (unless this
Agreement is terminated pursuant to Section 7.1(g), in which case the Parent
will bear such cost and promptly reimburse the Purchaser to the extent the
Purchaser has made such payment or reimbursement); and
(f) use its reasonable best efforts to assist the Parent in
obtaining releases of those guarantees and of those other commitments,
obligations and liabilities arising under those contracts, agreements,
arrangements and understandings listed on the Assigned Contracts Schedule
included on the Disclosure Letter.
SECTION 4.4 INTERCOMPANY ACCOUNTS. The Parent will cause all
intercompany liabilities owing from any Acquired Company to the Parent or its
Affiliates (except other Acquired Companies) as of the close of business on the
Measurement Date to be reclassified to capital of the Company (i.e., after the
Measurement Date the Acquired Companies shall not have any obligation to repay
such intercompany liabilities). The Acquired Companies will cause all
intercompany liabilities owing from the Parent or any of its Affiliates (other
than the Acquired Companies) to any Acquired Company as of the close of business
on the Measurement Date to be cancelled with such cancellation being reflected
as an adjustment to the equity or capital of the Acquired Companies (i.e., after
the Closing neither the Parent nor any of its Affiliates (other than the
Acquired Companies) shall have any obligation to repay such intercompany
liabilities).
SECTION 4.5 DISTRIBUTIONS. The Parties agree that Parent and the
Existing Stockholder shall have the right, at or prior to the close of business
on the Measurement Date, to cause the
25
<PAGE> 30
Acquired Companies (but not the TH JV's, except to the extent in the Ordinary
Course of Business and so long as such distributions do not create any
obligations to the TH JV's or their other owners) to distribute Cash held by the
Acquired Companies (but not the TH JV's, except to the extent in the Ordinary
Course of Business and so long as such distributions do not create any
obligations to the TH JV's or their other owners) to the Parent or the Existing
Stockholder or their respective Affiliates, by one or more cash dividends,
repurchase of existing stock and/or distributions.
SECTION 4.6 FINANCIAL INFORMATION.
(a) The Existing Stockholder and the Parent agree to use
reasonable best efforts to cause to be issued, on or before February 19, 1999,
the audited consolidated balance sheets of the Company as of December 31, 1998
and the related statements of income and cash flow (or the equivalent) for the
twelve-month period then-ended (the "1998 Financials"). The Existing Stockholder
and the Parent will assist Ernst & Young in completing the audit (but the
Existing Stockholder and the Parent are not guaranteeing the completion date of
the audit) and will assist the Purchaser by providing available data to support
any reclassifications, addbacks and/or pro forma adjustments related thereto. If
the Closing does occur, the Purchaser will cause the Company to pay the fees and
expenses of Ernst & Young for their audit of the 1998 Financials (the "E&Y 1998
Audit Fees"). If the Closing does not occur, the Purchaser and the Parent will
each pay 50% of the E&Y 1998 Audit Fees.
(b) The Existing Stockholder and the Parent agree to use
reasonable best efforts to provide all necessary financial data for the offering
materials to be prepared for the proposed $150,000,000 Senior Subordinated Notes
due 2009 to be issued by the Company in connection with the transactions
contemplated by this Agreement (the "Bonds") and the syndication materials to be
prepared for the Company's new senior credit facility, and agree to permit the
Purchaser's use of the information contained in the such financial data in
connection with the issuance of the Bonds and the syndication of such senior
credit facility. The Purchaser will provide the Parent with an opportunity to
review and approve such information as reflected in such offering and
syndication materials, which approval will not be unreasonably withheld.
SECTION 4.7 PARENT BOARD APPROVAL. On or before January 27, 1999, the
Parent will convene and hold a meeting of its Board of Directors for the purpose
of approving this Agreement and the transactions contemplated hereby (the
"Parent Board Approval"). The Parent's chief executive officer and its chief
financial officer shall recommend to its Board of Directors the approval of this
Agreement and the transactions contemplated hereby.
SECTION 4.8 CASH MANAGEMENT FROM MEASUREMENT DATE TO CLOSING DATE.
(a) Loan. On March 1, 1999, the Parent will make a cash loan
to the Company in the amount of $5.0 million. The Company will use the proceeds
of such loan solely to fund its working capital requirements for the period
beginning on the day after the Measurement Date and ending on the Closing Date
(the "Cash Management Period"). At the Closing, the Company will repay such $5.0
million loan in full without interest.
26
<PAGE> 31
(b) Cash Inflows. During the Cash Management Period, the
Acquired Companies will maintain one or more bank accounts and/or lock boxes
(collectively, the "Bank Accounts") for the collective receipt of all
collections on accounts receivable and all other Cash inflows of the Acquired
Companies (the "Transition Cash Inflows") and all Transition Cash Inflows will
be immediately deposited in the Bank Accounts.
(c) Cash Outflows. During the Cash Management Period, the
Acquired Companies will fund all accounts payable and other Cash outflows
(including, without limitation, making payments for the clearing of all checks
which were issued on or before the Measurement Date and taken into account as
either reductions in determining the Cash Amount or reductions in determining
the Net Working Capital Amount) of the Acquired Companies (the "Transition Cash
Outflows") through the Bank Accounts. During the Cash Management Period, except
pursuant to the loan described in Section 4.8(a) above, all Transition Cash
Outflows will be the responsibility of the Acquired Companies and will not be
funded by the Parent or its lenders.
ARTICLE V -- REPRESENTATIONS AND WARRANTIES
OF THE EXISTING STOCKHOLDER
As a material inducement to Purchaser to enter into this
Agreement, with such exceptions as are set forth in a letter (the "Disclosure
Letter") delivered by the Existing Stockholder to the Purchaser prior to
execution hereof, the Existing Stockholder hereby represents and warrants that:
SECTION 5.1 ORGANIZATION AND CORPORATE POWER.
(a) The Organization Schedule included in the Disclosure
Letter contains under the heading "Before Internal Reorganization" a complete
and accurate list for each Acquired Company of its name, its jurisdiction of
incorporation or organization, other jurisdictions in which it is authorized to
do business, and its capitalization (including the identity of each stockholder
or equity holder and the number of shares or other equity interests held by
each), determined as of the date hereof. The Organization Schedule included in
the Disclosure Letter also contains under the heading "After Internal
Reorganization" a complete and accurate list for each Acquired Company of its
name, its jurisdiction of incorporation or organization, other jurisdictions in
which it is authorized to do business, and its capitalization (including the
identity of each stockholder or equity holder and the number of shares or other
equity interests held by each), as such will exist after completion of the
Internal Reorganization and as of immediately before the Closing. No Acquired
Company owns or holds the right to acquire any Capital Stock in any other
Person.
(b) Each Acquired Company is a corporation duly organized,
validly existing, and in good standing under the laws of its jurisdiction of
organization, with full organizational power and authority to conduct its
business as it is now being conducted and to own or use the properties and
assets that it purports to own or use. Each Acquired Company is duly qualified
to do business
27
<PAGE> 32
as a foreign organization and is in good standing under the laws of each state
or other jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it, requires
such qualification, except where the failure to be so duly qualified or licensed
and in good standing would not individually or in the aggregate have a Material
Adverse Effect.
(c) The Existing Stockholder and the Parent is each a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of incorporation.
(d) The Existing Stockholder has made available to the
Purchaser correct and complete copies of the certificate of incorporation and
by-laws (or equivalent governing documents) for each Acquired Company, which
documents reflect all amendments made thereto at any time before the date
hereof. Correct and complete copies of the minute books containing the records
of meetings of the stockholders and board of directors (or equivalent parties),
the stock certificate books, and the stock record books of the Acquired
Companies have been furnished to the Purchaser. No Acquired Company is in
default under or in violation of any provision of its certificate of
incorporation or by-laws (or equivalent governing documents).
SECTION 5.2 AUTHORIZATION OF TRANSACTIONS. The Company, the Existing
Stockholder and the Parent each has all requisite corporate power and authority
to execute and deliver the Transaction Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby. The board of
directors of each of the Company and the Existing Stockholder has duly approved
the Transaction Documents to which it is a party and has duly authorized the
execution and delivery of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby. Except for the Parent
Board Approval and the approval of the sole shareholder of the Company and the
Existing Stockholder, which shall be received prior to Closing, no other
corporate proceedings on the part of the Company, the Existing Stockholder or
the Parent are necessary to approve and authorize the execution and delivery of
the Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby. All Transaction Documents to which the
Company, the Existing Stockholder or the Parent is a party have been duly
executed and delivered by the Company, the Existing Stockholder or the Parent
and constitute the valid and binding agreements of the Company, the Existing
Stockholder or the Parent, enforceable against the Company, the Existing
Stockholder or the Parent in accordance with their terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; and as limited
by general principles of equity that restrict the availability of equitable
remedies.
SECTION 5.3 ABSENCE OF CONFLICTS. The execution, delivery, and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby by the Company, the Existing Stockholder and
the Parent do not and shall not (a) conflict with or result in any breach of any
of the terms, conditions, or provisions of, (b) constitute a material default
under, (c) result in a material violation of, (d) give any third party the right
to modify, terminate, or accelerate any obligation under, (e) result in the
creation of any Lien upon the Capital Stock or assets of any of the Acquired
Companies, or (f) require any authorization, consent, approval, exemption,
28
<PAGE> 33
or other action by or notice or declaration to, or filing with, any court or
administrative or other governmental body or agency, under the provisions of the
articles of incorporation, by-laws or similar organizational document of the
Existing Stockholder, the Parent or any Acquired Company or any indenture,
mortgage, lease, loan agreement or other agreement listed on either the
Contracts Schedule or the Benefit Plans Schedule included in the Disclosure
Letter, or any material law, statute, rule, or regulation to which the Existing
Stockholder, the Parent or any Acquired Company is subject or any material
judgment, order, or decree to which the Existing Stockholder, the Parent or any
Acquired Company is subject.
SECTION 5.4 CAPITALIZATION. The authorized Capital Stock of the Company
consists of 1,000 shares of Common Stock, no par value, of which 100 shares are
issued and outstanding, all of which are owned by the Existing Stockholder. As
of immediately after the amendment to the Company's charter contemplated in
Section 3.1(j) above, the authorized Capital Stock of the Company will consist
of 12,000,000 shares of Common Stock, par value $.01 per share, of which 1,000
shares will be issued and outstanding, and 200,000 shares of Class A Preferred
Stock, par value $.01 per share, of which no shares will be issued or
outstanding. All of the issued and outstanding Capital Stock of the Acquired
Companies have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record and owned beneficially by the Persons and
in the manner described on the Organization Schedule included in the Disclosure
Letter, free and clear of all Liens, and are not subject to, nor were they
issued in violation of, any preemptive rights or rights of first refusal. There
are no outstanding or authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights, or other agreements or commitments
to which any Acquired Company is a party or which are binding upon any Acquired
Company providing for the issuance, disposition, or acquisition of any Acquired
Company's Capital Stock (other than this Agreement). There are no outstanding or
authorized stock appreciation, phantom stock, or similar rights with respect to
any Acquired Company. There are no voting trusts, proxies, or any other
agreements or understandings with respect to the voting of the Capital Stock of
any Acquired Company. No Acquired Company is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of any Acquired Company's Capital Stock.
SECTION 5.5 FINANCIAL STATEMENTS AND RELATED MATTERS.
(a) Financial Statements. Included in the Disclosure Letter as
the Financial Statements Schedule are the following financial statements: (i)
the audited consolidated balance sheets of the Company as of December 31, 1996
and 1997, and the related statements of income and cash flows (or the
equivalent) for the respective twelve-month periods ended December 31, 1995,
1996 and 1997; and (ii) the unaudited consolidated balance sheet of the Company
as of November 30, 1998 (the "Latest Balance Sheet"), and the related statements
of income and cash flows (or the equivalent) for the eleven-month period then
ended. Each of the foregoing financial statements (the "Financial Statements")
presents fairly, in all material respects, the Company's consolidated financial
condition and results of operations as of the times and for the periods referred
to therein, and has been prepared in accordance with GAAP, subject in the case
of unaudited consolidated financial statements to the absence of footnote
disclosure and customary year-end adjustments, none of which will be material.
29
<PAGE> 34
(b) Receivables. All accounts receivable that are taken into
account in determining the Net Working Capital Amount (collectively, the
"Accounts Receivable") represent or will represent valid obligations arising
from services actually performed in the Ordinary Course of Business. The
Accounts Receivable and the reserves thereto will be established in accordance
with GAAP.
SECTION 5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Acquired Company has
any material obligations or liabilities (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether or not known, whether due or to become due,
and regardless of when asserted) arising out of or relating to the operation of
the Acquired Companies at or before the Closing, except (i) obligations under
contracts or commitments described on the Contracts Schedule included in the
Disclosure Letter or under contracts and commitments which are not required to
be disclosed thereon (but not liabilities for breaches thereof), (ii)
liabilities reflected on the liabilities side of the Latest Balance Sheet, (iii)
liabilities which have arisen after the date of the Latest Balance Sheet in the
Ordinary Course of Business of such Acquired Company or otherwise in accordance
with the terms and conditions of this Agreement (none of which is a liability
for breach of contract, breach of warranty, tort, or infringement or a claim or
lawsuit or an environmental liability), and (iv) liabilities, contracts,
commitments or obligations disclosed elsewhere in this Agreement or the
Disclosure Letter hereto. Without limiting the generality of the foregoing, all
fees and expenses owing or potentially owing to Coopers & Lybrand in connection
with its cost savings project for the Acquired Companies will be paid in full by
the Parent on or prior to Closing.
SECTION 5.7 ABSENCE OF CERTAIN DEVELOPMENTS. Except as expressly
contemplated by this Agreement or the Internal Reorganization, since December
31, 1997, no Acquired Company has:
(a) suffered any change that has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
suffered any theft, damage, destruction, or casualty loss in excess of $100,000,
to its assets, whether or not covered by insurance, or suffered any substantial
destruction of books and records;
(b) subjected any portion of its properties or assets to any
Lien (other than Permitted Liens) other than Liens, which individually or in the
aggregate, would not have a Material Adverse Effect;
(c) sold, leased, assigned, or transferred (including, without
limitation, transfers to Existing Stockholder or any Insider) a portion of its
tangible assets, or canceled without fair consideration any material debts or
claims owing to or held by it, except in the Ordinary Course of Business of the
Acquired Company;
(d) sold, assigned, licensed, or transferred (including,
without limitation, transfers to Existing Stockholder or any Insider) any
material Proprietary Rights owned by, issued to, or licensed to any Acquired
Company or to the knowledge of the Parent disclosed any material
30
<PAGE> 35
confidential information to (other than pursuant to agreements requiring the
recipient to maintain the confidentiality of such confidential information) or
received any material confidential information of any third party in violation
of any obligation of confidentiality;
(e) suffered any losses or waived any rights, the suffering or
wavier of which would result in a Material Adverse Effect;
(f) other than in the Ordinary Course of Business of the
Acquired Company, entered into, amended, or terminated any Real Property Leases,
material personal property lease, contract, agreement, license or commitment, or
taken any other action or entered into any other material transaction;
(g) materially changed any business practice other than in the
Ordinary Course of Business of the Acquired Company;
(h) except in the Ordinary Course of Business of the Acquired
Company, paid or increased any bonuses, salaries, or other compensation to any
stockholder, director, officer, or employee or entered into any employment,
severance, or similar contract or agreement with any director, officer, or
employee;
(i) adopted, or materially increased the payments to or
benefits under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or with any
employees of any Acquired Company;
(j) conducted its cash management customs and practices other
than in the Ordinary Course of Business of the Acquired Company (including,
without limitation, with respect to collection of accounts receivable, purchases
of supplies, repairs and maintenance, payment of accounts payable and accrued
expenses, levels of capital expenditures and operation of cash management
practices generally);
(k) made any capital expenditures or commitments for capital
expenditures in excess of $100,000 except in the Ordinary Course of Business of
the Acquired Company;
(l) made a material change in its accounting methods; or
(m) made or committed to make any payments or other transfers
in connection with, or in contemplation of, the transactions contemplated by
this Agreement or the other Transaction Documents.
SECTION 5.8 REAL PROPERTY.
(a) The Real Property Schedule included in the Disclosure
Letter sets forth the address and the record legal description of the land for
each Owned Real Property. With respect to each parcel of Owned Real Property:
(i) the owner Acquired Company has good and marketable fee
31
<PAGE> 36
simple title to such parcel, which shall be free and clear of all Liens as of
the Closing Date, except Permitted Liens; (ii) there are no leases, subleases,
licenses, concessions or other agreements (written or oral) granting to any
person other than the Acquired Company the right to use or occupy such parcel or
any portion thereof; and (iii) there are no outstanding options, rights of first
offer or rights of first refusal to purchase such parcel or any portion thereof
or interest therein.
(b) The Real Property Schedule included in the Disclosure
Letter sets forth the address of each Leased Real Property and a list of all
Real Property Leases (including, without limitation, all amendments, extensions,
renewals, guaranties and other agreements with respect thereto) for each Leased
Real Property. The Existing Stockholder has delivered to Purchaser a true and
complete copy of each written Real Property Lease, and in the case of any oral
Real Property Leases, a written summary of the basic terms thereof. With respect
to each of the Real Property Leases: (i) the Real Property Lease is legal,
valid, binding, enforceable and in full force and effect, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights and by general
principles of equity that restrict the availability of equitable remedies; (ii)
the acquisition of stock and change in control of the Acquired Companies (as the
case may be) as contemplated under this Agreement will not result in a breach of
or default under the Real Property Lease or otherwise cause the Real Property
Lease to cease to be legal, valid, binding, enforceable and in full force and
effect on identical terms following the Closing; (iii) no Acquired Company nor,
to the knowledge of the Parent, any other party to the Real Property Lease is in
material breach or default under the Real Property Lease beyond applicable cure
periods, and to the knowledge of the Parent, no event has occurred or
circumstance exists which, with the delivery of notice, passage of time or both,
would constitute such a material breach or default or permit the termination,
modification or acceleration of rent under the Real Property Lease; (iv) no
party to the Real Property Lease has repudiated any term thereof, and there are
no material disputes in effect with respect to the Real Property Lease; and (v)
no Acquired Company has assigned, subleased, mortgaged, deeded in trust or
otherwise transferred or encumbered the Real Property Lease or any interest
therein.
(c) Pursuant to and subject to the Real Property Leases, the
Acquired Companies have good title to the Leasehold Improvements, which shall be
free and clear of all Liens as of the Closing Date, except Permitted Liens.
(d) The Owned Real Property, the Leased Real Property and
Leasehold Improvements (collectively, the "Real Property") include all of the
real property used by the Acquired Companies in the operation of their
businesses.
SECTION 5.9 ASSETS.
(a) Each Acquired Company owns good and marketable title to,
or a valid leasehold interest in, free and clear of all Liens other than
Permitted Liens, all of the properties and assets (whether real, personal, or
mixed and whether tangible or intangible) which are shown on the Latest Balance
Sheet, or which have been acquired by such Acquired Company thereafter, except
for personal property and assets sold since the date of the Latest Balance Sheet
in the Ordinary
32
<PAGE> 37
Course of Business. Neither the Parent nor any of its Subsidiaries (except
Acquired Companies) owns any properties or assets (whether real, personal, or
mixed and whether tangible or intangible) which are used in the business of any
of the Acquired Companies. The Assigned Contracts Schedule included in the
Disclosure Letter contains a true, complete and correct list of all contracts,
agreements, arrangements and understandings to which the Parent or Affiliates of
the Parent (other than the Acquired Companies) are a party which primarily
relate to the business of the Acquired Companies as conducted in the ordinary
course, except those such contracts, agreements, arrangements and understandings
which exclusively relate to the business of the Acquired Companies.
(b) The buildings, machinery, equipment, personal properties,
vehicles, and other tangible assets of the Acquired Companies (other than the TH
JV's), and to the knowledge of the Parent, the TH JV's, located upon or used in
connection with the Real Property are operated in conformity in all material
respects with all applicable laws and regulations and are usable in the Ordinary
Course of Business. The Acquired Companies (other than the TH JV's), and to the
knowledge of the Parent, the TH JV's, own, license under valid licenses or lease
under valid leases all buildings, machinery, equipment, and other tangible
assets, other than Cash (except for equity securities of the Acquired
Companies), necessary for the conduct of their business as currently conducted.
SECTION 5.10 TAXES.
(a) Each of the Acquired Companies has filed all material Tax
Returns required to be filed by it, and each such Tax Return has been prepared
in compliance with all applicable laws and regulations and is true and correct
in all material respects.
(b) All Taxes that are due and payable by the Acquired
Companies (whether or not shown on any Tax Return) have been paid, and each of
the Acquired Companies has properly withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any
shareholder, employee, creditor, independent contractor, or other third party.
(c) No action, suit, proceeding or audit is pending against or
with respect to the Acquired Companies regarding Taxes and no Acquired Company
has received any written notice of any audit that has not commenced.
(d) None of the Acquired Companies is a party to or bound by
any Tax allocation or Tax sharing agreement with any Person other than the
Acquired Companies.
(e) None of the Acquired Companies (A) has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than a
group the common parent of which was the Parent or one of the Acquired
Companies) for any taxable year ended after December 31, 1994 or (B) has any
liability for the Taxes of any Person (other than any of the Acquired Companies)
under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
33
<PAGE> 38
(f) No Acquired Company has received written notice from a
taxing authority in a jurisdiction where any of the Acquired Companies does not
file Tax Returns that such Person is or may be subject to taxation by such
jurisdiction.
(g) Each of the Acquired Companies has made available to the
Purchaser true, correct and complete copies of all Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by any of
the Acquired Companies for the past three (3) years.
(h) None of the Acquired Companies has consented to extend the
time in which any Tax may be assessed or collected by any taxing authority.
(i) None of the Acquired Companies will be required to include
any item of income in, or exclude any item of deduction from, taxable income for
any taxable period (or portion thereof) ending after the Closing Date as a
result of any (i) change in method of accounting for a taxable period ending on
or prior to the Closing Date under Code Section 481(c) (or any corresponding or
similar provision of state, local or foreign income Tax law); (ii) "closing
agreement" as described in Code Section 7121 (or any corresponding or similar
provision of state, local or foreign income Tax law); or (iii) installment sale
made prior to the Closing Date.
(j) None of the Acquired Companies has filed a consent under
Code Section 341(f).
(k) None of the Acquired Companies is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess parachute payment"
within the meaning of Code Section 280G (or any corresponding provision of
state, local or foreign income Tax law), in connection with the transactions
contemplated hereby.
SECTION 5.11 CONTRACTS AND COMMITMENTS.
(a) Except for contracts with clients, physicians and health
care service providers which involve individually less than $250,000 annually,
no Acquired Company is a party to or bound by any written or oral:
(i) contract for the employment of any officer,
individual employee or other Person on a full-time, part-time,
consulting or other basis providing annual compensation in excess of
$150,000 or contract relating to loans to officers, directors or
Affiliates of such Acquired Company;
(ii) contract under which the Acquired Companies have
advanced or loaned any other Person amounts in the aggregate exceeding
$25,000, other than trade credit and advances of independent contractor
payments extended in the Ordinary Course of Business;
34
<PAGE> 39
(iii) agreement or indenture relating to borrowed
money or other Indebtedness in excess of $1,000,000 or the mortgaging,
pledging or otherwise placing a Lien on any material asset or group of
assets of the Acquired Companies;
(iv) guaranty of any obligation in excess of
$1,000,000;
(v) lease or agreement under which any Acquired
Company is the lessee of or holds or operates any personal property
owned by any other party, except for any lease or agreement for
personal property under which the aggregate annual payments do not
exceed $100,000;
(vi) lease or agreement under which any Acquired
Company is the lessor of or permits any third party to hold or operate
any property, real or personal, owned or controlled by any Acquired
Company;
(vii) contract or group of related contracts
(excluding purchase orders issued or received in the Ordinary Course of
Business) with the same party or group of affiliated parties the
performance of which involves consideration in excess of $250,000;
(viii) assignment, license, indemnification or
agreement with respect to any intangible property (including, without
limitation, any Proprietary Rights);
(ix) distribution or franchise agreement;
(x) agreement with a term of more than six months,
which is not terminable by the Acquired Companies upon less than 90
days notice without penalty or which involves more than $250,000
annually;
(xi) contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world; or
(xii) any other agreement, entered into other than in
the Ordinary Course of Business, which is material to its operations
and business prospects or involves a consideration in excess of
$250,000 annually.
(b) All of the contracts, agreements and instruments set forth
on the Contracts Schedule included in the Disclosure Letter, and all contracts
with clients, physicians and health care service providers of the Acquired
Companies, are valid, binding and enforceable in accordance with their
respective terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; and as limited by general principles of equity
that restrict the availability of equitable remedies. Each Acquired Company has
performed all material obligations required to be performed by it and is not in
default under or in breach of nor in receipt of any claim of default or breach
under any such
35
<PAGE> 40
contract, agreement or instrument other than defaults which would not result in
a Material Adverse Effect. No event has occurred which with the passage of time
or the giving of notice or both would result in a default, breach or event of
noncompliance by the Company or, to the Parent's knowledge, any other party
under any such contract, agreement or instrument other than such defaults,
breaches and events of noncompliance as would not result in a Material Adverse
Effect. No Acquired Company has received written notice of the intention of any
Party to cancel or terminate any contract, agreement or instrument required to
be set forth on the Contracts Schedule included in the Disclosure Letter and, to
the Parent's knowledge, there has not been any breach or anticipated breach by
the other parties to any such contract, agreement or instrument.
(c) The Existing Stockholder has provided the Purchaser with,
or provided the Purchaser with access to, a true and correct copy of all written
contracts which are required to be disclosed on the Contracts Schedule included
in the Disclosure Letter, in each case together with all amendments, waivers, or
other changes thereto (all of which are disclosed on the Contracts Schedule
included in the Disclosure Letter). The Contracts Schedule included in the
Disclosure Letter contains an accurate and complete description of all material
terms of all oral contracts referred to therein (unless the oral agreement is to
extend a terminated or expired written contract substantially on the same terms
of such contract).
SECTION 5.12 PROPRIETARY RIGHTS.
(a) The Proprietary Rights Schedule included in the Disclosure
Letter contains a complete and accurate list of all patented and registered
Proprietary Rights and all pending patent applications and applications for the
registration of other Proprietary Rights filed by the Acquired Companies. The
Proprietary Rights Schedule included in the Disclosure Letter also contains a
complete and accurate list of all material (i) trade names, unregistered
trademarks, service marks, copyrights, proprietary information systems and
proprietary databases owned by the Acquired Companies (collectively, the
"Unregistered Proprietary Rights"); (ii) computer software owned and/or used by
the Acquired Companies other than commercially available "off-the-shelf"
software; and (iii) licenses granted by the Acquired Companies to any third
party and all licenses granted by any third party to the Acquired Companies, in
each case identifying the subject Proprietary Rights. The Company has made
available to the Purchaser correct and complete copies of all documents
embodying the licenses applicable to the Proprietary Rights listed on the
Proprietary Rights Schedule included in the Disclosure Letter other than for
software described in clause (ii).
(b) Each Acquired Company owns and possesses free and clear of
all Liens (except Permitted Liens), all right, title, and interest in and to, or
has the right to use pursuant to a valid and enforceable license, the
Proprietary Rights necessary for the operation of such Acquired Company's
business as currently conducted; no Acquired Company has received any notice of
invalidity, infringement, or misappropriation from any third party with respect
to any such Proprietary Rights; no Acquired Company has received any notice that
any Proprietary Rights of any third parties have been interfered with, infringed
upon, or misappropriated by such Acquired Company and to the Parent's knowledge,
no grounds exist for any claim of such interference, infringement,
misappropriation or conflict; and to the knowledge of the Parent, no third party
has
36
<PAGE> 41
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Proprietary Rights of any Acquired Company.
(c) The Existing Stockholder has made available to the
Purchaser a copy of the inventory conducted by the Acquired Companies of the
hardware, software and embedded microcontrollers in noncomputer equipment (the
"Computer Systems") used by all of the Acquired Companies in their respective
businesses, in order to determine which parts of the Computer Systems are not
Year 2000 Compliant (as defined below) and to estimate the cost and time of
rendering such Computer Systems Year 2000 Compliant prior to December 31, 1999
or such earlier date on which the Computer Systems may shut down or produce
incorrect calculations or otherwise malfunction without becoming totally
inoperable. The Existing Stockholder and the Acquired Companies have budgeted
$1,200,000 through December 31, 1999 to address Computer Systems which are not
Year 2000 Compliant. For purposes of this Agreement, "Year 2000 Compliant" means
that all of the hardware, software and embedded microcontrollers in non computer
equipment comprising Computer Systems will correctly differentiate between years
in different centuries that end in the same two digits, and will accurately
process date/time data (including, but not limited to, calculating, comparing
and sequencing) from, into and between the twentieth and twenty-first centuries,
including leap year calculations.
SECTION 5.13 LITIGATION; PROCEEDINGS. There are no actions, suits,
proceedings, orders, judgments, decrees, or investigations pending or, to the
Parent's knowledge, threatened against any Acquired Company (or against any of
their respective officers, directors, agents, or employees (in each case, in
their capacity as such)) at law or in equity, or before or by any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign, and to the knowledge of the
Parent, there is no reasonable basis known for any of the foregoing. No Acquired
Company is subject to any outstanding order, judgment, or decree issued by any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or any arbitrator. There is no claim, action, suit,
proceeding or governmental investigation pending or, to the knowledge of the
Parent, threatened against the Parent or the Existing Stockholder, by or before
any court, governmental or regulatory authority or by any third party which
challenges the validity of this Agreement or which would be reasonably likely to
adversely affect or restrict the Parent's or the Existing Stockholder's ability
to consummate the transactions contemplated hereby.
SECTION 5.14 BROKERAGE. There are no claims for brokerage commissions,
finders' fees, or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of any Acquired Company, the Existing Stockholder or the Parent.
SECTION 5.15 GOVERNMENTAL LICENSES AND PERMITS. The License Schedule
included in the Disclosure Letter contains a complete listing and summary
description of all material Licenses owned or possessed by any Acquired Company
or used by any Acquired Company in the conduct of its business. Except as would
not result in a Material Adverse Effect, each Acquired Company owns or possesses
such right in and to all Licenses as is necessary to conduct such Acquired
37
<PAGE> 42
Company's business as presently conducted and as proposed to be conducted and
shall use its reasonable efforts to maintain all such Licenses. No loss or
expiration of any License is pending or, to the Parent's knowledge, threatened
or reasonably foreseeable (including, without limitation, as a result of the
transactions contemplated hereby) other than expiration in accordance with the
terms thereof or as would not result in a Material Adverse Effect.
SECTION 5.16 EMPLOYEES. To the knowledge of the Parent, no key
executive employee and no group of employees or independent contractors of any
Acquired Company has any plans to terminate his, her, or their employment or
relationship with any Acquired Company; each Acquired Company has complied in
all material respects during the last five years with all applicable laws
relating to the employment of personnel and labor; no Acquired Company is a
party to or bound by any collective bargaining agreement, nor has any Acquired
Company experienced any material strikes, grievances, unfair labor practices
claims, or other material employee or labor disputes in the last five years; no
Acquired Company has engaged in any unfair labor practice in the last five
years; and the Parent has no any knowledge of any organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of any Acquired Company.
SECTION 5.17 EMPLOYEE BENEFIT PLANS.
(a) The Benefit Plans Schedule included in the Disclosure
Letter identifies all bonus, deferred or incentive compensation, profit sharing,
retirement, vacation, sick leave, hospitalization or severance plans, "employee
benefit plans" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) and material fringe benefit plans
sponsored, maintained or contributed to by any Acquired Company or with respect
to which any Acquired Company has any material liability (the "Plans"). None of
the Plans are subject to Title IV of ERISA nor provide for medical or life
insurance benefits to retired or former employees of any Acquired Company (other
than as required under Code Section 4980B, or similar state law). Each Acquired
Company is not a participating or contributing employer in any "multiemployer
plan" (as defined in Section 3(37) of ERISA) with respect to employees of the
Acquired Companies nor has any Acquired Company incurred any withdrawal
liability with respect to any multiemployer plan or any liability in connection
with the termination or reorganization of any multiemployer plan.
(b) Each such Plan is in all material respects in compliance,
and has been administered in all material respects in accordance, with the
applicable provisions of ERISA and the Code and all other applicable laws, rules
and regulations, including, but not limited to, medical continuation under Code
Section 4980B. No Acquired Company has (i) engaged in any transaction prohibited
by ERISA or the Code; (ii) breached any fiduciary duty owed by it with respect
to the Plans described above; or (iii) failed in any material respect to file
and distribute timely and properly all reports and information required to be
filed or distributed in accordance with ERISA or the Code.
(c) All material contributions, premiums or payments under or
with respect to each Plan which are due on or before the Closing Date have been
paid.
38
<PAGE> 43
(d) Each Plan which is intended to be qualified under section
401(a) of the Code (i) has been amended to reflect all requirements of the Tax
Reform Act of 1986 and all subsequent legislation which is required to be
adopted prior to the Closing Date and (ii) has received from the Internal
Revenue Service a favorable determination letter which considers the terms of
the Plan as amended for such changes in law.
(e) Each Acquired Company has not incurred and has no reason
to expect that it will incur, any liability to the Pension Benefit Guaranty
Corporation (other than premium payments) or otherwise under Title IV of ERISA
(including any withdrawal liability) or under the Code with respect to any
employee pension benefit plan that any Acquired Company or any other entity,
that together with any Acquired Company is treated as a single employer under
section 414 of the Code, maintains or ever has maintained or to which any of
them contributes, ever has contributed, or ever has been required to contribute.
(f) Each individual who has received compensation for the
performance of services on behalf of any Acquired Company has been properly
classified as an employee or independent contractor in accordance with
applicable laws.
SECTION 5.18 INSURANCE. The Parent has made available to Purchaser a
list and brief description of each insurance policy maintained by each Acquired
Company with respect to such Acquired Company's properties, assets, and
business, together with a claims history for the past three years. All of such
insurance policies are in full force and effect, and no Acquired Company is in
default with respect to its obligations under any such insurance policies. No
Acquired Company has any self-insurance or co-insurance programs, and the
reserves set forth on the Latest Balance Sheet have been established in the
Ordinary Course of Business of the Acquired Companies.
SECTION 5.19 OFFICERS AND DIRECTORS; BANK ACCOUNTS. The Officers,
Directors, and Bank Accounts Schedule included in the Disclosure Schedule lists
all officers and directors of each Acquired Company, and all bank accounts,
safety deposit boxes, and lock boxes (designating each authorized signatory with
respect thereto) for each Acquired Company.
SECTION 5.20 AFFILIATE TRANSACTIONS. No Insider is a party to any
material agreement, contract, commitment, or transaction with any Acquired
Company or which is pertaining to the business of any Acquired Company or has
any interest in any property, real or personal or mixed, tangible or intangible,
used in or pertaining to the business of any Acquired Company.
SECTION 5.21 COMPLIANCE WITH LAWS. Each Acquired Company and their
respective officers, directors, agents (in their capacity as such), and
employees have complied in all material respects with and are in material
compliance with all applicable laws, regulations, and ordinances of foreign,
federal, state, and local governments and all agencies thereof which are
applicable to the business, business practices, or any owned or leased
properties of any Acquired Company and to which any Acquired Company may be
subject, and no material claims have been filed against any Acquired Company
alleging a violation of any such laws or regulations, and neither any Acquired
Company nor the Existing Stockholder has received notice of any such violations.
39
<PAGE> 44
SECTION 5.22 HEALTH CARE MATTERS.
(a) To the knowledge of the Parent, all physicians employed by
or otherwise contracting with the Acquired Companies have and are maintaining in
good standing their license to practice medicine in the state(s) in which they
practice medicine, except where the failure to have or maintain such license in
good standing would not have a Material Adverse Effect.
(b) To the knowledge of the Parent, no Acquired Company has
submitted any claim which violates any applicable self-referral law, including
the Federal Ethics in Patient Referrals Act, 42 U.S.C. Section 1395nn (known as
the "Stark Act"), or any applicable state self-referral law, other than claims
the submission or payment of which individually or in the aggregate would not
have a Material Adverse Effect. To the knowledge of the Parent, no Acquired
Company has submitted any claim for payment to any payor source, either
governmental or nongovernmental, in violation of any false claim or fraud law,
including the "False Claim Act," 31 U.S.C. Section 3729, or any other applicable
federal or state false claim or fraud law, other than claims the submission or
payment of which individually or in the aggregate would not have a Material
Adverse Effect.
(c) To the knowledge of the Parent, no Acquired Company
(including without limitation any manager, officer, member, partner or employee
of any Acquired Company), nor any agent acting on behalf of or for the benefit
thereof, has directly or indirectly, other than as would not result in a
Material Adverse Effect, (i) knowingly and willfully offered or paid any
remuneration, in cash or in kind, to, or made any financial arrangements with,
any past or present customers, past or present suppliers, contractors or third
party payors in order to obtain business or payments from such persons, other
than entertainment activities in the ordinary and lawful course of business,
(ii) knowingly and willfully given or agreed to give, or is aware that there has
been made or that there is any agreement to make, any gift or gratuitous payment
of any kind, nature or description (whether in money, property or services) to
any customer or potential customer, supplier or potential supplier, contractor,
third party payor or any other person other than in connection with promotional
or entertainment expenses in the ordinary and lawful course of business, (iii)
knowingly and willfully made or agreed to make, or is aware that there has been
made or that there is any agreement to make, any contribution, payment or gift
of funds or property to, or for the private use of, any governmental official,
employee or agent where either the contribution, payment or gift is or was
illegal under the laws of the United States or under the laws of any state
thereof or any other jurisdiction (foreign or domestic) under which such
payment, contribution or gift was made, (iv) knowingly and willfully established
or maintained any unrecorded fund or asset for any purpose or made any false or
artificial entries on any of its books or records for any reason, (v) knowingly
and willfully made, or agreed to make, or is aware that there has been made or
that there is any agreement to make, any payment to any person with the
intention or understanding that any part of such payment would be used for any
purpose other than that described in the documents supporting such payment, or
(vi) knowingly and willfully paid or offered to pay any illegal remuneration for
any referral to any Acquired Company in violation of any applicable
anti-kickback law, including the Federal Anti-Kickback Statute, 42 U.S.C.
Section 1320a-7b(b), or any applicable state anti-kickback law.
40
<PAGE> 45
(d) To the knowledge of the Parent, no Acquired Company
(including without limitation any of their managers, officers, or employees) has
been convicted of, charged with, or investigated for a Medicare, Medicaid or
state health program related offense, or convicted of, charged with, or
investigated for a violation of federal or state law related to fraud, theft,
embezzlement, breach of fiduciary responsibility, financial misconduct,
obstruction of an investigation or controlled substances, or has been excluded
or suspended from participation in Medicare, Medicaid or any federal or state
health program or been subject to any order or consent decree of, or criminal
or civil fine or penalty imposed by, any court or governmental agency. To the
knowledge of the Parent, no Acquired Company has arranged or contracted with (by
employment or otherwise) any individual or entity that the Acquired Companies
know or should know is excluded from participation in a Federal Health Care
Program, as defined in 42 U.S.C. Section 1320a-7b(f), for the provision of items
or services for which payment may be made under such Federal Health Care
Program.
SECTION 5.23 ENVIRONMENTAL MATTERS.
(a) Each Acquired Company has complied in all material
respects with and is currently in compliance in all material respects with all
Environmental and Safety Requirements, and neither any Acquired Company nor the
Existing Stockholder has received any oral or written notice, report, or
information regarding any liabilities (whether accrued, absolute, contingent,
unliquidated, or otherwise) or any corrective, investigatory, or remedial
obligations arising under Environmental and Safety Requirements which relate to
any Acquired Company or any of their respective properties or facilities.
(b) Without limiting the generality of the foregoing, each
Acquired Company has obtained and complied with, and is currently in compliance
with, all permits, licenses, and other authorizations that may be required
pursuant to any Environmental and Safety Requirements for the occupancy of such
Acquired Company's respective properties or facilities or the operation of such
Acquired Company's respective businesses, except where the failure to so obtain
or comply with all such permits, licenses and other authorizations would not
have a Material Adverse Effect. A list of all such permits, licenses, and other
authorizations which are material to any Acquired Company is set forth on the
Environmental Schedule included in the Disclosure Letter.
(c) To the knowledge of the Parent, neither this Agreement,
nor the other Transaction Documents, nor the consummation of the transactions
contemplated hereby and thereby shall impose any obligations on any Acquired
Company or otherwise for site investigation or cleanup, or notification to or
consent of any government agencies or third parties under any Environmental and
Safety Requirements (including, without limitation, any so called
"transaction-triggered" or "responsible property transfer" laws and
regulations).
(d) To the knowledge of the Parent, none of the following
exists at any property or facility owned or leased by any Acquired Company: (i)
underground storage tanks or surface impoundments; (ii) asbestos-containing
material in any friable or potentially friable form or condition; (iii)
materials or equipment containing polychlorinated biphenyls; or (iv) landfills.
41
<PAGE> 46
(e) To the knowledge of the Parent, no Acquired Company has
ever treated, stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or Released (as defined in CERCLA) any substance
(including, without limitation, any hazardous substance), except to the extent
in compliance with Environmental and Safety Requirements, or owned, occupied, or
operated any facility or property in a manner known to the Parent to give rise
to liabilities of any Acquired Company for response costs, natural resource
damages, or attorneys' fees pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or any
other Environmental and Safety Requirements.
(f) To the knowledge of the Parent, without limiting the
generality of the foregoing, no facts, events, or conditions relating to the
past or present properties, facilities, or operations of any Acquired Company
shall give rise to any material corrective, investigatory, or remedial
obligations pursuant to Environmental and Safety Requirements, or give rise to
any other material liabilities (whether accrued, absolute, contingent,
unliquidated, or otherwise) pursuant to Environmental and Safety Requirements,
including, without limitation, those liabilities relating to onsite or offsite
Releases or threatened Releases of hazardous materials, substances or wastes,
personal injury, property damage, or natural resources damage.
(g) To the knowledge of the Parent, no Acquired Company has,
either expressly or by operation of law, assumed or undertaken any liability or
corrective investigatory or remedial obligation of any other Person relating to
any Environmental and Safety Requirements.
SECTION 5.24 DISCLOSURE. Neither this Agreement, the other Transaction
Documents, nor any of the schedules, attachments or exhibits hereto, contain any
untrue statement of a material fact or omit a material fact necessary to make
each statement contained herein or therein, not misleading.
SECTION 5.25 CLOSING DATE. All of the representations and warranties
contained in this Article V and elsewhere in this Agreement and all information
delivered in any schedule, attachment, or Exhibit hereto or in any certificate
delivered pursuant to this Agreement to the Purchaser are true and correct on
the date of this Agreement and shall be true and correct on the Closing Date,
except to the extent that the Existing Stockholder has advised the Purchaser
otherwise in writing before the Closing (each, a "Schedule Update"). Each
Schedule Update delivered to the Purchaser shall be taken into account in
determining whether or not a representation or warranty has been breached for
purposes of any claims for indemnification pursuant to Section 8.2(a)(i) below,
as long as such Schedule Update discloses facts, events or circumstances which
occurred after the date hereof or such Schedule Update discloses facts, events
or circumstances which occurred prior to the date hereof as to which the
Company's chief executive officer, chief operating officer and executive vice
president of finance and administration had no knowledge as of the date hereof.
No Schedule Update shall be taken into account in determining whether or not the
conditions to Closing set forth in Article III above have been satisfied unless
the Purchaser has approved such Schedule Update.
42
<PAGE> 47
ARTICLE VI -- REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
As a material inducement to the Company and the Existing
Stockholder to enter into this Agreement, the Purchaser hereby represents and
warrants to the Existing Stockholder that:
SECTION 6.1 ORGANIZATION. The Purchaser is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware.
SECTION 6.2 AUTHORIZATION OF TRANSACTIONS. The Purchaser has all
requisite organizational power and authority to execute and deliver the
Transaction Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby. The board of directors of the Purchaser has
duly approved the Transaction Documents to which it is a party and has duly
authorized the execution and delivery of the Transaction Documents to which it
is a party and the consummation of the transactions contemplated thereby. No
other limited liability company proceedings on the part of the Purchaser are
necessary to approve and authorize the execution and delivery of the Transaction
Documents to which it is a party and the consummation of the transactions
contemplated thereby. All Transaction Documents to which the Purchaser is a
party have been duly executed and delivered by the Purchaser and constitute the
valid and binding agreements of the Purchaser, enforceable against the Purchaser
in accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights; and as limited by general principles
of equity that restrict the availability of equitable remedies.
SECTION 6.3 ABSENCE OF CONFLICTS. The execution, delivery, and
performance of the Transaction Documents and the consummation of the
transactions contemplated thereby by the Purchaser do not and shall not (a)
conflict with or result in any breach of any of the terms, conditions, or
provisions of, (b) constitute a material default under, (c) result in a material
violation of, (d) give any third party the right to modify, terminate, or
accelerate any obligation under, or (e) require any authorization, consent,
approval, exemption, or other action by or notice or declaration to, or filing
with, any court or administrative or other governmental body or agency, under
the provisions of the certificate of formation or limited liability company
agreement of the Purchaser or any material indenture, mortgage, lease, loan
agreement, or other material agreement or instrument to which the Purchaser is
bound or affected, or any material law, statute, rule, or regulation to which
the Purchaser is subject or any material judgment, order, or decree to which the
Purchaser is subject.
SECTION 6.4 LITIGATION. There is no claim, action, suit, proceeding or
governmental investigation pending or, to the knowledge of the Purchaser,
threatened against the Purchaser, by or before any court, governmental or
regulatory authority or by any third party which challenges the validity of this
Agreement or which would be reasonably likely to adversely affect, delay or
restrict the Purchaser's ability to consummate the transactions contemplated
hereby.
43
<PAGE> 48
SECTION 6.5 INVESTIGATION BY THE PURCHASER. The Purchaser has conducted
its own independent review and analysis of the business, operations, technology,
assets, liabilities, results of operations, financial condition and prospects of
the Acquired Companies and acknowledges that Parent and the Existing Stockholder
have provided the Purchaser with access to the personnel, properties, premises
and records of each of the Acquired Companies for this purpose. In entering into
this Agreement, the Purchaser has relied solely upon the representations,
warranties and other provisions of the Transaction Documents and its own
investigation and analysis, and the Purchaser (a) acknowledges that none of the
Parent, the Existing Stockholder or the Acquired Companies nor any of their
respective directors, officers, employees, Affiliates, controlling Persons,
agents or representatives makes or has made any representation or warranty,
either express or implied, as to the accuracy or completeness of any of the
information provided or made available to the Purchaser or its directors,
officers, employees, Affiliates, controlling Persons, agents or representatives,
and (b) agrees, to the fullest extent permitted by law, that none of the Parent,
the Existing Stockholder or the Acquired Companies nor any of their respective
directors, officers, employees, Affiliates, controlling Persons, agents or
representatives shall have any liability or responsibility whatsoever to the
Purchaser or its directors, officers, employees, Affiliates, controlling
Persons, agents or representatives on any basis (including, without limitation,
in contract or tort, under federal or state securities laws or otherwise) based
upon any information provided or made available, or statements made, to the
Purchaser or its directors, officers, employees, Affiliates, controlling
Persons, agents or representatives (or any omissions therefrom), including,
without limitation, in respect of the specific representations and warranties of
Parent and the Existing Stockholder set forth in this Agreement, except as and
only to the extent expressly set forth in this Agreement.
SECTION 6.6 FINANCING. Attached hereto as Exhibit H are true and
correct copies of the senior and subordinated debt financing commitment letters
(the "Debt Commitment Letters") issued to the Purchaser by (i) Fleet National
Bank, NationsBank, N.A. and DLJ Capital Funding, Inc., and (ii) DLJ Bridge
Finance, Inc., NationsBridge, L.L.C. and Fleet Corporate Finance, Inc. and the
equity financing commitment letters issued to the Purchaser by (i) Madison
Dearborn Capital Partners II, L.P., (ii) Cornerstone Equity Investors IV, L.P.
and (iii) Healthcare Equity Partners, L.P. (together with the Debt Commitment
Letters, the "Debt and Equity Commitment Letters"), respectively, on or about
January 22, 1999 in order to consummate the transactions contemplated hereby,
and to fund the working capital requirements of the Company after the Closing.
The Purchaser acknowledges that the Debt and Equity Commitment Letters have been
delivered by the Purchaser to the Parent and the Existing Stockholder to
materially induce the Parent and the Existing Stockholder to enter into this
Agreement.
SECTION 6.7 HART-SCOTT-RODINO. Within the meaning of the
Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended, and the rules
promulgated thereunder (16 C.F.R. Sections 801- 803), the Purchaser is its
own ultimate parent entity, the total assets of the Purchaser are less than
$10,000,000 and the annual net sales of the Purchaser are less than $10,000,000.
SECTION 6.8 BROKERAGE. There are no claims for brokerage commissions,
finders' fees, or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Purchaser.
44
<PAGE> 49
SECTION 6.9 INVESTMENT. The Purchaser (a) understands that the
Purchased Securities have not been registered under the Securities Act, or under
any state securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public offering,
(b) is acquiring the Purchased Securities solely for its own account for
investment purposes, and not with a view to the distribution thereof, and (c) is
an accredited investor within the meaning of Regulation D promulgated under the
Securities Act; provided that, nothing contained herein shall prevent the
Purchaser or subsequent holder of Restricted Securities from transferring such
securities in compliance with the provisions of Section 9.1.
SECTION 6.10 CLOSING DATE. All of the representations and warranties
contained in this Article VI and elsewhere in this Agreement and all information
delivered in any schedule, attachment, or Exhibit hereto or in any certificate
delivered pursuant this Agreement to the Parent or Existing Stockholder are true
and correct on the date of this Agreement and shall be true and correct on the
Closing Date, except to the extent that the Existing Stockholder has advised the
Purchaser otherwise in writing before the Closing (each, a "Schedule Update").
Each Schedule Update delivered to the Existing Stockholder or the Parent shall
be taken into account in determining whether or not a representation or warranty
has been breached for purposes of any claims for indemnification pursuant to
Section 8.2(c)(i) below, as long as such Schedule Update discloses facts, events
or circumstances which occurred after the date hereof or such Schedule Update
discloses facts, events or circumstances which occurred prior to the date hereof
as to which the Purchaser had no knowledge as of the date hereof. No Schedule
Update shall be taken into account in determining whether or not the conditions
to Closing set forth in Article III above have been satisfied unless the
Existing Stockholder or the Parent has approved such Schedule Update.
ARTICLE VII -- TERMINATION
SECTION 7.1 TERMINATION. This Agreement may be terminated at any time
before the Closing:
(a) by mutual written consent of the Parent and the Purchaser;
(b) by the Purchaser if the representations and warranties set
forth in Article V hereof taken in their entirety are not true and correct in
all material respects on the date made or deemed made; provided that, for
purposes of this Section 7.1(b), those representations and warranties that are
qualified by references to "material" or "Material Adverse Effect" shall be
deemed not to include such qualifications;
(c) by the Parent if the representations and warranties set
forth in Article VI hereof taken in their entirety are not true and correct in
all material respects on the date made or deemed made; provided that, for
purposes of this Section 7.1(c), those representations and warranties that are
qualified by references to "material" shall be deemed not to include such
qualifications;
45
<PAGE> 50
(d) by the Purchaser if the Company, the Existing Stockholder
or the Parent shall have failed to perform and comply in all material respects
with all of the covenants and agreements required to be performed by each of
them under this Agreement on or before the Closing;
(e) by the Parent if the Purchaser shall have failed to
perform and comply in all material respects with all of the covenants and
agreements required to be performed by it under this Agreement on or before the
Closing;
(f) by the Parent or the Purchaser if events have occurred
which have made it impossible to satisfy a condition precedent to the
terminating Party's obligations to consummate the transactions contemplated
hereby unless such terminating Party's willful or knowing breach of this
Agreement has caused the condition to be unsatisfied;
(g) by the Parent or the Purchaser if the Parent Board
Approval is not obtained on or before January 27, 1999 unless such terminating
Party's willful or knowing breach of this Agreement has caused such approval to
not be obtained; or
(h) by the Parent or the Purchaser if the Closing has not
occurred on or before March 16, 1999; provided, however, that neither the
Purchaser nor the Existing Stockholder shall be entitled to terminate this
Agreement pursuant to this Section 7.1(h) if such Party's willful or knowing
breach of this Agreement has prevented the consummation of the transactions
contemplated hereby at or before such time.
SECTION 7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Existing Stockholder or the Purchaser as provided in
Section 7.1, this Agreement shall forthwith become void and there shall be no
liability on the part of any Party to any other Party under this Agreement,
except that the provisions of this Section 7.2, Sections 9.2, 9.5 and 9.9 and
Article X (other than Section 10.3) shall continue in full force and effect and
except that nothing herein shall relieve any Party from liability for any breach
of this Agreement before such termination.
ARTICLE VIII -- INDEMNIFICATION AND RELATED MATTERS
SECTION 8.1 SURVIVAL. All representations, warranties, covenants, and
agreements set forth in this Agreement or in any writing or certificate
delivered in connection with this Agreement shall survive the Closing Date and
the consummation of the transactions contemplated hereby and shall not be
affected by any examination made for or on behalf of any Party, the knowledge of
any of such Party's officers, directors, stockholders, employees, or agents, or
the acceptance of any certificate or opinion. Notwithstanding the foregoing, no
Party shall be entitled to recover for any Loss pursuant to Section 8.2(a)(i) or
(iv) or Section 8.2(c)(i) unless written notice of a claim thereof is delivered
to the other Party before the Applicable Limitation Date. For purposes of this
Agreement, the term "Applicable Limitation Date" shall mean the date which is 18
months after the Closing Date; provided that the Applicable Limitation Date with
respect to the following Losses shall be as follows: (i) with respect to any
Loss arising from or related to (A) a breach of the representations and
46
<PAGE> 51
warranties of the Existing Stockholder set forth in Section 5.22 (Health Care
Matters), or (B) matters described in Section 8.2(a)(iv), the Applicable
Limitation Date shall be the date which is three years after the Closing Date;
(ii) with respect to any Loss arising from or related to a breach of the
representations and warranties of the Existing Stockholder set forth in Section
5.10 (Taxes) and Section 5.17 (Employee Benefits Matters), the Applicable
Limitation Date shall be the date of expiration of the statute of limitations
applicable to the statute, regulation or other authority which gave rise to such
Loss, and (iii) with respect to any Loss arising from or related to a breach of
the representations and warranties of the Existing Stockholder set forth in
Section 5.1 (Organization and Corporate Power), Section 5.2 (Authorization of
Transactions), Section 5.3 (Absence of Conflicts), Section 5.4 (Capitalization)
or Section 5.14 (Brokerage) and with respect to any Loss arising from or related
to a breach of the representations and warranties of the Purchaser set forth in
Section 6.1 (Organization), Section 6.2 (Authorization of Transactions), Section
6.3 (Absence of Conflicts) or Section 6.7 (Brokerage), there shall be no
Applicable Limitation Date (i.e., such representations and warranties shall
survive forever). The representations and warranties described in clause (iii)
of the preceding sentence are referred to as the "Fundamental Representations
and Warranties."
SECTION 8.2 INDEMNIFICATION.
(a) Indemnification by the Existing Stockholder and the
Parent. The Existing Stockholder and the Parent shall jointly and severally
indemnify the Purchaser and the Acquired Companies, and each of the Purchaser's
and the Acquired Companies' respective officers, directors, stockholders,
employees, agents, representatives, affiliates, successors, and assigns
(collectively, the "Purchaser Parties") and hold each of them harmless from and
against and pay on behalf of or reimburse such Purchaser Parties in respect of
any Loss which any such Purchaser Party may suffer, sustain, or become subject
to, as a result of or relating to:
(i) the breach of any representation or warranty made
by the Company, the Existing Stockholder or the Parent contained in
this Agreement or in any certificate delivered by the Company, the
Existing Stockholder or the Parent with respect thereto in connection
with the Closing (in each case, determined without regard to any
qualifications therein referencing the terms "materiality," "Material
Adverse Effect," or other terms of similar import or effect and, in the
case of Sections 5.22(a), (b) and (c), also, determined without regard
to any qualifications therein referencing the term "knowledge", but
determined with regard to any qualifications therein referencing the
terms "knowingly and willfully");
(ii) the breach of any covenant or agreement made by
Company contained in this Agreement to be performed by the Company
prior to or at the Closing;
(iii) the breach of any covenant or agreement made by
the Existing Stockholder or the Parent contained in this Agreement;
(iv) any claim or audit by any governmental authority
or agent thereof (including, without limitation, any fiscal
intermediary or carrier) or qui tam relator pertaining
47
<PAGE> 52
to any healthcare program (including, without limitation, with respect
to billings under Medicare, Medicaid and CHAMPUS), arising out of the
operation of the Acquired Companies on or before the Closing Date;
(v) any matter listed under the heading "General
Litigation" on the Litigation Schedule included in the Disclosure
Letter to the extent not covered by third party insurance;
(vi) any matter listed under the heading "Dollar One
Litigation" on the Litigation Schedule included in the Disclosure
Letter to the extent not covered by third party insurance;
(vii) Medical Malpractice Claims which arise out of
or relate to, or have arisen out of or relate to, events that occur in
connection with the operations of the Acquired Companies on or prior to
the Closing, to the extent not covered by the insurance policies
referenced in Section 9.11 hereof or any other applicable professional
liability insurance policy maintained for the benefit of the Acquired
Companies (collectively, the "Applicable Insurance Policies"); provided
that the indemnity provided in this clause (vii) will not apply to
Medical Malpractice Claims that would have been covered by the
Applicable Insurance Policies, but for (A) the insolvency, bankruptcy
or liquidation of the applicable insurer or any other similar event
which renders the applicable insurer unable or incapable of paying all
or any part of a Loss associated with a Medical Malpractice Claim; (B)
the post-Closing breach of the Applicable Insurance Policy by an
Acquired Company, an Affiliate thereof or an insured (other than the
Parent, the Existing Stockholder or their Affiliates) under such
insurance policy or the failure following the Closing of an Acquired
Company, an Affiliate thereof or an insured (other than the Parent, the
Existing Stockholder or their Affiliates) under such insurance policy
to comply with the applicable covenants and agreements of such
insurance policy; or (C) an express exclusion from coverage or express
limitation on coverage, other than a per occurrence, per doctor or
aggregate limitation set forth in the Applicable Insurance Policy which
places a cap or limit on the liability of the applicable insurance
company for such Medical Malpractice Claim; provided however, that for
purposes of the exclusions from coverage and limitations on coverage
contemplated by this clause (C), the Parties agree that the express
exclusions and limitations (other than per occurrence, per doctor or
aggregate limitations or the endorsement(s) excluding InPhyNet
entities) set forth in the St. Paul policy referenced on Exhibit L
hereto shall control and be deemed applicable to all of the Applicable
Insurance Policies for purposes of this clause (C), notwithstanding the
actual limitations and exclusions set forth in such other Applicable
Insurance Policies; or
(viii) any Excluded Liabilities.
The Existing Stockholder and the Parent hereby acknowledge that they and their
Affiliates will have no claims or rights to contribution or indemnity from the
Acquired Companies or their officers and directors with respect to any amounts
paid by any of them pursuant to this Section 8.2(a).
48
<PAGE> 53
(b) Limitations on Indemnification by the Existing Stockholder
and the Parent. The indemnification provided for in Section 8.2(a) above is
subject to the following limitations:
(i) The Existing Stockholder and the Parent will be
liable to the Purchaser Parties with respect to claims referred to in
Sections 8.2(a)(i) and (iv) only if a Purchaser Party gives the
Existing Stockholder written notice thereof within the Applicable
Limitation Date.
(ii) The aggregate amount of all payments made by the
Existing Stockholder and the Parent in satisfaction of claims for
indemnification pursuant to Sections 8.2(a)(i), (iv) and (v) shall not
exceed $50,000,000 (the "Cap"); provided, however, that the Cap shall
not apply with respect to any Losses resulting from or relating to
breaches of any Fundamental Representations and Warranties and such
Losses shall not count towards satisfaction of the Cap.
(iii) The Existing Stockholder and the Parent shall
not be liable to indemnify any Purchaser Parties pursuant to Sections
8.2(a)(i), (iv) and (v) unless and until the Purchaser Parties have
collectively suffered Losses by such breaches or pursuant to such
Sections in excess of a $3,700,000 aggregate basket ("Basket") (at
which point, subject to the other limitations herein, the Existing
Stockholder and the Parent will be liable to the Purchaser Parties for
all Losses in excess of such Basket); provided, however, that the
Basket shall not apply with respect to any Losses resulting from or
relating to breaches of any Fundamental Representations and Warranties
and such Losses shall not count towards satisfaction of the Basket.
(iv) The Purchaser Parties shall take all reasonable
steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to
give rise to any liabilities or damages that are indemnifiable
hereunder.
(v) If the Existing Stockholder's or the Parent's
indemnification obligation under this Section 8.2 arises in respect of
any indemnifiable event (A) for which a Purchaser Party receives
indemnification from the Existing Stockholder or the Parent and (B)
which results in any Tax benefit to such Purchaser Party for any
taxable period (or portion thereof) beginning and ending after the
Closing Date which would not, but for such indemnifiable event, be
available, such Purchaser Party shall pay, or shall cause to be paid,
to the Existing Stockholder or the Parent an amount equal to the actual
Tax saving produced by such Tax benefit reduced by the amount of any
Tax detriment to such Purchaser Party as a result of the receipt of
such indemnification. Tax benefits and detriments shall be taken into
account as and when actually realized. The amount of any such Tax
saving for any taxable period shall be the amount of the reduction in
Taxes payable to a Tax authority by such Purchaser Party with respect
to such Tax period (net of any Tax detriment resulting from the receipt
of the indemnity payment) as compared to the Taxes that would have been
payable to a Tax
49
<PAGE> 54
authority by such Purchaser Party with respect to such Tax period in
the absence of such Tax benefit.
(vi) Any payment made by the Existing Stockholder or
the Parent to a Purchaser Party pursuant to this Section 8.2 in respect
of any indemnifiable event shall be net of any insurance proceeds or
proceeds from indemnification by third parties realized by and paid to
such Purchaser Party or an Acquired Company in respect of such claim.
Such Purchaser Party shall use its reasonable efforts to make insurance
claims relating to any indemnifiable event for which it is seeking
indemnification pursuant to this Section 8.2; provided that such
Purchaser Party shall not be obligated to make such an insurance claim
if the cost of pursuing such an insurance claim together with any
corresponding increase in insurance premiums or other chargebacks to
such Purchaser Party, as the case may be, would exceed the value of the
claim for which such Purchaser Party is seeking indemnification. To the
extent the Acquired Companies are party to agreements (through
assignment in accordance with the provisions of this Agreement, or
otherwise) pursuant to which the Acquired Companies have the right to
indemnification with respect to an indemnifiable event for which a
Purchaser Party is seeking indemnification pursuant to this Section
8.2, the Purchaser Parties shall use their reasonable efforts to make
claims (or cause the Acquired Companies to make claims) against such
third parties for indemnification against such Losses.
(vii) From and after the Closing, the indemnification
rights provided in Section 8.2(a) of this Agreement shall be the sole
and exclusive remedy of the Purchaser Parties with respect to any
dispute arising out of or related to this Agreement or any Loss which
any Purchaser Party may suffer, sustain or become subject to, as a
result of or relating to this Agreement and the transactions
contemplated hereby, except for (A) the right to seek specific
performance of any of the agreements contained herein, and (B) except
in the case where the Company, the Existing Stockholder or the Parent
has defrauded the Purchaser Parties.
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Purchaser delivers written notice of a claim to the Existing
Stockholder no later than the Applicable Limitation Date, the Existing
Stockholder shall be required to indemnify the Purchaser Parties for all Losses
(subject to the Basket and Cap limitations) which the Purchaser Parties may
incur in respect of the matters which are the subject of such claim, regardless
of when incurred. Notwithstanding any implication to the contrary contained in
this Agreement, the limits on indemnification set forth in this Agreement shall
not apply to claims for damages arising from fraud.
(c) Indemnification by the Purchaser. The Purchaser shall
indemnify the Parent, the Existing Stockholder and the Company, and hold the
Parent, the Existing Stockholder, the Company, and the Parent's, the Existing
Stockholder's and the Company's respective officers, directors, stockholders,
employees, agents, representatives, affiliates, successors, and assigns
(collectively, the "Seller Parties") harmless from and against and pay on behalf
of or reimburse such
50
<PAGE> 55
Seller Parties in respect of any Loss which such Seller Party may suffer,
sustain, or become subject to, as a result of or relating to:
(i) the breach of any representation or warranty made
by the Purchaser contained in this Agreement or in any certificate
delivered by the Purchaser with respect thereto in connection with the
Closing (in each case, determined without regard to any qualifications
therein referencing the terms "materiality," or other terms of similar
import or effect); or
(ii) the breach of any covenant or agreement made by
the Purchaser contained in this Agreement.
(d) Limitations on Indemnification by the Purchaser. The
indemnification provided for in Section 8.2(c) above is subject to the following
limitations:
(i) The Purchaser will be liable to the Seller
Parties with respect to claims referred to in Section 8.2(c)(i) only if
a Existing Stockholder gives the Purchaser written notice thereof
within the Applicable Limitation Date;
(ii) The Seller Parties shall take all reasonable
steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to
give rise to any liabilities or damages that are indemnifiable
hereunder.
(iii) Any payment made by the Purchaser to a Seller
Party pursuant to this Section 8.2 in respect of any indemnifiable
event shall be net of any insurance proceeds realized by and paid to
such Seller Party in respect of such claim. Such Seller Party shall use
its reasonable efforts to make insurance claims relating to any
indemnifiable event for which it is seeking indemnification pursuant to
this Section 8.2; provided that such Seller Party shall not be
obligated to make such an insurance claim if such Seller Party in its
reasonable judgment believes the cost of pursuing such an insurance
claim together with any corresponding increase in insurance premiums or
other chargebacks to such Seller Party, as the case may be, would
exceed the value of the claim for which such Seller Party is seeking
indemnification.
(iv) From and after the Closing, the indemnification
rights provided in Section 8.2(c) of this Agreement shall be the sole
and exclusive remedy of the Seller Parties with respect to any dispute
arising out of or related to this Agreement or any Loss which any
Seller Party may suffer, sustain or become subject to, as a result of
or relating to this Agreement and the transactions contemplated hereby,
except for (A) the right to seek specific performance of any of the
agreements contained herein, and (B) except in the case where the
Purchaser has defrauded the Seller Parties.
51
<PAGE> 56
Notwithstanding any implication to the contrary contained in this Agreement, so
long as the Existing Stockholder delivers written notice of a claim to the
Purchaser no later than the Applicable Limitation Date, the Purchaser shall be
required to indemnify the Seller Parties for all Losses which the Seller Parties
may incur in respect of the matters which are the subject of such claim,
regardless of when incurred. Notwithstanding any implication to the contrary
contained in this Agreement, the limits on indemnification set forth in this
Agreement shall not apply to claims for damages arising from fraud.
In the event a Purchaser Party has a claim for indemnification pursuant to
Section 8.2(a) for which (A)(i) the Parent agrees in writing that the Purchaser
Party is entitled to indemnification or (ii) a final non-appealable order of a
court of competent jurisdiction is rendered in favor of the Purchaser Party and
(B) the Parent has failed to satisfy such claim in full within ten business days
of notice of the issuance of such final, non-appealable court order or the date
of the written agreement with respect thereto, then the Company may, at its
option, cause the Parent and Existing Stockholder to satisfy such
indemnification obligation by canceling a number of shares of Preferred Stock
held by the Existing Stockholder having a liquidation value (plus accrued and
unpaid dividends thereon) equal to the indemnification obligation. In the event
of a cancellation of shares of Preferred Stock in accordance with this
paragraph, then from and after such time, the Existing Stockholder shall no
longer have any rights as a holder of such shares, and such shares shall be
deemed cancelled in accordance with the applicable provisions hereof, whether or
not the certificates therefor have been delivered to the Company. The
certificates representing the Existing Stockholder's Preferred Stock will bear
the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN CANCELLATION OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH
IN A RECAPITALIZATION AGREEMENT, DATED AS OF JANUARY 25, 1999, AS AMENDED AND
MODIFIED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND CERTAIN INVESTORS. A
COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE." This paragraph is not intended to
create a security interest within the meaning of the Uniform Commercial Code or
other preference or encumbrance but rather is intended to cancel all or a
portion of the Preferred Stock retained by the Existing Stockholder under the
specific circumstances described in this paragraph.
(e) Indemnification by the Company. The Company shall
indemnify the Purchaser Parties and the Seller Parties and hold each of them
harmless from and against and pay on behalf of or reimburse such Purchaser
Parties and Seller Parties in respect of any Loss which any such Purchaser Party
or Seller Party may suffer, sustain, or become subject to, as a result of or
relating to the breach of any covenant or agreement made by the Company
contained in this Agreement to be performed by the Company after the Closing.
52
<PAGE> 57
(f) Procedures.
(i) If a party hereto seeks indemnification under
this Article VIII (including any indemnification for Taxes pursuant to
Section 8.3), such party (the "Indemnified Party") shall promptly give
written notice to the other party (the "Indemnifying Party") after
receiving written notice of any action, lawsuit, proceeding,
investigation, or other claim against it (if by a third party) or
discovering the liability, obligation, or facts giving rise to such
claim for indemnification, describing the claim, the amount thereof (if
known and quantifiable), and the basis thereof; provided that the
failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party of its obligations hereunder except to the extent
such failure shall have prejudiced the Indemnifying Party. In that
regard, if any action, lawsuit, proceeding, investigation, or other
claim shall be brought or asserted by any third party which, if
adversely determined, would entitle the Indemnified Party to indemnity
pursuant to this Article VIII, the Indemnified Party shall promptly
notify the Indemnifying Party of the same in writing, specifying in
detail the basis of such claim and the facts pertaining thereto and the
Indemnifying Party shall be entitled to participate in the defense of
such action, lawsuit, proceeding, investigation, or other claim giving
rise to the Indemnified Party's claim for indemnification at its
expense, and at its option (subject to the exceptions in paragraphs
(ii) and (iii) below) shall be entitled to control and appoint lead
counsel of such defense with reputable counsel reasonably acceptable to
the Indemnified Party; provided that, as a condition precedent to the
Indemnifying Party's right to assume control of such defense, it must
first agree in writing to be fully responsible for all Losses relating
to such claims and to provide full indemnification to the Indemnified
Party for all Losses relating to such claims subject to the terms
hereof.
(ii) Except as provided in paragraph (iii) below, if
the claim which the Indemnifying Party seeks to assume control (A)
involves claims for non-monetary relief (except where non-monetary
relief is merely incidental to a primary claim or claims for monetary
damages), (B) involves criminal allegations, (C) is one in which the
Indemnifying Party is also a party and joint representation would be
inappropriate or there may be legal defenses available to the
Indemnified Party which are different from or additional to those
available to the Indemnifying Party; or (D) involves a claim which,
upon petition by the Indemnified Party, the appropriate court rules
that the Indemnifying Party failed or is failing to vigorously
prosecute or defend, then the Indemnifying Party shall not have the
right to assume control of such defense and shall pay the fees and
expenses of counsel retained by the Indemnified Party.
(iii) If the claim which the Indemnifying Party seeks
to assume control (i) involves claims for both monetary and
non-monetary relief (except where non-monetary relief is merely
incidental to a primary claim or claims for monetary damages), or (ii)
involves both monetary claims and criminal allegations (each, a "Joint
Defense Proceeding"), the Indemnifying Party and the Indemnified Party
will jointly participate in and control the defense of such Joint
Defense Proceeding, and the Indemnifying Party will pay the
53
<PAGE> 58
reasonable fees and expenses of legal counsel jointly retained by the
Indemnifying Party and the Indemnified Party in connection with such
Joint Defense Proceeding.
If the Indemnifying Party is permitted to assume and control
the defense and elects to do so, the Indemnified Party shall have the right to
employ counsel separate from counsel employed by the Indemnifying Party in any
such action and to participate in the defense thereof, but the fees and expenses
of such counsel employed by the Indemnified Party shall be at the expense of the
Indemnified Party unless the employment thereof has been specifically authorized
by the Indemnifying Party in writing.
If the Indemnifying Party shall control the defense of any
such claim, the Indemnifying Party shall obtain the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld) before entering
into any settlement of a claim or ceasing to defend such claim, if pursuant to
or as a result of such settlement or cessation, injunction, or other equitable
relief will be imposed against the Indemnified Party or any of the Indemnified
Party's respective affiliates or if such settlement does not expressly
unconditionally release the Indemnified Party from all liabilities and
obligations with respect to such claim.
If the Indemnified Party shall control the defense of any such
claim, the Indemnifying Party shall not be bound by any settlement or compromise
of such claim or any consent to the entry of any judgment with respect to such
claim without the prior written consent of the Indemnifying Party (which shall
not be unreasonably withheld).
With reference to the indemnification by the Parent and the
Existing Stockholder pursuant to Section 8.2(a)(vii) hereof, the parties agree
as follows:
(i) The Acquired Companies shall have the
responsibility for timely reporting of all Medical Malpractice Claims
to the appropriate insurance carrier, and/or state fund, based on a
schedule of insurance and state funds to be provided by the Parent. Any
Medical Malpractice Claim received by the Parent or any of its
Affiliates (other than an Acquired Company) will be promptly
transmitted to the Company's designated claims manager.
(ii) The Company will provide the Parent with copies
of any notification received by any insurance carrier, and/or state
fund, stating any of the following: (i) that a particular case has the
potential to exceed the applicable policy limit; or (ii) that there is
a reservation of rights or declination of coverage. In the event of
such notification, and at the request of the Parent, the Company will
provide the Parent with copies of the claim files of the Acquired
Companies and any other relevant information reasonably available. Upon
request, the Company will assist the Parent in taking reasonable steps
to protect the interests of the Parent and, with respect to excess
policy limit losses, to exercise reasonable efforts to cause the
carrier to settle such claim, if appropriate, within the policy limit.
54
<PAGE> 59
(g) Tax Treatment. Amounts paid to or on behalf of the
Existing Stockholder or the Company as indemnification shall be treated as
adjustments to the Redemption Consideration for Tax purposes.
SECTION 8.3 CERTAIN TAX MATTERS.
(a) Certain Definitions. As used in this Agreement:
"Purchaser Tax Group" means the Affiliated Group of which the Purchaser is the
common parent.
"Pre-Closing Period" means any taxable period, including that portion of any
Straddle Period, which ends on or before the Closing Date.
"Seller Group" means the Affiliated Group of which the Parent is the common
parent.
"Straddle Period" means any taxable period that includes (but does not end on)
the Closing Date.
(b) Section 338(h)(10) Elections. The Existing Stockholder
will join with Purchaser in making a timely election under Section 338(h)(10) of
the Code, and any applicable corresponding or similar provisions of state or
local law (the "Section 338(h)(10) Election") to treat the transaction hereunder
as the deemed sale of the assets of the Acquired Companies which are members of
the Seller Group (the "Consolidated Subsidiaries"), for federal and state income
tax purposes. The Existing Stockholder and the Purchaser shall jointly prepare
Internal Revenue Service Form 8023 with respect to the Consolidated
Subsidiaries, and such other forms and schedules as are necessary or required to
make the Section 338(h)(10) Election, and the Existing Stockholder and the
Purchaser shall execute such Form 8023, and shall take all such other acts as
are necessary to make or perfect such Section 338(h)(10) Election. The Existing
Stockholder and the Purchaser will use their reasonable best efforts to agree on
the allocation of the "MADSP" among the assets of the Consolidated Subsidiaries
pursuant to the applicable Treasury Regulations under Section 338 of the Code
(the "Allocation") and will use the Allocation in reporting the deemed purchase
and sale of the assets of the Consolidated Subsidiaries for federal and state
income tax purposes. If the parties are unable to agree upon the Allocation
within 90 days before the due date of filing any Tax Return for which the
Allocation is relevant, the Allocation shall be made by the Firm.
(c) Return Filing, Refunds, Credits and Transfer Taxes.
(i) Except with regard to Tax Returns for Straddle
Periods, the Parent shall prepare, or cause to be prepared, and file,
or cause to be filed, on a timely basis all Tax Returns of or including
each Consolidated Subsidiary for all Pre-Closing Periods (the
"Pre-Closing Period Returns"). The Parent shall pay, or cause to be
paid, all Taxes shown to be due on the Pre-Closing Period Returns.
(ii) The Company shall prepare, or cause to be
prepared, and shall file, or cause to be filed, on a timely basis all
Tax Returns other than the Pre-Closing Period Returns
55
<PAGE> 60
with respect to each Consolidated Subsidiary, including Tax Returns, if
any, for the Straddle Period (the "Straddle Period Returns"). The
Company shall pay, or cause to be paid, all Taxes shown to be due on
such Tax Returns.
(iii) The Company shall provide the Parent with
copies of any Straddle Period Returns at least 30 days prior to the due
date thereof (giving effect to any extensions thereto), accompanied by
a statement calculating in reasonable detail the Parent's
indemnification obligation pursuant to Section 8.3(e) hereof (the
"Indemnification Statement"). The Parent shall have the right to review
such Straddle Period Returns and Indemnification Statement prior to the
filing of such Straddle Period Returns. If the Parent disputes any
amounts shown due on such Tax Returns or the amount calculated in the
Indemnification Statement, the Parent and the Company shall consult and
resolve in good faith any issues arising as a result of the review of
such Straddle Period Return and Indemnification Statement. If the
Parent agrees to the Indemnification Statement amount, the Parent shall
pay to the Company an amount equal to the Taxes shown on the
Indemnification Statement less any amounts paid by the Parent or any
Consolidated Subsidiary on or before the Closing Date with respect to
estimated taxes thereto not later than three days before the due date
(including any extensions thereof) for payment of Taxes with respect to
such Straddle Period Return. If the Parties are unable to resolve any
dispute within 15 days after the Parent's receipt of such Straddle
Period Return and Indemnification Statement, such dispute shall be
resolved by the Firm, which shall resolve any issue in dispute as
promptly as practicable. If the Firm is unable to make a determination
with respect to any disputed issue prior to the due date (including any
extensions) for the filing of the Straddle Period Return in question,
(A) the Company shall file, or shall cause to be filed, such Straddle
Period Return without such determination having been made and (B) the
Parent shall pay to the Company, not later than three days before the
due date (including any extensions thereof) for the payment of Taxes
with respect to such Straddle Period Return, an amount determined by
the Parent as the proper amount chargeable to the Parent pursuant to
this Section 8.3. Upon delivery to the Parent and the Company by the
Firm of its determination, appropriate adjustments shall be made to the
amount paid by the Parent in accordance with the immediately preceding
sentence in order to reflect the decision of the Firm. The
determination by the Firm shall be final, conclusive and binding on the
parties.
(iv) The Parent and the Company shall reasonably
cooperate, and shall cause their respective Affiliates, officers,
employees, agents, auditors and representatives reasonably to
cooperate, in preparing and filing all Tax Returns (including amended
returns and claims for refund), including maintaining and making
available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all taxable
periods relating to Taxes. The Company and the Parent recognize that
the Parent will need access, from time to time, after the Closing Date,
to certain accounting and tax records and information held by each
Consolidated Subsidiary to the extent such records and information
pertain to events occurring prior to the Closing Date; therefore, the
Company agrees that from and after the Closing Date the Company shall,
and shall cause each other Consolidated Subsidiary to, (A) retain and
maintain such records until such time as the
56
<PAGE> 61
Parent determines that such retention and maintenance is no longer
necessary and (B) allow the Parent and its agents and representatives
(and agents and representatives of its Affiliates) to inspect, review
and make copies of such records as the Parent may deem necessary or
appropriate from time to time. The Company shall indemnify Parent from
and against any penalties, additions to tax or interest imposed on
Parent as a result of any failure of the Company to provide records or
other information regarding Taxes with respect to the Company or any
Consolidated Subsidiary in a timely manner.
(v) The Company shall not, and shall cause each other
Consolidated Subsidiary not to, dispose of or destroy any of the
business records and files of such Consolidated Subsidiary relating to
Taxes in existence on the Closing Date without first offering to turn
over possession thereof to the Parent by written notice to the Parent
at least 30 days prior to the proposed date of such disposition or
destruction.
(vi) Any refunds and credits of Taxes of any
Consolidated Subsidiary or similar benefit (including any interest or
similar benefit) received from or credited thereon by the applicable
tax authority (a "Tax Benefit") with respect to (A) any taxable period
ending on or before the Closing Date or (B) Taxes for which the Parent
has indemnified the Company under this Agreement, shall be for the
account of the Parent, and if received or utilized by the Company or
another Consolidated Subsidiary, shall be paid to the Parent within
five business days after the Company or such other Consolidated
Subsidiary receives such refund or utilizes such credit. Except as
provided in the next sentence, any refunds or credits of any
Consolidated Subsidiary with respect to any Straddle Period shall be
apportioned between the Parent, on the one hand, and the Company, on
the other hand, on the basis of an interim closing of the books. In the
case of a refund or credit attributable to any Taxes that are imposed
on a periodic basis and are attributable to the Straddle Period, other
than Taxes based upon or related to gross or net income or receipts,
the refund or credit of such Taxes of a Consolidated Subsidiary for the
Pre-Closing Period shall be deemed to be the amount of such refund or
credit for the Straddle Period multiplied by a fraction the numerator
of which is the number of days in the Straddle Period ending on the
Closing Date and the denominator of which is the number of days in the
Straddle Period. Any Tax Benefit not described in clauses (A) or (B) of
the first sentence of this Section 8.3(c)(vi) shall be for the account
of the Company only.
(vii) Notwithstanding any other provisions of this
Agreement to the contrary, all sales, use, transfer, gains, stamp,
duties, recording and similar Taxes incurred in connection with the
transactions contemplated by this Agreement shall be split equally
between the Company and the Existing Stockholder, and the Company
shall, at its own expense, accurately file or cause to be filed all
necessary Tax Returns and other documentation with respect to such
Taxes. If required by applicable law, the Existing Stockholder will
join in the execution of any such Tax Returns or such other
documentation.
(d) Elections. The Company shall not, and shall cause each
other Consolidated Subsidiary not to, make, amend or revoke any Tax election if
such action would adversely affect the
57
<PAGE> 62
Parent or any Person (other than a Consolidated Subsidiary) as to whom or with
whom the Parent has filed a consolidated return with respect to any taxable
period ending on or before the Closing Date or for the Pre-Closing Period or any
Tax refund with respect thereto.
(e) Tax Indemnification.
(i) The Company shall indemnify, defend and hold
harmless the Parent and its Affiliates, at any time after the Closing,
from and against any liability for Taxes of the Company or any other
Consolidated Subsidiary for any taxable period ending after the Closing
Date except for Straddle Periods, in which case the Company's indemnity
will cover only that portion of any such Taxes that is not attributable
to the Pre-Closing Period.
(ii) The Parent shall indemnify, defend and hold
harmless the Acquired Companies and their Affiliates, at any time after
the Closing, from and against any liability for (i) Taxes of any
Acquired Company, except as provided in Section 8.3(c)(vii) hereof, for
the Pre-Closing Period (including the portion of any Straddle Period
ending on the Closing Date) and (ii) Taxes imposed pursuant to Treasury
Regulation Section 1.1502-6 with respect to the taxable income of any
member of the Seller Group (other than the Consolidated Subsidiaries)
for any taxable period.
(iii) In determining the responsibility of the Parent
and the Company for Taxes attributable to any Straddle Period, Taxes
based upon or related to gross or net income or receipts shall be
apportioned on the basis of an interim closing of the books as of the
Closing Date, and all other Taxes shall be prorated on a daily basis.
SECTION 8.4 EMPLOYEES; EMPLOYEE BENEFITS.
(a) For the six month period following the Closing, the
Company shall cause each Acquired Company to provide each individual who is
actively employed by such Acquired Company on the Closing Date (each, an
"Employee") with salary, bonuses and benefits that are substantially comparable
in the aggregate to the salary, bonuses and benefits provided to each such
Employee immediately prior to the Closing (excluding special retention and other
similar bonuses paid or payable with respect to the year 1998 or in connection
with the transactions contemplated hereby), provided that no Person, in
providing such substantially comparable salary, bonuses and benefits, shall be
required to continue to employ any such Employee during such six-month period or
to provide or maintain any particular plan or benefit which was provided to or
maintained for Employees prior to the Closing. The Acquired Companies shall
treat all pre-Closing service completed by an Employee with any Acquired Company
or any Affiliate thereof, and any predecessor thereto, the same as post-Closing
service completed with such Acquired Company for vesting and eligibility
purposes, including waiting periods relating to preexisting conditions under
medical plans, vacations, severance pay, early retirement or any subsidized
benefit provided for under any employee benefit plan (including, but not limited
to, any "employee benefit plan" as defined in Section 3(3) of ERISA) maintained
by the Company on or after the Closing Date. Prior to the Closing, the Existing
Stockholder shall furnish the Purchaser with a list of the length of
58
<PAGE> 63
service with each Acquired Company or its Affiliates for each of the Employees.
For purposes of computing deductible amounts (or like adjustments or limitations
on coverage) under any employee welfare benefit plan (including, without
limitation, any "employee welfare benefit plan" as defined in Section 3(1) of
ERISA), expenses and claims previously recognized for similar purposes under the
applicable welfare benefit plan of any Acquired Company or any Affiliate shall
be credited or recognized under the comparable plan maintained after the Closing
Date by the Acquired Companies.
(b) After the Closing Date, the Company shall be responsible
for, and shall indemnify and hold harmless Parent, the Existing Stockholder and
their Affiliates and their officers, directors, employees, Affiliates and agents
and the fiduciaries (including plan administrators) of the Plans, from and
against, any and all claims, losses, damages, costs and expenses (including,
without limitation, attorneys' fees and expenses) and other liabilities and
obligations relating to or arising out of (i) all salaries, bonuses,
commissions, vacation entitlements and other benefits accrued but unpaid as of
the Closing and taken into account in determining the Net Working Capital
Amount, (ii) the employee benefit liabilities assumed by the Company under this
Agreement, and (iii) any claims of, or damages or penalties sought by, any
Employee, or any governmental entity on behalf of or concerning any Employee,
with respect to any act or failure to act by the Company or any Acquired Company
after the Closing Date to the extent arising from the employment, discharge,
layoff or termination of any Employee. The foregoing notwithstanding, nothing in
this Section 8.4(b) shall be deemed to limit the responsibility of the Existing
Stockholder or the Parent for the representations and warranties of the Existing
Stockholder set forth in Article V hereof or the indemnification of the
Purchaser Parties with respect thereto in accordance with Section 8.2 hereof.
(c) The Company shall, for a period of six months following
the Closing Date, operate the Acquired Companies in compliance with the Worker
Adjustment Retraining and Notification Act, 29 U.S.C. Section 2101 et. seq. (the
"WARN Act") and any other applicable similar state or local law concerning plant
closings. In the event the Company's actions should trigger any notice
requirement under the WARN Act or any other applicable similar state or local
law concerning plant closings during the 90 days following the Closing Date, the
Company shall be solely responsible for providing appropriate notice under such
plant closing law. The Company shall indemnify the Parent and the Existing
Stockholder for any claims, losses, damages, costs or expenses arising out of
the Company's failure to provide proper notice pursuant to the WARN Act or other
law regarding plant closings or otherwise comply with the WARN Act or such other
laws regarding plant closings.
(d) During the period commencing on the Closing Date and
ending on the date the Acquired Companies reasonably can arrange for health,
dental, short-term disability, long-term disability, life, accidental death and
dismemberment and business travel accident insurance independent of the
insurance provided to the employees of the Acquired Companies under the
MedPartners, Inc. Health and Welfare Benefits Plan (the "Parent Health Plan")
immediately prior to the Closing Date (but in no event later than September 30,
1999) (the "Welfare Benefit Transition Period"), the Parent shall permit the
employees of the Acquired Companies (and their covered dependents), including
those employees (and their covered dependents) who become eligible for such
insurance during the Welfare Benefit Transition Period, to participate in the
health, dental,
59
<PAGE> 64
short-term disability, long-term disability, life, accidental death and
dismemberment and business travel accident insurance in which employees of the
Acquired Companies participated immediately prior to the Closing Date; provided
(i) the Acquired Companies shall pay all costs associated with the provision of
such insurance (to the extent not paid for by employees of the Acquired
Companies), including any incidental administrative costs incurred by the Parent
and its Subsidiaries and any reasonable costs incurred as a result of any
changes in the form of payroll data which is provided by the Acquired Companies
to the plan administrators; (ii) the Acquired Companies shall promptly provide
all data the Parent requests with respect to the participation of such persons
in such insurance and (iii) the Acquired Companies shall comply with all notice
requirements associated with the provision of such insurance, including any
notice requirements imposed by third party administrators in connection with
payroll data. The Parent agrees to use reasonable best efforts to cooperate with
the Company to provide it with comprehensive health claims data with respect to
the Acquired Companies, and the Company agrees to reimburse the Parent for all
reasonable out-of-pocket expenses incurred by the Parent in providing such data.
Parent shall exercise reasonable efforts prior to the Closing Date to obtain the
consents of the Parent's applicable insurance providers to such Welfare Benefit
Transition Period insurance. The sole role of the Parent in permitting the
employees of the Acquired Companies (and their covered dependents) to
participate in such insurance subsequent to the Closing Date shall be to
facilitate the transition of health, dental, short-term disability, long-term
disability, life, accidental death and dismemberment and business travel
accident insurance coverage for such individuals and the Parent shall not be
deemed a plan fiduciary in such role, except as required under applicable law.
As provided under the Parent Health Plan, health and dental insurance coverage
will be provided based on covered expenses incurred prior to the end of the
Welfare Benefit Transition Period, and short-term disability, long-term
disability, life, accidental death and dismemberment and business travel
accident insurance coverage will be provided based on covered claims incurred
prior to the end of the Welfare Benefit Transition Period. The Acquired
Companies shall jointly and severally indemnify and hold harmless Parent and its
Subsidiaries from all liabilities, other than liabilities arising due to
Parent's or its Subsidiaries' gross negligence or willful misconduct, arising in
connection with the provision of, or the failure to provide, such insurance and
the benefits covered under such insurance by the Parent's applicable insurance
providers. Nothing in this paragraph (d) shall preclude amendment of the Parent
Health Plan in any manner after the Closing Date, to the extent permitted by the
Parent Health Plan, except where such amendment would cut-back the coverages of
employees of the Acquired Companies on a basis which is inconsistent with that
applicable to Parent's employees.
(e) COBRA. Any individual who is receiving or is otherwise
entitled to elect to receive medical continuation coverage under Parent's Health
Plan pursuant to Section 4980B of the Code as of Closing Date shall continue to
be eligible to participate under such plan, in accordance with Section 4980B of
the Code, and the Acquired Companies shall have no obligation or liability to
provide continuation coverage with respect to such individuals.
(f) 401(k) Retirement Plans. During the period from the
Closing Date until the date that the Acquired Companies reasonably arrange for
participation in a Company-sponsored 401(k) plan (the "Company 401(k) Plan") by
employees of the Acquired Companies, but in no event later than September 30,
1999 (the "Retirement Benefit Transition Period"), the Parent shall permit
60
<PAGE> 65
and shall cause its Subsidiaries to permit the employees of Acquired Companies
who participated in the Pacific Physician Services Profit Sharing and Retirement
Plan or the InPhyNet Administrative Services, Inc. 401(k) Retirement Plan (the
"Parent's 401(k) Plans") immediately prior to the Closing Date, as well as other
employees of the Acquired Companies who become eligible during the Retirement
Benefit Transition Period, to participate under the Parent's 401(k) Plans during
the Retirement Benefit Transition Period. The Acquired Companies shall reimburse
Parent and its Subsidiaries for the reasonable cost (internal and external) of
the provision and administration of benefits under the Parent's 401(k) Plans for
the current and former employees of the Acquired Companies during the Retirement
Benefit Transition Period. For purposes of participation in the Parent's 401(k)
Plans, the Acquired Companies shall adopt the Parent's 401(k) Plans. The Company
401(k) Plan shall recognize service credited under Parent's 401(k) Plans for all
purposes, including vesting. As soon as practicable after the last day of the
Retirement Benefit Transition Period, the Acquired Companies' current and former
employees' vested and nonvested account balances (including earnings through the
date of transfer) under the Parent's 401(k) Plans shall be transferred to one or
more tax-qualified defined contribution plans specified by the Company, in
accordance with the requirements of Code Section 414(l) and Title I of ERISA.
(g) Workers' Compensation. Except as set forth as in Section
8.4(j), Parent shall retain all liability and obligation with respect to
workers' compensation claims (filed before, on or after the Closing Date)
relating to injuries incurred prior to the Closing Date, except for those claims
relating to occupational illnesses and diseases that occur over a period of time
which have accident dates that transcend the Closing Date, in which case
proportional liability shall be determined by the Parent's and the Company's
respective insurance carriers and third party administrators.
(h) Flexible Spending Account Plans. On or prior to the
Closing Date, the Company shall adopt, or cause its Subsidiaries to adopt, a
health-care and dependent-care reimbursement account plan for the benefit of
current employees of the Acquired Companies who participate in the health-care
and dependent-care reimbursement accounts under the Parent Health Plan. On or
prior to the Closing Date, the Parent shall spinoff, or shall cause its
Subsidiaries to spinoff, the health-care and dependent-care reimbursement
account balances held under the Parent Health Plan for employees of the Acquired
Companies for 1999 and shall transfer, in cash, the related assets (and
liabilities) and recordkeeping information to the Company. The Company
thereafter shall have all liability and obligation with respect to reimbursement
of such employees under such accounts with respect to eligible health-care and
dependent-care expenses incurred in 1999; provided, that, the Parent shall, at
its option, act as a third party administrator with respect to such accounts
during the Welfare Benefit Transition Period.
(i) Special Bonus Plan. Subject to any deferred compensation
arrangements agreed to in writing between the Company and any of the senior
managers of the Company identified on Exhibit K attached hereto (the "Bonus
Participants"), at the Closing the Company shall make the special bonus payments
to the Bonus Participants in the amounts identified on Exhibit K attached
hereto, and such special bonuses shall not be taken into account as deductions
in determining the Net Working Capital Amount and shall not constitute
Indebtedness for purposes of this Agreement. The Company shall at the Closing
assume and shall thereafter discharge and pay in full any and all
61
<PAGE> 66
liabilities of the Parent and its Affiliates (other than the Acquired Companies)
with respect to such deferred compensation arrangements for the Bonus
Participants.
(j) Self-funded InPhyNet Coverages. The Acquired Companies
shall be responsible for all liabilities and obligations relating to (i)
self-funded medical claims incurred prior to the Closing Date by current or
former employees of InPhyNet Medical Management Inc. and its Subsidiaries which
relate to the Team Health division (or their covered dependents) and (ii)
self-funded workers' compensation claims with respect to injuries incurred prior
to July 1, 1997 by current or former employees of InPhyNet Medical Management
Inc. and its Subsidiaries which relate to the Team Health division. The Parent
shall be responsible for all liabilities and obligations relating to (i)
self-funded medical claims incurred prior to the Closing Date by current or
former employees of InPhyNet Medical Management Inc. and its Subsidiaries which
relate to the government services or managed healthcare divisions (or their
covered dependents) and (ii) self-funded workers' compensation claims with
respect to injuries incurred prior to July 1, 1997 by current or former
employees of InPhyNet Medical Management Inc. and its Subsidiaries which relate
to the government services or managed healthcare divisions.
(k) MedStock Plan. The Parent shall, on a timely basis,
reimburse any amounts due to employees of the Acquired Companies in accordance
with the terms of the MedStock Plan.
(l) The Parent and the Company shall act in good faith and
cooperate, and shall cause their Subsidiaries to act in good faith and
cooperate, to timely and efficiently effect the actions and transaction
contemplated by this Section 8.4, including any government filings necessary to
effect the transfer of assets and liabilities contemplated by this Section 8.4,
and the Parent and its Subsidiaries shall provide such information as is
reasonably requested by the Company, including, without limitation, participant
claim histories, for the purposes of putting replacement plans and coverages
into effect.
ARTICLE IX -- ADDITIONAL AGREEMENTS
SECTION 9.1 LEGEND FOR THE RESTRICTED SECURITIES.
(a) Restricted Securities are transferable only pursuant to
(i) public offerings registered under the Securities Act, (ii) Rule 144 or Rule
144A of the Securities and Exchange Commission (or any similar rule or rules
then in force) if such rule is available and (iii) subject to the conditions
specified in Section 9.1(b) below, any other legally available means of
transfer.
(b) In connection with the transfer of any Restricted
Securities (other than a transfer described in clauses (i) or (ii) of Section
9.1(a) above), the holder thereof shall deliver written notice to the Company
describing in reasonable detail the transfer or proposed transfer, together with
an opinion of counsel which (to the reasonable satisfaction of the Company) is
knowledgeable in securities law matters to the effect that such transfer of
Restricted Securities may be effected without registration of such Restricted
Securities under the Securities Act. In addition, if the holder of the
Restricted Securities delivers to the Company an opinion of counsel that no
62
<PAGE> 67
subsequent transfer of such Restricted Securities shall require registration
under the Securities Act, the Company shall promptly upon such contemplated
transfer deliver new certificates for such Restricted Securities which do not
bear the Securities Act legend set forth in Section 9.1(d). If the Company is
not required to deliver new certificates for such Restricted Securities not
bearing such legend, the holder thereof shall not transfer the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in this Section 9.1(b) and Section 9.1(d)
below.
(c) If any Restricted Securities become eligible for sale
pursuant to Rule 144(k), the Company shall, upon the request of the holder of
such Restricted Securities, remove the legend set forth in Section 9.1(d) below
from the certificates for such Restricted Securities.
(d) Each certificate or instrument representing Restricted
Securities shall be imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE
SECURITIES LAWS. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
RECAPITALIZATION AGREEMENT, DATED AS OF JANUARY 25, 1999, AS AMENDED
AND MODIFIED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND CERTAIN
INVESTORS, AND THE ISSUER RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT
TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE
ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE."
SECTION 9.2 PRESS RELEASES AND ANNOUNCEMENTS. Before the Closing Date,
no press releases related to this Agreement and the transactions contemplated
herein, or other announcements to the employees, customers, or suppliers of any
Acquired Company shall be issued by any Party without the mutual approval of all
Parties, except for any public disclosure which any Party in good faith believes
is required by law or regulation (in which case the disclosure shall be prepared
jointly by the Existing Stockholder and the Purchaser). After the Closing Date,
no press releases related to this Agreement and the transactions contemplated
herein, or other announcements to the employees, customers, or suppliers of any
Acquired Company shall be issued by the Parent or the Existing Stockholder
without the prior approval of the Purchaser, except for any public disclosure
which the Parent or the Existing Stockholder in good faith believes is required
by law or regulation (in which case the disclosure shall be prepared jointly by
the Existing Stockholder and the Purchaser); provided that after the Closing
Date, the Parent shall be permitted to make customary disclosures pursuant to
documents filed with the Securities and Exchange Commission.
SECTION 9.3 FURTHER TRANSFERS. Each Party shall execute and deliver
such further instruments of conveyance and transfer and take such additional
action as any other Party may
63
<PAGE> 68
reasonably request to effect, consummate, confirm, or evidence the consummation
of the transactions contemplated hereby.
SECTION 9.4 SPECIFIC PERFORMANCE. The Parties hereto acknowledge and
agree that in the event of a breach of this Agreement, money damages may be
inadequate and the non-breaching party may have no adequate remedy at law.
Accordingly, the Parties agree that each Party shall have the right, in addition
to any other rights and remedies existing in its favor, to enforce its rights
and the other Party's obligations hereunder not only by an action or actions for
damages but also by an action or actions for specific performance, injunctive,
and/or other equitable relief.
SECTION 9.5 EXPENSES. The Parties shall pay all of their own fees,
costs, and expenses (including, without limitation, fees, costs and expenses of
legal counsel, investment bankers, brokers, or other representatives and
consultants and appraisal fees, costs, and expenses) incurred in connection with
the negotiation of this Agreement and the other agreements contemplated hereby,
the performance of its obligations hereunder and thereunder, and the
consummation of the transactions contemplated hereby and thereby (collectively,
the "Transaction Expenses"); it being understood that if the transactions
contemplated hereby are consummated, the Company shall reimburse the Purchaser
and its investors for all of their Transaction Expenses. At the request of the
Existing Stockholder, the Transaction Expenses for which the Existing
Stockholder and the Parent are liable pursuant to this Section 9.5 may be
deducted from the Redemption Consideration and paid directly to the Existing
Stockholder's and Parent's legal counsel, investment bankers and other agents
and representatives. To the extent that any Acquired Company pays or becomes
liable with respect to any Transaction Expenses of the Parent, the Existing
Stockholder or any Acquired Company and such Transaction Expenses are not
otherwise taken into account as deductions in determining the Net Working
Capital Amount, the Redemption Consideration shall be reduced dollar-for-dollar;
provided that there shall be no such reduction to the Redemption Consideration
for legal fees and expenses to counsel for the Senior Managers in connection
with the negotiation and execution of the Senior Management Agreements.
SECTION 9.6 EXCLUSIVITY. Until this Agreement is terminated by its
terms, no Seller Party shall (and no Seller Party shall cause or permit any
Insider or agent or any other Person acting on its behalf to), discuss or
negotiate with any other Person a possible sale of all or part of any Acquired
Company's securities or assets (except for dispositions of assets in the
Ordinary Course of Business), whether such transaction takes the form of a sale
of stock, merger, liquidation, dissolution, reorganization, recapitalization,
consolidation, sale of assets or otherwise (an "Acquisition Proposal"), or
provide any information to any other Person concerning any Acquired Company
(other than information which the Acquired Companies provide to other Persons in
the Ordinary Course of Business). The Seller Parties and their agents and other
Persons acting on their behalf (a) do not have any agreement, arrangement or
understanding with respect to any Acquisition Proposal (except this Agreement),
(b) shall cease and cause to be terminated any and all discussions with third
parties regarding any Acquisition Proposal, and (c) shall promptly notify the
Purchaser if any Acquisition Proposal, or any inquiry or contact with any person
or entity with respect thereto, is made.
64
<PAGE> 69
SECTION 9.7 BOOKS AND RECORDS. Unless otherwise consented to in writing
by the Parent or the Purchaser (as the case may be), the Purchaser and the
Parent will not, for a period of ten years following the date hereof, destroy,
alter, or otherwise dispose of any of the books and records of any Acquired
Company acquired by the Purchaser hereunder or retained by the Parent or any of
its Affiliates without first offering to surrender to the Parent or the
Purchaser such books and records or any portion thereof of which the Parent or
the Purchaser may intend to destroy, alter, or dispose. The Purchaser and the
Parent will allow the other party's representatives, attorneys, and accountants
access to such books and records, upon reasonable request for during such
party's normal business hours, for the purpose of examining and copying the same
in connection with any matter whether or not related to or arising out of this
Agreement or the transactions contemplated hereby.
SECTION 9.8 NONCOMPETITION, NONSOLICITATION, AND CONFIDENTIALITY. From
and after the Closing:
(a) Noncompetition. In consideration of the mutual covenants
provided for herein to the Parent and the Existing Stockholder at the Closing,
during the period beginning on the Closing Date and ending on the fifth
anniversary of the Closing Date (the "Noncompete Period"), none of the Parent,
the Existing Stockholder or any of their then Affiliates shall engage (whether
as an owner, operator, manager, employee, officer, director, consultant,
advisor, representative, or otherwise) directly or indirectly in any business
that provides outsourced staffing or those related billing services being
provided by the Acquired Companies as conducted on the date hereof to hospitals
and clinics anywhere within the United States; provided that ownership of less
than 5% of the outstanding stock of any publicly traded corporation shall not be
deemed to be engaging solely by reason thereof in any of its businesses;
provided further that the Parent and the Existing Stockholder shall not be
deemed to be in breach of this Section 9.8(a) solely as a result of owning a
direct or indirect interest in a business whose other owner engages in the
activities prohibited hereunder. The Parties hereto agree that the covenant set
forth in this Section 9.8 is reasonable with respect to its duration,
geographical area, and scope. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 9.8 is invalid
or unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(b) Nonsolicitation. Except as otherwise agreed by the Company
and the Parent, the Parent and the Existing Stockholder agree that, during the
Noncompete Period, they will not (and they will cause their Affiliates to not)
directly or indirectly contact, approach, or solicit for the purpose of offering
employment to or hiring (whether as an employee, consultant, agent, independent
contractor, or otherwise) or hire any employee or independent contractor of any
Acquired Company at any time during the six month period before the Closing Date
or during the Noncompete Period, without the prior written consent of the
Company; provided that nothing in this Section 9.8(b) shall prohibit the Parent,
the Existing Stockholder or their Affiliates from taking any
65
<PAGE> 70
action otherwise prohibited by this Section 9.8(b) with respect to any employee
whose employment is first terminated or independent contractor whose engagement
is first terminated by an Acquired Company.
(c) Confidentiality. Each of the Existing Stockholder and the
Parent shall treat and hold as confidential any information concerning the
business and affairs of the Acquired Companies (including, without limitation,
all Proprietary Rights and all information learned in connection with activities
under Section 9.12 hereof, but excluding tax returns and related records) that
is not already generally available to the public (the "Confidential
Information"), refrain from using any of the Confidential Information except in
connection with this Agreement, and at any time upon the request of the
Purchaser deliver promptly to the Purchaser or destroy, at the request and
option of the Purchaser, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession or under its control. In
the event that the Existing Stockholder or the Parent is requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, it shall notify the Purchaser
promptly of the request or requirement so that the Purchaser may seek an
appropriate protective order or waive compliance with the provisions of this
Section 9.8(c). If, in the absence of a protective order or the receipt of a
waiver hereunder, the Parent or the Existing Stockholder is, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal or
else stand liable for contempt, it may disclose the Confidential Information to
the tribunal; provided that it shall use its best efforts to obtain, at the
request and expense of the Purchaser, an order or other assurance that
confidential treatment shall be accorded to such portion of the Confidential
Information required to be disclosed as the Purchaser shall designate.
(d) Trade Names. The Parent and the Existing Stockholder shall
not use or permit any of its Affiliates to use the "Team Health" name, the names
"Team Health Radiology", "Team Health Radiology Services", "Team Health West",
Team Health Southeast", "Park Med Occupational Services", "Doctor's Essential
Services, Inc.", "DESI" or "InPhyNet", any names of the Acquired Companies other
than names containing the term "EMSA", or any names or symbols confusingly
similar thereto in any manner anywhere in the world after Closing.
(e) Remedy for Breach. The Parent and Existing Stockholder
acknowledge and agree that in the event of a breach of any of the provisions of
this Section 9.8, monetary damages shall not constitute a sufficient remedy.
Consequently, in the event of any such breach, the Company, the Purchaser,
and/or their respective successors or assigns may, in addition to other rights
and remedies existing in their favor, apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce or prevent any violations of the provisions hereof,
in each case without the requirement of posting a bond or proving actual
damages.
SECTION 9.9 NONSOLICITATION BY THE PURCHASER. Except as otherwise
agreed by the Purchaser and the Parent, for a period of two years following the
date hereof, (a) if this Agreement is terminated for any reason pursuant to
Article VII, the Purchaser shall not, directly or indirectly,
66
<PAGE> 71
actively solicit or induce any employee, agent or contractor of any Acquired
Company, the Existing Stockholder or the Parent to leave such employment and
become an employee, agent or contractor of the Purchaser or any of its
Affiliates if the Purchaser had contact with such employee, agent or contractor
in connection with the transactions contemplated herein and (b) neither the
Purchaser, nor any Acquired Company shall, directly or indirectly, actively
solicit or induce any employee, agent or contractor of the Parent or any
Affiliate thereof (other than an Acquired Company) to leave such employment and
become an employee, agent or contractor of the Purchaser, any Acquired Company
or any of their respective Affiliates; provided that nothing in this Section 9.9
shall prohibit the Purchaser, any Acquired Company or any of their Affiliates
from taking any action otherwise prohibited by this Section 9.9 with respect to
any Person whose employment is first terminated by the Parent, an Acquired
Company or an Affiliate thereof, as the case may be. This Section 9.9 supersedes
Paragraph 5 of the Confidentiality Agreement.
SECTION 9.10 USE OF PARENT'S NAMES AND LOGOS. Except as expressly set
forth in this Section 9.10, it is expressly agreed that the Purchaser is not
purchasing, acquiring or otherwise obtaining any right, title or interest in the
names "MedPartners, Inc.", "EMSA" or any tradenames, trademarks, identifying
logos or service marks related thereto or employing the word "MedPartners" or
"EMSA" or any part or variation of any of the foregoing or any confusingly
similar tradename, trademark or logo (collectively, the "Seller Trademarks and
Logos"). Except as expressly set forth in this Section 9.10, the Purchaser
agrees that, neither it nor any of its Affiliates shall make any use of the
Seller Trademarks and Logos from and after the Closing Date. At or prior to the
Closing, the Existing Stockholder shall cause the name of each Acquired Company
that contains the word "MedPartners" or "EMSA" to be changed to a name that does
not contain such words. In recognition of the fact that certain of the Acquired
Companies' assets have imprinted thereon the Seller Trademark and Logos, the
Company shall remove, within one year after the Closing, such name or logotype
from, or render the same illegible on, all assets of the Acquired Companies on
which they are imprinted or legible or, in the alternative, shall discontinue
use of such assets. Subject to the foregoing, during the one year period
following Closing, the Acquired Companies are granted a non-exclusive,
nonassignable royalty-free license to use all assets utilizing the Seller
Trademark and Logos. The Acquired Companies shall not assert any claim of
ownership of, or any claim to, any goodwill or reputation associated with the
Seller Trademarks and Logos by reason of the Acquired Companies' use of the
Seller Trademarks and Logos pursuant to this Section 9.10 or otherwise. The
Company shall not take action in derogation of any of the rights of the Parent
to the Seller Trademarks and Logos. The Acquired Companies shall maintain
quality standards for all assets utilizing the Seller Trademarks and Logos that
are substantially equivalent to the standards currently used by the Parent in
connection with such assets.
SECTION 9.11 MEDICAL MALPRACTICE MATTERS. The Parent and the Purchaser
agree that on or prior to the Closing Date, the Parent shall acquire (at its
sole cost and expense) for the benefit of the Purchaser, insurance policies
covering the Tail Malpractice Liability in the amounts and reflecting the terms
and conditions set forth on Exhibit L attached hereto and such other terms and
conditions as are reasonable and customary for the industry and mutually
acceptable to the Parent and the Purchaser.
67
<PAGE> 72
SECTION 9.12 TRANSITION SERVICES.
(a) Plantation Premises. With respect to the Leased Real
Property located at 1200 South Pine Island Road, Plantation, Florida (the
"Plantation Premises"), the Parent shall cause its Affiliate, MedPartners
Acquisition Corporation, as the current tenant under such Real Property Lease
(the "Plantation Tenant"), to sublease to the Plantation Subtenant (as defined
below) that portion of the Plantation Premises which is used and occupied by one
or more of the Acquired Companies as of the date of this Agreement (such
Acquired Companies are referred to collectively herein as the "Plantation
Subtenant"), from the Closing Date until March 1, 2000, which term shall be
renewed automatically thereafter for successive periods of one (1) month each
until the Plantation Tenant or the Plantation Subtenant provide written notice
of non-renewal to the other party at least six months prior to the expiration of
the initial term or any renewal term, at a monthly rent equal to (i) $41,947,
payable on or prior to the first day of each calendar month (except for the
initial partial month, which shall be payable at Closing), plus (ii) 27.15% of
all excess expenses for the Plantation Premises which are charged to Plantation
Tenant under such Real Property Lease, payable upon delivery to the Plantation
Subtenant of documentation evidencing such charges (which amounts in clauses (i)
and (ii) shall be prorated on a per diem basis for the initial month if less
than a full calendar month), and which otherwise shall be on the same terms and
conditions as currently used or occupied by the Plantation Subtenant.
(b) Tampa Premises. With respect to the Leased Real Property
located at 6200 Courtney Campbell Causeway, Tampa, Florida (the "Tampa
Premises"), the Parent shall cause its Affiliate, MedPartners of Florida, Inc.
(the "Tampa Tenant"), as the current tenant under such Real Property Lease, to
sublease to the Tampa Subtenant (as defined below) that portion of the Tampa
Premises which is used and occupied by one or more of the Acquired Companies as
of the date of this Agreement (such Acquired Companies are referred to
collectively herein as the "Tampa Subtenant"), from the Closing until the last
day of the sixth (6th) calendar month after the Closing Date, which term shall
be renewed automatically thereafter for successive periods of one (1) month each
until the Tampa Tenant or the Tampa Subtenant provide written notice of
non-renewal to the other party at least thirty (30) days prior to the expiration
of the initial term or any renewal term, at a monthly rent equal to (i) $ 6,652,
payable on or prior to the first day of each calendar month (except for the
initial partial month, which shall be payable at Closing), plus (ii) 100% of all
excess expenses for the Tampa Premises which are charged to Tampa Tenant under
such Real Property Lease, payable upon delivery to Tampa Subtenant of
documentation evidencing such charges (which amounts in clauses (i) and (ii)
shall be prorated on a per diem basis for the initial month if less than a full
calendar month), and which otherwise shall be on the same terms and conditions
as currently used or occupied by the Tampa Subtenant.
(c) Akron Premises. With respect to the Leased Real Property
located at 2620 Ridgewood Road, Akron, Ohio (the "Akron Premises"), the Acquired
Company which is the tenant under such Real Property Lease (the "Akron Tenant"),
shall sublease to the Akron Subtenant (as defined below) that portion of the
Akron Premises consisting of approximately 3,738 square feet which is used and
occupied by the Parent or one or more of the Affiliates as of the date of this
Agreement (the "Akron Subtenant"), from the Closing Date until the last day of
the sixth (6th) full
68
<PAGE> 73
calendar month after the Closing, which term shall be renewed automatically
thereafter for successive periods of one (1) month each until Akron Tenant or
the Akron Subtenant provide written notice of non-renewal to the other party at
least thirty (30) days prior to the expiration of the initial term or any
renewal term, at a monthly rent equal to (i) $4,707 payable on or prior to the
first day of each calendar month (except for the initial partial month, which
shall be payable at Closing), plus (ii) 11.69% of excess expenses for the Akron
Premises which are charged to Akron Tenant under such Real Property Lease plus
(iii) 11.69% of electricity expenses which are charged to the Akron Tenant under
such Real Property Lease, payable upon delivery to Akron Subtenant of
documentation evidencing such charges (which amounts in clauses (i) and (ii)
shall be prorated on a per diem basis for the initial month if less than a full
calendar month), and which otherwise shall be on the same terms and conditions
as currently used or occupied by the Akron Subtenant.
(d) Plantation Phone System. The Parent agrees to provide to
the Acquired Companies, for as long as one of the Acquired Companies is the
Plantation Subtenant, access to the existing telephone system at the Plantation
Premises, in the manner, cost and at a relative level of service consistent with
that provided by the Parent to the Acquired Companies immediately prior to the
date hereof.
(e) Wide Area Network. The Parent agrees to provide to the
Acquired Companies, for the longer of six (6) months following the Closing or
until the Acquired Companies are no longer accessing the Parent's SAP R/3
software pursuant to paragraph (f) below, access to the Parent's wide area
network via MCI frame-relay circuits, in the manner, cost and at a relative
level of service consistent with that provided by the Parent to the Acquired
Companies immediately prior to the date hereof.
(f) SAP R/3 Software. The Parent agrees to provide to the
Acquired Companies, accounting, finance and related support services, including
but not limited to full access to and use of the Parent's SAP R/3 software and
related systems, through the date which is six (6) months following the Closing,
in the manner, cost (with the access and use cost in no event exceeding $10,000
per month) and at a relative level of service consistent with that provided by
the Parent to the Acquired Companies immediately prior to the date hereof;
provided that to the extent any support services cannot be provided by the
Parent itself and Parent is required to obtain the services of a third party to
provide such support, the Acquired Companies shall reimburse the Parent for all
amounts paid to such third parties for such support. If the Company desires to
use the SAP R/3 software and related systems beyond the date which is six (6)
months following the Closing, the Parent will (at the Company's sole cost and
expense) reasonably cooperate in good faith with the Company in negotiating
satisfactory arrangements with SAP America, Inc.
(g) DEC 8420 Services. The Acquired Companies agree to provide
to the Parent, for three (3) months following the Closing, systems hardware
support related to its COMPAQ (DEC) Alpha model 8420, including but not limited
to digital equipment maintenance and operations support, in the manner and at a
relative level of service consistent with that provided by the Acquired
Companies to the Parent as of the end of the third quarter of 1998, for the
amount of $48,115 per month, payable monthly.
69
<PAGE> 74
(h) PC & Network Support. The Acquired Companies agree to
provide to the Parent, for three (3) months following the Closing, PC and Local
Area Network support, in the manner and at a relative level of service
consistent with that provided by the Acquired Companies to the Parent as of the
end of the third quarter of 1998, for the amount of $7,600 per month, payable
monthly.
(i) DEC 4100 Services. The Acquired Companies agree to provide
to the Parent, for three (3) months following the Closing, information
technology support related to its COMPAQ (DEC) Alpha model 4100, including but
not limited to server hardware and systems maintenance, computer operations
support and software applications support, in the manner and at a relative level
of service consistent with that provided by the Acquired Companies to the Parent
as of the end of the third quarter of 1998, for the amount of $9,708 per month,
payable monthly.
SECTION 9.13 EMSA LIMITED PARTNERSHIP. The Parties agree that from and
after the Closing Date, the Parent shall cause EMSA Limited Partnership to enter
into an agreement to provide that any and all payments received by EMSA Limited
Partnership related to third-party payor contracts be forwarded immediately to
EMSA Contracting Services, Inc.
SECTION 9.14 CERTAIN VENDORS. Prior to the Closing Date, those vendors
specified on Exhibit M hereto that have supplied goods or services to the
Acquired Companies through the Parent's centralized purchasing programs shall be
notified that, from and after the Closing Date, all goods and services ordered
by the Acquired Companies are for the account of the Acquired Companies and that
the Parent has no obligation with respect thereto. To the extent deemed
appropriate by the Acquired Companies, on or prior to the Closing Date, the
Acquired Companies shall enter into purchase contracts with such vendors, under
which the Parent shall have no liability.
SECTION 9.15 IDX. Prior to the Closing Date, the Parent and the
Acquired Companies shall enter into an agreement with IDX Systems Corporation
which shall provide for IDX licenses to be allocated in accordance with Exhibit
N attached hereto.
ARTICLE X -- MISCELLANEOUS
SECTION 10.1 AMENDMENT AND WAIVER. This Agreement may be amended and
any provision of this Agreement may be waived, provided that any such amendment
or waiver shall be binding upon a Party only if such amendment or waiver is set
forth in a writing executed by the Purchaser and the Existing Stockholder. No
course of dealing between or among any Persons having any interest in this
Agreement shall be deemed effective to modify, amend, or discharge any part of
this Agreement or any rights or obligations of any Party under or by reason of
this Agreement.
SECTION 10.2 NOTICES. All notices, demands, and other communications
given or delivered under this Agreement shall be in writing and shall be deemed
to have been given, (i) when received if given in person, (ii) on the date of
electronic confirmation of receipt if sent by telex, facsimile or other wire
transmission, (iii) three days after being deposited in the U.S. mail, certified
or registered
70
<PAGE> 75
mail, postage prepaid, or (iv) one day after being deposited with a reputable
overnight courier. Notices, demands, and communications to the Parties shall,
unless another address is specified in writing, be sent to the address or
telecopy number indicated below:
<TABLE>
<CAPTION>
Notices to the Parent or the Existing Stockholder
or, before the Closing, notices to the Company: with a copy to
<S> <C>
c/o MedPartners, Inc. King & Spalding
3000 Galleria Tower 191 Peachtree Street
Suite 1000 Atlanta, Georgia 30303-1763
Birmingham, Alabama 35244 Fax No. (404) 572-5145
Fax No. (205) 982-7709 Attention: William R. Spalding, Esq.
Attention: Legal Services
</TABLE>
<TABLE>
<CAPTION>
Notices to the Purchaser
or, after the Closing, notices to the Company: with a copy to:
<S> <C>
Team Health Holdings, L.L.C. Kirkland & Ellis
c/o Madison Dearborn Partners 200 East Randolph
Three First National Plaza, Suite 3800 Chicago, Illinois 60601
Chicago, Illinois 60602 Attention: Sanford E. Perl, Esq.
Attention: Timothy Sullivan Fax No. (312) 861-2200
Fax No. (312) 895-1001
</TABLE>
and
Cornerstone Equity Investors, LLC
717 Fifth Avenue, Suite 1100
New York, NY 10022
Attention: Dana J. O'Brien
Fax No. (212) 826-6798
and
Healthcare Equity Partners
901 Warranville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
Fax No. (630) 435-0370
SECTION 10.3 BINDING AGREEMENT; ASSIGNMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns; provided that
neither this Agreement nor any of the rights, interests, or
71
<PAGE> 76
obligations hereunder may be assigned by any Party without the prior written
consent of the other Parties; provided that
(a) the Purchaser may at any time before the Closing, assign,
in whole or in part, its rights and obligations pursuant to this Agreement to
one or more of its Affiliates; provided that the Purchaser will nonetheless
remain liable for all of its obligations hereunder;
(b) the Purchaser and the Company may each assign its rights
under this Agreement for collateral security purposes to any lender providing
financing to the Purchaser, the Company, or any of their Affiliates and any such
lender may exercise all of the rights and remedies of the Purchaser and the
Company hereunder; and
(c) the Purchaser and the Company may assign its rights under
this Agreement, in whole or in part, to any subsequent purchaser of the
Purchaser or any Acquired Company or any material portion of its assets (whether
such sale is structured as a sale of stock, a sales of assets, a merger, or
otherwise); provided that the Purchaser and the Company will nonetheless remain
liable for all of its obligations hereunder.
SECTION 10.4 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
SECTION 10.5 NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the Parties to express
their mutual intent, and no rule of strict construction shall be applied against
any Person. The Parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event of an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement.
SECTION 10.6 CAPTIONS. The captions used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
shall not be deemed to limit, characterize, or in any way affect any provision
of this Agreement, and all provisions of this Agreement shall be enforced and
construed as if no caption had been used in this Agreement.
SECTION 10.7 ENTIRE AGREEMENT. This Agreement and the documents
referred to herein contain the entire agreement between the Parties and
supersede any prior understandings, agreements, or representations by or between
the Parties, written or oral, which may have related to the subject matter
hereof in any way; provided that if the Agreement is terminated pursuant to
Section 7.1(g), the expense reimbursement letter dated November 20, 1998 between
the Parent and certain of the Purchaser's stockholders shall remain in full
force and effect.
72
<PAGE> 77
SECTION 10.8 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
SECTION 10.9 GOVERNING LAW. All questions concerning the construction,
validity, and interpretation of this Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York, without
giving effect to any choice of law or conflict of law provision (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
SECTION 10.10 JURISDICTION AND CONSENT TO SERVICE. Without limiting the
jurisdiction or venue of any other court, each of Parties (a) agrees that any
suit, action or proceeding arising out of or relating to this Agreement may be
brought solely in the state or federal courts of New York; (b) consents to the
exclusive jurisdiction of each such court in any suit, action or proceeding
relating to or arising out of this Agreement; (c) waives any objection which it
may have to the laying of venue in any such suit, action or proceeding in any
such court; and (d) agrees that service of any court paper may be made in such
manner as may be provided under applicable laws or court rules governing service
of process.
SECTION 10.11 PARTIES IN INTEREST. Nothing in this Agreement, express
or implied, is intended to confer on any Person, other than the Parties and
their respective successors and assigns, any rights or remedies under or by
virtue of this Agreement.
SECTION 10.12 SCHEDULES. Information disclosed in the Disclosure Letter
shall be deemed to be disclosed for purposes of qualifying any representation
and warranty in Article V to the extent that such information is reasonably
apparent on its face as being applicable to such representation and warranty.
* * * * *
73
<PAGE> 78
IN WITNESS WHEREOF, the Parties have executed this
Recapitalization Agreement as of the date first written above.
TEAM HEALTH, INC.
By: ______________________________
Its: ______________________________
MEDPARTNERS, INC.
By: ______________________________
Its: ______________________________
PACIFIC PHYSICIAN SERVICES, INC.
By: ______________________________
Its: ______________________________
TEAM HEALTH HOLDINGS, L.L.C.
By: ______________________________
Its: ______________________________
<PAGE> 1
EXHIBIT 3.1
Filed in the Office of
Secretary of State of
West Virginia, this date:
ARTICLES OF INCORPORATION
OF
ALLIANCE CORPORATION
The undersigned, acting to incorporate a corporation under Section 27, Article
1, Chapter 31, of the Code of West Virginia, adopt the following Articles of
Incorporation for such corporation:
I. The undersigned agree to become a corporation by the name of
ALLIANCE CORPORATION.
II. The address of the principal office of said corporation will be 419
Brooks Street, in the City of Charleston, in the county of Kanawha, State of
West Virginia, ZIP 25301.
III. The purpose for which this corporation is formed as follows:
To practice the profession of medicine through physician and surgeons
licensed to practice in the State of West Virginia.
In general, to carry on any business not contrary to the laws of the
State of West Virginia, and to have and exercise all the powers, rights and
privileges conferred by the laws of West Virginia upon corporations formed under
such laws, and to do any and all of the things hereinabove set forth to the same
extent as natural persons might or could do.
IV. Provisions granting pre-emptive rights are: None.
V. Provisions for the regulation of the internal affairs of the
corporation are: In accordance with the corporation's Bylaws to be adopted.
VI. The amount of the total authorized capital stock of said
corporation shall be One Thousand Dollars ($l,000.00), which shall be divided
into one thousand shares (1,000) of the par value of One Dollar ($1.00) each.
Only physicians and surgeons licensed to practice medicine in the State of West
Virginia may acquire or own stock in this corporation.
VII. The full name and address of the incorporation is:
Jack D. Tolliver
419 Brooks Street
Charleston, WV 25301
<PAGE> 2
VIII. The existence of this corporation is to be perpetual.
IX. The name and address of the appointed person to whom notice or
process may be sent is:
Jack D. Tolliver
419 Brooks Street
Charleston, WV 25301
X. The names and addresses of the directors constituting the initial
board of directors of the corporation are:
Jack D. Tolliver David E. Seidler
419 Brooks Street 419 Brooks Street
Charleston, WV 25301 Charleston, WV 25301
-2-
<PAGE> 3
THE UNDERSIGNED, for the purpose of forming a corporation under the
laws of the State of West Virginia, does make and file this Articles of
Incorporation, and does accordingly hereunto set his hand and seal this 23rd day
of December, 1994.
Jack D. Tolliver (SEAL)
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
I, /s/ Patty L. Keim, a Notary Public in and for the County and State
aforesaid, hereby certify that JACK D. TOLLIVER, whose name is signed to the
foregoing Articles of Incorporation, bearing date the 23 day of December, 1994,
this day personally appeared before me in my said County and acknowledged his
signature to be the same.
Given under my hand and official seal this 23 day of December, 1994.
My commission expires June 28, 1999
/s/ Patty L. Keim
_____________________________
Notary Public
(NOTARIAL SEAL)
Articles of Incorporation Prepared By:
James M. Sturgeon, Jr.
PAULEY, CURRY, STURGEON & VANDERFORD
P. 0. Box 2786
Charleston, WV 25330
-3-
<PAGE> 4
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
ALLIANCE CORPORATION
Pursuant to the provisions of Section 31, Article 1, Chapter 31 of the
Code of West Virginia, the undersigned corporation adopts the following Articles
of Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is: Alliance Corporation.
SECOND: The following Amendments of the Articles of Incorporation were
adopted by the shareholders of the corporation on January 14, 1997, in the
manner prescribed in Sections 107 and 147, Article 1, Chapter 31.
Article III of the Articles of Incorporation of Alliance
Corporation is hereby stricken and the following language
substituted in its place and stead:
III. The purpose for which corporation is formed is
as follows: To provide medical management services and to
carry on any business not contrary to the laws of the State of
West Virginia and to have and exercise all powers, rights and
privileges conferred by the laws of West Virginia upon
corporations formed under such laws and to do any and all the
things hereinabove set forth to the same extent as natural
persons might or could do.
Article VI of the Articles of Incorporation of Alliance
Corporation is hereby stricken and the following language
substituted in its place and stead:
The amount of the total authorized capital stock of
said corporation shall be One Thousand Dollars ($1,000.00),
which shall be divided into one thousand shares (1,000) of the
par value of One Dollar ($1.00) each.
THIRD: The number of shares of the corporation outstanding at the time
of such adoption was 100; and the number of shares entitled to vote thereon was
100.
FOURTH: The designation and number of outstanding shares of each class
entitled to vote thereon as a class were as follows:
<TABLE>
<CAPTION>
Class Number of Shares
----- ----------------
<S> <C>
Common 100
</TABLE>
<PAGE> 5
FIFTH: The number of shares voted for such amendment was 100; and the
number of shares voted against such amendment was none.
SIXTH: The number of shares of each class entitled to vote thereon as a
class voted for and against such amendment, respectively, was:
<TABLE>
<CAPTION>
Class Number of Shares Voted
----- ----------------------
For Against
--- -------
<S> <C> <C>
Common 100 0
</TABLE>
SEVENTH: The manner in which any exchange, reclassification, or
cancellation of issued shares provided for in the amendment shall be effected is
as follows: None.
EIGHTH: The manner in which such amendment affects a change in the
amount of stated capital, and the amount of stated capital as changed by such
amendment, are as follows: None.
Dated: January 14, 1997
-2-
<PAGE> 6
Alliance Corporation ___________________________
By: /s/ Jack D. Tolliver
_________________________
Its: President
And /s/ David E. Seidle
_________________________
Its: Secretary
STATE OF WEST VIRGINIA
COUNTY OF KANAWRA, to-wit:
I, /s/ Patty L. Keim, a Notary Public, do hereby certify that on this
14th day of January, 1997, personally appeared before me JACK D. TOLLIVER who,
being by me first duly sworn, declared that he is the President of ALLIANCE
CORPORATION, that he signed the foregoing document as President of the
corporation, and that the statements therein contained are true.
Given under my hand this 14th day of January 1997.
My commission expires January 28, 1999.
/s/ Patty L. Keim
________________________
Notary Public
(NOTARIAL SEAL)
THIS DOCUMENT PREPARED BY:
James M. Sturgeon, Jr.
PAULEY, CURRY, STURGEON & VANDERFORD
P. O. Box 2786
Charleston, WV 25330
Tel: (304) 342-6000
-3-
<PAGE> 1
EXHIBIT 3.2
BYLAWS
of
ALLIANCE CORPORATION
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting, The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such place, either within or
without the State of West Virginia on such date, and at such time, as the Board
of Directors may by resolution provide.
Section 2. Special Meetings. Special meetings of the shareholders may
be called at any time by the Board of Directors or the holders of not less than
one-tenth of all the shares entitled to vote at the meeting.
Section 3. Notice of Meetings. A written or printed notice stating the
date, time and place of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered or
mailed by or at the direction of the President, the Secretary, or the officer or
person calling the meeting to each shareholder of record or member entitled to
vote at such meeting, at his or her address as it appears upon the records of
the Corporation, not less than ten (10) nor more than fifty (50) days prior to
such meeting. Notice of such meeting may be waived in writing by any shareholder
before or after the meeting. Notice of any adjourned meeting of the shareholders
shall not be required if the date, time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken, unless
the Board of Directors sets a new record date for such meeting in which case
notice shall be given in the manner provided in this Section 3. Notice of the
time, place or purpose of any meeting of shareholders, members or directors, may
be dispensed with if every shareholder or member shall attend either in person
or by proxy, or if every director shall attend in person.
Section 4. Quorum and Shareholder Vote. A quorum for action on any
subject matter at any annual or special meeting of shareholders shall exist when
the holders of shares entitled to vote a majority of the votes entitled to be
cast on such subject matter are represented in person or by proxy at such
meeting. In no event shall a quorum consist of less than one-third of the shares
entitled to vote at the meeting. If a quorum is present, the affirmative vote of
the majority of the shares represented or members present at the meeting and
entitled to vote on the subject matter, shall be the act of the shareholders or
members, unless a greater vote is required by the Articles of Incorporation or
these Bylaws. If a quorum is not present, a meeting of shareholders may be
adjourned from time to time by the vote of shares having a majority of the votes
of the shares represented at such meeting, until a quorum is present. When a
quorum is present at the reconvening of any adjourned meeting, and if the
requirements of Section 3 of this Article I have been observed, then any
business may be transacted at such reconvened meeting in the same manner and to
the same extent as it might have been transacted at the meeting as originally
noticed.
<PAGE> 2
Section 5. Proxies. A shareholder may vote either in person or by proxy
duly executed writing by the shareholder or by his duly authorized
attorney-in-fact. Unless otherwise provided in the proxy, no proxy shall be
valid after eleven months from the date of its execution.
Section 6. Conduct of Shareholders' Meetings. The President shall
preside at shareholders' meetings and shall establish such reasonable procedures
for the conduct of shareholders' meetings as such officer deems to be necessary
or appropriate, subject to the authority of the Board of Directors to appoint a
different presiding officer and to establish additional or different procedures.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the Company shall
be managed under the direction of, the Board of Directors, subject to any
restrictions imposed by law, by the Articles of Incorporation, by these Bylaws
or by agreement among the shareholders that are otherwise lawful.
Section 2. Number and Term of Directors. The number of directors shall
be such number as is provided for in the Articles of Incorporation or these
Bylaws or elected by the shareholders from time to time, but shall not be less
than one (1), and shall be reduced upon the resignation of any director to the
number still in office. Unless otherwise permitted by the West Virginia Business
Corporation Code, directors shall be natural persons who are 18 years of age or
older. At each annual meeting the shareholders shall elect the directors, who
shall serve until their successors are elected and qualified; provided that at
any shareholders' meeting with respect to which notice of such purpose has been
given, the entire Board of Directors or any individual director may be removed,
with or without cause, by the affirmative vote of the holders of a majority of
the shares entitled to vote at an election of directors.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of Notice.
The Board of Directors may hold regular meetings in accordance with such
schedule as may be established by the Board of Directors, and no notice of such
regular meetings need be given. Special meetings of the Board of Directors may
be called by the Chairman of the Board or by any Director, and written notice of
the date, time and place of such meetings shall be given by each director by
first class mail at least seven (7) days before the meeting or by telephone,
telegraph or cablegram or in person at least two (2) days before the meeting.
Any director may waive notice required to be given of a meeting, either before
or after the meeting, and shall be deemed to have waived notice if she or he is
present at or participates in such meeting unless the director at the beginning
of the meeting (or promptly upon the director's arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting. Neither the business to be transacted
at, nor the purpose of, any meeting of the Board of Directors need be stated in
the notice or waiver of notice of such meeting, except notice shall be required
to be given to every director when the meeting is being called for the purpose
of amending the bylaws or for the purpose of authorizing the sale of all or
substantially all of the assets of the corporation, in which case such
-2-
<PAGE> 3
notice shall set forth the nature of the business intended to be transacted. Any
meeting may held at any place within or without the State of West Virginia.
Section 4. Quorum; Vote Requirement. A majority of the number of
directors fixed in accordance with Article II, Section 2 of these Bylaws shall
constitute a quorum for the transaction of business at any meeting, unless a
greater number is required by the Articles of Incorporation. When a quorum is
present, the vote of a majority of the directors present shall be the act of the
Board of Directors, unless a greater vote is required by law, by the Articles of
Incorporation or by these Bylaws. Any number less than a quorum present may
adjourn any directors meeting until a quorum is present.
Section 5. Action of Directors Without a Meeting. Any action required
by law to be taken at a meeting of the Board of Directors, or any action which
may be taken at a meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if written consent, setting forth the
action so taken, shall be signed by all the Directors, or all the members of the
committee, as the case may be, and be filed with the minutes of the proceedings
of the Board or the committee. Such consent shall have the same force and effect
as a unanimous vote of the Board or the committee, as the case may be.
Section 6. Committees. The Board of Directors may, in its discretion,
appoint committees, each consisting of one or more directors, which shall have
and may exercise such delegated powers as shall be conferred on or authorized by
the resolutions appointing them, subject to such limitations as may be imposed
from time to time by the West Virginia Business Corporation Code. A majority of
any such committee may determine its action, fix the date, time and place of its
meetings, and determine its rules of procedure. Each committee shall keep
minutes of its proceedings and actions and shall report regularly to the Board
of Directors. The Board of Directors shall have power at any time to fill
vacancies in, change the membership of, or discharge any such committee.
Section 7. Removal. Any or all Directors may be removed from office at
any time with or without cause.
Section 8. Vacancies. A vacancy occurring in the Board of Directors by
reason of the removal of a director by the shareholders shall be filled by the
shareholders, or, if authorized by the shareholders, by the remaining directors.
Any other vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors, or by the sole remaining director, as the case
by be, or, if the vacancy is so filled, or if no director remains, by the
shareholders. A Director elected to fill a vacancy shall serve for the unexpired
term of his or her predecessor in office.
-3-
<PAGE> 4
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Corporation shall consist of a
President, a Secretary and a Treasurer, and such other officers or assistant
officers and agent as may be elected by the Board of Directors. Any two offices
may be held by the same person except the offices of President and Secretary.
Section 2. President. The President shall be the chief operating
officer of the Corporation. He shall, under the direction of the Board of
Directors, supervise the management of the day-to-day business of the
Corporation. He shall have such further powers and duties as are from time to
time may be conferred on him by the Board of Directors or the chief executive
officer. In the absence of the Chairman of the Board he shall preside at all
meetings of the shareholders.
Section 3. Treasurer. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation.
Section 4. Secretary. The Secretary shall keep the minutes of the
meetings of the shareholders and the Directors and shall have custody of and
attest the seal of the corporation.
Section 5. Other Duties and Authorities. Each officer, employee and
agent shall have such other duties and authorities as may be conferred on them
by the Board of Directors.
Section 6. Removal. Any officer may be removed at any time by the Board
of Directors. A contract of employment for a definite term shall not prevent the
removal of any officer, but this provision shall not prevent the making of a
contract of employment with any officer and shall have no effect upon any cause
of action which any officer may have as a result of removal in breach of a
contract of employment.
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.
Section 2. Contracts. All contracts and other instruments shall be
signed on behalf of the Corporation by the President or by such other officer,
officers, agent or agents, as the President designates from time to time or as
the Board of Directors from time to time may by resolution provide.
Section 3. Seal. The seal of the Corporation shall be as follows:
-4-
<PAGE> 5
The seal may be manually affixed to any document or may be lithographed
or otherwise printed on any document with the same force and effect as if it had
been affixed manually. The signature of the Secretary or Assistant Secretary
shall attest the seal and may be a facsimile if and to the extent permitted by
law.
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The shares of stock of
the Corporation shall be represented by certificates in such form as may be
approved by the Board of Directors, which certificates shall be issued to the
shareholders of the Corporation in numerical order from the stock book of the
Corporation, and each of which shall bear the name of the Corporation and state
that it is organized under the laws of the State of West Virginia, the name of
the shareholder, the number and class (and the designation of the series, if
any) of the shares represented, and which all be signed by the President and by
the Secretary of the Corporation.
Section 2. Transfers of Shares. Shares of stock of the Corporation
shall be transferable only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the shareholder of record or such shareholder's duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once the
conspicuously marked on its face "Canceled" and filed with the permanent stock
records of the Corporation. The Board of Directors may make such additional
rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of lost, destroyed or wrongfully taken
stock certificates including any requirement of an indemnity bond prior to
issuance of any replacement certificate) as it deems appropriate.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
Section 1. Permissive Indemnification. The Corporation shall indemnify
to the fullest extent permitted by the West Virginia Business Corporation Code,
and to the extent that applicable law from time to time in effect shall permit
indemnification that is broader than provided in these Bylaws, then to the
maximum extent authorized by law, any individual made a party to a proceeding
because she or he is or was an employee or agent of the Corporation against
liability, incurred in the proceeding, if he or she acted in a manner he
believed in good faith to be in or not opposed to the best interests of the
Corporation and, in the case of any criminal proceeding, he or she had no
reasonable cause to believe his conduct was unlawful.
Section 2. Advances for Expenses of Directors. The Corporation shall
pay for or reimburse the reasonable expenses incurred by a director who is a
party to a proceeding and shall
-5-
<PAGE> 6
have the authority to pay for or reimburse the reasonable expenses of an
employee or agent of the Corporation who is a party to a proceeding, in each
case in advance of disposition of a preceding if:
(a) Such person furnishes the Corporation a written affirmation of
his or her good faith belief that he or she has met the
standard of conduct set forth in Section I above or Section 2
of this Article VI, as applicable; and
(b) Such person furnishes the Corporation a written undertaking,
executed personally on his or her behalf to repay any advances
if it is ultimately determined that he is not entitled to
indemnification.
The written undertaking required by paragraph (b) above must be an
unlimited general obligation of the director but need not be secured and may be
accepted without reference to financial ability to make repayment.
Section 3. Indemnification Not Exclusive. The right to indemnification
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article VI shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, provision of these Bylaws,
agreement, vote of shareholders or disinterested directors or otherwise.
Section 4. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder or any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 1. Amendment. Except as set forth below, the Board of Directors
may amend or repeal these Bylaws or adopt new bylaws by the affirmative vote of
a majority of all directors then holding office, (a) except to the extent the
Articles of Incorporation or the West Virginia Business Corporation Code
reserves such power exclusively to the shareholders, or (b) unless the
shareholders in amending or repealing a particular bylaw provide expressly that
the Board of Directors may not amend or repeal that bylaw. The shareholders may
amend or repeal these Bylaws or adopt new bylaws even though these Bylaws may
also be amended or repealed by the Board of Directors.
-6-
<PAGE> 1
EXHIBIT 3.3
Filed in the Office of
Secretary of State of
West Virginia, this date:
AUG 12 1983
ARTICLES OF INCORPORATION
OF
EMERGENCY MANAGEMENT SPECIALISTS, INC.
The undersigned, acting to incorporate a corporation under Section [__], Article
1, Chapter 31, of the Code of West Virginia adopt the following Articles of
Incorporation for such corporation:
I. The undersigned agree to become a corporation by the name of
EMERGENCY MANAGEMENT SPECIALISTS, INC.
II. The address of the principal office of said corporation will be c/o
Dr. Jack Dale Tolliver, CAMC Memorial Division. 3100 MacCorkle Avenue, S.E., in
the City of Charleston, in the County of Kanawha, State of West Virginia, 25304.
III. The purpose for which this corporation is formed is as follows:
(a) To [___________________________________] and all lawful activities
or businesses. The corporation shall have all the powers, rights and privileges
entered by the laws of the State of West Virginia upon corporation and shall
have the power and right to take any and all action, not contrary to law, which
may be taken by any natural person or other corporation.
IV. Provisions granting pre-emptive rights are: None.
V. Provisions for the regulation of the internal affairs of the
corporation are: None.
VI. The amount of the total authorized capital stock of said
corporation shall be One Thousand Dollars, which shall be divided into one
thousand shares of the par value of One Dollar ($1.00) each.
<PAGE> 2
VII. The full name and address of the incorporator is:
Jack Date Tolliver, M.D.
CAMC Memorial Division
3100 MacCorkle Avenue, S.E.
Charleston, WV 25304
VIII. The existence of this corporation of this to be perpetual.
IX. The name and address of the appointed person to whom notice or
process may be sent is:
Jack Dale Tolliver, M.D.
CAMC, Memorial Division
3100 MacCorkle Avenue, S.E.
Charleston, WV 25304
X. The number of directors constituting the initial board of directors
or the corporation is one (1).
THE UNDERSIGNED, for the purpose of forming a corporation under the
laws of the State of West Virginia, does make and file these Articles of
Incorporation, and does accordingly hereunto set his hand and seal this 12th day
of August, 1983.
/s/ Jack Dale Tolliver
----------------------------------------
Jack Dale Tolliver
Articles of Incorporation Prepared By:
PAULEY, CURRY, STURGEON & VANDERFORD
JAMES M. STURGEON, JR.
P. O. Box 2786
Charleston, WV 25330
-2-
<PAGE> 3
STATE OF WEST VIRGINIA,
COUNTY OF KANAWHA, to-wit:
I, /s/ Peggy L. Keim, a Notary Public in and for the County and State
aforesaid, hereby certify that JACK DALE TOLLIVER, whose name is signed to the
foregoing Articles of Incorporation, bearing date the 12th day of August, 1983,
this day personally appeared before me in my said County and acknowledged his
signature to be the same.
Given under my and official seal this 12th day of August, 1983.
My commission expires January 28, 1999.
/s/ Peggy L. Keim
___________________________________
NOTARY PUBLIC
(NOTARIAL SEAL)
-3-
<PAGE> 1
EXHIBIT 3.4
BYLAWS
OF
EMERGENCY MANAGEMENT SPECIALISTS, INC.
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such place, either within or
without the State of West Virginia, on such date, and at such time, as the Board
of Directors may by resolution provide.
Section 2. Special Meetings. Special meetings of the shareholders may
be called at any time by the Board of Directors or the holders of not less than
one-tenth of all the shares entitled to vote at the meeting.
Section 3. Notice of Meetings. A written or printed notice stating the
date, time and place of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered or
mailed by or at the direction of the President, the Secretary, or the officer or
person calling the meeting to each shareholder of record or member entitled to
vote at such meeting, at his or her address as it appears upon the records of
the Corporation, not less than ten (10) nor more than fifty (50) days prior to
such meeting. Notice of such meeting may be waived in writing by any shareholder
before or after the meeting. Notice of any adjourned meeting of the shareholders
shall not be required if the date, time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken, unless
the Board of Directors sets a new record date for such meeting in which case
notice shall be given in the manner provided in this Section 3. Notice of the
time, place or purpose of any meeting of shareholders, members or directors, may
be dispensed with if every shareholder or member shall attend either in person
or by proxy, or if every director shall attend in person.
Section 4. Quorum and Shareholder Vote. A quorum for action on any
subject matter at any annual or special meeting of shareholders shall exist when
the holders of shares entitled to vote a majority of the votes entitled to be
cast on such subject matter are represented in person or by proxy at such
meeting. In no event shall a quorum consist of less than one-third of the shares
entitled to vote at the meeting. If a quorum is present, the affirmative vote of
the majority of the shares represented or members present at the meeting and
entitled to vote on the subject matter, shall be the act of the shareholders or
members, unless a greater vote is required by the Articles of Incorporation or
these Bylaws. If a quorum is not present, a meeting of shareholders may be
adjourned from time to time by the vote of shares having a majority of the votes
of the shares represented at such meeting, until a quorum is present. When a
quorum is present at the reconvening of any adjourned meeting, and if the
requirements of Section 3 of this Article I have been observed, then any
business may be transacted at such reconvened meeting in the same manner and to
the same extent as it might have been transacted at the meeting as originally
noticed.
<PAGE> 2
Section 5. Proxies. A shareholder may vote either in person or by proxy
duly executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Unless otherwise provided in the proxy, no proxy shall be
valid after eleven months from the date of its execution.
Section 6. Conduct of Shareholders' Meetings. The President shall
preside at shareholders' meetings and shall establish such reasonable procedures
for the conduct of shareholders' meetings as such officer deems to be necessary
or appropriate, subject to the authority of the Board of Directors to appoint a
different presiding officer and to establish additional or different procedures.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the Company shall
be managed under the direction of, the Board of Directors, subject to any
restrictions imposed by law, by the Articles of Incorporation, by these Bylaws
or by agreements among the shareholders that are otherwise lawful.
Section 2. Number and Term of Directors. The number of directors shall
be such number as is provided for in the Articles of Incorporation or these
Bylaws or elected by the shareholders from time to time, but shall not be less
than one (1), and shall be reduced upon the resignation of any director to the
number still in office. Unless otherwise permitted by the West Virginia Business
Corporation Code, directors shall be natural persons who are 18 years of age or
older. At each annual meeting the shareholders shall elect the directors, who
shall serve until their successors are elected and qualified; provided that at
any shareholders' meeting with respect to which notice of such purpose has been
given, the entire Board of Directors or any individual director may be removed,
with or without cause, by the affirmative vote of the holders of a majority of
the shares entitled to vote at an election of directors.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of Notice.
The Board of Directors may hold regular meetings in accordance with such
schedule as may be established by the Board of Directors, and no notice of such
regular meetings need be given. Special meetings of the Board of Directors may
be called by the Chairman of the Board or by any Director, and written notice of
the date, time and place of such meetings shall be given by each director by
first class mail at least seven (7) days before the meeting or by telephone,
telegraph or cablegram or in person at least two (2) days before the meeting.
Any director may waive notice required to be given of a meeting, either before
or after the meeting, and shall be deemed to have waived notice if she or he is
present at or participates in such meeting unless the director at the beginning
of the meeting (or promptly upon the director's arrival) objects to holding the
meeting or transacting business at the meeting and does not thereafter vote for
or assent to action taken at the meeting. Neither the business to be transacted
at, nor the purpose of, any meeting of the Board of Directors need be stated in
the notice or waiver of notice of such meeting, except notice shall be required
to be given to every director when the meeting is being called for the purpose
of amending the bylaws or for the purpose of authorizing the sale of all or
substantially all of the assets of the corporation, in which case such notice
shall set forth the nature of the business intended to be transacted. Any
meeting may held at any place within or without the State of West Virginia.
-2-
<PAGE> 3
Section 4. Quorum; Vote Requirement. A majority of the number of
directors fixed in accordance with Article II, Section 2 of these Bylaws shall
constitute a quorum for the transaction of business at any meeting, unless a
greater number is required by the Articles of Incorporation. When a quorum is
present, the vote of a majority of the directors present shall be the act of the
Board of Directors, unless a greater vote is required by law, by the Articles of
Incorporation or by these Bylaws. Any number less than a quorum present may
adjourn any directors meeting until a quorum is present.
Section 5. Action of Directors Without a Meeting. Any action required
by law to be taken at a meeting of the Board of Directors, or any action which
may be taken at a meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if written consent, setting forth the
action so taken, shall be signed by all the Directors, or all the members of the
committee, as the case may be, and be filed with the minutes of the proceedings
of the Board or the committee. Such consent shall have the same force and effect
as a unanimous vote of the Board or the committee, as the case may be.
Section 6. Committees. The Board of Directors may, in its discretion,
appoint committees, each consisting of one or more directors which shall have
and may exercise such delegated powers as shall be conferred on or authorized by
the resolutions appointing them, subject to such limitations as may be imposed
from time to time by the West Virginia Business Corporation Code. A majority of
any such committee may determine its action, fix the date, time and place of its
meetings and determine its rules of procedure. Each committee shall keep minutes
of its proceedings and actions and shall report regularly to the Board of
Directors. The Board of Directors shall have power at any time to fill vacancies
in, change the membership of, or discharge any such committee.
Section 7. Removal. Any or all Directors may be removed from office at
any time with or without cause.
Section 8. Vacancies. A vacancy occurring in the Board of Directors by
reason of the removal of a director by the shareholders shall be filled by the
shareholders, or, if authorized by the shareholders, by the remaining directors.
Any other vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors, or by the sole remaining director, as the case
by be, or, if the vacancy is not so filled, or if no director remains, by the
shareholders. A Director elected to fill a vacancy shall serve for the unexpired
term of his or her predecessor in office.
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Corporation shall consist of a
President, a Secretary and a Treasurer, and such other officers or assistant
officers and agent as may be elected by the Board of Directors. Any two offices
may be held by the same person except the offices of President and Secretary.
Section 2. President. The President shall be the chief operating
officer of the Corporation. He shall, under the direction of the Board of
Directors, supervise the management of the
-3-
<PAGE> 4
day-to-day business of the Corporation. He shall have such further powers and
duties as from time to time may be conferred on him by the Board of Directors or
the chief executive officer. In the absence of the Chairman of the Board he
shall preside at all meetings of the shareholders.
Section 3. Treasurer. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation.
Section 4. Secretary. The Secretary shall keep the minutes of the
meetings of the shareholders and the Directors and shall have custody of and
attest the seal of the corporation.
Section 5. Other Duties and Authorities. Each officer, employee and
agent shall have such other duties and authorities as may be conferred on them
by the Board of Directors.
Section 6. Removal. Any officer may be removed at any time by the Board
of Directors. A contract of employment for a definite term shall not prevent the
removal of any officer, but this provision shall not prevent the making of a
contract of employment with any officer and shall have no effect upon any cause
of action which any officer may have as a result of removal in breach of a
contract of employment.
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.
Section 2. Contracts. All contracts and other instruments shall be
signed on behalf of the Corporation by the President or by such other officer,
officers, agent or agents, as the President designates from time to time or as
the Board of Directors from time to time may by resolution provide.
Section 3. Seal. The seal of the Corporation shall be as follows:
The seal may be manually affixed to any document or may be lithographed
or otherwise printed on any document with the same force and effect as if it had
been affixed manually. The signature of the Secretary or Assistant Secretary
shall attest the seal and may be a facsimile if and to the extent permitted by
law.
-4-
<PAGE> 5
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The shares of stock of
the Corporation shall be represented by certificates in such form as may be
approved by the Board of Directors, which certificates shall be issued to the
shareholders of the Corporation in numerical order from the stock book of the
Corporation, and each of which shall bear the name of the Corporation and state
that it is organized under the laws of the State of West Virginia, the name of
the shareholder, the number and class (and the designation of the series, if
any) of the shares represented, and which shall be signed by the President and
by the Secretary of the Corporation.
Section 2. Transfers of Shares. Shares of stock of the Corporation
shall be transferable only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the shareholder of record or such shareholder's duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once be
conspicuously marked on its face "Canceled" and filed with the permanent stock
records of the Corporation. The Board of Directors may make such additional
rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of lost, destroyed or wrongfully taken
stock certificates (including any requirement of an indemnity bond prior to
issuance of any replacement certificate) as it deems appropriate.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
Section 1. Permissive Indemnification. The Corporation shall indemnify
to the fullest extent permitted by the West Virginia Business Corporation Code,
and to the extent that applicable law from time to time in effect shall permit
indemnification that is broader than provided in these Bylaws, then to the
maximum extent authorized by law, any individual made a party to a proceeding
because she or he is or was an employee or agent of the Corporation against
liability, incurred in the proceeding, if he or she acted in a manner he
believed in good faith to be in or not opposed to the best interests of the
Corporation and, in the case of any criminal proceeding, he or she had no
reasonable cause to believe his conduct was unlawful.
Section 2. Advances for Expenses of Directors. The Corporation shall
pay for or reimburse the reasonable expenses incurred by a director who is a
party to a proceeding and shall have the authority to pay for or reimburse the
reasonable expenses of an employee or agent of the Corporation who is a party to
a proceeding, in each case in advance of disposition of a preceding if:
(a) Such person furnishes the Corporation a written affirmation of
his or her good faith belief that he or she has met the
standard of conduct set forth in Section 1 above or Section 2
of this Article VI, as applicable; and
-5-
<PAGE> 6
(b) Such person furnishes the Corporation a written undertaking,
executed personally on his or her behalf to repay any advances
if it is ultimately determined that he is not entitled to
indemnification.
The written undertaking required by paragraph (b) above must be an
unlimited general obligation of the director but need not be secured and may be
accepted without reference to financial ability to make repayment.
Section 3. Indemnification Not Exclusive. The right to indemnification
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article VI shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, provision of these Bylaws,
agreement, vote of shareholders or disinterested directors or otherwise.
Section 4. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder or any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 1. Amendment. Except as set forth below, the Board of Directors
may amend or repeal these Bylaws or adopt new bylaws by the affirmative vote of
a majority of all directors then holding office, (a) except to the extent the
Articles of Incorporation or the West Virginia Business Corporation Code
reserves such power exclusively to the shareholders, or (b) unless the
shareholders in amending or repealing a particular bylaw provide expressly that
the Board of Directors may not amend or repeal that bylaw. The shareholders may
amend or repeal these Bylaws or adopt new bylaws even though these Bylaws may
also be amended or repealed by the Board of Directors.
-6-
<PAGE> 1
EXHIBIT 3.5
State of Florida
Articles of Incorporation
Of
EMSA South Broward, Inc.
FIRST: The corporate name that satisfies the requirements of Section
607.0401 is: EMSA South Broward, Inc.
SECOND: The street address of the principal office of the corporation
and its mailing address is:
1200 South Pine Island Road, Suite 600, Plantation, Florida, 33324 1200
THIRD: The number of shares the corporation is authorized to issue is
One Thousand (1,000) each with the par value of Zero Dollars and One Cent
($0.01).
FOURTH: The street address of the initial registered office of the
corporation is C/O C T CORPORATION SYSTEM, 1200 SOUTH PINE ISLAND ROAD, CITY OF
PLANTATION, FLORIDA 33324, and the name of its initial registered agent at such
address is C T CORPORATION SYSTEM.
FIFTH: The name and address of each incorporator is:
Joey Bryan 660 East Jefferson Street, Tallahassee,
Florida 32301
The undersigned have executed 'these articles of incorporation this 3rd
day of December, 1996.
/s/ Joey Bryan
___________________________________
Joey Bryan, Incorporator
Acceptance by the Registered Agent of
EMSA South Broward, Inc.
as required in Section 607.0501
-1-
<PAGE> 2
C T Corporation System is familiar with and accepts the obligations
provided fox in Section 607.0505.
C T CORPORATION SYSTEM
Dated 3rd day of December, 1996
By /s/ Connie Bryan
____________________________________
Connie Bryan
______________________________________
Name of Officer
Special Assistant Secretary
______________________________________
(Title of officer)
-2-
<PAGE> 1
EXHIBIT 3.6
BYLAWS
OF
EMSA SOUTH BROWARD, INC.
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of
EMSA South Broward, Inc. (the "Corporation") for the election of directors and
for the transaction of such other business as may properly come before the
meeting shall be held at such place, either within or without the State of
Florida, on such date, and at such time, as the Board of Directors of the
Corporation (the "Board of Directors") may by resolution provide, or if the
Board of Directors falls to provide, then such meeting shall be held at the
principal office of the Corporation at 10:00 a.m., local time, on the fourth
Tuesday of April of each year, if not a legal holiday under the laws of the
State of Florida, and if a legal holiday, on the next succeeding business day.
The Board of Directors may specify by resolution prior to any special meeting of
shareholders held within the year that such meeting shall be in lieu of the
annual meeting.
Section 2. Special Meetings. Special meetings of the shareholders of
the Corporation may be called at any time by the Chairman of the Board of
Directors or by the Board of Directors pursuant to a resolution adopted by the
affirmative vote of a majority of the entire Board of Directors. A special
meeting called by the Board of Directors shall be held at such place, either
within or without the State of Florida, as is stated in the notice thereof. A
special meeting called at the demand of the shareholders pursuant to this
Section 2 shall be held at such place in the State of Florida as is stated in
the notice thereof.
Section 3. Notice of Meetings. A written or printed notice stating the
date, time and place of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary of the Corporation to each holder of record of stock of
the Corporation at the time entitled to vote, at his address as it appears upon
the records of the Corporation, not less than ten nor more than 60 days prior to
such meeting. If the Secretary falls to give such notice within 20 days after
the call of a meeting, the person calling or requesting such meeting, or any
person designated by them, may give such notice. Notice of such meeting may be
waived in writing by any shareholder before or after the meeting. Notice of any
adjourned meeting of the shareholders shall not be required if the date, time
and place to which the meeting is adjourned are announced at the meeting at
which the adjournment is taken, unless the Board of Directors sets a new record
date for such meeting in which case notice shall be given in the manner provided
in this Section 3.
Section 4. Quorum and Shareholder Vote. A quorum for action on any
subject matter at any annual or special meeting of shareholders shall exist when
the holders of shares entitled to vote a majority of the votes entitled to be
cast on such subject matter are represented in person or by proxy at such
meeting. If a quorum is present, the affirmative vote of such number of shares
as is required
<PAGE> 2
by the Florida Business Corporation Act (as in effect at the time the vote is
taken), for approval of the subject matter being voted upon, shall be the act of
the shareholders, unless a greater vote is required by the Articles of
Incorporation or these Bylaws. If a quorum is not present, a meeting of
shareholders may be adjourned from time to time by the vote of shares having a
majority of the votes of the shares represented at such meeting, until a quorum
is present. When a quorum is present at the reconvening of any adjourned
meeting, and if the requirements of Section 3 of this Article I have been
observed, then any business may be transacted at such reconvened meeting in the
same manner and to the same extent as it might have been transacted at the
meeting as originally noticed.
Section 5. Proxies. A shareholder may vote either in person or by proxy
duly executed in writing by the shareholder. Unless written notice to the
contrary is delivered to the Corporation by the shareholder, a proxy for any
meeting shall be valid for any reconvention of any adjourned meeting.
Section 6. Conduct of Shareholders' Meetings. The President shall
preside at shareholders' meetings and shall establish such reasonable,
procedures for the conduct of shareholders' meetings as such officer deems to be
necessary or appropriate, subject to the authority of the Board of Directors to
appoint a different presiding, officer and to establish additional or different
procedures.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the Corporation
shall be managed under the direction of, the Board of Directors, subject to any
restrictions imposed by law, by the Articles of Incorporation, by these Bylaws
or by agreements among the shareholders that are otherwise lawful.
Section 2. Number and Term of Directors. The number of directors shall
be such number as is provided for in the Articles of Incorporation or as is
elected by the shareholders from time to time and shall be reduced upon the
resignation of any director to the number still in office. Unless otherwise
permitted by the Florida Business Corporation Act, directors shall be natural
persons who are 18 years of age or older. At each annual meeting the
shareholders shall elect the directors, who shall serve until their successors
are elected and qualified; provided that at any shareholders' meeting with
respect to which notice of such purpose has been given, the entire Board of
Directors or any individual director may be removed, with or without cause, by
the affirmative vote of the holders of a majority of the shares entitled to vote
at an election of directors.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of Notice.
The Board of Directors may hold regular meetings in accordance with such
schedule as may be established by the Board of Directors, and no notice of such
regular meetings need be given. Special meetings of the Board of Directors may
be called by the Chairman of the Board or by any Director, and written notice of
the date, time and place of such meetings shall be given by each director by
first class mail at least seven days before the meeting or by telephone,
telegraph or cablegram or in person at least two days before the meeting. Any
director may waive notice required to be given of a meeting, either before or
after the meeting, and shall be deemed to have waived notice if he is present at
or participates in
-2-
<PAGE> 3
such meeting unless the director at the beginning of the meeting (or promptly
upon the director's arrival) objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to action
taken at the meeting. Neither the business to be transacted at, nor the purpose
of, any meeting of the Board of Directors need be stated in the notice or waiver
of notice of such meeting. Any meeting may be held at any place within or
without the State of Florida.
Section 4. Quorum; Vote Requirement. A majority of the number of
directors fixed in accordance with Section 2 of this Article II shall constitute
a quorum for the transaction of business at any meeting. When a quorum is
present, the vote of a majority of the directors present shall be the act of the
Board of Directors, unless a greater vote is required by law, by the Articles of
Incorporation or by these Bylaws.
Section 5. Action of Directors Without a Meeting. Any action required
by law to be taken at a meeting of the Board of Directors, or any action which
may be taken at a meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if written consent, setting forth the
action so taken, shall be signed by all the Directors, or all the members of the
committee, as the case may be, and be filed with the minutes of the proceedings
of the Board of Directors or the committee. Such consent shall have the same
force and effect as a unanimous vote of the Board or the committee, as the case
may be.
Section 6. Committees. The Board of Directors may, in its discretion,
appoint committees, each consisting of one or more directors, which shall have
and may exercise such delegated powers as shall be conferred on or authorized by
the resolutions appointing them, subject to such limitations as may be imposed
from time to time by the Florida Business Corporation Act. A majority of any
such committee may determine its action, fix the date, time and place of its
meetings and determine its rules of procedure. Each committee shall keep minutes
of its proceedings and actions and shall report regularly to the Board of
Directors. The Board of Directors shall have power at any time to fill vacancies
in, change the membership of, or discharge any such committee.
Section 7. Removal. Any or all Directors may be removed from office at
any time with or without cause.
Section 8. Vacancies. A vacancy occurring in the Board of Directors by
reason of the removal of a director by the shareholders shall be filled by the
shareholders, or, if authorized by the shareholders, by the remaining directors.
Any other vacancy occurring in the Board of Directors may be filled by the
affirmative vote of a majority of the remaining directors though less than a
quorum of the Board of Directors, or by the sole remaining director, as the case
may be, or, if the vacancy is not so filled, or if no director remains, by the
shareholders. A director elected to fill a vacancy shall serve for the unexpired
term of his predecessor in office.
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Corporation shall consist of a
Chief Executive Officer, President, a Secretary and a Treasurer and such other
officers or assistant officers as may be elected by the Board of Directors. Any
two offices may be held by the same person.
-3-
<PAGE> 4
Section 2. Chief Executive Officer. The Chief Executive Officer shall
be the chief operating officer of the Corporation. He shall, under the direction
of the Board of Directors, supervise the management of the day-to-day business
of the Corporation. He shall have such further powers and duties as from time to
time may be conferred on him by the Board of Directors. In the absence of the
Chairman of the Board, the Chief Executive Officer shall preside at all meetings
of the shareholders.
Section 3. President. The President shall generally assist the Chief
Executive Officer and perform such other duties as the Board of Directors or the
Chief Executive Officer shall prescribe, and in the absence or disability of the
Chief Executive Officer, shall perform the duties and exercise the powers of the
Chief Executive Officer.
Section 4. Treasurer. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation.
Section 5. Secretary. The Secretary shall keep the minutes of the
meetings of the shareholders and the directors and shall have custody of and
attest the seal of the corporation.
Section 6. Other Duties and Authorities. Each officer, employee and
agent shall have such other duties and authorities as may be conferred on them
by the Board of Directors.
Section 7. Removal. Any officer may be removed at any time by the Board
of Directors. A contract of employment for a definite term shall not prevent the
removal of any officer, but this provision shall not prevent the making of a
contract of employment with any officer and shall have no effect upon any cause
of action which any officer may have as a result of removal in breach of a
contract of employment.
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board of Directors may
from time to time authorize.
Section 2. Contracts. All contracts and other instruments shall be
signed on behalf of the Corporation by the Chief Executive Officer or President
or by such other officer, officers, agent or agents, as the Chief Executive
Officer or President shall designate from time to time or as the Board of
Directors from time to time may by resolution provide.
Section 3. Seal. The seal of the Corporation shall be as follows:
The seal may be manually affixed to any document or may be lithographed
or otherwise printed on any document with the same force and effect as if it had
been affixed manually. The
-4-
<PAGE> 5
signature of the Secretary or Assistant Secretary shall attest the seal and may
be a facsimile if and to the extent permitted by law.
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The shares of stock of
the Corporation shall be represented by certificates in such form as may be
approved by the Board of Directors, which certificates shall be issued to the
shareholders of the Corporation in numerical order from the stock book of the
Corporation, and each of which shall bear the name of the Corporation and state
that it is organized under the laws of the State of Florida, the name of the
shareholder, the number and class (and the designation of the series, if any) of
the shares represented, and which shall be signed by the President and by the
Secretary of the Corporation.
Section 2. Transfers of Shares. Shares of stock of the Corporation
shall be transferable only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the shareholder of record or such shareholder's duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once be
conspicuously marked on its face "Canceled" and filed with the permanent stock
records of the Corporation. The Board of Directors may make such additional
rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of lost, destroyed or wrongfully taken
stock certificates (including any requirement of an indemnity bond prior to
issuance of any replacement certificate) as it deems appropriate.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
Section 1. Actions Other Than Those by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation (or such other corporation or organization), and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful.
Section 2. Actions by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened,
-5-
<PAGE> 6
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that such person is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise against expenses and amounts paid in
settlement not exceeding, in the judgment of the Board of Directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Corporation,
except that no indemnification shall be made under this Section 2 in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Section 3. Successful Defense of Action. To the extent that a director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any proceeding referred to in Sections 1 or 2 of this
Article VI, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
Section 4. Determination Required. Any indemnification under Sections 1
or 2 of this Article VI, unless pursuant to a determination by a court, shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 1 or 2 of this Article VI. Such determination shall be made: (i) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such proceeding; (ii) if such quorum is not obtainable or,
even if obtainable, by a majority vote of a committee duly designated by the
Board of Directors (in which directors who are parties may participate)
consisting solely of two or more directors not at the time parties to the
proceeding; (iii) by independent legal counsel selected by the Board of
Directors as described in (i) above or a committee as described in (ii) or,
otherwise, by majority vote of the full Board of Directors (in which directors
who are parties may participate); or (iv) by the shareholders by a majority vote
a quorum consisting of shareholders who were not parties to such proceeding or,
if no such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
Section 5. Advances for Expenses of Directors. Expenses incurred by an
officer or director in defending or investigating any civil, criminal,
administrative or investigative action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article VI.
Such expenses incurred by employees or agents who are not officers or directors
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate. The right provided in the first sentence of this Section 5 is
a contract right.
Section 6. Indemnification Not Exclusive. The right to indemnification
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred
-6-
<PAGE> 7
in this Article VI shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, provision of the Articles of
Incorporation, provision of these Bylaws, agreement, vote of shareholders or
disinterested directors or otherwise.
Section 7. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder or any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 1. Amendment. Except as set forth below, the Board of Directors
may amend or repeal these Bylaws or adopt new bylaws by the affirmative vote of
a majority of all directors then holding office, (i) except to the extent the
Articles of Incorporation or the Florida Business Corporation Act reserves such
power exclusively to the shareholders or (ii) unless the shareholders in
amending or repealing a particular bylaw provide expressly that the Board of
Directors may not amend or repeal that bylaw. The shareholders may amend or
repeal these Bylaws or adopt new bylaws even though these Bylaws may also be
amended or repealed by the Board of Directors.
-7-
<PAGE> 1
EXHIBIT 3.7
ARTICLES OF INCORPORATION
OF
HERSCHEL FISCHER, INC.
I.
The name of the corporation is Herschel Fischer, Inc.
II.
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated by
the California Corporations Code.
III.
The name and address in this State of the corporation's initial agent
for service of process is
Herschel Fischer
699 View Drive
Pleasanton, CA 94566
IV.
The corporation is authorized to issue only one class of shares of
stock; and the total number of shares which this corporation is authorized to
issue is 10,000.
V.
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
VI.
The Corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, through agreements with the agents, or through vote of shareholders
of disinterested directors or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code, subject
to the limits on such excess indemnification set forth in Section 204 of the
California Corporations Code with respect to actions for breach of duty to the
corporation and its shareholders.
VII.
-1-
<PAGE> 2
Any repeal or modification of the foregoing provisions of Articles V
and VI by the shareholders of this corporation shall not adversely affect the
right or protection of an agent of the corporation existing at the time of such
repeal or modification.
VIII.
If proceedings are commenced for the dissolution of the corporation to
which Section 2000 of the California Corporations Code applies, the provisions
of any Buy-Sell Agreement or Stock Repurchase Agreement, if any, then in effect
among the corporation and its shareholders shall govern and supersede any
provisions of Section 2000 which are inconsistent therewith, to the extent
required to enforce any such Buy-Sell Agreement or Stock Repurchase Agreement.
Dated: 2/10/97
/s/ Herschel Fischer_
-----------------------------
Herschel Fischer
Incorporator
-2-
<PAGE> 3
AGREEMENT OF MERGER
BETWEEN
HERSCHEL FISCHER, INC., A CALIFORNIA CORPORATION
AND
FISCHER MERGER CORPORATION, A DELAWARE CORPORATION
This Agreement of Merger ("Agreement") is entered into as of June 24,
1997 between Herschel Fischer, Inc., California corporation (herein "Surviving
Corporation") and Fischer Merger Corporation., a Delaware corporation (herein
"Merging Corporation")
NOW, THEREFORE, the Surviving Corporation and the Merging Corporation
hereby agree as follows:
1. Merging Corporation shall be merged into Surviving
Corporation.
2. Each outstanding share of Merging Corporation shall be
converted to one share common stock of Surviving Corporation
3. The outstanding shares of Surviving Corporation shall be
converted into the right to receive the Merger Consideration,
as such term as defined in that certain Plan and Agreement of
Merger dated as of May 27, 1997 by and among MedPartners,
Inc., Merging Corporation and Surviving Corporation. Merger
Consideration means 823.222 shares of MedPartners, Inc. Common
Stock for each share of the Surviving Corporation outstanding
immediately before the effectiveness of the merger.
4. Merging Corporation shall from time to time, as and when
requested by Surviving Corporation execute and deliver all
such documents and instruments and take all such action
necessary or desirable to evidence or carry out this merger.
5. The effect of the merger and the effective date June 30, 1997.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be
executed as of the date first set forth above.
HERSCHEL FISCHER, INC.,
a California corporation
By: /s/ Herschel Fischer
--------------------------------
Herschel Fischer, President
By: /s/ Sherry Fischer
--------------------------------
Sherry Fischer, Secretary
FISCHER MERGER CORPORATION
a Delaware corporation
-1-
<PAGE> 4
By: /s/ Harold O. Knight, Jr.
-------------------------------
Harold O. Knight, Jr.
Its: Vice President
By: /s/ Tracy P. Thrasher
-------------------------------
Tracy P. Thrasher
Its: Secretary
-2-
<PAGE> 5
CERTIFICATE
OF
MERGER
OF
HERSCHEL FISCHER, INC.
a California corporation
Herschel Fischer and Sherry Fischer, certify that:
1. They are the president and secretary, respectively of
Herschel Fischer, Inc., a California corporation;
2. The Agreement of Merger in the form attached was duly
approved by the board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the
outstanding shares of the corporation.
4. There is only one class of shares and the number of shares
outstanding is 1,000.
We further declare under penalty of perjury under the laws of the State
of California that the matter set forth in this certificate are true and correct
of our own knowledge.
Executed in Pleasanton, California on June 24, 1997.
/s/ Herschel Fischer
------------------------------------
Herschel Fischer, President
/s/ Sherry Fischer
------------------------------------
Sherry Fischer, Secretary
-1-
<PAGE> 6
CERTIFICATE
OF
MERGER
OF
FISCHER MERGER CORPORATION,
a Delaware corporation
Harold O. Knight, Jr. and Tracy P. Thrasher hereby certify that:
1. They are the Vice President and Secretary, respectively of Fischer
Merger Corporation, a Delaware corporation (the "Corporation").
2. The Agreement of Merger, in the form attached, was duly approved by
the board of directors and stockholder of the Corporation.
3. The stockholder approval was by the holder of 100% of the
outstanding shares of the Corporation.
4. There is only one class of shares of the Corporation and the number
of shares outstanding is 1,000.
5. Common Stock of MedPartners, Inc. a Delaware corporation, the parent
corporation of the Corporation, will be issued in the merger. No vote of the
stockholders of the parent corporation was required.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Executed in Jefferson County, Alabama on June 24, 1997.
/s/ Harold O. Knight, Jr.
-------------------------------------
Harold O. Knight, Jr., Vice President
/s/ Tracy P. Thrasher
-------------------------------------
Tracy P. Thrasher, Secretary
-1-
<PAGE> 1
EXHIBIT 3.8
BYLAWS
OF
HERSCHEL FISCHER, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Title Page
- ------- ----- ----
<S> <C>
OFFICES
1. Principal Offices................................................................................
2. Other Offices....................................................................................
MEETINGS OF SHAREHOLDERS
3. Place of Meetings................................................................................
4. Annual Meeting...................................................................................
5. Special Meeting..................................................................................
6. Notice of Shareholders' Meetings.................................................................
7. Manner of Giving Notice; Affidavit of Notice.....................................................
8. Quorum...........................................................................................
9. Adjourned Meeting: Notice........................................................................
10. Voting...........................................................................................
11. Waiver of Notice or Consent by Absent Shareholders...............................................
12. Shareholder Action by Written Consent Without a Meeting..........................................
13. Record Date for Shareholder Notice, Voting and Giving Consents...................................
14. Proxies..........................................................................................
15. Inspectors of Election...........................................................................
DIRECTORS
16. Powers...........................................................................................
17. Number and Qualification of Directors............................................................
18. Election and Term of Office of Directors.........................................................
19. Vacancies........................................................................................
20. Place of Meetings and Meetings by Telephone......................................................
21. Organization Meetings............................................................................
22. Other Regular Meetings...........................................................................
23. Special Meetings.................................................................................
24. Quorum...........................................................................................
25. Waiver of Notice.................................................................................
26. Adjournment......................................................................................
27. Notice of Adjournment............................................................................
28. Action Without Meeting...........................................................................
29. Fees and Compensation of Directors...............................................................
OFFICERS
30. Officers.........................................................................................
31. Election of Officers.............................................................................
32. Subordinate Officers.............................................................................
33. Removal and Resignation of Officers..............................................................
34. Vacancies in Offices.............................................................................
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
35. President........................................................................................
36. Vice President...................................................................................
37. Secretary........................................................................................
38. Chief Financial Officer..........................................................................
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS
39. Right of Indemnity...............................................................................
40. Approval of Indemnity............................................................................
41. Advancement of Expenses..........................................................................
42. Insurance........................................................................................
43. Nonapplicability to Fiduciaries of Employee Benefit Plans........................................
RECORDS AND REPORT
44. Maintenance and Inspection of Share Register.....................................................
45. Maintenance and Inspection of Bylaws.............................................................
46. Maintenance and Inspection of Other Corporate Records............................................
47. Inspection by Directors..........................................................................
48. Annual Report to Shareholders....................................................................
49. Financial Statements.............................................................................
GENERAL CORPORATE MATTER
50. Record Date for Purposes Other than Notice and Voting............................................
51. Checks, Drafts, Evidences of Indebtedness........................................................
52. Corporate Contracts and Instruments; How Executed................................................
53. Certificates for Shares..........................................................................
54. Lost Certificates................................................................................
55. Representation of Shares of Other Corporations...................................................
56. Construction and Definitions.....................................................................
AMENDMENTS
57. Amendment by Shareholders........................................................................
58. Amendment by Directors...........................................................................
CERTIFICATE OF SECRETARY...........................................................................................
</TABLE>
-ii-
<PAGE> 4
BYLAWS
OF
HERSCHEL FISCHER, INC.
OFFICES
1. Principal Offices. The Board of Directors shall fix the location of
the principal executive office of the Corporation at any place within the State
of California.
2. Other Offices. The Board of Directors may at any time establish
branch or subordinate offices at any place or places where the Corporation is
qualified to do business.
MEETINGS OF SHAREHOLDERS
3. Place of Meetings. Meetings of shareholders shall be held at any
place within or outside the State of California designated by the Board of
Directors. In the absence of any such designation, shareholders' meetings shall
be held at the principal executive office of the Corporation.
4. Annual Meeting. The annual meeting of shareholders shall be held on
the first business day of September of each year, but if such date falls on a
legal holiday, then the annual meeting of shareholders shall be held at the same
time and place on the next succeeding full business day. At this meeting,
Directors shall be elected, and any other proper business may be transacted.
5. Special Meeting. A special meeting of the shareholders may be called
at any time by the Board of Directors, or by the President, or by one or more
shareholders holding shares in the aggregate entitled to cast not less than 10%
of the votes at the meeting. If a special meeting is called by any person or
persons other than the Board of Directors, the request shall be in writing,
specifying the time of such meeting and the general nature of the business
proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
President or the Secretary of the Corporation. The officer receiving the request
shall cause notice to be promptly given to the shareholders entitled to vote, in
accordance with the provisions of Sections 6 and 7 of these Bylaws, that a
meeting will be held at the time requested by the person or persons calling the
meeting, not less than thirty-five (35) nor more than sixty (60) days after the
receipt of the request. If the notice is not given within twenty (20) days after
receipt of the request, the person or persons requesting the meeting may give
the notice. Nothing contained in this Section 5 shall be construed as limiting,
fixing or affecting the time when a meeting of shareholders called by action of
the Board of Directors may be held.
6. Notice of Shareholders' Meeting. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 7 below
not less than ten (10) nor more than sixty (60) days before the date of the
meeting. The notice shall specify the place, date and hour of the meeting and
(a) in the case of a special meeting, the general nature of the
-1-
<PAGE> 5
business to be transacted, or (b) in the case of the annual meeting, those
matters which the Board of Directors, at the time of giving the notice, intends
to present for action by the shareholders. The notice of any meeting at which
Directors are to be elected shall include the name of any nominee or nominees
whom, at the time of the notice, management intends to present for election.
If action is proposed to be taken at any meeting for approval of (a) a
contract or transaction in which a Director has a direct or indirect financial
interest, pursuant to Section 310 of the California Corporations Code, (b) an
amendment of the articles of incorporation, pursuant to Section 902 of that
Code, (c) a reorganization of the Corporation, pursuant to Section 1201 of that
Code, (d) a voluntary dissolution of the Corporation, pursuant to Section 1900
of that Code, or (e) a distribution in dissolution other than in accordance with
the rights of outstanding preferred shares, pursuant to Section 2007 of that
Code, the notice shall also state the general nature of that proposal.
7. Manner of Giving Notice; Affidavit of Notice. Notice of any meeting
of shareholders shall be given either personally or by first-class mail or
telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
Corporation or given by the shareholder to the Corporation for the purpose of
notice. If no such address appears on the Corporation's books or has been given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the
Corporation's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally
or deposited in the mail or sent by telegram or other means of written
communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Corporation is returned to the
Corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the shareholder
at that address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the shareholder on
written demand of the shareholder at the principal executive office of the
Corporation for a period of one year from the date of the giving of notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting may be executed by the Secretary or any transfer agent of
the Corporation giving the notice, and shall be filed and maintained in the
minute book of the Corporation.
8. Quorum. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting of shareholders shall
constitute a quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
-2-
<PAGE> 6
9. Adjourned Meeting: Notice. Any shareholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the shares represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 8 above.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the Board of Directors shall
set a new record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 6 and 7 hereof. At any adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting.
10. Voting. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section 13
below, subject to the provisions of Sections 702 to 704, inclusive, of the
California Corporations Code (relating to voting shares held by a fiduciary, in
the name of a corporation, or in joint ownership). The shareholders' vote may be
by voice vote or by ballot; provided, however, that any election for Directors
must be by ballot if demanded by any shareholder before the meeting has begun.
On any matter other than elections of Directors, any shareholder may vote part
of the shares in favor of the proposal and refrain from voting the remaining
shares or vote them against the proposal, but, if the shareholder fails to
specify the number of shares which the shareholder is voting affirmatively, it
will be conclusively presumed that the shareholder's approving vote is with
respect to all shares that the shareholder is entitled to vote. Subject to the
provisions of Section 8 above, the affirmative vote of the majority of the
shares represented and voting at a duly held meeting at which a quorum is
present (which shares voting affirmatively also constitute at least a majority
of the required quorum), shall be the act of the shareholders, unless the vote
of a greater number or voting by classes is required by the California
Corporations Code or by the articles of incorporation.
At a shareholders' meeting at which Directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any one or more
candidates a number of votes greater than the number of the shareholders,
shares) unless the candidates' names have been placed in nomination prior to
commencement of the voting and a shareholder has given notice prior to
commencement of the voting of the shareholder's intention to cumulate votes. If
any shareholder has given such a notice, then every shareholder entitled to vote
may cumulate votes for candidates in nomination and give one candidate a number
of votes equal to the number of Directors to be elected multiplied by the number
of votes to which that shareholder's shares are entitled, or distribute the
shareholder's votes on the same principle among any or all of the candidates, as
the shareholder thinks fit. The candidates receiving the highest number of
votes, up to the number of Directors to be elected, shall be elected.
-3-
<PAGE> 7
11. Waiver of Notice or Consent by Absent Shareholders. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote, who was not present in person or by proxy, signs a written
waiver of notice or a consent to a holding of the meeting, or an approval of the
minutes. The waiver of notice or consent need not specify either the business to
be transacted or the purpose of any annual or special meeting of shareholders,
except that if action is taken or proposed to be taken for approval of any of
those matters specified in the second paragraph of Section 6, the waiver of
notice or consent shall state the general nature of the proposal. All such
waivers, consents or approvals shall be filed with the corporate records or made
a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the meeting.
12. Shareholder Action by Written Consent Without a Meeting. Any action
which may be taken at any annual or special meeting of shareholders may be taken
without a meeting and without prior notice, if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take that action at a meeting at which all shares entitled to vote on that
action were present and voted. In the case of election of Directors, such a
consent shall be effective only if signed by the holders of all outstanding
shares entitled to vote for the election of Directors; provided, however, that a
Director may be elected at any time to fill a vacancy on the Board of Directors
that has not been filled by the Directors, by the written consent of the holders
of a majority of the outstanding shares entitled to vote for the election of
Directors. All such consents shall be filed with the Secretary of the
Corporation and shall be maintained in the corporate records. Any shareholder
giving a written consent, or the shareholder's proxy holders, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxy holders, may revoke the consent by a writing received by the Secretary of
the Corporation before written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing, and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the corporate action approved by the shareholders without a meeting.
This notice shall be given in the manner specified in Section 7. In the case of
approval of (a) contracts or transactions in which a Director has a direct or
indirect financial interest, pursuant to Section 310 of the California
Corporations Code, (b) indemnification of agents of the Corporation, pursuant
to Section 317 of that Code, (c) a reorganization of the Corporation, pursuant
to Section 1201 of that Code, or (d) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, pursuant to Section
2007 of
-4-
<PAGE> 8
that Code, the notice shall be given at least ten (10) days before the
consummation of any action authorized by that approval.
13. Record Date for Shareholder Notice, Voting and Giving Consents. For
purposes of determining the shareholders entitled to notice of any meeting or to
vote or entitled to give consent to corporate action without a meeting, the
Board of Directors may fix, in advance, a record date, which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting nor more than sixty (60) days before any such action without a meeting,
and in this event only shareholders of record on the date so fixed are entitled
to notice and to vote or to give consents, as the case may be, notwithstanding
any transfer of any shares on the books of the Corporation after the record
date, except as otherwise provided in the California Corporations Code.
If the Board of Directors does not so fix a record date:
a. The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the close
of business on the business day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held.
b. The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting, (1) when
no prior action by the Board has been taken, shall be the day on which
the first written consent is given, or (2) when prior action of the
Board has been taken, shall be at the close of business on the day on
which the Board adopts the resolution relating to that action, or the
sixtieth (60th) day before the date of such other action, whichever is
later.
14. Proxies. Every person entitled to vote for Directors or on any
other matter shall have the right to do so either in person or by one or more
agents authorized by a written proxy signed by the person and filed with the
Secretary of the Corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (a)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the Corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (b) written notice of the death or
incapacity of the maker of that proxy is received by the Corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of eleven (11) months from the date of the proxy,
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of
Section 705 of the California Corporations Code.
-5-
<PAGE> 9
15. Inspectors of Election. Before any meeting of shareholders, the
Board of Directors may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the chairman of the meeting may, and on the request
of any shareholder or a shareholder's proxy shall, appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or
three (3). If inspectors are appointed at a meeting on the request of one or
more shareholders or proxies, the holders of a majority of shares or their
proxies present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. If any person appointed as inspector fails to
appear or fails or refuses to act, the chairman of the meeting may, and upon the
request of any shareholder or a shareholder's proxy shall, appoint a person to
fill that vacancy.
These inspectors shall:
a. Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of
a quorum, and the authenticity, validity, and effect of proxies;
b. Receive votes, ballots, or consents;
c. Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
d. Count and tabulate all votes or consents;
e. Determine when the polls shall close;
f. Determine the result; and
g. Do any other acts that may be proper to conduct the
election or vote with fairness to all shareholders.
DIRECTORS
16. Powers. Subject to the provisions of the California Corporations
Code and any limitations in the articles of incorporation and these Bylaws
relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the Corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
Board of Directors.
17. Number and Qualification of Directors. The authorized number of
Directors shall be one (1) until changed by a duly adopted amendment to the
articles of incorporation or by an amendment to this bylaw adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote.
-6-
<PAGE> 10
18. Election and Term of Office of Directors. Directors shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
19. Vacancies. Vacancies in the Board of Directors may be filled by a
majority of the remaining Directors, though less than a quorum, or by a sole
remaining Director, except that a vacancy created by the removal of a Director
by the vote or written consent of the shareholders or by court order may be
filled only by the vote of a majority of the shares entitled to vote represented
at a duly held meeting at which a quorum is present, or by the written consent
of holders of a majority of the outstanding shares entitled to vote. Each
Director so elected shall hold office until the next annual meeting of the
shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any Director, or if
the Board of Directors by resolution declares vacant the office of a Director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of Directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any Director or
Directors are elected, to elect the number of Directors to be voted for at that
meeting.
The shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such election by
written consent other than to fill a vacancy created by removal, shall require
the consent of a majority of the outstanding shares entitled to vote.
Any Director may resign effective on giving written notice to the
President, the Secretary, or the Board of Directors, unless the notice specifies
a later time for that resignation to become effective. If the resignation of a
Director is effective at a future time, the Board of Directors may elect a
successor to take office when the resignation becomes effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
20. Place of Meetings and Meetings by Telephone. Regular meetings of
the Board of Directors may be held at any place within or outside the State of
California that has been designated from time to time by resolution of the
Board. In the absence of such a designation, regular meetings shall be held at
the principal executive office of the Corporation. Special meetings of the Board
shall be held at any place within or outside the State of California that has
been designated in the notice of the meeting or, if not stated in the notice or
if there is no notice, at the principal executive office of the Corporation. Any
meeting, regular or special, may be held by conference telephone or similar
communication equipment, so long as all Directors participating in the meeting
can hear one another, and all such Directors shall be deemed to be present in
person at the meeting.
-7-
<PAGE> 11
21. Organization Meetings. Regular meetings of the Board of Directors
shall be held immediately following the adjournment of the annual meetings of
shareholders, for the purpose of organization, election of officers and the
transaction of other business.
22. Other Regular Meetings. Other regular meetings of the Board of
Directors shall be held without call at such time as shall from time to time be
fixed by the Board of Directors. Such regular meetings may be held without
notice.
23. Special Meetings. Special meetings of the Board of Directors for
any purpose or purposes may be called at any time by the President or the
Secretary or any Director.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Director or sent by first-class mail or
telegram, charges prepaid, addressed to each Director at that Director's address
as it is shown on the records of the Corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least four (4) days before
the time of the holding of the meeting. In case the notice is delivered
personally, or by telephone or telegram, it shall be delivered personally or by
telephone or to the telegraph company at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Director or to a person at the
office of the Director who the person giving the notice has reason to believe
will promptly communicate it to the Director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at the
principal executive office of the Corporation.
24. Quorum. One-half of the authorized number of Directors but in no
event less than two, whichever is larger (unless the authorized number of
Directors is one, in which case one Director), shall constitute a quorum for the
transaction of business, except to adjourn as provided in Section 26. Every act
or decision done or made by a majority of the Directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of the Board
of Directors, subject to the provisions of Section 310 of the California
Corporations Code (as to approval of contracts or transactions in which a
Director has a direct or indirect material financial interest), Section 311 of
that Code (as to appointment of committees), and Section 317(c) of that Code (as
to indemnification of Directors). A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
Directors, if any action taken is approved by at least a majority of the
required quorum for that meeting.
25. Waiver of Notice. The transactions of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the Directors not
present signs a written waiver of notice, a consent to holding the meeting or an
approval of the minutes. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents, and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting. Notice
of a meeting shall also be deemed given to any Director who attends the meeting
without protesting the lack of notice to that Director before or at the
commencement of the meeting.
-8-
<PAGE> 12
26. Adjournment. A majority of the Directors present whether or not
constituting a quorum, may adjourn any meeting to another time and place.
27. Notice of Adjournment. Notice of the time and place of holding an
adjourned meeting need not be given, unless the meeting is adjourned for more
than twenty-four (24) hours, in which case notice of the time and place shall be
given before the adjourned meeting is to commence, in the manner specified in
Section 23, to the Directors who were not present at the time of the
adjournment.
28. Action Without Meeting. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting, if all members
of the Board shall individually or collectively consent in writing to that
action. Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors. Such written consent or consents shall
be filed with the minutes of the proceedings of the Board.
29. Fees and Compensation of Directors. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement of expenses, as may be fixed or determined by resolution of the
Board of Directors. This Section 29 shall not be construed to preclude any
Director from serving the Corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation for those services.
OFFICERS
30. Officers. The officers of the Corporation shall be a president, a
vice-president, a secretary, and a chief financial officer, and any other
offices created by resolution of the Board of Directors. Any number of offices
may be held by the same person.
31. Election of Officers. The officers of the Corporation, except such
officers as may be appointed in accordance with the provisions of Section 32 or
Section 34, shall be chosen by the Board of Directors, and each shall serve at
the pleasure of the Board, subject to the rights, if any, of an officer under
any contract of employment.
32. Subordinate Officers. The Board of Directors may appoint, and may
empower the President to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in these Bylaws or as the
Board of Directors may from time to time determine.
33. Removal and Resignation of Officers. Subject to the rights, if any,
of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Directors, at any regular or
special meeting of the Board, or, except in case of an officer chosen by the
Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
-9-
<PAGE> 13
Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.
34. Vacancies in Offices. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to that office.
35. President. Subject to such supervisory powers, if any, as may be
given by the Board of Directors to the chairman of the Board, if there be such
an officer, the President shall be the chief executive officer of the
Corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction, and control of the business and the officers of
the Corporation. He shall preside at all meetings of the shareholders and, in
the absence of the chairman or if there be none, at all meetings of the Board of
Directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or these
Bylaws.
36. Vice President. In the absence or disability of the President, the
Vice President shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. The Vice President shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or the President.
37. Secretary. The Secretary shall keep or cause to be kept, at the
principal executive office or such other place as the Board of Directors may
direct, a book of minutes of all meetings and actions of Directors, committees
of Directors, and shareholders, with the time and place of holding, whether
regular or special, and, if special, how authorized, the notice given, the names
of those present at Directors' meetings or committee meetings, the number of
shares present or represented at shareholders' meetings, and the proceedings.
The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the Corporation's transfer agent or
registrar, as determined by resolution of the Board of Directors, a share
register, or a duplicate share register, showing the names of all shareholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the Board of Directors required by these Bylaws or by
law to be given, and he shall keep the seal of the Corporation if one be
adopted, in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or by these Bylaws.
-10-
<PAGE> 14
38. Chief Financial Officer. The chief financial officer of the
Corporation, who may be designated as the Treasurer or such other title as the
Board of Directors may determine, shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any Director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated by the Board of Directors. He shall disburse
the funds of the Corporation as may be ordered by the Board of Directors, shall
render to the President and Directors, whenever they request it, an account of
all of his transactions as chief financial officer and of the financial
condition of the Corporation, and shall have other powers and perform such other
duties as may be prescribed by the Board of Directors or these Bylaws.
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS
39. Right of Indemnity. To the full extent permitted by law, this
Corporation shall indemnify its Directors, officers, employees and other persons
described as "agents" in Section 317(a) of the California Corporations Code,
including persons formerly occupying any such position, against all expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
by them in connection with any "proceeding", as that term is used in such
Section and including an action by or in the right of the Corporation, by reason
of the fact that such person is or was a person described by such Section.
"Expenses", as used in this bylaw, shall have the same meaning as in Section
317(a) of the California Corporations Code.
40. Approval of Indemnity. Except as provided in subdivision (d) of
Section 317 of the California Corporations Code, any indemnification under this
section shall be made by the Corporation only if authorized in the specific
case, upon a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct set
forth in Sections 317(b) or (c) of the California Corporations Code by any of
the following:
(1) A majority vote of a quorum consisting of directors who
are not parties to such proceeding.
(2) If such a quorum of directors is not obtainable, by
independent legal counsel in a written opinion.
(3) Approval of the shareholders with the shares owned by the
person to be indemnified not being entitled to vote thereon.
-11-
<PAGE> 15
(4) The court in which the proceeding is or was pending upon
application made by the Corporation or the agent or the attorney or other person
rendering services in connection with the defense, whether or not the
application by the agent, attorney or other person is opposed by the
Corporation.
41. Advance of Expenses. To the full extent permitted by law and except
as is otherwise determined by the Board of Directors in the specific instance,
expenses incurred by a person seeking indemnification under this bylaw in
defending any proceeding covered by this bylaw shall be advanced by the
Corporation prior to the final disposition of the proceeding upon receipt by the
Corporation of an undertaking by or on behalf of such person to repay such
amount unless it shall ultimately be determined that such person is entitled to
be indemnified by the Corporation therefor.
42. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any agent of the Corporation against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such whether or not the Corporation would have the
power to indemnify the agent against such liability under the provisions of this
Article.
43. Nonapplicability to Fiduciaries of Employee Benefit Plans. This
Article does not apply to any proceeding against any trustee, investment
manager, or other fiduciary of an employee benefit plan in such person's
capacity as such, even though such person may also be an agent of the
Corporation as defined in Section 317(a) of the California Corporations Code.
The Corporation shall have the power to indemnify such trustee, investment
manager or other fiduciary to the extent permitted by subdivision (f) of Section
207 of the California Corporations Code.
RECORDS AND REPORTS
44. Maintenance and Inspection of Share Register. The Corporation shall
keep at its principal executive office, or at the office of its transfer agent
or registrar, if either be appointed and as determined by resolution of the
Board of Directors, a record of its shareholders, giving the names and addresses
of all shareholders and the number and class of shares held by each shareholder.
A shareholder or shareholders of the Corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
Corporation may (a) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours on five (5) days prior
written demand on the Corporation, and (b) obtain from the transfer agent of the
Corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the names and addresses of the shareholders who
are entitled to vote for the election of Directors, and their shareholdings, as
of the most recent record date for which that list has been compiled or as of a
date specified by the shareholder after the date of demand. This list shall be
made available to any such shareholder by the transfer agent on or before the
later of five (5) days after the demand is received or the date specified in the
demand
-12-
<PAGE> 16
as the date as of which the list is to be complied. The record of shareholders
shall also be open to inspection on the written demand of any shareholder or
holder of a voting trust certificate, at any time during usual business hours,
for a purpose reasonably related to the holder's interests as a shareholder or
as the holder of a voting trust certificate. Any inspection and copying under
this Section 44 may be made in person or by an agent or attorney of the
shareholder or holder of a voting trust certificate making the demand.
45. Maintenance and Inspection of Bylaws. The Corporation shall keep at
its principal executive office, or if its principal executive office is not in
the State of California, at its principal business office in this state, the
original or a copy of the Bylaws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during office hours.
46. Maintenance and Inspection of Other Corporate Records. The
accounting books and records and minutes of proceedings of the shareholders and
the Board of Directors and any committee or committees of the Board of Directors
shall be kept at such place or places designated by the Board of Directors, or,
in the absence of such designation, at the principal executive office of the
Corporation. The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other form capable of
being converted into written form. The minutes and accounting books and records
shall be open to inspection upon the written demand of any shareholder or holder
of a voting trust certificate, at any reasonable time during usual business
hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney, and shall include the right to
copy and make extracts. These rights of inspection shall extend to the records
of each subsidiary corporation of the Corporation.
47. Inspection by Directors. Every Director shall have the absolute
right at any reasonable time to inspect all books, records, and documents of
every kind and the physical properties of the Corporation and each of its
subsidiary corporations. This inspection by a Director may be made in person or
by an agent or attorney and the right of inspection includes the right to copy
and make extracts of documents.
48. Annual Report to Shareholders. The annual report to shareholders
referred to in Section 1501 of the California Corporations Code is expressly
dispensed with, but nothing herein shall be interpreted as prohibiting the Board
of Directors from issuing annual or other periodic reports to the shareholders
of the Corporation as they consider appropriate.
49. Financial Statements. A copy of any annual financial statement and
any income statement of the Corporation for each quarterly period of each fiscal
year, and any accompanying balance sheet of the Corporation as of the end of
each such period, that has been prepared by the Corporation shall be kept on
file in the principal executive office of the Corporation for twelve (12) months
and each such statement shall be exhibited at all reasonable times to any
shareholder demanding an examination of any such statement or a copy shall be
mailed to any such shareholder.
-13-
<PAGE> 17
If a shareholder or shareholders holding at least five percent (5%) of
the outstanding shares of any class of stock of the Corporation makes a written
request to the Corporation for an income statement of the Corporation for the
three-month, six-month or nine-month period of the then current fiscal year
ended more than thirty (30) days before the date of the request, and a balance
sheet of the Corporation as of the end of that period, the chief financial
officer shall cause that statement to be prepared, if not already prepared, and
shall deliver personally or mail that statement or statements to the person
making the request within thirty (30) days after the receipt of the request. If
the Corporation has not sent to the shareholders its annual report for the last
fiscal year, this report shall likewise be delivered or mailed to the
shareholder or shareholders within thirty (30) days after the request.
The Corporation shall also, on the written request of any shareholder,
mail to the shareholder a copy of the last annual, semi-annual, or quarterly
income statement which it has prepared, and a balance sheet as of the end of
that period.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Corporation or the certificate of an authorized
officer of the Corporation that the financial statements were prepared without
audit from the books and records of the Corporation.
GENERAL CORPORATE MATTERS
50. Record Date for Purposes Other than Notice and Voting. For purposes
of determining the shareholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise any rights
in respect of any other lawful action (other than action by shareholders by
written consent without a meeting), the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty (60) days before any such
action, and in that case only shareholders of record on the date so fixed are
entitled to receive the dividend, distribution, or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date so fixed except as
otherwise provided by the California Corporations Code.
If the Board of Directors does not so fix a record date, the record
date for determining shareholders for any such purpose shall be at the close of
business on the day on which the Board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
51. Checks, Drafts, Evidences of Indebtedness. All checks, drafts, or
other orders for payment of money, notes, or other evidences of indebtedness,
issued in the name of or payable to the Corporation, shall be signed or endorsed
by such person or persons and in such manner as, from time to time, shall be
determined by resolution of the Board of Directors.
52. Corporate Contracts and Instruments; How Executed. The Board of
Directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf
-14-
<PAGE> 18
of the Corporation, and this authority may be general or confined to specific
instances; and, unless so authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent, or employee shall have
any power or authority to bind the Corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or for any amount.
53. Certificates for Shares. A certificate or certificates for shares
of the capital stock of the Corporation shall be issued to each shareholder when
any of these shares are fully paid, and the Board of Directors may authorize the
issuance of certificates or shares as partly paid provided that these
certificates shall state the amount of the consideration to be paid for them and
the amount paid. All certificates shall be signed in the name of the Corporation
by the President and by the chief financial officer or the Secretary, certifying
the number of shares and the class or series of shares owned by the shareholder.
Any or all of the signatures on the certificate may be facsimile. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the Corporation with the same effect as if that person were an officer,
transfer agent, or registrar at the date of issue.
54. Lost Certificates. Except as provided in this Section 54, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is surrendered to the Corporation and canceled at the same time. The
Board of Directors may, in case any share certificate or certificate for any
other security is lost, stolen, or destroyed, authorize the issuance of a
replacement certificate on such terms and conditions as the Board may require,
including provision for indemnification of the Corporation secured by a bond or
other adequate security sufficient to protect the Corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft, or destruction of the certificate or the issuance of
the replacement certificate.
55. Representation of Shares of Other Corporations. The President, or
any other person authorized by resolution of the Board of Directors or by any of
the foregoing designated officers, is authorized to vote on behalf of the
Corporation any and all shares of any other corporation or corporations, foreign
or domestic, standing in the name of the Corporation. The authority granted to
these officers to vote or represent on behalf of the Corporation any and all
shares held by the Corporation in any other corporation or corporations may be
exercised by any of these officers in person or by any person authorized to do
so by a proxy duly executed by these officers.
56. Construction and Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in the
California Corporations Code shall govern the construction of these Bylaws.
Without limiting the generality of this provision, the singular number includes
the plural, the plural number includes the singular, the masculine includes the
feminine, and the term "person" includes both a corporation and a natural
person.
-15-
<PAGE> 19
AMENDMENTS
57. Amendment by Shareholders. New bylaws may be adopted and these
Bylaws may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the articles of incorporation of the Corporation set forth the number of
authorized Directors of the Corporation, the authorized number of Directors may
be changed only by an amendment of the articles of incorporation.
58. Amendment by Directors. Subject to the rights of the shareholders
as provided in Section 57, other than a bylaw or an amendment of a bylaw
changing the authorized number of Directors, bylaws may be adopted, amended, or
repealed by the Board of Directors.
CERTIFICATE OF SECRETARY
I, the undersigned, hereby certify as follows:
1. I am the duly elected and qualified Secretary of Herschel Fischer,
Inc., a California corporation;
2. The foregoing Bylaws were duly adopted by the Board of Directors of
this Corporation as of February 19, 1997 and remain unmodified and in full force
and effect as of the date hereof.
Dated: February 21, 1997
/s/ Sherry A. Fischer
-----------------------------------
Sherry A. Fischer, Secretary
[Seal]
-16-
<PAGE> 1
EXHIBIT 3.9
ARTICLES OF INCORPORATION
OF
IMBS, INC.
ARTICLE I - NAME The name of
this corporation shall be:
IMBS, INC.
ARTICLE II - DURATION
This corporation shall exist in perpetuity.
ARTICLE III - PURPOSE
1. The general nature of the business and the object and purposes
proposed to be transacted and carried on, are to do any and all of the things
mentioned herein, as fully and to the same extent as natural persons might or
could do.
2. To take, acquire, buy, hold, own, maintain, work, develop, sell,
convey, lease, mortgage, exchange, improve and otherwise invest in and dispose
of real estate and real property or any interest or rights therein without limit
as to the amount to do all things and engage in all activities necessary and
proper or incidental to the business of investing in and developing real estate.
3. To sell at wholesale and retail and do deal in any manner whatever
in all types and descriptions of property; to do all things and engage in all
activities necessary and proper or incidental to wholesale and retail business.
4. To purchase, acquire, hold, and dispose of stocks, bonds, and other
obligations including judgments, interest, accounts or debts of any corporation,
domestic or foreign (except moneyed or transportation or banking, or insurance
corporations) owning or controlling any articles which are or might be or become
useful in the business of this company, and to purchase, acquire, hold and
dispose of stocks, bonds or other obligations including judgments, interest,
accounts or debts of any corporation, domestic or foreign (except moneyed or
transportation or banking or insurance corporations) engaged in a business
similar to that of this company, or engaged in the manufacture, use or sale of
property, or in the construction or operation of works necessary or useful in
the business of this company, or in which, or in connection with which, the
manufactured articles, product or property of this company may be used, or of
any corporation with which this corporation is or may be used, or of any
corporation with which this corporation is or may be authorized to consolidate
-1-
<PAGE> 2
according to law, and this company may issue in exchange therefor the stocks,
bonds or other obligations of this company.
5. To purchase, take and lease, or in exchange, hire or otherwise
acquire any real or personal property, rights or privileges suitable or
convenient for any of the purposes of this business, and to purchase, acquire,
erect and construct, make improvement of buildings or machinery, stores or
works, insofar as the same may be appurtenant to or useful for the conduct of
the business as above specified, but only to the extent to which the company may
be authorized by the statutes under which it is organized.
6. To acquire and carry on all or any part of the business or property
of any company engaged in a business similar to that authorized to be conducted
by this company, or with which this company is authorized under the laws of this
state to consolidate, or whose stock the company under the laws of this state
and the provisions of this certificate is authorized to purchase and to
undertake in conjunction therewith, any liabilities or any person, firm,
association, or company described as aforesaid, possessing of property suitable
for any of the purposes of this company, or for carrying on any business which
this company is authorized to conduct, and as for the consideration for the same
to pay cash or to issue shares, stocks and obligations of this company.
7. To purchase, subscribe for or otherwise acquire and to hold the
shares, stocks or obligations of any company organized under the laws of this
state or of any other state, or of any territory of the United States, or of any
foreign country, except moneyed or transportation or banking or insurance
corporations, and to sell or exchange the same, or upon the distribution of
assets or divisions of profits, to distribute any such shares, stocks, or
obligations or proceeds thereof among the stockholders of this company.
8. To borrow or raise money for any purposes of the company, and to
secure the same and interest, or for any other purpose, to mortgage all or any
part of the property corporeal or incorporeal rights or franchises of this
company now owned or hereafter acquired, and to create, issue, draw and accept
and negotiate bonds and mortgages, bills of exchange, promissory notes or other
obligations or negotiable instruments.
9. To guarantee the payment of dividends or interest on any shares,
stocks, debentures or other securities issued by, or any other contract or
obligation of, any corporation described as aforesaid, whenever proper or
necessary for the business of the company, and provided the required authority
be first obtained for that purpose, and always subject to the limitations herein
prescribed.
-2-
<PAGE> 3
10. To acquire by purchase or otherwise own, hold, buy, sell, convey,
lease, mortgage or incumber real estate or other property, personal or mixed.
11. To buy, sell, and generally trade in, store, carry and transport
all kinds of goods, wares, merchandise, provisions and supplies.
12. To do and perform and cause to be done or performed each, any and
all of the acts and things above enumerated, and any and all other acts and
things insofar as the same any be incidental to or included in any or all of the
general powers given, always provided on the grant of the foregoing enumerated
powers is upon the express condition precedent that the various powers above
enumerated shall be exercised by said company only in case the same are
authorized to be exercised by the acts above recited under which said company is
organized, and the same shall be exercised by said company only in the manner
and to the extent that the same may be authorized to be exercised under the said
acts above recited under which it was organized. The said corporation may
perform any part of its business outside the State of Florida, in the other
states or colonies of the United States of America, and in all foreign
countries.
13. And further for the purpose of transacting any and all lawful
businesses.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 1,000 shares of ONE DOLLAR AND
NO/100 ($1.00) par value common stock.
ARTICLE V - PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he/she already
holds, shall have the right to purchase his/her pro rata share thereof (as
nearly as may be done without issuance of fractional shares) at the price at
which it is offered to others.
ARTICLE VI - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 1200 S. Pine Island Road, Ft. Lauderdale, Florida 33324 and the name of the
initial registered agent of this corporation at that address is CT Corporation.
ARTICLE VII - PRINCIPAL OFFICE
The principal office of the corporation is 1200 S. Pine Island Road,
Suite 600, Plantation, Florida 33324.
ARTICLE VIII - INITIAL BOARD OF DIRECTORS
-3-
<PAGE> 4
This corporation shall have three (3) directors initially. The number
of directors may be either increased or diminished from time to time by the
bylaws. but shall not be less than three (3). The names and addresses of the
initial directors of this corporation are:
Jere D. Creed, M.D. J. Clifford Findeiss, M.D.
1200 S. Pine Island Road 1200 S. Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
George W. McCleary, Jr.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE IX - INCORPORATOR
The name and address of the person signing these articles is:
Neesa K. Warlen, Esq.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE X - AMOUNT OF CAPITAL
The amount of capital with which this corporation will begin business
will be not less than Five Hundred Dollars ($500.00).
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors and the shareholders.
ARTICLE XII - APPROVAL OF SHAREHOLDERS REQUIRED FOR MERGER
The approval of the shareholders of this corporation to any plan of
merger shall be required in every case, whether or not such approval is required
by law.
ARTICLE XIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XIV - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these articles of incorporation, or any amendment hereto, and any
right conferred upon the shareholders is subject to this reservation.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the undersigned subscriber has executed these
articles of incorporation this 28th of November, 1995.
/s/ Neesa K. Warlen
--------------------------------
Neesa K. Warlen, Subscriber
STATE OF FLORIDA
SS
COUNTY OF BROWARD
BEFORE ME, a notary public authorized to take acknowledgments in the
state and county set forth above, personally appeared Neesa K. Warlen,
personally known to me to be the person who executed the foregoing or who
produced , who executed the foregoing articles of incorporation, and
he/she acknowledged before me that he/she executed those articles of
incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 28th day of November, 1995.
/s/ JoAnn Loch
--------------------------------
Notary Public, State of Florida
-5-
<PAGE> 6
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE
OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY BE
SERVED.
[?] pursuance of Chapter 48.091, Florida Statutes, the following is
submitted, in compliance with said Act;
First -- That IMBS, INC. desiring to organize under the laws of the
State of Florida with its principal office, as indicated in the articles of
incorporation at City of Fort Lauderdale, County of Broward, State of Florida
has named C T corporation System located at 1200 S. Pine Island Road, City of
Plantation, County of Broward, State of Florida, as its agent to accept service
of process within this state. ACKNOWLEDGMENT: (MUST BE SIGNED BY DESIGNATED
AGENT)
Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act relative to
keeping open said office.
By /s/ Tanya M. Villar
--------------------------------------------
C T Corporation System,
Registered Agent
Tanya M. Villar, Special Assistant Secretary
-1-
<PAGE> 1
EXHIBIT 3.10
BYLAWS
OF
IMBS, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall
<PAGE> 2
be deemed to be delivered when deposited in the United States mail addressed to
the shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
-2-
<PAGE> 3
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a
-3-
<PAGE> 4
specified item of business is required to be voted on by a class or series of
stock, a majority of the shares of such class or series shall constitute a
quorum for the transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time
-4-
<PAGE> 5
multiplied by the number of his shares, or by distributing such votes on the
same principle among any number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a
-5-
<PAGE> 6
bank or trust company with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates therefor,
such shares shall not be entitled to vote on any matter and shall not be deemed
to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise
-6-
<PAGE> 7
represent their shares, as provided by law. Where the counterpart of a voting
trust agreement and the copy of the record of the holders of voting trust
certificates has been deposited with the corporation as provided by law, such
documents shall be subject to the same right of examination by a shareholder of
the corporation, in person or by agent or attorney, as are the books and records
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting. Any action
required by law, these bylaws, or the articles of incorporation of this
corporation to be taken at any annual or special meeting of shareholders of the
corporation, or any action which may be taken at any annual or special meeting
of such shareholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or to take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. If any class of shares is entitled to vote thereon as a class, such
written consent shall be required of the holders of a majority of the shares of
each class of shares entitled to vote as a class thereon and of the total shares
entitled to vote thereon.
-7-
<PAGE> 8
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
-8-
<PAGE> 9
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 3 director(s). The
number of directors may be increased or decreased from time to time by amendment
to these bylaws, but no decrease shall have the effect of shortening the terms
of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
-9-
<PAGE> 10
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
-10-
<PAGE> 11
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
-11-
<PAGE> 12
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may he held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
-12-
<PAGE> 13
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
-13-
<PAGE> 14
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
-14-
<PAGE> 15
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
-15-
<PAGE> 16
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired
-16-
<PAGE> 17
by a purchaser for value in good faith and without notice of any adverse claim;
(c) gives bond in such form as the corporation may direct, to indemnify the
corporation, the transfer agent, and registrar against any claim that may be
made on account of the alleged loss, destruction, or theft of a certificate; and
(d) satisfies any other reasonable requirements imposed by the corporation.
Article V. - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial
-17-
<PAGE> 18
condition of the corporation as of the close of its fiscal year, and a profit
and loss statement showing the results of the operations of the corporation
during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI. - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
-18-
<PAGE> 19
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII. - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII. - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any
-19-
<PAGE> 20
bylaw adopted by shareholders if the shareholders specifically provide such
bylaw not subject to amendment or repeal by the directors.
-20-
<PAGE> 1
Exhibit 3.11
ARTICLES OF INCORPORATION
OF
INPHYNET HOSPITAL SERVICES, INC.
ARTICLE I - NAME
The name of this corporation shall be:
INPHYNET HOSPITAL SERVICES, INC.
ARTICLE II - DURATION
This corporation shall exist in perpetuity.
ARTICLE III - PURPOSE
1. The general nature of the business and the object and purposes
proposed to be transacted and carried on, are to do any and all of the things
mentioned herein, as fully and to the same extent as natural persons might or
could do.
2. To take, acquire, buy, hold, own, maintain, work, develop, sell,
convey, lease, mortgage, exchange, improve and otherwise invest in and dispose
of real estate and real property or any interest or rights therein without limit
as to the amount to do all things and engage in all activities necessary and
proper or incidental to the business of investing in and developing real estate.
3. To sell at wholesale and retail and do deal in any manner whatever
in all types and descriptions of property; to do all things and engage in all
activities necessary and proper or incidental to wholesale and retail business.
4. To purchase, acquire, hold, and dispose of stocks, bonds, and other
obligations including judgments, interest, accounts or debts of any corporation,
domestic or foreign (except moneyed or transportation or banking, or insurance
corporations) owning or controlling any articles which are or might be or become
useful in the business of this company, and to purchase, acquire, hold and
dispose of stocks, bonds or other obligations including judgments, interest,
accounts or debts of any corporation, domestic or foreign (except moneyed or
transportation or banking or insurance corporations) engaged in a business
similar to that of this company, or engaged in the manufacture, use or sale of
property, or in the construction or operation of works necessary or useful in
the business of this company, or in which, or in connection with which, the
manufactured articles, product or property of this company may be used, or of
any corporation with which this corporation is or may be used, or of any
corporation with which this corporation is or may be authorized to consolidate
according to law and this company may issue in exchange therefor the stocks,
bonds or other obligations of this company.
-1-
<PAGE> 2
5. To purchase, take and lease, or in exchange, hire or otherwise
acquire any real or personal property, rights or privileges suitable or
convenient for any of the purposes of this business, and to purchase, acquire,
erect and construct, make improvement of buildings or machinery, stores or
works, insofar as the same may be appurtenant to or useful for the conduct of
the business as above specified, but only to the extent to which the company may
be authorized by the statutes under which it is organized.
6. To acquire and carry on all or any part of the business or property
of any company engaged in a business similar to that authorized to be conducted
by this company, or with which this company is authorized under the laws of this
state to consolidate, or whose stock the company under the laws of this state
and the provisions of this certificate is authorized to purchase and to
undertake in conjunction therewith, any liabilities or any person, firm,
association, or company described as aforesaid, possessing of property suitable
for any of the purposes of this company, or for carrying on any business which
this company is authorized to conduct, and as for the consideration for the same
to pay cash or to issue shares, stocks and obligations of this company.
7. To purchase, subscribe for or otherwise acquire and to hold the
shares, stocks or obligations of any company organized under the laws of this
state or of any other state, or of any territory of the United States, or of any
foreign country, except moneyed or transportation or banking or insurance
corporations, and to sell or exchange the same, or upon the distribution of
assets or divisions of profits, to distribute any such shares, stocks, or
obligations or proceeds thereof among the stockholders of this company.
8. To borrow or raise money for any purposes of the company, and to
secure the same and interest, or for any other purpose, to mortgage all or any
part of the property corporeal or incorporeal rights or franchises of this
company now owned or hereafter acquired, and to create, issue, draw and accept
and negotiate bonds and mortgages, bills of exchange, promissory notes or other
obligations or negotiable instruments.
9. To guarantee the payment of dividends or interest on any shares,
stocks, debentures or other securities issued by, or any other contract or
obligation of, any corporation described as aforesaid, whenever proper or
necessary for the business of the company, and provided the required authority
be first obtained for that purpose, and always subject to the limitations herein
prescribed.
10. To acquire by purchase or otherwise own, hold, buy, sell, convey,
lease, mortgage or incumber real estate or other property, personal or mixed.
-2-
<PAGE> 3
11. To buy, sell, and generally trade in, store, carry and transport
all kinds of goods, wares, merchandise, provisions and supplies.
12. To do and perform and cause to be done or performed each, any and
all of the acts and things above enumerated, and any and all other acts and
things insofar as the same any be incidental to or included in any or all of the
general powers given, always provided on the grant of the foregoing enumerated
powers is upon the express condition precedent that the various powers above
enumerated shall be exercised by said company only in case the same are
authorized to be exercised by the acts above recited under which said company is
organized, and the same shall be exercised by said company only in the manner
and to the extent that the same may be authorized to be exercised under the said
acts above recited under which it was organized. The said corporation may
perform any part of its business outside the State of Florida, in the other
states or colonies of the United States of America, and in all foreign
countries.
13. And further for the purpose of transacting any and all lawful
businesses.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 1,000 shares of ONE DOLLAR AND
NO/100 ($1.00) par value common stock.
ARTICLE V - PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he/she already
holds, shall have the right to purchase his/her pro rata share thereof (as
nearly as may be done without issuance of fractional shares) at the price at
which it is offered to others.
ARTICLE VI - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 1200 S. Pine Island Road, Ft. Lauderdale, Florida 33324 and the name of the
initial registered agent of this corporation at that address is CT Corporation.
ARTICLE VII - PRINCIPAL OFFICE
The principal office of the corporation is 1200 S. Pine Island Road,
Suite 600, Plantation, Florida 33324.
ARTICLE VIII - INITIAL BOARD OF DIRECTORS
This corporation shall have three (3) directors initially. The number
of directors may be either increased or diminished from time to time by the
bylaws, but shall not be less than three (3). The names and addresses of the
initial directors of this corporation are:
-3-
<PAGE> 4
Jere D. Creed, M.D. J. Clifford Findeiss, M.D.
1200 S. Pine Island Road 1200 S. Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
George W. McCleary, Jr.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE IX - INCORPORATOR
The name and address of the person signing these articles is:
Neesa K. Warlen, Esq.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE X - AMOUNT OF CAPITAL
The amount of capital with which this corporation will begin business
will be not less than Five Hundred Dollars ($500.00).
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors and the shareholders.
ARTICLE XII - APPROVAL OF SHAREHOLDERS REQUIRED FOR MERGER
The approval of the shareholders of this corporation to any plan of
merger shall be required in every case, whether or not such approval is required
by law.
ARTICLE XIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XIV - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these articles of incorporation, or any amendment hereto, and any
right conferred upon the shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these
articles of incorporation this 28th day of November, 1995.
-4-
<PAGE> 5
/s/ Neesa K. Warlen
-----------------------------------
Neesa K. Warlen, Subscriber
STATE OF FLORIDA
SS
COUNTY OF BROWARD
BEFORE ME, a notary public authorized to take acknowledgments in the
state and county set forth above, personally appeared Neesa K. Warlen,
personally known to me to be the person who executed the foregoing or who
produced _____________________, who executed the foregoing articles of
incorporation, and he/she acknowledged before me that he/she executed those
articles of incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 28th day of November, 1995.
/s/ JoAnn Loch
-----------------------------------
Notary Public, State of Florida
-5-
<PAGE> 6
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE
OF PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY
BE SERVED.
___________________________________
In pursuance of Chapter 48.091, Florida Statutes, the following is
submitted, in compliance with said Act;
First -- That InPhyNet Hospital Services, Inc., desiring to organize
under the laws of the State of Florida with its principal office, as indicated
in the articles of incorporation at City of Fort Lauderdale, County of Broward,
State of Florida has named C T Corporation System located at 1200 S. Pine Island
Road, City of Plantation, County of Broward, State of Florida, as its agent to
accept service of process within this state.
ACKNOWLEDGMENT: (MUST BE SIGNED BY DESIGNATED AGENT)
Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act relative to
keeping open said office.
/s/ Tanya M. Villar
___________________________________
C T Corporation System
Registered Agent
Tanya M. Villar, special Assistant
Secretary
-1-
<PAGE> 1
Exhibit 3.12
BYLAWS
OF
INPHYNET HOSPITAL SERVICES, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If,
<PAGE> 2
however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and
-2-
<PAGE> 3
place of the meeting and shall be subject to the inspection of any shareholder
at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that
-3-
<PAGE> 4
time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the
-4-
<PAGE> 5
proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder of record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the
-5-
<PAGE> 6
action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
-6-
<PAGE> 7
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 3 director(s). The
number of directors may be increased or decreased from time to time by amendment
to these bylaws, but no decrease shall have the effect of shortening the terms
of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
-7-
<PAGE> 8
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
-8-
<PAGE> 9
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
-9-
<PAGE> 10
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
-10-
<PAGE> 11
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
-11-
<PAGE> 12
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
-12-
<PAGE> 13
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be
-13-
<PAGE> 14
identified as a distribution of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-14-
<PAGE> 1
Exhibit 3.13
ARTICLES OF INCORPORATION
OF
INPHYNET EMERGENCY MEDICINE INSTITUTE, INC.
ARTICLE I - NAME
The name of this corporation shall be:
INPHYNET EMERGENCY MEDICINE INSTITUTE, INC.
ARTICLE II - DURATION
This corporation shall exist in perpetuity.
ARTICLE III - PURPOSE
1. The general nature of the business and the object and purposes
proposed to be transacted and carried on, are to do any and all of the things
mentioned herein, as fully and to the same extent as natural persons might or
could do.
2. To take, acquire, buy, hold, own, maintain, work, develop, sell,
convey, lease, mortgage, exchange, improve and otherwise invest in and dispose
of real estate and real property or any interest or rights therein without limit
as to the amount to do all things and engage in all activities necessary and
proper or incidental to the business of investing in and developing real estate.
3. To sell at wholesale and retail and do deal in any manner whatever
in all types and descriptions of property; to do all things and engage in all
activities necessary and proper or incidental to wholesale and retail business.
4. To purchase, acquire, hold, and dispose of stocks, bonds, and other
obligations including judgments, interest, accounts or debts of any corporation,
domestic or foreign (except moneyed or transportation or banking, or insurance
corporations) owning or controlling any articles
-1-
<PAGE> 2
which are or might be or become useful in the business of this company, and to
purchase, acquire, hold and dispose of stocks, bonds or other obligations
including judgments, interest, accounts or debts of any corporation, domestic or
foreign (except moneyed or transportation or banking or insurance corporations)
engaged in a business similar to that of this company, or engaged in the
manufacture, use or sale of property, or in the construction or operation of
works necessary or useful in the business of this company, or in which, or in
connection with which, the manufactured articles, product or property of this
company may be used, or of any corporation with which this corporation is or may
be used, or of any corporation with which this corporation is or may be
authorized to consolidate according to law, and this company may issue in
exchange therefor the stocks, bonds or other obligations of this company.
5. To purchase, take and lease, or in exchange, hire or otherwise
acquire any real or personal property, rights or privileges suitable or
convenient for any of the purposes of this business, and to purchase, acquire,
erect and construct, make improvement of buildings or machinery, stores or
works, insofar as the same may be appurtenant to or useful for the conduct of
the business as above specified, but only to the extent to which the company may
be authorized by the statutes under which it is organized.
6. To acquire and carry on all or any part of the business or property
of any company engaged in a business similar to that authorized to be conducted
by this company, or with which this company is authorized under the laws of this
state to consolidate, or whose stock the company under the laws of this state
and the provisions of this certificate is authorized to purchase and to
undertake in conjunction therewith, any liabilities or any person, firm,
association, or company described as aforesaid, possessing of property suitable
for any of the purposes of this company, or for carrying on
-2-
<PAGE> 3
any business which this company is authorized to conduct, and as for the
consideration for the same to pay cash or to issue shares, stocks and
obligations of this company.
7. To purchase, subscribe for or otherwise acquire and to hold the
shares, stocks or obligations of any company organized under the laws of this
state or of any other state, or of any territory of the United States, or of any
foreign country, except moneyed or transportation or banking or insurance
corporations, and to sell or exchange the same, or upon the distribution of
assets or divisions of profits, to distribute any such shares, stocks, or
obligations or proceeds thereof among the stockholders of this company.
8. To borrow or raise money for any purposes of the company, and to
secure the same and interest, or for any other purpose, to mortgage all or any
part of the property corporeal or incorporeal rights or franchises of this
company now owned or hereafter acquired, and to create, issue, draw and accept
and negotiate bonds and mortgages, bills of exchange, promissory notes or other
obligations or negotiable instruments.
9. To guarantee the payment of dividends or interest on any shares,
stocks, debentures or other securities issued by, or any other contract or
obligation of, any corporation described as aforesaid, whenever proper or
necessary for the business of the company, and provided the required authority
be first obtained for that purpose, and always subject to the limitations herein
prescribed.
10. To acquire by purchase or otherwise own, hold, buy, sell, convey,
lease, mortgage or incumber real estate or other property, personal or mixed.
11. To buy, sell, and generally trade in, store, carry and transport
all kinds of goods, wares, merchandise, provisions and supplies.
12. To do and perform and cause to be done or performed each, any and
all of the acts
-3-
<PAGE> 4
and things above enumerated, and any and all other acts and things insofar as
the same any be incidental to or included in any or all of the general powers
given, always provided on the grant of the foregoing enumerated powers is upon
the express condition precedent that the various powers above enumerated shall
be exercised by said company only in case the same are authorized to be
exercised by the acts above recited under which said company is organized, and
the same shall be exercised by said company only in the manner and to the extent
that the same may be authorized to be exercised under the said acts above
recited under which it was organized. The said corporation may perform any part
of its business outside the State of Florida, in the other states or colonies of
the United States of America, and in all foreign countries.
13. And further for the purpose of transacting any and all lawful
businesses.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 1,000 shares of ONE DOLLAR AND
NO/100 ($1.00) par value common stock.
ARTICLE V - PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he/she already
holds, shall have the right to purchase his/her pro rata share thereof (as
nearly as may be done without issuance of fractional shares) at the price at
which it is offered to others.
ARTICLE VI - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 1200 S. Pine Island Road, Ft. Lauderdale, Florida 33324 and the name of the
initial registered agent of this corporation at that address is CT Corporation.
-4-
<PAGE> 5
ARTICLE VII - PRINCIPAL OFFICE
The principal office of the corporation is 1200 S. Pine Island Road,
Suite 600, Plantation, Florida 33324.
ARTICLE VIII - INITIAL BOARD OF DIRECTORS
This corporation shall have three (3) directors initially. The number
of directors may be either increased or diminished from time to time by the
bylaws, but shall not be less than three (3). The names and addresses of the
initial directors of this corporation are:
Jere D. Creed, M.D. J. Clifford Findeiss, M.D.
1200 S. Pine Island Road 1200 S. Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
George W. McCleary, Jr.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE IX - INCORPORATOR
The name and address of the person signing these articles is:
Neesa K. Warlen, Esq.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE X - AMOUNT OF CAPITAL
The amount of capital with which this corporation will begin business
will be not less than Five Hundred Dollars ($500.00).
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors and the shareholders.
-5-
<PAGE> 6
ARTICLE XII - APPROVAL OF SHAREHOLDERS REQUIRE FOR MERGER
The approval of the shareholders of this corporation to any plan of
merger shall be required in every case, whether or not such approval is required
by law.
ARTICLE XIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XIV - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these articles of incorporation, or any amendment hereto, and any
right conferred upon the shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these
articles of incorporation this 14th day of November, 1995.
/s/ Neesa K. Warlen
-----------------------------
Neesa K. Warlen, Subscriber
STATE OF FLORIDA
SS:
COUNTY OF BROWARD
BEFORE ME, a notary public authorized to take acknowledgements in the
state and county set forth above, personally appeared Neesa K. Warlen,
personally known to me to be the person who executed the foregoing
_______________________ who executed the foregoing articles of incorporation,
and he/she acknowledged before me that he/she executed those articles of
incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 14th day of December, 1995.
/s/ JO ANN LOCH
-----------------------------------
Notary Public, State of Florida
-6-
<PAGE> 7
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF
PROCESS WITHIN THIS STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED.
In pursuance of Chapter 48.091, Florida Statutes, the following is submitted, in
compliance with said Act;
First -- That InPhyNet Hospital Services, Inc., desiring to organize
under the laws of the State of Florida with its principal office, as indicated
in the articles of incorporation at City of Fort Lauderdale, County of Broward,
State of Florida has named C T Corporation System located at 1200 S. Pine Island
Road, City of Plantation, County of Broward, State of Florida, as its agent to
accept service of process within this state.
ACKNOWLEDGEMENT: (MUST BE SIGNED BY DESIGNATED AGENT)
Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act relative to
keeping open said office.
By /s/ Barbara A. Burke
C T Corporation System,
Registered Agent
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION OF
INPHYNET EMERGENCY MEDICINE INSTITUTE, INC.
We, the undersigned President and Secretary of INPHYNET EMERGENCY
MEDICINE INSTITUTE, INC., a corporation organized under the laws of the State of
Florida and located in the County of Broward, in such State, hereby certify:
1. The name of the Corporation is INPHYNET EMERGENCY MEDICINE
INSTITUTE, INC.
2. The Certificate of Incorporation is ______ by the following
resolution adopted by the Stockholders on February 2, 1996;
RESOLVED, that the Officers of the Corporation be, and they hereby are,
authorized to take the necessary measures to amend the Corporation's
Certificate of Incorporation by changing the name of the Corporation
from InPhynet Emergency Medicine Institute, Inc. to InPhyNet Medical
Management Institute, Inc. to be effective as of the 1st day of
January, 1996.
The Certificate of Incorporation is hereby amended so that the FIRST
Article is eliminated, and the following substituted for said FIRST Article:
FIRST: The name of the corporation is:
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
-1-
<PAGE> 9
Signed and dated at Fort Lauderdale, Florida this 12th day of February, 1996.
InPhyNet Medical Management
Institute, Inc.
BY: /s/ J. Clifford Findeiss
--------------------------
J. Clifford Findeiss,
President
ATTEST: /s/ David C. Peck
-------------------------
David C. Peck,
Secretary
STATE OF FLORIDA
SS:
COUNTY OF BROWARD
I HEREBY CERTIFY that on this 12th day of February, 1996, personally
appeared before me, the undersigned authority, J. Clifford Findeiss and David C.
Peck, to me well known to be the President and Secretary, respectively, of
InPhyNet Medical Management Institute, Inc., who acknowledged before me that
they executed said Certificate of Amendment of Certificate of Incorporation as
their free and voluntary act and deed for the uses and purposes therein set
forth and expressed.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the 12th day
of February, 1996 at Ft. Lauderdale, Florida.
/s/ Nessa K. Warlen
-------------------------------
Notary Public, State of Florida
My Commission Expires:
-2-
<PAGE> 1
Exhibit 3.14
BYLAWS
OF
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any
<PAGE> 2
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the adjournment the Board of Directors fixes
a new record date for the adjourned meeting, a notice of the adjourned meeting
shall be given as provided in this section to each shareholder of record on the
new record date entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and
-2-
<PAGE> 3
place of the meeting and shall be subject to the inspection of any shareholder
at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that
-3-
<PAGE> 4
time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders, duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the
-4-
<PAGE> 5
proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder of record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the
-5-
<PAGE> 6
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or to
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
-6-
<PAGE> 7
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have no less than three (3)
directors. The number of directors may be increased or decreased from time to
time by amendment to these bylaws, but no decrease shall have the effect of
shortening the terms of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
-7-
<PAGE> 8
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
-8-
<PAGE> 9
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any
contract to issue or sell, shares or designate the terms of a series of a class
of shares, except that the Board of Directors, having acted regarding general
authorization for the issuance or sale of shares, or any contract therefor, and,
in the case of a series, the designation thereof, may, pursuant to a general
formula or method specified by the Board of Directors, by resolution or by
adoption of a stock option or other plan, authorize a committee to fix the terms
of any contract for the sale of the shares and to fix the terms upon which such
shares may be issued or sold, including, without limitation, the price, the rate
or manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
-9-
<PAGE> 10
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
-10-
<PAGE> 11
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
-11-
<PAGE> 12
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
-12-
<PAGE> 13
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be
-13-
<PAGE> 14
identified as a distribution of capital surplus, and the amount per share paid
from such surplus shall be disclosed to the shareholders receiving the same
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-14-
<PAGE> 1
EXHIBIT 3.15
ARTICLES OF INCORPORATION
OF
KARL G. MANGOLD, INC.
I.
The name of the corporation is Karl G. Mangold, Inc.
II.
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of California other than the banking business, the trust
company business or the practice of a profession permitted to be incorporated by
the California Corporations Code.
III.
The name and address in this State of the corporation's initial agent
for service of process is:
Karl G. Mangold
2400 Diablo Lakes Lane
Diablo, CA 94528
IV.
The corporation is authorized to issue only one class of shares of
stock; and the total number of shares which this corporation is authorized to
issue is 10,000.
V.
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent under California law.
VI.
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, through agreements with the agents, or through vote of shareholders
or disinterested directors or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code, subject
in the limits on such excess indemnification set forth in Section 204 of the
California Corporations Code with respect to actions for breach of duty to the
corporation and its shareholders.
-1-
<PAGE> 2
VII.
Any repeal or modification of the foregoing provisions of Articles V
and VI by the shareholders of this corporation shall not adversely affect the
right or protection of an agent of the corporation existing at the time of such
repeal or modification.
VIII.
If proceedings are commenced for the dissolution of the corporation to
which Section 2600 of the California Corporations Code applies, the provisions
of any Buy-Sell Agreement or Stock Purchase Agreement, if any, then in effect
among the corporation and its shareholders shall govern and supersede any
provisions of Section 2000 which are inconsistent therewith, to the extent
required to enforce any such Buy-Sell Agreement or Stock Repurchase Agreement.
Dated: 2/10/97
/s/ Karl G. Mangold
----------------------------------
Karl G. Mangold
Incorporator
-2-
<PAGE> 3
AGREEMENT OF MERGER
BETWEEN
KARL G. MANGOLD, INC., A CALIFORNIA CORPORATION
AND
MANGOLD MERGER CORPORATION, A DELAWARE CORPORATION
This Agreement of Merger ("Agreement") is entered into as of June 24,
1997 between Karl G. Mangold, Inc., California corporation (herein "Surviving
Corporation") and Mangold Merger Corporation, a Delaware corporation (herein
"Merging Corporation")
NOW, THEREFORE, the Surviving Corporation and the Merging Corporation
hereby agree as follows:
1. Merging Corporation shall be merged into Surviving
Corporation.
2. Each outstanding share of Merging Corporation shall be
converted to one share common stock of Surviving Corporation.
3. The outstanding shares of Surviving Corporation shall be
converted into the right to receive the Merger Consideration,
as such defined in that certain Plan and Agreement of Merger
dated as of May 27, 1997 by and among MedPartners, Inc.,
Merging Corporation and Surviving Corporation. Merger
consideration means 1231.142 shares of MedPartners, Inc.
Common Stock for each share of the Surviving Corporation
outstanding immediately before the effectiveness of the
merger.
4. Merging Corporation shall from time to time, as and when
requested by Surviving Corporation execute and deliver all
such documents and instruments and take all such action
necessary or desirable to evidence or carry out this merger.
5. The effect of the merger and the effective date June 30, 1997.
IN WITNESS WHEREOF the undersigned have caused this Agreement to be
executed as of the date first set forth above.
KARL G. MANGOLD, INC.,
a California corporation
By: /s/ Karl G. Mangold
__________________________________
Karl G. Mangold, President
By: /s/ Janet Mangold
__________________________________
Janet Mangold, Secretary
-1-
<PAGE> 4
MANGOLD MERGER CORPORATION
a Delaware corporation
By: /s/ Harold O. Knight, Jr.
__________________________________
Harold O. Knight, Jr.
Its: Vice President
By: /s/ Tracy P. Thrasher
__________________________________
Tracy P. Thrasher
Its: Secretary
-2-
<PAGE> 5
CERTIFICATE
OF
MERGER
OF
KARL G. MANGOLD, INC.
a California corporation
Karl G. Mangold and Janet Mangold, certify that:
1. They are the president and secretary, respectively, of Karl
G. Mangold, Inc., a California corporation;
2. The Agreement of Merger in the form attached was duly
approved by the board of directors and shareholders of the corporation.
3. The shareholder approval was by the holders of 100% of the
outstanding shares of the corporation.
4. There is only one class of shares and the number of shares
outstanding is 1,000.
We further declare under penalty of perjury under the laws of the State
of California that the matter set forth in this certificate are true and correct
of our own knowledge.
Executed in Pleasanton, California on June 24, 1997.
/s/ Karl G. Mangold
__________________________________
Karl G. Mangold, President
/s/ Janet Mangold
__________________________________
Janet Mangold, Secretary
-1-
<PAGE> 6
CERTIFICATE
OF
MERGER
OF
MANGOLD MERGER CORPORATION,
a Delaware corporation
Harold O. Knight, Jr. and Tracy P. Thrasher hereby certify that:
1. They are the Vice President and Secretary, respectively, of Mangold
Merger Corporation, a Delaware corporation (the "Corporation").
2. The Agreement of Merger, in the form attached, was duly approved by
the board of directors and the stockholder of the Corporation.
3. The stockholder approval was by the holder of 100% of the
outstanding shares of the Corporation.
4. There is only one class of shares of the Corporation and the number
of shares outstanding is 1,000.
5. Common Stock securities of MedPartners, Inc., a Delaware
corporation, the parent corporation of the Corporation, will be issued in the
merger. No vote of the stockholders of the parent corporation was required.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of our own knowledge.
Executed in Jefferson County, Alabama on June 24, 1997.
/s/ Harold O. Knight, Jr.
_______________________________________
Harold O. Knight, Jr., Vice President
/s/ Tracy P. Thrasher
_______________________________________
Tracy P. Thrasher, Secretary
-1-
<PAGE> 1
Exhibit 3.16
BYLAWS
OF
KARL G. MANGOLD, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Title Page
- ------- ----- ----
<S> <C> <C>
OFFICES
1 Principal Offices
2 Other Offices
MEETINGS OF SHAREHOLDERS
3 Place of Meetings
4 Annual Meeting
5 Special Meeting
6 Notice of Shareholders' Meetings
7 Manner of Giving Notice; Affidavit of Notice
8 Quorum
9 Adjourned Meeting: Notice
10 Voting
11 Waiver of Notice or Consent by Absent Shareholders
12 Shareholder Action by Written Consent
Without a Meeting
13 Record Date for Shareholder Notice, Voting
and Giving Consents
14 Proxies
15 Inspectors of Election
DIRECTORS
16 Powers
17 Number and Qualification of Directors
18 Election and Term of Office of Directors
19 Vacancies
20 Place of Meetings and Meetings by Telephone
21 Organization Meetings
22 Other Regular Meetings
23 Special Meetings
24 Quorum
25 Waiver of Notice
26 Adjournment
27 Notice of Adjournment
28 Action Without Meeting
29 Fees and Compensation of Directors
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Section Title Page
- ------- ----- ----
<S> <C> <C>
OFFICERS
30 Officers
31 Election of Officers
32 Subordinate Officers
33 Removal and Resignation of Officers
34 Vacancies in Offices
35 President
36 Vice President
37 Secretary
38 Chief Financial Officer
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND OTHER
AGENTS
39 Right of Indemnity
40 Approval of Indemnity
41 Advancement of Expenses
42 Insurance
43 Nonapplicability to Fiduciaries of Employee
Benefit Plans
RECORDS AND REPORTS
44 Maintenance and Inspection of Share Register
45 Maintenance and Inspection of Bylaws
46 Maintenance and Inspection of Other Corporate
Records
47 Inspection by Directors
48 Annual Report to Shareholders
49 Financial Statements
GENERAL CORPORATE MATTERS
50 Record Date for Purposes Other than
Notice and Voting
51 Checks, Drafts, Evidences of Indebtedness
52 Corporate Contracts and Instruments; How
Executed
53 Certificates for Shares
54 Lost Certificates
55 Representation of Shares of Other Corporations
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Section Title Page
- ------- ----- ----
<S> <C> <C>
56 Construction and Definitions
AMENDMENTS
57 Amendment by Shareholders
58 Amendment by Directors
CERTIFICATE OF SECRETARY
</TABLE>
iii
<PAGE> 5
BYLAWS
OF
KARL G. MANGOLD, INC.
OFFICES
1. Principal Offices. The Board of Directors shall fix the location of
the principal executive office of the Corporation at any place within the State
of California.
2. Other Offices. The Board of Directors may at any time establish
branch or subordinate offices at any place or places where the Corporation is
qualified to do business.
MEETINGS OF SHAREHOLDERS
3. Place of Meetings. Meetings of shareholders shall be held at any
place within or outside the State of California designated by the Board of
Directors. In the absence of any such designation, shareholders' meetings shall
be held at the principal executive office of the Corporation.
4. Annual Meeting. The annual meeting of shareholders shall be held on
the first business day of September of each year, but if such date falls on a
legal holiday, then the annual meeting of shareholders shall be held at the same
time and place on the next succeeding full business day. At this meeting,
Directors shall be elected, and any other proper business may be transacted.
5. Special Meeting. A special meeting of the shareholders may be called
at any time by the Board of Directors, or by the President, or by one or more
shareholders holding shares in the aggregate entitled to cast not less than 10%
of the votes at the meeting. If a special meeting is called by any person or
persons other than the Board of Directors, the request shall be in writing,
specifying the time of such meeting and the general nature of the business
proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
President or the Secretary of the Corporation. The officer receiving the request
shall cause notice to be promptly given to the shareholders entitled to vote, in
accordance with the provisions of Sections 6 and 7 of these Bylaws, that a
meeting will be held at the time requested by the person or persons calling the
meeting, not less than thirty-five (35) nor more than sixty (60) days after the
receipt of the request. If the notice is not given within twenty (20) days after
receipt of the request, the person or persons requesting the meeting may give
the notice. Nothing contained in this Section 5 shall be construed as limiting,
fixing or affecting the time when a meeting of shareholders called by action of
the Board of Directors may be held.
6. Notice of Shareholders' Meetings. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 7 below
not less than ten (10) nor more than sixty (60) days before the date of the
meeting. The notice shall specify the place, date and hour of the meeting and
(a) in the case of a special meeting, the general nature of the business to be
transacted, or (b) in the case of the annual meeting, those matters which the
Board of Directors, at the time of giving the notice, intends to present for
action by the shareholders. The
-1-
<PAGE> 6
notice of any meeting at which Directors are to be elected shall include the
name of any nominee or nominees whom, at the time of the notice, management
intends to present for election.
If action is proposed to be taken at any meeting for approval of (a) a
contract or transaction in which a Director has a direct or indirect financial
interest, pursuant to Section 310 of the California Corporations Code, (b) an
amendment of the articles of incorporation, pursuant to Section 902 of that
Code, (c) a reorganization of the Corporation, pursuant to Section 1201 of that
Code, (d) a voluntary dissolution of the Corporation, pursuant to Section 1900
of that Code, or (e) a distribution in dissolution other than in accordance with
the rights of outstanding preferred shares, pursuant to Section 2007 of that
Code, the notice shall also state the general nature of that proposal.
7. Manner of Giving Notice; Affidavit of Notice. Notice of any meeting
of shareholders shall be given either personally or by first-class mail or
telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
Corporation or given by the shareholder to the Corporation for the purpose of
notice. If no such address appears on the Corporation's books or has been given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the
Corporation's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally
or deposited in the mail or sent by telegram or other means of written
communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the Corporation is returned to the
Corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the shareholder
at that address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the shareholder on
written demand of the shareholder at the principal executive office of the
Corporation for a period of one year from the date of the giving of notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting may be executed by the Secretary or any transfer agent of
the Corporation giving the notice, and shall be filed and maintained in the
minute book of the Corporation.
8. Quorum. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting of shareholders shall
constitute a quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
9. Adjourned Meeting: Notice. Any shareholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the shares represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 8 above.
-2-
<PAGE> 7
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the Board of Directors shall
set a new record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 6 and 7 hereof. At any adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting.
10. Voting. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section 13
below, subject to the provisions of Sections 702 to 704, inclusive, of the
California Corporations Code (relating to voting shares held by a fiduciary, in
the name of a corporation, or in joint ownership). The shareholders' vote may be
by voice vote or by ballot; provided, however, that any election for Directors
must be by ballot if demanded by any shareholder before the meeting has begun.
On any matter other than elections of Directors, any shareholder may vote part
of the shares in favor of the proposal and refrain from voting the remaining
shares or vote them against the proposal, but, if the shareholder fails to
specify the number of shares which the shareholder is voting affirmatively, it
will be conclusively presumed that the shareholder's approving vote is with
respect to all shares that the shareholder is entitled to vote. Subject to the
provisions of Section 8 above, the affirmative vote of the majority of the
shares represented and voting at a duly held meeting at which a quorum is
present (which shares voting affirmatively also constitute at least a majority
of the required quorum), shall be the act of the shareholders, unless the vote
of a greater number or voting by classes is required by the California
Corporations Code or by the articles of incorporation.
At a shareholders' meeting at which Directors are to be
elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any
one or more candidates a number of votes greater than the number of the
shareholders' shares) unless the candidates' names have been placed in
nomination prior to commencement of the voting and a shareholder has given
notice prior to commencement of the voting of the shareholder's intention to
cumulate votes. If any shareholder has given such a notice, then every
shareholder entitled to vote may cumulate votes for candidates in nomination and
give one candidate a number of votes equal to the number of Directors to be
elected multiplied by the number of votes to which that shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among any
or all of the candidates, as the shareholder thinks fit. The candidates
receiving the highest number of votes, up to the number of Directors to be
elected, shall be elected.
11. Waiver of Notice or Consent by Absent Shareholders. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present either
in person or by proxy, and if, either before or after the meeting, each person
entitled to vote, who was not present in person or by proxy, signs a written
waiver of notice or a consent to a holding of the meeting, or an approval of the
minutes. The waiver of notice or consent need not specify either the business to
be transacted or the purpose of any annual or special meeting of shareholders,
except that if action is taken or proposed to be taken for approval of any of
those matters specified in the second paragraph of Section 6, the waiver of
notice or
-3-
<PAGE> 8
consent shall state the general nature of the proposal. All such waivers,
consents or approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the meeting.
12. Shareholder Action by Written Consent Without a Meeting. Any action
which may be taken at any annual or special meeting of shareholders may be taken
without a meeting and without prior notice, if a consent in writing, setting
forth the action so taken, is signed by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take that action at a meeting at which all shares entitled to vote on that
action were present and voted. In the case of election of Directors, such a
consent shall be effective only if signed by the holders of all outstanding
shares entitled to vote for the election of Directors; provided, however, that a
Director may be elected at any time to fill a vacancy on the Board of Directors
that has not been filled by the Directors, by the written consent of the holders
of a majority of the outstanding shares entitled to vote for the election of
Directors. All such consents shall be filed with the Secretary of the
Corporation and shall be maintained in the corporate records. Any shareholder
giving a written consent, or the shareholder's proxy holders, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxy holders, may revoke the consent by a writing received by the Secretary of
the Corporation before written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary.
If the consents of all shareholders entitled to vote have not
been solicited in writing, and if the unanimous written consent of all such
shareholders shall not have been received, the Secretary shall give prompt
notice of the corporate action approved by the shareholders without a meeting.
This notice shall be given in the manner specified in Section 7. In the case of
approval of (a) contracts or transactions in which a Director has a direct or
indirect financial interest, pursuant to Section 310 of the California
Corporations Code, (b) indemnification of agents of the Corporation, pursuant
to Section 317 of that Code, (c) a reorganization of the Corporation, pursuant
to Section 1201 of that Code, or (d) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares, pursuant to Section
2007 of that Code, the notice shall be given at least ten (10) days before the
consummation of any action authorized by that approval.
13. Record Date for Shareholder Notice, Voting and Giving Consents. For
purposes of determining the shareholders entitled to notice of any meeting or to
vote or entitled to give consent to corporate action without a meeting, the
Board of Directors may fix, in advance, a record date, which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting nor more than sixty (60) days before any such action without a meeting,
and in this event only shareholders of record on the date so fixed are entitled
to notice and to vote or to give consents, as the case may be, notwithstanding
any transfer of any shares on the books of the Corporation after the record
date, except as otherwise provided in the California Corporations Code.
-4-
<PAGE> 9
If the Board of Directors does not so fix a record date:
a. The record date for determining shareholders entitled to
notice of or to vote at a meeting of shareholders shall be at the close
of business on the business day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held.
b. The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting, (1) when
no prior action by the Board has been taken, shall be the day on which
the first written consent is given, or (2) when prior action of the
Board has been taken, shall be at the close of business on the day on
which the Board adopts the resolution relating to that action, or the
sixtieth (60th) day before the date of such other action, whichever is
later.
14. Proxies. Every person entitled to vote for Directors or on any
other matter shall have the night to do so either in person or by one or more
agents authorized by a written proxy signed by the person and filed with the
Secretary of the Corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (a)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the Corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (b) written notice of the death or
incapacity of the maker of that proxy is received by the Corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of eleven (11) months from the date of the proxy,
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of
Section 705 of the California Corporations Code.
15. Inspectors of Election. Before any meeting of shareholders, the
Board of Directors may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the chairman of the meeting may, and on the request
of any shareholder or a shareholder's proxy shall, appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or
three (3). If inspectors are appointed at a meeting on the request of one or
more shareholders or proxies, the holders of a majority of shares or their
proxies present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. If any person appointed as inspector fails to
appear or fails or refuses to act, the chairman of the meeting may, and upon the
request of any shareholder or a shareholder's proxy shall, appoint a person to
fill that vacancy.
These inspectors shall:
a. Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of
a quorum, and the authenticity, validity, and effect of proxies;
-5-
<PAGE> 10
b. Receive votes, ballots, or consents;
c. Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
d. Count and tabulate all votes or consents;
e. Determine when the polls shall close;
f. Determine the result; and
g. Do any other acts that may be proper to conduct the
election or vote with fairness to all shareholders.
DIRECTORS
16. Powers. Subject to the provisions of the California Corporations
Code and any limitations in the articles of incorporation and these Bylaws
relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the Corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
Board of Directors.
17. Number and Qualification of Directors. The authorized number of
Directors shall be one (1) until changed by a duly adopted amendment to the
articles of incorporation or by an amendment to this bylaw adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote.
18. Election and Term of Office of Directors. Directors shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
19. Vacancies. Vacancies in the Board of Directors may be filled by a
majority of the remaining Directors, though less than a quorum, or by a sole
remaining Director, except that a vacancy created by the removal of a Director
by the vote or written consent of the shareholders or by court order may be
filled only by the vote of a majority of the shares entitled to vote represented
at a duly held meeting at which a quorum is present, or by the written consent
of holders of a majority of the outstanding shares entitled to vote. Each
Director so elected shall hold office until the next annual meeting of the
shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any Director, or if
the Board of Directors by resolution declares vacant the office of a Director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of Directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any Director or
Directors are elected, to elect the number of Directors to be voted for at that
meeting.
-6-
<PAGE> 11
The shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such election by
written consent other than to fill a vacancy created by removal, shall require
the consent of a majority of the outstanding shares entitled to vote.
Any Director may resign effective on giving written notice to the
President, the Secretary, or the Board of Directors, unless the notice specifies
a later time for that resignation to become effective. If the resignation of a
Director is effective at a future time, the Board of Directors may elect a
successor to take office when the resignation becomes effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
20. Place of Meetings and Meetings by Telephone. Regular meetings of
the Board of Directors may be held at any place within or outside the State of
California that has been designated from time to time by resolution of the
Board. In the absence of such a designation, regular meetings shall be held at
the principal executive office of the Corporation. Special meetings of the Board
shall be held at any place within or outside the State of California that has
been designated in the notice of the meeting or, if not stated in the notice or
if there is no notice, at the principal executive office of the Corporation. Any
meeting, regular or special, may be held by conference telephone or similar
communication equipment, so long as all Directors participating in the meeting
can hear one another, and all such Directors shall be deemed to be present in
person at the meeting.
21. Organization Meetings. Regular meetings of the Board of Directors
shall be held immediately following the adjournment of the annual meetings of
shareholders, for the purpose of organization, election of officers and the
transaction of other business.
22. Other Regular Meetings. Other regular meetings of the Board of
Directors shall be held without call at such time as shall from time to time be
fixed by the Board of Directors. Such regular meetings may be held without
notice.
23. Special Meetings. Special meetings of the Board of Directors for
any purpose or purposes may be called at any time by the President or the
Secretary or any Director.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Director or sent by first-class mail or
telegram, charges prepaid, addressed to each Director at that Director's address
as it is shown on the records of the Corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least four (4) days before
the time of the holding of the meeting. In case the notice is delivered
personally, or by telephone or telegram, it shall be delivered personally or by
telephone or to the telegraph company at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the Director or to a person at the
office of the Director who the person giving the notice has reason to believe
will promptly communicate it to the Director. The notice need not specify the
purpose of the meeting nor the place if the meeting is to be held at the
principal executive office of the Corporation.
-7-
<PAGE> 12
24. Quorum. One-half of the authorized number of Directors but in no
event less than two, whichever is larger (unless the authorized number of
Directors is one, in which case one Director), shall constitute a quorum for the
transaction of business, except to adjourn as provided in Section 26. Every act
or decision done or made by a majority of the Directors present at a meeting
duly held at which a quorum is present shall be regarded as the act of the Board
of Directors, subject to the provisions of Section 310 of the California
Corporations Code (as to approval of contracts or transactions in which a
Director has a direct or indirect material financial interest), Section 311 of
that Code (as to appointment of committees), and Section 317(e) of that Code (as
to indemnification of Directors). A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
Directors, if any action taken is approved by at least a majority of the
required quorum for that meeting.
25. Waiver of Notice. The transactions of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice if a quorum is
present and if, either before or after the meeting, each of the Directors not
present signs a written waiver of notice, a consent to holding the meeting or an
approval of the minutes. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents, and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting. Notice
of a meeting shall also be deemed given to any Director who attends the meeting
without protesting the lack of notice to that Director before or at the
commencement of the meeting.
26. Adjournment. A majority of the Directors present whether or not
constituting a quorum, may adjourn any meeting to another time and place.
27. Notice of Adjournment. Notice of the time and place of holding an
adjourned meeting need not be given, unless the meeting is adjourned for more
than twenty-four (24) hours, in which case notice of the time and place shall be
given before the adjourned meeting is to commence, in the manner specified in
Section 23, to the Directors who were not present at the time of the
adjournment.
28. Action Without Meeting. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting, if all members
of the Board shall individually or collectively consent in writing to that
action. Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors. Such written consent or consents shall
be filed with the minutes of the proceedings of the Board.
29. Fees and Compensation of Directors. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement of expenses, as may be fixed or determined by resolution of the
Board of Directors. This Section 29 shall not be construed to preclude any
Director from serving the Corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation for those services.
OFFICERS
-8-
<PAGE> 13
30. Officers. The officers of the Corporation shall be a president, a
vice-president, a secretary, and a chief financial officer, and any other
offices created by resolution of the Board of Directors. Any number of offices
may be held by the same person.
31. Election of Officers. The officers of the Corporation, except such
officers as may be appointed in accordance with the provisions of Section 32 or
Section 34, shall be chosen by the Board of Directors, and each shall serve at
the pleasure of the Board, subject to the rights, if any, of an officer under
any contract of employment.
32. Subordinate Officers. The Board of Directors may appoint, and may
empower the President to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in these Bylaws or as the
Board of Directors may from time to time determine.
33. Removal and Resignation of Officers. Subject to the rights, if any,
of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Directors, at any regular or
special meeting of the Board, or, except in case of an officer chosen by the
Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.
34. Vacancies in Offices. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these Bylaws for regular appointments to that office.
35. President. Subject to such supervisory powers, if any, as may be
given by the Board of Directors to the chairman of the Board, if there be such
an officer, the President shall be the chief executive officer of the
Corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction, and control of the business and the officers of
the Corporation. He shall preside at all meetings of the shareholders and, in
the absence of the chairman or if there be none, at all meetings of the Board of
Directors. He shall have the general powers and duties of management usually
vested in the office of president of a corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or these
Bylaws.
36. Vice President. In the absence or disability of the President, the
Vice President shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. The Vice President shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or the President.
-9-
<PAGE> 14
37. Secretary. The Secretary shall keep or cause to be kept, at the
principal executive office or such other place as the Board of Directors may
direct, a book of minutes of all meetings and actions of Directors, committees
of Directors, and shareholders, with the time and place of holding, whether
regular or special, and, if special, how authorized, the notice given, the names
of those present at Directors' meetings or committee meetings, the number of
shares present or represented at shareholders' meetings, and the proceedings.
The Secretary shall keep, or cause to be kept, at the
principal executive office or at the office of the Corporation's transfer agent
or registrar, as determined by resolution of the Board of Directors, a share
register, or a duplicate share register, showing the names of all shareholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board of Directors required by these
Bylaws or by law to be given, and he shall keep the seal of the Corporation if
one be adopted, in safe custody, and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or by these
Bylaws.
38. Chief Financial Officer. The chief financial officer of the
Corporation, who may be designated as the Treasurer or such other title as the
Board of Directors may determine, shall keep and maintain, or cause to be kept
and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any Director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated by the Board of Directors. He shall disburse
the funds of the Corporation as may be ordered by the Board of Directors, shall
render to the President and Directors, whenever they request it, an account of
all of his transactions as chief financial officer and of the financial
condition of the Corporation, and shall have other powers and perform such other
duties as may be prescribed by the Board of Directors or these Bylaws.
INDEMNIFICATION OF DIRECTORS, OFFICERS
EMPLOYEES AND OTHER AGENTS
39. Right of Indemnity. To the full extent permitted by law, this
Corporation shall indemnify its Directors, officers, employees and other persons
described as "agents" in Section 317(a) of the California Corporations Code,
including persons formerly occupying any such position, against all expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
by them in connection with any "proceeding", as that term is used in such
Section and including an action by or in the right of the Corporation, by reason
of the fact that such person is or was a person described by such Section.
"Expenses", as used in this bylaw, shall have the same meaning as in Section
317(a) of the California Corporations Code.
-10-
<PAGE> 15
40. Approval of Indemnity. Except as provided in subdivision (d) of
Section 317 of the California Corporations Code, any indemnification under this
section shall be made by the Corporation only if authorized in the specific
case, upon a determination that indemnification of the agent is proper in the
circumstances because the agent has met the applicable standard of conduct set
forth in Sections 317(b) or (c) of the California Corporations Code by any of
the following:
(1) A majority vote of a quorum consisting of directors who
are not parties to such proceeding.
(2) If such a quorum of directors is not obtainable, by
independent legal counsel in a written opinion.
(3) Approval of the shareholders with the shares owned by the
person to be indemnified not being entitled to vote thereon.
(4) The court in which the proceeding is or was pending upon
application made by the Corporation or the agent or the attorney or other person
rendering services in connection with the defense, whether or not the
application by the agent, attorney or other person is opposed by the
Corporation.
41. Advance of Expenses. To the full extent permitted by law and except
as is otherwise determined by the Board of Directors in the specific instance,
expenses incurred by a person seeking indemnification under this bylaw in
defending any proceeding covered by this bylaw shall be advanced by the
Corporation prior to the final disposition of the proceeding upon receipt by the
Corporation of an undertaking by or on behalf of such person to repay such
amount unless it shall ultimately be determined that such person is entitled to
be indemnified by the Corporation therefor.
42. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any agent of the Corporation against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such whether or not the Corporation would have the
power to indemnify the agent against such liability under the provisions of this
Article.
43. Nonapplicability to Fiduciaries of Employee Benefit Plans. This
Article does not apply to any proceeding against any trustee, investment
manager, or other fiduciary of an employee benefit plan in such person's
capacity as such, even though such person may also be an agent of the
Corporation as defined in Section 317(a) of the California Corporations Code.
The Corporation shall have the power to indemnify such trustee, investment
manager or other fiduciary to the extent permitted by subdivision (f) of Section
207 of the California Corporations Code.
RECORDS AND REPORTS
44. Maintenance and Inspection of Share Register. The Corporation shall
keep at its principal executive office, or at the office of its transfer agent
or registrar, if either be appointed and as determined by resolution of the
Board of Directors, a record of its shareholders,
-11-
<PAGE> 16
giving the names and addresses of all shareholders and the number and class of
shares held by each shareholder.
A shareholder or shareholders of the Corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
Corporation may (a) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours on five (5) days prior
written demand on the Corporation, and (b) obtain from the transfer agent of the
Corporation, on written demand and on the tender of such transfer agent's usual
charges for such list, a list of the names and addresses of the shareholders who
are entitled to vote for the election of Directors, and their shareholdings, as
of the most recent record date for which that list has been compiled or as of a
date specified by the shareholder after the date of demand. This list shall be
made available to any such shareholder by the transfer agent on or before the
later of five (5) days after the demand is received or the date specified in the
demand as the date as of which the list is to be complied. The record of
shareholders shall also be open to inspection on the written demand of any
shareholder or holder of a voting trust certificate, at any time during usual
business hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. Any inspection and
copying under this Section 44 may be made in person or by an agent or attorney
of the shareholder or holder of a voting trust certificate making the demand.
45. Maintenance and Inspection of Bylaws. The Corporation shall keep at
its principal executive office, or if its principal executive office is not in
the State of California, at its principal business office in this state, the
original or a copy of the Bylaws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during office hours.
46. Maintenance and Inspection of Other Corporate Records. The
accounting books and records and minutes of proceedings of the shareholders and
the Board of Directors and any committee or committees of the Board of Directors
shall be kept at such place or places designated by the Board of Directors, or,
in the absence of such designation, at the principal executive office of the
Corporation. The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other form capable of
being converted into written form. The minutes and accounting books and records
shall be open to inspection upon the written demand of any shareholder or holder
of a voting trust certificate, at any reasonable time during usual business
hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney, and shall include the right to
copy and make extracts. These rights of inspection shall extend to the records
of each subsidiary corporation of the Corporation.
47. Inspection by Directors. Every Director shall have the absolute
right at any reasonable time to inspect all books, records, and documents of
every kind and the physical properties of the Corporation and each of its
subsidiary corporations. This inspection by a Director may be made in person or
by an agent or attorney and the right of inspection includes the right to copy
and make extracts of documents.
48. Annual Report to Shareholders. The annual report to shareholders
referred to in Section 1501 of the California Corporations Code is expressly
dispensed with, but nothing herein shall be interpreted as prohibiting the Board
of Directors from issuing annual or other periodic reports to the shareholders
of the Corporation as they consider appropriate.
-12-
<PAGE> 17
49. Financial Statements. A copy of any annual financial statement and
any income statement of the Corporation for each quarterly period of each fiscal
year, and any accompanying balance sheet of the Corporation as of the end of
each such period, that has been prepared by the Corporation shall be kept on
file in the principal executive office of the Corporation for twelve (12) months
and each such statement shall be exhibited at all reasonable times to any
shareholder demanding an examination of any such statement or a copy shall be
mailed to any such shareholder.
If a shareholder or shareholders holding at least five percent
(5%) of the outstanding shares of any class of stock of the Corporation makes a
written request to the Corporation for an income statement of the Corporation
for the three-month, six-month or nine-month period of the then current fiscal
year ended more than thirty (30) days before the date of the request, and a
balance sheet of the Corporation as of the end of that period, the chief
financial officer shall cause that statement to be prepared, if not already
prepared, and shall deliver personally or mail that statement or statements to
the person making the request within thirty (30) days after the receipt of the
request. If the Corporation has not sent to the shareholders its annual report
for the last fiscal year, this report shall likewise be delivered or mailed to
the shareholder or shareholders within thirty (30) days after the request.
The Corporation shall also, on the written request of any
shareholder, mail to the shareholder a copy of the last annual, semi-annual, or
quarterly income statement which it has prepared, and a balance sheet as of the
end of that period.
The quarterly income statements and balance sheets referred to
in this section shall be accompanied by the report, if any, of any independent
accountants engaged by the Corporation or the certificate of an authorized
officer of the Corporation that the financial statements were prepared without
audit from the books and records of the Corporation.
GENERAL CORPORATE MATTERS
50. Record Date for Purposes Other than Notice and Voting. For purposes
of determining the shareholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise any rights
in respect of any other lawful action (other than action by shareholders by
written consent without a meeting), the Board of Directors may fix, in advance,
a record date, which shall not be more than sixty (60) days before any such
action, and in that case only shareholders of record on the date so fixed are
entitled to receive the dividend, distribution, or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after the record date so fixed, except as
otherwise provided by the California Corporations Code.
If the Board of Directors does not so fix a record date, the
record date for determining shareholders for any such purpose shall be at the
close of business on the day on which the Board adopts the applicable resolution
or the sixtieth (60th) day before the date of that action, whichever is later.
51. Checks, Drafts, Evidences of Indebtedness. All checks, drafts, or
other orders for payment of money, notes, or other evidences of indebtedness,
issued in the name of or
-13-
<PAGE> 18
payable to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board of Directors.
52. Corporate Contracts and Instruments; How Executed. The Board of
Directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation, and this authority
may be general or confined to specific instances; and, unless so authorized or
ratified by the Board of Directors or within the agency power of an officer, no
officer, agent, or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
53. Certificates for Shares. A certificate or certificates for shares
of the capital stock of the Corporation shall be issued to each shareholder when
any of these shares are fully paid, and the Board of Directors may authorize the
issuance of certificates or shares as partly paid provided that these
certificates shall state the amount of the consideration to be paid for them and
the amount paid. All certificates shall be signed in the name of the Corporation
by the President and by the chief financial officer or the Secretary, certifying
the number of shares and the class or series of shares owned by the shareholder.
Any or all of the signatures on the certificate may be facsimile. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the Corporation with the same effect as if that person were an officer,
transfer agent, or registrar at the date of issue.
54. Lost Certificates. Except as provided in this Section 54, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is surrendered to the Corporation and canceled at the same time. The
Board of Directors may, in case any share certificate or certificate for any
other security is lost, stolen, or destroyed, authorize the issuance of a
replacement certificate on such terms and conditions as the Board may require,
including provision for indemnification of the Corporation secured by a bond or
other adequate security sufficient to protect the Corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft, or destruction of the certificate or the issuance of
the replacement certificate.
55. Representation of Shares of Other Corporations. The President, or
any other person authorized by resolution of the Board of Directors or by any of
the foregoing designated officers, is authorized to vote on behalf of the
Corporation any and all shares of any other corporation or corporations, foreign
or domestic, standing in the name of the Corporation. The authority granted to
these officers to vote or represent on behalf of the Corporation any and all
shares held by the Corporation in any other corporation or corporations may be
exercised by any of these officers in person or by any person authorized to do
so by a proxy duly executed by these officers.
56. Construction and Definitions. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in the
California Corporations Code shall govern the construction of these Bylaws.
Without limiting the generality of this provision, the
-14-
<PAGE> 19
singular number includes the plural, the plural number includes the singular,
the masculine includes the feminine, and the term "person" includes both a
corporation and a natural person.
AMENDMENTS
57. Amendment by Shareholders. New bylaws may be adopted and these
Bylaws may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the articles of incorporation of the Corporation set forth the number of
authorized Directors of the Corporation, the authorized number of Directors may
be changed only by an amendment of the articles of incorporation.
58. Amendment by Directors. Subject to the rights of the shareholders
as provided in Section 57, other than a bylaw or an amendment of a bylaw
changing the authorized number of Directors, bylaws may be adopted, amended, or
repealed by the Board of Directors.
CERTIFICATE OF SECRETARY
I, the undersigned, hereby certify as follows:
1. I am the duly elected and qualified Secretary of KARL G. MANGOLD,
Inc., a California corporation;
2. The foregoing Bylaws were duly adopted by the Board of Directors of
this Corporation as of February 20, 1997 and remain unmodified and in full force
and effect as of the date hereof
Dated: February, 1997
/s/ Janet L. Mangold
___________________________________
Janet L. Mangold, Secretary
[Seal]
-15-
<PAGE> 1
EXHIBIT 3.17
ARTICLES OF INCORPORATION OF A PROFESSIONAL CORPORATION
First - The name of this corporation shall be CHARLES LARRY
SPRINGFIELD, M.D., a Professional Corporation.
Second - The purpose of the corporation is to engage in the profession
of medicine and any other lawful activity (other than the banking or trust
company business) not prohibited to a corporation engaging in such profession by
applicable laws and regulations.
This corporation is a professional corporation within the meaning of
Part 4 of Division 3 of Title I of the California Corporations Code.
Third - The name and address of the corporation's initial agent for
service of process are:
CHARLES LARRY SPRINGFIELD, M.D.
5389 Sagebrush Trail
Redding, California 96003
Fourth - The name and address of the person appointed to act as initial
director are:
CHARLES LARRY SPRINGFIELD, M.D.
5389 Sagebrush Trail
Redding, California 96003
Fifth - The corporation is authorized to issue a total of 1,000 shares.
Signed at Redding, California on 1/15, 1981.
/s/ Charles Larry Springfield
_____________________________
CHARLES LARRY SPRINGFIELD
-1-
<PAGE> 2
State of California
County of Shasta
On this 15 day of January in the year, 1981, before me, the
undersigned, a notary public for the state of California, personally appeared
CHARLES LARRY SPRINGFIELD, known to me to be the person whose name is subscribed
to these articles of incorporation and acknowledged to me that he executed the
same.
WITNESS my hand and official seal on the day and year first above
written.
/s/ Francis Apling
_________________________
NOTARY
-2-
<PAGE> 3
1016923
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
CHARLES L. SPRINGFIELD, M.D., certifies that:
1. He is the President and Secretary of CHARLES LARRY SPRINGFIELD,
M.D., A PROFESSIONAL CORPORATION, a California professional corporation.
2. The Articles of Incorporation of this corporation are amended and
restated to read as follows:
"I
The name of this corporation is CHARLES L.
SPRINGFIELD, INC.
II
The purpose of this corporation is to engage in any
lawful act or activity for which a corporation may be
organized under the General Corporation Law of
California other than the banking business, the trust
company business or the practice of a profession
permitted to be incorporated by the California
Corporations Code.
III
This corporation is authorized to issue only one
class of shares of stock; and the total number of
shares which this corporation is authorized to issue
is one thousand (1,000) shares.
IV
The liability of the directors of the corporation for
monetary damages shall be eliminated to the fullest
extent permissible under California law.
V
The corporation is authorized to provide
indemnification of agents (as defined in Section 317
of the California Corporations Code) through bylaws
provisions, agreements with agents, vote of
-1-
<PAGE> 4
shareholders or disinterested directors or otherwise,
in excess of the indemnification otherwise permitted
by Section 317 of the California Corporations Code,
subject only to the applicable limits set forth in
Section 204 of the California Corporations Code with
respect to actions for breach of duty to the
corporation and its shareholders."
3. The foregoing amendment and restatement of Articles of Incorporation
has been duly approved by the board of directors.
4. The foregoing amendment and restatement of articles of incorporation
has been duly approved by the required vote of shareholders in accordance with
Section 902 of the Corporations Code. The total number of outstanding shares of
the corporation is 100. The number of shares voting in favor of the amendment
equaled or exceeded the vote required. The percentage vote required was more,
than fifty percent (50%).
I further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this certificate are true and
correct of my own knowledge.
Date: November 17, 1997
/s/ Charles L. Springfield
____________________________
CHARLES L. SPRINGFIELD, M.D.
President and Secretary
-2-
<PAGE> 1
EXHIBIT 3.18
BY-LAWS
OF
CHARLES SPRINGFIELD, M.D.
A PROFESSIONAL CORPORATION,
A CALIFORNIA CORPORATION
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction
of business of the corporation is hereby fixed and located at 5389 Sagebrush
Trail, Redding, CA 96003. The location may be changed by approval of a majority
of the authorized Directors, and additional offices may be established and
maintained at such other place or places, either within or without California,
as the Board of Directors may from, time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any tine
be established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the
provisions of the General Corporation Law and to any limitations in the Articles
of Incorporation of the corporation relating to action required to be approved
by the Shareholders, as that term is defined in Section 153 of the California
Code, or by the outstanding shares, as that term is defined in Section 152 of
the Code, the business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of the Board of
Directors.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of
a Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes
to be in the best interests of the corporation, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would use
under similar circumstances. (Sec. 309)
Section 3. EXCEPTION FOR CLOSE CORPORATION. Notwithstanding the
provisions of Section 1, in the event that this corporation shall elect to
become a close corporation
-1-
<PAGE> 2
as defined in Sec. 186, its Shareholders may enter into a Shareholders'
Agreement as provided in Sec. 300(b). Said agreement may provide for the
exercise of corporate powers and the management of the business and affairs of
this corporation by the Shareholders, provided, however, such agreement shall,
to the extent and so long as the discretion or the powers of the Board in its
management of corporate affairs is controlled by such agreement, impose upon
each Shareholder who is a party thereof, liability for managerial acts performed
or omitted by such person pursuant thereto otherwise imposed upon Directors as
provided in Section 300(d).
Section 4. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of Directors shall be one (1) until changed by a duly adopted amendment to the
Articles of Incorporation or by an amendment to this by-law adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote, as provided in Sec. 212.
Each Director shall be a licensed person as defined in Section 13401(c)
of the California Corporations Code.
Section 5. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
Section 6. VACANCIES. Vacancies in the Board of Directors may be filled
by a majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, except that a vacancy created by the removal of a
Director by the vote or written consent of the Shareholders or by court order
may be filled only by the vote of a majority of the shares entitled to vote
represented at a duly held meeting at which a quorum is present, or by the
written consent of holders of a majority of the outstanding shares entitled to
vote. Each Director so elected shall hold office until the next annual meeting
of the Shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any Director, or if
the Board of Directors by resolution declares vacant the office of a Director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of Directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any Director or
Directors are elected, to elect the number of Directors to be voted for at that
meeting.
-2-
<PAGE> 3
The Shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any Director may resign effective on giving written notice to the
Chairman of the Board, the President, the Secretary, or the Board of Directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a Director is effective at a future time, the
Board of Directors may elect a successor to take office when the resignation
becomes effective.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
Section 7. REMOVAL OF DIRECTORS. The entire Board of Directors or any
individual Director may be removed from office as provided by Secs. 302, 303 and
304 of the Corporations Code of the State of California. In such case, the
remaining Board members may elect a successor Director to fill such vacancy for
the remaining unexpired term of the Director so removed.
Section 8. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board
of Directors may be called by the Chairman of the Board, or the President, or
any Vice President, or any one (1) Director and shall be held at the principal
executive office of the corporation, unless some other place is designated in
the notice of the meeting. Members of the Board may participate in a meeting
through use of a conference telephone or similar communications equipment so
long as all members participating in such a meeting can hear one another.
Accurate minutes of any meeting of the Board or any committee thereof, shall be
maintained as required by Sec. 312 of the Code by the Secretary or other Officer
designated for that purpose.
Section 9. ORGANIZATION MEETINGS. The organization meetings of the
Board of Directors shall be held immediately following the adjournment of the
annual meetings of the Shareholders.
Section 10. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as fellows:
Time of Regular Meeting: 8:00 P.M.
Date of Regular Meeting: March 1 of every year
-3-
<PAGE> 4
If said day shall fall upon a holiday, such meetings shall be held on
the next succeeding business day thereafter. No notice need be given of such
regular meetings.
Section 11. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of
the Board may be called at any time by the President or by one (1) Director if
only one is provided. At least forty-eight (48) hours notice of the time and
place of special meetings shall be delivered personally to the Directors or
personally communicated to them by a corporate Officer by telephone or
telegraph. If the notice is sent to a Director by letter, it shall be addressed
to him or her at his or her address as it is shown upon the records of the
corporation, or if it is not so shown on such records or is not readily
ascertainable, at the place in which the meetings of the Directors are regularly
held. In case such notice is mailed, it shall be deposited in the United States
mail, postage prepaid, in the place in which the principal executive office of
the corporation is located at least four (4) days prior to the time of the
holding of the meeting. Such mailing, telegraphing, telephoning or delivery as
above provided shall be due, legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting,
however called or noticed, and either (i) sign a written consent thereto on the
records of such meeting, or, (ii) if a majority of the Directors are present and
if those not present sign a waiver of notice of such meeting or a consent to
holding the meeting or an approval of the minutes thereof, whether prior to or
after the holding of such meeting, which said waiver, consent or approval shall
be filed with the Secretary of the corporation, or, (iii) if a Director attends
a meeting without notice but without protesting, prior thereto or at its
commencement, the lack of notice, then the transactions thereof are as valid as
if had at a meeting regularly called and noticed.
Section 12. SOLE DIRECTOR PROVIDED BY ARTICLES OF INCORPORATION OR
BY-LAWS. In the event only one (1) Director is required by the By-Laws or
Articles of Incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the Directors
shall be deemed to refer to such notice, waiver, etc., by such sole Director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to a Board of Directors.
Section 13. DIRECTORS ACTIONS BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a
-4-
<PAGE> 5
writing signed individually or collectively by all members of the Board. Such
consent shall be filed with the regular minutes of the Board.
Section 14. QUORUM. A majority of the number of Directors as fixed by
the Articles of Incorporation or By-Laws shall be necessary to constitute a
quorum for the transaction of business, and the action of a majority of the
Directors present at any meeting at which there is a quorum, when duly
assembled, is valid as a corporate act; provided that a minority of the
Directors, in the absence of a quorum, may adjourn from time to time, but may
not transact any business. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of Directors, if
any action taken is approved by a majority of the required quorum for such
meeting.
Section 15. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent Directors if the time
and place be fixed at the meeting adjourned and held within twenty-four (24)
hours, but if adjourned more than twenty-four (24) hours, notice shall be given
to all Directors not present at the time of the adjournment.
Section 16. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 17. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be composed
of two (2) or more members of the Board, and shall have such powers of the Board
as may be expressly delegated to it by resolution of the Board of Directors,
except those powers expressly made nondelegable by Sec. 311.
Section 18. ADVISORY DIRECTORS. The Board of Directors from time to
time may elect one or more persons to be Advisory Directors who shall not by
such appointment be members of the Board of Directors. Advisory Directors shall
be available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
-5-
<PAGE> 6
Section 19. RESIGNATIONS. Any Director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The Officers of the corporation shall be a
President, a Secretary and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, one
or more Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other Officers as may be appointed in accordance
with the provisions of Section 3 of this Article III. Any number of offices may
be held by the same person. So long as the corporation has two (2) or more
Shareholders, each Officer shall be a licensed person, as defined in the
California Corporation Code Section 13401(c).
Section 2. ELECTION. The Officers of the corporation, except such
Officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold office until he or she shall resign or shall be removed or
otherwise disqualified to serve, or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may
appoint such other Officers as the business of the corporation may require, each
of whom shall hold office for such period, have such authority and perform such
duties as are provided in the By-Laws or as the Board of Directors may from time
to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an Officer under any contract of employment, any Officer may be
removed, either with or without cause, by the Board of Directors, at any regular
or special meeting of the Board, or, except in case of an Officer chosen by the
Board of Directors, by any Officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the Officer is a
party.
-6-
<PAGE> 7
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By-Laws for regular appointments to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By-Laws. If
there is no President, the Chairman of the Board shall in addition be the Chief
Executive Officer of the corporation and shall have the powers and duties
prescribed in Section 7 of this Article III.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Directors to the Chairman of the Board, if there be
such an Officer, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and Officers of the
corporation. He or she shall preside at all meetings of the Shareholders and in
the absence of the Chairman of the Board, or if there be none, at all meetings
of the Board of Directors. The President shall be ex officio a member of all the
standing committees, including the Executive Committee, if any, and shall have
the general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Directors, or if not ranked, the Vice President designated by the Board
of Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to, all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of Directors and Shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at Directors'
meetings, the number of shares present or represented at Shareholders' meetings
and the proceedings thereof.
-7-
<PAGE> 8
The Secretary shall keep, or cause to be kept, at the principal office
or at the Office of the corporation's transfer agent, a share register, or
duplicate share register, showing the names of the Shareholders and their
addresses; the number and classes of shares held by each; the number and date of
certificates issued for the same: and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by the
By-Laws or by law to be given. He or she shall keep the seal of the corporation
in safe custody and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained in accordance with
generally accepted accounting Principles, adequate and correct accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
earnings (or surplus) and shares. The books of account shall at all reasonable
times be open to inspection by any Director. The Chief Financial Officer shall
be the Treasurer and as long as this corporation has one shareholder that
shareholder shall also be Treasurer of the corporation.
This Officer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositaries as may be designated
by the Board of Directors. He or she shall disburse the funds of the corporation
as may be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his or her
transactions and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be
held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders
shall be held, each year, at the time and on the day following:
Time of Meeting: 7:00 P.M.
Date of Meeting: March 1 of every year
-8-
<PAGE> 9
If this day shall be a legal holiday, then the meeting shall be held on
the next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be property brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may
be called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call a special meeting of
Shareholders, such Officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than thirty-five (35) nor more than
sixty (60) days after the receipt of such request. If such notice is not given
within twenty (20) days after receipt of such request, the persons calling the
meeting may give notice thereof in the manner provided by these By-Laws or apply
to the Superior Court as provided in Sec. 305(c).
Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant Secretary,
or if there be no such Officer, or in the case of his or her neglect or refusal,
by any Director or Shareholder.
Such notices or any reports shall be given personally or by mail or by
other means of written communication as provided in Sec. 601 of the Code and
shall be sent to the Shareholder's address appearing on the books of the
corporation, or supplied by him or her to the corporation for the purpose of
notice, and in the absence thereof, as provided in Sec. 601 of the Code.
Notice of any meeting of Shareholders shall specify the place, the day
and the hour of meeting, and (1) in case of a special meeting, the general
nature of the business to be transacted and no other business may be transacted,
or (2) in the case of an annual meeting, those matters which the Board at date
of mailing, intends to present for action by the Shareholders. At any meetings
where Directors are to be elected, notice shall include the names of the
nominees, if any, intended at date of notice to be presented by management for
election.
-9-
<PAGE> 10
If a Shareholder supplies no address, notice shall be deemed to have
been given if mailed to the place where the principal executive office of the
corporation, in California, is situated, or published at least once in some
newspaper of general circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of
the adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which such adjournment is taken.
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, however called and noticed, shall
be valid as though had at a meeting duly held after regular call and notice, if
a quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Shareholders entitled to vote, not present in person or
by proxy, sign a written waiver of notice, or a consent to the holding of such
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance shall constitute a waiver of notice, unless
objection shall be made as provided in See. 601(e).
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING - DIRECTORS. Any
action which may be taken at a meeting of the Shareholders, may be taken without
a meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with the
Secretary of the corporation, provided, further, that while ordinarily Directors
can only be elected by unanimous written consent under Sec. 603(d), if the
Directors fail to fill a vacancy, then a Director to fill that vacancy may be
elected by the written consent of persons holding a majority of shares entitled
to vote for the election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided
in the GCL or the Articles, any action which may be taken at any annual or
special meeting of Shareholders may be taken without a meeting and without prior
notice, if a consent in writing, setting forth the action so taken, signed by
the holders of outstanding shares having not less than the
-10-
<PAGE> 11
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval pursuant to Secs. 310,
317, 1201 or 2007 without a meeting by less than unanimous
written consent shall be given at least ten (10) days before
the consummation of the action authorized by such approval,
and (2) Prompt notice shall be given of the taking of any
other corporate action approved by Shareholders without a
meeting by less than unanimous written consent, to each of
those Shareholders entitled to vote who have not consented in
writing.
Any Shareholder giving a written consent, or the Shareholder's
proxyholders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxyholders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holders of a majority of the shares entitled to
vote thereat, present in person, or represented by proxy, shall constitute a
quorum at all meetings of the Shareholders for the transaction of business
except as otherwise provided by law, by the Articles of Incorporation, or by
these By-Laws. If, however, such majority shall not be present or represented
at any meeting of the Shareholders, the Shareholders entitled to vote thereat,
present in person, or by proxy, shall have the power to adjourn the meeting from
time to time, until the requisite amount of voting shares shall be present. At
such adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day
-11-
<PAGE> 12
be fixed by the Board of Directors for the determination of shareholders of
record, and then on such other day, shall be entitled to vote at such meeting.
A "disqualified person" within the meaning of California Corporations
Code Section 13401(d) shall have no power to vote.
Provided the candidate's name has been placed in nomination prior to
the voting and one or more Shareholder has given notice at the meeting prior to
the voting of the Shareholder's intent to cumulate the Shareholder's votes,
every Shareholder entitled to vote at any election for Directors of any
corporation for profit may cumulate their votes and give one candidate a number
of votes equal to the number of Directors to be elected multiplied by the number
of votes to which his or her shares are entitled, or distribute his or her votes
on the same principle among as many candidates as he or she thinks fit.
The candidates receiving the highest number of votes up to the number
of Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding
thirty (30) days preceding the date of any meeting of Shareholders or the date
fixed for the payment of any dividend or distribution, or for the allotment of
rights, or when any change or conversion or exchange of shares shall go into
effect, as a record date for the determination of the Shareholders entitled to
notice of and to vote at any such meeting, or entitled to receive any such
dividend or distribution, or any allotment of rights, or to exercise the rights
in respect to any such change, conversion or exchange of shares. In such case
only Shareholders of record on the date so fixed shall be entitled to notice of
and to vote at such meeting, or to receive such dividends, distribution or
allotment of rights, or to exercise such rights, as the case may be
notwithstanding any transfer of any share on the books of the corporation after
any record date fixed as aforesaid. The Board of Directors may close the books
of the corporation against transfers of shares during the whole or any part of
such period.
Section 10. PROXIES, VOTING TRUSTS, ETC. No Shareholder of a
professional corporation shall enter into a voting trust, proxy, or any other
arrangement vesting another person (other than another licensed person who is a
Shareholder of the same corporation) with the authority to exercise the voting
power of any or all of his or her shares, and any such purported voting trust,
proxy, or other arrangement shall be void.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as chairman of the
-12-
<PAGE> 13
meeting. In the absence of the President and all of the Vice Presidents,
Shareholders shall appoint a chairman for such meeting. The Secretary of the
corporation shall act as secretary of all meetings of the Shareholders, but in
the absence of the Secretary at any meeting of the Shareholders, the presiding
Officer may appoint any person to act as Secretary of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders the Board of Directors may, if they so elect, appoint inspectors of
election to act at such meeting or any adjournment thereof. If inspectors of
election be not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any such meeting may, and on the request of any
Shareholder or his or her proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one (1) or three (3) as
determined by a majority of the Shareholders represented at the meeting.
Section 13. (A) SHAREHOLDERS' AGREEMENTS. Notwithstanding the above
provisions, in the event this corporation elects to become a close corporation,
an agreement between two (2) or more Shareholders thereof, if in writing and
signed by the parties thereof, may provide that in exercising any voting rights
the shares held by them shall be voted as provided therein or in Sec. 706, and
may otherwise modify these provisions as to Shareholders' meetings and actions.
(B) EFFECT OF SHAREHOLDERS' AGREEMENTS. Any Shareholders'
Agreement authorized by Sec. 300(b), shall only be effective to modify the terms
of these By-Laws if this corporation elects to become a close corporation with
appropriate filing of or amendment to its Articles as required by Sec. 202 and
shall terminate when this corporation ceases to be a close corporation. Such an
agreement cannot waive or alter Secs. 158, (defining close corporations), 202
(requirements of Articles of Incorporation), 500 and 501 relative to
distributions, 111 (merger), 1201(e) (reorganization) or Chapters 15 (Records
and Reports), 16 (Rights of Inspection), 18 (Involuntary Dissolution) or 22
(Crimes and Penalties). Any other provisions of the Code or these By-Laws may be
altered or waived thereby, but to the extent they are not so altered or waived,
these By-Laws shall be applicable.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be-of
such form and device as the Board of Directors may designate and shall state the
name of the record holder of the shares represented thereby; its number; date of
issuance; the number of shares for
-13-
<PAGE> 14
which it is issued; a statement of the rights, privileges, preferences and
restrictions, if any; a statement as to the redemption or conversion, if any; a
statement of liens or restrictions upon transfer or voting, if any; if the
shares be assessable or, if assessments are collectible by personal action, a
plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the Shareholder.
Any or all of the signatures on the certificate may be facsimile. In
case any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that Officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the Corporation with the same effect as if that person were an Officer,
transfer agent, or registrar at the date of issue.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and shall, if the Directors so require, give the
corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued in the same tenor
and for the same number of shares as the one alleged to be lost or destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars, which shall be an incorporated bank or trust company, either
domestic or foreign, who shall be appointed at such times and places as the
requirements of the corporation may necessitate and the Board of Directors may
designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that
the corporation may determine the Shareholders entitled to notice of any meeting
or to vote or entitled to receive payment of any dividend or other distribution
or allotment of any rights or
-14-
<PAGE> 15
entitled to exercise any rights in respect of any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than sixty (60) nor
less than ten (10) days prior to the date of such meeting nor more than sixty
(60) days prior to any other action.
If no record date is fixed, the record date for determining
Shareholders entitled to notice of or to vote at a meeting of Shareholders shall
be at the close of business on the business day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held. The record
date for determining Shareholders entitled to give consent to corporate action
in writing without a meeting, when no prior action by the Board is necessary,
shall be the day on which the first written consent is given.
The record date for determining Shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts the
resolution relating thereto, or the sixtieth (60th) day prior to the date of
such other action, whichever is later.
Section 6. LEGEND CONDITION. The share certificates of this corporation
shall contain an appropriate legend setting forth the restrictions of Section 8
of this Article V. The person or persons issuing or transferring said shares
shall make sure said legend appears on the certificate and shall not be required
to transfer any shares free of such legend.
Section 7. CLOSE CORPORATION CERTIFICATES. All certificates
representing shares of this corporation, in the event it shall. elect to become
a close corporation, shall contain the legend required by Sec. 418(c).
Section 8. RESTRICTIONS ON OWNERSHIP AND TRANSFER OF SHARES. The shares
of a medical corporation may be owned only by a licensed person and may be
transferred only to a licensed person or to the issuing corporation.
Where there are two (2) or more Shareholders in this corporation and
one of the Shareholders:
(a) Dies;
(b) Ceases to be an eligible Shareholder; or
(c) Becomes a disqualified person as defined in Section 13401(d) of the
Corporations Code of the State of California for a period exceeding ninety (90)
days, his or her shares shall be sold and transferred to the corporation, its
Shareholders, or other eligible persons, on such terms as are agreed upon. Such
sale or transfer shall not be later than six (6) months after any such death and
not later than ninety (90) days after the date he or she ceases to be an
eligible Shareholder, or ninety (90) days after the date he or she becomes a
disqualified person.
-15-
<PAGE> 16
The share certificates of this corporation shall contain an appropriate
legend setting forth the foregoing restrictions.
So long as the corporation has one (1) Shareholder, the foregoing
requirements of this section shall be set forth in the corporation's ByLaws. If
the corporation has two (2) or more Shareholders, the foregoing requirements of
this section shall be set forth in the corporation's ByLaws except that the
terms of the sale or transfer may be set forth in a written stock purchase
agreement entered into by and between this corporation and its Shareholders.
A corporation and its Shareholders may, but need not, agree that shares
sold to it by a person who becomes a disqualified person may be resold to such
person if and when he or she again becomes an eligible Shareholder.
The income of this corporation attributable to professional services
rendered while a Shareholder is a disqualified person shall not in any manner
accrue to the benefit of such Shareholder or his or her shares.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office in the State of
California, as fixed by the Board of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records
provided for in Sec. 1500 shall be open to inspection of the Directors and
Shareholders from time to time and in the manner provided in said Sec. 1600 -
1602.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a
copy of these By-Laws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's principal executive office and
shall be open to inspection by the Shareholders of the corporation at all
reasonable times during office hours, as provided in Sec. 213 of the
Corporations Code.
Section 4. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
-16-
<PAGE> 17
Section 5. CONTRACTS, ETC. -- HOW EXECUTED. The Board of Directors,
except as in the By-Laws otherwise provided, may authorize any Officer or
Officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the corporation. Such authority may be general
or confined to specific instances. Unless so authorized by the Board of
Directors, no Officer, agent or employee shall have any power or authority to
bind the corporation by any contract or agreement, or to pledge its credit, or
to render it liable for any purpose or to any amount, except as provided in Sec.
313 of the Corporations Code.
ARTICLE VII
ANNUAL REPORTS
Section 1. REPORT TO SHAREHOLDERS, DUE DATE. The Board of Directors
shall cause an annual report to be sent to the Shareholders not later than one
hundred twenty (120) days after the close of the fiscal or calendar year adopted
by the corporation. This report shall be sent at least fifteen (15) days before
the annual meeting of Shareholders to be held during the next fiscal year and in
the manner specified in Section 4 of Article IV of these ByLaws for giving
notice to Shareholders of the corporation. The annual report shall contain a
balance sheet as of the end of the fiscal year and an income statement and
statement of changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such report, the
certificate of an authorized Officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
Section 2. WAIVER. The annual report to Shareholders referred to in
Section 1501 of the California General Corporation Law is expressly dispensed
with so long as this corporation shall have less than one hundred (100)
Shareholders. However, nothing herein shall be interpreted as prohibiting the
Board of Directors from issuing annual or other periodic reports to the
Shareholders of the corporation as they consider appropriate.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or
these By-Laws may be amended or repealed by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the Articles of Incorporation of the corporation set forth the
number of authorized Directors of the corporation, the authorized number of
Directors may be changed only by an amendment of the Articles of Incorporation.
-17-
<PAGE> 18
Section 2. POWERS OF DIRECTORS. Subject to the right of the
Shareholders to adopt, amend, or repeal By-Laws, as provided in Section 1 of
this Article VIII, and the limitations of Sec. 204(a) (5) and Sec. 212, the
Board of Directors may adopt, amend or repeal any of these By-Laws other than a
By-Law or amendment thereof changing the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of By-Laws with the original By-Laws, in
the appropriate place. If any By-Law is repealed, the fact of repeal with the
date of the meeting at which the repeal was enacted or written assent was filed
shall be stated in said book.
ARTICLE IX
CORPORATE SEAL
The corporate seal shall be circular in form, and shall have inscribed
thereon the name of the corporation, the date of its incorporation, and the word
"California."
ARTICLE X
MISCELLANEOUS
Section 1. REFERENCES TO CODE SECTIONS. "Sec." references herein refer
to the equivalent Sections of the General Corporation Law effective January 1,
1977, as amended.
Section 2. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of
other corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 3. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by
a subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined as a corporation, the shares of which possessing more than
25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 4. INDEMNITY. The corporation may indemnify any Director,
Officer, agent or employee as to those liabilities and on those terms and
conditions as are specified in Sec. 317 of the Code. In any event, the
corporation shall have the right to purchase and maintain insurance on behalf of
any such persons whether or not the corporation would have the power to
indemnify such person against the liability insured against.
Section 5. ACCOUNTING YEAR. The accounting year of the corporation
shall be fixed by resolution of the Board of Directors.
-18-
<PAGE> 19
CERTIFICATE OF ADOPTION OF BY-LAWS
ADOPTION BY INCORPORATOR(S) OR FIRST DIRECTOR(S).
The undersigned person(s) appointed in the Articles of Incorporation to
act as the Incorporator(s) or First Director(s) of the above named corporation
hereby adopt the same as the By-Laws of said corporation.
Executed this 16 day of March, 1981.
/s/ Charles Springfield
_________________________
CHARLES SPRINGFIELD, M.D.
CERTIFICATE BY SECRETARY.
I DO HEREBY CERTIFY AS FOLLOWS:
That I am the duly elected, qualified and acting Secretary of the above
named corporation, that the foregoing By-Laws were adopted as the By-Laws of
said corporation on the date set forth above by the person(s) appointed in the
Articles of Incorporation to act as the Incorporator(s) or First Director(s) of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
corporate seal this 16TH day of March, 1981
/s/ Susan A. Springfield
_____________________________
Secretary
-19-
<PAGE> 20
CERTIFICATE BY SECRETARY OF ADOPTION BY SHAREHOLDERS' VOTE.
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of the above
named corporation and that the above and foregoing Code of By-Laws was submitted
to the Shareholders at their first meeting and recorded in the minutes thereof,
was ratified by the vote of Shareholders entitled to exercise the majority of
the voting power of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand this 16 day of March,
1981.
/s/ Susan Springfield
_____________________________
Secretary
-20-
<PAGE> 21
EXHIBIT A
AMENDMENT TO BYLAWS OF
CHARLES LARRY SPRINGFIELD, M.D., A PROFESSIONAL CORPORATION
Article V, Section 6 and Article V, Section 8 of the Bylaws of this corporation
are hereby deleted in their entirety,
Except as provided herein, the Bylaws shall remain unchanged and in full force
and effect.
(adopted 11/20/97 by shareholder)
<PAGE> 1
Exhibit 3.19
SECRETARY OF STATE
CHARTER
OF
ALLWAYS CARE CLINIC, INC.
The undersigned, acting as the incorporator under the Tennessee
Business Corporation Act, adopts the following Charter for such corporation:
1. The name of the corporation is Allways Care Clinic, Inc.
2. The corporation is authorized to issue 2,000 common shares, which
shares collectively shall have unlimited voting rights and the right to receive
the net assets of the corporation upon dissolution.
3. The street address and zip code of the corporation's initial
registered office is 9207 Park West Boulevard, Post Office Box 30698, Knoxville,
Tennessee 37930.
4. The corporation's initial registered office is located in Knox
County, Tennessee.
5. The name of the corporation's initial registered agent at that
office is Michael Lynn Hatcher.
6. The name, address, and zip code of the incorporator is W. Dale
Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
7. The street address and zip code of the principal office of the
corporation is 9207 Park West Boulevard, Post Office Box 20698, Knoxville,
Tennessee 37930.
8. The corporation is for profit.
9. No director may be sued by the corporation or its shareholders for
breach of his or her fiduciary duty to the corporation, provided, however, that
this provision shall not absolve a director from a breach of his or her duty of
loyalty, or acts or omissions not in good faith or which involve
-1-
<PAGE> 2
intentional misconduct or a knowing violation of law, or for distributions in
violation of T.C.A. Section 48-18-304.
DATED: this 21st day of November, 1990.
/s/ W. Dale Amburn
------------------------------------
W. DALE AMBURN, INCORPORATOR
-2-
<PAGE> 3
ARTICLES OF AMENDMENT TO THE CHARTER
OF
ALLWAYS CARE CLINIC, INC.
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its Charter:
1. The name of the corporation is AllWays Care Clinic, Inc.
2. The text of the amendment adopted is as follows:
The corporation will be a professional corporation for the
purpose of practicing medicine, operating and managing
clinics, and any other lawful purpose. The corporation elects
to be governed by the provisions of the Tennessee Professional
Corporation Act.
3. The amendment was duly adopted on the 14th day of December,
1990.
4. The amendment was duly adopted by the incorporator without
shareholder action, such action not being required.
ALLWAYS CARE CLINIC, INC.
By: /s/ W. Dale Amburn
W. DALE AMBURN, INCORPORATOR
----------------------------
-1-
<PAGE> 4
APPLICATION FOR REGISTRATION
OF
ASSUMED CORPORATE NAME
TO THE SECRETARY OF STATE FOR THE STATE OF TENNESSEE
Pursuant to the provisions of Section 48-14-101(d) of the Tennessee
Business Corporation Act, the undersigned corporation hereby submits this
application:
1. The true name of the corporation is AllWays Care Clinic, Inc.
2. The state of incorporation is Tennessee.
3. The corporation intends to transact business in Tennessee under an
assumed corporate name.
4. The corporation is for profit.
5. The assumed corporate name the corporation proposes to use is Park
Med.
ALLWAYS CARE CLINIC, INC.
By: /s/ Michael L. Hatcher
____________________________
Its: Vice-President
DATE: July 8, 1991
LS2
APPALL
070591
CORPORATION ANNUAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
-1-
<PAGE> 5
SUITE 1800, JAMES K. POLK BUILDING
NASHVILLE, TN 37243-0306
FILING FEE - $10.00; PRIVILEGE TAX - $10.00; TOTAL AMOUNT DUE - $20.00
<TABLE>
<S> <C>
CURRENT FISCAL YEAR CLOSING MONTH 11 IF DIFFERENT,
CORRECT MONTH IS 12. THIS REPORT IS DUE ON OR BEFORE 11/1/93
1) SECRETARY OF STATE CONTROL NUMBER 0234924 OR FEDERAL EMPLOYER IDENTIFICATION NUMBER 62-1453392
2A) NAME AND MAILING ADDRESS OF CORPORATION 2B) STATE OR COUNTRY OF INCORPORATION.
ALLWAYS CARE CLINIC, INC. TENNESSEE
9207 PARK WEST BLVD 2C) ADD OR CHANGE MAILING ADDRESS
P.O. BOX 20698 1900 Winston Road, Suite 300
KNOXVILLE. TN 37930 P.O. Box 30698
Knoxville, TN 37919
</TABLE>
D 11/27/1990 FOR PROFIT
3) A. PRINCIPAL ADDRESS INCLUDING CITY, STATE, ZIP CODE
9207 PARK WEST BLVD, P.O. BOX 20698, KNOXVILLE, TN 37930
B. CHANGE OF PRINCIPAL ADDRESS
<TABLE>
<CAPTION>
STREET CITY STATE ZIP CODE + 4
------- ----- ------ ------------
<S> <C> <C> <C>
1900 Winston Road, Suite 309 Knoxville, TN 37919
</TABLE>
** BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED **
4) A NAME AND BUSINESS ADDRESS, INCLUDING ZIP CODE, OF THE PRESIDENT, SECRETARY
AND OTHER PRINCIPAL OFFICERS (ATTACH ADDITIONAL SHEET IF NECESSARY)
<TABLE>
<CAPTION>
TITLE NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE + 4
----- ---- ---------------- -------------------------
<S> <C> <C> <C>
President John W. Minchey, MD 1900 Winston Road. Suite 300 Knoxville. TN 37919
Secretary Michael L. Hatcher, CPA 1900 Winston Rd., Suite 300 Knoxville, TN 37919
V-Pres: H. Lynn Massingale, MD 1900 Winston Rd., Suite 300 Knoxville, TN 37919
V-Pres: John R. Staley, Jr., MD 1900 Winston Rd., Suite 300 Knoxville, TN 37919
</TABLE>
B. BOARD OF DIRECTORS NAMES, BUSINESS ADDRESS INCLUDING ZIP CODE; (ATTACH
ADDITIONAL SHEET IF NECESSARY)
X SAME AS ABOVE
NONE
OR LIST BELOW NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE + 4
5) NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
MICHAEL LYNN HATCHER
B REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS
9207 PARK WEST BLVD, P.O. BOX 30698, KNOXVILLE, TN 37930
-2-
<PAGE> 6
6) INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME AND/OR REGISTERED
OFFICE
(BLOCK 5A AND/OR 5B) THERE IS AN ADDITIONAL $10.00 FILING FEE AND $10.00
PRIVILEGE TAX FOR A TOTAL OF $20.00 REQUIRED FOR CHANGES MADE TO THIS
INFORMATION.
A. CHANGE OF REGISTERED AGENT
<TABLE>
<S> <C> <C> <C> <C> <C>
B. CHANGE OF REGISTERED OFFICE 1900 Winston Rd., Suite 300 Knoxville, TN 37919
Street City State Zip Code + 4 County
</TABLE>
7) A. THIS BOX APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT
THAT YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT FOR A MUTUAL
BENEFIT CORPORATION AS INDICATED BELOW:
IF BLANK OR CHANGE, PLEASE CHECK APPROPRIATE BOX
PUBLIC
MUTUAL
B. IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
RELIGIOUS
<TABLE>
<S> <C>
8) SIGNATURE 9) DATE
10) TYPE/PRINT NAME OF SIGNER: Michael L. Hatcher 11) TITLE OF SIGNER: Secretary-Treasurer
</TABLE>
** THIS REPORT MUST BE DATED AND SIGNED **
-3-
<PAGE> 7
ARTICLES OF AMENDMENT TO THE CHARTER
OF
ALLWAYS CARE CLINIC, INC.
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned Corporation hereby submits the
following articles to amend its Charter and states as follows:
1. The name of the Corporation is Allways Care Clinic, Inc.
2. The text of the amendment adopted is:
(a) The Corporation hereby changes its registered agent
and office to: W. Dale Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
(b) The Corporation hereby changes the street address of
its principal office to 1900 Winston Road, Post Office Box 30698, Knoxville,
Tennessee 37930.
3. After the changes are made, the street address of the
registered office of the Corporation and the business office of its registered
agent shall be identical.
4. The amendment was duly adopted on the 14th day of December,
1992, by the board of directors without shareholder action, as such shareholder
action was not required.
DATED this 14th day of December, 1992.
ALLWAYS CARE CLINIC, INC.
By:
--------------------------
Its: Secretary/Treasurer
--------------------------
LS11
CH-ALL
111892
-1-
<PAGE> 8
ARTICLES OF AMENDMENT TO THE CHARTER
OF
ALLWAYS CARE CLINIC, INC.
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation hereby submits the
following articles to amend its charter and states as follows:
1. The name of the corporation is AllWays Care Clinic, Inc.
2. The corporation hereby changes its name to Park Med, P.C.
3. The amendment was duly adopted on the 18th day of Oct., 1993,
by the Board of Directors without Shareholder action, such Shareholder action
not being required.
DATED the 18th day of Oct., 1993.
ALLWAYS CARE CLINIC, INC.
By: /s/ Michael L. Hatcher
MICHAEL L. HATCHER
Its: President
--------------------------
-1-
<PAGE> 9
APPLICATION FOR CANCELLATION
OF
ASSUMED CORPORATE NAME
Pursuant to the provisions of Section 48-4-101(e) of the Tennessee
Business Corporation Act, the undersigned corporation hereby submits this
application:
1. The true name of the corporation is AllWays Care Clinic, Inc.
2. The state or country of the corporation is Tennessee.
3. The corporation tends to cease transacting business under an
assumed corporate name by cancelling it.
4. The assumed corporate name to be canceled is Park Med.
ALLWAYS CARE CLINIC. INC.
By: /s/ Michael L. Hatcher
--------------------------
MICHAEL L. HATCHER
President
Dated:
------------------------
-1-
<PAGE> 10
ARTICLES OF MERGER
OF
AMBULATORY CARE CENTER, INC.,
A TENNESSEE CORPORATION
INTO
PARK MED, P.C.,
A TENNESSEE CORPORATION
Pursuant to the provisions of Section 48-21-105, of the Tennessee
General Corporation Act, the undersigned corporations adopt the following
Articles of Merger:
1. The attached Plan of Merger (Exhibit "A"), was approved by each of
the undersigned corporations in the manner prescribed by the Tennessee General
Business Corporation Act.
2. As to Ambulatory Care Center, Inc., a Tennessee corporation
("Ambulatory"), the plan was duly adopted by written consent of the shareholders
on December 29, 1993.
3. As to Park Med, P.C., a Tennessee corporation ("Park Med"), the plan
was duly adopted by written consent of the shareholders on December 29, 1993.
4. These Articles of Merger shall take effect on the close of business
on December 31, 1993, or the date of the filing, whichever is later.
Executed on behalf of Ambulatory and Park Med by the president of each,
pursuant to the authorization of the directors and shareholders of each
corporation, on the date first written above.
-1-
<PAGE> 11
Dated: December 29, 1993
AMBULATORY CARE CENTER, INC.,
a Tennessee corporation
By: /s/ Michael L. Hatcher
__________________________________
Michael L. Hatcher, President
PARK MED, P.C.,
a Tennessee corporation
By: /s/ Michael L. Hatcher
_________________________________
Michael L. Hatcher, President
-2-
<PAGE> 12
PLAN OF MERGER
OF
AMBULATORY CARE CENTER, INC.
A TENNESSEE CORPORATION
INTO
PARK MED, P.C.
A TENNESSEE CORPORATION
PLAN AND AGREEMENT OF MERGER (hereinafter called "Agreement") dated as
of the 29TH day of December, 1993, between Ambulatory Care Center, Inc., a
Tennessee Corporation ("Ambulatory"), and Park Med, P.C., a Tennessee
corporation ("Park Med"), said corporations hereinafter sometimes collectively
referred to as "Constituent Corporations."
WITNESSETH:
WHEREAS, Ambulatory is a corporation duly organized under the laws of
the State of Tennessee, and was duly incorporated on October 22, 1990; and
WHEREAS, Park Med is a corporation duly organized under the laws of the
State of Tennessee, and was duly incorporated on November 27, 1990; and
WHEREAS, the authorized capital stock of Ambulatory consists of two
thousand (2,000) shares of common stock (no par value), of which eighty (80)
shares are outstanding; and
WHEREAS, the authorized capital stock of Park Med consists of two
thousand (2,000) shares of common stock (no par value), of which one thousand
(1,000) shares are outstanding; and
-1-
<PAGE> 13
WHEREAS, the Boards of Directors of the Constituent Corporations deem
it advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent Corporations
merge into a single corporation pursuant to this Agreement and pursuant to the
applicable provisions of the laws of the States of Tennessee;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree that the Constituent
Corporations shall be merged into a single corporation, to wit: Park Med, a
Tennessee corporation, one of the Constituent Corporations, which shall continue
its corporate existence and be the corporation surviving the merger (at times
called "Surviving Corporation"), and the terms and conditions of the merger
hereby agreed upon (hereinafter called the "Merger") which the parties
covenanted to observe, keep and perform and the mode of carrying the same into
effect are and shall be as hereafter set forth:
ARTICLE I
EFFECTIVE TIME OF THE MERGER
At the effective date of the Merger, the separate existence of
Ambulatory shall cease, and Ambulatory shall be merged into the Surviving
Corporation. Consummation of this Agreement shall be effective on the close of
business on December 31, 1993, or the date that a certificate of merger is filed
with the Secretary of State for the State of Tennessee, whichever is later.
-2-
<PAGE> 14
ARTICLE II
GOVERNING LAW; CERTIFICATE OF INCORPORATION
The Laws which are to govern the Surviving Corporation are the laws of
the State of Tennessee.
ARTICLE III
BYLAWS
The Bylaws of Park Med, at the effective time of the Merger, shall be
the Bylaws of the Surviving Corporation until the same shall be altered or
amended in accordance with the provisions thereof.
ARTICLE IV
DIRECTORS AND OFFICERS
The directors of Park Med, at the effective time of the Merger, shall
be the directors of the Surviving Corporation until their respective successors
are duly elected and qualified.
ARTICLE V
CONVERSION OF SHARES ON THE MERGER
The mode of carrying into effect the Merger provided in this Agreement
and the manner and basis of converting the shares of the Constituent
Corporations into shares of the Surviving Corporation are as follows:
1. Park Med's Common Stock. None of the shares of common stock issued
at the effective time of the Merger shall be converted as a result of the
Merger, but all such shares shall remain issued shares of common stock of the
Surviving Corporation.
-3-
<PAGE> 15
2. Ambulatory's Common Stock. At the effective time of the Merger, each
share of common stock of Ambulatory, issued and outstanding, shall be converted
into and become one (1) share of the Surviving Corporation's stock; upon
surrender to the Surviving Corporation of one or more stock certificates for
common stock of Ambulatory for cancellation, the shareholders of Ambulatory
shall receive one (1) share of common stock of the Surviving Corporation.
3. Surrender of Ambulatory's Certificates. As soon as practicable after
the Merger is effective, the stock certificates representing common stock of
Ambulatory, issued and outstanding at the time the Merger became effective,
shall be surrendered for exchange to the Surviving Corporation as above
provided. Until so surrendered for exchange, each such stock certificate
nominally representing common stock of Ambulatory shall be deemed for all
corporate purposes to evidence the ownership of the number of shares of common
stock of the Surviving Corporation of which the holder thereof would be entitled
to receive upon its surrender to the Surviving Corporation.
ARTICLE VI
EFFECT OF THE MERGER
At the effective time of the Merger, the Surviving Corporation shall
succeed to, without other transfer, and shall possess and enjoy, all the rights,
privileges, immunities, powers and franchises, both of a public and a private
nature, and be subject to all of the restrictions, disabilities and duties of
each of the Constituent Corporations, and all the rights, privileges,
immunities, powers and franchises of each of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to either of said
Constituent Corporation on whatever account, for stock subscriptions as well as
for all other things in action or belonging to each of said corporations, shall
be vested in the Surviving Corporation; and all property, rights, privileges,
immunities, powers and franchises, and all and every other interest shall be
thereafter as effectually the property of the Surviving Corporation as they were
of the respective
-4-
<PAGE> 16
Constituent Corporations, and a title to any real estate vested by deed or
otherwise in either of said Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens at the
effective time of the Merger, and all debts, liabilities and duties of said
Constituent Corporations, respectively, shall thenceforth attach to the
Surviving Corporation and may be enforced against it to the same extent as if
said debts, liabilities and duties had it been incurred or contracted by the
Surviving Corporation.
ARTICLE VII
ACCOUNTING MATTERS
The assets and liabilities of the Constituent Corporations, as at the
effective time of the Merger, shall be taken up on the books of the Surviving
Corporation at the amounts at which they shall be carried at the time on the
books of the respective Constituent Corporations.
ARTICLE VIII
APPROVAL OF SHAREHOLDERS; FILING OF CERTIFICATE OF MERGER
This Agreement shall be submitted to the shareholders of each of the
Constituent Corporations as provided by law and their respective Certificates of
Incorporation at meetings which should be held on or before December 20, 1993.
After such adoption and approval, and subject to the conditions contained in
this Agreement, a Certificate of Merger shall be signed, verified and delivered
to the Secretary of State for the State of Tennessee and to the Secretary of
State for the State of Tennessee for filing and subsequently to the appropriate
county Register's Office for filing.
-5-
<PAGE> 17
ARTICLE IX
AMBULATORY'S REPRESENTATIONS AND WARRANTIES
Ambulatory represents and warrants to Park Med as follows:
1. Corporate Power. Ambulatory is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee.
Ambulatory has corporate power to carry on its business as it is now being
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned or the nature of the business
transacted by it require qualification.
2. Capitalization Benefits. Capitalization consists of two thousand
(2,000) authorized shares of common stock (no par value), of which eighty (80)
shares are issued and outstanding as of the date hereof.
3. Financial Statements. Ambulatory has delivered to Park Med copies of
balance sheets and financial statements (unaudited). All of such financial
statements are true and complete and have been prepared in accordance with
generally accepted accounting principles consistently filed throughout the
periods indicated, except as otherwise indicated in the notes thereto. Each of
such balance sheets represents a true and complete statement as to the state of
financial condition and assets and liabilities of Ambulatory.
4. Further Warranties and Representations.
a. Ambulatory has and, at the closing date, will have good and
marketable title in fee simple to the machinery, equipment, merchandise,
materials, supplies and other property of every kind, tangible and intangible,
contained in its offices, and other facilities or shown as assets in its records
and books of account, free and clear of all liens, encumbrances and charges
except as reflected in the aforesaid financial statements and except for liens,
encumbrances and charges, if any, which do not
-6-
<PAGE> 18
materially detract from the value of or interfere with the use of the property
subject thereto or effective thereby. Ambulatory has, and on the closing date
will have, valid leases under which it is entitled to use in its business and
all personal property of which it is the lessee, and Ambulatory has no knowledge
of any default under any such lease.
b. All taxes imposed by the United States or by an state, municipality,
subdivision or instrumentality of the United States have been paid in full or
are adequately provided for by reserves shown in the records and books of
account of Ambulatory. All income tax returns for Ambulatory have been filed,
and Ambulatory has no knowledge of any unassessed tax deficiencies proposed or
threatened against it.
c. There is no suit, action or legal or administrative proceeding
pending, or in the knowledge of Ambulatory, threatened against it, nor is there
any decree, injunctions or order of any court, governmental department or agency
outstanding against Ambulatory.
d. At the effective time of the Merger, the consummation of the
transactions contemplated by this Plan will not result in the breach of any term
or provision of or constitute a default under any indenture, mortgage, deed of
trust or other material agreement or instrument to which Ambulatory is a party.
ARTICLE X
PARK MED'S REPRESENTATIONS AND WARRANTIES
Park Med represents and warrants to Ambulatory as follows:
1. Corporate Power. Park Med is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee. Park Med
has corporate power to carry on its business as it is now being conducted and is
qualified to do business in every jurisdiction in which the character and
location of the assets owned or the nature of the business transacted by it
require qualification.
-7-
<PAGE> 19
2. Capitalization Benefits. Capitalization consists of two thousand
(2,000) authorized shares of common stock (no par value), of which one thousand
(1,000) shares are issued and outstanding as of the date hereof.
3. Further Warranties and Representations.
a. Park Med has and, at the closing date, will have good and marketable
title in fee simple to the machinery, equipment, merchandise, materials,
supplies and other property of every kind, tangible and intangible, contained in
its offices, and other facilities or shown as assets in its records and books of
account, free and clear of all liens, encumbrances and charges except as
reflected in the aforesaid financial statements and except for liens,
encumbrances and charges, if any, which do not materially detract from the value
of or interfere with the use of the property subject thereto or effective
thereby. Park Med has, and on the closing date will have, valid leases under
which it is entitled to use in its business and all personal property of which
it is the lessee, and Park Med has no knowledge of any default under any such
lease.
b. All taxes imposed by the United States or by an state, municipality,
subdivision or instrumentality of the United States have been paid in full or
are adequately provided for by reserves shown in the records and books of
account of Park Med. All income tax returns for Ambulatory have been filed, and
Park Med has no knowledge of any unassessed tax deficiencies proposed or
threatened against it.
c. There is no suit, action or legal or administrative proceeding
pending or in the knowledge of Park Med, threatened against it, nor is there any
decree, injunctions or order of any court, governmental department or agency
outstanding against Park Med.
-8-
<PAGE> 20
d. At the effective time of the Merger, the consummation of the
transactions contemplated by this Plan will not result in the breach of any term
or provision of or constitute a default under any indenture, mortgage, deed of
trust or other material agreement or instrument to which Park Med is a party.
ARTICLE XI
CONDUCT OF BUSINESS PENDING THE MERGER
From and after the date of this Agreement and prior to the
effective time of the Merger, neither of the Constituent Corporations will,
without the prior written consent of the other:
1. Amend its Certificate of Incorporation or Bylaws except as may be
necessary to enable it to carry out the provisions of this Agreement;
2. Engage in any material activity or transaction or incur any material
obligation (by contract or otherwise) except in the ordinary course of business;
or
3. Declare or pay any dividends on or make any distributions in respect
of any shares of its capital stock.
ARTICLE XII
GENERAL PROVISIONS
Termination and Abandonment. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and abandoned at any
time before the effective time of the Merger, whether before or after adoption
or approval of this Agreement by the Shareholders of the Constituent
Corporations on any one or more of the following circumstances:
a. By the mutual consent of the Board of Directors of the
Constituent Corporations;
b. By either corporation if the holders of more than one-third
(1/3) of the outstanding shares of common stock of either corporation has voted
against the merger;
-9-
<PAGE> 21
c. By either of the Constituent Corporations if any action or
proceeding before any court or other governmental body or agency shall have been
instituted or threatened to restrain or prohibit the Merger and such Constituent
Corporations deem it advisable to proceed with the Merger; or
d. By either of the Constituent Corporations if the other
Constituent Corporation is not able to comply with its representations and
warranties as contained herein.
Upon any such termination and abandonment, neither party shall have any
liability or obligation hereunder to the other.
ARTICLE XIII
EFFECTIVE DATE
This Agreement of Merger shall become effective on the close of
business on December 31, 1993, or the date of filing of the Articles of Merger
with the Secretary of State for the State of Tennessee.
IN WITNESS WHEREOF, this Agreement has been signed by all of the
directors of each of the Constituent Corporations.
AMBULATORY CARE CENTER, INC.,
a Tennessee corporation
By: /s/ H. Lynn Massingale
____________________________________
H. Lynn Massingale, M.D.,
Director
By: /s/ John W. Minchey
____________________________________
John W. Minchey, Jr., M.D.,
Director
By: /s/ Randal L. Dabbs
___________________________________
Randal L. Dabbs, M.D.,
Director
By: /s/ John R. Staley
__________________________________
-10-
<PAGE> 22
John R. Staley, Jr., M.D.,
Director
By: /s/ Michael L. Hatcher
__________________________________
Michael L. Hatcher,
Director
PARK MED, P.C.,
a Tennessee corporation
By: /s/ H. Lynn Massingale
___________________________________
H. Lynn Massingale, M.D.,
Director
By: /s/ John W. Minchey
___________________________________
John W. Minchey, Jr., M.D.,
Director
By: /s/ Randal L. Dabbs
__________________________________
Randal L. Dabbs, M.D.
Director
By: /s/ John R. Staley
__________________________________
John R. Staley, Jr., M.D.
Director
-11-
<PAGE> 23
ARTICLES OF AMENDMENT TO THE CHARTER,
OF
PARK MED, P.C.
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is Park Med, P.C.
2. The text of the amendment adopted is as follows:
(a) The corporation hereby changes from a professional
corporation to a general corporation; and
(b) The corporation hereby changes its name to Clinic
Management Services, Inc.
3. The amendment was adopted on the 25th day of March, 1994.
4. The amendment was duly adopted by the Board of Directors
without Shareholder action, such Shareholder action not being required.
DATED the 25th day of March, 1994.
PARK MED, P.C.
By: /s/ Michael L. Hatcher
___________________________
MICHAEL L. HATCHER
PRESIDENT
-1-
<PAGE> 24
CORPORATION ANNUAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
SUITE 1800, JAMES K. POLK BUILDING
NASHVILLE, TN 37243-0304
AMOUNT DUE $26.00
CURRENT FISCAL YEAR CLOSING MONTH 12 IF DIFFERENT
CORRECT MONTH IS THIS REPORT IS DUE ON OR BEFORE 04/01/98
(1) SECRETARY OF STATE CONTROL NUMBER 0234924
OR FEDERAL EMPLOYER IDENTIFICATION NUMBER 62-1453392
<TABLE>
<S> <C>
(2A) NAME AND ADDRESS OF CORPORATION (2B) STATE OR COUNTRY OF INCORPORATION
CLINIC MANAGEMENT SERVICES, INC. TENNESSEE
REBECCA TABER S-1000
3000 GALLERIA TOWER (2C) ADD OR CHANGE MAILING ADDRESS
BIRMINGHAM, AL 35244
3000 GALLERIA TOWER
SUITE 1000
BIRMINGHAM, AL 35244
</TABLE>
D 11/27/1990 FOR PROFIT
(3) A. PRINCIPAL ADDRESS INCLUDING CITY, STATE, ZIP CODE
1900 WINSTON ROAD, P.O. BOX 30698, KNOXVILLE, TN 37930
B. CHANGE OF PRINCIPAL ADDRESS
<TABLE>
<CAPTION>
STREET CITY STATE ZIP CODE + 4
------ ---- ----- ------------
<S> <C> <C> <C>
1900 Winston Rd., Suite 300 Knoxville TN 37919
</TABLE>
** BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED **
(4) A. NAME AND BUSINESS ADDRESS, INCLUDING ZIP CODE OF THE PRESIDENT,
SECRETARY AND OTHER PRINCIPAL OFFICERS
(ATTACH ADDITIONAL SHEET IF NECESSARY)
<TABLE>
<CAPTION>
TITLE NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE +4
<S> <C> <C> <C>
President H. Lynn Massingale, M.D. 1900 Winston Rd., Ste. 300 Knoxville, TN 37919
VP & Secretary Tracy P. Thrasher 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
VP & Treasurer Harold O. Knight, Jr. 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
CEO E. Mac Crawford 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
</TABLE>
B. BOARD OF DIRECTORS (NAMES, BUSINESS ADDRESS INCLUDING ZIP CODE)
(ATTACH ADDITIONAL SHEET, IF NECESSARY)Same as above None
<TABLE>
<S> <C> <C>
E. Mac Crawford 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
Harold O. Knight, Jr. 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
Tracy P. Thrasher 3000 Galleria Tower, Ste. 1000 Birmingham, AL 35244
</TABLE>
(5) A. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
PRENTICE-HALL CORPORATION SYSTEM
B. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS
500 TALLAN BLDG., TWO UNION SQ., CHATTANOOGA, TN 37402-2571
(6) INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME AND/OR
REGISTERED OFFICE
(BLOCK 5A AND/OR 5B) THERE IS AN ADDITIONAL $30.00 REQUIRED FOR
CHANGES MADE TO THIS INFORMATION.
A. CHANGE OF REGISTERED AGENT:
-2-
<PAGE> 25
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE + 4 COUNTY
(7) A. THIS BOX APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT
THAT YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL
BENEFIT CORPORATION AS INDICATED.
IF BLANK OR CHANGE, PLEASE CHECK APPROPRIATE BOX PUBLIC
MUTUAL
B. IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS
OTHERWISE INDICATED.
RELIGIOUS
(8) SIGNATURE (9) DATE 3-30-98
(10) TYPE/PRINT NAME OF SIGNER (11) TITLE OF SIGNER
Tracy P. Thrasher VP & Secretary
** THIS REPORT MUST BE DATED AND SIGNED **
-3-
<PAGE> 1
EXHIBIT 3.20
CLINIC MANAGEMENT SERVICES, INC.
BYLAWS
OF
ALLWAYS CARE CLINIC, INC.
ARTICLE I
MEETING OF SHAREHOLDERS
1. Annual Meeting. The annual meeting of the shareholders shall be held
at such time and place, either within or without this State, as may be
designated from time to time by the directors.
2. Special Meetings. Special meetings of the shareholders may be called
by the president, a majority of the board of directors, or by the holders of not
less than ten percent (10%) of all the shares entitled to vote at such meeting.
The place of said meetings shall be designated by the directors.
3. Notice of Shareholder Meetings. Written notice stating the date,
time, and place of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered either
personally or by mail by or at the direction of the president, secretary,
officer, or person calling the meeting to each shareholder entitled to vote at
the meeting. Such notice shall be delivered not less than ten (10) days nor more
than two (2) months before the date of the meeting, and shall be deemed to be
delivered when deposited in the United States mail postpaid and correctly
addressed (if mailed) , or upon actual receipt (if hand- delivered). The person
giving such notice shall certify that the notice required by this paragraph has
been given.
4. Quorum Requirements. A majority of the shares entitled to vote shall
constitute a quorum for the transactions of business. Once a share is
represented for any purpose at a meeting, it shall be deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be set for that adjourned meeting.
5. Voting and Proxies. If a quorum exists, action on a matter (other
than the election of Directors) shall be approved if the votes favoring the
action exceed the vote opposing the action. A shareholder may vote his or her
shares either in person or by written proxy, which proxy is effective when
received by the secretary or other person authorized to tabulate votes. No proxy
shall be valid after the expiration of eleven (11) months from the date of its
execution unless otherwise provided in the proxy.
<PAGE> 2
ARTICLE II
BOARD OF DIRECTORS
1. Qualification and Election. Directors need not be shareholders or
residents of this State. They shall be elected by a plurality of the votes cast
at a meeting at which a quorum is present. Each director shall hold office until
the expiration of the term for which the director is elected, and thereafter
until his successor has been elected and qualified.
2. Number. The number of directors shall be fixed from time to time by
either the shareholders or by the board of directors.
3. Meetings. The board of directors shall hold such regular and special
meetings as it from time to time decides. These meetings may be either in person
or by conference call. Special meetings may be called at any time by the
chairman of the board, president, or any two (2) directors.
4. Notice of Directors' Meetings. All regular board meetings may be
held without notice. Special meetings shall be preceded by at least two (2) days
notice of the date, time, and place of the meeting. Notice of an adjourned
meeting need not be given if the time and place to which the meeting is
adjourned are fixed at the meeting at which the adjournment is taken, and if the
period of adjournment is taken, and if the period of adjournment does not exceed
one (1) month in any one adjournment.
5. Quorum and Vote. The presence of a majority of the directors shall
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the board.
6. Executive and Other Committees. The board of directors, by a
resolution adopted by a majority of its members, may create one or more
committees, consisting of one or more directors, and may delegate to such
committee or committees any and all such authority as is permitted by law.
ARTICLE III
OFFICERS
1. Number. The corporation shall have a president and a secretary, and
such other officers as the board of directors shall from time to time deem
necessary. Any two or more offices may be held by the same person, except the
offices of president and secretary.
2. Election and Term. The officers shall be elected by the board of
directors. Each officer shall serve at the pleasure of the board until such
officers resignation or removal.
-2-
<PAGE> 3
3. Duties. All officers shall have such authority and perform such
duties in the management of the corporation as are normally incident to their
offices and as the board of directors may from time to time provide.
ARTICLE IV
RESIGNATIONS, REMOVALS AND VACANCIES
1. Resignations. Any officer or director may resign at any time by
giving written notice to the chairman of the board, the president, or the
secretary. Any such resignation shall take effect at the time specified therein,
or, if no time is specified, then upon its delivery.
2. Removal of Officers. Any officer or agent may be removed by the
board at any time with or without cause.
3. Removal of Directors. Any or all of the directors may be removed
either with or without cause by a proper vote of the shareholders.
4. Vacancies. Newly created directorships resulting from an increase in
the number of directors, and vacancies occurring in any office or directorship
for any reason, including removal of an officer or director, may be filled by
the vote of a majority of the directors then in office, even if less than a
quorum exists.
ARTICLE V
CAPITAL STOCK
1. Stock Certificates. Every shareholder shall be entitled to a
certificate or certificates of capital stock of the corporation in such form as
may be prescribed by the board of directors. Unless otherwise decided by the
board, such certificates shall be signed by the president and the secretary of
the corporation.
2. Transfer of Shares. Shares of stock may be transferred on the books
of the corporation by delivery and surrender of the properly assigned
certificate, but subject to any restrictions or transfer imposed by either the
applicable securities laws or any shareholder agreement.
3. Loss of Certificates. In the case of the loss, mutilation, or
destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms as the board of directors shall prescribe.
ARTICLE VI
ACTION BY CONSENT
-3-
<PAGE> 4
Whenever the shareholders or directors are required or permitted to
take any action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by all the persons or
entities entitled to vote thereon. The affirmative vote of the number of shares
or directors that would be necessary to take such action at a meeting shall be
the act of the shareholders or directors, as the case may be.
ARTICLE VII
AMENDMENT OF BYLAWS
These bylaws may be amended, added to, or repealed either by the
shareholders or the board of directors as provided by statute. Any change in the
bylaws made by the board of directors, however, may be amended or repealed by
the shareholders.
CERTIFICATION
I certify that these initial bylaws for the corporation were duly
adopted as of _______ the day of _______________ , 19__ .
/s/ W. Dale Amburn
----------------------------
W. DALE AMBURN, INCORPORATOR
-4-
<PAGE> 1
EXHIBIT 3.21
STATE OF ALABAMA
ss.
MADISON COUNTY
ARTICLES OF INCORPORATION
OF
DANIEL & YEAGER, INC.
KNOW ALL MEN BY THESE PRESENTS,
That I, Samuel C. Yeager, the undersigned incorporator, for the purpose
of forming a business corporation pursuant to the provisions of Title 10,
Chapter 2A, Code of Alabama (3975), as amended ("Alabama Business Corporation
Act"), do hereby adopt these Articles of Incorporation, the same to constitute a
charter for carrying on the business hereinafter specified.
ARTICLE I
NAME OF CORPORATION
The name of the corporation shall be Daniel & Yeager, Inc.
ARTICLE II
PURPOSES
The nature of the business and the purposes for which the corporation
is formed shall be as follows:
(1) To provide support and personnel services and locum tenens services
in the medical field, and to provide an perform all related services thereto.
(2) To do all things necessary, desirable, or expedient in the
operation, management, and conduct of the business.
-1-
<PAGE> 2
(3) To transact all lawful business for which corporations may be
incorporated under the Alabama Business Corporation Act.
ARTICLE III
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the corporation shall
be 7220 Governors Drive, W., Huntsville, Alabama 35806, and the initial
registered agent at such address shall be Samuel C. Yeager.
ARTICLE IV
DURATION
The duration of the corporation shall be perpetual unless the
corporation is dissolved by law or otherwise terminated.
ARTICLE V
SHARES
The corporation shall be authorized to issue 1,000 common shares having
a par value of $1.00 each.
ARTICLE VI
INCORPORATOR AND DIRECTORS
(1) INCORPORATOR: The name and address of the incorporator is as
follows:
NAME ADDRESS
Samuel C. Yeager Huntsville, Alabama
(2) DIRECTORS: The initial board of directors shall consist of four (4)
directors. The names and addresses of the persons who are to serve as directors
until the first annual meeting of the shareholders, or until their successors
are elected and qualified, are as follows:
-2-
<PAGE> 3
NAME ADDRESS
Samuel C. Yeager 7220 Governors Drive, S.W.
Huntsville, Alabama 35806
Charles F. Daniel, Jr. 933 Meadow Lane
Henderson, South Carolina 27536
Timothy L. Yeager 563 Pettus Road
Madison, Alabama 35758
John S. Daniel 2421 Inverloch Circle
Dulth, Georgia 30136
ARTICLE VII
REGULATORY PROVISIONS
(1) VOTING: At any meetings of the shareholders of the corporation, the
shareholders of record shall be entitled to one vote for each share standing in
his name. Shares may be voted by the shareholders either in person or by proxy.
(2) PRE-EMPTIVE RIGHTS: Each shareholder shall have a pre-emptive right
to purchase additional or treasury shares of the corporation under the Alabama
Business Corporation Act.
(3) MANAGEMENT: The business and affairs of the corporation shall be
under the management of a board of directors to consist initially of four (4)
persons, and such number thereafter as may be fixed by the bylaws.
(4) SHARES NONASSESSABLE: The shares of the corporation, when fully
paid for in accordance with the subscription therefor, shall be fully paid and
nonassessable, and in no case shall any shareholder be liable other than for the
unpaid shares subscribed for by him.
(5) LIEN ON SHARES: The corporation shall have a lien on the shares of
a shareholder for any debt or liability owed to it by him before a notice of
transfer or levy on such
-3-
<PAGE> 4
shares is received by the corporation. The corporation shall have the rights
with respect to the lien conferred by the laws of the State of Alabama.
(6) AMENDMENTS: The corporation reserves the right to amend or repeal
any provision of these Articles of Incorporation in the manner provided by law;
and all rights conferred upon the officers, directors, and shareholders of the
corporation are granted subject to this reservation.
(7) BYLAWS: The initial bylaws of the corporation shall be adopted by
the shareholders. The power to alter, amend or repeal the bylaws or adopt new
bylaws shall be vested in the board of directors: provided, however, that a
majority of the shareholders may alter or amend such bylaws at any meeting of
the shareholders called for that purpose.
IN WITNESS WHEREOF, I, the said incorporator, have hereunto set my hand
on this 25 day of October, 1989.
/s/ Samuel C. Yeager
______________________________
Samuel C. Yeager
THIS INSTRUMENT PREPARED BY
BRADLEY, ARANT, ROSE & WHITE
By: Scott E. Ludwig
223 East Side Square
Huntsville, Alabama 35801
Telephone (205) 533-5040
-4-
<PAGE> 1
EXHIBIT 3.22
BYLAWS OF
DANIEL & YEAGER, INC.
ARTICLE I
IDENTIFICATION
(1) NAME: The name of the corporation is Daniel & Yeager, Inc.
("Corporation").
(2) PRINCIPAL OFFICE: The address of the principal office of the
Corporation is 7220 Governors Drive, W., Huntsville, Alabama 35806. The
Corporation may have such other offices either within or without the State of
Alabama as the board of directors may designate or as the business of the
Corporation may from time to time require.
ARTICLE 11
MEETINGS OF SHAREHOLDERS
(1) ANNUAL MEETING: The annual meeting of the shareholders of the
Corporation shall be held on the second Tuesday of the third month following the
end of the Corporation's fiscal year, if not a legal holiday, and if a legal
holiday, then on the next day following, or such other date as may be prescribed
by the board of directors, for the purposes of:
(a) electing directors;
(b) considering and acting upon the reports of officers and
directors; and
(c) transacting such other business as may come before the
meeting.
(2) SPECIAL MEETINGS: Special meetings of the shareholders may be held
at any time whenever called by the president, by the board of directors, or by
any shareholder.
(3) NOTICE: Written notice of all meetings shall be given to each
shareholder at his address as it appears on the stock transfer books of the
Corporation. Notices shall specify the purpose, place, day, and hour of the
meeting. Notice shall be given not less than ten nor more than fifty days before
the meeting.
(4) WAIVER: Any shareholder may waive notice of any meeting of the
shareholders by a written waiver of notice signed by such shareholder before,
at, or after such meeting.
(5) PROXY: At any meeting of the shareholders a shareholder may vote
either in person or by written proxy. No proxy shall be valid after eleven
months from the date of its execution, unless otherwise provided in the proxy.
(6) QUORUM: For the transaction of business at any meeting of the
shareholders, the holders of more than fifty percent of the shares must be
present in person or by proxy, except as
<PAGE> 2
otherwise provided by law. If, however, such majority shall not be present at
any meeting of the shareholders, the shareholders present shall have power to
adjourn the meeting, without notice other than announcement at the meeting,
until the requisite number of shares shall be present. If the requisite number
of shares shall become represented at such adjourned meeting, any business may
then be transacted which might have been transacted at the meeting as originally
called.
(7) VOTING: All questions and elections shall be determined by a
majority vote of the shares present at any meeting, except as otherwise provided
by law. Only persons in whose names shares appear on the stock transfer books of
the Corporation on the date on which notice of the meeting is given shall be
entitled to vote at such meeting, unless some other day is fixed by the board of
directors for the determination of shareholders of record. Such date shall be
not less than ten days nor more than fifty days before the meeting. Each
outstanding share shall be entitled to one vote on each matter submitted to a
vote.
(8) PLACE: The board of directors may designate any place either within
or without the State of Alabama as the place of meeting for any annual or
special meeting of the shareholders. In the absence of any designation, all
meetings shall be held at the principal office of the Corporation.
(9) CONSENT: Any action which may be taken by the shareholders at a
meeting may be taken without a meeting if a written consent setting forth the
action so taken is signed by all of the shareholders. Such a consent shall have
the effect of a unanimous vote, and the signature of a shareholder thereon shall
constitute a waiver of notice under Paragraph (4) above.
(10) VOTING RECORD: At least ten days before each meeting of the
shareholders, the secretary shall make a complete list of the shareholders
entitled to vote at such meeting. Such list shall be prepared in alphabetical
order and shall show the address and number of shares held by each shareholder.
The list shall be kept on file at the principal office of the Corporation and
shall be subject to inspection at any time during normal business hours by any
shareholder making written request therefor. The list shall be produced and kept
open at the time and place of the meeting and shall be subject to inspection by
any shareholder during the meeting.
ARTICLE III
THE BOARD OF DIRECTORS
(1) NUMBER AND QUALIFICATIONS: The board of directors of the
Corporation shall consist of not less than one nor more than seven directors to
be elected by the shareholders. No director need be a shareholder or a resident
of Alabama.
-2-
<PAGE> 3
(2) TERM: A director's term of office shall be for the twelve-month
period following his election and until his successor is elected and qualified,
or until his earlier death.
(3) VACANCY: The remaining directors, even if not constituting a
quorum, shall elect a director to fill any vacancy caused by death or by an
increase in the number of directorships.
(4) REMOVAL: Any director may be removed with or without cause by vote
of the shareholders at any meeting called for that purpose; and the shareholders
may immediately upon such removal elect a successor to fill such director's
unexpired term.
(5) POWERS: The board of directors shall have the entire management of
the Corporation and is vested with all the powers possessed by the Corporation
itself. The board of directors shall have the power to determine what
constitutes net income, earnings, and surplus, what amounts shall be reserved
for working capital and for other purposes, and what amount shall be declared as
dividends. Such determinations by the board of directors shall be final and
conclusive.
(6) REGULAR MEETING: A regular meeting of the board of directors shall
be held immediately following the annual meeting of the shareholders.
(7) SPECIAL MEETINGS: Special meetings of the board of directors may be
called by the president or by any two directors.
(8) NOTICE: Meetings of the board of directors shall be called on no
less than three-days advance written notice to each director, at his address,
specifying the purpose, place, day, and hour of such meeting. Meetings may be
held by conference telephone call or by like means in accordance with Title 10,
Chapter 2A, Code of Alabama (11975), as amended ("Alabama Business Corporation
Act").
(9) WAIVER: Any director may waive notice of any meeting of the board
of directors by written waiver of notice signed by such director before, at, or
after such meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting.
(10) QUORUM: A quorum shall consist of a majority of the directors.
(11) VOTING: All questions and elections shall be determined by a
majority vote of the directors in attendance at any meeting, except as may
otherwise be provided by law.
(12) CONSENT: Any action which may be taken by the board of directors
at a meeting may be taken without a meeting if a written consent setting forth
the action so taken is signed by all of the directors. Such a consent shall have
the effect of a unanimous vote, and the signature of a director thereon shall
constitute a waiver of notice under Paragraph (9) of this article.
-3-
<PAGE> 4
(13) COMPENSATION: Directors and members of committees may receive such
compensation, if any, for their services and such reimbursement for expenses as
may be fixed or determined by resolution of the board of directors.
ARTICLE IV
THE OFFICERS
(1) OFFICERS: The officers of the corporation shall be elected by the
board of directors and shall consist of a president, a vice-president, a
secretary, and a treasurer, or a secretary-treasurer. The board of directors may
also elect additional vice-presidents, assistant secretaries, and assistant
treasurers.
(2) ELECTION: At its regular meeting after an annual meeting of the
shareholders, the board of directors shall elect a president, a vice-president,
a secretary, and a treasurer, or a secretary-treasurer, and such other officers
as shall be deemed appropriate. One person may hold more than one office.
(3) OTHER AGENTS: The board of directors may elect and employ such
other officers, agents and/or employees as it shall deem appropriate. Such
officers, agents and/or employees shall exercise such powers and perform such
duties as shall be fixed by the board of directors.
(4) COMPENSATION: The salaries and other compensation of all officers,
agents, and employees of the Corporation shall be fixed by the board of
directors.
(5) TERM OF OFFICE: The term of office for an officer shall be the
twelve-month period following election and until a successor is duly elected and
qualified or until his earlier death. Any vacancy occurring in any office of the
Corporation shall be filled by the board of directors by electing a successor to
serve for the remaining portion of the above-mentioned twelve-month period.
(6) REMOVAL: Any officer elected by the board of directors may be
removed at any time with or without cause by vote of the board of directors.
(7) DUTIES: Each officer shall have the duties usual and customary to
his office, including but not limited to the following:
(a) PRESIDENT: The president shall be the chief executive
officer of the Corporation. He shall preside at all meetings of the shareholders
and directors and shall have the general supervision and management of the
business of the Corporation. The president shall see that all orders and
resolutions are carried into effect. The president shall have authority to
execute
-4-
<PAGE> 5
instruments and documents on behalf of the Corporation in the ordinary
course of business, and on such instruments and documents the seal of the
Corporation may be affixed and attested by the secretary of the Corporation.
(b) VICE-PRESIDENT: The vice-president shall perform those
duties assigned to him by the board of directors and shall, in the absence or
disability of the president, perform the duties and exercise the powers of the
president. However, the vice-president shall not have the power to execute
instruments and documents on behalf of the Corporation, except upon resolution
of the board of directors.
(c) SECRETARY: The secretary shall attend all meetings of the
board of directors and meetings of the shareholders, and shall record all votes
and minutes of all meetings in a book to be kept for that purpose. He shall give
notice of all shareholder's meetings to the shareholders and of all meetings of
the board of directors to the directors. He shall be custodian of the corporate
seal of the Corporation and shall affix the corporate seal to any instrument
requiring it, attesting the same by his signature. The secretary shall keep and
maintain the Corporation's stock transfer book, including a stock register,
showing the number of shares issued to all shareholders, and the date of any
issuance, transfer, or cancellation of same.
(d) TREASURER: The treasurer shall have custody of the
Corporation's funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation. The treasurer
shall deposit all monies and all valuable effects in the name of the Corporation
in such depositories as may be designated by the board of directors, except such
petty cash funds as may be provided by the board of directors. Such funds so
deposited shall be subject to withdrawal on checks signed by the treasurer or by
such other person as the board of directors may designate.
ARTICLE V
AMENDMENTS
These bylaws may be amended or repealed and new bylaws may be adopted
by the board of directors at any regular meeting of the board of directors or at
a special meeting of the directors called for such purpose; provided, however,
that a majority of the shareholders may amend, repeal or adopt new bylaws at any
regular meeting of the shareholders or at a special meeting of the shareholders
called for that purpose.
ARTICLE VI
SHARES
-5-
<PAGE> 6
(1) CERTIFICATES FOR SHARES: Each shareholder of the Corporation shall
be entitled to have a certificate signed in the name of the Corporation by the
president or vice-president and the secretary or treasurer, certifying the
number of shares owned by him.
(2) TRANSFER OF SHARES: Upon surrender to the secretary of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment, or authority to transfer, the secretary shall issue a
new certificate to the person entitled thereto, cancel the old certificate, and
record the transaction upon the Corporation's books -- subject, however, to any
agreement of the shareholders and the Corporation restricting the right to
transfer shares.
(3) SHAREHOLDER'S RIGHTS: The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner. The Corporation shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have notice or
knowledge thereof, except as otherwise provided by law.
(4) COMMON SHARES: The shares of the Corporation shall be common
shares. Except as stated in the articles of incorporation or herein, such shares
have all of the powers granted by the laws of the State of Alabama to shares of
that nature.
(5) ASSESSMENT: When fully paid for, the shares of the Corporation
shall not be assessable.
(6) LIEN FOR INDEBTEDNESS: The Corporation shall have a lien on the
shares of any holder for any indebtedness of the holder to the Corporation.
(7) LOST CERTIFICATES: Any person claiming that a certificate for
shares has been lost, stolen, or destroyed shall make an affidavit or
affirmation of that fact and advertise the same in such manner as the board of
directors may require and shall give the Corporation such bond or
indemnification in such amount and form and with such sureties as may be
required by the board of directors, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to have been
lost or destroyed.
ARTICLE VII
DIVIDENDS
Dividends shall be declared and paid out of the unrestricted and
unreserved earned surplus of the Corporation as often and at such times as the
board of directors may determine in accordance with the Alabama Business
Corporation Act. Such dividends shall be declared and paid at such times as not
to curtail the effective operation of the business. Before payment of any
-6-
<PAGE> 7
dividend the board of directors may set aside out of the earned surplus of the
Corporation such sum as the board of directors may, in its discretion, deem
proper as a reserve fund for meeting contingencies, for equalizing dividends,
for repairing or maintaining any property of the Corporation, or for any other
purposes the board of directors shall deem conducive to the interests of the
Corporation.
ARTICLE VIII
NOTICES
Whenever the provisions of these bylaws or the laws of the State of
Alabama require notice to be given to any director or shareholder, notice shall
be given by personal delivery or by depositing the same in the United States
mail, postage prepaid, addressed to such shareholder or director at his address
as it appears in the minute book or stock transfer records of the Corporation.
Any director or shareholder may waive any notice required to be given by law,
the articles of incorporation, or these bylaws.
ARTICLE IX
FISCAL YEAR
The first fiscal year of the Corporation shall begin on the formation
of the Corporation and shall end on such day as may be selected by the board of
directors; and each subsequent fiscal year shall conform to the fiscal year
adopted for purposes of reporting under the Internal Revenue Code of 1986, as
amended.
ARTICLE X
RECORDS AND FINANCIAL REPORTS
(1) MINUTE BOOK: The secretary shall keep and maintain a minute book
containing the articles of incorporation, bylaws, minutes of the meetings of the
shareholders, directors, and committees, the stock transfer books, and other
pertinent records of the Corporation.
(2) RECORDS OF TRANSACTIONS: The secretary shall maintain at the
principal office of the Corporation correct and complete records of all
transactions of the Corporation and the minute book, or copies thereof.
(3) FINANCIAL STATEMENT: The board of directors shall direct the
treasurer to mail to each of the shareholders such financial information as may
be required by the laws of the State of Alabama.
ARTICLE XI
CORPORATE SEAL
-7-
<PAGE> 8
The corporate seal shall have inscribed thereon the name of the
Corporation and the words "Corporate Seal, Alabama." The seal may be used by
causing it or a facsimile thereof to be impressed or otherwise affixed.
-8-
<PAGE> 9
DATED this the 26th day of October, 1989
ATTEST:
/s/ Samuel C. Yeager
____________________________
Samuel C. Yeager
As Its President
/s/ John S. Daniel
____________________________
John S. Daniel
As Its Secretary
THIS INSTRUMENT PREPARED BY:
BRADLEY, ARANT, ROSE & WHITE
By: Scott E. Ludwig
223 East Side Square
Huntsville, Alabama 35801
Telephone (205) 533-5040
-9-
<PAGE> 1
EXHIBIT 3.23
ARTICLES OF INCORPORATION
OF
DRS. SHEER, AHEARN & ASSOCIATES
PROFESSIONAL ASSOCIATION
We, the undersigned, being the subscribers to these Articles of
Incorporation, and being natural persons competent to contract and Doctors of
Medicine duly licensed to render services as such under the laws of the State of
Florida, do hereby present these Articles of Incorporation for the formation of
a professional corporation for profit under The Professional Service Corporation
Act, and other laws, of the State of Florida.
ARTICLE I
The name of this Corporation shall be:
DRS. SHEER, AHEARN & ASSOCIATES
PROFESSIONAL ASSOCIATION
and its principal place of business shall be in the City of Tampa, Florida,
County of Hillsborough, with the right to change and move said principal place
of business and establish such other offices and places of business within or
without the State of Florida as the Board of Directors may from time to time
deem proper.
ARTICLE II
The general nature of the business to be transacted by this corporation
shall be as follows:
To engage in every phase and aspect of the business of rendering the
same professional services to the public that a Doctor of Medicine, duly
licensed under the laws of the State of Florida, is authorized to render, but
such professional services shall be rendered only through officers, employees,
and agents who are duly licensed under the laws of the State of Florida to
practice medicine therein.
To invest the funds of this corporation in real estate, mortgages,
stocks, bonds or any other type of investment, and to own real and personal
property necessary for the rendering of professional services.
To do all and everything necessary and proper for the accomplishment of
any of the purposes or the attaining of any of the objects or the furtherance of
any of the purposes enumerated in these Articles of Incorporation or any
amendment thereof, necessary or incidental to the protection and benefit of the
corporation. and in general, either alone or in association with other
-1-
<PAGE> 2
corporations, firms, or individuals, to carry on any lawful pursuit necessary or
incidental to the accomplishment of the purposes or the attainment of the
objects or the furtherance of such purposes or objects of this corporation.
The foregoing paragraphs shall be construed as enumerating both objects
and purposes of this corporation; and it is hereby expressly provided that the
foregoing enumeration of specific purposes shall not be held to limit or
restrict in any manner the purposes of this corporation otherwise permitted by
law.
ARTICLE III
The total authorized capital stock of this corporation shall be One
Thousand shares having a par valve of Five Dollars ($5.00) per share.
All such stock shall be issued fully paid and non-assessable at and for
such consideration, whether the same be cash, services rendered, or otherwise,
and upon such terms and conditions as may be fixed by the Board of Directors of
this Corporation.
At all meetings of the Stockholders and at all elections of Directors,
each holder of common stock shall be entitled to cast one vote for each share
held by him.
None of the shares of this Corporation may be issued to or owned by
anyone other than an individual duly licensed to practice medicine in the State
of Florida who is an employee, officer or agent of this Corporation.
ARTICLE IV
The amount of capital with which this Corporation shall begin shall be
not less than Five Hundred Dollars ($500.00).
ARTICLE V
The Corporation shall have perpetual existence, unless earlier
terminated by due and proper legal procedure.
ARTICLE VI
The post office address of the principal office of the Corporation
shall be 501 East Buffalo Avenue, Tampa, Florida.
ARTICLE VII
The affairs of the corporation shall be conducted by a Board of
Directors of not less than three (3) directors nor more than five (5). The
number of Directors may be determined
-2-
<PAGE> 3
from time to time by the holders of the Common Stock of the Corporation, but
shall never be less than three (3). It is not necessary that a Director be a
Stockholder in the Corporation.
ARTICLE VIII
The names and post office addresses of the members of the first Board
of Directors who shall hold office for the first year of the existence of the
Corporation, or until their successors are elected and qualified, unless
otherwise provided by the By-Laws, are:
Dr. Allen L. Sheer 501 East Buffalo Avenue
Tampa, Florida
Dr. James P. Ahearn 501 East Buffalo Avenue
Tampa, Florida
Dr. Zoltan Petrany 501 East Buffalo Avenue
Tampa, Florida
ARTICLE IX
The names and post office addresses of the subscribers of these
Articles of Incorporation, each of whom is a Doctor of Medicine, duly licensed
under the laws of the State of Florida to render services as such, are as
follows:
Dr. Allen L. Sheer 501 East Buffalo Avenue
Tampa, Florida
Dr. James P. Ahearn 501 East Buffalo Avenue
Tampa, Florida
ARTICLE X
No shareholder of this Corporation shall enter into any voting trust
agreement or any other type of agreement vesting in another person the authority
to exercise the voting power of any or all of his shares.
ARTICLE XI.
No contract or other transaction between this Corporation and any other
Corporation shall be affected by the fact that any Director of this Corporation
is interested in, or is a Director or officer of, such other Corporation, and
any Director, individually or jointly, may be a party to, or may be interested
in, any contract or transaction of this Corporation or in which this Corporation
is interested; and no contract, or other transaction of this Corporation with
any person, firm, or Corporation, shall be affected by the fact that any
Director of this Corporation is a party in any way connected with such person,
firm, or corporation, and every person who may become a
-3-
<PAGE> 4
Director of this Corporation is hereby relieved from any liability that might
otherwise exist from contracting with this Corporation for the benefit of
himself or any firm, association, or Corporation in which he may be in any way
interested.
ARTICLE XII
Any Director or this Corporation may be removed at any annual or
special meeting of the Stockholders by the same vote as that required to elect a
Director.
ARTICLE XIII
The shareholder of this Corporation shall have the power to include in
the By-Laws, adopted by a two-thirds majority of the shareholders of this
Corporation, any regulatory or restrictive provisions regarding the proposed
sale, transfer, or other disposition of any of the outstanding shares of this
Corporation by any of its shareholders, or in the event of the death of any of
its shareholders. The manner and form, as well as relevant terms, conditions,
and details hereof, shall be determined by the shareholders of this Corporation:
provided, however, that such regulatory or restrictive provisions shall not
affect the rights of third parties without actual notice thereof, unless
existence of such provision shall he plainly written upon the certificate
evidencing the ownership of such stock. No shareholder of this Corporation may
sell or transfer his shares therein except to another individual who is eligible
to be a shareholder of this Corporation, and such sale or transfer may be made
only after the same shall have been approved at a stockholders' meeting
specially called for such purpose. If any shareholder (1) becomes legally
disqualified to practice medicine in the State of Florida, or (2) is elected to
a public office, or accepts employment that places restrictions or limitations
upon his continuous rendering of such professional services as a medical doctor,
or (3) sells, transfers, hypothecates or pledges, or attempts to sell, transfer,
hypothecate or pledge any shares of stock in this Corporation to any person
ineligible by law or by virtue of these articles to be a shareholder in this
Corporation, or if such sale, transfer, hypothecation or pledge or attempt to
sell, transfer, hypothecate or pledge to made in a manner prohibited by law or
in a manner inconsistent with the provisions of these articles, or the by-laws
of this Corporation, or (4) suffers an execution to be levied upon his stock, or
such stock to subjected to judicial sale or other process, the effect of which
is to vest any legal or equitable interest in such stock in some person other
than the stockholder such shareholder's shares shall immediately become
forfeited and such stock shall be immediately cancelled by this Corporation and
the stockholder or other person in possession of such stock shall be entitled
only to receive payment for the value of such stock, which, in the
-4-
<PAGE> 5
absence of a by-law provision or written agreement between the Corporation and
its stockholders, or written agreement among its stockholders shall be the book
value thereof as of the end of the month preceding the month in which any of the
events enumerated above occurs. In addition, such shareholder shall, immediately
be discharged from his employment with the Corporation as employee, director,
officer, or agent and the Corporation shall immediately terminate all other
financial interest of such shareholder in the Corporation.
ARTICLE XIV
In furtherance, and not in limitation of the general powers conferred
by the laws of the State of Florida and of the purposes and objects hereinabove
stated, this Corporation shall have all and singular the following power:
This corporation shall have the power to enter into, or become a
partner in, any arrangement for sharing profits, union of interest, or
cooperation, joint venture or otherwise, with any person, firm, or Corporation
to carry on any business which this Corporation has the direct or incidental
authority to pursue.
-5-
<PAGE> 6
This Corporation shall have the power to deny to the holders of the
Common Stock of this Corporation any pre-emptive right to purchase or subscribe
to any new issues of any type stock of this Corporation, and no shareholder
shall have any pre-emptive right to subscribe to any such stock.
This corporation shall have the power, at its option to purchase and
acquire any or all of its shares owned and held by any such shareholder as
should desire to sell, transfer, or otherwise dispose of his shares, in
accordance with the By-Laws adopted by the shareholders of this Corporation
setting forth the terms and conditions of such purchase; provided, however, the
capital of this Corporation is not impaired.
This Corporation shall have the power, at its option, to purchase and
acquire the shares owned and held by any shareholder who dies, in accordance
with the By-Laws adopted by the shareholders of this Corporation setting forth
the terms and conditions of such purchase; provided, however, the capital of
this Corporation is not impaired.
This Corporation shall have the power to enter into, for the benefit of
its employees, one or more of the following: (1) a pension plan, (2) a
profit-sharing plan, (3) a stock bonus plan, (4) a thrift and savings plan (5) a
restricted stock option plan, or (6) other retirement or incentive compensation
plans.
ARTICLE XV
These Articles of Incorporation may be amended in the manner provided
by law. Every amendment shall be approved by the Board of Directors, proposed by
them to the stockholders, and approved at a stockholders' meeting by a majority
of the stock entitled to vote 'hereon, unless all the Directors and all the
Stockholders sign a written statement manifesting their intention that a certain
amendment of these Articles of Incorporation be made. All rights of shareholders
are subject to this reservation.
IN WITNESS WHEREOF we, the subscribers, have executed these Articles of
Incorporation this 27th day of March, 1969.
/s/ Allen L. Sheer
_________________________________
Dr. Allen L. Sheer
/s/ James P. Ahearn
_________________________________
Dr. James P. Ahearn
-6-
<PAGE> 7
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
BEFORE ME, the undersigned authority, personally appeared DR. ALLEN L.
SHEER and DR. JAMES P. AHEARN, to me well known to be the persons described in
and who executed the foregoing Articles of Incorporation, and who acknowledged
the execution thereof to be their free act and deed for the uses and purposes
therein mentioned.
WITNESS my hand and official seal at Tampa, Florida this 27th day of
March, 1969.
/s/ Joan M. Sifferth
_____________________________________
Notary Public, State of Florida
My commission expires:
-7-
<PAGE> 8
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
DRS. SHEER, AHEARN & ASSOCIATES, PROFESSIONAL ASSOCIATION
We, the undersigned, being all of the Stockholders and Directors of
DRS. SHEER, AHEARN & ASSOCIATES, P.A., whose Articles of Incorporation were
filed with the Secretary of State of the State of Florida on March 31, 1969,
hereby manifest our intention that the said Articles of Incorporation be amended
in accordance with the proposed Amendment set forth herein, pursuant to the
provisions of Section 607.181(3). Florida Statutes; and we do hereby request the
approval thereof by the Secretary of State; and we do hereby certify that there
are no other directors or stockholders in the said DRS. SHEER, AHEARN &
ASSOCIATES, PROFESSIONAL ASSOCIATION.
I
The provisions of Article III of the Articles of
Incorporation are hereby deleted in their entirety and the
following inserted in lieu thereof:
ARTICLE III
(a) The aggregate number of shares of capital stock
authorized to be issued by this Corporation shall be 50,000
shares of common stock with a par value of .10(cent) per
share. Each share of said stock shall entitle the holder
thereof to one vote at every annual or special meeting of the
Stockholders of this Corporation. The consideration for the
issuance of said shares of capital stock may be paid, in whole
or in part, in cash, in other property (tangible or
intangible) or in labor or services actually performed for the
Corporation, at a fair valuation to be fixed by the Board of
Directors. When issued, all shares of stock shall be fully
paid and nonassessable.
-1-
<PAGE> 9
(b) In the election of directors of this Corporation
there shall be no cumulative voting of the stock entitled to
vote at such election.
(c) All stockholders will have an equal number of
share of stock in the Corporation.
II
The provisions of Article VII of the Articles of
Incorporation are hereby deleted in their entirety and the
following inserted in lieu thereof.
ARTICLE VII
The Board of Directors of this Corporation shall
consist of not less than one (1) nor more than fifteen (15)
members, the exact number of directors to be fixed from time
to time by the Stockholders or the by-laws. The business
affairs of this Corporation shall be managed by the Board of
Directors, which may exercise all such powers of this
Corporation and do all such lawful acts and thinks as are not
by law directed or required to be exercised or done only by
the Stockholders. A quorum for the transaction of business at
meetings of the Directors shall be a majority of the number of
Directors determined from time to time to comprise the Board
of Directors, and the act of a majority of the Directors
present at a meeting at which a quorum is present shall be the
act of the Directors. Subject to the by-laws of this
Corporation, meetings of the Directors may be held within or
without the State of Florida. Directors need not be
stockholders. The Stockholders of this corporation may remove
any Director from office at anytime with or without cause.
-2-
<PAGE> 10
IN WITNESS WHEREOF, these Articles of Amendments to the Articles of
Incorporation of DRS. SHEER, AHEARN & ASSOCIATES, P.A. has been duly executed by
the Directors and Stockholders of such Corporation this 30th day of November,
1976.
Stockholders Directors
/s/ Allen L. Sheer /s/ Allen L. Sheer
________________________________ ________________________________
ALLEN L. SHEER, M.D. ALLEN L. SHEER, M.D.
/s/ James P. Ahearn /s/ James P. Ahearn
________________________________ ________________________________
JAMES P. AHEARN, M.D. JAMES P. AHEARN, M.D.
/s/ William C. Klein /s/ William C. Klein
________________________________ ________________________________
WILLIAM C. KLEIN, M.D. WILLIAM C. KLEIN, M.D.
/s/ Zoltan Petrany /s/ Zoltan Petrany
________________________________ ________________________________
ZOLTAN PETRANY M.D. ZOLTAN PETRANY, M.D.
/s/ H. Kirby Blankenship /s/ H. Kirby Blankenship
________________________________ ________________________________
H. KIRBY BLANKENSHIP, M.D. H. KIRBY BLANKENSHIP, M.D.
/s/ Ray L. Columbaro /s/ Ray L. Columbaro
________________________________ ________________________________
RAY L. COLUMBARO, M.D. RAY L. COLUMBARO, M.D.
/s/ A. Raymond Brooker /s/ A. Raymond Brooker
________________________________ ________________________________
A. RAYMOND BROOKER, M.D. A. RAYMOND BROOKER, M.D.
/s/ Aaron Longacre /s/ Aaron Longacre
________________________________ ________________________________
AARON LONGACRE, M.D. AARON LONGACRE, M.D.
/s/ Lawrence R. Muroff /s/ Lawrence R. Muroff
________________________________ ________________________________
LAWRENCE R. MUROFF, M.D. LAWRENCE R. MUROFF, M.D.
THE FOREGOING AMENDMENT having been adopted in accordance with the
requirements of Chapter 607 of the Florida Statutes, the Corporation has caused
its President and Secretary to execute on behalf of the Corporation these
Articles of Amendment this 30th day of November, 1976.
DRS. SHEER, AHEARN & ASSOCIATES, P.A.
By: /s/ William C. Klein By: /s/ Allen L. Sheer
________________________________ ________________________________
William C. Klein, M.D. Allen L. Sheer, M.D., President
-3-
<PAGE> 11
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 30th day of
November, 1976, by ALLEN L. SHEER. M.D. and WILLIAM C. KLEIN, M.D., President
and Secretary, respectively, of DRS. SHEER, AHEARN & ASSOCIATES, P.A., a Florida
professional service corporation, on behalf of the Corporation.
/s/ Martha Mammicco
________________________________
NOTARY PUBLIC
My Commission Expires: Notary Public, State of
Florida at Large
My Commission Expires
May 9, 1980
-4-
<PAGE> 12
DOMESTIC CORPORATION AND FOREIGN CORPORATION
ARTICLES OF MERGER
The undersigned corporations, pursuant to Section 607.1107 of the
Florida Business Corporation Act (the "FBCA") hereby execute the following
Articles of Merger:
1. Parties of Merger. The names of the corporations proposing to merge
and the names of the states or countries under the laws of which such
corporation are organized are as follows:
<TABLE>
<CAPTION>
Name of Corporation State/Country of Incorporation
------------------- ------------------------------
<S> <C>
SA Merger Corporation Delaware
Drs. Sheer, Ahearn and Associates, Inc. Florida
</TABLE>
2. Compliance with Delaware Law. The laws of the State of Delaware,
under which TEAM Merger Corporation is organized permit the merger herein
contemplated and SA Merger Corporation is complying with those laws in effecting
the merger.
3. Compliance with Florida Law. Drs. Sheer, Ahearn and Associates,
Inc., as the surviving corporation, complies with the applicable provisions of
FBCA Sections; 607.1101 - 607.1104, and with FBCA Section 607.1105.
4. Plan of Merger. The terms and conditions of the proposed merger and
the manner and basis for converting the shares are set forth in the Plan and
Agreement of Merger. Attached hereto as Exhibit A is a Plan of Merger, which
implements the terms of a Plan and Agreement of Merger adopted by the merged
corporation and the surviving corporation.
5. Board of Directors Approval. The Plan and Agreement of Merger, dated
as of December 2, 1996, by and among MedPartners, Inc., SA Merger Corporation,
and Drs. Sheer, Ahearn and Associates, Inc. (the "Plan of Merger"), has been
approved and adopted, by the respective Boards of Directors of, MedPartners,.
Inc., on November 30, 1996, SA Merger Corporation on November 25, 1996 and Drs.
Sheer, Ahearn and Associates, Inc. on November 30, 1996, and certified, executed
and acknowledged by the duly authorized officers of MedPartners, Inc., SA Merger
Corporation, and Drs. Sheer, Ahearn and Associates, Inc.
6. Shareholder Approval. The Agreement and Plan of Merger was approved
and adopted by the stockholders of Drs. Sheer, Ahearn and Associates, Inc. on
the 30th day of November, 1996, and such approval and adoption was certified by
the Secretary of Drs. Sheer, Ahearn and Associates, Inc. The Plan of Merger was
approved and adopted by the sole stockholder of SA Merger Corporation on the
25th day of November, 1996, and such approval and adoption was certified by the
Secretary of SA Merger Corporation.
-1-
<PAGE> 13
7. Effective Date. The effective date of the merger herein contemplated
shall be the date on which these Articles of Merger are filed with the Secretary
of State, State of Florida.
SA MERGER CORPORATION
By: /s/ Harold O. Knight, Jr.
---------------------------------
Harold O. Knight, Jr.
------------------------------------
(Print Name)
Vice President SA Merger Corporation
------------------------------------
(Print Title)
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
By: /s/ Michael P. Flynn
---------------------------------
Michael P. Flynn, M.D.
President
-2-
<PAGE> 14
EXHIBIT A
MERGER
OF
SA MERGER CORPORATION
with and into
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
PLAN OF MERGER
1. Definitions. For the purposes hereof, the following terms shall be
defined as follows:
(a) "Constituent Corporations" - SA Merger Corporation. a Delaware
corporation and Drs. Sheer, Ahearn and Associates, Inc., a Florida corporation.
(b) "Merged Corporation" - SA Merger Corporation, a Delaware
corporation.
(c) "Surviving Corporation" - upon the effective date of the merger,
DRS. SHEER, AHEARN AND ASSOCIATES, INC., a Florida corporation.
2. Organizational Documents of Surviving Corporation. The Articles of
Incorporation and the Bylaws of Drs. Sheer, Ahearn and Associates, Inc., upon
the effective date of the merger, shall become the Articles of Incorporation and
the Bylaws of the Surviving Corporation, until altered, amended, or repealed.
3. Effect of Merger on Shares of Constituent Corporations.
(a) Shares of Surviving Corporation. From and after the date
of the Merger, each issued and outstanding share of common stock of Drs. Sheer,
Ahearn and Associates, Inc. shall be converted into 3,714.738 shares of common
stock of MedPartners, Inc., a Delaware corporation, which is the sole
shareholder of the Merged Corporation.
(b) Shares of Merged Corporation. From and after the date of
the Merger. the issued and outstanding shares of the Merged Corporation shall be
converted into an equal number of shares of the Surviving Corporation.
4. Effect of Merger. Upon the effective date of the merger, the
separate existence of the Merged Corporation shall cease and the Merged
Corporation shall be merged in accordance with the provisions of this Plan of
Merger into the Surviving Corporation, which shall survive such merger and shall
continue in existence and shall, without other transfer, succeed to and possess
all of the rights, privileges, immunities, powers and purposes of each of the
Constituent Corporations consistent with the Articles of Incorporation of the
Surviving Corporation, and all property, real personal and mixed, causes of
action, and every other asset of each of the Constituent Corporations shall vest
in the Surviving Corporation without further act or deed; the Surviving
Corporation shall assume, and be liable for all of the liabilities, obligations
and
-1-
<PAGE> 15
penalties of each of the Constituent Corporations. No liability or
obligation against either of the Constituent Corporations due or to become due,
claim or demand for any cause existing against either of the Constituent
Corporations, or any member, director or officer thereof, shall be released or
impaired by such merger. No action or proceeding, civil or criminal, then
pending by or against either of the Constituent Corporations, or any member,
director, or officer thereof, shall abate or be discontinued by such merger but
may be enforced, prosecuted, settled or compromised as if such merger but may be
enforced, prosecuted, settled, or compromised as if such merger had not
occurred, or the Surviving Corporation may be substituted in such action in
place of either of the Constituent Corporations.
5. Dissenter's Rights. Shareholders of the Merged Corporation who,
except for the applicability of Section 607.1104 of the FBCA, would be entitled
to vote and who dissent from the merger pursuant to Section 607.1320 my be
entitled, if they comply with the provisions of the FBCA regarding the rights of
dissenting shareholders, to be paid the fair value of their shares.
6. Further Assurances. To the extent permitted by law, from time to
time, as and when requested by the Surviving Corporation or by its successors
and assigns, the Merged Corporation shall execute and deliver or cause to be
executed and delivered all such deeds and instruments, and to take or cause to
be taken, such further or other action as the surviving Corporation may deem
necessary or desirable in order to vest in and confirm to the Surviving
Corporation title to, and possession of, and property of the Merged Corporation
acquired or to be acquired by reason of or as a result of the merger herein
provided for; and the proper officers and directors of the Merged Corporation
and the proper officers and directors of the Surviving Corporation are fully
authorized, in the name of the Surviving Corporation or otherwise, to take any
and all such action.
-2-
<PAGE> 16
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF DRS. SHEER, AHEARN & ASSOCIATES
PROFESSIONAL ASSOCIATION
Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act. DRS. SHEER, AHEARN & ASSOCIATES PROFESSIONAL ASSOCIATION, a
Florida corporation (the "Corporation") adopts the following Articles of
Amendment to its Articles of Incorporation.
1. Name of Corporation. The name of the corporation is DRS. SHEER,
AHEARN & ASSOCIATES PROFESSIONAL ASSOCIATION.
2. Amendments. The Articles of Incorporation shall be amended by (a)
revising Article I to read as follows:
"I
The name of this corporation shall be "DRS. SHEER, AHEARN & ASSOCIATES,
INC."
and (b) by deleting Paragraph (c) of Article III.
3. Manner of Adoption. The foregoing amendment was approved on November
25, 1996 by the written consent of all of the shareholders of said corporation
in accordance with Section 607.1003 of the Florida Business Corporation Act: the
total number of outstanding shares of each class entitled to vote on the
foregoing amendments is 621.47 shares of common stock; and said amendment was
approved by the votes of the holders of all of such shares and by all of the
members of the Board of Directors.
4. Effective Date. The foregoing amendment shall become effective and
the Articles of Incorporation shall be deemed to be amended thereby immediately
upon filing in the office of the Secretary of State.
Executed this 27th day of November, 1996.
DRS. SHEER, AHEARN & ASSOCIATES
PROFESSIONAL ASSOCIATION
By: /s/ Michael P. Flynn
------------------------------
Michael P. Flynn
President
-1-
<PAGE> 1
EXHIBIT 3.24
* * * * * *
AMENDED AND RESTATED
BY-LAWS
(As of February 15, 1989)
OF
DRS. SHEER, AHEARN & ASSOCIATES,
PROFESSIONAL ASSOCIATION
* * * * * *
<PAGE> 2
AMENDED AND RESTATED BY-LAWS
(As of February 15, 1989)
OF
DRS. SHEER, AHEARN & ASSOCIATES,
PROFESSIONAL ASSOCIATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I Offices...........................................................
Section 1. PRINCIPAL OFFICE.................................................
Section 2. OTHER OFFICES....................................................
ARTICLE II Stockholders......................................................
Section 1. ANNUAL MEETING...................................................
Section 2. SPECIAL MEETINGS.................................................
Section 3. PLACE OF MEETING.................................................
Section 4. NOTICE OF MEETING................................................
Section 5. WAIVER OF CALL AND NOTICE OF MEETING.............................
Section 6. QUORUM...........................................................
Section 7. VOTING LISTS.....................................................
Section 8. VOTING OF SHARES.................................................
Section 9. PROXIES..........................................................
Section 10. INFORMAL ACTION BY STOCKHOLDERS..................................
Section 11. INSPECTORS.......................................................
Section 12. DISQUALIFICATION.................................................
ARTICLE III Board of Directors................................................
Section 1. GENERAL POWERS...................................................
Section 2. NUMBER, TENURE AND QUALIFICATIONS................................
Section 3. ANNUAL MEETING...................................................
Section 4. REGULAR MEETINGS.................................................
Section 5. SPECIAL MEETINGS.................................................
Section 6. NOTICE...........................................................
Section 7. QUORUM...........................................................
Section 8. MANNER OF ACTING.................................................
Section 9. REMOVAL..........................................................
Section 10. VACANCIES........................................................
Section 11. COMPENSATION.....................................................
Section 12. PRESUMPTION OF ASSENT............................................
Section 13. INFORMAL ACTION BY BOARD.........................................
Section 14. MEETING BY TELEPHONE.............................................
Section 15. DISQUALIFICATION.................................................
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV Officers..........................................................
Section 1. NUMBER AND QUALIFICATIONS........................................
Section 2. ELECTION AND TERM OF OFFICE......................................
Section 3. REMOVAL..........................................................
Section 4. VACANCIES........................................................
Section 5. DUTIES OF OFFICERS...............................................
Section 6. SALARIES.........................................................
Section 7. DELEGATION OF DUTIES.............................................
Section 8. DISASTER EMERGENCY POWERS OF ACTING OFFICERS.....................
Section 9. DISQUALIFICATION.................................................
ARTICLE V Executive and Other Committees....................................
Section 1. CREATION OF COMMITTEES...........................................
Section 2. EXECUTIVE COMMITTEE..............................................
Section 3. OTHER COMMITTEES.................................................
Section 4. REMOVAL OR DISSOLUTION...........................................
Section 5. VACANCIES ON COMMITTEES..........................................
Section 6. MEETINGS OF COMMITTEES...........................................
Section 7. ABSENCE OF COMMITTEE MEMBERS.....................................
Section 8. QUORUM OF COMMITTEES.............................................
Section 9. MANNER OF ACTING OF COMMITTEES...................................
Section 10. MINUTES OF COMMITTEES............................................
Section 11. COMPENSATION.....................................................
Section 12. INFORMAL ACTION..................................................
ARTICLE VI Indemnification of Directors and Officers.........................
Section 1. GENERAL..........................................................
Section 2. ACTIONS BY OR IN THE RIGHT OF THE
CORPORATION......................................................
Section 3. HOW EFFECTED.....................................................
Section 5. NONEXCLUSIVITY...................................................
ARTICLE VII Interested Parties................................................
Section 1. GENERAL..........................................................
Section 2. DETERMINATION OF QUORUM..........................................
ARTICLE VIII Certificates of Stock.............................................
Section 1. CERTIFICATES FOR SHARES..........................................
Section 2. FACSIMILE SIGNATURE..............................................
Section 3. TRANSFER AGENTS AND REGISTRARS...................................
Section 5. LOST CERTIFICATES................................................
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IX Record Date.......................................................
ARTICLE X Dividends.........................................................
ARTICLE XI Fiscal Year.......................................................
ARTICLE XII Seal..............................................................
ARTICLE XIII Stock in Other Corporations.......................................
ARTICLE XIV Amendments........................................................
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED
BY-LAWS
(As of February 15, 1989)
OF
DRS. SHEER, AHEARN & ASSOCIATES,
PROFESSIONAL ASSOCIATION
ARTICLE I
Offices
Section 1. PRINCIPAL OFFICE. The principal office of the corporation
shall be in the City of Tampa, County of Hillsborough, and State of Florida.
Section 2. OTHER OFFICES. The corporation also may have offices at such
other places, both within and without the State of Florida, as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
Stockholders
Section 1. ANNUAL MEETING. The annual meeting of the stockholders
shall be held between January 1 and December 31, inclusive, in each year for the
purpose of electing Directors and for the transaction of such other business as
may come before the meeting, the exact date to be established by the Board of
Directors from time to time.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, may be called by the President, the Board of Directors
or stockholders holding at least ten (10) percent of the outstanding shares of
capital stock of the corporation entitled to vote thereat, and shall be called
by the President or the Secretary at the request in writing of a majority of the
Board of Directors then in office. Any such call shall state the purpose or
purposes of the proposed meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice thereof.
Section 3. PLACE OF MEETING. The Board of Directors may designate any
place, either within or without the State of Florida, as the place of meeting
for any annual or special meeting of the
1
<PAGE> 6
stockholders. A waiver of notice signed by all stockholders entitled to vote at
a meeting may designate any place, either within or without the State of
Florida, as the place for the holding of such meeting. If no designation is
made, or if a special meeting be otherwise called, the place of meeting shall be
the principal office of the corporation in the State of Florida.
Section 4. NOTICE OF MEETING. Written notice stating the place, day and
hour of the meeting and the purpose or purposes for which it is called shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally or by first-class mail, by or at the direction
of the President or the Secretary, to each stockholder of record entitled to
vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the stockholder at the
stockholder's address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. WAIVER OF CALL AND NOTICE OF MEETING. Call and notice of any
stockholders' meeting may be waived by any stockholder; and, notice of such
meeting shall not be required as to any stockholder who shall attend such
meeting in person or by proxy, except where the stockholder attends a meeting
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened.
Section 6. QUORUM. Except as otherwise provided in these by-laws or in
the Articles of Incorporation, a majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of the stockholders; and, except as otherwise
provided in the Articles of Incorporation, the vote, in person or by proxy, of
the holders of a majority of the shares constituting such quorum shall be the
act of the stockholders of the corporation. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, not withstanding the withdrawal
of enough stockholders to leave less than a quorum.
Section 7. VOTING LISTS. At least ten (10) days prior to each meeting
of stockholders, the officer or agent having charge of the
2
<PAGE> 7
stock transfer books for shares of the corporation shall make a complete list of
the stockholders entitled to vote at such meeting, or any adjournment thereof,
with the address and the number of shares held by each, which list shall be
subject to by any stockholder during normal business hours for at least ten (10)
days prior to the meeting. The list also shall be produced at the meeting and
shall be subject to inspection by any stockholder during the whole time of the
meeting. The original stock transfer book shall be prima facie evidence as to
who are the stockholders entitled to examine such list or the transfer books or
to vote at any meeting of the stockholders.
Section 8. VOTING OF SHARES. Each stockholder entitled to vote shall be
entitled at every meeting of the stockholders to one vote in person or by proxy
for each share of voting stock held by such stockholder. Such right to vote
shall be subject to the right of the Board of Directors to close the transfer
books or to fix a record date for voting stockholders as hereinafter provided.
Section 9. PROXIES. At all meetings of stockholders, a stockholder may
vote by proxy, executed in writing by the stock holder or by the stockholder's
duly authorized attorney-in-fact; but, no proxy shall be valid after eleven (11)
months from its date, unless the proxy provides for a longer period. Each proxy
shall be filed with the Secretary of the corporation before or at the time of
the meeting. In the event that a proxy shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one is present, that one, shall have all of the powers conferred by the proxy
upon all the persons so designated, unless the instrument shall provide
otherwise.
Section 10. INFORMAL ACTION BY STOCKHOLDERS. Unless otherwise provided
in the Articles of Incorporation, any action required to be taken at a meeting
of the stockholders, or any other action which may be taken at a meeting of the
stockholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by stockholders holding not less than
the minimum number of shares that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. If less than all stockholders so consent, then within ten (10) days
after any such action is authorized by written consent, the stockholders who did
not consent must be given written notice of the action thus taken.
Section 11. INSPECTORS. For each meeting of the stockholders, the Board
of Directors or the President may appoint two inspectors to supervise the
voting; and, if inspectors are so appointed, all
3
<PAGE> 8
questions respecting the qualification of any vote, the validity of any proxy,
and the acceptance or rejection of any vote shall be decided by such inspectors.
Before acting at any meeting, the inspectors shall take an oath to execute their
duties with strict impartiality and according to the best of their ability. If
any inspector shall fail to be present or shall decline to act, the President
shall appoint another inspector to act in his place. In case of a tie vote by
the inspectors on any question, the presiding officer shall decide the issue.
Section 12. DISQUALIFICATION. If any stockholder ceases to be an
employee of the corporation for any reason whatsoever other than the death of
such stockholder, or if any stockholder becomes legally disqualified to practice
medicine within the State of Florida, or is elected to a public office or
accepts employment that, pursuant to existing law, places restrictions or
limitations upon his continued rendering of such professional services, then
such stockholder shall no longer be qualified to serve as a stockholder of the
corporation.
ARTICLE III
Board of Directors
Section 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors, which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by law, the
Articles of Incorporation or these by-laws directed or required to be exercised
or done only by the stockholders.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
of the corporation shall be not less than three (3) nor more than fifteen (15),
the exact number of directors to be determined from time to time by resolution
adopted by affirmative vote of a majority of the stockholders at any annual or
special meeting; provided, that the exact number shall be four (4) until
otherwise determined by resolution adopted by affirmative vote of a majority of
the stockholders. The Board of Directors shall be divided into three classes,
each class to consist of as nearly an equal number of directors as the then
total number of directors constituting the entire Board of Directors permits,
with the term of office of one class expiring each year. Unless and until
otherwise determined by resolution adopted by affirmative vote of a majority of
the stockholders, the first and third classes of directors shall consist of one
(1) member each, and the second class of directors shall consist of two (2)
members. At the
4
<PAGE> 9
meeting of the stockholders at which these Amended and Restated By laws are
adopted, or at the next following meeting of the stockholders in 1989, the
directors shall be elected as follows: (a) the director of the first class shall
be elected to hold office for a term expiring at the third succeeding annual
meeting of the stockholders and until such director's successor shall have been
duly elected and qualified, unless such director sooner dies, resigns or is
removed by the stockholders at any annual or special meeting; (b) each director
of the second class (two members) shall be elected to hold office for a term
expiring at the next succeeding annual meeting of the stockholders and until
such director's successor shall have been duly elected and qualified, unless any
such director sooner dies, resigns or is removed by the stockholders at any
annual or special meeting; and (c) the director of the third class shall be
elected to hold office for a term expiring at the second succeeding annual
meeting and until such director's successor shall have been duly elected and
qualified, unless such director sooner dies, resigns or is removed by the
stockholders at any annual or special meeting. Subject to the foregoing and
Section 10 of this Article III, at each annual meeting of the stockholders
thereafter, the successor to each director whose term shall then expire shall be
elected to hold office for a term expiring at the third succeeding annual
meeting of the stockholders and until such director's successor shall have been
duly elected and qualified, unless such director sooner dies, resigns or is
removed by the stockholders at any annual or special meeting. All directors
shall be stockholders and duly licensed or otherwise legally authorized to
practice medicine in the State of Florida.
Section 3. ANNUAL MEETING. After each annual meeting of stock holders,
the Board of Directors shall hold its annual meeting at the same place as and
immediately following such annual meeting of stockholders for the purpose of the
election of officers and the transaction of such other business as may come
before the meeting; and, if a majority of the directors are present at such
place and time, no prior notice of such meeting shall be required to be given to
the directors. The place and time of such meeting may be varied by written
consent of all the directors.
Section 4. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall be determined
from time to time by the Board of Directors.
Section 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, if there is one, the President or
any two (2) directors. The person or persons
5
<PAGE> 10
authorized to call special meetings of the Board of Directors may fix the place
for holding any special meetings of the Board of Directors called by him, her or
them, as the case may be. If no such designation is made, the place of meeting
shall be the principal office of the corporation in the State of Florida.
Section 6. NOTICE. Written notice stating the place, day and hour of
the meeting shall be delivered at least three (3) days prior thereto to each
director, either personally, or by mail, telegram or cablegram to the director's
business address. If notice is given by mail, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed with postage
thereon prepaid. If notice is given by telegram or cablegram, such notice shall
be deemed to be delivered when the telegram or cablegram is delivered to the
issuing company. Any director may waive notice of any meeting, either before, at
or after such meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 7. QUORUM. A majority of the total number of directors as
determined from time to time shall constitute a quorum, but a smaller number may
adjourn from time to time, without further notice, until a quorum is secured.
Section 8. MANNER OF ACTING. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 9. REMOVAL. Any director may be removed by the stockholders at
any meeting of the stockholders called expressly for that purpose whenever in
the judgment of the stockholders the best interests of the corporation will be
served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person removed. This by-law shall not be subject to
change by the Board of Directors.
Section 10. VACANCIES. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors, though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall be elected for the unexpired term of such
director's predecessor in office. No decrease in the number of directors shall
shorten the term of any incumbent director.
6
<PAGE> 11
Section 11. COMPENSATION. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as directors. No payment
shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
Section 12. PRESUMPTION OF ASSENT. A director of the corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless such director votes against such action or abstains from voting in
respect of such matter because of an asserted conflict of interest.
Section 13. INFORMAL ACTION BY BOARD. Any action required or permitted
to be taken by any provisions of law, the Articles of Incorporation or these
by-laws at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all members
of the Board or of such committee, as the case may be, and is filed in the
minutes of the proceedings of the Board or such committee, as the case may be.
Section 14. MEETING BY TELEPHONE. Directors or the members of any
committee thereof shall be deemed present at a meeting of the Board of Directors
or of any such committee, as the case may be, if the meeting is conducted using
a conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time.
Section 15. DISQUALIFICATION. If any director becomes legally
disqualified to practice medicine within the State of Florida, or is elected to
a public office or accepts employment that, pursuant to existing law, places
restrictions or limitations upon his continued rendering of such professional
services, then such director shall no longer be qualified to serve as a director
of the corporation and he shall be deemed to have forthwith submitted his
resignation as a director of the corporation.
ARTICLE IV
Officers
Section 1. NUMBER AND QUALIFICATIONS. The officers of the corporation
shall consist of a President, a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors.
7
<PAGE> 12
The Board of Directors also may elect a Chairman of the Board, one or more Vice
Presidents, one or more Assistant Secretaries and Assistant Treasurers and such
other officers as the Board of Directors shall deem appropriate. Two or more
offices may be held by the same person. Each officer shall be duly licensed or
otherwise legally authorized to practice medicine within the State of Florida.
Section 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the Board of Directors at its annual meeting. If
the election of officers shall not be held at such meeting, such election shall
be held as soon thereafter as is convenient. Each officer shall hold office
until such officer's successor shall have been duly elected and qualified,
unless such officer sooner dies, resigns or is removed by the Board of
Directors.
Section 3. REMOVAL. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever, in its judgment,
the best interests of the corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. DUTIES OF OFFICERS. The Chairman of the Board of the
corporation, or the President if there shall not be a Chairman of the Board,
shall preside at all meetings of the Board of Directors and of the stockholders.
The President shall be the chief executive officer of the corporation. Subject
to the foregoing, the officers of the corporation shall have such powers and
duties as ordinarily pertain to their respective offices and such additional
powers and duties specifically conferred by law, the Articles of Incorporation
and these by-laws, or as may be assigned to them from time to time by the Board
of Directors.
Section 6. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors, and no officer shall be prevented from
receiving a salary by reason of the fact that the officer is also a director of
the corporation.
Section 7. DELEGATION OF DUTIES. In the absence or disability of any
officer of the corporation, or for any other reason deemed sufficient by the
Board of Directors, the Board of Directors may
8
<PAGE> 13
delegate the powers or duties of such officer to any other officer or to any
other director for the time being.
Section 8. DISASTER EMERGENCY POWERS OF ACTING OFFICERS. If, as a
result of a nuclear disaster or a state of emergency, the President is unable to
perform the duties of the office of President and/or other officers are unable
to perform their duties, (a) the powers and duties of President shall be held
and performed by that officer of the corporation highest on the list of
successors (adopted by the Board of Directors for such purpose) who shall be
available and capable of holding and performing such powers and duties; and,
absent any such prior designation, by that Vice President who shall be available
and capable of holding and performing such powers and duties whose surname
commences with the earliest letter of the alphabet among all such Vice
Presidents; or, if no Vice President is available and capable of holding and
performing such powers and duties, then by the Secretary; or, if the Secretary
is likewise unavailable, by the Treasurer; (b) the officer so selected to hold
and perform such powers and duties shall serve as Acting President until the
President again becomes capable of holding and performing the powers and duties
of President, or until the Board of Directors shall have elected a new President
or designated another individual as Acting President; (c) such officer (or the
President, if such person is still serving) shall have the power, in addition to
all other powers granted to the President by law, the Articles of Incorporation,
these by-laws and the Board of Directors, to appoint acting officers to fill
vacancies that may have occurred, either permanently or temporarily, by reason
of such disaster or emergency, each of such acting appointees to serve in such
capacity until the officer for whom the acting appointee is acting is capable of
performing the duties of such office, or until the Board of Directors shall have
designated another individual to perform such duties or shall have elected or
appointed another person to fill such office; (d) each acting officer so
appointed shall be entitled to exercise all powers invested by law, the Articles
of Incorporation, these by-laws and the Board of Directors in the office in
which such person is serving; and (e) anyone transacting business with the
corporation may rely upon a certificate signed by any two officers of the
corporation that a specified individual has succeeded to the powers and duties
of the President or such other specified office. Any person, firm, corporation
or other entity to which such certificate has been delivered by such officers
may continue to rely upon it until notified of a change by means of a writing
signed by two officers of this corporation.
9
<PAGE> 14
Section 9. DISQUALIFICATION. If any officer becomes legally
disqualified to practice medicine within the State of Florida, or is elected to
a public office or accepts employment that, pursuant to existing law, places
restrictions or limitations upon his continued rendering of such professional
services, then such officer shall no longer be qualified to serve as an officer
of the corporation and he shall be deemed to have forthwith submitted his
resignation as an officer of the corporation.
ARTICLE V
Executive and Other Committees
Section 1. CREATION OF COMMITTEES. The Board of Directors may designate
an Executive Committee and one or more other committees, each to consist of two
(2) or more of the directors of the corporation.
Section 2. EXECUTIVE COMMITTEE. The Executive Committee, if there shall
be one, shall consult with and advise the officers of the corporation in the
management of its business, and shall have, and may exercise, except to the
extent otherwise provided in the resolution of the Board of Directors creating
such Executive Committee, such powers of the Board of Directors as can be
lawfully delegated by the Board.
Section 3. OTHER COMMITTEES. Such other committees, to the extent
provided in the resolution or resolutions creating them, shall have such
functions and may exercise such powers of the Board of Directors as can be
lawfully delegated.
Section 4. REMOVAL OR DISSOLUTION. Any Committee of the Board of
Directors may be dissolved by the Board of Directors at any meeting; and, any
member of such committee may be removed by the Board of Directors whenever, in
its judgment, the best interests of the corporation will be served thereby, but,
such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
Section 5. VACANCIES ON COMMITTEES. Vacancies on any committee of the
Board of Directors shall be filled by the Board of Directors at any regular or
special meeting.
Section 6. MEETINGS OF COMMITTEES. Regular meetings of any committee of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by such committee and special meetings
of any such committee may be called by any member thereof upon two (2) days
10
<PAGE> 15
notice to each of the other members of such committee, or on such shorter notice
as may be agreed to in writing by each of the other members of such committee,
given either personally or in the manner provided in Section 6 of Article III of
these by-laws (pertaining to notice for directors' meetings).
Section 7. ABSENCE OF COMMITTEE MEMBERS. The Board of Directors may
designate one or more directors as alternate members of any committee of the
Board of Directors, who may replace at any meeting of such committee, any member
not able to attend.
Section 8. QUORUM OF COMMITTEES. At all meetings of committees of the
Board of Directors, a majority of the committee's members then in office shall
constitute a quorum for the transaction of business.
Section 9. MANNER OF ACTING OF COMMITTEES. The acts of a majority of
the members of any committee of the Board of Directors present at any meeting at
which there is a quorum shall be the act of such committee.
Section 10. MINUTES OF COMMITTEES. Each committee of the Board of
Directors shall keep regular minutes of its proceedings and report the same to
the Board of Directors when required.
Section 11. COMPENSATION. Members of any committee of the Board of
Directors may be paid compensation in accordance with the provisions of Section
11 of Article III of these by-laws (pertaining to compensation of directors).
Section 12. INFORMAL ACTION. Any committee of the Board of Directors
may take such informal action and hold such informal meetings as allowed by the
provisions of Sections 13 and 14 of Article III of these by-laws.
ARTICLE VI
Indemnification of Directors and Officers
Section 1. GENERAL. To the fullest extent permitted by law, the
corporation shall indemnify any person who was or is a party, or is threatened
to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by, or in the right of, the corporation), by reason of the fact that
such person is or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director or officer
11
<PAGE> 16
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, including any appeal thereof, if such person
acted in good faith and in a manner such person reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person reasonably believed to
be in, or not opposed to, the best interests of the corporation or, with respect
to any criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
Section 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. In any
action, suit or proceeding, threatened, pending or completed, by or in the right
of the corporation, indemnification shall be made as provided in Section 1 of
this Article VI, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
Section 3. HOW EFFECTED. Indemnification pursuant to Section 1 or
Section 2 of this Article VI, unless pursuant to a determination by a court,
shall be made by the corporation only as authorized in the specific case upon a
determination that the indemnification is proper in the circumstances because
the indemnified person has met the applicable standard of conduct set forth in
Section 1 or Section 2 hereof. Such determination shall be made by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding to which the indemnification relates
or by the stockholders by a majority vote of a quorum consisting of stockholders
who were not parties to the action, suit or proceeding to which the
indemnification relates. If a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1 or Section 2 of this
12
<PAGE> 17
Article VI, or in the defense of any claim, issue or matter therein, the
corporation shall be obligated upon proper application to indemnify such person
in respect of expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith.
Section 4. PREPAYMENT OF EXPENSES. Expenses (including attorneys'
fees) incurred in defending a civil or criminal action, suit or proceeding may
be paid by the corporation in advance of the final disposition of such action,
suit or proceeding upon a preliminary determination following one of the
procedures set forth in Section 3 of this Article VI that such indemnified
person meets the applicable standard of conduct referred to therein and after
receipt of an undertaking satisfactory in form and substance to the corporation
that such person will promptly repay such amount unless it shall ultimately be
determined that the person is entitled to be indemnified by the corporation as
authorized in this Article VI.
Section 5. NONEXCLUSIVITY. The indemnification provided by this Article
VI shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in any
official capacity and as to action in any other capacity while holding office
with the corporation. The Board of Directors may, at any time, approve
indemnification of any other person that the corporation has the power by law to
indemnify, including, without limitation, employees and agents of the
corporation. The indemnification provided for in this Article VI shall continue
as to any person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of such person's heirs and personal representatives.
ARTICLE VII
Interested Parties
Section 1. GENERAL. No contract or other transaction between the
corporation and any one or more of its directors or any other corporation, firm,
association or entity in which one or more of its directors are directors or
officers or are financially interested shall be either void or voidable because
of such relationship or interest, because such director or directors were
present at the meeting of the Board of Directors or of a committee thereof which
authorizes, approves or ratifies such contract or transaction or because such
director's or directors' votes are counted for such purpose if: (a) the fact of
such relationship or interest is disclosed or known to the Board of Directors or
13
<PAGE> 18
committee which authorizes, approves or ratifies the contract or transaction by
a vote or consent sufficient for the purpose without counting the votes or
consents of such interested directors; (b) the fact of such relationship or
interest is disclosed or known to the stockholders entitled to vote on the
matter, and they authorize, approve or ratify such contract or transaction by
vote or written consent; or (c) the contract or transaction is fair and
reasonable as to the corporation at the time it is authorized by the Board of
Directors, a committee thereof or the stockholders.
Section 2. DETERMINATION OF QUORUM. Common or interested directors may
be counted in determining the presence of a quorum at meeting of the Board of
Directors or a committee thereof which authorizes, approves or ratifies a
contract or transaction referred to in Section 1 of this Article VII.
ARTICLE VIII
Certificates of Stock
Section 1. CERTIFICATES FOR SHARES. Every holder of stock in the
corporation shall be entitled to have a certificate, in such form as the Board
of Directors may from time to time prescribe, signed by the President or a Vice
President and by the Secretary or an Assistant Secretary, and sealed with the
seal of the corporation, exhibiting the holder's name and certifying the number
of shares owned. The certificates shall be numbered and entered on the books of
the corporation as they are issued.
Section 2. FACSIMILE SIGNATURE. Where a certificate is manually signed
on behalf of a transfer agent or a registrar, the signature of the President or
Vice President and the signature of the Secretary or Assistant Secretary may be
a facsimile. In case any officer or officers who have signed, or whose facsimile
signature or signatures have been used on, any such certificate or certificates
shall cease to be such officer or officers of the corporation, such certificate
or certificates may nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile signature
or signatures have been used thereon had not ceased to be such officer or
officers of the corporation.
Section 3. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may,
in its discretion, appoint responsible banks or trust companies in such city or
cities as the Board may deem advisable from time to time to act as transfer
agents and registrars of the stock of the Corporation; and, when such
14
<PAGE> 19
appointments shall have been made, no stock certificate shall be valid until
countersigned by one of such transfer agents and registered by one of such
registrars.
Section 4. TRANSFER OF SHARES. Subject to the provisions of these
by-laws regarding the qualifications of stockholders, transfers of shares of the
corporation shall be made upon its books by the holder of the shares in person
or by the holder's lawfully constituted representative, upon surrender of the
certificate of stock for cancellation. The person in whose name shares stand on
the books of the corporation shall be deemed by the corporation to be the owner
thereof for all purposes and the corporation shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of the State of Florida.
Section 5. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation and alleged to have been lost
or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or the owner's
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
ARTICLE IX
Record Date
The Board of Directors is authorized from time to time to fix in
advance a date, not more than sixty (60) nor less than ten (10) days before the
date of any meeting of stockholders, or not more than sixty (60) days prior to
the date for the payment of any dividend or the date for the allotment of
rights, or the date when any change or conversion or exchange of stock shall go
into effect, or a date in connection with the obtaining of the consent of
stockholders for any purpose, as a record date for the determination of the
stockholders entitled to notice of and to vote at any such meeting and any
adjournment thereof, or entitled to
15
<PAGE> 20
receive payment of any such dividend, or to any such allotment, or to exercise
the rights in respect of any such change, conversion or exchange of stock or to
give such consent, as the case may be; and, in such case, such stockholders and
only such stockholders as shall be stockholders of record as of the close of
business on the date so fixed shall be entitled to such notice of and to vote at
such meeting and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.
ARTICLE X
Dividends
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares of capital stock in the
manner and upon the terms and conditions provided by the Articles of
Incorporation and by law. Subject to the provisions of the Articles of
Incorporation and to law, dividends may be paid in cash or property, including
shares of stock or other securities of the corporation.
ARTICLE XI
Fiscal Year
The fiscal year of the corporation shall be the period selected by the
Board of Directors as the taxable year of the corporation for federal income tax
purposes, unless the Board of Directors specifically establishes a different
fiscal year.
ARTICLE XII
Seal
The corporate seal shall have the name of the corporation, the word
"SEAL" and the year of incorporation inscribed thereon, and may be a facsimile,
engraved, printed or impression seal. An impression of said seal appears on the
margin hereof.
16
<PAGE> 21
ARTICLE XIII
Stock in Other Corporations
Shares of stock in other corporations held by the corporation shall be
voted by such officer or officers of the corporation as the Board of Directors
shall from time to time designate for the purpose or by a proxy hereunto duly
authorized by said Board.
ARTICLE XIV
Amendments
These by-laws may be altered, amended or repealed and new by-laws may
be adopted by the Board of Directors; provided that any by-law or amendment
thereto as adopted by the Board of Directors may be altered, amended or repealed
by vote of the stockholders entitled to vote thereon, or a new by-law in lieu
thereof may be adopted by the stockholders. No by-law which has been altered,
amended or adopted by such a vote of the stockholders may be altered, amended or
repealed by a vote of the directors until two (2) years shall have expired since
such vote of the stockholders.
17
<PAGE> 1
EXHIBIT 3.25
CHARTER
OF
ECC EMERGENCY COVERAGE CORPORATION
The undersigned natural person, having capacity to contract and acting
as the incorporator of a corporation under the Tennessee General Corporation
Act, adopts the following charter for such corporation:
1. Name. The name of the corporation is -
ECC Emergency Coverage Corporation.
2. Duration. The duration of the corporation is perpetual.
3. Address. The address of the principal office of the corporation in
the State of Tennessee shall be 1701 United American Plaza, in the City of
Knoxville, County of Knox.
4. Profit. The corporation is for profit.
5. Purposes. The purpose or purposes for which the corporation is
organized are to assist hospitals and related health care organizations by
providing emergency care, and to enter into or in any way engage in any and all
financial or other transactions of every kind and nature necessary or desirable
in connection therewith, and to carry on all such other business or businesses
of allied natures as may be necessary or desirable in conducting the principal
business or businesses; and to purchase or otherwise acquire, own, mortgage,
pledge, sell, assign, transfer or otherwise dispose of, to invest, trade and
deal in goods, wares and merchandise and real and personal property of every
class and description; and, without limitation by the specificity of the
foregoing, to engage in any and all activities necessary or desirable to further
any lawful purpose, subject to the provisions of the Tennessee General
Corporation Act.
6. Capital Stock. The maximum number of shares which the corporation
shall have the authority to issue is one hundred thousand (100,000) shares of
common stock with One Dollar ($1.00) par value per share.
7. Initial Capital. The corporation will not commence business until a
consideration of at least $1,000 has been received for the issuance of shares.
8. Preemptive Rights. No holder of shares of the capital stock of the
corporation of any class or series, or of any securities convertible into or
carrying any option to purchase any class or series of the capital stock of the
corporation, now or hereafter authorized, shall have any preferential or
preemptive rights to subscribe for, purchase or receive any shares of the
corporation of any class or series, now or hereafter authorized, or of any
options or warrants for such shares, or of any rights to subscribe or purchase
such shares, or of any securities convertible into or exchangeable for such
shares, which may at any time be issued, sold or offered for sale by the
corporation.
-1-
<PAGE> 2
9. Indemnification. The corporation may indemnify its directors,
officers, employees and agents to the extent and under the circumstances that
such indemnification is authorized by law and authorized or required by the
by-laws.
10. Amendment. The corporation reserves the right to amend, alter,
change or repeal any provisions contained in this Charter, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
Dated this 13th day of January, 1982.
/s/ Robert S. Talbott
--------------------------------------
Robert S. Talbott, Incorporator
RSTJH5G
-2-
<PAGE> 3
DESIGNATION OF
REGISTERED AGENT OF
ECC EMERGENCY COVERAGE CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-1201 of the Tennessee General
Corporation Act, the undersigned incorporator of a domestic corporation being
organized under the Tennessee Corporation Act, submits the following statement
for the purpose of designating the registered agent for the corporation in the
State of Tennessee.
1. The name of the corporation is ECC Emergency Coverage
Corporation.
2. The name and street address of its registered agent in the
State of Tennessee is Robert S. Talbott, 1701 United American Plaza, Knoxville,
Knox County, Tennessee, 37929.
This 13th day of January, 1982.
ECC EMERGENCY COVERAGE CORPORATION
By /s/ Robert S. Talbott
----------------------------------
Robert S. Talbott, Incorporator
RSTJH6G
-1-
<PAGE> 4
Form No. 28
Section 48-1201
For Profit
or
Not For Profit
DESIGNATION, REVOCATION OR CHANGE
OF
REGISTERED AGENT
OF
ECC Emergency Coverage Corporation
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-1201 of the Tennessee General
Corporation Act, the undersigned foreign or domestic corporation or the
incorporator or incorporators of a domestic corporation being organized under
the Act submit the following statement for the purpose of designating, revoking
or changing, as the case may be, the registered agent for the corporation in the
State of Tennessee:
1. The name of the corporation is ECC Emergency Coverage Corporation
The address of the corporation is 5401 Kingston Pike, Suite 300,
Knoxville, Tennessee, 37919
If a foreign corporation, state or country of incorporation N/A
2. 2. The name and street address of its registered agent in the State of
Tennessee shall be John R. Staley, Jr., M.D., 5401 Kingston Pike, Suite 300,
Knoxville, Tennessee, 37919
Dated: February 7, 1986.
ECC Emergency Coverage Corporation
-------------------------------------------
Name of Corporation
By Martha H. McMurry, Treasurer
-----------------------------------------
(Title)
(Incorporator N/A
or incorporators, -----------------------------------------
if corporation is -----------------------------------------
being organized) -----------------------------------------
-1-
<PAGE> 5
ARTICLES OF AMENDMENT TO THE CHARTER
OF
EMERGENCY COVERAGE CORPORATION
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is Emergency Coverage Corporation
2. The text of each amendment adopted is:
The principal office of the corporation is 9207 Park
West Blvd., Suite 103, Knoxville, TN 37923. The
mailing address of the corporation is P. 0. Box
30707, Knoxville, TN 37930.
3. The corporation is a for-profit corporation.
4. The manner (if not set forth in the amendment) for implementation of
any exchange, reclassification, or cancellation of issued shares is as follows:
5. The amendment was adopted on January 15, 1989 by (the shareholders)
[NOTE: Please strike the choices which do not apply to this amendment.]
6. If the amendment is not to be effective when these articles are filed
by the Secretary of State, the date/time it will be effective is
________________________ , 19_______ (date) ________________________ (time).
[NOTE: The delayed effective date shall not be later than the 90th day after the
date this document is filed by the Secretary of State.]
2-7-90 Emergency Coverage Corporation
- ------------------------------- -------------------------------
Signature Date Name of Corporation
President /s/ John R. Staley
- ------------------------------- -------------------------------
Signer's Capacity Signature
John R. Staley, Jr., M.D.
-------------------------------
Name (typed or printed)
-1-
<PAGE> 6
ARTICLES OF AMENDMENT TO THE CHARTER
OF
ECC EMERGENCY COVERAGE CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is ECC Emergency Coverage Corporation.
2. The text of the amendment adopted is as follows:
The corporation hereby changes its name to Emergency Coverage
Corporation.
3. The amendment was adopted on the 6th day of November, 1991.
4. The amendment was duly adopted by the Board of Directors without
Shareholder action, such Shareholder action not being required.
DATED the 11th day of November, 1991.
EMERGENCY COVERAGE CORPORATION
By: /s/ John Staley
-----------------------------
JOHN STALEY, M.D.
-1-
<PAGE> 7
ARTICLES OF AMENDMENT TO THE CHARTER
OF
EMERGENCY COVERAGE CORPORATION
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned Corporation hereby submits the
following articles to amend its Charter and states as follows:
1. The name of the Corporation is Emergency Coverage Corporation.
2. The text of the amendment adopted is:
(a) The Corporation hereby changes its registered agent and
office to: W. Dale Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
(b) The Corporation hereby adds the following paragraph to its
Charter: "No director may be sued by the Corporation or its shareholders for
breach of his or her fiduciary duty to the Corporation, provided, however, that
this provision shall not absolve a director from a breach of his or her duty of
loyalty, or acts or omissions not in good faith or which involves intentional
misconduct or a knowing violation of law, or for distributions in violation of
T.C.A. Section 48-18-304."
3. After the changes are made, the street address of the registered
office of the Corporation and the business office of its registered agent shall
be identical.
4. The amendment was duly adopted on the 15th day of February, 1993, by
the board of directors without shareholder action, as such shareholder action
was not required.
DATED this 15th day of February, 1993.
EMERGENCY COVERAGE CORPORATION
By: /s/ John R. Staley, Jr.
------------------------------------------
Its: President
------------------------------------------
-1-
<PAGE> 8
JAMES K. POLK BUILDING
NASHVILLE, TN 37243-0306
FILING FEE - $10.00; PRIVILEGE TAX - $10.00; TOTAL AMOUNT DUE: $20.00
CURRENT FISCAL YEAR CLOSING MONTH 3 IF DIFFERENT
CORRECT MONTH IS THIS REPORT IS DUE ON OR BEFORE 07/01/93
(1) SECRETARY OF STATE CONTROL NUMBER: 0111738 OR FEDERAL EMPLOYER
IDENTIFICATION NUMBER: 62-1130266
(2A) NAME AND MAILING ADDRESS OF CORPORATION: (2B) STATE OR COUNTRY OF
INCORPORATION:
EMERGENCY COVERAGE CORPORATION TENNESSEE
P.O. BOX 30707
KNOXVILLE, TN 37930
(2C) ADD OR CHANGE MAILING
ADDRESS:
D 01/14/1982 FOR PROFIT
(3) A. PRINCIPAL ADDRESS INCLUDING CITY, STATE, ZIP CODE:
9207 PARK WEST BLVD, SUITE 103, KNOXVILLE, TN 37923
B. CHANGE OF PRINCIPAL ADDRESS:
<TABLE>
<CAPTION>
STREET CITY STATE ZIP CODE + 4
------ ---- ----- ------------
<S> <C> <C> <C>
1900 Winston Rd., Suite 300 Knoxville TN 37919
</TABLE>
** BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED **
(4) A. NAME AND BUSINESS ADDRESS, INCLUDING ZIP CODE, OF THE PRESIDENT,
SECRETARY AND OTHER PRINCIPAL OFFICERS. (ATTACH ADDITIONAL SHEET IF
NECESSARY.)
<TABLE>
<CAPTION>
TITLE NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE + 4
----- ---- ---------------- -------------------------
<S> <C> <C> <C>
President John R. Staley, Jr., M.D. 1900 Winston Rd., Suite 300 Knoxville, TN 37919
Secretary Margaret W. Seymour 1900 Winston Rd., Suite 300 Knoxville, TN 37919
Vice-Pres. Michael L. Hatcher 1900 Winston Rd., Suite 300 Knoxville, TN 37919
</TABLE>
B. BOARD OF DIRECTORS (NAMES, BUSINESS ADDRESS INCLUDING ZIP CODES)
(ATTACH ADDITIONAL SHEET, IF NECESSARY).
X Same as above
None
<TABLE>
<S> <C> <C> <C>
OR LIST BELOW: NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE + 4
</TABLE>
(5) A. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS:
W. DALE AMBURN
B. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS:
1716 CLINCH AVENUE, KNOXVILLE, TN 37916
(6) INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME AND/OR
REGISTERED OFFICE:
(BLOCK 5A AND/OR 5B.) THERE IS AN ADDITIONAL $10.00 FILING FEE AND
$10.00 PRIVILEGE TAX FOR A TOTAL OF $20.00 REQUIRED FOR CHANGES MADE TO
THIS INFORMATION
A. CHANGE OF REGISTERED AGENT:
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE + 4 COUNTY
-2-
<PAGE> 9
(7)A. THIS BOX APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT
THAT YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL BENEFIT
CORPORATION AS INDICATED BELOW:
IF BLANK, OR CHANGE, PLEASE CHECK APPROPRIATE BOX:
PUBLIC
MUTUAL
B. IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
RELIGIOUS
(8) SIGNATURE: Margaret W. Seymour (9) DATE: 6-1-93
(10) TYPE/PRINT NAME OF SIGNER: (11) TITLE OF SIGNER:
Margaret W. Seymour Secretary
** THIS REPORT MUST BE DATED AND SIGNED **
-3-
<PAGE> 10
ARTICLES OF MERGER
OF EMERGENCY DEPARTMENT MANAGEMENT SERVICES, INC.
INTO
EMERGENCY COVERAGE CORPORATION
Pursuant to the provisions of Section 48-21-107 of the
Tennessee Business Corporation Act, the undersigned corporations adopt the
following Articles of Merger:
1. The attached Plan of Merger (Exhibit "A"), was approved by
each of the undersigned corporations in the manner prescribed by the Tennessee
Business Corporation Act.
2. Approval by the Shareholders of each corporation that is a
party to the merger is required by the Tennessee Business Corporation Act.
3. As to Emergency Department Management Services, Inc., a
Tennessee corporation, the plan was duly adopted by the Board of Directors and
approved by the written consent of the sole shareholder entitled to vote on
December 12, 1995.
4. As to Emergency Coverage Corporation, a Tennessee
corporation, the plan was duly adopted by the Board of Directors and approved by
the written consent of the sole shareholder entitled to vote on December 12,
1995.
5. These Articles of Merger shall take effect on December 31,
1995.
-1-
<PAGE> 11
IN WITNESS WHEREOF, these Articles of Merger are executed and
approved on behalf of the parties to the merger by the undersigned, pursuant to
the authorization of the directors and the sole shareholder of each corporation.
Dated: December 12, 1995.
EMERGENCY DEPARTMENT MANAGEMENT SERVICES, INC.
a Tennessee corporation
By: /s/ Michael Hatcher
-------------------------------------------------
Its: Secretary
-------------------------------------------------
EMERGENCY COVERAGE CORPORATION
a Tennessee corporation
By: /s/ H. Lynn Massengale
-------------------------------------------------
Its: President
-------------------------------------------------
-2-
<PAGE> 12
PLAN OF MERGER
OF
EMERGENCY DEPARTMENT MANAGEMENT SERVICES, INC.
INTO
EMERGENCY COVERAGE CORPORATION
Pursuant to the provisions of Section 48-21-102 of the Tennessee Business
Corporation Act, the undersigned corporations adopt the following Plan of
Merger:
1. The name of each corporation planning to merge is:
(a) Emergency Department Management Services, Inc.
(b) Emergency Coverage Corporation
2. The name of the surviving corporation is:
(a) Emergency Coverage Corporation
3. The name of the corporation whose shares will be issued in
connection with the merger is.
(a) Emergency Coverage Corporation
4. The terms and conditions of the merger are:
(a) Agreement to Merge. Emergency Department Management
Services, Inc., and Emergency Coverage Corporation agree to execute and deliver
to the Tennessee Secretary of State for filing Articles of Merger which shall
provide that Emergency Coverage Corporation shall be the surviving corporation
in the Merger.
(b) Effective Date of Merger. Effective date of the Merger
shall be December 31, 1995.
(c) Management of Surviving Corporation. The surviving
corporation, Emergency Coverage Corporation, shall be managed by a Board of
Directors consisting of two Directors.
(d) Costs and Expenses. The constituent corporations shall
bear their own costs and expenses in connection with due diligence and other
related activities preliminary to the Merger. Provided, however, that the
surviving corporation shall bear all legal and accounting costs and expenses
associated with the preparation and filing of the Articles of Merger, Plan of
Merger and all other related documents.
(e) Effect of the Merger. As of the effective date of the
Merger, the separate existence of Emergency Department Management Services.
Inc., shall cease and all property owned by it shall be vested in Emergency
Coverage Corporation without reversion or impairment and all liabilities of
the non-surviving corporation shall be vested in the surviving corporation. The
surviving corporation shall possess and enjoy all the rights, privileges,
immunities, powers and franchises, both of a public and a private nature, and be
subject to all restrictions, disabilities, duties, debts, and liabilities of the
non-surviving corporation.
-3-
<PAGE> 13
5. The manner and basis of converting the shares of the merging
corporation into securities, cash, or other property of the surviving
corporation is as follows: The sole shareholder of Emergency Department
Management Services, Inc. shall receive ten (10) shares of the common stock of
Emergency Coverage Corporation in exchange for all of the issued and outstanding
shares of common stock of Emergency Department Management Services, Inc., held
by such shareholder.
Dated: December 12, 1995.
EMERGENCY COVERAGE CORPORATION
By: /s/ H. Lynn Massingale
--------------------------------------------
Its: President
--------------------------------------------
EMERGENCY DEPARTMENT MANAGEMENT SERVICES, INC.
By: /s/ Michael Hatcher
--------------------------------------------
Its: Secretary
--------------------------------------------
-4-
<PAGE> 14
APPLICATION FOR USE OF ASSUMED CORPORATE NAME
OF
EMERGENCY COVERAGE CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-14-101(d) of the Tennessee Business
Corporation Act, the undersigned corporation hereby applies for the right to
transact business under an assumed corporate name:
1. The true name of the corporation is Emergency Coverage Corporation.
2. The corporation was organized under the laws of Tennessee.
3. The corporation intends to transact business under an assumed corporate
name.
4. The assumed corporate name which it proposes to use is: Emergency
Department Management Services, Inc.
Dated 12-21, 1995.
EMERGENCY COVERAGE CORPORATION
By: /s/ Michael L. Hatcher
-----------------------------
Michael L. Hatcher, Secretary
-1-
<PAGE> 1
Exhibit 3.26
AMENDMENT TO BYLAWS
OF
EMERGENCY COVERAGE CORPORATION
Effective April 1, 1994, Article 111, Section 3 Number of Directors, is
hereby deleted in its entirety and the following language is substituted
therefore:
The number of Directors shall be fixed from time to by either
the Shareholders or by the Board of Directors.
SECRETARY'S CERTIFICATE
The undersigned, being the duly elected Secretary of Emergency Coverage
Corporation, hereby certifies that the above Amendment to the Bylaws of the
Corporation was approved by the Board of Directors acting by Written Consent on
June 12, 1995.
/s/ Michael L. Hatcher
---------------------------------
Michael L. Hatcher, Secretary
-1-
<PAGE> 2
BY-LAWS
OF
ECC EMERGENCY COVERAGE CORPORATION
ARTICLE I. SHAREHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the shareholders
shall be held on the first Tuesday of the month of the corporation's year end or
on such other date as may be determined by the Board of Directors and set forth
in the notice of such meeting. The business to be transacted at the annual
meeting shall be the election of directors and such other business as may
properly come before the meeting.
SECTION 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President or by the Board of Directors of the corporation, and shall be
called by the President at the request of the holders of not less than ten
percent (10%) of all outstanding shares of the corporation entitled to vote at
such meeting.
SECTION 3. Place of Meetings. Shareholders meetings shall be held at
the principal office of the corporation or at such other place as may be
designated by the President or the Board of Directors.
SECTION 4. Notice of Meetings. Written or printed notice stating the
place, day, and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called and the person or persons
calling the meeting, shall be delivered either personally or by mail at the
direction of the President, the Board of Directors, or the persons calling the
meeting to each shareholder entitled to vote at the meeting. If mailed, such
notice shall be delivered not less than ten (10) nor more than sixty (60) days
prior to the date of the meeting and shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid. If delivered personally, such notice shall be delivered not
less than five (5) nor more than sixty (60) days before the date of the meeting
and shall be deemed delivered when actually received by the shareholder. A
certificate of the Secretary or other person giving the notice, or of a transfer
agent of the corporation, that the notice required by this section has been
given, in the absence of fraud, shall be prima facia evidence of the facts
therein stated.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If after the adjournment, however, the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
to each shareholder of record on the new record date entitled to notice under
the first paragraph of this SECTION 4.
SECTION 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any
-1-
<PAGE> 3
adjournment thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the corporation may provide that the
stock transfer books shall be closed for a stated period but not to exceed, in
any case, thirty (30) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten (10) days
immediately preceding such meeting. In lieu of closing the stock transfer books,
the Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not less than ten
(10) days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The Secretary of the corporation shall make a
complete list of the shareholders entitled to vote at each meeting of
shareholders or any adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each. Such list shall be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder during the whole time of the meeting for
the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. The shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by such shareholder or by his
duly authorized attorney in fact. Such proxy shall be filed with the Secretary
of the corporation before or at the time of the meeting. No proxy shall be valid
after eleven (11) months from the date of its execution, unless otherwise
provided in the proxy.
SECTION 9. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a meeting
of shareholders and fractional shares shall be voted and counted as a fractional
vote equal to the fraction of each such share voted.
Shares standing in the name of another corporation may be, voted by
such officer, agent, or proxy as the By-Laws of such corporation may prescribe,
or, in the absence of such provision, as the Board of Directors of such
corporation may determine.
Shares held by an administrator, executor, guardian, or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
-2-
<PAGE> 4
Shares standing in the name of a receiver may be voted by such receiver
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given time.
SECTION 10. Action by Unanimous Written Consent. Whenever shareholders
are required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by all shareholders entitled to vote thereon.
ARTICLE II. CERTIFICATES FOR SHARES
AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the president and by the
secretary or by such other officers authorized by law and by the Board of
Directors so to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and the date of issue, shall be entered on the stock
transfer books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificates shall be
issued until the former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed, or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the corporation as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the hooks of the corporation shall be deemed by
the corporation to be the owner thereof for all purposes.
SECTION 3. Stated Value. Any shares of the corporation without par
value shall have such stated value as the board shall from time to time
determine.
SECTION 4. Lost, Destroyed or Stolen Certificates. Certificates for
shares of stock in the corporation shall be issued in place of any certificate
alleged to have been lost, destroyed, or stolen on production of evidence,
satisfactory to the Board of Directors, of such loss, destruction or theft, and,
if the Board of Directors so requires upon the furnishing of an indemnity bond
in such
-3-
<PAGE> 5
amount and with such terms and such surety as the Board of Directors may, in its
discretion, require.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors, all of whom shall be of legal age.
SECTION 2. Election and Term. Directors shall be elected at the first
meeting of shareholders and at annual meetings of shareholders, for terms not to
exceed three years. Each director shall hold office until the expiration of the
term for which he is elected, and thereafter until his successor has been
elected and qualified.
SECTION 3. Number of Directors. The Board of Directors shall consist of
one (1) member. The number of directors may be changed by amendment of this
By-Law by the Board of Directors provided such amendment is approved by a
majority of the entire Board of Directors and provided further that the number
shall not be less than the number permitted by law.
SECTION 4. Meetings. The regular annual meeting of the Board of
Directors shall be held without other notice than this By-Law immediately
following the annual meeting of shareholders on the same day thereof and at the
same place of such annual meeting. Additional regular meetings of the Board of
Directors shall be held at such times and places as are fixed from time to time
by resolution of the Board of Directors. Special meetings may be held at any
time upon the call of the President or any two directors.
SECTION 5. Notice of Meetings. Notice of any special meeting shall be
given at least ten (10) days previously thereto by written notice delivered
personally or mailed to each director.
-4-
<PAGE> 6
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, directed to the director's last known address, with postage
thereon prepaid. Any director may waive notice of any meeting. Attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened.
SECTION 6. Quorum. A majority of the number of directors duly elected
and holding office shall constitute a quorum, and the act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
SECTION 7. Acting without a Meeting. Whenever the directors are
permitted or required to take any action, they may take such action without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all directors entitled to vote thereon.
SECTION 8. Telephone Meeting Allowed. Participation by members of the
board or any committee designated by the board in any telephone meeting of the
board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other shall be permitted. Participation in such a meeting pursuant to this
Paragraph 8 shall constitute presence in person at such meeting. The directors
shall be promptly furnished a copy of the minutes of any meeting held under this
paragraph.
SECTION 9. Newly Created Directorships and Vacancies. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason may be filled by
the vote of a majority of the directors then in office although less than a
quorum exists. A director elected to fill a vacancy shall hold office until the
next annual meeting of shareholders and thereafter until a successor has been
elected and qualified.
SECTION 10. Compensation. By resolution of the Board of Directors, each
director may be paid his expenses, if any, of attendance at each meeting of the
Board of Directors, and may be paid a stated salary as director or a fixed sum
for attendance at each meeting of the Board of Directors or both. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 11. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
SECTION 12. Committees. The board, by resolution adopted by a majority
of the entire board, may designate an executive committee, consisting of two or
more directors, and other committees, consisting of two or more persons, who may
or may not be directors, and may delegate to such committee or committees all
such authority of the board that it deems desirable. Only the specific
delegation of the board shall be effective to give a committee the authority to
adopt, amend or repeal the By-Laws, to submit to shareholders any action that
needs shareholder authorization under applicable law, to fill vacancies in the
board or in any committee, or to
-5-
<PAGE> 7
declare dividends or make other corporate distributions. The committee shall
report any action taken to the meeting of the board next following the taking of
such action, unless the board otherwise requires. The board may designate one or
more directors as alternate members of any such committee, who may replace any
absent member or members at any meeting of the committee. Each such committee,
and each member of each such committee, shall serve at the pleasure of the
board. The designation of any such committee and the delegation thereto of
authority shall not relieve any director of any responsibility imposed by law.
So far as applicable, the provisions of these by-laws relating to the conduct of
meetings of the board shall govern meetings of the executive and other
committees.
SECTION 13. Proxy Committee. The directors shall have the authority to
appoint from their number or from the corporation's shareholders a Proxy
Committee whose names may be, at the direction of the directors, printed as
proxies on the proxy blanks to be mailed to the shareholders; provided, such
proxies so mailed shall leave a space for such name or names as the shareholders
may wish to substitute in place of the names of the Proxy Committee. The Proxy
Committee shall be entitled to vote at any regular or special called meeting of
shareholders on all business matters and affairs of the corporation then
considered.
ARTICLE IV. OFFICERS
SECTION 1. Number. The officers of the corporation shall be a
president, a secretary and a treasurer. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person, except that
no person shall hold the offices of president and secretary.
SECTION 2. Election and Term of Office. The officers of the corporation
to he elected by the Board of Directors shall be elected annually by the Board
of Directors at the annual meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death, resignation,
or removal. Election or appointment of an officer or agent shall not of itself
create contract rights.
SECTION 3. Removal and Vacancies. Any officer or agent may be removed
by the Board of Directors with or without cause by the affirmative vote of a
majority of the directors then in office. A vacancy in any office may be filled
by the Board of Directors for the unexpired portion of the term.
SECTION 4. President. The president shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all business and affairs of
the corporation, shall preside at the meetings of shareholders and the Board of
Directors. He may sign, with the secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, certificates for
shares of the corporation, leases, deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these By-Laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed and
in
-6-
<PAGE> 8
general shall perform all duties incident to the office of president and such
other duties as may be prescribed by the Board of Directors from time to time.
SECTION 5. Secretary. The secretary shall: (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these By-Laws or as required by law; (c) be
custodian of the corporate records; (d) keep a register of the post office
address of each shareholder which shall be furnished to the secretary by such
shareholder; (e) sign with the president, certificates for shares of the
corporation, the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock transfer books of
the corporation; and (g) in general perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him by
the president or by the Board of Directors.
SECTION 6. Vice President. The vice president shall be vested with all
the powers and shall be required to perform all the duties of the President in
his absence and/or disability and he shall perform such other duties as may be
prescribed by the Board of Directors.
SECTION 7. Treasurer. The treasurer shall have the custody of the funds
and securities of the corporation and shall keep full and accurate accounts of
all receipts and disbursements in books belonging to the corporation. He shall
disburse the funds of the corporation as may be ordered by the Directors, and
shall render to the President, stockholders and directors, whenever they may
require it, an account of all his transactions as treasurer and of the financial
condition of the corporation.
SECTION 8. General Manager. In addition to the other offices
specifically provided for herein, the Board of Directors shall have the power to
select and appoint a general manager with such duties as may be determined and
assigned by the Board of Directors. The general manager need not be an officer
of the corporation but may also hold any office specifically provided for
herein.
SECTION 9. Salaries. The salaries of the officers of the corporation
shall be fixed from time to time by the Board of Directors and no officer shall
be prevented from receiving such salary by reason of the fact that he is also a
director of the corporation.
ARTICLE V. CONTRACTS, LOANS,
CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
SECTION 2. Loans. No loans shall he contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the corporation, shall be
-7-
<PAGE> 9
signed by such officer or officers, employee, agent or agents of the corporation
and in such manner as shall from time to time be determined by resolution of the
Board of Directors.
SECTION 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies, or other depositories as the Board of Directors
may select.
ARTICLE VI. DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its articles of incorporation.
ARTICLE VII. CORPORATE SEAL
The Board of Directors may, but shall not be obligated to, provide a
corporate seal which shall be circular in form and shall have inscribed thereon
the name of the corporation and the state of incorporation; but the presence or
absence of such seal on any or its addition thereto, shall not affect its
character, validity or legal effect in any respect.
ARTICLE VIII. WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the corporation under the provisions of
these By-Laws or under the provisions of the articles of incorporation or
otherwise, a waiver thereof in writing, signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall he deemed
equivalent to the giving of such notice.
ARTICLE IX. MISCELLANEOUS
SECTION 1. Offices. The principal office of the corporation in the
State of Tennessee shall be located at 1701 United American Plaza, Knoxville,
Tennessee 37929, or such other place as shall be designated by the Board.
SECTION 2. Stock in Other Companies. In the absence of other
arrangement by the board, the president of the corporation may vote, endorse for
transfer or take any other action necessary with respect to shares of stock and
securities issued by any other corporation and owned by this corporation; and he
may make, execute and deliver any proxy, waiver of consent with respect thereto.
SECTION 3. Indemnification of Directors and Officers. Any director or
officer, or his executor or administrator, shall be entitled to indemnification
in accordance with Sections 48-406 through 46-411 of the Tennessee General
Corporation Act.
ARTICLE X. AMENDMENTS
These By-Laws may be altered, amended, or repealed by the shareholders
at any annual meeting of shareholders or at any special meeting of shareholders
or by the affirmative vote of a
-8-
<PAGE> 10
majority of the entire Board of Directors of the corporation at any regular or
special meeting of the Board of Directors, provided each director is given
written notice by the proposed alteration, amendment, or repeal of these By-Laws
in the normal manner at least ten (10) days prior to such meeting of the Board
of Directors.
-9-
<PAGE> 1
EXHIBIT 3.27
RESTATED
CERTIFICATE OF INCORPORATION OF
EMERGENCY PHYSICIANS ASSOCIATES, INC.
TO: THE SECRETARY OF STATE LONNA R. HOOKS
State of New Jersey Secretary of State
Pursuant to the provisions of 14A:9-5, Corporations, General of the New
Jersey Statutes, the undersigned corporation hereby executes the following
Restated Certificate of Incorporation:
FIRST: The name of the corporation is
EMERGENCY PHYSICIANS ASSOCIATES, INC.
SECOND: The purpose or purposes for which the corporation is organized
are:
To engage in any activity within the purposes for which
corporations may be organized under the "New Jersey Business Corporation Act"
N.J.S. 14A: 1-1 et seq.,
THIRD: The aggregate number of shares which the corporation shall have
authority to issue is One thousand (1,000) shares without par value.
FOURTH: The address of the corporation's current registered office is
4300 Haddonfield Road, Pennsauken, NJ, 08109 and the name of the corporation's
current registered agent at such address is Sherman, Silverstein, Kohl, Rose &
Podolsky, A Professional Corporation.
FIFTH: The number of directors constituting the current Board of
Directors is one and the name and address of the director is as follows:
NAME ADDRESS
James E. George, M.D. P.O. Box 298, Woodbury, N.J. 08096
SIXTH: To the full extent that the laws of the State of New Jersey, as
they exist on the date hereof or as they may hereafter be amended, permit the
limitation or elimination of the liability of Directors or officers, no Director
or officer of the Corporation shall be personally liable to the Corporation or
its shareholders for damages for breach of any duty owed to the Corporation or
its shareholders. Neither the amendment or repeal of this article nor the
adoption of an amendment which is inconsistent with this Article shall apply to
or have any effect on the liability or alleged liability of any Director or
officer of the Corporation for or with respect to any act or omission of such
Director or officer occurring prior to such amendment, repeal or adoption.
SEVENTH: The duration of the corporation shall be perpetual.
<PAGE> 2
Dated this 20th day of June, 1996.
EMERGENCY PHYSICIANS ASSOCIATES, INC.
By: /s/ James E. George
----------------------------------------
James E. George, M.D., President
-2-
<PAGE> 3
CERTIFICATE REQUIRED TO BE FILED WITH THE
RESTATED CERTIFICATE OF INCORPORATION OF
EMERGENCY PHYSICIANS ASSOCIATES, P.A.
Pursuant to the provisions of 14A:9-5(5), Corporations, General of the
New Jersey Statutes, the undersigned corporation hereby executes the following
certificate:
FIRST: The name of the corporation is:
EMERGENCY PHYSICIANS ASSOCIATES, INC.
SECOND: The Restated Certificate of Incorporation was adopted on the
20th day of June, 1996 by unanimous written consent of the shareholders without
a meeting.
THIRD: this Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of this
Corporation by amending paragraphs FIRST, SECOND, THIRD, FOURTH and SIXTH to
read as follows:
"'FIRST: The name of the corporation is
EMERGENCY PHYSICIANS ASSOCIATES, INC.
'SECOND: The purpose or purposes for which the corporation is organized
are:
To engage in any activity within the purposes for which corporations
may be organized under the "New Jersey Business Corporation Act," N.J.S. 14A:1-1
et seq.,'
'FOURTH: The address of the corporation's current registered office is
4300 Haddonfield Road, Pennsauken, N.J. 08109 and the name of the corporation's
current registered agent at such address is Sherman, Silverstein, Kohl, Rose &
Podolsky, A Professional Corporation.
'FIFTH: The number of directors constituting the current Board of
Directors is one and the name and address of the director is as follows:
NAME ADDRESS
James E. George, M.D. P.O. Box 298, Woodbury, N.J. 08096
'SIXTH: To the full extent that the laws of the State of Now Jersey, as
they exist on the date hereof or as they may hereafter be amended, permit the
limitation or elimination of the liability of Directors or officers, no Director
or officer of the Corporation shall be personally liable to the Corporation or
its shareholders for damages for breach of any duty owed to the Corporation or
its shareholders. Neither the amendment or repeal of this article nor the
adoption of an amendment
-1-
<PAGE> 4
which is inconsistent with this Article shall apply to or have any effect on the
liability or alleged liability of any Director or officer of the Corporation for
or with respect to any act or omission of such Director or officer occurring
prior to such amendment, repeal or adoption."
Dated this 20th day of June, 1996, and the Restated Certificate of Incorporation
is to become effective upon the later of (i) 11:50 p.m. June 30, 1996 or (ii)
filing.
EMERGENCY PHYSICIANS ASSOCIATES, P.A.
By: /s/ James E. George
________________________________
James E. George, M.D., President
-2-
<PAGE> 5
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION BY
EMERGENCY PHYSICIAN ASSOCIATES, INC.
To: The Secretary to State "FEDERAL EMPLOYER IDENTIFICATION NO."
State of New Jersey
Pursuant to the provision of Section 14A:9-2(4) and Section 14A:9-4(3),
Corporations, General, of the New Jersey Statutes, the undersigned corporation
executes the following Certificate of Amendment to its Certificate of
Incorporation:
1. The name of the corporation is:
Emergency Physician Associates, Inc.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the shareholders of the
corporation on the 1st day of July, 1996.
RESOLVED, That the Certificate of Incorporation be amended in part to
read as follows:
FIRST: The name of the corporation is:
EPA, Inc.
3. The number of shares outstanding at the time of adoption of the
amendment was 50. The total number of shares entitled to vote there was 50.
4. The number of shares voting for and against such amendment is as
follows:
Number of Shares Voting Number of Shares Voting
For Amendment Against Amendment
50 -0-
-1-
<PAGE> 6
Dated this 1st day of July, 1989.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
By: /s/ James E. George
_________________________________
James E. George, M.D., President
-2-
<PAGE> 7
CERTIFICATE OF MERGER
OF
HOSPITAL HEALTHCARE SERVICES, INC.;
MEDECON, INC.; AND
MED/LAW PUBLISHERS, INC.
(Merged Corporations)
INTO
EMERGENCY PHYSICIANS ASSOCIATES, INC.
(Surviving corporation)
MERGER PURSUANT TO N.J.S.A. 14A:10-5.1
DATED: JUNE 20,1996
The undersigned Corporations, each being a New Jersey corporation and
each having adopted a Plan of Merger pursuant to N.J.S.A. 14A:10-5.1 for the
purpose of merging Hospital Healthcare Services, Inc.; Medecon, Inc.; and
Med/Law Publishers, Inc. (Merged Corporations) into Emergency Physicians
Associates, Inc., (Surviving Corporation), certify that;
1. The name of the Surviving Corporation is Emergency Physicians
Associates, Inc. The name of the Merged Corporations are Hospital Healthcare
Services, Inc.; Medecon, Inc.; and Med/Law Publishers, Inc.
2. The Plan of Merger, pursuant to which the merger will be
effectuated, is annexed hereto as Exhibit "A."
3. The Plan of Merger was unanimously opted by the respective Boards of
Directors of each of the Merged Corporations and the Surviving Corporation on
June 20, 1996.
4. The number of shares of common stock of each of the Corporations
entitled to vote on the Plan of Merger was as follows:
-1-
<PAGE> 8
<TABLE>
<CAPTION>
CORPORATIONS NUMBER OF SHARES
<S> <C>
Hospital Healthcare Services, Inc. 100
Medecon, Inc. 50
Med/Law Publishers, Inc. 500
Emergency Physicians Associates, Inc. 50
</TABLE>
None of the Corporations have any other class or series of stock entitled to
vote on the Plan of Merger.
5. Approval of the Plan by the Shareholders of Hospital Healthcare
Services, Inc., Medecon, Inc., Med/Law Publishers, Inc., and Emergency
Physicians Associates, Inc. was given without a meeting by unanimous written
consent pursuant to N.J.S.A. 14A:5-6. No shares were voted against the Plan. The
number of shares voted in favor of the Plan and represented by the consent of
each of the Shareholders for the Merging Corporations was as follows:
<TABLE>
<CAPTION>
SHARES IN FAVOR SHARES AGAINST
<S> <C> <C>
Hospital Healthcare Services, Inc. 100 0
Medecon. Inc. 50 0
Med/Law Publishers, Inc. 500 0
Emergency Physicians Associates, Inc. 50 0
</TABLE>
6. The merger shall become effective upon the later of filing of the
Certificate of Merger with the New Jersey Secretary of State or 11:50 p.m. June
30, 1996.
-2-
<PAGE> 9
IN WITNESS WHEREOF, each of the undersigned Corporations has caused
this Certificate of Merger to be executed on its behalf by its duly authorized
Officer as of the date first written above.
SURVIVING CORPORATION:
EMERGENCY PHYSICIANS ASSOCIATES, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MERGED CORPORATIONS:
HOSPITAL HEALTHCARE SERVICES, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MEDECON, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MED/LAW PUBLISHERS, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
-3-
<PAGE> 10
PLAN OF MERGER
OF
HOSPITAL HEALTHCARE SERVICES, P.A.;
MEDECON, INC.; AND
MED/LAW PUBLISHERS, INC.
(Merged Corporations)
INTO
EMERGENCY PHYSICIANS ASSOCIATES, P.A.
(Surviving Corporation)
DATED: JUNE 20,1996
1. The names of the Corporations proposing to merge are Hospital
Healthcare Services, P.A. ("Healthcare"); Medecon, Inc. ("Medecon"); Med/Law
Publishers, Inc. ("Med/Law") and Emergency Physicians Associates, P.A. ("EPA").
EPA will be the Surviving Corporation. Professional Corporations Healthcare, and
EPA shall each file restatements of their respective Certificates of
Incorporation to change their names to "Hospital Healthcare Services, Inc." and
to "Emergency Physicians Associates, Inc." respectively and to then each be
authorized to engage in any activity permitted by N.J.S. 14A:1-1 et seq. of the
New Jersey Business Corporation Act.
2. The terms and conditions of the proposed merger are that Healthcare,
Medecon and Med/Law shall then be merged with and into EPA on the effective date
of the merger. Other than the change of EPA from a Professional Association to a
Business Corporation, the Certificate of Incorporation, the By-Laws, the
Directors and the Officers of EPA, the surviving corporation, shall not be
changed by the merger.
3. The manner and basis of converting the shares of each Corporation
into shares, obligations or other securities of EPA are as follows:
(a) Each share of EPA shall remain unchanged.
(b) Each share of Medecon, and Med/Law Shan be cancelled on
the effective date of the merger.
-1-
<PAGE> 11
IN WITNESS WHEREOF, each of the parties hereto duly executed this Plan
of Merger as of the day and year first above written.
SURVIVING CORPORATION:
EMERGENCY PHYSICIANS ASSOCIATES, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MERGED CORPORATIONS:
HOSPITAL HEALTHCARE SERVICES, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MEDECON, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
MED/LAW PUBLISHERS, INC.
By: /s/ James E. George
____________________________________
James E. George, M.D., Sole Shareholder,
Sole Director and President
-2-
<PAGE> 12
CERTIFICATE OF MERGER
OF
EPA MERGER CORPORATION
(Merged Corporation)
INTO
EMERGENCY PHYSICIAN ASSOCIATES, INC.
(Surviving Corporation)
MERGER PURSUANT TO N.J.S.A. 14A:10-7
DATED: June 25, 1996
The undersigned corporations, EPA Merger Corporation, a Delaware
corporation and a wholly-owned subsidiary of MedPartners/Mullikin, Inc., also a
Delaware corporation, and Emergency Physician Associates, Inc., a New Jersey
corporation, each having adopted a Plan of Merger pursuant to N.J.S.A. 14A:10-7
for the purpose of Merging EPA Merger Corporation ("Merged Corporation") into
Emergency Physician Associates, Inc. ("Surviving Corporation"), certify that:
1. The name of the Surviving Corporation is Emergency Physician
Associates, Inc. The name of the Merged Corporation is EPA Merger Corporation.
2. The Plan and Agreement of Merger ("Plan of Merger"), pursuant to
which the merger will be effectuated, is annexed hereto as Exhibit "A", the
terms and provisions of which are incorporated hereby by reference and made a
part hereof.
3. The Plan of Merger was unanimously adopted by the respective Boards
of Directors of each of the Merged Corporation and the Surviving Corporation on
May 28, 1996.
-3-
<PAGE> 13
4. The number of shares of common stock of each of the Corporations
entitled to vote on the Plan of Merger was as follows:
Corporations Number of Shares
EPA Merger Corporation 1,000
Emergency Physicians Associates, Inc. 50
None of the Corporations have any other class or series of stock entitled to
vote on the Plan of Merger.
5. Approval of the Plan by the Shareholders of Emergency Physicians
Associates, Inc., was given without a meeting by unanimous written consent
pursuant to N.J.S.A 14A:5-6. Approval of the Plan by the Shareholders of EPA
Merger Corporation was given without a meeting by unanimous written consent
pursuant to the applicable provisions of the Delaware General Business
Corporation Law (Section 141(f)). No shares were voted against the Plan. The
number of shares voted in favor of the Plan and represented by the consent of
each of the Shareholders for the Merging Corporations was as follows:
<TABLE>
<CAPTION>
Shares In Favor Shares Against
<S> <C> <C>
EPA Merger Corporation 1,000 0
Emergency Physicians Associates, Inc. 50 0
</TABLE>
6. The merger shall become, effective upon the later of the filing of
the Certificate of Merger with the New Jersey Secretary of State or 11:59 p.m.,
June 30, 1996.
7. The applicable provisions of the laws with respect to this merger of
the state of Delaware, the state of incorporation of EPA Merger Corporation,
will, upon compliance with the filing and recording requirements contained
therein, have been complied with.
-4-
<PAGE> 14
IN WITNESS WHEREOF, each of the undersigned Corporations has caused
this Certificate of Merger to be executed on its behalf of its authorized
officer as of the date first written above.
SURVIVING CORPORATION:
Emergency Physician Associates, Inc.
By: /s/ James E. George
____________________________________
James E. George, M.D.,
Sole Shareholder, Sole Director and President
MERGED CORPORATION:
EPA Merger Corporation
By: /s/ Harold O. Knight, Jr.
____________________________________
Its: Vice President & Treasurer
______________________________
-5-
<PAGE> 15
PLAN AND AGREEMENT OF MERGER
Dated as of May 28, 1996
By and Among
MedPartners/Mullikin, Inc.
EPA Merger Corporation,
Hospital Healthcare Services, P.A.,
Med/Law Publishers, Inc.,
Medecon, Inc.
and
Emergency Physician Associates, P.A.
<PAGE> 16
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Parties ......................................................................................................... 1
Recitals......................................................................................................... 1
Section 1. The Merger .................................................................................... 2
1.1 The Merger..................................................................................... 2
1.2 The Closing.................................................................................... 3
1.3 Effective Time................................................................................. 3
1.4 Effect of the Merger........................................................................... 4
Section 2. Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates....................................................................... 4
2.1 Effect on Capital Stock........................................................................ 4
2.2 Exchange of Certificates....................................................................... 5
2.3 Articles of Incorporation of Surviving Corporation............................................. 6
2.4 By-laws of the Surviving Corporation........................................................... 6
2.5 Directors and Officers of the Surviving Corporation............................................ 6
2.6 Assets, Liabilities, Reserves and Accounts..................................................... 7
2.7 Corporate Acts of the Subsidiary............................................................... 7
Section 3. Representations and Warranties of EPA.......................................................... 7
3.1 Organization, Existence and Good Standing...................................................... 7
3.2 EPA Capital Stock.............................................................................. 8
3.3 Subsidiaries................................................................................... 8
3.4 Foreign Qualifications......................................................................... 8
3.5 Power and Authority............................................................................ 9
3.6 EPA Financial Information...................................................................... 9
3.7 Contracts, etc................................................................................. 10
3.8 Properties and Assets.......................................................................... 10
3.9 Legal Proceedings.............................................................................. 11
3.10 Subsequent Events.............................................................................. 11
3.11 Accounts Receivable............................................................................ 12
3.12 Tax Returns.................................................................................... 13
3.13 Employee Benefit Plans; Employment Matters..................................................... 13
3.14 Compliance with Laws in General................................................................ 14
3.15 Regulatory Approvals .......................................................................... 14
3.16 Commissions and Fees........................................................................... 15
3.17 Retirement or Re-Acquisition of MedPartners/Mullikin Common Stock.............................. 15
3.18 Disposition of Assets of Surviving Corporation................................................. 15
3.19 Vote Required.................................................................................. 16
</TABLE>
-i-
<PAGE> 17
<TABLE>
<S> <C>
3.20 EPA Shareholder Investment Qualification ...................................................... 16
3.21 No Untrue Representations ..................................................................... 16
Section 4. Representations and Warranties of the Subsidiary............................................... 16
4.1 Organization, Existence and Capital Stock ..................................................... 16
4.2 Power and Authority............................................................................ 17
4.3 Commissions and Fees........................................................................... 17
4.4 Legal Proceedings.............................................................................. 17
4.5 No Subsidiaries................................................................................ 18
4.6 No Contracts or Liabilities ................................................................... 18
Section 5. Representations and Warranties of MedPartners/Mullikin......................................... 18
5.1 Organization, Existence and Good Standing...................................................... 18
5.2 MedPartners/Mullikin Capitalization............................................................ 18
5.3 MedPartners/Mullikin Common Stock.............................................................. 19
5.4 Subsidiaries and Affiliated Entities........................................................... 19
5.5 Organization, Existence and Good Standing of MedPartners/Mullikin
Subsidiaries and Other MedPartners/Mullikin Entities........................................... 20
5.6 Foreign Qualifications......................................................................... 21
5.7 Subsidiary Common Stock........................................................................ 21
5.9 Power and Authority ........................................................................... 21
5.9 MedPartners/Mullikin Public Information........................................................ 22
5.10 Legal Proceedings.............................................................................. 23
5.11 Subsequent Events ..................................................................... 23
5.12 Compliance with Laws in General................................................................ 24
5.13 Regulatory Approvals........................................................................... 25
5.14 Investment Intent.............................................................................. 25
5.15 Commissions and Fees........................................................................... 26
5.6 Retirement or Re-Acquisition of MedPartners/Mullikin Common Stock............................. 26
5.18 Registration Rights............................................................................ 26
5.19 No Untrue Representations...................................................................... 26
Section 6. Access to Information and Documents............................................................ 27
6.1 Access to Information.......................................................................... 27
6.2 Return of Records.............................................................................. 27
6.3 Effect of Access............................................................................... 27
Section 7. Covenants...................................................................................... 28
7.1 Preservation of Business....................................................................... 28
7.2 Material Transactions.......................................................................... 28
7.3 Approval of EPA Shareholder.................................................................... 30
7.4 Securities Matters............................................................................. 30
7.5 Exemption from State Takeover Laws............................................................. 31
</TABLE>
-ii-
<PAGE> 18
<TABLE>
<S> <C>
7.6 Public Disclosures............................................................................. 32
7.7 Resignation of EPA Directors................................................................... 32
7.8 Notice of Subsequent Events.................................................................... 32
7.9 No Solicitations............................................................................... 32
7.10 Other Actions.................................................................................. 33
7.11 Accounting Methods ............................................................................ 34
7.12 Pooling and Tax-Free Reorganization Treatment ................................................. 34
7.13 Affiliate and Pooling Agreements............................................................... 34
7.14 Cooperation.................................................................................... 34
7.15 Publication of Combined Results ............................................................... 35
7.16 Post Closing Matters ......................................................................... 35
7.17 Certain Employee Benefits ..................................................................... 36
7.18 MedPartners/Mullikin Common Stock ............................................................ 36
7.19 Payment of Certain Obligations of EPA.......................................................... 36
Section 8. Termination, Amendment and Waiver............................................................ 36
8.1 Termination.................................................................................... 36
8.2 Effect of Termination ........................................................................ 38
8.3 Amendment...................................................................................... 39
8.4 Extension; Waiver ............................................................................ 39
8.5 Procedure for Termination, Amendment, Extension or Waiver .................................... 39
8.6 Expenses....................................................................................... 39
Section 9. Conditions to Closing........................................................................ 40
9.1 Mutual Conditions ............................................................................. 40
9.2 Conditions to Obligations of MedPartners/Mullikin and the Subsidiary........................... 41
9.3 Conditions to Obligations of EPA .............................................................. 44
Section 10. Miscellaneous ................................................................................. 46
10.1 Nonsurvival of Representations and Warranties ................................................ 46
10.2 Notices........................................................................................ 46
10.3 Further Assurances ............................................................................ 47
10.4 Indemnification................................................................................ 47
10.5 Governing Law ................................................................................ 48
10.6 "Including".................................................................................... 48
10.7 "Knowledge"................................................................................... 48
10.8 "Material adverse change" or "material adverse effect"......................................... 48
10.9 "Hazardous Materials" ......................................................................... 49
10.10 Environmental Laws............................................................................. 49
10.11 Captions....................................................................................... 49
10.12 Integration of Exhibits ....................................................................... 50
10.13 Entire Agreement............................................................................... 50
10.14 Counterparts................................................................................... 50
</TABLE>
-iii-
<PAGE> 19
<TABLE>
<S> <C>
10.15 Binding Effect................................................................................. 50
10.16 No Rule of Construction........................................................................ 50
Testimonium............................................................................................. 52
Signatures.............................................................................................. 52
</TABLE>
-iv-
<PAGE> 20
PLAN AND AGREEMENT OF MERGER
PLAN AND AGREEMENT OF MERGER ("Plan of Merger"), made and entered into
as of the 28th day of May, 1996, by and among MEDPARTNERS/MULLIKIN, INC., a
Delaware corporation ("MedPartners/Mullikin"), EPA MERGER CORPORATION, a
Delaware corporation (the "Subsidiary"), HOSPITAL HEALTHCARE SERVICES, P.A., a
New Jersey professional corporation ("Hospital Healthcare"). MED/LAW PUBLISHERS,
INC., a New Jersey corporation ("Med/Law"), MEDECON, INC., a New Jersey
corporation ("Medecon") and EMERGENCY PHYSICIAN ASSOCIATES, P.A., a New Jersey
professional corporation ("EPA") (the Subsidiary and EPA being sometimes
collectively referred to herein as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of MedPartners/Mullikin,
the Subsidiary and EPA have approved the merger of the Subsidiary with and into
EPA (the "Merger"), upon the terms and conditions set forth in this Plan of
Merger, whereby each share of Common Stock, no par value, of EPA (the "EPA
Common Stock"), not owned directly or indirectly by EPA, will be converted into
the right to receive the Merger Consideration (as herein defined) (the EPA
Common Stock may be sometimes hereinafter referred to as the "EPA Shares");
WHEREAS, each of MedPartners/Mullikin, the Subsidiary and EPA desire to
make certain representations, warranties, covenants and agreements in connection
with the Merger and also to prescribe various conditions to the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code");
-1-
<PAGE> 21
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a "pooling of interests"; and
WHEREAS, it has been agreed between the parties that the Merger will be
carried out as a private placement of the Common Stock, par value $.001 per
share, of MedPartners/ Mullikin (the "MedPartners/Mullikin Common Stock") to the
sole shareholder of EPA.
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants and agreements contained herein, the parties hereto do hereby agree as
follows:
Section 1. The Merger.
1.1 The Merger. (a) Upon the terms and conditions set forth in this
Plan of Merger, and in accordance with the General Corporation Law of the State
of Delaware (the"DGCL") and the New Jersey Business Corporation Act (the
"NJBCA"), the Subsidiary shall be merged into EPA at the Effective Time (as
defined in Section 1.3). Following the Effective Time, the separate corporate
existence of the Subsidiary shall cease and EPA shall continue as the surviving
corporation (the "Surviving Corporation") as a business corporation incorporated
under the laws of the State of New Jersey under the name Emergency Physician
Associates, Inc. and shall succeed to and assume all the rights and obligations
of the Subsidiary and EPA in accordance with the DGCL and the NJBCA.
(b) On or immediately prior to the Closing Date, Hospital Healthcare,
Med/Law and Medecon will be merged with and into EPA so that EPA, as the
surviving corporation of such serial merger transaction, shall succeed to all of
the "assets and liabilities of such corporations pursuant to applicable law. It
is understood and agreed, that to the extent relevant and/or necessary to the
consummation of the Merger provided for in this Plan of Merger, all of the
representations and warranties and covenants of EPA shall apply also to each
such merged corporations as though named therein and the EPA Disclosure Schedule
shall provide the information called for therein for each of the three merged
corporations in addition to that required for EPA. At the Closing (as herein
-2-
<PAGE> 22
defined), such opinions, certificates and other documents required to be
delivered by EPA shall also be delivered by each of the other three merged
corporations.
1.2 The Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. Eastern Time on a date to be specified by the parties (the
"Closing Date"), which (subject to satisfaction or waiver of the conditions set
forth in Sections 9.2 and 9.3) shall be no later than the second business day
after satisfaction of the conditions set forth in Section 9.1 (other than
Section 9.1(a)), but in no event later than September 30, 1996, at the offices
of Sherman, Silverstein, Kohl, Rose & Podolsky, Pennsauken, New Jersey, unless
another date or place is agreed to in writing by the parties hereto.
1.3 Effective Time. (a) Subject to the provisions of this Plan of
Merger, EPA and the Subsidiary shall file a Certificate of Merger (the "New
Jersey Certificate of Merger") in accordance with the relevant provisions of the
NJBCA and EPA shall file a Certificate of Merger (the "Delaware Certificate of
Merger") executed by EPA in accordance with the relevant provisions of the DGCL
and shall make all other filings or recordings required under the DGCL and the
NJBCA and as soon as practicable on or after the Closing Date. The Merger shall
become effective at such time as the Delaware Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware and the New Jersey
Certificate of Merger is duly filed with the Secretary of State of New Jersey,
or at such other time as the Subsidiary and EPA shall agree should be specified
in the Delaware Certificate of Merger and the New Jersey Certificate of Merger
(the "Effective Time").
(b) On the Closing Date, and immediately prior to the Effective Time,
each of Med/Law, Medecon, and Hospital Healthcare, each a New Jersey
corporation, shall be merged with and into EPA, the Surviving Corporation,
pursuant to the filing by such respective corporations and EPA of Certificates
of Merger in accordance with the relevant provisions of the NJBCA, so that the
Surviving Corporation shall succeed to all of the business assets and
liabilities of each of EPA, Med/Law, Medecon, and Hospital Healthcare.
-3-
<PAGE> 23
1.4 Effect of the Merger. The Merger shall have the effects set forth
in Section 259 of 259 of the DGCL and Section 14A:10-6 of the NJBCA.
Section 2. Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates.
2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder of shares of EPA Common
Stock or any shares of capital stock of the Subsidiary:
(a) Subsidiary Common Stock. Each share of capital stock of the
Subsidiary issued and outstanding immediately prior to the Effective Time of the
Merger shall be converted into one issued and outstanding and nonassessable
share of Common Stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock. Each share of EPA Common Stock that
is owned by EPA shall automatically be canceled and retired and shall cease to
exist, and none of MedPartners/Mullikin Common Stock; cash or other
consideration shall be delivered in exchange therefor.
(c) Conversion of EPA Shares. In the Merger, all of the EPA Shares
shall be converted into the right to receive that number of shares of
MedPartners/Mullikin Common Stock equal to the Merger Consideration (as defined
herein). All such shares of MedPartners/Mullikin Common Stock shall be fully
paid and nonassessable and are hereinafter sometimes referred to as the
"MedPartners/Mullikin Shares". Upon such conversion, all such EPA Shares shall
be canceled and cease to exist, and each holder thereof shall cease to have any
right with respect thereto other than the right to receive MedPartners/Mullikin
Share issued in exchange therefor on the terms provided herein.
-5-
<PAGE> 24
"Merger Consideration" means that number of MedPartners/Mullikin Shares
(rounded to the nearest whole share) equal to $27,750,000 divided by the "Base
Period Trading Price".
"Base Period Trading Price" shall mean the average of the last reported
sale prices per share of the MedPartners/Mullikin Common Stock for the 15
consecutive trading days on which such shares are actually traded on The New
York Stock Exchange, Inc. (the "NYSE") ending at the close of trading and the
second trading day immediately preceding the earlier of June 28, 1996 or the
Closing Date.
(d) Anti-Dilution Provisions. If after the date hereof and prior to the
Effective Time MedPartners/Mullikin shall have declared a stock split (including
a reverse split) of MedPartners/Mullikin Common Stock or a dividend payable in
MedPartners/Mullikin Common Stock, or any other distribution of securities or
dividend (in cash or otherwise) to holders of MedPartners/Mullikin Common Stock
with respect to their MedPartners/Mullikin Common Stock (including without
limitation such a distribution or dividend made in connection with a
recapitalization, reclassification, merger, consolidation, reorganization or
similar transaction) then the Merger Consideration shall be appropriately
adjusted to reflect such stock split, dividend or other distribution of
securities.
2.2 Exchange of Certificates. (a) Exchange Agent. The outstanding EPA
Shares shall be exchanged at the Closing. Upon surrender of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding EPA Shares (the "Certificates") whose shares were converted into the
right to receive the Merger Consideration pursuant to Section 2.1 for
cancellation to MedPartners/Mullikin and such other documents as may reasonably
be required by MedPartners/Mullikin, the holder of such Certificate shall be
entitled to receive in exchange therefor a certificate representing that number
of whole shares of MedPartners/Mullikin Common Stock which such holder has the
right to receive pursuant to the provisions of this Section 2, and the
Certificate so surrendered shall forthwith be canceled.
-6-
<PAGE> 25
(b) No Further Ownership Rights in EPA Shares. All shares of
MedPartners/Mullikin Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Section 2 (including any cash
paid pursuant to Section 2.2(c) shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the EPA Shares theretofore
represented by such Certificates.
(c) No Fractional Shares. No certificates or scrip representing
fractional shares of MedPartners/Mullikin Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests will
not entitle the owner thereof to vote or to any rights of a stockholder of
MedPartners/Mullikin. Notwithstanding any other provision of this Plan of
Merger, each holder of shares or EPA Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a share
of MedPartners/Mullikin Common Stock (after taking into account all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of
MedPartners/Mullikin Common Stock multiplied by the Base Period Trading Price.
2.3 Articles of Incorporation of Surviving Corporation. The Articles of
Incorporation of EPA, effective immediately following the Effective Time, and
amended in form satisfactory to MedPartners/Mullikin and its counsel, shall be
the Articles of Incorporation of the Surviving Corporation from and after the
Effective Time and until thereafter amended as provided by law.
2.4 By-Laws of the Surviving Corporation. The By-laws of EPA shall be
the By-laws of the Surviving Corporation from and after the Effective Time, and
amended in form satisfactory to MedPartners/Mullikin, and its counsel, and until
thereafter altered, amended or repealed in accordance with the DGCL, the
Articles of Incorporation of the Surviving Corporation and the said By-laws.
2.5 Directors and Officers of the Surviving Corporation. The directors
and officers of the Subsidiary immediately prior to the Effective Time shall be
the directors and officers of the
-7-
<PAGE> 26
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation.
2.6 Assets, Liabilities, Reserves and Accounts. At the Effective Time,
the assets, liabilities, reserves and accounts of each of the Subsidiary and EPA
shall be taken up on the books of the Surviving Corporation at the amounts at
which they respectively shall be carried on the books of said corporations
immediately prior to the Effective Time, except as otherwise set forth in this
Plan of Merger and subject to such adjustments, or elimination of intercompany
items, as may be appropriate in giving effect to the Merger in accordance with
generally accepted accounting principles.
2.7 Corporate Acts of the Subsidiary. All corporate acts, plans,
policies, approvals and authorization of the Subsidiary, its stockholder, its
Board of Directors, committees elected or appointed by the Board of Directors,
and all officers and agents, valid immediately prior to the Effective Time,
shall be those of the Surviving Corporation and shall be as effective and
binding thereon as they were with respect to the Subsidiary to the extent not
inconsistent with the terms of this Plan of Merger. The Surviving Corporation
shall continue to employ, as employees-at-will, all persons (other than persons
who have employment agreements, physicians and such other personnel as agreed
among the parties should be independent contractors) who are employees of EPA on
the Closing Date.
Section 3. Representations and Warranties of EPA.
Subject to and consistent with Section 1.1(b), EPA hereby represents
and warrants to MedPartners/Mullikin and the Subsidiary as follows:
3.1 Organization, Existence and Good Standing. EPA is a New Jersey
professional corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey. EPA has all necessary corporate power
to own its properties and assets and to carry on its
-8-
<PAGE> 27
business as presently conducted. EPA does not, and has not within the two years
immediately preceding the date of this Plan of Merger owned, directly or
indirectly, any shares of MedPartners/Mullikin Common Stock or Common Stock of
the Subsidiary.
3.2 EPA Capital Stock. The authorized capital stock of EPA, Medecon,
Med/Law and Hospital Healthcare is as set forth on Exhibit 3.2 to the EPA
Disclosure Schedule. There are 50 shares of Common Stock of EPA, no par value,
issued and outstanding as of the date of this Plan of Merger and no shares are
held in treasury. All of the issued and outstanding EPA Shares are duly and
validly issued, fully paid and nonassessable. Except as set forth in Exhibit 3.2
to the Disclosure Schedule delivered to MedPartners/Mullikin and the Subsidiary
by EPA at the time of the execution and delivery of this Plan of Merger (the
"EPA Disclosure Schedule"), there are no options, warrants, or similar rights
granted by EPA or any other agreements to which EPA is a party providing for the
issuance or sale by it of any additional securities which would remain in effect
after the Effective Time. There is no liability for dividends declared or
accumulated but unpaid with respect to any of the EPA Shares. Except as set
forth in Exhibit 3.2 to the EPA Disclosure Schedule, EPA has not made any
distributions to any holders of EPA Shares or participated in or effected any
issuance, exchange or retirement of EPA Shares, or otherwise changed the equity
interests of holders of EPA Shares in contemplation of effecting the Merger
within the two years immediately preceding the date of this Plan of Merger. Any
EPA Shares that EPA has re-acquired during the two years immediately preceding
the date of this Plan of Merger have been so re-acquired only for purposes other
than "business combinations", as such term is defined in Accounting Principles
Board Opinion No. 16, as amended ("Business Combinations").
3.3 Subsidiaries. Except as set forth on Exhibit 3.3 to the EPA
Disclosure Schedule, EPA does not own stock in and does not control, directly or
indirectly, any other corporation, association or business organization. Except
as set forth on Exhibit 3.3 to the EPA Disclosure Schedule, EPA does not own an
equity interest in, nor does such entity control, directly or indirectly, any
other joint venture or partnership.
-9-
<PAGE> 28
3.4 Foreign Qualifications. EPA is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
nature or character of the property owned, leased or operated by it or the
nature of the business transacted by it makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on its business or operations.
3.5 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, EPA has the corporate power to execute, deliver and
perform this Plan of Merger and all agreements and other documents executed and
delivered or to be executed and delivered by it pursuant to this Plan of Merger,
and, subject to the satisfaction of the conditions precedent set forth herein
has taken all action required by its Certificate of Incorporation, By-laws or
otherwise, to authorize the execution, delivery and performance of this Plan of
Merger and such related documents. Except as set forth in Exhibit 3.5 to the EPA
Disclosure Schedule, the execution and delivery of this Plan of Merger does not
and, subject to the receipt of required stockholder and regulatory approvals and
any other required third-party consents or approvals, the consummation of the
Merger will not violate any provisions of the Certificate of Incorporation or
Regulations of EPA or any provisions of, or result in the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree, to which EPA is a party, or by which it
is bound, or violate any restrictions of any kind to which it is subject which,
if violated or accelerated would have a material adverse effect on EPA. The
execution and delivery of this Plan of Merger has been approved by the Board of
Directors of EPA.
3.6 EPA Financial Information. EPA has heretofore furnished
MedPartners/Mullikin with a true and complete copy of the December 31, 1995
financial statements of Emergency Physician Associates, P.A., and affiliates and
Med/Law Publishers, Inc. The financial statements, together with the notes
thereto reflect all known liabilities of EPA and affiliates, fixed or
contingent, required to be stated therein, and present fairly the financial
condition of EPA and its affiliates at said dates and the results of operations
and cash flows of EPA for the periods then ended. The
-10-
<PAGE> 29
balance sheet of EPA and its affiliates at December 31, 1995, is herein
sometimes referred to as the "EPA Balance Sheet".
3.7 Contracts, etc. (a) To EPA's knowledge, all material contracts,
leases, agreements and arrangements to which EPA is a party are legally valid
and binding in accordance with their terms and in full force and effect and EPA
has provided MedPartners/Mullikin and the Subsidiaries with copies of all such
documents. To the knowledge of EPA, all parties to such contracts, leases,
agreements and arrangements have complied with the provisions of such contracts,
leases, agreements and arrangements, and, to the knowledge of EPA, no party is
in default thereunder and no event has occurred which, but for the passage of
time or the giving of notice or both, would constitute a default thereunder,
except, in each case, where the invalidity of the lease, contract, agreement or
arrangement or the default or breach thereunder or thereafter would not,
individually or in the aggregate, have a material adverse effect on EPA. Except
as set forth in Exhibit 3.7 to the EPA Disclosure Schedule, EPA has received no
written or oral notice that any of EPA's material agreements are to be
terminated or are subject to non-renewal, nor does EPA have any knowledge that
any such termination or non-renewal will occur.
(b) Except as set forth in Exhibit 3.7 to the EPA Disclosure Schedule,
no hospital staffing contract or agreement to which EPA is a party will, by its
terms, terminate as a result of the transactions contemplated hereby or require
any consent from any obligor thereto in order to remain in full force and effect
immediately after the Effective Time, except for contracts or agreements which,
if terminated, would not have a material adverse effect on EPA.
(c) Except as set forth in Exhibit 3.7 to the EPA Disclosure Schedule,
EPA has not granted any right of first refusal or similar right in favor of any
third party with respect to any material portion of its properties or assets
(excluding liens described in Section 3.8) or entered into any non-competition
agreement or similar agreement restricting its ability to engage in any business
in any location.
-11-
<PAGE> 30
3.8 Properties and Assets. EPA owns or leases all of the real and
personal property included in the EPA Balance Sheet (except assets recorded
under capital law obligations and such property as has been disposed of during
the ordinary course of EPA's business since the date of the EPA Balance Sheet),
free and clear of any liens, claims, charges, exceptions or encumbrances, except
for those (i) if any, which in the aggregate are not material and which do not
materially affect continued use of such property, or (ii) which are set forth in
Exhibit 3.8 to the EPA Disclosure Schedule.
3.9 Legal Proceedings. Except as listed in Exhibit 3.9 to the EPA
Disclosure Schedule, there are no actions, suits or proceedings pending or, to
the knowledge of EPA, threatened against EPA, at law or in equity, relating to
or affecting EPA, including the Merger. EPA does not know or have any reasonable
grounds to know of any justification for any such action, suit or proceeding.
3.10 Subsequent Events. Except as set forth in Exhibit 3.10 to the EPA
Disclosure Schedule or as contemplated by this Plan of Merger, EPA has not,
since the date of the EPA Balance Sheet:
(a) Incurred any material adverse change.
(b) Discharged or satisfied any material lien or encumbrance,
or paid or satisfied any material obligation or liability (absolute,
accrued, contingent or otherwise) other than (i) liabilities shown or
reflected on the EPA Balance Sheet or (ii) liabilities incurred since
the date or the EPA Balance Sheet in the ordinary course of business,
which discharge or satisfaction would not have a material adverse
effect on EPA.
(c) Increased or established any reserve for taxes or any
other liability on its books or otherwise provided therefor which would
have a material adverse effect
-12-
<PAGE> 31
on EPA, except as may have been required due to income or operations of
EPA since the date of the EPA Balance Sheet.
(d) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of the assets, tangible or intangible, which
assets are material to the business or financial condition of EPA.
(e) Sold or transferred any of the assets material to the
consolidated business of EPA, canceled any material debts or claims or
waived any material rights, except in its ordinary course of business.
(f) Granted any general or uniform increase in the rates of
pay of employees or any material increase in salary payable or to
become payable by EPA to any officer or employee, consultant or agent
(other than normal merit increases), or by means of any bonus or
pension plan, contract or other commitment, increased in a material
respect the compensation of any officer, employee, consultant or agent.
(g) Except for this Plan of Merger and any other agreement
executed and delivered pursuant to this Plan of Merger, entered into
any material transaction other than in the ordinary course of business
or permitted under other Sections of this Plan of Merger.
(h) Issued any stock, bonds or other securities or any options
or rights to purchase any of its securities.
3.11 Accounts Receivable. Since the date of the EPA Balance Sheet, EPA
has not changed any principle or practice with respect to the recordation of
accounts receivable or the calculation of reserves therefor, or any material
collection, discount or write-off policy or procedure. EPA is in compliance in
all material respects with the terms and conditions of all third-party payor
-13-
<PAGE> 32
arrangements relating to its accounts receivable, except to the extent that such
noncompliance would not have a material adverse effect on EPA.
3.12 Tax Returns. EPA has filed all tax returns required to be filed by
it or requests for extensions to file such returns or reports have been timely
filed and granted and have not expired, except to the extent that such failures
to file, taken together, do not have a material adverse effect on EPA. EPA has
made all payments shown as due on such returns. EPA has not been notified that
any tax returns of EPA are currently under audit by the Internal Revenue Service
or any state or local tax agency. No agreements have been made by EPA for the
extension of time or the waiver of the statute of limitations for the assessment
or payment of any federal, state or local taxes.
3.13 Employee Benefit Plans; Employment Matters. (a) Except as set
forth in Exhibit 3.13(a) to the EPA Disclosure Schedule, EPA has neither
established nor maintains nor is obligated to make contributions to or under or
otherwise participate in (i) any bonus or other type of incentive compensation
plan, program or arrangement (whether or not set forth in a written document),
(ii) any pension, profit-sharing, retirement or other plan, program or
arrangement, or (iii) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of ERISA. All
such plans listed in Exhibit 3.13(a) (individually, a "EPA Plan" and
collectively, the "EPA Plans") have been operated and administered in all
material respects in accordance with, as applicable, ERISA, the Code, the Age
Discrimination in Employment Act of 1967, as amended, and the related rules and
regulations adopted by those federal agencies responsible for the administration
of such laws. No act or failure to act by EPA has resulted in a "prohibited
transaction" (as defined in ERISA) with respect to the EPA Plans that is not
subject to a statutory or regulatory exception and that could have a material
adverse effect on EPA. No "reportable event" (as defined in ERISA, but excluding
any event for which is waived under the ERISA regulations) has occurred with
respect to any of the EPA Plans which is subject to Title IV of ERISA. EPA has
not previously made, is not currently making, and is not obligated in any way to
make, any contributions to any multi-employer plan within the meaning of the
Multi-Employer Pension Plan Amendments Act of 1980.
-14-
<PAGE> 33
(b) Except as disclosed in the EPA Documents or as set forth in Exhibit
3.13(b) to the EPA Disclosure Schedule, EPA is not a party to any oral or
written (i) union, guild or collective bargaining agreement which agreement
covers employees in the United States (nor is it aware of any union organizing
activity currently being conducted in respect to any of its employees), (ii)
agreement with any executive officer or other key employee the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction of the nature contemplated by this Plan of Merger
and which provides for the payment of in excess of $25,000, or (iii) agreement
or plan, including any stock option plan, including any stock appreciation
rights plan, restricted stock plan or stock purchase plan, any of the benefits
of which will be increased, or the vesting of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Plan of Merger or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Plan of Merger.
3.14 Compliance with Laws in General. Except as set forth in Exhibit
3.14 to the EPA Disclosure Schedule, EPA not received any notices of material
violations of any federal, state and local laws, regulations and ordinances
relating to its business and operations, including, without limitation, the
Occupational Safety and Health Act, the Americans with Disabilities Act, the
Medicare or applicable Medicaid statutes and regulations and any Environmental
Laws, and no notice of any pending inspection or violation of any such law,
regulation or ordinance has been received by EPA which, if it were determined
that a violation had occurred, would have a material adverse affect on EPA.
3.15. Regulatory Approvals. Except as disclosed in the EPA Documents or
Exhibit 3.15 to the EPA Disclosure Schedule, EPA holds all licenses,
certificates of need and other regulatory approvals required or necessary to be
applied for or obtained in connection with its business as presently conducted
or as proposed to be conducted, except where the failure to obtain such license,
certificate of need or regulatory approval would not have a material adverse
effect on EPA. All such licenses, certificates of need and other regulatory
approvals relating to the business, operations and facilities of EPA are in full
force and effect except where any failure of such license, certificate of
-15-
<PAGE> 34
need or regulatory approval to be in full force and effect would not have a
material adverse effect on EPA. Any and all past litigation concerning such
licenses, certificates of need and regulatory approval, and all claims and
causes of action raised therein, has been finally adjudicated. No such license,
certificate of need or regulatory approval has been revoked, conditioned (except
as may be customary) or restricted, and no action (equitable, legal or
administrative), arbitration or other process is pending, or to the best
knowledge of EPA, threatened, which in any way challenges the validity of, or
seeks to revoke, condition or restrict any such license, certificate of need, or
regulatory approvals. Subject to compliance with applicable securities laws and
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR
Act"), the consummation of the Merger will not violate any law or restriction to
which EPA is subject which, if violated, would have a material adverse effect on
EPA.
3.16 Commissions and Fees. Except for the fees payable to Wallingford
Capital pursuant to the letter agreement, a copy of which has been delivered to
MedPartners/Mullikin, there are no valid claims for brokerage commissions or
finder's or similar fees in connection with the transactions contemplated by
this Plan of Merger which may be now or hereafter asserted against
MedPartners/Mullikin from any action taken by EPA or its officers, directors or
agents, or any of them.
3.17 Retirement or Re-Acquisition of MedPartners/Mullikin Common Stock.
EPA is not a party to any agreement the effect of which would be to require
MedPartners/Mullikin directly or indirectly to retire or re-acquire all or part
of the shares of MedPartners/Mullikin Common Stock issued pursuant to Section
2.1 hereof.
3.18 Disposition of Assets of Surviving Corporation. EPA is not a party
to any plan to dispose of a significant part of the assets of the Surviving
Corporation within two years after the Closing Date, other than dispositions in
the ordinary course of business of Surviving Corporation and dispositions
intended to eliminate duplicate facilities or excess capacity.
-16-
<PAGE> 35
3.19 Vote Required. The affirmative vote of the holders of a majority
of the outstanding EPA Shares entitled to vote thereon is the only vote of the
holders of any class or series of EPA capital stock necessary to approve this
Plan of Merger, the Merger and the transactions contemplated hereby, it being
understood, however, that the approval of the Merger by the EPA shareholders is
to be accomplished by action without a meeting pursuant to Section 14A:5-6 of
the NJBCA by the execution and delivery simultaneously with the execution and
delivery of this Plan of Merger of an irrevocable written consent of the sole
shareholder of EPA.
3.20 EPA Shareholder Investment Qualification. To the best knowledge of
EPA, after due inquiry by the officers and directors of EPA, the sole
shareholder of EPA is an "accredited investor" as defined in Rule 501 (a) of
Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act") so as to enable the
private placement of the MedPartners/Mullikin Shares to be issued to the sole
shareholder of the EPA shares in the Merger to qualify for the exemption
provided under Section 4(2) of the Securities Act.
3.21 No Untrue Representations. No representation or warranty by EPA in
this Plan of Merger, and no Exhibit or certificate issued by EPA and furnished
or to be furnished to MedPartners/Mullikin and the Subsidiary pursuant hereto,
or in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact in response to the disclosure
requested, or omits or will omit to state a material fact necessary to make the
statements or facts contained therein in response to the disclosure requested
not misleading in light of all of the circumstances then prevailing.
Section 4. Representations and Warranties of the Subsidiary.
The Subsidiary hereby represents and warrants to EPA as follows:
4.1 Organization, Existence and Capital Stock. The Subsidiary is a
newly organized corporation duly organized and validly existing and is in good
standing under the laws of the
-17-
<PAGE> 36
State of Delaware. The Subsidiary's authorized capital consists of 1,000 shares
of Common Stock, par value $1.00 per share, all of which shares are issued and
registered in the name of MedPartners/Mullikin. The Subsidiary has not, within
two years immediately preceding the date of this Plan of Merger, owned, directly
or indirectly, any EPA Shares.
4.2 Power and Authority. The Subsidiary has the corporate power to
execute, deliver and perform this Plan of Merger and all agreements and other
documents executed and delivered or to be executed and delivered, by it pursuant
to this Plan of Merger, and, subject to the satisfaction of the conditions
precedent set forth herein, has taken all actions required by law, its
Certificate of Incorporation, its By-laws or otherwise, to authorize the
execution and delivery of this Plan of Merger and such related documents. The
execution and delivery of this Plan of Merger does not and, subject to the
receipt of required regulatory approvals and any other required third-party
consents or approvals, the consummation of the Merger contemplated hereby will
not, violate any provisions of the Certificate of Incorporation or By-laws of
the Subsidiary, or any agreement, instrument, order, judgment or decree to which
the Subsidiary is a party or by which it is bound, violate any restrictions of
any kind to which the Subsidiary is subject, or result in the creation of any
lien, charge or encumbrance upon any of the property or assets of the
Subsidiary.
4.3 Commission and Fees. There are no claims for brokerage commissions,
investment bankers' fees or finder's fees in connection with the transaction
contemplated by this Plan of Merger resulting from any action taken by the
Subsidiary or any of its officers, Directors or agents.
4.4 Legal Proceedings. There are no actions, suits or proceedings
pending or threatened against the Subsidiary, at law or in equity, relating to
or affecting the Subsidiary, including the Merger. The Subsidiary does not know
or have any reasonable grounds to know of any justification for any such action,
suit or proceeding.
-18-
<PAGE> 37
4.5 No Subsidiaries. The Subsidiary does not own stock in, and does not
control directly or indirectly, any other corporation, association or business
organization. The Subsidiary is not a party to any joint venture or partnership.
4.6 No Contracts or Liabilities. Other than the obligations created
under this Plan of Merger, the Subsidiary is not obligated under any contracts,
claims, leases, liabilities (contingent or otherwise), loans or otherwise.
Section 5. Representations and Warranties of MedPartners/Mullikin.
MedPartners/Mullikin hereby represents and warrants to EPA as follows:
5.1 Organization, Existence and Good Standing. MedPartners/Mullikin is
a corporation duly organized and validly existing and is in good standing under
the laws of the State of Delaware. MedPartners/Mullikin has all necessary
corporate power to own its properties and assets and to carry on its business as
presently conducted. MedPartners/Mullikin is not, and has not been within the
two years immediately preceding the date of this Plan of Merger, a subsidiary or
division of another corporation, nor has MedPartners/Mullikin within such time
owned, directly or indirectly, any EPA Shares.
5.2 MedPartners/Mullikin Capitalization. MedPartners/Mullikin has an
authorized capitalization of 9,500,000 shares of Preferred Stock, par value
$.001 per shares, of which no shares are issued and outstanding, and no shares
are held in treasury, 500,000 shares of Series C Junior Participating Preferred
Stock, par value $.001 per share, of which no shares are outstanding and no
shares are held in treasury and 200,000,000 shares of Common Stock, par value
$.001 per share, of which 50,786,775 shares were issued and outstanding at May
1, 1996, and, no shares are held in treasury. All of the issued and outstanding
shares of MedPartners/Mullikin Common Stock have been duly and validly issued
and are fully paid and nonassessable. Except as disclosed in the
MedPartners/Mullikin S-1 Registration Statement (as herein defined), and except
as described in
-19-
<PAGE> 38
Exhibit 5.2 to the MedPartners/Mullikin Disclosure Schedule delivered to EPA at
the time of the execution and delivery of this Plan of Merger (the
"MedPartners/Mullikin Disclosure Schedule"), there are no options, warrants or
similar rights granted by MedPartners/Mullikin or any other agreements to which
MedPartners/Mullikin is a party providing for the issuance or sale by it of any
additional securities. There is no liability for dividends declared or
accumulated but unpaid with respect to any shares of MedPartners/Mullikin Common
Stock. MedPartners/Mullikin has not made any distributions to any holder of
MedPartners/Mullikin Common Stock or participated in or effected any issuance,
exchange or retirement of MedPartners/Mullikin Common Stock, or otherwise
changed the equity interests of holders of MedPartners/Mullikin Common Stock, in
contemplation of effecting the Merger within the two years immediately preceding
the date of this Plan of Merger. Any shares of MedPartners/Mullikin Common Stock
that MedPartner/Mullikin has re-acquired during the two years immediately
preceding the date of this Plan of Merger have been so re-acquired only for
purposes other than Business Combinations.
5.3 MedPartners/Mullikin Common Stock. On the Closing Date,
MedPartners/Mullikin will have a sufficient number of authorized but unissued
and/or treasury shares of its Common Stock available for issuance to the holders
of EPA Shares in accordance with the provisions of this Plan of Merger. The
MedPartners/Mullikin Common Stock to be issued Pursuant to this Plan of Merger
will, when so delivered, be (i) duty and validly issued, fully paid and
nonassessable and (iii) listed on the NYSE, upon official notice of issuance.
5.4 Subsidiaries and Affiliated Entities.
(a) Attached as Exhibit 5.4 to the MedPartners/Mullikin Disclosure
Schedule is a list of all subsidiaries of MedPartners/Mullikin (individually, a
"MedPartners/Mullikin Subsidiary," and collectively, the "MedPartners/Mullikin
Subsidiaries") and their states of incorporation and all professional
corporations or professional associations (individually a "MedPartners/Mullikin
Professional Corporation" and collectively the "MedPartners/Mullikin
Professional Corporations") of which MedPartners/Mullikin has control and their
states of incorporation. Except as set forth in
-20-
<PAGE> 39
Exhibit 5.4 to the MedPartners/Mullikin Disclosure Schedule,
MedPartners/Mullikin does not own stock in and does not control, directly or
indirectly, any other corporation, association, partnership or business
organization.
(b) Also disclosed in Exhibit 5.4 to the MedPartners/Mullikin
Disclosure Schedule is a list of all general or limited partnerships in which a
general partner is MedPartners/Mullikin, a MedPartners/Mullikin Subsidiary or
another partnership controlled by MedPartners/Mullikin (individually a
"MedPartners/Mullikin Partnership" and collectively, the "MedPartners/Mullikin
Partnerships"), and all limited liability companies in which
MedPartners/Mullikin a MedPartners/Mullikin Subsidiary is a member
(individually, a "MedPartners/Mullikin LLC", the MedPartners/Mullikin
Professional Corporations and the MedPartners/Mullikin LLCs being collectively
called the "Other MedPartners/Mullikin Entities"), and their states of
organization. Except as set forth in Exhibit 5.4 to MedPartners/Mullikin
Disclosure Schedule, neither MedPartners/Mullikin nor any MedPartners/Mullikin
Subsidiary owns an equity interest in, nor does such entity control, directly or
indirectly, any other joint venture, limited liability company or partnership.
(c) Except as set forth in Exhibit 5.4, neither MedPartners/Mullikin
nor any MedPartners/Mullikin Subsidiary owns an equity interest in, nor does
such entity control, directly or indirectly, any other joint venture or
partnership.
5.5 Organization, Existence and Good Standing of MedPartners/Mullikin
Subsidiaries and Other MedPartners/Mullikin Entities.
(a) Each MedPartners/Mullikin Subsidiary and each MedPartners/Mullikin
Entity is a corporation duly organized, validly existing and in good standing
under the laws of its respective state of incorporation. Each
MedPartners/Mullikin Subsidiary and each MedPartners/Mullikin Professional
Corporation has all necessary corporate power to own its properties and assets
and to carry on its business as presently conducted.
-21-
<PAGE> 40
(b) Each MedPartners/Mullikin Partnership that is a limited partnership
is validly formed, each MedPartners/Mullikin Partnership that is a general
partnership has been duly organized, and each MedPartners/Mullikin Partnership
is in good standing under the laws of its respective state of organization. Each
MedPartners/Mullikin Partnership has all necessary power to own its property
and assets and to carry on its business as presently conducted.
(c) Each MedPartners/Mullikin LLC that is a limited company validly
formed and in good standing under the laws of its respective state of
organization. Each MedPartners/Mullikin LLC has all necessary power to own its
property and assets and to carry on its business as presently conducted.
5.6 Foreign Qualifications. MedPartners/Mullikin, each
MedPartners/Mullikin Subsidiary and MedPartners/Mullikin LLC is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or operated by it or
the nature of the business transacted by it makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on MedPartners/Mullikin.
5.7 Subsidiary Common Stock. MedPartners/Mullikin owns, beneficially
and of record, all of the issued and outstanding shares of Common Stock, par
value, $1.00 per share, of the Subsidiary (the "Subsidiary Common Stock"), which
are validly issued and outstanding, fully paid and nonassessable, free and clear
of all liens and encumbrances. MedPartners/Mullikin has, or will by the
Effective Time have, taken all such actions as may be required in its capacity
as the sole stockholder of the Subsidiary to approve the Merger.
5.8 Power and Authority. MedPartners/Mullikin has corporate power to
execute, deliver and perform this Plan of Merger and all agreements and other
documents executed and delivered, or to be executed and delivered, by it
pursuant to this Plan of Merger, and, subject to the satisfaction of the
conditions precedent set forth herein has taken all actions required by law, its
Certificate of
-22-
<PAGE> 41
Incorporation, its By-laws or otherwise, to authorize the execution and delivery
of this Plan of Merger and such related documents. The execution and delivery of
this Plan of Merger does not and, subject to the receipt of required regulatory
approvals and any other required third-party consents or approvals, the
consummation of the Merger contemplated hereby will not, violate any provisions
of the Certificate of Incorporation or By-laws of MedPartners/Mullikin, or any
provision of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, order, arbitration award,
judgement or decree to which MedPartners/Mullikin is a party or by which it is
bound, or violate any restrictions of any kind to which MedPartners/Mullikin is
subject. The execution and delivery of this Plan of Merger has been approved by
the Board of Directors of MedPartners/Mullikin and the approval of the Merger or
this Plan of Merger by the MedPartners/Mullikin stockholders is not required.
5.9 MedPartners/Mullikin Public Information. MedPartners/Mullikin has
heretofore made available to EPA a true and complete copy of each report,
schedule, registration statement and definitive proxy statement filed by it or
its predecessor, MedPartners, Inc., with the SEC (as any such documents have
since the time of their original filing been amended, the "MedPartners/Mullikin
Documents") since February 21, 1995, which are all the documents (other than
preliminary material) that it was required to file with the SEC since such date.
As of their respective dates, the MedPartners/Mullikin Documents did not contain
any untrue statements of material facts or omit to state material facts required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the MedPartners/Mullikin Documents complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, and the rules and regulations promulgated under such statutes. The
financial statements contained in the MedPartners/Mullikin Document, together
with the notes thereto, have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods indicated
(except as may be indicated in the notes thereto, or, in the case of the
unaudited financial statements, as permitted by Form 10-0), reflect all known
liabilities of MedPartners/Mullikin, fixed or contingent, required to be stated
therein, and present fairly the financial condition of MedPartners/Mullikin at
said dates and the
-23-
<PAGE> 42
consolidated results of operations and cash flows of MedPartners/Mullikin for
the periods then ended. The consolidated balance sheet of MedPartners/Mullikin
at December 31, 1995, included in the Annual Report on Form 10-K for the fiscal
year ended December 31, 1995 of MedPartners/Mullikin is herein sometimes
referred to as the "MedPartners/Mullikin Balance Sheet".
5.10 Legal Proceedings. There is no pending or threatened litigation,
governmental investigation, condemnation or other proceeding against or relating
to or affecting MedPartners/Mullikin or the transactions contemplated by this
Plan of Merger for which MedPartners/Mullikin is uninsured or which, if resolved
adversely to MedPartners/Mullikin, would have a material adverse effect on
MedPartners/Mullikin and, to the knowledge of MedPartners/Mullikin, no basis for
any such action exists.
5.11 Subsequent Events. Except as set forth in Exhibit 5.11 to the
MedPartners/Mullikin Disclosure Schedule, MedPartners/Mullikin has not, since
the date of the MedPartners/Mullikin Balance Sheet:
(a) Incurred any material adverse change.
(b) Discharged or satisfied any material lien or encumbrance,
or paid or satisfied any material obligation or liability (absolute,
accrued, contingent or otherwise) other than (i) liabilities shown or
reflected on the MedPartners/Mullikin Balance Sheet or (ii) liabilities
incurred since the date of the MedPartners/Mullikin Balance Sheet in
the ordinary course of business, which discharge or satisfaction would
not have a material adverse effect on MedPartners/Mullikin.
(c) Increased or established any reserve for taxes, or any
other liability on its books or otherwise provided therefor which would
have a material adverse effect on MedPartners/Mullikin, except as may
have been required due to income or
-24-
<PAGE> 43
operations of MedPartners/Mullikin since the date of the
MedPartners/Mullikin Balance Sheet.
(d) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of the assets, tangible or intangible, which
assets are material to the consolidated business or financial condition
of MedPartners/Mullikin.
(e) Sold or transferred any of the assets material to the
consolidated business of MedPartners/Mullikin, canceled any material,
debts or claims or waived any material rights, except in the ordinary
course of business.
(f) Granted any general or uniform increase in the rates of
pay of employees or any material increase in salary payable or to
become payable by MedPartners/Mullikin to any officer or employee,
consultant or agent (other than normal merit increases), or by means of
any bonus or pension plan, contract or other commitment, increased in a
material respect the compensation of any officer, employee, consultant
or agent.
(g) Except for this Plan of Merger and any agreement executed
and delivered pursuant to this Plan of Merger, entered into any
material transaction other than in the ordinary course of business or
permitted under other Sections of this Plan of Merger.
(h) Issued any stock, bonds or other securities or any options
or rights to purchase any of its securities (other than stock issued
upon the exercise of outstanding options under MedPartners/Mullikin's
stock option plans or stock options granted under such plans, except as
set forth in Exhibit 5.11(h) to the MedPartners/Mullikin Disclosure
Schedule.
-25-
<PAGE> 44
5.12 Compliance with Laws in General. MedPartners/Mullikin has not
received any notices of material violations of any federal, state and local
laws, regulations and ordinances relating to its business and operations,
including, without limitation, the Occupational Safety and Health Act, the
Americans with Disabilities Act, the Medicare or applicable Medicaid statutes
and regulations and any Environmental Laws, and no notice of any pending
inspection or violation of any such law, regulation or ordinance has been
received by MedPartners/Mullikin which, if it were determined that a violation
had occurred, would have a material adverse effect on MedPartners/Mullikin.
5.13 Regulatory Approvals. Except as disclosed in the
MedPartners/Mullikin Documents or in Exhibit 5.13 to the MedPartners/Mullikin
Disclosure Schedule, MedPartners/Mullikin and each MedPartners/Mullikin
Subsidiary, as applicable, holds all licenses, certificates of need and other
regulatory approvals required or necessary to be applied for or obtained in
connection with its business as presently conducted or as proposed to be
conducted, except where the failure to obtain such license, certificate of need
or regulatory approval would not have a material adverse effect on
MedPartners/Mullikin. All such licenses, certificates of need and other
regulatory approvals relating to the business, operations and facilities of
MedPartners/Mullikin and each MedPartners/Mullikin Subsidiary are in full force
and effect, except where any failure of such license, certificate of need or
regulatory approval to be in full force and effect would not have a material
adverse effect on MedPartners/Mullikin. Any and all past litigation concerning
such licenses, certificates of need and regulatory approvals, and all claims and
causes of action raised therein, has been finally adjudicated. No such license,
certificate of need or regulatory approval has been revoked, conditioned (except
as may be customary) or restricted, and no action (equitable, legal or
administrative), arbitration or other process is pending, or to the best
knowledge of MedPartners/Mullikin, threatened, which in any way challenges the
validity of, or seeks to revoke, condition or restrict any such license,
certificate of need, or regulatory approval. Subject to compliance with
applicable securities laws and the HSR Act, the consummation of the Merger will
not violate any law or restriction to which MedPartners/Mullikin is subject
which, if violated, would have a material adverse effect on
MedPartners/Mullikin.
-26-
<PAGE> 45
5.14 Investment Intent. MedPartners/Mullikin is acquiring the EPA
Shares hereunder for its own account and not with a view to the distribution or
sale thereof, and MedPartners/Mullikin has no understanding, agreement or
arrangement to sell, distribute, partition or otherwise transfer or assign all
or any part of the EPA Shares to any other person, firm or corporation.
5.15 Commissions and Fees. There are no claims for brokerage
commissions, investment bankers' fees or finder's fees in connection with the
transactions contemplated by this Plan of Merger resulting from any action taken
by MedPartners/Mullikin or any of its officers, Directors or agents.
5.16 Retirement or Re-Acquisition of MedPartners/Mullikin.
MedPartners/Mullikin Common Stock has not agreed directly or indirectly to
retire or re-acquire all or part of the shares of MedPartners/Mullikin Common
Stock issued pursuant to Section 2.1 hereof.
5.17 Disposition of Assets of Surviving Corporation. MedPartners/
Mullikin does not intend or plan to dispose of, or to cause the Surviving
Corporation to dispose of, or to cause the Surviving Corporation to dispose of,
a significant part of the assets of the Surviving Corporation within two years
after the Effective Date, other than dispositions in the ordinary course of
business of the Surviving Corporation and dispositions intended to eliminate
duplicate facilities or excess capacity.
5.18 Registration Rights. Except as set forth in Exhibit 5.18 or in the
MedPartners/Mullikin Documents, MedPartners/Mullikin is not under any
obligations to register shares of its stock with the SEC on behalf of any
stockholder. MedPartners/Mullikin has not received any demand for registration
of any shares of its stock from any other stockholder and is not aware of any
intention of any stockholder to make such a demand; provided, however, that
MedPartners/Mullikin is contractually obligated to carry out two registrations
before the end of 1996.
-27-
<PAGE> 46
5.19 No Untrue Representations. No representation or warranty by
MedPartners/Mullikin in this Plan of Merger, and no Exhibit or certificate
issued by MedPartners/Mullikin and furnished or to be furnished to EPA pursuant
hereto, or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact in response to the
disclosure requested, or omits or will omit to state a material fact necessary
to make the statements or facts contained therein in response to the disclosure
requested not misleading in light of all of the circumstances then prevailing.
Section 6. Access to Information and Documents.
6.1 Access to Information. Between the date hereof and the Closing
Date, EPA will give to MedPartners/Mullikin and its counsel, accountants and
other representatives full access to all the properties, documents, contracts,
personnel files and other records of such party and shall furnish
MedPartners/Mullikin with copies of such documents and with such information
with respect to the affairs of such party as the other party may from time to
time reasonably request. EPA will disclose and make available to
MedPartners/Mullikin and its representatives all books, contracts, accounts,
personnel records, letters of intents, papers, records, communications with
regulatory authorities and other documents relating to the business and
operations of EPA. In addition, EPA shall make available to MedPartners/Mullikin
all such banking, investment and financial information as shall be necessary to
allow for the efficient integration of EPA's banking, investment and financial
arrangements with those of MedPartners/Mullikin at the Effective Time.
6.2 Return of Records. If the transactions contemplate hereby are not
consummated and this Plan of Merger terminates, each party agrees to promptly
return all documents, contracts, records or properties of the other party and
all copies thereof furnished pursuant to this Section 6 or otherwise. All
information disclosed by any party or any affiliate or representative of any
party shall be deemed to be "Evaluation Material" under the terms of the
Confidentiality Agreement dated November 15, 1995, between EPA and
MedPartners/Mullikin (the "Confidentiality Agreement").
-28-
<PAGE> 47
6.3 Effect of Access. (a) Nothing contained in this Section 6 shall be
deemed to create any duty or responsibility on the part of either party to
investigate or evaluate the value, validity or enforceability of any contract,
lease or other asset included in the assets of the other party.
(b) With respect to matters as to which any party has made express
representations or warranties herein, the parties shall be entitled to rely upon
such express representations and warranties irrespective of any investigations
made by such parties, except to the extent that such investigations result in
actual knowledge of the inaccuracy or falsehood of particular representations
and warranties.
Section 7. Covenants.
7.1 Preservation of Business. EPA will use its reasonable best efforts
to preserve the business organization of EPA intact, to keep available to
MedPartners/Mullikin and the Surviving Corporation the services of the present
employees of EPA, and to preserve for MedPartners/Mullikin and the Surviving
Corporation the goodwill of the suppliers, customers and others having business
relations with EPA.
7.2 Material Transactions. Prior to the Effective Time, EPA will not
(other than as contemplated by the terms of the Plan of Merger and the related
documents, and other than with respect to transactions for which binding
commitment have been entered into prior to the date hereof and transactions
described in Exhibit 7.2) to the EPA Disclosure Schedule which do not vary
materially from the terms set forth on such Exhibit 7.2, without first obtaining
the written consent of MedPartners/Mullikin:
(a) Encumber any asset or enter into any transaction or make
any contract or commitment relating to the properties, assets and
business of EPA, other than in the ordinary course of business or as
otherwise disclosed herein.
-29-
<PAGE> 48
(b) Enter into any employment contract which is not terminable
upon notice of 30 days or less, at will, and without penalty to EPA
except as provided herein.
(c) Enter into any contract or agreement (i) which cannot be
performed within three months or less, or (ii) which involves the
expenditure of over $50,000, except in the ordinary course of business.
(d) Issue or sell, or agree to issue or sell, any shares of
capital stock or other securities of EPA.
(e) Make any payment or distribution to the trustee under any
bonus, pension, profit-sharing or retirement plan or incur any
obligation to make any such payment or contribution which is not in
accordance with EPA's usual past practice, or make any payment or
contributions or incur any obligation pursuant to or in respect of any
other plan or contract or arrangement providing for bonuses, executive
incentive compensation, pensions, deferred compensation, retirement
payments, profit-sharing or the like, establish or enter into any such
plan, contract or arrangement, or terminate any plan.
(f) Extend credit to anyone, except in the ordinary course of
business consistent with prior practices.
(g) Guarantee the obligation of any person, firm or
corporation, except in the ordinary course of business consistent with
prior practices.
(h) Amend its Certificate or Articles of Incorporation or
By-laws.
-30-
<PAGE> 49
(i) Take any action of a character described in Section
3.10(a) to 3.10(h), inclusive.
7.3 Approval of EPA Shareholder. EPA will take all steps necessary in
accordance with its Articles of Incorporation and By-laws to call, give notice
of, convene and hold a meeting of its sole shareholder (the "Shareholders
Meeting") as soon as practicable after the execution and delivery of this Plan
of Merger, for the purpose of approving this Plan of Merger and for such other
purposes as may be necessary. Unless this Plan of Merger shall have been validly
terminated as provided herein, the Board of Directors of EPA (subject to the
provisions of Section 8.1 (d) hereof) will: (i) recommend to its shareholder the
approval of the Plan of Merger, the transactions contemplated hereby and any
other matters to submitted to the sole shareholder in connection therewith, to
the extent that such approval is required by applicable law in order to
consummate the Merger, and (ii) use its reasonable, good faith efforts to obtain
the approval by its shareholder of this Plan of Merger and the transactions
contemplated hereby. Nothing contained herein shall affect the right of EPA's
shareholder to take action by written consent in lieu of a meeting to the extent
permitted by applicable law and its Articles of Incorporation and By-Laws.
7.4 Securities Matters. (a) MedPartners/Mullikin shall prepare and
distribute to the sole holder of EPA Shares an information package (the
"Information Package") designed to provide such shareholder with such
information as he shall need about this Plan of Merger and the Merger in order
to qualify for private placement of MedPartners/Mullikin Shares into which the
EPA Shares are to be converted pursuant to this Plan of Merger for the exemption
under the Securities Act provided by Section 4(2) promulgated thereunder. EPA
shall provide MedPartners/Mullikin with such information and documentation as
shall be reasonably requested by MedPartners/Mullikin in order to prepare the
Information Package contemplated by this Section 7.4(a).
(b) The information specifically designated as being supplied by EPA
for inclusion in the Information Package shall not, at the time the Information
Package is delivered to the shareholder of EPA, at the time of the meeting of
the EPA shareholder and at the Effective Time,
-31-
<PAGE> 50
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, not misleading. If at any time prior to the Effective Time any event or
circumstance relating to EPA, or its officers or directors, should be discovered
by EPA which should be set forth in an amendment or a supplement to the
Information Package, EPA shall promptly inform MedPartners/Mullikin.
(c) The information specifically designated as being supplied by
MedPartners/ Mullikin for inclusion in the Information Package shall not, at the
time the Information Package is delivered to the shareholder of EPA, at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, not misleading. If at any time prior to the Effective
Time any event or circumstance relating to MedPartners/Mullikin, or its officers
or Directors, should be discovered by MedPartners/Mullikin which should be as
forth in an amendment or a supplement to the Information Package,
MedPartners/Mullikin shall promptly inform EPA and shall promptly prepare and
distribute such amendment or supplement to the Information Package.
(d) Prior to the Closing Date, MedPartners/Mullikin shall cause, to the
extent required, the shares of MedPartners/Mullikin Common Stock to be issued
pursuant to the Merger to be registered or qualified under all applicable
securities or Blue Sky laws of each of the states and territories of the United
States, and to take any other actions which may be necessary to enable the
MedPartners/Mullikin Common Stock to be issued pursuant to the Merger to be
distributed in each such jurisdiction.
(e) Prior to the Closing Date, MedPartners/Mullikin shall file a
Subsequent Listing Application with the NYSE relating to the shares of
MedPartners/Mullikin Common Stock to be issued in connection with the Merger,
and shall cause such shares of MedPartners/Mullikin Common Stock to be listed on
the NYSE, upon official notice of issuance, prior to the Closing Date.
-32-
<PAGE> 51
7.5 Exemption from State Takeover Laws. EPA shall take all reasonable
steps necessary and within its power to exempt the Merger from the requirements
of any state takeover statute or other similar state law which would prevent or
impede the consummation of the transactions contemplated hereby, by action of
EPA's Board of Directors.
7.6 Public Disclosures. MedPartners/Mullikin and EPA will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the transactions contemplated by this Plan of Merger,
and shall not issue any such press release or make any such public statement
prior to such consultation except as may be required by application law or
requirements of the NYSE. The parties shall issue a joint press release,
mutually acceptable to MedPartners/Mullikin and EPA, promptly upon execution and
delivery of this Plan of Merger.
7.7 Resignation of EPA Directors. On or prior to the Closing Date, EPA
shall deliver to MedPartners/Mullikin evidence satisfactory to
MedPartners/Mullikin of the resignation of the directors of EPA, such
resignations to be effective on the Closing Date.
7.8 Notice of Subsequent Events. Each party hereto shall notify the
other parties of any changes, additions or events of which they have knowledge
which would cause any material change in or material addition to any Exhibit to
its Disclosure Schedule delivered by the notifying party under this Plan of
Merger, promptly after the occurrence of the same. If the effect of such change
or addition would, individually or in the aggregate with the effect of changes
or additions previously disclosed pursuant to this Section 7.8, constitute a
material adverse effect on the notifying party, the non-notifying party may,
within ten days after receipt of such notice, elect to terminate this Plan of
Merger. If the non-notifying party does not give written notice of such
termination within such 10- day period, the non-notifying party shall be deemed
to have consented to such change or addition and shall not be entitled to
terminate this Plan of Merger by reason thereof.
7.9 No Solicitations. Either MedPartners/Mullikin or EPA may, directly
or indirectly, furnish information and access, in response to unsolicited
requests therefor, to the same extent
-33-
<PAGE> 52
permitted by Section 6.1, to any corporation, partnership, person or other
entity or group, pursuant to appropriate confidentiality agreements, and may
participate in discussions and negotiate with such corporation, partnership,
person or other entity or group concerning any proposal to acquire such party
upon a merger, purchase of assets, purchase of or tender offer for shares of its
Common Stock or similar transaction (an "Acquisition Transaction"), if the Board
of Directors of MedPartners/Mullikin or EPA, as the case may be, determines in
its good faith judgment in the exercise of its fiduciary duties or the exercise
of its duties under Rule 14e-2 under the Exchange Act, after consultation with
legal counsel and its financial advisors, that such action is appropriate in
furtherance of the best interest of its stockholders. Except as set forth above,
MedPartners/Mullikin or EPA shall not, and will direct any officer, director,
employee, representative and agent of such party not to, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with
or provide any information to any corporation, partnership, person or other
entity or group (other than MedPartners/Mullikin or an affiliate or associate or
agent of MedPartners/Mullikin) concerning any merger, sale of assets, sale of or
tender offer for its shares or similar transactions involving such party. Such
party shall promptly notify the other party if it shall, on or after the date
hereof, have entered into a confidentiality agreement with any third party in
response to any unsolicited request for information and access in connection
with a possible Acquisition Transaction involving such party, such notification
to include the identity of such third party and the proposed terms of such
possible Acquisition Transaction.
7.10 Other Actions. Subject to the provisions of Section 7.9 hereof,
none of EPA, MedPartners/Mullikin and the Subsidiary shall knowingly or
intentionally take any action, or omit to take any action, if such action or
omission would, or reasonably might be expected to, result in any of its
representations and warranties set forth herein being or becoming untrue in any
material respect, or in any of the conditions to the Merger set forth in this
Plan of Merger not being satisfied, or (unless such action is required by
applicable law) which would materially adversely affect the ability, of EPA or
MedPartners/Mullikin to obtain any consents or approvals required for the
consummation of the Merger without imposition of a condition or restriction
which would have a material adverse effect on the Surviving Corporation or which
would otherwise materially impair
-34-
<PAGE> 53
the ability of EPA or MedPartners/Mullikin, to consummate the Merger in
accordance with the terms of this Plan of Merger or materially delay such
consummation.
7.11 Accounting Methods. Neither MedPartners/Mullikin nor EPA shall
change, in any material respect, its methods of accounting in effect at its most
recent fiscal year end, except as required by changes in generally adopted
accounting principles as concurred by such parties' independent accountants.
7.12 Pooling and Tax-Free Reorganization Treatment. Neither
MedPartners/Mullikin nor EPA shall intentionally take or cause to be taken any
action, whether on or before the Effective Time, which would disqualify the
Merger as a "pooling of interests" for accounting purposes or as a
"reorganization" within the meaning of Section 368(a) of the Code.
7.13 Affiliate and Pooling Agreements. MedPartners/Mullikin and EPA
will each use their respective reasonable, good faith efforts to cause each of
their respective Directors and executive officers and each of their respective
"affiliates" (within the meaning of Rule 145 under the Securities Act) to
execute and deliver to MedPartners/Mullikin as soon as practicable an agreement
in the form attached hereto as Exhibit 7.13 relating to the disposition of
shares of EPA Common Stock and shares of MedPartner/Mullikin Common Stock hold
by such person and the shares of MedPartners/Mullikin Common Stock issuable
pursuant to this Plan of Merger.
7.14 Cooperation. (a) MedPartners/Mullikin and EPA shall together, or
pursuant to an allocation of responsibility agreed to between them, (i)
cooperate with one another in determining whether any filings required to be
made required to be obtained in any jurisdiction prior to the Effective Time in
connection with the consummation of the transactions contemplated hereby and
cooperate in making any such filings promptly and in seeking to obtain timely
any such consents, (ii) use their respective best efforts to cause to be lifted
any injunction prohibiting the Merger, or any part thereof, or the other
transactions contemplated hereby, and (iii) furnish to one another and to one
another's counsel all such information as may be required to effect the
foregoing actions.
-35-
<PAGE> 54
(b) Subject to the terms and conditions herein provided, and unless
this Plan of Merger shall have been validly terminated as provided herein, each
of MedPartners/Mullikin and EPA shall use all reasonable efforts (i) to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party (or any subsidiaries or
affiliates of such party) with respect to the Plan of Merger and to consummate
the transactions contemplated hereby, subject to the vote of EPA's shareholder
described above, and (ii) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any governmental entity and/or any other public or private third party which is
required to be obtained or made by such party or any of its subsidiaries or
affiliates in connection with this Plan of Merger and the transactions
contemplated hereby. Each of MedPartners/Mullikin and EPA will promptly
cooperate with and furnish information to the other in connection with any such
burden suffered by, or requirement imposed upon, either of them or any of their
subsidiaries or affiliates in connection with the foregoing.
7.15 Publication of Combined Results. MedPartners/Mullikin agrees that
within 30 days after the end of the first full calendar month following the
Effective Time, MedPartners/ Mullikin shall cause publication of the combined
results of operations for MedPartners/Mullikin and EPA, provided however that
such period shall be tolled for such period as the financial statements required
for the preparation of such financial statements for such publication (which
financial statements MedPartners/Mullikin agrees to use its best efforts to
obtain) are not reasonably available to MedPartners/Mullikin. For purposes of
this Section 7.15, the term "publication" shall have the meaning provided in SEC
Accounting Series Release No. 135.
7.16 Post Closing Matters. There is no plan or intention on the part of
MedPartners/ Mullikin, or the Subsidiary to liquidate, sell, merge or otherwise
dispose of the stock of the Surviving Corporation except for transfers of stock
to affiliates of MedPartners/Mullikin. Med/Partners/Mullikin and the Subsidiary
currently plan, and intend for the Surviving Corporation after the Merger, (i)
to continue EPA's historic business or (ii) to use a significant portion of
EPA's historic business assets in a business, subject to the provisions of
Section 1.5.
-36-
<PAGE> 55
7.17 Certain Employee Benefits. MedPartners/Mullikin shall provide or
cause the Surviving Corporation to provide all of the EPA employees who are
employed by the Surviving Corporation after the Closing Date shall be entitled
to participate in all benefit plans and programs generally made available to all
MedPartners/Mullikin employees.
7.18 MedPartners/Mullikin Common Stock Listing. MedPartners/Mullikin
shall maintain the listing of the MedPartners/Mullikin Common Stock on the NYSE
or another national securities exchange for a period of one year following the
Closing Date.
7.19 Payment of Certain Obligations of EPA: It is acknowledged and
agreed that EPA shall:
(a) pay to the sole shareholder of EPA the net amount of
$148,179 reflected as owed him on the EPA Balance Sheet;
(b) advance to the sole shareholder of EPA the Subchapter S
tax liability payable by him as a result of the 1996 income of EPA
through the Closing Date; and
(c) pay the President of EPA the total amount of $307,500 as
compensation for the period from January 1, 1996 through the Closing
Date.
SECTION 8. TERMINATION, AMENDMENT AND WAIVER.
8.1 Termination. This Plan of Merger may be terminated at any time
prior to the Effective Time, whether before or after approval of matters
presented in connection with the Merger by the holders of EPA Common Stock:
(a) by mutual written consent of MedPartners/Mullikin, the
Subsidiary and EPA;
-37-
<PAGE> 56
(b) by either MedPartners/Mullikin or EPA:
(i) if, upon a vote at a duly hold a meeting of
shareholders or any adjournment thereof, or otherwise, any
required approval of the holders of EPA Common Stock shall not
have been obtained;
(ii) if the Merger shall not have been consummated on
or before September 30, 1996, unless the failure to consummate
the Merger is the result of a willful and material breach of
this Plan of Merger by the party seeking to terminate this
Plan of Merger; provided, however, that the passage of such
period shall be tolled for any part thereof (but not exceeding
60 days in the aggregate) during which any party shall be
subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the
consummation of the Merger or the calling or holding of a
meeting of shareholders;
(iii) if any court of competent jurisdiction or other
governmental entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final
and nonappealable;
(iv) in the event of a breach by the other party of
any representation, warranty, covenant or other agreement
contained in this Plan of Merger which (A) would give rise to
the failure of a condition set forth in Section 9.2(a) or (b)
or Section 9.3(a) or (b), as applicable, and (B) cannot be or
has not been cured within 30 days after the giving of written
notice to the breaching party of such breach (a "Material
Breach") (provided that the terminating party is not then in
Material Breach of any representation, warranty, covenant or
other agreement contained in this Plan of Merger); or
-38-
<PAGE> 57
(v) if either MedPartners/Mullikin or EPA gives
notice of termination pursuant to Section 7.8;
(c) by either MedPartners/Mullikin or EPA in the event that
(i) all of the conditions to the obligation of such party to effect the
Merger set forth in Section 9.1 shall have been satisfied and (ii) any
condition to the obligation of such party to effect the Merger set
forth in Section 9.2 (in the case of MedPartners/Mullikin) or Section
9.3 (in the case of EPA) is not capable of being satisfied prior to the
end of the period referred to in Section 8.1(b)(ii);
(d) By EPA, if EPA's Board of Directors shall have (i)
determined, in the exercise of its fiduciary duty under applicable law,
not to recommend the Merger to the holder of EPA Shares or shall have
withdrawn such recommendation or (ii) approved, recommended or
endorsed any Acquisition Transaction (as defined in Section 7.9) other
than this Plan of Merger or (iii) resolved to do any of the foregoing;
(e) By either MedPartners/Mullikin or EPA, if the condition
set forth in Section 9.1(e) is not satisfied by September 30, 1996; or
(f) By EPA if the Base Period Trading Price of the
MedPartners/Mullikin Common Stock on the NYSE is less than $16.00.
8.2 Effect of Termination. In the event of termination of this Plan of
Merger as provided in Section 8.1, this Plan of Merger shall forthwith become
void and have no effect, without any liability or obligation on the part of any
party, other than the provisions of Sections 6.2, 8.2 and 8.6 of this Plan and
Agreement of Merger and the Confidentiality Agreement, and except to the extent
that such termination results from the willful and material breach by a party of
any of its representations, warranties, covenants or other agreements set forth
in this Plan of Merger.
-39-
<PAGE> 58
8.3 Amendment. This Plan of Merger may be amended by the parties at any
time before or after any required approval of matters presented in connection
with the Merger by the holders of EPA Shares. This Plan of Merger may not be
amended except by an instrument in writing signed on behalf of each, of the
parties.
8.4 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Plan of Merger or in any
document delivered pursuant to "Plan of Merger or (c) subject to the provisions
of Section 8.3, waive compliance with any of the agreements or conditions
contained in this Plan of Merger. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this Plan of
Merger to assert any of its rights under this Plan of Merger or otherwise shall
not constitute a waiver of such rights, except as otherwise provided in Section
7.8.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Plan of Merger pursuant to Section 8.1, an amendment of this
Plan of Merger pursuant to Section 8.3, or an extension or waiver pursuant to
Section 8.4 shall, in order to be effective, require in the case of
MedPartners/Mullikin, the Subsidiary or EPA, action by its Board of Directors or
the duly authorized designee of the Board of Directors.
8.6 Expenses. All costs and expenses incurred in connection with the
Plan of Merger and the transactions contemplated hereby shall be paid by the
party incurring such expense, it being understood that if the Merger is
consummated, by reason thereof, MedPartners/Mullikin will indirectly bear the
expenses incurred by EPA, including EPA's counsel and accounting fees and the
fees referred to in Section 3.16.
-40-
<PAGE> 59
SECTION 9. CONDITIONS TO CLOSING.
9.1 Mutual Conditions. The respective obligations of each party to
effect the Merger shall be subject to the satisfaction, at or prior to the
Closing Date, of the following conditions (any of which may be waived in writing
by MedPartners/Mullikin, the Subsidiary and EPA):
(a) None of MedPartners/Mullikin, the Subsidiary or EPA nor
any of their respective subsidiaries shall be subject to any order,
decree or injunction by a court of competent jurisdiction which (i)
prevents or materially delays the consummation of the Merger or (ii)
would impose any material limitation on the ability of MedPartners/
Mullikin effectively to exercise full rights of ownership of the Common
Stock of the Surviving Corporation or any material portion of the
assets or business of EPA, taken as a whole.
(b) No statute, rule or regulation shall have been enacted by
the government (or any governmental agency) of the United States or any
state, municipality or other political subdivision thereof that makes
the consummation of the Merger and any other transaction contemplated
hereby illegal.
(c) The holder of shares of EPA Common Stock shall have
approved the adoption of this Plan of Merger and any other matters
submitted to him in accordance with the provisions of Section 7.3
hereof.
(d) The shares of MedPartners/Mullikin Common Stock to be
issued in connection with the Merger shall have been listed on the
NYSE, upon official notice of issuance, and shall have been issued in
transactions qualified or exempt from registration under applicable
securities or Blue Sky laws of such states and territories of the
United States as may be required.
-41-
<PAGE> 60
(e) MedPartners/Mullikin and EPA shall each have received a
letter from Ernst & Young, LLP dated not later than (i) September 30,
1996, and (ii) the Closing Date to the effect that the Merger shall
qualify for "pooling of interests" accounting treatment if consummated
in accordance with the Plan of Merger.
(f) MedPartners/Mullikin, the Subsidiary and EPA shall have
received all consents, approvals and authorizations of third parties
with respect to all material leases and management agreements to which
such parties are parties, which consents, approvals and authorizations
are required of such parties by such documents, in form and substance
acceptable to MedPartners/Mullikin or EPA, as the case may be, except
where the failure to obtain such consent, approval or authorization
would not have a material effect on the business of the Surviving
Corporation.
9.2 Conditions to Obligations of MedPartners/Mullikin and the
Subsidiary. The obligations of MedPartners/Mullikin and the Subsidiary to
consummate the Merger and the other transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions (any of which may be waived by MedPartners/Mullikin and the
Subsidiary):
(a) Each of the agreements of EPA to be performed at or prior
to the Closing Date pursuant to the terms hereof shall have been duly
performed in all material respects, and EPA shall have performed, in
all material respects, all of the acts required to be performed by it
at or prior to the Closing Date by the term hereof.
(b) The representations and warranties of EPA set forth in
Section 3.10(a) shall be true and correct of the date of this Plan of
Merger and as of the Closing Date. The representations and warranties
of EPA set forth in this Plan of Merger that are qualified as to
materiality shall be true and correct, and those that are not so
qualified be true and correct in all material respects, as of the date
of this Plan of Merger and as of the Closing as though
-42-
<PAGE> 61
made at and as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality shall be
true and correct, and those that are not so qualified shall be true and correct
in all material respects, as of such earlier date); provided, however, that EPA
shall not be deemed to be in breach of any such representations or warranties by
taking any action permitted (or approved by MedPartners/Mullikin) under Section
7.2 or otherwise permitted herein. MedPartners/Mullikin and the Subsidiary shall
have been furnished with a certificate, executed by a duly authorized officer of
EPA, dated the Closing Date, certifying in such detail as MedPartners/Mullikin
and the Subsidiary my reasonably request as to the fulfillment of the foregoing
conditions.
(c) MedPartners/Mullikin and the Subsidiary shall have
obtained, or obtained the transfer of, any licenses and other
regulatory approval necessary to allow the Surviving Corporation to
operate EPA's business, unless the failure to obtain such transfer or
approval would not have a material adverse effect on EPA.
(d) MedPartners/Mullikin shall have received an opinion from
Haskell Slaughter & Young, L.L.C., to the effect that the Merger will
constitute a reorganization within the meaning of Section 368 of the
Code of which opinion may be based upon reasonable representations of
fact provided by officers of MedPartners/Mullikin, EPA and the
Subsidiary.
(e) MedPartners/Mullikin shall have received an opinion from
Sherman, Silverstein, Kohl, Rose & Podolsky or Ballard Spahr Andrews
and Ingersoll substantially to the effect set forth in Exhibit 9.2(e)
hereto.
(f) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board or
other regulatory body required in connection with the execution,
delivery and performance of this Plan of Merger shall have
-43-
<PAGE> 62
been obtained or made, except for filings in connection with the Merger
and any other documents required to be filed after Effective Time.
(g) MedPartners/Mullikin shall have received "Affiliate
Letters" as provided in Section 7.13 herein in Section 7.13 herein from
each of the affiliates of EPA.
(h) The Required Lenders (as defined in the Revolving Credit
and Reimbursement Agreement, dated as of November 21, 1995, among
MedPartners/Mullikin and NationsBank of Georgia, N.A., as agent for the
parties thereto shall, in their sole discretion, have approved the
Merger and the transactions contemplated by the Merger.
(i) The shareholder of EPA shall have executed and delivered
to MedPartners/Mullikin an investment letter in the form of Exhibit
9.2(i) attached to this Plan of Merger.
(j) The shareholder of EPA shall have executed and delivered
to MedPartners/Mullikin a Financial Data Sheet in the form included in
the Information Package.
(k) The sole shareholder of EPA shall have executed and
delivered an Indemnification Agreement substantially in the form of
Exhibit 9.2(k) attached to this Plan of Merger.
(l) The sole shareholder of EPA shall have executed and
delivered to MedPartners/Mullikin a document, in form mutually
satisfactory to MedPartners/Mullikin's counsel, pursuant to which such
shareholders confirms and joins in the representations and warranties
and covenants of EPA set forth in this Plan of Merger as of the Closing
Date.
-44-
<PAGE> 63
(m) The lease related to the Corporate headquarters of EPA
shall have been amended in form satisfactory to MedPartners/Mullikin.
(n) The sole shareholder of EPA and MedPartners/Mullikin shall
have entered into an Escrow Agreement, in form satisfactory to
MedPartners/Mullikin and its counsel, pursuant to which such
shareholder shall deposit 10% of the shares of MedPartners/Mullikin
Common Stock to be received by him in the Merger to secure the
production of $1,450,000 EBIT (earnings before interest and taxes,
excluding the impact of the transaction costs associated with the
Merger) by EPA and its affiliated companies during the first six months
of operations after June 1, 1996.
9.3 Conditions to Obligations of EPA. The obligations of EPA to
consummate the Merger and the other transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions (any of which may be waived by EPA):
(a) Each of the agreements of MedPartners/Mullikin and the
Subsidiary to be performed at or prior to the Closing Date pursuant to
the terms hereof shall have been duty performed, in all material
respects, and MedPartners/Mullikin and the Subsidiary shall have
performed, in all material respects, all of the acts required to be
performed by them at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of MedPartners/Mullikin
set forth in Section 5.13(a) shall be true and correct as of the date
of the Plan of Merger and as of the Closing Date. The representations
and warranties of MedPartners/Mullikin set forth in this Plan of Merger
that are qualified as to materiality shall be true and correct, and
those that are not so qualified shall be true and correct in all
material respects, as of the date of this Plan of Merger and as of the
Closing as though made at and as of such time, except to the extent
such representations and warranties expressly relate to an earlier date
(in which case such representations and warranties that are qualified
as to materiality shall be true and correct,
-45-
<PAGE> 64
and those that are not so qualified shall be true and correct in all
material respects, as of such earlier date). EPA shall have been
furnished with a certificate, executed by duly authorized officers of
MedPartners/Mullikin and the Subsidiary, dated the Closing Date,
certifying in such detail as EPA may reasonably request as to the
fulfillment of the foregoing conditions.
(c) EPA shall have received an opinion from Sherman,
Silverstein, Kohl, Rose & Podolsky or Ballard Spahr Andrews & Ingersall
to the effect that the Merger will constitute a reorganization with the
meaning of Section 368 of the Code which opinion may be based upon
reasonable representations of fact provided by officers of
MedPartners/Mullikin, EPA and the Subsidiary.
(d) EPA shall have received an opinion from Haskell Slaughter
& Young, L.L.C., substantially to the effect set forth in Exhibit
9.3(d) hereto.
(e) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, based on
other regulatory body required in connection with the execution,
delivery and performance of this Plan of Merger shall have been
obtained or made, except for filings in connection with the Merger and
any other documents required to be filed after the Effective Time.
(f) MedPartners/Mullikin and the shareholder of EPA shall have
entered into a Registration Rights Agreement in a form mutually
satisfactory to all parties providing for up to three registrations and
piggyback registration rights thereafter during the two-year holding
period which will be applicable to the MedPartners/Mullikin Shares into
which the EPA Shares shall be converted pursuant to the Merger under
the Securities Act.
(g) Team Health Group, Inc. and Jima E. George, M.D., the sole
shareholder of EPA, shall have entered into Employment Agreements, in
mutually satisfactory forms.
-46-
<PAGE> 65
(h) The lease related to the corporate headquarters of EPA
shall have been amended in form satisfactory to EPA.
Section 10. Miscellaneous.
10.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Plan of Merger or in any instrument
delivered pursuant to this Plan of Merger shall survive the Effective Time.
10.2 Notices. Any communications required or desired to be given
hereunder shall be deemed to have been properly given if sent by hand delivery
or by facsimile and overnight courier to the parties hereto at the following
addresses, or at such other address as either party may advise the other in
writing from time to time:
If to MedPartners/Mullikin:
MedPartners/Mullikin
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
Facsimile: (205) 733-1568
Attn: J. Brooke Johnston, Jr., Esq.
Senior Vice President and
General Counsel
with a copy to:
F. Hampton McFadden, Jr., Esq.
Haskell Slaughter & Young, L.L.C.
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203
Facsimile: (205) 324-1133
-47-
<PAGE> 66
If to EPA:
Emergency Physician Associates, Inc.
307 South Evergreen Avenue
Woodbury, New Jersey 08096
Facsimile: (609) 845-9347
Attn: James R. George, M.D.
Personal and Confidential
with a copy to:
Sherman, Silverstein, Kohl, Rose & Podolsky
4300 Haddon Field Road, Suite 311
Pennsauken, New Jersey 08109
Attention: Daniel J. Barrison, Esq.
Facsimile: (609) 662-0165
All such communications shall be deemed to have been delivered on the date of
hand delivery or on the next business day following the deposit of such
communications with the overnight courier.
10.3 Further Assurances. Each party hereby agrees to perform any
further acts and to execute and deliver any documents which may be reasonably
necessary to carry out the provisions of this Plan of Merger.
10.4 Indemnification. MedPartners/Mullikin and Subsidiary agree that
all rights to indemnification for acts or omissions occurring prior to the
Effective Time now existing in favor of the current or former directors or
officers of EPA as provided in its articles of incorporation or bylaws shall
survive the Merger and shall continue in full force and effect in accordance
with their terms. The provisions of this Section 10.4 are intended to be for the
benefit of, and shall be
-48-
<PAGE> 67
enforceable by, each such indemnified party, and each such indemnified party's
heirs and representatives.
10.5 Governing Law. This Plan of Merger shall be interpreted, construed
and enforced in accordance with the laws of the State of Delaware, applied
without giving effect to any conflicts-of-law principles.
10.6 "Including". The word "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific terms or matters as provided immediately following the
word "including" or to similar items or matters, whether or not non-limiting
language (such as "without limitation", "but not limited to", or words of
similar import) is used with reference to the word "including" or the similar
items or matters, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of the
general statement, term or matter.
10.7 "Knowledge", "To the knowledge", "to the best knowledge,
information and belief", or any similar phrase shall be deemed to refer to the
knowledge of the Chairman of the Board, Chief Executive Officer or Chief
Financial Officer of a party and to include the assurance that such knowledge is
based upon a reasonable investigation, unless otherwise expressly provided.
10.8 "Material adverse change" or "material adverse effect" means, when
used in connection with EPA or MedPartners/Mullikin, any change, effect, event
or occurrence that has, or
-49-
<PAGE> 68
is reasonably likely to have, individually or in the aggregate, a material
adverse impact on the business or financial position of such party and its
subsidiaries taken as a whole (which in the case of EPA, shall include Med/Law,
Hospital Healthcare and Medecon); provided, however, that "material adverse
change" and "material adverse effect" shall be deemed to exclude the impact of
(i) changes in generally accepted accounting principles, (ii) changes in
applicable law, and (iii) any changes resulting from any restructuring or other
similar charges or write-offs taken by EPA with the consent of
MedPartners/Mullikin; provided, however, that no such charges or write-offs
will be taken if such would adversely affect pooling-of-interests accounting
treatment for the Merger. Moreover, it shall not be deemed a "material adverse
change" or "material adverse effect" so long as future financial performance
shall be consistent with discussions between the parties in connection with the
Merger.
10.9 "Hazardous Materials". The term "Hazardous Materials" means any
material which has been determined by any applicable governmental authority to
be harmful to the health or safety of human or animal life or vegetation,
regardless of whether such material is found on or below the surface of the
ground, in any surface or underground water, airborne in ambient air or in the
inside any structure built or located upon or below the surface of the ground or
in building materials or in improvements of any structures, or in any personal
property located or used in any such structure, including, but not limited to,
all hazardous substances, imminently hazardous substances, hazardous wastes,
toxic substances, hazardous wastes, pollutants and contaminants from time to
time defined, listed, identified, designated or classified as such under any
Environmental laws (as defined in Section 10.10) regardless of the quantity of
any such material.
-50-
<PAGE> 69
10.10 Environmental Laws. The term "Environmental Laws" means any
federal, state or local statute, regulation, rule or ordinance, and any judicial
or administrative interpretation thereof, regulating the use, generation,
handling, storage, transportation, discharge, emission, spillage or other
release of Hazardous Materials or relating to the protection of the environment.
10.11 Captions. The captions or headings in this Plan of Merger are
made for convenience and general reference only and shall not be construed to
describe, define or limit the scope or intent of the provisions of this Plan of
Merger.
10.12 Integration of Exhibits. All exhibits attached to this Plan of
Merger as if fully set forth herein, and all statements appearing therein shall
be deemed disclosed for all purposes and not only in connection with the
specific representation in which they are explicitly referenced.
10.13 Entire Agreement. This instrument, including all exhibits
attached hereto and the Confidentiality Agreement contain the entire agreement
of the parties and supersede any and all prior or contemporaneous agreements
between the parties, written or oral, with respect to the transactions
contemplated hereby. Such agreement may not be changed or terminated orally, but
may only be changed by an agreement in writing signed by the party or parties
against whom enforcement of any waiver, change, modification, extension,
discharge or termination is sought.
-51-
<PAGE> 70
10.14 Counterparts. This Plan of Merger may be executed in several
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together constitute and be one and the
same instrument.
10.15 Binding Effect. This Plan of Merger shall be binding on, and
shall inure to the benefit of, the parties hereto, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Plan of Merger. No party may assign any right or
obligation hereunder without the prior written consent of other parties.
10.16 No Rule of Construction. The parties acknowledge that this Plan
of Merger was initially prepared by MedPartners/Mullikin, and that all parties
have read and negotiated the language used in this Plan of Merger. The parties
agree that, because all parties participated in negotiating and drafting this
Plan of Merger, no rule of construction shall apply to this Plan of Merger which
construes ambiguous language in favor of or against any party by reason of that
party's role in drafting this Plan of Merger.
-52-
<PAGE> 71
IN WITNESS WHEREOF, MedPartners/Mullikin, the Subsidiary, Hospital
Healthcare and EPA have caused this Plan and Agreement of Merger to be executed
by their respective duly authorized officers, all as of the day and year first
above written.
MEDPARTNERS/MULLIKIN, INC.
By /s/ Harold O. Knight
----------------------------------------
Harold O. Knight, Jr.
Executive Vice President and
Chief Financial Officer
EPA MERGER CORPORATION
By /s/ Harold O. Knight
----------------------------------------
Harold O. Knight, Jr.
Vice President and Treasurer
HOSPITAL HEALTHCARE SERVICES, P.A.
By /s/ James E. George
----------------------------------------
James E. George, M.D.
President
MED/LAW PUBLISHERS, INC.
By /s/ James E. George
----------------------------------------
James E. George, M.D.
President
-53-
<PAGE> 72
MEDECON, INC.
By /s/ James E. George
----------------------------------------
James E. George, M.D.
President
EMERGENCY PHYSICIAN ASSOCIATES, P.A.
By /s/ James E. George
----------------------------------------
James E. George, M.D.
President
-54-
<PAGE> 73
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
EMERGENCY PHYSICIAN ASSOCIATES, INC.
To: The Secretary of State "FEDERAL EMPLOYEE IDENTIFICATION NO."
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificates of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is
Emergency Physician Associates, Inc.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the shareholders of the
corporation on this 1st day of July, 1996:
RESOLVED, That the Certificate of Incorporation be amended in part to
read as follows:
FIRST: The name of the corporation is:
EPA, Inc.
3. The number of shares outstanding at the time of adoption of the
amendment was 50. The total number of shares entitled to vote there on was 50.
4. The number of shares voting for and against such amendment is as
follows:
Number of Shares Voting Number of Shares Voting
For Amendment Against Amendment
50 -0-
Dated this 1st day of July, 1996.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
By: /s/ James E. George
----------------------------------------
James E. George, M.D., President
-1-
<PAGE> 74
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
EPA, Inc.
To: The Secretary of State "FEDERAL EMPLOYEE IDENTIFICATION NO."
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificates of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is
EPA, Inc.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the shareholders of the
corporation on this 30th day of July, 1996:
RESOLVED, That the Certificate of Incorporation be amended in part to
read as follows:
FIRST: The name of the corporation is:
Emergency Physician Associates, Inc.
3. The number of shares outstanding at the time of adoption of the
amendment was 100. The total number of shares entitled to vote there on was 100.
4. The number of shares voting for and against such amendment is as
follows:
Number of Shares Voting Number of Shares Voting
For Amendment Against Amendment
100 -0-
Dated this 30th day of July, 1996.
By: /s/ James E. George
----------------------------------------
James E. George, M.D., President
-1-
<PAGE> 1
EXHIBIT 3.28
BY-LAWS
ARTICLE I - OFFICES
Section 1. The registered office of the corporation shall be at one
Executive Campus, Suite 306, Cherry Hill, New Jersey, 08002.
Section 2. The corporation may have such other offices either within or
without the state as the Board of Directors may designate or as the business of
the corporation may require from time to time.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its creation and the words "Corporate Seal, New
Jersey."
ARTICLE III - SHAREHOLDERS' MEETINGS
Section 1. All meetings of the shareholders shall be held at 900 Kings
Highway North, Suite 101, Cherry Hill, New Jersey, 08034 or at such other place
or places, either within or without the State of New Jersey, as may from time to
time be selected by the Board of Directors.
Section 2. Annual Meetings: The annual meeting of shareholders, after
the year 1978 shall be held on the first Monday of June in each year if not a
legal holiday, and if a legal holiday, then on the next full business day at 10
o'clock A.M., or on such other day as may be fixed by the Board, when the
shareholders shall elect, by a plurality vote, a Board of Directors, and
transact such other business as may properly be brought before the meeting.
If the annual meeting for election of directors is not held on the day
designated therefor, the directors shall cause the meeting to be held as soon
thereafter as convenient.
-1-
<PAGE> 2
Section 3. Special Meetings: Special meetings of the shareholders may
be called by the President or the Board of Directors, and shall be called at the
request in writing to the President by the holder or holders of not less than
ten percent of all the shares entitled to vote at a meeting.
Section 4. Notice of Shareholders' Meetings: Written notice of the
time, place and purpose or purposes of every meeting of shareholders shall be
given not less than ten or more than sixty days before the date of the meeting,
either personally or by mail, to each shareholder of record entitled to vote at
the meeting, unless a greater period of notice is required by statute in a
particular case.
When a meeting is adjourned to another time or place, it shall not be
necessary to give notice of the adjourned meeting if the time and place to which
the meeting is adjourned are announced at the meeting at which the adjournment
is taken and at the adjourned meeting only such business is transacted as might
have been transacted at the original meeting. However, if after the adjournment
the Board fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder of record on the new record
date entitled to notice.
Section 5. Waiver of Notice: Notice of a meeting need not be given to
any shareholder who signs a waiver of such notice, in person or by proxy,
whether before or after the meeting. The attendance of any shareholder at a
meeting, in person or by proxy, without protesting prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a waiver of
notice by him.
Whenever shareholders are authorized to take any action after the lapse
of a prescribed period of time, the action may be taken without such lapse if
such requirement is waived in writing, in person or by proxy, before or after
the taking of such action, by every shareholder entitled to vote thereon as of
the date of the taking of such action.
-2-
<PAGE> 3
Section 6. Action by Shareholders Without Meeting:
(1) Any action required or permitted to be taken at a meeting of
shareholders by statute or the Certificate of Incorporation or By-Laws of the
corporation, may be taken without a meeting if all the shareholders entitled to
vote thereon consent thereto in writing, except that in the case of any action
to be taken pursuant to Chapter 10 of the Business Corporation Act (concerning
mergers, etc.), such action may be taken without a meeting only if all
shareholders entitled to vote consent thereto in writing and the corporation
provides to all other shareholders the advance notification required by
paragraph (2)(b) of this section.
(2) Except as otherwise provided in the Certificate of Incorporation
and subject to the provisions of this subsection, any action required or
permitted to be taken at a meeting of shareholders by the Act, the Certificate
of Incorporation, or By-Laws, other than the annual election of directors, may
be taken without a meeting upon the written consent of shareholders who would
have been entitled to cast the minimum number of votes which would be necessary
to authorize such action at a meeting at which all shareholders entitled to vote
thereon were present and voting.
(a) If any shareholder shall have the right to dissent from a proposed
action, pursuant to Chapter 11 of the Act, the Board shall fix a date on which
written consents are to be tabulated; in any other case, it may fix a date for
tabulation. If no date is fixed, consents may be tabulated as they are received.
No consent shall be counted which is received more than sixty days after the
date of the Board action authorizing the solicitation of consents or, in a case
in which consents, or proxies for consents, are solicited from all shareholders
who would have been entitled to vote at a meeting called to take such action,
more than sixty days after the date of mailing of solicitation of consents, or
proxies for consents.
-3-
<PAGE> 4
(b) Except as provided in paragraph (2)(c), the corporation, upon
receipt and tabulation of the requisite number of written consents, shall
promptly notify all non-consenting shareholders, who would have been entitled to
notice of a meeting to vote upon such action, of the action consented to, the
proposed effective date of such action, and any conditions precedent to such
action. Such notification shall be given at least twenty days in advance of the
proposed effective date of such action in the case of any action taken pursuant
to Chapter 10 of the Act, and at least ten days in advance in the case of any
other action.
(c) The corporation need not provide the notification required to be
given by paragraph (2)(b) if it
(i) solicits written consents or proxies for consents
from all shareholders who would have been entitled to vote at
a meeting called to take such action, and at the same time
gives notice of the proposed action to all other shareholders
who would have been entitled to notice of a meeting called to
vote upon such action;
(ii) advises all shareholders, if any, who are
entitled to dissent from the proposed action, as provided in
Chapter 11 of the Act, of their right to do so and to be paid
the fair value of their shares; and
(iii) fixes a date for tabulation of consents not
less than twenty days, in the case of any proposed action to
be taken pursuant to Chapter 10 of the Act, or not less than
ten days in the case of any other proposed action, and not
more than sixty days after the date of mailing of
solicitations of consents or proxies for consents.
(d) Any consent obtained pursuant to paragraph (2)(c) may be revoked at
any time prior to the day fixed for tabulation of consents. Any other consent
may be revoked at any time prior to the day on which the proposed action could
be taken
-4-
<PAGE> 5
upon compliance with paragraph (2)(b). The revocation must be in writing and be
received by the corporation.
(3) Whenever action is taken pursuant to subsection (1) or (2), the
written consents of the shareholders consenting thereto or the written report of
inspectors appointed to tabulate such consents shall be filed with the minutes
or proceedings of shareholders.
In case the corporation is involved in a merger, consolidation or other
type of acquisition or disposition regulated by Chapters 10 and 11 of the Act,
the pertinent provisions of the statute should be referred to and strictly
complied with.
Section 7. Fixing Record Date:
(1) The Board may fix, in advance, a date as the record date for
determining the corporation's shareholders with regard to any corporate action
or event and, in particular, for determining the shareholders who are entitled
to;
(a) notice of or to vote at any meeting of shareholders or any
adjournment thereof;
(b) give a written consent to any action without a meeting; or
(c) receive payment of any dividend or allotment of any right.
The record date may in no case be more than sixty days prior to the
shareholders' meeting or other corporate action or event to which it relates.
The record date for a shareholders' meeting may not be less than ten days before
the date of the meeting. The record date to determine shareholders to give a
written consent may not be more than sixty days before the date fixed for
tabulation of the consents or, if no date has been fixed for tabulation, more
than sixty days before the last day on which consents received may be counted.
(2) If no record date is fixed,
-5-
<PAGE> 6
(a) the record date for a shareholders' meeting shall be the
close of business on the day next preceding the day on which notice is
given, or, if no notice is given, the day next preceding the day on
which the meeting is held; and
(b) the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the
resolution of the Board relating thereto is adopted.
(3) When a determination of shareholders of record for a shareholders'
meeting has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board fixes a new record date under
this section for the adjourned meeting.
Section 8. Voting Lists: The officer or agent having charge of the
stock transfer books for shares of the corporation shall make and certify a
complete list of shareholders entitled to vote at a shareholders' meeting or any
adjournment thereof. A list required by this section may consist of cards
arranged alphabetically. Such list shall be arranged alphabetically within each
class, series or group of shareholders maintained by the corporation for
convenience of reference, with the address of, and the number of shares held by,
each shareholder; be produced at the time and place of the meeting; be subject
to the inspection of any shareholder during the whole time of the meeting; and
be prima facie evidence as to who are the shareholders entitled to examine such
list or to vote at any meeting.
If the requirements of this section have not been complied with, the
meeting shall, on the demand of any shareholder in person or by proxy, be
adjourned until the requirements are complied with. Failure to comply with the
requirements of this section shall not affect the validity of any action taken
at such meeting prior to the making of any such demand.
Section 9. Quorum: Unless otherwise provided in the Certificate of
Incorporation or by statute, the holders of shares entitled to cast a majority
of the votes at a meeting shall constitute a
-6-
<PAGE> 7
quorum at such meeting. The shareholders present in person or by proxy at a duly
organized meeting may continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum. Less than a
quorum may adjourn.
Whenever the holders of any class or series of shares are entitled to
vote separately on a specified item of business, the provisions of this section
shall apply in determining the presence of a quorum of such class or series for
the transaction of such specified item of business.
Section 10. Voting: Each holder of shares with voting rights shall be
entitled to one vote for each such share registered in his name, except as
otherwise provided in the Certificate of Incorporation. Whenever any action,
other than the election of directors, is to be taken by vote of the
shareholders, it shall be authorized by a majority of the votes cast at a
meeting of shareholders by the holders of shares entitled to vote thereon,
unless a greater plurality is required by statute or by the Certificate of
Incorporation.
Every shareholder entitled to vote at a meeting of shareholders or to
express consent without a meeting may authorize another person or persons to act
for him by proxy. Every proxy shall be executed in writing by the shareholder or
his agent, except that a proxy may be given by a shareholder or his agent by
telegram or cable or its equivalent. No proxy shall be valid for more than
eleven months unless a longer time is expressly provided therein, but in no
event shall a proxy be valid after three years from the date of execution.
Unless it is coupled with an interest, a proxy shall be revocable at will. A
proxy shall not be revoked by the death or incapacity of the shareholder but
such proxy shall continue in force until revoked by the personal representative
or guardian of the shareholder. The presence at any meeting of any shareholder
who has given a proxy shall not revoke such proxy unless the shareholder shall
file written notice of such revocation with the Secretary of the meeting prior
to the voting of such proxy.
-7-
<PAGE> 8
Section 11. Election of Directors: At each election of directors every
shareholder entitled to vote at such election shall have the right to vote the
number of shares owned by him for as many persons as there are directors to be
elected and for whose election he has a right to vote. Directors shall be
elected by a plurality of the votes cast at the election, except as otherwise
provided by the Certificate of Incorporation.
Elections of directors need not be by ballot unless a shareholder
demands election by ballot at the election and before the voting begins.
Section 12. Inspectors of Election: The Board may, in advance of any
shareholders' meeting, or of the tabulation of written consents of shareholders
without a meeting, appoint one or more inspectors to act at the meeting or any
adjournment thereof or to tabulate such consents and make a written report
thereof. If inspectors to act at any meeting of shareholders are not so
appointed or shall fail to qualify, the person presiding at a shareholders'
meeting may, and on the request of any shareholder entitled to vote thereat,
shall, make such appointment.
Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability. No person shall be
elected a director in an election for which he has served as an inspector.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be
managed by its Board of Directors, one or more in number. A director shall be at
least eighteen years of age and need not be a United States citizen or a
resident of this State or a shareholder in the corporation. Each director shall
be elected by the shareholders, at the annual meeting of shareholders of the
corporation, and shall be elected for the term of one year, and until his
successor shall be elected and shall qualify.
-8-
<PAGE> 9
Section 2. First Meeting After Election: After the election of the
directors, the newly elected Board may meet at such place and time as shall be
fixed by the vote of the shareholders at the annual meeting, for the purpose of
organization and otherwise, and no notice of such meeting shall be necessary to
the newly elected directors in order to legally constitute the meeting; provided
a majority of the whole Board shall be present; or such place and time may be
fixed by the consent in writing of the directors.
Section 3. Regular Meetings: Regular meetings of the Board shall be
held without notice at the registered office of the corporation, or at such
other time and place as shall be determined by the Board.
Section 4. Quorum: A majority of the entire Board, or of any committee
thereof, shall constitute a quorum for the transaction of business, and the act
of the majority present at a meeting at which a quorum is present shall be the
act of the Board or of the committee.
Any action required or permitted to be taken pursuant to authorization
voted at a meeting of the Board or any committee thereof, may be taken without a
meeting if, prior or subsequent to such action, all members of the Board or of
such committee, as the case may be, consent thereto in writing and such written
consents are filed with the minutes of the proceedings of the Board or
committee.
Section 5. Special Meetings: Special meetings of the Board may be
called by the President on five days' notice to each director, either personally
or by mail; special meetings may be called in like manner and on like notice, on
the written request of any director.
Section 6. Waiver of Notice: Notice of any meeting need not be given to
any director who signs a waiver of notice, whether before or after the meeting.
The attendance of any director at a meeting without protesting prior to the
conclusion of the meeting the lack of notice of such meeting shall constitute a
waiver of notice by him. Neither the business to be transacted at, nor the
-9-
<PAGE> 10
purposes of any meeting of the Board need be specified in the notice or waiver
of notice of such meeting. Notice of an adjourned meeting need not be given if
the time and place are fixed at the meeting adjourning and if the period of
adjournment does not exceed ten days in any one adjournment.
Section 7. Powers of Directors: The Board of Directors shall have the
management of the business of the corporation. In addition to the powers and
authorities by these By-Laws expressly conferred upon them, the Board may
exercise all such powers of the corporation and do all such lawful acts and
things as are not by statute or by these By-Laws directed or required to be
exercised or done by the shareholders.
Section 8. Compensation of Directors: The Board, by the affirmative
vote of a majority of directors in office and irrespective of any personal
interest of any of them, shall have authority to establish reasonable
compensation of directors for services to the corporation as directors, officers
or otherwise.
Section 9. Executive Committee: If deemed advisable, the Board of
Directors, by resolution adopted by a majority of the entire Board, may appoint
from among its members an executive committee and one or more other committees,
each of which shall have one or more members. Each such committee shall have and
may exercise all the authority of the Board, except that no such committee shall
make, alter or repeal any By-Law of the corporation; elect or appoint any
director, or remove any officer of director; submit to shareholders any action
that requires shareholders' approval; or amend or repeal any resolution
theretofore adopted by the Board which by its terms is amendable or repealable
only by the Board.
Actions taken at a meeting of any such committee shall be reported to
the Board at its next meeting following such committee meeting; except that,
when the meeting of the Board is held
-10-
<PAGE> 11
within two days after the committee meeting, such report shall, if not made at
the first meeting, be made to the Board at its second meeting following such
committee meeting.
ARTICLE V - OFFICERS
Section 1. The officers of the corporation shall consist of a
President, a Secretary, a Treasurer, and, if desired, a Chairman of the Board,
one or more Vice Presidents, and such other officers as may be required. They
shall be annually elected by the Board of Directors and shall hold office for
one year and until their successors are elected and have qualified, subject to
earlier termination by removal or resignation. The Board may also choose such
employees and agents as it shall deem necessary, who shall hold their offices
for such terms and shall have such authority and shall perform such duties as
from time to time shall be prescribed by the Board.
Any two or more offices may be held by the same person but no officer
shall execute, acknowledge, or verify any instrument in more than one capacity
if such instrument is required by law or by these By-Laws to be executed,
acknowledged, or verified by two or more officers.
Section 2. Salaries: The salaries of all officers, employees and agents
of the corporation shall be fixed by the Board of Directors.
Section 3. Removal: Any officer elected or appointed by the Board of
Directors may be removed by the Board with or without cause. An officer elected
by the shareholders may be removed, with or without cause, only by vote of the
shareholders but his authority to act as an officer may be suspended by the
Board for cause.
Section 4. President: The President shall be the chief executive
officer of the corporation; he shall preside at all meetings of the shareholders
and directors; he shall have general and active management of the business of
the corporation, shall see that all orders and resolutions of the Board are
carried into effect, subject, however, to the right of the directors to delegate
any specific powers, except such as may be by statute exclusively conferred on
the
-11-
<PAGE> 12
President, to any other officer or officers of the corporation. He shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation. He shall be EX-OFFICIO a member of all committees, and shall have
the general powers and duties of supervision and management -usually vested in
the office of President of a corporation.
Section 5. Vice President: The Vice President, if one has been
appointed, shall be vested with all the powers and be required to perform all
the duties of the President in his absence.
Section 6. Chairman of the Board: The Chairman of the Board, if one has
been appointed, shall exercise such powers and perform such duties as shall be
provided in the resolution proposing that a Chairman of the Board be elected.
Section 7. Secretary: The Secretary shall keep full minutes of all
meetings of the shareholders and directors; he shall be EX-OFFICIO Secretary of
the Board of Directors; he shall attend all sessions of the Board, shall act as
clerk thereof, and record all votes and the minutes of all proceedings in a book
to be kept for that purpose; and shall perform like duties for the standing
committees when required. He shall give or cause to be given, notices of all
meetings of the shareholders of the corporation and the Board of Directors, and
shall perform such other duties as may be prescribed by the Board of Directors
or President, under whose supervision he shall be.
Section 8. Treasurer: The Treasurer shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation,
and shall deposit all moneys and other valuable effects in the name and to the
credit of the corporation, in such depositories as may be designated by the
Board of Directors.
He shall disburse the funds of the corporation as may be ordered by the
Board, taking proper vouchers for such disbursements, and shall render to the
President and directors, at the regular meetings of the Board, or whenever they
may require it, an account of all his transactions
-12-
<PAGE> 13
as Treasurer and of the financial condition of the corporation, and shall submit
a full financial report at the annual meeting of the shareholders.
The corporation shall be made upon the books of the corporation by the
holders of the shares in person, or by his legal representatives. Share
certificates shall be surrendered and cancelled at the time of transfer.
Section 3. Loss of Certificates: In the event that a share certificate
shall be lost, destroyed or mutilated, a new certificate may be issued therefor
upon such terms and indemnity to the corporation as the Board of Directors may
prescribe.
ARTICLE VIII - BOOKS AND ACCOUNTS
Section 1. The corporation shall keep books and records of account and
minutes of the proceedings of the shareholders, Board of Directors and executive
committee, if any. Such books, records and minutes may be kept outside this
State. The corporation shall make available for inspection at its registered
office, or at the office of a transfer agent in this State, a record or records
containing the names and addresses of all shareholders, the number, class and
series of shares held by each and the dates when they respectively became the
owners of record thereof, within ten days after demand by a shareholder entitled
to inspect them, except that in the case of shares listed on a national
securities exchange, the records may be made available at the office of a
transfer agent within or without this State.
Section 2. Inspection: Any person who shall have been a shareholder of
record of the corporation for at least six months immediately preceding his
demand, or any person holding, or so authorized in writing by the holders of, at
least five percent of the outstanding shares of any class or series, upon at
least five days' written demand shall have the right for any proper purpose to
examine in person or by agent or attorney, during usual business hours, the
minutes of the
-13-
<PAGE> 14
proceedings of the shareholders and record of shareholders and to make extracts
therefrom at the places where the same are kept.
ARTICLE IX - MISCELLANEOUS PROVISIONS
Section 1. Monetary Disbursements: All checks or demands for money and
notes of the corporation shall be signed by such officer or officers as the
Board of Directors may from time to time designate.
Section 2. Fiscal Year: The fiscal year of the corporation shall begin
on the 1st day of July.
Section 3. Dividends: The Board of Directors may declare and pay
dividends upon the outstanding shares of the corporation from time to time and
to such extent as they deem advisable, in the manner and upon the terms and
conditions provided by statute and the Certificate of Incorporation.
Section 4. Reserve: Before payment of any dividend there may be set
aside such sum or sums as the directors, from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think conducive to
the interests of the corporation, and the directors may abolish any such reserve
in the manner in which it was created.
Section 5. Giving Notice: Whenever written notice is required to be
given to any person, it may be given to such person, either personally or by
sending a copy thereof through the mail. If notice is given by mail, the notice
shall be deemed to be given when deposited in the mail addressed to the person
to whom it is directed at his last address as it appears on the records of the
corporation, with postage prepaid thereon. Such notice shall specify the place,
day and hour of
-14-
<PAGE> 15
the meeting and, in the case of a shareholders' meeting, the general nature of
the business to be transacted.
In computing the period of time for the giving of any notice required
or permitted by statute, or by the Certificate of Incorporation or these By-Laws
or any resolution of directors or shareholders, the day on which the notice is
given shall be excluded, and the day on which the matter noticed is to occur
shall be included,
Section 6. Loans to Officers or Employees: The corporation may lend
money to, or guarantee any obligation of, or otherwise assist, any officer or
other employee of the corporation or of any subsidiary, whenever it may
reasonably be expected to benefit the corporation. If the officer or employee is
also a director of the corporation, such loan, guarantee or assistance, unless
pursuant to a plan adopted by the shareholders in accordance with the provisions
of Chapter 8 of the Act (Employee Benefit Plans), shall be authorized by a
majority of the entire Board of Directors.
Section 7. Disallowed Compensation: Any payments made to an officer or
employee of the corporation such as a salary, commission, bonus, interest, rent,
travel or entertainment expense incurred by him, which shall be disallowed in
whole or in part as a deductible expense by the Internal Revenue Service, shall
be reimbursed by such officer or employee to the corporation to the full extent
of such disallowance. It shall be the duty of the directors, as a Board, to
enforce payment of each such amount disallowed. In lieu of payment by the
officer or employee, subject to the determination of the directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
ARTICLE X - AMENDMENTS
-15-
<PAGE> 16
Section 1. The Board of Directors shall have the power to make, alter
and repeal these By-Laws, but By-Laws made by the Board may be altered or
repealed, and new By-Laws may be made, by the shareholders.
-16-
<PAGE> 1
EXHIBIT 3.29
ARTICLES OF INCORPORATION
MASTER FORM Disk: A/1-1 F/ART INC
I, MARC H. FELDMAN, hereby adopt the following Articles of
Incorporation for the purpose of forming a corporation under the laws of the
State of Florida, as follows:
ARTICLE ONE: NAME
The name of the corporation is EMERGENCY PHYSICIANS OF MANATEE, INC.
and its mailing address shall be 907 Cimmaron Circle, Bradenton, Florida, 34209,
until and unless such address is subsequently changed by act of the corporation.
ARTICLE TWO: COMMENCEMENT AND DURATION
The corporation shall commence its corporate existence on 1 June 1988
and its shall exist perpetually thereafter until dissolved according to law.
ARTICLE THREE: PURPOSE
The corporation is organized for the purpose of transacting any and all
lawful business for which corporations may be incorporated under Florida Law.
ARTICLE FOUR: CAPITALIZATION
The corporation shall have the authority to issue 1,000 shares of
common stock with a par value of $1.00 per share. The shares of stock may be
issued for such consideration, having a value not less than the par value,
thereof, as is determined from time to time by the Board of Directors, to be
paid in cash, in property, or in labor or services actually performed for the
corporation. Shares may not be issued until the full amount of the consideration
for such shares has been paid. Thereafter, such shares shall be deemed to be
fully paid and nonassessable.
ARTICLE FIVE: DIRECTORS
The corporation shall have an initial Board of three Directors. The
number of Directors may thereafter be changed from time to time in accordance
with the By-Laws of the corporation. The initial Directors shall hold office
until the election of successor directors by the shareholders or, until as is
otherwise provided by Florida Law. The following persons shall be the initial
Directors of the corporation:
STEVEN C. WATSKY DON HARVEY HENRY SMOAK
907 Cimmaron Circle 2613 - 59th Street 605 Citrus Court
Bradenton, FL 34209 Sarasota, FL 33580 Largo, FL 33540
ARTICLE SIX: BY-LAWS
-1-
<PAGE> 2
The power to adopt, alter, amend or repeal by-laws shall be vested in
the Board of Directors, however, the Shareholders may also adopt, alter, amend
or repeal by-laws in which event the Shareholders may provide in any by-law made
by them that such by-law shall not be altered, amended or repealed by the
Directors.
ARTICLE SEVEN: AMENDMENT
These Articles of Incorporation may be amended at any time by a vote of
the majority of the voting stock of the corporation then outstanding, at any
regular meeting of the Shareholders or at any special meeting of the
Shareholders called for that purpose.
ARTICLE EIGHT: REGISTERED OFFICE AND AGENT
The initial registered office of the corporation is to be at 3908 26th
Street West, Bradenton, Florida 34205, and the initial Registered Agent at that
address is MARC H. FELDMAN. Such registered office and agent may be changed by
proper act of the corporation at any time hereafter.
ARTICLE NINE: PREEMPTIVE RIGHTS
Each shareholder of the corporation shall have the first right to
purchase shares and securities convertible into shares of any class, kind or
series of stock in the corporation that may from time to time be issued, whether
or not presently authorized, including shares from the treasury of the
corporation, in the ratio that the number of shares the shareholder holds at the
time of issue bears to the total number of shares outstanding, exclusive of
treasury shares. This right shall be deemed waived by any shareholder who does
not exercise it and pay for the shares preempted within thirty days after
receipt of a notice in writing from the corporation, stating the price, terms,
and conditions of the issue of shares, and inviting the shareholder to exercise
such preemptive rights. This right may also be waived by affirmative written
waiver submitted by the shareholder to the corporation within thirty days of
receipt of notice from the corporation.
ARTICLE TEN: INCORPORATION
This corporation is being formed by MARC H. FELDMAN, 3908, 26th Street
West, Bradenton, Florida 34205.
-2-
<PAGE> 3
IN WITNESS WHEREOF, I subscribe to these Articles of Incorporation on 1
June, 1988.
/s/ Marc H. Feldman
______________________________
MARC H. FELDMAN
STATE OF FLORIDA
COUNTY OF MANATEE
The foregoing instrument was acknowledged before me on 1 June 1988 by
MARC H. FELDMAN.
/s/ Peggy A. Swisher
___________________________
Notary Public
My Commission Expires:
-3-
<PAGE> 1
EXHIBIT 3.30
EMERGENCY PHYSICIANS OF MANATEE, INC.
BY-LAWS OF THE CORPORATION
ARTICLE I: MEETINGS OF SHAREHOLDERS
1. ANNUAL MEETING. The annual meeting of the shareholders of this
corporation shall be held at the time and place designated by the board of
directors of the corporation. The annual meeting of shareholders for any year
shall be held no later than thirteen months after the last preceding annual
meeting of shareholders. Business transacted at the annual meeting shall include
the election of directors of the corporation.
2. SPECIAL MEETING. Special meetings of the shareholders shall be held
when directed by the board of directors or when requested in writing by the
holders of not less than ten percent of all the shares entitled to vote at the
meeting. A meeting requested by shareholders shall be called for a date not less
than ten nor more than sixty days after the request is made, unless the
shareholders requesting the meeting designate a later date. The call for the
meeting shall be issued by the secretary, unless the president, board of
directors, or shareholders requesting the meeting designate another person to do
so.
3. PLACE OF MEETING. Meetings of shareholders may be held within or
without the State of Florida.
4. NOTICE OF MEETING. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meeting, either personally or by first class mail, by or
at the direction of the president, the secretary, or the officer or persons
calling the meeting, to each shareholder of record entitled to vote at the
meeting. If mailed, the notice shall be deemed to be delivered when deposited
with prepaid postage in the United States Mail addressed to the shareholder at
the shareholder's address as it appears on the stock transfer books of the
corporation.
5. NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned to another
time or place, it shall not be necessary to give any notice of the adjourned
meeting if the time and place to which the meeting is adjourned are announced at
the meeting at which the adjournment is taken. At the adjourned meeting any
business may be transacted that might have been transacted on the original date
of the meeting. If, however, after the adjournment, the board of directors fixes
a new record date for the adjourned
<PAGE> 2
meeting, a notice of the adjourned meeting shall be given as provided in this
article to each shareholder of record on the new record date entitled to vote at
that meeting.
6. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment, or entitled to receive payment of any dividend,
or in order to make a determination of shareholders for any other purpose, the
board of directors may provide that the stock transfer books shall be closed for
a stated period but not to exceed, in any case, sixty days. If the stock
transfer book shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, the books shall
be closed for at least ten days immediately preceding the meeting.
In lieu of closing the stock transfer books, the board of
directors may fix in advance a date as the record date for any determination of
shareholders, that date in any case to be not more than sixty days and, in case
of a meeting of shareholders, not less than ten days before the date on which
the particular action requiring the determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date
is fixed for the determination of shareholders entitled to notice or to vote at
a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the board of directors declaring the dividend is adopted, as
the case may be, shall be the record date for the determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, the
determination shall apply to any adjournment thereof, unless the board of
directors fixes a new record date for the adjourned meeting.
7. VOTING RECORD. The secretary of the corporation shall make, at least
ten days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting or any adjournment thereof with the
address of and the number and class and series, if any, of shares held by each.
The list, for a period of ten days before that meeting, shall be kept on file at
the registered office of the corporation, at the principal place of business of
the corporation, or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be
2
<PAGE> 3
entitled to inspect the list at any time during usual business hours. The list
also shall be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder at any time during the
meeting.
If the requirements of this section have not been complied
with substantially, the meeting on demand of any shareholder in person or by
proxy shall be adjourned until the requirements are met. If no such demand is
made, failure to comply with the requirements of this section shall not affect
the validity of any action taken at the meeting.
Notwithstanding the foregoing, the requirements of this
section shall not apply in the event the corporation has fewer than six
shareholders entitled to vote at the meeting or any adjournment thereof.
8. SHAREHOLDER QUORUM AND VOTING. A majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a quorum at a meeting
of shareholders. When a specified item of business is required to be voted on by
a class or series of stock, a majority of the shares of that class or series
shall constitute a quorum for the transaction of that item of business by that
class or series.
If a quorum is present, the affirmative vote of the majority
of the shares represented at the meeting and entitled to vote on the subject
matter shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders'
meeting, the subsequent withdrawal of shareholders, so as to reduce the number
of shares entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment of it.
9. VOTING OF SHARES. Each outstanding share, regardless of class, shall
be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.
Treasury shares, shares of stock of this corporation owned by
another corporation the majority of the voting stock of which is owned or
controlled by this corporation, and shares of stock of this corporation held by
it in a fiduciary capacity shall not be voted, directly or indirectly, at any
meeting, and shall not be counted in determining the total number of outstanding
shares at any given time.
3
<PAGE> 4
A shareholder may vote either in person or by proxy executed
in writing by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to
vote at the election shall have the right to vote, in person or by proxy, the
number of shares owned by him for as many persons as there are directors to be
elected at that time and for whose election the shareholder has a right to vote;
or, if expressly permitted by the articles of incorporation, to cumulate his
votes by giving one candidate as many votes as the number of directors to be
elected at that time multiplied by the number of the shareholder's shares, or by
distributing the votes on the same principal among any number of the candidates.
Shares standing in the name of another corporation, domestic
or foreign, may be voted by the officer, agent, or proxy designated by the
by-laws of the corporate shareholder, or, in the absence of any applicable
by-law, by whatever person the board of directors of the corporate shareholder
may designate. Proof of the designation may be made by presentation of a
certified copy of the by-laws or other instrument of the corporate shareholder.
In the absence of any such designation, or in case of conflicting designation by
the corporate shareholder, the chairman of the board, president, any vice
president, secretary and treasurer of the corporate shareholder shall be
presumed to possess, in that order, authority to vote the shares.
Shares held by an administrator, executor, guardian or
conservator may be voted by such fiduciary, either in person or by proxy,
without a transfer of the shares into the fiduciary's name. Shares standing in
the name of a trustee may be voted by the trustee, either in person or by proxy,
but no trustee shall be entitled to vote shares held by that trustee without a
transfer of the shares into the trustee's name.
Shares standing in the name of a receiver may be voted by the
receiver. Shares held by or under the control of a receiver may be voted by the
receiver without transfer into the receiver's name if authority to do so is
contained in an appropriate order of the court by which the receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote those shares until the shares have been transferred into the name of the
pledgee. Thereafter the pledgee or the nominee of the pledgee shall be entitled
to vote the shares so transferred.
4
<PAGE> 5
After written notice of redemption of redeemable shares has
been mailed to the shareholders and a sum sufficient to redeem the shares has
been deposited with a bank or trust company with irrevocable instruction and
authority to pay the redemption price upon surrender, the redeemed shares shall
not be entitled to vote on any matter and shall not be deemed to be outstanding
shares.
10. PROXIES. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholder's duly authorized attorney-in-fact may authorize another person or
persons to act for the shareholder by proxy.
Every proxy must be signed by the shareholder or the
shareholder's attorney-in-fact. No proxy shall be valid after the expiration of
eleven months from its date unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the shareholder executing it, except as
otherwise provided by law.
The authority of a proxyholder to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of
incompetence or death is received by the secretary of the corporation.
If a proxy for the same shares confers authority on two or
more persons, a majority of them present at the meeting (or one person if only
one is present) may exercise all the powers conferred by the proxy, unless
otherwise provided. If the proxyholders present at the meeting are equally
divided as to the right and manner of voting in any particular case, the voting
of the shares shall be prorated.
If a proxy expressly provides, any proxyholder may appoint in
writing a substitute to act in the proxyholder's place.
11. VOTING TRUSTS. Any number of shareholders of this corporation may
create a voting trust for the purpose of conferring on a trustee or trustees the
right to vote or otherwise represent their shares, as provided by law. When the
counterpart of a voting trust agreement and the copy of the record of the
holders of voting trust certificates has been deposited with the corporation as
provided by law, those documents shall be subject to the same right of
examination by a shareholder of the corporation, in person or by agent or
attorney, as are the books and records of the corporation. The counterpart and
copy of the record shall be subject to examination by any holder of record of
voting trust certificates,
5
<PAGE> 6
either in person or by his agent or attorney, at any reasonable time for any
proper purpose.
12. SHAREHOLDERS AGREEMENTS. Two or more shareholders of this
corporation may enter into an agreement providing for the exercise of voting
rights in the manner provided in the agreement or relating to any phase of the
affairs of the corporation as provided by law. Nothing in that agreement shall
impair the right of this corporation to treat the shareholders of record as
entitled to vote the shares standing in their names.
13. ACTION BY SHAREHOLDERS WITHOUT A MEETING. Any action required by
law, these by-laws or the articles of incorporation of this corporation to be
taken at any annual or special meeting of shareholders of the corporation, or
any action that may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take the action at a
meeting at which all shares entitled to vote were present and voted. If any
class of shares is entitled to vote as a class, written consent shall be
required of the holders of a majority of the shares of each class of shares
entitled to vote as a class and the total shares entitled to vote.
Within ten days after obtaining authorization by written
consent, notice shall be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action. If the action is a merger, consolidation, or sale or exchange
of assets for which dissenters' rights are provided, the notice shall contain a
clear statement of the right of dissenting shareholders to be paid the fair
value of their shares on compliance with further statutory provisions regarding
the rights of dissenting shareholders.
ARTICLE II: DIRECTORS
1. FUNCTION. All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall be managed
under the direction of, the board of directors.
2. QUALIFICATION. Directors need not be residents of this state or
shareholders of this corporation.
3. COMPENSATION. The board of directors shall have authority to fix the
compensation of directors.
6
<PAGE> 7
4. DUTIES OF DIRECTORS. A director shall perform his duties as a
director or board committee member in good faith and in a manner the director
reasonably believes in the best interests of the corporation. A director shall
act with such care as an ordinarily prudent person in a like position would use
under similar circumstances.
In performing the director's duties, a director shall be
entitled to rely on information, opinions, reports or statements, including
financial statements and other financial data, prepared or presented by: (a) one
or more officers or employees of the corporation whom the director reasonably
believes to be reliable and competent in the matters presented; (b) counsel,
public accountants or other persons as to matters which the director reasonably
believes to be within that person's professional or expert competence; or (c) a
committee of the board upon which the director does not serve, duly designated
in accordance with a provision of the articles of incorporation or the by-laws,
as to matters within its designated authority, which committee the director
reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith
if he has knowledge concerning the matter in question that would cause that
reliance described above to be unwarranted.
A person who performs his duties in compliance with this
section shall have no liability by reason of being or having been a director of
the corporation.
5. PRESUMPTION OF ASSENT. A director of the corporation who is present
at a meeting of its board of directors at which action on any corporate matter
is taken shall be presumed to have assented to the action taken unless he votes
against that action or abstains from voting because of an asserted conflict of
interest.
6. NUMBER. The number of directors shall be as set forth in the
Articles of Incorporation; however, the number of directors may be increased or
decreased from time to time by amendment to these by-laws, provided there shall
always be at least one director and no decrease in number shall have the effect
of shortening the terms of any incumbent director.
7. ELECTION AND TERM. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until that person's
successor shall have been elected and qualified
7
<PAGE> 8
or until that person's earlier death, resignation, or removal from office.
At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors to hold office until
the next succeeding annual meeting. Each director shall hold office for that
director's elected term and until that director's successor is elected and
qualified or until that director's earlier death, resignation, or removal from
office.
8. VACANCIES. Any vacancy occurring in the board of directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the board of directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
9. REMOVAL OF DIRECTORS. At a meeting of shareholders called expressly
for that purpose, any director or the entire board of directors may be removed,
with or without cause, by a vote of the holders of a majority of the shares then
entitled to vote at an election of directors. In the event the articles of
incorporation expressly provide for cumulative voting by the shareholders, then
no director can be removed if the votes cast against that director's removal
would be sufficient to elect that director if cumulatively voted at an election
of the entire board or, if there are classes of directors, at an election of the
class of directors of which that director is a part. A director elected by
shareholders of a class may be removed by a majority vote of the shareholders of
that class.
10. QUORUM AND VOTING. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for the transaction of business. An act
of a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors.
11. DIRECTOR CONFLICTS OF INTEREST. No contract or other transaction
between this corporation and one or more of its directors or any other
corporation, firm, association or entity in which one or more of the directors
are directors or officers or are financially interested shall be either void or
voidable because of that relationship or interest or because that director or
those directors are present at the meeting of the board of directors or a
committee that authorizes, approves or ratifies the contract or transaction or
because such directors' votes are counted for that
8
<PAGE> 9
purpose, if (a) the fact of that relationship or interest is disclosed or known
to the board of directors or committee that authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of the interested directors; or (b) the fact of
that relationship or interest is disclosed or known to the shareholders entitled
to vote and they authorize, approve or ratify the contract or transaction by
vote or written consent; or (c) the contract or transaction is fair and
reasonable as to the corporation at the time it is authorized by the board, a
committee or the shareholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the board of directors or a
committee that authorizes, approves or ratifies the contract or transaction.
12. EXECUTIVE AND OTHER COMMITTEES. The board of directors, by
resolution adopted by a majority of the full board of directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in the resolution, shall have and may
exercise all the authority of the board of directors. However, no committee
shall have the authority to: (a) approve or recommend to shareholders actions or
proposals required by law to be approved by shareholders; (b) designate
candidates for the office of director, for the purpose of proxy solicitation, or
otherwise; (c) fill vacancies on the board of directors or any committee of the
board; (d) amend the by-laws; (e) authorize or approve the reacquisition of
shares unless pursuant to a general formula or method specified by the board of
directors; or (f) authorize or approve the issuance or sale of, shares, nor may
a committee designate the terms of a series of a class of shares; however, the
board of directors, having acted regarding general authorization for the
issuance or sale of shares, or any contract for that purpose, and, in the case
of a series, its designation, pursuant to a general formula or method specified
by the board of directors, by resolution or by adoption of a stock option or
other plan may authorize a committee to fix the terms of any contract for the
sale of the shares and to fix the terms upon which those shares may be issued or
sold, including without limitation the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in the committee to adopt any
final resolution setting forth all its terms and to authorize the statement of
the terms of a series for filing with the Department of State.
9
<PAGE> 10
The board of directors, by resolution adopted in accordance
with this section, may designate one or more directors as alternate members of
any such committee. Alternate members may act in the place and stead of any
absent member or members at any meeting of the committee.
13. PLACE OF MEETINGS. Regular and special meetings by the board of
directors may be held within or without the State of Florida.
14. TIME, NOTICE AND CALL OF MEETINGS. Regular meetings of the board of
directors shall be held as specified by resolution of the board of directors.
Written notice of the time and place of special meetings of the board of
directors shall be given to each director either by personal delivery at least
two days before the meeting or by notice mailed to the director at least seven
days before the meeting.
Notice of a meeting of the board of directors need not be
given to any director who signs a waiver of notice either before or after the
meeting. Attendance of a director at a meeting shall constitute a waiver of
notice of the meeting and waiver of any and all objections to the place of the
meeting, the time of the meeting or the manner in which it has been called or
convened, except when a director states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened.
Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the board of directors need be specified in
the notice or waiver of notice of the meeting.
A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the board of directors to another time and
place. Notice of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and to the other directors
unless the time and place of the adjourned meeting are announced at the time of
the adjournment.
Meetings of the board of directors may be called by the
chairman of the board (if any), by the president of the corporation or by any
two directors.
Members of the board of directors may participate in a meeting
of the board by means of a telephone conference or similar communications means
by which all persons participating in the
10
<PAGE> 11
meeting can hear each other at the same time. Participation by those means shall
constitute personal presence at a meeting.
15. ACTION WITHOUT A MEETING. Any action required to be taken at a
meeting of the directors of a corporation, or any action that may be taken at a
meeting of the directors or a committee of the directors, may be taken without a
meeting if a consent in writing, setting forth the action to be taken and signed
by all of the directors or committee members, is filed in the minutes of the
proceedings of the board or committee. The consent shall have the same effect as
an unanimous vote.
ARTICLE III: OFFICERS
1. OFFICERS. The officers of this corporation shall consist of a
president, a secretary, and a treasurer, each of whom shall be elected by the
board of directors at the first meeting of directors immediately following the
annual meeting of shareholders of this corporation, and shall serve until their
successors are chosen and qualified. Other officers, assistant officers, and
agents may be elected or appointed by the board of directors from time to time.
Any two or more offices may be held by the same person. The failure to elect a
president, secretary, or treasurer shall not affect the existence of this
corporation.
2. DUTIES. The officers of this corporation shall have the following
duties:
The president shall be the chief executive officer of the
corporation, shall have general and active management of the business and
affairs of the corporation subject to the directions of the board of directors,
and shall preside at all meetings of the stockholders and board of directors.
The secretary shall have custody of and maintain all of the
corporate records except the financial records, shall record the minutes of all
meetings of the stockholders and board of directors, shall send out all notices
of meetings, and shall perform such other duties as may be described by the
board of directors or the president.
The treasurer shall have custody of all corporate funds and
financial records, shall keep full and accurate accounts of receipts and
disbursements and render accounts at the annual meetings of stockholders and
whenever else required by the board of directors or the president, and shall
perform such other duties as may be described by the board of directors or the
president.
11
<PAGE> 12
3. REMOVAL OF OFFICERS. Any officer or agent elected or appointed by
the board of directors may be removed by the board whenever in its judgment the
best interests of the corporation will be served by that removal.
Any officer or agent elected by the shareholders may be
removed only by vote of the shareholders unless the shareholders shall have
authorized the directors to remove the officer or agent.
Any vacancy, however occurring, in any office may be filled by
the board of directors unless the by-laws have expressly reserved that power to
the shareholders.
Removal of any officer shall be without prejudice to the
contract rights, if any, of the person so removed; however, election or
appointment of an officer or agent shall not of itself create contract rights.
ARTICLE IV: STOCK CERTIFICATES
1. ISSUANCE. Every holder of shares in this corporation shall be
entitled to have a certificate representing all shares to which he or she is
entitled. No certificate shall be issued for any share unless the share is fully
paid.
2. FORM. Certificates representing shares in this corporation shall be
signed by the president or vice president and the secretary or an assistant
secretary and may be sealed with the seal of this corporation or a facsimile.
The signatures of the president or vice president and the secretary or assistant
secretary may be facsimiles if the certificate is manually signed on behalf of a
transfer agent or a registrar, other than the corporation itself or an employee
of the corporation. If any officer who signed or whose facsimile signature has
been placed upon the certificate shall have ceased to be that officer before the
certificate is issued, the certificate may be issued by the corporation with the
same effect as if the signature were that of an officer at the date of issuance.
Every certificate representing shares issued by this
corporation shall set forth or fairly summarize upon the face or back of the
certificate or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of the designations,
preferences, limitations and relative rights of the shares of each class or
series authorized to be issued, and the variations in the relative rights and
preferences between the shares of each series as far as have been fixed and
determined, and the authority of the board of directors
12
<PAGE> 13
to fix and determine the relative rights and preferences of subsequent series.
Every certificate representing shares that are restricted as
to the sale, disposition or other transfer of the shares shall state that the
shares are restricted as to transfer and shall set forth or fairly summarize the
restrictions on the certificate. Alternatively, the certificates shall state
that the corporation will furnish to any shareholder upon request and without
charge a full statement of the restrictions.
Each certificate representing shares shall state upon its face
the name of the corporation, that the corporation is organized under the laws of
the State of Florida, the name of the person or persons to whom issued, the
number and class of shares and the designation of the series, if any, that the
certificate represents, and the par value of each share represented by the
certificate or a statement that the shares are without par value.
3. TRANSFER OF STOCK. The corporation shall register a stock
certificate presented to it for transfer. If the certificate is properly
endorsed by the holder of record or by his duly authorized attorney. The
corporation may require the endorsement signature to be guaranteed by a
commercial bank or trust company or by a member of the New York or American
Stock Exchange.
4. LOST, STOLEN, OR DESTROYED CERTIFICATES. The corporation shall issue
a new stock certificate in the place of any certificate previously issued if the
holder of record of the certificate (a) makes proof in affidavit form that it
has been lost, destroyed or wrongfully taken; (b) requests the issuance of a new
certificate before the corporation has noticed that the certificate has been
acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent and registrar against any claim
that may be made on account of the alleged loss, destruction or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
ARTICLE V: BOOKS AND RECORDS
1. The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, board of
directors and committees of directors.
13
<PAGE> 14
The corporation shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders, and the number, class and series, if any, of the shares held by
each.
Any books, records and minutes may be in written form or in
any other form capable of being converted into written form within a reasonable
time.
2. SHAREHOLDERS INSPECTION RIGHTS. Any person who has been a holder of
record of shares or of voting trust certificates for shares at least six months
immediately preceding his demand or is the holder of record of, or the holder of
record of voting trust certificates for, at least five percent of the
outstanding shares of any class or series of the corporation, upon written
demand stating the purpose, shall have the right to examine, in person or by
agent or attorney, at any reasonable time for any proper purpose, its relevant
books and records of accounts, minutes, and records of shareholders and to make
extracts from those records.
3. FINANCIAL INFORMATION. Not later than four months after the close of
each fiscal year, this corporation shall prepare a balance sheet showing in
reasonable detail the financial condition of the corporation as of the close of
its fiscal year, and a profit and loss statement showing the results of the
operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of
voting trust certificates for shares of the corporation, the corporation shall
mail to that shareholder or holder of voting trust certificates a copy of the
most recent balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be
filed in the registered office of the corporation in this state, shall be kept
for at least five years and shall be subject to inspection during business hours
by any shareholder or holder of voting trust certificates, in person or by
agent.
ARTICLE VI: DIVIDENDS
The board of directors of this corporation, from time to time,
may declare and the corporation may pay dividends on its shares in cash,
property or its own shares, except when the corporation is insolvent or when the
payment of dividends would render the corporation insolvent or when the
declaration or payment
14
<PAGE> 15
would be contrary to any restrictions contained in the Articles of
Incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid,
except as otherwise provided in this section, only out of the unreserved and
unrestricted earned surplus of the corporation or out of capital surplus,
however arising, that each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from the surplus shall be disclosed to the shareholders receiving the payment
concurrently with the distribution.
(b) Dividends may be declared and paid in the corporation's
own treasury shares.
(c) Dividends may be declared and paid in the corporation's
own authorized but unissued shares out of any unreserved and unrestricted
surplus of the corporation upon the following conditions:
(i) If a dividend is payable in shares having a par value,
those shares shall be issued in not less than the par value and there shall be
transferred to stated capital at the time the dividend is paid and amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(ii) If a dividend is payable in shares without par value,
those shares shall be issued at such stated value as fixed by the board of
directors by resolution adopted at the time the dividend is declared, and there
shall be transferred to stated capital at the time the dividend is paid and
amounts of surplus equal to the aggregate stated value so fixed in respect of
those shares. The amount per share so transferred to stated capital shall be
disclosed to the shareholders receiving the dividend concurrently with its
payment.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares in any other class unless the Articles of Incorporation so
provide or the payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
15
<PAGE> 16
(f) Subject to any restriction in the Articles of Incorporation,
dividends may be declared and paid in cash out of the current value of the net
assets of the corporation (as determined by resolution of the board of
directors) based on a current fair valuation or other method that is reasonable
in the circumstances. Each dividend shall be identified as a distribution of
current value of the net assets. The amount per share paid from current value of
the net assets shall be disclosed to the shareholders receiving the dividends.
ARTICLE VII: CORPORATE SEAL
The board of directors shall provide a corporate seal that
shall be circular in form and shall have inscribed on it the name of the
corporation, the year of incorporation, the state of incorporation, and the
words "corporate seal."
ARTICLE VIII: AMENDMENT OF BY-LAWS
These by-laws may be repealed or amended, and new by-laws may
be adopted, by either the board of directors or the shareholders; however, the
board of directors may not amend or repeal any by-law adopted by the
shareholders if the shareholders specifically provide that the by-law is not
subject to amendment or repeal by the directors.
16
<PAGE> 1
EXHIBIT 3.31
ARTICLES OF INCORPORATION
OF
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
The undersigned, being a natural person, duly licensed or
otherwise legally authorized to render a professional service within the State
of Ohio, and acting as the incorporator, does hereby adopt the following
articles of incorporation for the purpose of forming a professional corporation
pursuant to the provisions of Chapter 1785 of the Revised Code of Ohio, as
amended and implemented, and the provisions of Chapter 1701 of the Revised Code
of Ohio, as amended and implemented, hereinafter sometimes referred to as the
"General Corporation Law":
FIRST: The name of the corporation (hereinafter called the
"corporation") is Emergency Professional Services of Ohio, Inc.
SECOND: The place in the State of Ohio where the principal
office of the corporation is to be located is the City of Cleveland, County of
Cayahuga.
THIRD: The purposes for which the corporation is formed, which
shall be in addition to the purpose to engage in any lawful act or activity for
which corporations may be formed under sections 1701.01 to 1701.98 inclusive of
the Revised Code of Ohio, is to render the professional services which may be
rendered by physicians and surgeons and by doctors of medicine.
FOURTH: The authorized number of shares of the corporation is
500, each of which is of a par value of $.01 and is of the same class as each
other share and is to be a common share.
FIFTH: The minimum amount of stated capital with which the
corporation will begin business is Five Hundred Dollars.
SIXTH: No holder of any (illegible) subscribe for any unissued
shares of any class or any additional shares of any class to be issued by reason
of any increase of the authorized number of shares of the corporation of any
class, or bonds, certificates of indebtedness, debentures or other securities
convertible into shares of the corporation or carrying any right to purchase
shares of any class, but any such unissued shares or such additional authorized
issue of any shares or of other securities convertible into shares, or carrying
any right to purchase shares may be issued and disposed of pursuant to
resolution of the Board of Directors to such persons, firms, corporations or
associations and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its discretion.
SEVENTH: 1. Notwithstanding any provision in the General
Corporation Law requiring for any purpose the vote, consent, waiver, or release
of the holders of a designated greater proportion (but less than all) of the
shares of any particular class or of each class, if the
<PAGE> 2
shares are classified, the vote, consent, waiver, or release of the holders of
at least a majority of the voting power or of at least a majority of the shares
entitled to vote, as the case may be, of such particular class or of each class,
if the shares are classified, shall be required in lieu of any such designated
greater proportion otherwise required by any provision of said General
Corporation law.
2. Whenever the General Corporation Law shall fail to
prescribe a designated proportion of voting power required for any purpose, the
vote, consent, waiver, or release of at least a majority of the voting power
represented at a meeting of shareholders at which a quorum is present shall be
sufficient for any such purpose; and at any such meeting the shareholders
entitled to exercise at least a majority of the voting power relating to any
such purpose shall constitute a quorum.
3. The corporation shall have the power, without the approval,
which might otherwise be required, of any of its shareholders, to repurchase any
of its shares if and when any shareholder, on the happening of any event is
required to sell such shares, and shall have the power, without the approval of
any of its shareholders, to purchase any of its issued shares to the fullest
extent permitted by Section 1701.35 of the General Corporation Law.
EIGHTH: The corporation shall, to the fullest extent permitted
by Section 1701.13 of the General Corporation Law, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled under the
Regulations, any agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, trustee, officer, employee, or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
NINTH: From time to time any of the provisions of the Articles
of Incorporation may be amended, altered or repealed, and other provisions
authorized by the General Corporation Law and the laws of the State of Ohio at
the time in force may be added or inserted in the manner and at the time
prescribed by said laws, and all rights at any time conferred upon the
shareholders of the corporation by the Articles of Incorporation are granted
subject to the provisions of this Article TENTH.
Signed on December 29, 1977.
/s/ Richard Shoop
--------------------------------
Richard Shoop, M.D.
-2-
<PAGE> 3
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
The undersigned, being the president and secretary of Emergency
Professional Services of Ohio, Inc., an Ohio corporation, hereby certifies that,
by action taken without a meeting on February 1, 1979 the shareholder adopted a
resolution amending the Articles of Incorporation as follows:
RESOLVED that the Articles of Incorporation of Emergency
Professional Services of Ohio, Inc. be amended so that Article
Second shall read as follows:
SECOND. The place in Ohio where its principal office
is to be located is City of Lakewood, County
of Cuyahoga.
/s/ Richard
_________________________
President
/s/
____________________________
Secretary
<PAGE> 4
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
For Profit Charter No. 511318
THOMAS G. LEMKE, President and G. MALCOLM HOPE, Secretary, of Emergency
Professional Services of Ohio, Inc. (the "Company"), an Ohio corporation, do
hereby certify that the following amendment to the Articles of Incorporation of
said Company was duly authorized by unanimous written consent of all the
shareholders of the Company, without a meeting, dated February 15, 1981:
"RESOLVED: That Article Fourth of the Articles of Incorporation of this
Company be and the same is hereby amended so that, as amended, it shall
read as follows:
FOURTH. The authorized number of shares of the corporation is 500, all
of which are common shares, $.01 per value.
Each of the issued and outstanding units of 37.5 common
shares, $.01 par value heretofore authorized is hereby changed into
three (3) common shares of the corporation. Said change shall become
effective as to shareholders of record on February 1, 1981. Any issued
and outstanding units of less than 37.5 common shares, $.01 par value
shall remain unchanged.
<PAGE> 5
IN WITNESS WHEREOF, said Thomas G. Lemke, President, and G. Malcolm
Hope, Secretary, of Emergency Professional Services of Ohio, Inc., for and on
behalf of said Company have hereunto subscribed their names this 5th day of
March, 1981.
/s/ Thomas G. Lemke
___________________________________
Thomas G. Lemke, President
/s/ G. Malcolm Hope
___________________________________
G. Malcolm Hope, Secretary
-2-
<PAGE> 6
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
James J. Rybak, President, and Michael C. Thomas, Secretary,
of Emergency Professional Services of Ohio, Inc., an Ohio corporation (the
"Corporation"), with its principal office located in Middleburg Heights, Ohio,
do hereby certify that all the Shareholders of the Corporation, present at the
May 12, 1988 Annual Meeting unanimously approved and adopted the following
resolutions:
RESOLVED: That Article SECOND of the Articles of Incorporation
of the Corporation be amended to read in its entirety as
follows:
"SECOND. The place in the State of Ohio where the principal
office of the corporation is located is the City of Middleburg
Heights, County of Cuyahoga."
RESOLVED FURTHER: That the President and the Secretary of the
Corporation are hereby authorized and directed to execute and
file in the office of the Secretary of State of Ohio an
appropriate Certificate of Amendment in order to carry out the
intent and purposes of the preceding resolution and render
effective said Amendment to the Articles of Incorporation.
IN WITNESS WHEREOF, said James J. Rybak, President and Michael
C. Thomas, Secretary, acting for and on behalf of the
Corporation, have hereunto subscribed their names this 12th
day of May, 1988.
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
By: /s/ James J. Rybak
_________________________________________________
James J. Rybak, President
And: /s/ Michael C. Thomas
__________________________________________________
Michael C. Thomas, Secretary
<PAGE> 7
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
EMERGENCY PROFESSIONAL SERVICES OF OHIO, INC.
James J. Rybak, President, and Michael C. Thomas, Secretary,
of Emergency Professional Services of Ohio, Inc. (the "Corporation"), with its
principle office located in Middleburg Heights, Ohio, do hereby certify that all
of the Shareholders of the Corporation present at the May 17, 1990 Annual
Meeting of Shareholders unanimously approved and adopted the following
resolutions:
RESOLVED: That Article FIRST of the Articles of Incorporation
of the Corporation be amended to read in its entirety as
follows:
"FIRST: The name of the corporation is Emergency Professional
Services, Inc."
RESOLVED FURTHER: That the President and the Secretary of the
Corporation are hereby authorized and directed to execute and
file in the office of the Secretary of State of Ohio an
appropriate Certificate of Amendment in order to carry out the
intent and purposes of the preceding resolution and render
effective said Amendment to the Articles of Incorporation.
IN WITNESS WHEREOF, said James J. Rybak, President, and Michael C.
Thomas, Secretary, have hereunto subscribed their names this 17th day of May,
1990.
EMERGENCY PROFESSIONAL SERVICES OF
OHIO, INC.
By: /s/ James J. Rybak
___________________________________
James J. Rybak, President
By: /s/ Michael C. Thomas
___________________________________
Michael C. Thomas, Secretary
<PAGE> 8
CERTIFICATE OF MERGER
I. SURVIVING ENTITY
A. The name of the entity surviving the merger is: Emergency
Professional Services, Inc.
B. Name change:
C. The surviving entity is a: Domestic (Ohio) corporation
II. Merging Entities
The name, type or entity, and state/country of incorporation or
organization, respectively, of each entity, other than the survivor, which is a
party to the merger are as follows:
EPS Merger Corporation Delaware Corporation
III. Merger Agreement on File
The name and mailing address of the person or entity from whom which
eligible persons may obtain a copy of the agreement of merger upon written
request:
Emergency Professional Services, Inc.
7123 Pearl Road, Suite 201
Middleburg Hts., Ohio 44130
IV. EFFECTIVE DATE OF MERGER
This merger is to be effective:
On ______________ (if a date is specified, the date must be a date on
or after the date of filing; the effective date of the merger cannot be earlier
than the date of filing; if no date is specified, the date of filing will be the
effective date of the merger).
V. MERGER AUTHORIZED
The laws of the state or country under which each constituent entity
exists, permits this merger.
This merger was adopted, approved and authorized by each of the
constituent entities in compliance with the laws of the state under which it is
organized, and the persons signing this certificate on behalf of each of the
constituent entities are duly authorized to do so.
VI. STATUTORY AGENT
The name and address of the surviving entity's statutory agent upon
whom any process, notice or demand may be served is:
Name Address
______________________ ____________________________________________________
(complete street address)
____________________________________________________
(city, village or township) (zip code)
(This item MUST be completed if the surviving entity is a foreign entity which
is not licensed, registered or otherwise authorized to conduct or transact
business in the State of Ohio)
ACCEPTANCE OF AGENT
The undersigned, named herein as the statutory agent for the above
referenced surviving entity, hereby acknowledges and accepts the appointment of
statutory agent for said entity.
____________________________________________________
Signature of Agent
(The acceptance of agent must be completed by domestic surviving entities if
through this merger the statutory agent for the surviving entity has changed,
or the named agent differs in any way from the name reflected on the Secretary
of State's records.)
VII. STATEMENT OF MERGER
Upon filing, or upon such later date as specified herein, the merging
entity/entities listed herein shall merge into the listed surviving entity.
VIII. AMENDMENTS
The Articles of incorporation, articles of organization or certificate
of limited partnership (strike the inapplicable terms) of the surviving
domestic entity herein, are amended as set forth in the attached "Exhibit A".
(Please note that any amendments to articles of incorporation,
articles of organization or to a certificate of limited partnership MUST be
attached if the surviving entity is a DOMESTIC corporation, limited liability
company, or limited partnership.)
IX. QUALIFICATION OR LICENSURE OF FOREIGN SURVIVING ENTITY
A. The listed surviving foreign corporation, limited liability company,
or limited partnership desires to transact business in Ohio as a foreign
corporation, foreign limited liability company, or foreign limited partnership,
and hereby appoints the following as its statutory agent upon whom process,
notice or demand against the entity may be served in the State of Ohio. The name
and complete address of the statutory agent is:
______________________ ____________________________________________________
(name) (street and number)
____________________________________________________, Ohio _________________
(city, village or township) (zip code)
The subject surviving foreign corporation, limited liability company or
limited partnership irrevocably consents to service of process on the statutory
agent listed above as long as the authority of the agent continues, and to
service of process upon the Secretary of State if the agent cannot be found, if
the corporation, limited liability company or limited partnership fails to
designate another agent when required to do so, or if the corporation's, limited
liability company's, or limited partnership's license or registration to do
business in Ohio expires or is cancelled.
B. The qualifying entity also states as follows: (complete only if
applicable)
1. FOREIGN QUALIFYING LIMITED LIABILITY COMPANY
(If the qualifying entity is a foreign limited liability company,
the following information must be completed)
a. The name of the limited liability company in its state of
organization/registration is ___________________________________
________________________________________________________________
b. The name under which the limited liability company desires to
transact business in Ohio is ___________________________________
c. The limited liability company was organized or registered on
_____________________________________ under the laws of the
month day year
state/country of _______________________________________________
d. The address to which interested persons may direct request for
copies of the articles of organization, operating agreement,
bylaws, or other charter documents of the company is:
________________________________________________________________
________________________________________________________________
2. FOREIGN QUALIFYING LIMITED PARTNERSHIP
(If the qualifying entity is foreign limited partnership, the
following information must be completed)
a. The name of limited partnership is _____________________________
________________________________________________________________
b. The limited partnership was formed on __________________________
month day year
under the laws of the state/country of _________________________
c. The address of the office of the limited partnership in its
state/country of organization is ______________________________
________________________________________________________________
d. The limited partnership's principal office address is __________
________________________________________________________________
e. The names and business or residence addresses of the GENERAL
partners of the partnership are as follows:
Name Address
________________________________________________________________
________________________________________________________________
________________________________________________________________
(If insufficient space to cover this item, please attach a
separate sheet listing the general partners and their respective
addresses)
f. The address of the office where a list of the names and business
or residence addresses of the limited partners and their
respective capital contributions is to be maintained is:
________________________________________________________________
________________________________________________________________
The limited partnership hereby certifies that it shall maintain
said records until the registration of the limited partnership
in Ohio is cancelled or withdrawn.
The undersigned, (illegible) entities have caused this certificate of
merger to be (illegible) duly authorized officers, partners and representatives
on the dates stated below.
Emergency Professional Services, Inc. EPS Merger Corporation
By: /s/ By: /s/ Harold O.
----------------------- -----------------------
Its: President Its: Vice President
Emergency Professional Services, Inc. EPS Merger Corporation
By: /s/ Michael Hatcher By: /s/
----------------------- -----------------------
Its: Secretary Its: Secretary
<PAGE> 9
CERTIFICATE TO AMEND THE
ARTICLES OF INCORPORATION
OF
EMERGENCY PROFESSIONAL SERVICES, INC.
The undersigned officer of Emergency Professional Services, Inc. (the
"Corporation"), does hereby certify that the following resolutions amending the
Articles of Incorporation of the Corporation were duly adopted in a writing
effective September 15, 1996, signed by the sole shareholder who would be
entitled to notice of a meeting held for such purpose.
WHEREAS, the Corporation has changed its corporate structure from a
professional corporation duly formed under Chapter 1785 of the Ohio
Revised Code to a for profit corporation organized according to the
provisions of Chapter 1701 of the Ohio Revised Code; and
WHEREAS, the Corporation desires to formally amend its Articles of
Incorporation to reflect the change in corporate structure; be it
therefor
RESOLVED, that the initial paragraph of the Articles of Incorporation
of the Corporation is hereby amended to read as follows:
"The undersigned, for purposes of forming a corporation for
profit in accordance with Chapter 1701 of the Ohio Revised
Code, does hereby state the following:"
RESOLVED FURTHER, that the President, Vice President, Secretary,
Treasurer, or other appropriate officers are authorized and directed to
certify adoption of the foregoing resolution, to file such certificate
with the Secretary of State, and to take all action necessary to effect
the foregoing amendment of the Articles of Incorporation.
Dated: 9/30, 1997 Emergency Professional Services, Inc.
By: /s/
___________________________
Its: president
-2-
<PAGE> 1
EXHIBIT 3.32
CODE OF REGULATIONS
OF
EMERGENCY PROFESSIONAL SERVICES, INC.
Adopted February 15, 1981
Amended June 22, 1987
ARTICLE I
Fiscal Year
The fiscal year of the Corporation shall commence on the first
day of February in each year and end on the last day of the following January,
or be such other period as the Board of Directors may designate by resolution
from time to time.
ARTICLE II
Shareholders
Section 1. Meeting of Shareholders.
(a) Annual Meeting. The annual meeting of the Shareholders of
this Corporation, for the election of Directors, the consideration of financial
statements and other reports, and the transaction of such other business as may
properly be brought before such meeting, shall be held at such date after the
annual financial statements of the Corporation have been prepared as the Board
of Directors shall determine from time to time. Upon due notice there may also
be considered and acted upon at an annual meeting any matter which could
properly be considered and acted upon at a special meeting, in which case and
for which purpose the annual meeting shall also be considered as, and shall be,
a special meeting. In the event that the annual meeting is not held or if
Directors are not elected thereat, a special meeting may be called and held for
that purpose. [1701.39, 1701.38(A)]
(b) Special Meeting. Special meetings of the Shareholders may
be held on any business day when called by any person or persons who may be
authorized by law to do so. Calls for special meetings shall specify the purpose
or purposes thereof, and no business shall be considered at any such meeting
other than that specified in the call therefor. [1701.40(A), 1701.41]
(c) Place of Meetings. Any meeting of Shareholders may be held
at such place within or without the State of Ohio as may be designated in the
Notice of said meeting. [1701.40(B)1]
(d) Notice of Meeting and Waiver of Notice.
(1) Notice. Written notice of the time, place and purposes of,
any meeting of Shareholders shall be given to each Shareholder entitled thereto
not less than seven (7) days nor
<PAGE> 2
more than sixty (60) days before the date fixed for the meeting and as
prescribed by law. Such notice shall be given either by personal delivery or
mailed to each Shareholder entitled to notice of or to vote at such meeting. If
such notice is mailed, it shall be directed, postage prepaid, to the
Shareholders at their respective addresses as they appear upon the records of
the Corporation, and notice shall be deemed to have been given on the day so
mailed. If any meeting is adjourned to another time or place, no notice as to
such adjourned meeting need be given other than by announcement at the meeting
at which such an adjournment is taken. No business shall be transacted at any
such adjourned meeting except as might have been lawfully transacted at the
meeting at which such adjournment was taken. (1701.41 (A), 1701.02)
(2) Notice to Joint Owners. All notices with respect to any
shares to which persons are entitled by joint or co-ownership may be given to
that one of such persons who is named first upon the books of this Corporation,
and notice so given shall be sufficient notice to all the holders of such
shares.
(3) Waiver. Notice of any meeting, however, may be waived in
writing by any Shareholder either before or after any meeting of Shareholders,
or by attendance at such meeting without protest prior to the commencement
thereof. (1701.42)
(e) Shareholders Entitled to Notice and to Vote. If a record
date shall not be fixed or the books of the Corporation shall not be closed
against transfers of shares pursuant to statutory authority, the record date for
the determination of Shareholders entitled to notice of or to vote at any
meeting of Shareholders shall be the close of business on the twentieth day
prior to the date of the meeting and only Shareholders of record at such record
date shall be entitled to notice of or to vote at such meeting. Such record date
shall continue to be the record date for all adjournments of such meeting unless
a new record date shall be fixed and notice thereof and of the date of the
adjourned meeting be given to all Shareholders entitled to notice in accordance
with the new record date so fixed. (1701.45 (A) (C) (E))
(f) Quorum. At any meeting of Shareholders, the holders of
shares entitling them to exercise a majority of the voting power of the
Corporation, present in person or by proxy, shall constitute a quorum for such
meeting; provided, however, that no action required by law, the Articles, or
these Regulations to be authorized or taken by the holders of a designated
proportion of the shares of the Corporation may be authorized or taken by a
lesser proportion. The Shareholders present in Person or by proxy, whether or
not a quorum be present, may adjourn the meeting from time to time without
notice other than by announcement at the meeting. (1701.51)
(g) Organization of Meetings:
(1) Presiding Officer. The Chairman of the Board, or in his
absence, the President, or in the absence of both of them, a Vice President of
the Corporation shall call all meetings of the Shareholders to order and shall
act as Chairman thereof. If all are absent, the Shareholders shall select a
Chairman.
-2-
<PAGE> 3
(2) Minutes. The Secretary of the Corporation, or, in his
absence, an Assistant Secretary, or, in the absence of both, a person appointed
by the Chairman of the meeting, shall act as Secretary of the meeting and shall
keep and make a record of the proceedings thereat.
(h) Order of Business. The order of business at all meetings
of the Shareholders, unless waived or otherwise determined by a vote of the
holder or holders of the majority of the number of shares entitled to vote
present it in person or represented by proxy, shall be as follows:
1. Call meeting to order.
2. Selection of Chairman and/or Secretary, if necessary.
3. Proof of notice of meeting and presentment of
affidavit thereof.
4. Roll call, including filing of proxies with
Secretary.
5. Upon appropriate demand, appointment of inspectors of
election. (1701.50)
6. Reading, correction and approval of previously
unapproved minutes.
7. Reports of officers and committees.
8. If annual meeting, or meeting called for that
purpose, election of Directors.
9. Unfinished business, if adjourned meeting.
10. Consideration in sequence of all other matters set
forth in the call for and written notice of the
meeting.
11. Adjournment.
(i) Voting. Except as provided by statute or in the Articles,
every Shareholder entitled to vote shall be entitled to cast one vote on each
proposal submitted to the meeting for each share held of record by him on the
record date for the determination of the Shareholders entitled to vote at the
meeting. At any meeting at which at which a quorum is present, all questions and
business which may come before the meeting shall be determined by a majority
of votes cast except when a greater proportion is required by law, the Articles,
or these Regulations. (1701.44 (A))
(j) Proxies. A person who is entitled to attend a
Shareholders' meeting, to vote thereat, or to execute consents, waivers and
releases, may be represented at such meeting or vote thereat, and execute
consents, waivers, and releases, and exercise any of his rights, by proxy or
proxies appointed by a writing signed by such person, or by his duly authorized
attorney, as provided by the laws of the State of Ohio. (1701.48)
-3-
<PAGE> 4
(k) List of Shareholders. At any meeting of Shareholders a
list of Shareholders, alphabetically arranged, showing the number and classes of
shares held by each on the record date applicable to such meeting shall be
produced on the request of any Shareholder. (1701.37 (B))
(l) Qualification. Shareholders must be licensed doctors of
medicine.
Section 2. Action of Shareholders Without a Meeting. Any
action which may be taken at a meeting of Shareholders may be taken without a
meeting if authorized by a writing or writings signed by all of the holders of
shares who would be entitled to notice of a meeting for such purpose, which
writing or writings shall be filed or entered upon the records of the
Corporation. (1701.54)
ARTICLE III
Directors
Section 1. General Powers.
The business, power and authority of this Corporation shall be
exercised, conducted and controlled by a Board of Directors, except where the
law, the Articles or these Regulations require action to be authorized or taken
by the Shareholders. (1701.59)
Section 2. Election, Number and Qualification of Directors.
(a) Election. The Directors shall be elected at the annual
meeting of Shareholders, or if not so elected, at a special meeting of
Shareholders called for that purpose. At any meeting of Shareholders at which
Directors are to be elected, only persons nominated as candidates shall be
eligible for election. (1701.39, 1701.55 (A))
(b) Number. The number of Directors shall be fixed at five (5)
persons.
(c) Qualification. Directors must be Shareholders of the
Corporation. (1701.56) (C))
(d) Tenure of Office. Two of the five directors (the "Class A
Directors") shall serve for a period of two years and three of the five
directors (the "Class B Directors") shall serve for a period of one year.
Notwithstanding the foregoing, each director shall hold office until his
successor is elected and qualified or until his earlier resignation, removal
from office, or death. A director shall be deemed to have been removed from
office if he is not reelected at a shareholder's meeting at which directors are
elected for the class of directors in which he has been serving.
Section 3. Term of Office of Directors.
-4-
<PAGE> 5
(a) Term. Each Director shall hold office until the next
annual meeting of the Shareholders and until his successor has been elected or
until his earlier resignation, removal from office, or death. Directors shall be
subject to removal as provided by statute or by other lawful procedures and
nothing herein shall be construed to prevent the removal of any or all Directors
in accordance therewith. (1701.57, 1701.58 (C))
(b) Resignation. A resignation from the Board of Directors
shall be deemed to take effective immediately upon its being received by any
incumbent corporate officer other than an officer who is also the resigning
Director, unless some other time is specified therein. (1701.58 (A))
(c) Vacancy. In the event of any vacancy in the Board of
Directors for any cause, the remaining Directors, though less than a majority of
the whole Board, may fill any such vacancy for the unexpired term. (1701.58 (D))
Section 4. Meetings of Directors.
(a) Regular Meetings. A regular meeting of the Board of
Directors shall be held immediately following the adjournment of the annual
meeting of the Shareholders or a special meeting of the Shareholders at which
Directors are elected. The holding of such Shareholders' meeting shall
constitute notice of such Directors' meeting and such meeting may be held
without further notice. Other regular meetings shall be held at such other times
and places as may be fixed by the Directors. (1701.61)
(b) Special Meetings. Special meetings of the Board of
Directors may be held at any time upon call of the Chairman of the Board, the
President, any Vice President, or any two Directors. (1701.61 (A))
(c) Place of Meeting. Any meeting of Directors may be held at
any place within or without the State of Ohio in person and/or through any
communications equipment if all persons participating in the meeting can hear
each other. (1701.61 (B))
(d) Notice of Meeting and Waiver of Notice. Notice of the time
and place of any regular or special meeting of the Board of Directors (other
than the regular meeting of Directors following the adjournment of the annual
meeting of the Shareholders or following any special meeting of the Shareholders
at which Directors are elected) shall be given to each Director by personal
delivery, telephone, mail, telegram or cablegram at least forty-eight (48) hours
before the meeting, which notice need not specify the purpose of the meeting.
Such notice, however, may be waived in writing by any Director either before or
after any such meeting, or by attendance at such meeting (including attendance
(presence) by means of participation through any communications equipment as
above provided) without protest prior to the commencement thereof. (1701.61
(B)(C), 1701.42)
Section 5. Quorum and Voting.
At any meeting of Directors, not less than one-half of the
whole authorized number of Directors is necessary to constitute a quorum for
such meeting, except that a majority of the remaining Directors in office
constitutes a quorum for filling a vacancy in the Board. At any meeting at which
-5-
<PAGE> 6
a quorum is present, all acts, questions and business which may come before the
meeting shall be determined by a majority of votes cast by the Directors present
at such meeting, unless the vote of a greater number is required by the
Articles, Regulations or By-Laws, (1701.62)
Section 6. Committees.
(a) Appointment. The Board of Directors may from time to time
appoint certain of its members (but in no event less than three) to act as a
committee or committees in the intervals between meetings of the Board and any
delegate to such committee or committees powers to be exercised under the
control and direction of the Board. Each such committee and each member thereof
shall serve at the pleasure of the Board.
(b) Executive Committee. In particular, the Board of Directors
may create from its membership and define the powers and duties of an Executive
Committee. During the intervals between meetings of the Board of Directors the
Executive Committee shall possess and may exercise all of the powers of the
Board of Directors in the management and control of the business of the
Corporation to the extent permitted by law. All action taken by the Executive
Committee shall be reported to the Board of Directors at its first meeting
thereafter.
(c) Committee Action. Unless otherwise provided by the Board
of Directors, a majority of the members of any committee appointed by the Board
of Directors pursuant to this Section shall constitute a quorum at any meeting
thereof and the act of a majority of the members present at a meeting at which a
quorum is present shall be the act of such committee. Action may be taken by any
such committee without a meeting by a writing signed by all its members. Any
such committee shall prescribe its own rules for calling and holding meetings
and its method of procedure, subject to any rules prescribed by the Board of
Directors, and shall keep a written record of all action taken by it. (1701.63)
Section 7. Action of Directors Without a Meeting.
Any action which may be taken at a meeting of Directors may be
taken without a meeting if authorized by a writing or writings signed by all the
Directors, which writing or writings shall be filed or entered upon the records
of the Corporation. (1701.54)
Section 8. Compensation of Directors.
The Board of Directors may allow compensation for attendance
at meetings or for any special services, may allow compensation to members of
any committee, and may reimburse any Director for his expenses in connection
with attending any Board or committee meeting. (1701.60)
Section 9. Attendance at Meetings of Persons Who Are Not
Directors.
Unless waived by a majority of Directors in attendance, not
less than twenty-four (24) hours before any regular or special meeting of the
Board of Directors any Director who desires the presence at such meeting of not
more than one person who is not a Director shall so notify all other Directors,
request the presence of such person at the meeting, and state the reason in
writing. Such
-6-
<PAGE> 7
person will not be permitted to attend the Directors' meeting unless a majority
of the Directors in attendance vote to admit such person to the meeting. Such
vote shall constitute the first order of business for any such meeting of the
Board of Directors. Such right to attend, whether granted by waiver or vote, may
be revoked at any time during any such meeting by the vote of a majority of the
Directors in attendance.
ARTICLE IV
Officers
Section 1. General Provisions.
The Board of Directors shall elect a President, a Secretary
and a Treasurer, and may elect a Chairman of the Board, one or more
Vice-Presidents, and such other officers and assistant officers as the Board may
from time to time deem necessary. The Chairman of the Board, if any, shall be a
Director, but no one of the other officers need be a Director. Any two or more
offices may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity if such
instrument is required to be executed, acknowledged or verified by two or more
officers. (1701.64 (A))
Section 2. Powers and Duties.
All officers, as between themselves and the Corporation, shall
respectively have such authority and perform such duties as are customarily
incident to their respective offices, and as may be specified from time to time
by the Board of Directors, regardless of whether such authority and duties are
customarily incident to such office. In the absence of any officer of the
Corporation, or for any other reason the Board of Directors may deem sufficient,
the Board of Directors may delegate for the time being, the powers or duties of
such officer, or any of them, to any other officer or to any Director. The Board
of Directors may from time to time delegate to any officer authority to appoint
and remove subordinate officers and to prescribe their authority and duties.
Since the lawful purposes of this Corporation include the acquisition and
ownership of real property, personal property and property in the nature of
patents, copyrights, and trademarks and the protection of the Corporation's
property rights in its patents, copyrights and trademarks, each of the officers
of this Corporation is empowered to execute any power of attorney necessary to
protect, secure, or vest the Corporation's interest in and to real property,
personal property and its property protectable by patents, trademarks and
copyright registration and to secure such patents, copyrights and trademark
registrations. (1701.64 (B) (1))
Section 3. Term of Office and Removal.
(a) Term. Each officer of the corporation shall hold office
during the pleasure of the Board of Directors, and unless sooner removed by the
Board of Directors, until the meeting of the Board of Directors following the
date of their election and until his successor is elected and qualified.
(1701.64(A))
-7-
<PAGE> 8
(b) Removal. The Board of Directors may remove any officer at
any time, with or without cause by the affirmative vote of a majority of
Directors in office. (1701.64(B)(2))
Section 4. Compensation of Officers.
Unless compensation is otherwise determined by a majority of
the Directors at a regular or special meeting of the Board of Directors, or
unless such determination is delegated by the Board of Directors to another
officer or officers, the President of the Corporation from time to time shall
determine the compensation to be paid to all officers and other employees for
services rendered to the Corporation. (1701.60)
ARTICLE V
Indemnification of Directors and Officers
(a) Right of Indemnification. The Corporation shall indemnify
any Directors officer, employee or other person to the fullest extent provided
by, or permissible under, Section 1701.13(E), Ohio Revised Code; and the
Corporation is hereby specifically authorized to take any and all further action
to effectuate any indemnification of any person which any Ohio corporation may
have power to take, [permissible under Section 1701.13(E)(6) or under any other
statute or under general law] by any vote of the Shareholders, vote of
disinterested Directors, by any Agreement, or otherwise. This Section of the
Code of Regulations of the Corporation shall be interpreted in all respects to
expand such power to indemnify to the maximum extent permissible to any Ohio
Corporation with regard to the particular facts of each case and act in any way
to limit any statutory or other power to indemnify or right of any individual to
indemnification.
(b) Insurance for Indemnification. The Corporation may
purchase and maintain insurance for protection of the Corporation and for
protection of any Director, officer, employee and/or any other person for whose
protection, and to the fullest extent, such insurance may be purchased and
maintained under Section 1701.13(E)(7), Ohio Revised Code, or otherwise. Such
policy or policies of insurance may provide such coverage and be upon such terms
and conditions as shall be authorized or approved from time to time by the Board
of Directors or the Shareholders of the Corporation.
ARTICLE VI
Securities Held by the Corporation
Section 1. Transfer of Securities Owned by the Corporation.
All endorsements, assignments, transfers, stock powers, share
powers or other instruments of transfer of securities standing in the name of
the Corporation shall be executed for and in the name of the Corporation by the
President, by May 12, 1999 Vice President, by the Secretary or by the Treasurer
or by any other person or persons as may be thereunto authorized by the Board of
Directors.
-8-
<PAGE> 9
Section 2. Voting Securities Held by the Corporation.
The Chairman of the Board, President, any Vice President,
Secretary or Treasurer, in person or by another person thereunto authorized by
the Board of Directors, in person or by proxy or proxies appointed by appointed
by him, shall have full power and authority on behalf of the Corporation to
vote, act and consent with respect to any securities issued by other
corporations which the Corporation may own. (1701.47 (A))
ARTICLE VII
Share Certificates
Section 1. Transfer and Registration of Certificates.
The Board of Directors shall have authority to make such rules
and regulations, not inconsistent with law the Articles or these Regulations, as
it deems expedient concerning the issuance, transfer and registration of
certificates for shares, and the shares represented thereby and may appoint
transfer agents and registrars thereof. (1701.14 (A), 1701.26)
Section 2. Substituted Certificates.
Any person claiming that a certificate for shares has been
lost, stolen or destroyed, shall make an affidavit or affirmation of that fact
and, if required, shall give the Corporation (and its registrar or registrars
and its transfer agent or agents, if any a bond of indemnity, in such form and
with one or more sureties satisfactory to the Board, and, if required by the
Board of Directors, shall advertise the same in such manner as the Board of
Directors may require, whereupon a new certificate may be executed and delivered
of the same tenor and for the same number of shares as the one alleged to have
been lost, stolen or destroyed. (1701.27, 1308.35)
ARTICLE VIII
Seal
The Directors may adopt a seal for the Corporation which shall
be in such form and of such style as is determined by the Directors. Failure to
affix any such corporate seal shall not affect the validity of any instrument.
(1701.13(B))
ARTICLE IX
Consistency with Articles of Incorporation
If any provision of these Regulations shall be inconsistent
with the Corporation's Articles of Incorporation (and as they may be amended
from time to time), the Articles of Incorporation (as so amended at the time)
shall govern.
ARTICLE X
-9-
<PAGE> 10
Section Headings
The headings contained in this Code of Regulations are for
reference purposes only and shall not be construed to be part of and/or shall
not affect in any way the meaning or interpretation of this Code of Regulations.
ARTICLE XI
Amendments
This Code of Regulations of the Corporation (and as it may be
amended from time to time) may be amended or added to by the affirmative vote or
the written consent of the Shareholders of record entitled to exercise a
majority of the voting power on such proposal; provided, however, that if an
amendment or addition is adopted by written consent without a meeting of the
Shareholders, it shall be the duty of the Secretary to enter the amendment or
addition in the records of the Corporation, and to mail a copy of such amendment
or addition to each Shareholder of record who would be entitled to vote thereon
and did not participate in the adoption thereof. (1701.11)
-10-
<PAGE> 1
EXHIBIT 3.33
DECEMBER 1, 1972 VOLUME C-6, PAGE 1150
CHARTER OF
MADISON EMERGENCY GROUP, P.C.
The undersigned natural person having capacity to contract and acting
as the incorporator of a Tennessee Professional Corporation organized under the
Tennessee Professional Corporation Act, adopts the following charter for such
corporation:
ARTICLE ONE: The name of the corporation is MADISON EMERGENCY GROUP,
P.C.
ARTICLE TWO: Term of Existence. This Corporation is to exist
perpetually unless dissolved in the manner prescribed by law.
ARTICLE THREE: The address of the principal office of the Corporation
is:
Madison Emergency Group, P.C.
Box 3
Nashville Memorial Hospital
612 West Due West Avenue
Madison, Tennessee 37115 in the county of Davidson.
ARTICLE FOUR: The Professional Corporation is for profit, and is formed
to practice the profession of medicine, as set forth in Article Five.
ARTICLE FIVE: The Professional Corporation elects to be governed by the
provisions of the Tennessee Corporation Act. The general nature of the business
to be transacted by this Professional Corporation is:
The practice of medicine by a graduate physician or physicians licensed
to practice in the State of Tennessee, the furnishing of related clinical
services and the lease and purchase of such real and personal property as is
necessary for the rendering of its practice.
The contract of debts, borrow money, issue and sell or pledge bonds,
notes or other evidences of indebtedness and to execute such mortgages,
transfers of corporate property or other instruments to secure the payment of
Corporation indebtedness as required.
The investment of funds in real estate, mortgages, stocks and bonds, or
any other type of investments, but only if such investments further the
principal business of the Corporation.
To purchase by the Corporation, the assets of, merger or consolidation
with any other professional corporation engaged in the same character of
business.
The redemption, purchase, retention, sale or transfer of its capital
stock.
The creation of employee benefit plans and trusts incidental thereto.
<PAGE> 2
ARTICLE SIX: The maximum number of shares which the Corporation shall
have the authority to issue is One Thousand (1,000) shares with no par value.
ARTICLE SEVEN: The Professional Corporation will not commence business
until consideration of at least One Thousand ($1,000.00) Dollars has been
received for the issuance of shares.
ARTICLE EIGHT: The Professional Corporation shall be governed by a
Board of Directors the number of which is to be fixed in the By-Laws adopted for
the Professional Corporation. If the By-Laws allow the Board to change the
number of Directors, it shall be done by a majority vote by such Board. However,
no decrease in the number of Directors shall shorten the term of any incumbent
Director. The sole member or a majority of the members of the Board shall be
licensed to practice medicine in the State of Tennessee. However, if the Board
includes persons not so licensed, the By-Laws must direct the Board to create a
standing committee of licensed members and vest the responsibility for decisions
relating wholly to professional considerations in such committee.
ARTICLE NINE: Ownership of capital shares. No shares of this
Professional Corporation shall be issued to, held by or transferred to anyone
other than an individual who is a graduate physician licensed to practice in the
State of Tennessee, and who, unless disabled, is actively engaged in such
practice, and each certificate shall be appropriately endorsed disclosing this
restriction.
ARTICLE TEN: Amendment. This Charter may be amended in the manner
provided by Section 48-302 of the Tennessee General Corporation Act.
ARTICLE ELEVEN: By-Laws. The Board of Directors are hereby given the
power to adopt the By-Laws necessary to conduct orderly and proper functions of
the Professional Corporation as provided by law.
ARTICLE TWELVE: In the event a shareholder dies or retires, his shares
in the Professional Corporation shall be either redeemed or cancelled by the
Professional Corporation or transferred to a person or persons authorized to
hold the shares within six (6) months after the date of death or retirement, and
the shares held by a shareholder who becomes legally disqualified from
practicing the profession for which the Professional Corporation is organized
shall be so redeemed, cancelled or transferred within ninety (90) days after the
disqualification becomes final. The Board of Directors are directed to adopt
By-Laws providing the procedure for the
-2-
<PAGE> 3
redemption or transfer of such shares in the event a shareholder becomes
disqualified, retires or dies.
I, the undersigned incorporator, apply to the State of Tennessee by
virtue of the laws of such state for filing of the foregoing Charter, with the
Secretary of State, this 1st day of December, 1972.
/s/ H. Stennis Little
H. Stennis Little, Jr.
-3-
<PAGE> 4
ARTICLES OF AMENDMENT
TO THE CHARTER
OF
MADISON EMERGENCY GROUP, PROFESSIONAL CORPORATION
Pursuant to the provisions of Section 48-303 of the Tennessee
General Corporation Act, the undersigned corporation adopts the following
Articles of Amendment to its Charter:
1. The name of the corporation is Madison Emergency
Group, Professional Corporation.
2. The Amendment adopted is:
Article One of the Charter
is deleted and the following is inserted:
ARTICLE ONE: The name of
the corporation is MADISON
EMERGENCY PHYSICIANS, P.C.
3. The Amendment was duly adopted by the unanimous
written consent of all persons entitled to vote on the issue of amending the
Charter.
4. The Amendment will become effective when these
Articles are filed by the Secretary of State.
Dated this 27th day of December, 1979.
MADISON EMERGENCY GROUP, P.C.
BY: /s/ Hill
______________________________
PRESIDENT
-1-
<PAGE> 5
ARTICLES OF AMENDMENT
TO THE CHARTER OF
MADISON EMERGENCY PHYSICIANS, P.C.
Pursuant to Section 48-20-106, T.C.A., the following is hereby
submitted:
1. The name of the Corporation is Madison Emergency
Physicians, P.C.
2. The text of the amendment adopted is as follows:
Article One of the Charter is hereby deleted in its entirety. In its
place, the following is hereby inserted:
The name of the Corporation is Emergicare Management,
Incorporated.
3. The amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
4. The date of the above amendment's adoption was
________________.
5. The amendment was duly adopted by action of the
shareholders.
MADISON EMERGENCY PHYSICIANS, P.C.
BY:_________________________________
Printed Name: Warren T. Hill
Title: President
-5-
<PAGE> 6
APPLICATION FOR REGISTRATION OF ASSUMED CORPORATE NAME
Pursuant to the provisions of Section 48-14-101(d) of the Tennessee
Business Corporation Act or Section 48-54-101(d) of the Tennessee Nonprofit
Corporation Act, the undersigned corporation hereby submits this application:
1. The true name of the corporation is Emergicare Management,
Incorporated.
2 . The state or country of incorporation is Tennessee.
3. The corporation intends to transact business in Tennessee
under an assumed corporate name.
4. The corporation is for profit.
[NOTE: Please strike the sentence which does not apply to this corporation.]
5. The assumed corporate name the corporation proposes to use is
Emergicare. [NOTE: The assumed corporate name must meet the requirements of
Section 48-14-101 of the Tennessee Business Corporation Act or Section 48-54-101
of the Tennessee Nonprofit Corporation Act.]
December 28, 1989
- ----------------------------- Emergicare Management, Incorporated
Signature Date Name of Corporation
President /s/ Warren T. Hill
- ----------------------------- -------------------------------------
Signer's Capacity Signature
Warren T. Hill
-------------------------------------
Name (typed or printed)
-1-
<PAGE> 7
CHANGE OF REGISTERED AGENT/OFFICE (BY CORPORATION)
Pursuant to the provisions of Section 48-15-102 or 48-25-108 of the
Tennessee Business Corporation Act or Section 48-65-102 or 48-65-108 of the
Tennessee Nonprofit Corporation Act, the undersigned corporation hereby submits
this application:
1. The name of the corporation is Emergicare Management,
Incorporated.
2. The street address of its current registered office is 211
Printers Alley Building, Nashville, Tennessee 37201.
3. If the current registered office is to be changed, the street
address of the new registered office, the zip code of such office, and the
county in which said office is located is 223 Madison Street, Madison, Davidson
County, Tennessee 37115.
4. The name of the current registered agent is Casey Moreland.
5. If the current registered agent is to be changed, the name of
the new registered agent is Warren T. Hill.
6. After the change(s), the street addresses of the registered
office and the business office of the registered agent will be identical.
December 28, 1989 Emergicare Management, Incorporated
- ---------------------------- -----------------------------------
Signature Date Name of Corporation
President /s/ Warren T. Hill
- ---------------------------- -----------------------------------
Signer's Capacity Signature
Warren T. Hill
-----------------------------------
Name (typed or printed)
-1-
<PAGE> 8
AMENDED AND RESTATED CHARTER
OF
EMERGICARE MANAGEMENT, INCORPORATED
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-20-107 of the Tennessee
Business Corporation Act, as amended, the undersigned corporation adopts the
following amended and restated charter:
A. The name of the corporation is Emergicare Management, Incorporated. The
corporation is for profit.
B. The text of the charter of the corporation is restated as follows:
1. The name of the corporation is Emergicare Management,
Incorporated.
2. The street address, zip code and county of the registered
agent of the corporation is 1716 Clinch Avenue, Knoxville,
Knox County, Tennessee 37916.
3. The name of the registered agent of the corporation is Dale
Amburn.
4. The street address and zip code of the principal office of the
corporation is 1900 Winston Road, Third Floor, Knoxville,
Tennessee 37919.
5. The corporation is for profit.
6. The maximum number of shares which the corporation shall have
the authority to issue shall be 1,000 shares of common stock,
having no par value.
7. The corporation is organized under the Tennessee Business
Corporation Act and is not subject to the provisions of the
Tennessee Professional Corporation Act.
C. The corporation certifies that the restatement contains an amendment to
the charter of the corporation requiring shareholder approval.
D. The corporation further certifies that the restatement was duly adopted
by the shareholders and the board of directors of the corporation.
-1-
<PAGE> 9
E. This amended and restated charter is to be effective upon filing by the
Secretary of State.
DATED: February 28, 1995
EMERGICARE MANAGEMENT,
INCORPORATED
/s/ Warren T. Hill
-------------------
By: Warren T. Hill M.D.
Capacity: President
-2-
<PAGE> 1
B Y - L A W S
OF
MADISON EMERGENCY GROUP, P.C.
Article I
MEETING OF STOCKHOLDERS
Sec. 1. ANNUAL MEETINGS. The annual meeting of the stockholders shall
be held at the principal office of the Corporation on the first Thursday
following the 10th of September of each year at 6:00 p.m. on that day. If the
day so designated falls on a legal holiday, then the meeting shall be held upon
the first secular day thereafter. The Secretary shall serve personally, or send
through the post office at least ten days before such meeting, a notice thereof,
addressed to each stockholder at his last known post office address, and publish
notice thereof as required by law; but at any meeting at which all stockholders
shall be present, or of which all stockholders not present have waived notice in
writing, the giving of notice as above required may be dispensed with.
Sec. 2. QUORUM. At all meetings of stockholders except where it is
otherwise provided by law, it shall be necessary that stockholders representing
in person two-thirds of the capital stock shall be present to constitute a
quorum.
Sec. 3. SPECIAL MEETINGS. Special meetings of stockholders other than
those regulated by statute may be called at any time by one Director upon ten
(10) days' notice to each stockholder of record, such notice to contain a
statement of the business to be transacted at such a meeting and to be served
personally or sent through the post office, addressed to each of such
stockholders of record at his last known post office address; but at any meeting
at which all
-1-
<PAGE> 2
stockholders shall be present or of which stockholders not present have waived
notice in writing, the giving of notice as above-described may be dispensed
with. The Board of Directors shall also, in like manner, call a special meeting
of stockholders for the purpose of a transfer of corporate stock whenever so
requested in writing by any one stockholder of the Corporation. No business
other than that specified in the call for the meeting shall be transacted at any
special meeting of the stockholders.
Sec. 4. VOTING. At all meetings of stockholders, all questions (the
manner of deciding which is not specifically regulated by statute) shall be
determined by a majority vote of the stockholders present in person; provided,
however, that any qualified voter may demand a stock vote, in which case each
stockholder present in person shall be entitled to cast one vote for each share
of stock owned by him. All voting shall be viva voce except that a stock vote
shall be by ballot, each of which shall state the name of the stockholder voting
and the number of shares owned by him. The casting of all votes at special
meetings of stockholders shall be governed by the provision of the Corporation
Laws of this state.
Sec. 5. ORDER OF BUSINESS. The order of business of all meetings of the
stockholders shall be as follows:
1. Roll call.
2. Proof of notice of meeting or waiver of notice.
3. Reading of minutes of preceding meeting.
4. Reports of officers.
5. Reports of committees.
6. Election of inspectors of election.
7. Election of Directors.
-2-
<PAGE> 3
8. Unfinished business.
9. Redemption value of capital stock.
10. New Business.
Article II
DIRECTORS
Sec. 1. NUMBER. The affairs and business of the Corporation shall be
managed by a Board of three Directors, the majority of which shall be Doctors of
Medicine, and all of such Directors shall be residents of the State of Tennessee
and citizens of the United States.
Sec. 2. HOW ELECTED. At the annual meeting of stockholders, the three
persons receiving a plurality of the votes cast shall be Directors and shall
constitute the Board of Directors for the ensuing year.
Sec. 3. TERM OF OFFICE. The term of office of each of the Directors
shall be one year, and thereafter until his successor has been elected.
Sec. 4. DUTIES OF DIRECTORS. The Board of Directors shall have the
control and general management of the affairs and business of the Corporation.
Such Directors shall in all cases act as a Board, regularly convened, by a
majority, and they may adopt such rules and regulations for the conduct of their
meetings and the management of the Corporation, as they may deem proper, not
inconsistent with these By-Laws and the laws of the State of Tennessee.
Sec. 5. DIRECTORS' MEETING. Regular meetings of the Board of Directors
shall be held immediately following the annual meeting of the stockholders, and
on the first Thursday of each month at 6:00 p.m. on that day. If the day so
designated falls upon a legal holiday, then the meeting shall be held upon the
first secular day thereafter. Special meetings of the Board of
-3-
<PAGE> 4
Directors may be called by the President at any time and shall be called by the
President or the Secretary upon the written request of one Director.
See. 6. NOTICE OF MEETINGS. Notice of meetings, other than the regular
annual meeting, shall be given by service upon each Director in person or by
mailing to him at his last known post office address, at least ten (10) days
before the date therein designated for such meeting, including the day of
mailing, of a written or printed notice thereof specifying the time and place of
such meeting and the business to be brought before the meeting and no business
other than the business specified in such notice shall be transacted at any
special meeting. At any meeting at which every member of the Board of Directors
shall be present although held without notice, any business may be transacted
which would have been transacted if the meeting had been duly called.
Sec. 7. QUORUM. At any meeting of the Board of Directors a majority of
the Board shall constitute a quorum for the transaction of business; but in the
event of a quorum not being pre sent, a less number may adjourn the meeting to
some future time, not more than ten (10) days later.
Sec. 8. VOTING. At all meetings of the Board of Directors, each
Director is to have one vote, irrespective of the number of shares of stock that
he may hold.
Sec. 9. VACANCIES. Whenever any vacancy shall occur in the Board of
Directors by death, resignation, removal or otherwise, the same shall be filled
without undue delay by a majority vote by ballot of the remaining members of the
Board at a special meeting which shall be called for that purpose. Such election
shall be held within sixty (60) days after the occurrence of such vacancy. The
person so chosen shall hold office until the next annual meeting or until his
successor shall have been chosen at a special meeting of the stockholders.
-4-
<PAGE> 5
Sec. 10. REMOVAL OF DIRECTORS. Any one or more of the Directors may be
removed either with or without cause at any time by a vote of the stockholders
holding two-thirds of the stock at any special meeting called for the purpose or
at the annual meeting.
Sec. 11. INCLUSION OF NON-MEDICAL PERSONNEL ON BOARD. If the Board of
Directors includes persons that are not licensed to practice medicine in the
State of Tennessee, the Board must create a standing committee of licensed
members and vest the responsibility for decisions relating wholly to
professional consideration in such committee.
Article III
OFFICERS
Sec. 1. NUMBER. The officers of this Corporation shall be:
1. President
2. Vice-President
3. Secretary
4. Treasurer
Sec. 2. ELECTION. All officers of the Corporation shall be elected
annually by the Board of Directors at its meeting held immediately after the
meeting of stockholders and shall hold office for the term of one year or until
their successors are duly elected.
Sec. 3. DUTIES OF OFFICERS. The duties and powers of the officers of
the Corporation shall be as follows:
PRESIDENT
The President shall preside at all meetings of the Board of Directors
and stockholders.
He shall present at each meeting of the stockholders and Directors a
report of the condition of the business of the Corporation.
-5-
<PAGE> 6
He shall cause to be called regular and special meetings of the
stockholders and Directors in accordance with these By-Laws.
He shall appoint and remove, employ and discharge, and fix the
compensation of all servants, agents, employees and clerks of the Corporation
subject to the approval of the Board of Directors.
He shall sign and make all contracts and agreements in the name of the
Corporation and see that they are properly carried out.
He shall see that the books, reports, statements and certificates
required by the statutes are properly kept, made and filed according to law.
He shall sign all certificates of stock, notes, drafts or bills or
exchange, warrants or other orders for the payment of money duly drawn by the
Treasurer.
He shall enforce these By-Laws and perform all the duties incidental to
the position and office and which are required by law.
VICE-PRESIDENT
During the absence and inability of the President to render and perform
his duties or exercise his powers as set forth in these By-Laws or in the acts
under which this Corporation is organized, the same shall be performed and
exercised by the Vice-President; and when so acting, he shall have all the
powers and be subject to all responsibilities hereby given to or imposed upon
such President.
SECRETARY
The Secretary shall keep the minutes of the meetings of the Board of
Directors and of the stockholders in appropriate books.
He shall give and serve all notices of the Corporation.
-6-
<PAGE> 7
He shall be custodian of the records and of the seal, and affix the
latter when required.
He shall keep the stock and transfer books in the manner prescribed by
law so as to show at all times the amount of capital stock, the manner and the
time the same was paid in, the names of the owners thereof, alphabetically
arranged, their respective places of residence, their post office addresses, the
number of shares owned by each, the time at which each person became such owner
and the amount paid thereon and keep such stock and transfer books open daily
during business hours at the office of the Corporation, subject to the
inspection of any stockholder of the Corporation, and permit such stockholder to
make extracts from said books to the extent and as prescribed by law.
He shall sign all certificates of stock.
He shall present to the Board of Directors at their stated meetings all
communications addressed to him officially by the President or any officer or
shareholder of the Corporation.
He shall attend to all correspondence and perform all the duties
incident to the office of Secretary.
TREASURER
The Treasurer shall have the care and custody of and be responsible for
all the funds and securities of the Corporation and deposit all such funds in
the name of the Corporation in such bank or banks, trust company or trust
companies or safe deposit vaults as the Board of Directors may designate.
He shall sign, make and endorse in the name of the Corporation all
checks, drafts, warrants and orders for the payment of money and pay out and
dispose of same and receipt therefore, under the direction of the President or
the Board of Directors.
-7-
<PAGE> 8
He shall exhibit at all reasonable times his books and accounts to any
Director or stockholder of the Corporation upon application at the office of the
Corporation during business hours.
He shall render a statement at each regular meeting of the Board of
Directors and at such other times as shall be required of him and a full
financial report at the annual meeting of the stockholders.
He shall keep at the office of the Corporation correct books of account
of all its business and transactions and such other books of account as the
Board of Directors may require.
He shall do and perform all duties appertaining to the office of
Treasurer.
Sec. 4. VACANCIES, HOW FILLED. All vacancies in any office shall be
filled by the Board of Directors without undue delay at its regular meeting or
at a meeting specially called for that purpose.
Sec. 5. COMPENSATION OF OFFICERS. The officers shall receive such
salary or compensation as may be determined by the Board of Directors.
Sec. 6. REMOVAL OF OFFICERS. The Board of Directors may remove any
officer by a majority vote at any time, with or without cause.
Sec. 7. INCLUSION OF NON-MEDICAL PERSONNEL AS OFFICERS. If persons that
are not licensed to practice medicine in the State of Tennessee serve as
officers, the Board of Directors must appoint a standing committee of licensed
members and vest the responsibility for decisions relating wholly to
professional consideration in such committee.
Article IV
Sec. 1. SEAL. The seal of the Corporation shall be as follows:
-8-
<PAGE> 9
Article V
CERTIFICATES OF STOCK
Sec. 1. DESCRIPTION OF STOCK CERTIFICATES. The certificates of stock
shall be numbered and registered in the order in which they are issued. They
shall be bound in a book and shall be issued in consecutive order therefrom and
in the margin thereof shall be entered the name of the person owning the shares
therein represented with the number of shares and the date thereof. Such
certificates shall exhibit the holder's name and the number of shares. They
shall be signed by the President or the Vice-President and countersigned by the
Secretary or the Treasurer and sealed with the seal of the Corporation.
Sec. 2. TRANSFER OF STOCK. The stock of the Corporation shall he
assigned and transferable on the books of the Corporation only by the person in
whose name it appears on said books or his legal representatives. In case of
transfer by attorney, the power of attorney, duly executed and acknowledged,
shall be deposited with the Secretary. In all cases of transfer, the former
certificates must be surrendered up and cancelled before a new certificate can
be issued. No transfer shall be made upon the books of the Corporation within
ten (10) days preceding the next annual meeting of the stockholders.
Sec. 3. SALE OF STOCK TO OUTSIDERS CONDITIONED ON OFFER FIRST TO OTHER
STOCKHOLDERS. No stock in this Corporation shall be issued to anyone other than
an individual who is a graduate physician licensed to practice in the State of
Tennessee.
No stockholders shall transfer or encumber any part of his stock in the
Corporation except under the following conditions:
1. Restriction during life. No stockholder shall transfer or encumber
his shares of capital stock of the Corporation to any other graduate physician
licensed to practice in the State
-9-
<PAGE> 10
of Tennessee without the unanimous consent of all other stockholders at a
stockholders meeting called specifically for that purpose.
a. If such consent is not granted by all other stockholders, the
Corporation shall purchase all the stock of the stockholder.
b. The purchase price shall be as set forth in Sec. 3 (4) hereof.
c. The closing of such sale shall occur fifteen (15) days after
said meeting and the purchase price shall be paid by the delivery of twelve (12)
promissory notes of the Corporation, each for one-twelfth (1/12) of the purchase
price, the first note payable one month after the closing and remaining notes
monthly thereafter. Each note shall bear interest at the rate of five (5%) per
cent per annum from the date of closing and provide for prepayment without
penalty; a default of payment in any note shall cause all remaining notes to
become due and payable forthwith.
2. Purchase upon death. Upon the death of a stockholder (hereinafter
referred to as the decedent), all shares of the capital stock of the Corporation
owned by him and to which he or his personal representatives shall be entitled
shall be sold and purchased as herein provided.
a. Obligation of Corporation to purchase. The Corporation
shall purchase from the decedent's personal representatives and the decedent's
personal representatives shall sell to the Corporation all of the shares of
capital stock of the Corporation owned by the decedent and to which the decedent
or his personal representatives shall be entitled, at the price set forth in
Sec. 3 (4) hereof.
b. Closing. The closing of such purchase and sale shall take
place at the office of the Corporation at a date designated by the Corporation,
which shall not be more than
-10-
<PAGE> 11
ninety (90) days following the date of the qualification of the personal
representatives and not less than the (10) days following such date.
c. Insurance. If the Corporation shall receive any proceeds of
any policy on the life of a decedent, such proceeds shall be paid by the
Corporation to the decedent's personal representatives to the extent of the
purchase price of the decedent's stock, such payment to be deemed made on
account of such purchase price. Payment thereof shall be deferred until the
expiration of ninety (90) days after the decedent's death.
d. Balance of purchase price. The balance of the purchase
price remaining after credit for any such insurance proceeds shall be payable in
twelve (12) equal installments, the first such installment payable one month
after the closing, and the remaining installments successively monthly
thereafter. Each installment shall be represented by a promissory note of the
Corporation delivered to the personal representatives, bearing interest at the
rate of five (5%) per cent per annum from the date of closing and containing the
stipulations regarding prepayment and default described in Sec. 3 (1) c.
e. Insufficient corporate surplus. If the Corporation shall
not have sufficient surplus to permit it lawfully to purchase all of such shares
of capital stock, the decedent's personal representatives and the surviving
stockholders shall promptly take such measures to vote their respective holdings
of the shares of capital stock to reduce the capital of the Corporation or to
take such other steps as may be appropriate or necessary in order to enable the
Corporation to lawfully purchase and pay for all the decedent's shares of
capital stock, including, by way of illustration and not by way of limitation,
an up-to-date appraisal of the assets of the Corporation. If the Corporation
shall, nevertheless, be unable or refuse to purchase all of the decedent's
shares of capital stock, the obligation of the Corporation with respect to the
shares
-11-
<PAGE> 12
which the Corporation shall be unable or refuse to purchase shall be deemed
assumed by the surviving stockholders.
f. Death of all stockholders within ninety (90) days. The
provisions of this Sec. 3 (2) shall be of no effect if all the stockholders
shall die within ninety (90) days of each other.
3. Purchase upon retirement or disqualification. If a stockholder
becomes disqualified to practice medicine in the State of Tennessee, or if a
stockholder ceases to engage in the active practice of medicine as an Employee
of the Corporation due to disability (as defined in the employment contract with
the Employee) termination of employment, retirement, or any other reason, all of
the shares of the capital stock of the Corporation owned by him shall be sold
and purchased as herein provided.
a. Obligation of Corporation to purchase. The Corporation
shall purchase from the stockholder and the stockholder shall sell to the
Corporation all of the shares of capital stock of the Corporation owned by the
disqualified or retiring stockholder and to which the disqualified or retiring
stockholder shall be entitled, at the price set forth in Sec. 3 (4) hereof.
b. Closing. The closing of such purchase and sale shall take
place at 'the office of the Corporation at a date designated by the Corporation,
which shall not be more than sixty (60) days following the date of
disqualification or retirement and not less than ten (10) days following such
date.
c. Balance of purchase price. The purchase price shall he
payable in twelve (12) equal installments, the first remaining installments
successively monthly thereafter. Each installment shall be represented by a
promissory note of the Corporation delivered to the stockholders, bearing
interest at the rate of five (5%) per cent per annum from the date of the
-12-
<PAGE> 13
closing and containing the stipulations regarding prepayment and default
described in Sec. 3 (1) c.
d. Insufficient corporate surplus. If the Corporation shall
not have sufficient surplus to permit it lawfully to purchase all of such shares
of capital stock, the stockholders shall promptly take such measures to vote
their respective holdings of the shares of capital stock to reduce the capital
of the Corporation or to take such other steps as may be appropriate or
necessary in order to enable the Corporation to lawfully purchase and pay for
all the stockholder's shares of capital stock, including, by way of illustration
and not by way of limitation, an up-to-date appraisal of the assets of the
Corporation. If the Corporation shall, nevertheless, be unable or refuse to
purchase all of the stockholder's shares of capital stock, the obligation of the
Corporation with respect to the shares which the Corporation shall be unable or
refuse to purchase shall be deemed assumed by the remaining stockholders.
e. Disqualification or retirement of all stockholders within
ninety (90) days. The provisions of this Sec. 3 (3) shall be of no effect if all
the stockholders become disqualified or retire within ninety (90) days of each
other.
4. Purchase price. The price of each share of capital stock to be sold
is stipulated to be $________ subject, however, to the adjustments herein
provided.
a. Review of price. Within ninety (90) days following the
close of each fiscal year, the stockholders shall review the stipulated price.
Upon each review, the stockholders may either stipulate that there is no change
in the price last stipulated or they may unanimously agree upon a new stipulated
price.
b. Failure to review. If, following the close of any fiscal
year, the stockholders shall have failed to stipulate upon maintaining the last
stipulated price or to agree
-13-
<PAGE> 14
upon a new stipulated price, the price for each share of capital stock to be
sold under this agreement shall be the last stipulated price.
c. Stock splits, etc. Appropriate adjustment in purchase price
shall be made for any stock dividend, split up, recapitalization or issuance by
the Corporation of additional outstanding shares occurring after the fixing of
the last stipulated price.
5. Purchase by Corporation. Whenever the Corporation shall, pursuant to
this agreement, be required to purchase shares of the capital stock of the
Corporation, each stockholder and the personal representatives of any decedent
shall do all things and execute and deliver all papers as may be necessary to
consummate such purchase. Any note required to be given hereunder by the
Corporation as part of the purchase price shall be endorsed and guaranteed by
the remaining or surviving stockholders, as the case may be, who shall not be
discharged from such liability by reason of the subsequent extension,
modification or renewal of any such note.
6. Specific performance. It is impossible to measure in money the
damages which will accrue to the stockholder or to the personal representatives
of a decedent by reason of a failure to perform any of the obligations under
this agreement. Therefore, if any stockholder or the personal representatives of
a decedent shall institute any action or proceeding to enforce the provisions
hereof, any person (including the Corporation) against whom such action or
proceeding is brought waives the claim or defense therein that such stockholder
or such personal representatives has or have an adequate remedy at law; and such
person shall not urge in any such action or proceeding the claim or defense that
such remedy at law exists.
7. Article V, Section 3 (2) and 3 (3) only applicable in certain
events. In the event that all outstanding stock is owned by a single stockholder
at such stockholder's death, or when such
-14-
<PAGE> 15
single stockholder becomes disqualified or retires, the provisions of Article V,
Sections 3 (2) and 3 (3) shall be ineffective. Instead, the Corporation shall be
liquidated and the assets distributed to the deceased stockholder's personal
representatives or to the disqualified or retiring stockholder, unless within
sixty (60) days of such stockholder's death, disqualification or retirement, a
physician authorized to practice medicine in the State of Tennessee purchases
the outstanding stock from the decedent's personal representatives or from the
disqualified or retiring stockholder.
Article VI
DIVIDENDS
Sec. 1. WHEN DECLARED. The Board of Directors shall by vote declare
dividends from the surplus profits of the Corporation whenever, in their
opinion, the condition of the Corporation's affairs will render it expedient for
such dividends to be declared.
Article VII
BILLS, NOTES, ETC.
Sec. 1. HOW MADE. All bills payable, notes, checks or other negotiable
instruments of the Corporation shall be made in the name of the Corporation and
shall be signed by such officer or officers as the Board of Directors shall from
time to time direct. No officer or agent of the Corporation, either singly or
jointly with others, shall have the power to make any bill payable, note, check,
draft or warrant or other negotiable instrument or endorse the same in the name
of the Corporation or contract or cause to be contracted any debt or liability
in the name of or on behalf of the Corporation, except as herein expressly
prescribed and provided.
-15-
<PAGE> 16
Article VIII
AMENDMENTS
Sec. 1. HOW AMENDED. These By-Laws may be altered, amended, repealed or
added to by an affirmative vote of the Board of Directors representing all of
the whole capital stock at a monthly meeting or at a special meeting called for
that purpose, provided that a written notice shall have been sent to each
Director on record at his last known address at least ten (10) days before the
date of such monthly or special meeting, which notice shall state the
alterations, amendments or changes which are proposed to be made in such
By-Laws. Only such changes as have been specified in the notice shall be made.
If, however, all the Directors shall be present at any regular or special
meeting, these By-Laws may be amended by a unanimous vote, without any previous
notice.
Article IX
EMPLOYMENT OF GRADUATE PHYSICIANS
This Corporation shall employ various graduate physicians licensed to
practice in the State of Tennessee. Such physicians shall enter into an
employment agreement as authorized by the Board of Directors.
There being no further business to come before the meeting, on motion
duly made, seconded and carried, the meeting was adjourned.
Dated the 29th day of December, 1972.
/s/ Jack T. Swan
____________________________________
Jack T. Swan, Secretary
/s/ Warren T. Hill
_________________________________
Warren T. Hill, Chairman
-16-
<PAGE> 1
EXHIBIT 3.35
ARTICLES OF INCORPORATION
OF
EMSA CONTRACTING SERVICES, INC.
ARTICLE I - NAME
The name of this corporation shall be:
EMSA CONTRACTING SERVICES, INC.
ARTICLE II - DURATION
This corporation shall exist in perpetuity.
ARTICLE III - PURPOSE
1. The general nature of the business and the object and purposes
proposed to be transacted and carried on, are to do any and all of the things
mentioned herein, as fully and to the same extent as natural persons might or
could do.
2. To take, acquire, buy, hold, own, maintain, work, develop, sell,
convey, lease, mortgage, exchange, improve and otherwise invest in and dispose
of real estate and real property or any interest or rights therein without limit
as to the amount to do all things and engage in all activities necessary and
proper or incidental to the business of investing in and developing real estate.
3. To sell at wholesale and retail and do deal in any manner whatever
in all types and descriptions of property; to do all things and engage in all
activities necessary and proper or incidental to wholesale and retail business.
4. To purchase, acquire, hold, and dispose of stocks, bonds, and other
obligations including judgments, interest, accounts or debts of any corporation,
domestic or foreign (except moneyed or transportation or banking, or insurance
corporations) owning or controlling any articles which are or might be or become
useful in the business of this company, and to purchase, acquire, hold and
dispose of stocks, bonds or other obligations including judgments, interest,
accounts or debts of any corporation, domestic or foreign (except moneyed or
transportation or banking or insurance corporations) engaged in a business
similar to that of this company, or engaged in the manufacture, use or sale of
property, or in the construction or operation of works necessary or useful in
the business of this company, or in which, or in connection with which, the
manufactured articles, product or property of this company may be used, or of
any corporation with which this corporation is or may be used, or of any
corporation with which this corporation is or may be authorized to consolidate
according to law, and this company may
-2-
<PAGE> 2
issue in exchange therefor the stocks, bonds or other obligations of this
company.
5. To purchase, take and lease, or in exchange, hire or otherwise
acquire any real or personal property, rights or privileges suitable or
convenient for any of the purposes of this business, and to purchase, acquire,
erect and construct, make improvement of buildings or machinery, stores or
works, insofar as the same may be appurtenant to or useful for the conduct of
the business as above specified, but only to the extent to which the company may
be authorized by the statutes under which it is organized.
6. To acquire and carry on all or any part the business or property of
any company engaged in a business similar to that authorized to be conducted by
this company, or with which this company is authorized under the laws of this
state to consolidate, or whose stock the company under the laws of this state
and the provisions of this certificate is authorized to purchase and to
undertake in conjunction therewith, any liabilities or any person, firm,
association, or company described as aforesaid, possessing of property suitable
for any of the purposes of this company, or for carrying on any business which
this company is authorized to conduct, and as for the consideration for the same
to pay cash or to issue shares, stocks and obligations of this company.
7. To purchase, subscribe for or otherwise acquire and to hold the
shares, stocks or obligations of any company organized under the laws of this
state or of any other state, or of any territory of the United States, or of any
foreign country, except moneyed or transportation or banking or insurance
corporations, and to sell or exchange the same, or upon the distribution of
assets or divisions of profits, to distribute any such shares, stocks, or
obligations or proceeds thereof among the stockholders of this company.
8. To borrow or raise money for any purposes of the company, and to
secure the same and interest, or for any other purpose, to mortgage all or any
part of the property corporeal or incorporeal rights or franchises of this
company now owned or hereafter acquired, and to create, issue, draw and accept
and negotiate bonds and mortgages, bills of exchange, promissory notes or other
obligations or negotiable instruments.
9. To guarantee the payment of dividends or interest on any shares,
stocks, debentures or other securities issued by, or any other contract or
obligation of, any corporation described as aforesaid, whenever proper or
necessary for the business of the company, and provided the required authority
be first obtained for that purpose, and always subject to the limitations herein
prescribed.
10. To acquire by purchase or otherwise own, hold, buy, sell, convey,
lease, mortgage or incumber real estate or other property, personal or mixed.
11. To buy, sell, and generally trade in, store, carry and transport
all kinds of goods, wares, merchandise, provisions and supplies.
12. To do and perform and cause to be done or performed each, any and
all of the acts and things above enumerated, and any and all other acts and
things insofar as the same any be
-3-
<PAGE> 3
incidental to or included in any or all of the general powers given, always
provided on the grant of the foregoing enumerated powers is upon the express
condition precedent that the various powers above enumerated shall be exercised
by said company only in case the same are authorized to be exercised by the acts
above recited under which said company is organized, and the same shall be
exercised by said company only in the manner and to the extent that the same may
be authorized to be exercised under the said acts above recited under which it
was organized. The said corporation may perform any part of its business outside
the State of Florida, in the other states or colonies of the United States of
America, and in all foreign countries.
13. And further for the purpose of transacting any and all lawful
businesses.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 1,000 shares of ONE DOLLAR AND
NO/100 ($1.00) par value common stock.
ARTICLE V - PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he/she already
holds, shall have the right to purchase his/her pro rata share thereof (as
nearly as may be done without issuance of fractional shares) at the price at
which it is offered to others.
ARTICLE VI - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 1200 S. Pine Island Road, Ft. Lauderdale, Florida 33324 and the name of the
initial registered agent of this corporation at that address is CT Corporation.
ARTICLE VII - PRINCIPAL OFFICE
The principal office of the corporation is 1200 S. Pine Island Road,
Suite 600, Plantation, Florida 33324.
ARTICLE VIII - INITIAL BOARD OF DIRECTORS
This corporation shall have three (3) directors initially. The number
of directors may be either increased or diminished from time to time by the
bylaws, but shall not be less than three (3). The names and addresses of the
initial directors of this corporation are:
Jere D. Creed, M.D. J. Clifford Findeiss, M.D.
1200 S. Pine Island Road 1200 S. Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
-4-
<PAGE> 4
George W. McCleary, Jr.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE IX - INCORPORATOR
The name and address of the person signing these articles is:
Neesa K. Warlen, Esq.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE X - AMOUNT OF CAPITAL
The amount of capital with which this corporation will begin business
will be not less than Five Hundred Dollars ($500.00).
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors and the shareholders.
ARTICLE XII - APPROVAL OF SHAREHOLDERS REQUIRED FOR MERGER
The approval of the shareholders of this corporation to any plan of
merger shall be required in every case, whether or not such approval is required
by law.
ARTICLE XIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XIV - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these articles of incorporation, or any amendment hereto, and any
right conferred upon the shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these
articles of incorporation this 28th day of November, 1995.
/s/ Neesa K. Warlen
-----------------------------------
-5-
<PAGE> 5
Neesa K. Warlen, Subscriber
STATE OF FLORIDA
SS
COUNTY OF BROWARD
BEFORE ME, a notary public authorized to take acknowledgements in the
state and county set forth above, personally appeared Neesa K. Warlen,
personally known to me to be the person who executed the foregoing or who
produced _________________________, who executed the foregoing articles of
incorporation, and he/she acknowledged before me that he/she executed those
articles of incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 28th day of November, 1995.
/s/ Joann Loch
----------------------------------
Notary Public, State of Florida
-6-
<PAGE> 6
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE FOR THE SERVICE OF PROCESS
WITHIN THIS STATE, MAKING AGENT UPON WHOM PROCESS MAY BE SERVED.
In pursuance of Chapter 48.091, Florida Statutes, the following is
submitted, in compliance with said Act;
First -- That EMSA Contracting Services, Inc., desiring to organize
under the laws of the State of Florida with its principal office, as indicated
in the articles of incorporation at City of Fort Lauderdale, County of Broward,
State of Florida has named C T Corporation System located at 1200 S. Pine Island
Road, City of Plantation, County of Broward, State of Florida, as its agent to
accept service of process within this state.
ACKNOWLEDGEMENT: (MUST BE SIGNED BY DESIGNATED AGENT)
Having been named to accept service of process for the above stated
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act relative to
keeping open said office.
By: /s/ Tanya M. Villar
________________________________
CT Corporation System,
Registered Agent
Tanya M. Villar, Special Assistant Secretary
-1-
<PAGE> 1
EXHIBIT 3.36
BYLAWS
OF
EMSA CONTRACTING SERVICES, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the
<PAGE> 2
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled
-2-
<PAGE> 3
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
-3-
<PAGE> 4
shares of such class or series shall constitute a quorum for the transaction of
such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
-4-
<PAGE> 5
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not he deemed to be outstanding shares.
-5-
<PAGE> 6
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of then present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records
-6-
<PAGE> 7
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder's Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their
-7-
<PAGE> 8
shares upon compliance with further provisions of this act regarding the rights
of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
-8-
<PAGE> 9
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 3 director(s) . The
number of directors nay be increased or decreased from time to time by amendment
to these bylaws, but no decrease shall have the effect of shortening the terms
of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of
-9-
<PAGE> 10
Directors. A director elected to fill a vacancy shall hold office only until the
next election of directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
-10-
<PAGE> 11
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to, shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms
-11-
<PAGE> 12
upon which such shares may be issued or sold, including, without limitation, the
price, the rate or manner of payment of dividends, provisions for redemption,
sinking fund, conversion, voting or preferential rights, and provisions for
other features of a class of shares, or a series of a class of shares, with full
power in such committee to adopt any final resolution setting forth all the
terms thereof and to authorize the statement of the terms of a series for filing
with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
-12-
<PAGE> 13
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
-13-
<PAGE> 14
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
-14-
<PAGE> 15
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to, be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
-15-
<PAGE> 16
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
-16-
<PAGE> 17
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or
-17-
<PAGE> 18
when the declaration or payment thereof would be contrary to any restrictions
contained in the articles of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the
-18-
<PAGE> 19
affirmative vote or the written consent of the holders of at least a majority of
the outstanding shares of the class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-19-
<PAGE> 1
EXHIBIT 3.37
STATE OF FLORIDA
ARTICLES OF INCORPORATION
OF
EMSA MANAGED CARE, INC.
THE UNDERSIGNED, ACTING AS INCORPORATORS OF A CORPORATION
UNDER THE FLORIDA GENERAL CORPORATION ACT, ADOPT THE FOLLOWING
ARTICLES OF INCORPORATION.
FIRST: THE NAME OF THE CORPORATION IS EMSA MANAGED CARE, INC.
SECOND: THE PERIOD OF ITS DURATION IS PERPETUAL.
THIRD: THE PURPOSE OR PURPOSES FOR WHICH THE CORPORATION IS ORGANIZED
ARE:
TO ENGAGE IN THE TRANSACTION OF ANY OR ALL LAWFUL BUSINESS FOR
WHICH CORPORATIONS MAY BE INCORPORATED UNDER THE PROVISIONS OF
THE FLORIDA GENERAL CORPORATION ACT.
FOURTH: THE AGGREGATE NUMBER OF SHARES WHICH THE CORPORATION SHALL HAVE
AUTHORITY TO ISSUE IS:
1,000 COMMON SHARES @ $1.00
FIFTH: THE STREET ADDRESS OF THE INITIAL REGISTERED OFFICE OF THE
CORPORATION IS 100 N.W. 70TH AVENUE, PLANTATION, FLORIDA 33317, AND THE NAME OF
ITS INITIAL REGISTERED AGENT AT SUCH ADDRESS IS GEORGE W. McCLEARY, JR.
SIXTH: THE NUMBER OF DIRECTORS CONSTITUTING THE INITIAL BOARD OF
DIRECTORS OF THE CORPORATION IS ONE (1), AND THE NAMES AND ADDRESS OF THE
PERSONS WHO ARE TO SERVE AS DIRECTORS UNTIL THE FIRST ANNUAL MEETING OF
SHAREHOLDERS OR UNTIL THEIR SUCCESSORS ARE ELECTED AND SHALL QUALIFY ARE:
J. CLIFFORD FINDEISS 100 N.W. 70TH AVENUE
PLANTATION, FLORIDA 33317
<PAGE> 2
SEVENTH: THE NAME AND ADDRESS OF EACH INCORPORATOR IS:
BARBARA A. BURKE 8751 WEST BROWARD BOULEVARD
PLANTATION, FLORIDA 33324
DOMENICO A. BORRIELLO 8751 WEST BROWARD BOULEVARD
PLANTATION, FLORIDA 33324
ACCEPTANCE BY THE REGISTERED AGENT:
GEORGE W. McCLEARY, JR. IS FAMILIAR WITH AND ACCEPTS THE
OBLIGATIONS PROVIDED FOR IN S. 607.325.
DATED: May 22, 1989.
/s/ Barbara A. Burke
______________________________
BARBARA A. BURKE
/s/ Domenico A. Borriello
______________________________
DOMENICO A. BORRIELLO
______________________________
INCORPORATORS
STATE OF FLORIDA
COUNTY OF BROWARD
THE FOREGOING INSTRUMENT WAS ACKNOWLEDGED BEFORE ME THIS
22ND DAY OF MAY, 1987, BY BARBARA A. BURKE OF EMSA MANAGED CARE, INC.
MY COMMISSION EXPIRES:
/s/
______________________________
Notary Public
-2-
<PAGE> 3
ARTICLES OF AMENDMENT
OF
EMSA MANAGED CARE, INC.
(BY VOTE OF SHAREHOLDERS)
PURSUANT TO SECTION 607.181 OF THE GENERAL CORPORATION ACT OF
FLORIDA, THE UNDERSIGNED CORPORATION ADOPTS THESE ARTICLES OF
AMENDMENT.
FIRST: THE NAME OF THE CORPORATION IS EMSA MANAGED CARE, INC.
SECOND: THE ARTICLES OF INCORPORATION OF THIS CORPORATION IS AMENDED BY
CHANGING THE ARTICLE NUMBERED "FIRST" SO THAT, AS AMENDED, SAID ARTICLE SHALL
READ AS FOLLOWS:
EMSA LOUISIANA, INC.
THIRD: THE AMENDMENT TO THE ARTICLES OF INCORPORATION WAS ADOPTED BY
THE SHAREHOLDERS OF THE CORPORATION ON THE 16 DAY OF JUNE, 1989.
FOURTH: IF SUCH AMENDMENT PROVIDES FOR AN EXCHANGE, RECLASSIFICATION OR
CANCELLATION OF ISSUED SHARES, THE MANNER IN WHICH THE SAME SHALL BE EFFECTED,
IF IT IS NOT SET FORTH IN THE
AMENDMENT ITSELF, IS AS FOLLOWS:
SIGNED THIS 16 DAY OF JUNE, 1989.
EMSA MANAGED CARE, INC.
-1-
<PAGE> 4
BY: /s/ J. Clifford Findeiss
__________________________
PRESIDENT
J. Clifford Findeiss, President
_______________________________
(TYPE OR PRINT NAME AND
CAPACITY)
/s/ George McCleary
_______________________________
(SECRETARY OR ASSISTANT
SECRETARY
George McCleary
_______________________________
(TYPE OR PRINT NAME AND
CAPACITY)
STATE OF FLORIDA
COUNTY OF BROWARD
THE FOREGOING INSTRUMENT WAS ACKNOWLEDGED BEFORE ME
THIS 16 DAY OF JUNE, 1989, BY J. CLIFFORD FINDEISS, PRESIDENT OF EMSA
LOUISIANA, INC., ON BEHALF OF THE CORPORATION.
MY COMMISSION EXPIRES JAN. 5, 1993.
/s/ Mary Ann D'Armato
______________________________
NOTARY PUBLIC
(SEAL)
-2-
<PAGE> 1
EXHIBIT 3.38
BYLAWS
OF
EMSA MANAGED CARE, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the
<PAGE> 2
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled
-2-
<PAGE> 3
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
-3-
<PAGE> 4
shares of such class or series shall constitute a quorum for the transaction of
such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
-4-
<PAGE> 5
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
-5-
<PAGE> 6
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in- fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records
-6-
<PAGE> 7
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their
-7-
<PAGE> 8
shares upon compliance with further provisions of this act regarding the rights
of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
-8-
<PAGE> 9
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 2 directors. The number
of directors may be increased or decreased from time to time by amendment to
these bylaws, but no decrease shall have the effect of shortening the terms of
any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of
-9-
<PAGE> 10
Directors. A director elected to fill a vacancy shall hold office only until the
next election of directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
-10-
<PAGE> 11
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without
-11-
<PAGE> 12
limitation, the price, the rate or manner of payment of dividends, provisions
for redemption, sinking fund, conversion, voting or preferential rights, and
provisions for other features of a class of shares, or a series of a class of
shares, with full power in such committee to adopt any final resolution setting
forth all the terms thereof and to authorize the statement of the terms of a
series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
-12-
<PAGE> 13
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same tine. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
-13-
<PAGE> 14
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
-14-
<PAGE> 15
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
-15-
<PAGE> 16
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
-16-
<PAGE> 17
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or
-17-
<PAGE> 18
when the declaration or payment thereof would be contrary to any restrictions
contained in the articles of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the
-18-
<PAGE> 19
affirmative vote or the written consent of the holders of at least a majority of
the outstanding shares of the class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-19-
<PAGE> 1
EXHIBIT 3.39
CHARTER
OF
SOUTHEASTERN MEDICAL GROUP, P.C.
The undersigned, acting as the incorporator under the Tennessee
Business Corporation Act, adopts the following charter for such corporation:
1. The name of the corporation is Southeastern Medical Group, P.C.
2. The corporation is authorized to issue 2,000 common shares, which
shares collectively shall have unlimited voting rights and the right to receive
the net assets of the corporation upon dissolution.
3. The street address and zip code of the corporation's initial
registered office is 1716 Clinch Avenue, Knoxville, Tennessee 37916.
4. The corporation's initial registered office is located in Knox
County, Tennessee.
5. The name of the corporation's initial registered agent at the office
is W. Dale Amburn.
6. The name, address, and zip code of the incorporator is W. Dale
Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
7. The street address and zip code of the principal office of the
corporation is 1900 Winston Road, Knoxville, Tennessee 37919.
8. The corporation is for profit.
9. This corporation is organized for the purpose of engaging in the
practice of medicine and any other lawful business.
10. The corporation elects to be governed by the provisions of the
Tennessee
<PAGE> 2
Professional Corporation Act T.C.A. Section 48-3-401 et seq.
11. No director may be sued by the corporation or its shareholders for
breach of his or her fiduciary duty to the corporation, provided, however, that
this provision shall not absolve a director from a breach of his or her duties
of loyalty, for acts of omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or for distributions in violation of
T.C.A. Section 48-18-304.
Dated this 4th day of June, 1993.
/s/ W. Dale Amburn
______________________________
W. DALE AMBURN, INCORPORATOR
-2-
<PAGE> 3
ARTICLES OF AMENDMENT TO THE CHARTER
OF
SOUTHEASTERN MEDICAL GROUP, P.C.
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is Southeastern Medical Group,
P.C.
2. The text of the amendment adopted is as follows:
(a) The corporation hereby changes from a professional corporation
to a general corporation; and
(b) The corporation hereby changes its name to Hospital Based
Physician Services, Inc.
3. The amendment was adopted on the 25th day of March, 1994.
4. The amendment was duly adopted by the Board of Directors
without Shareholder action, such Shareholder action not being
required.
DATED the 25th day of March, 1994.
SOUTHEASTERN MEDICAL GROUP, P.C.
By: /s/ Michael L. Hatcher
________________________________
MICHAEL L. HATCHER
VICE PRESIDENT
-1-
<PAGE> 1
EXHIBIT 3.40
BYLAWS
OF
SOUTHEASTERN MEDICAL GROUP, P.C.
ARTICLE I
MEETING OF SHAREHOLDERS
1. Annual Meeting. The annual meeting of the shareholders shall he held
at such time and place, either within or without this State, as may be
designated from time to time by the directors.
2. Special Meetings. Special meetings of the shareholders may be called
by the president, a majority of the board of directors, or by the holders of not
less than ten percent (10%) of all the shares entitled to vote at such meeting.
The place of said meetings shall be designated by the directors.
3. Notice of Shareholder Meetings. Written notice stating the date,
time, and place of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered either
personally or by mail by or at the direction of the president, secretary,
officer, or person calling the meeting to each shareholder entitled to vote at
the meeting. Such notice shall be delivered not less than ten (10) days nor more
than two (2) months before the date of the meeting, and shall be deemed to be
delivered when deposited in the United States mail postpaid and correctly
addressed (if mailed), or upon actual receipt (if hand-delivered). The person
giving such notice shall certify that the notice required by this paragraph has
been given.
4. Quorum Requirements. A majority of the shares entitled to vote shall
constitute a quorum for the transactions of business. Once a share is
represented for any purpose
<PAGE> 2
at a meeting, it shall be deemed present for quorum purposes for the remainder
of the meeting and for any adjournment of that meeting unless a new record date
is or must be set for that adjourned meeting.
5. Voting and Proxies. If a quorum exists, action on a matter (other
than the election of Directors) shall be approved if the votes favoring the
action exceed the vote opposing the action. A shareholder may vote his or her
shares either in person or by written proxy, which proxy is effective when
received by the secretary or other person authorized to tabulate votes. No proxy
shall be valid after the expiration of eleven (11) months from the date of its
execution unless otherwise provided in the proxy.
ARTICLE II
BOARD OF DIRECTORS
1. Qualification and Election. Directors need not be shareholders or
residents of this State. They shall be elected by a plurality of the votes cast
at a meeting at which a quorum is present. Each director shall hold office until
the expiration of the term for which the director is elected, and thereafter
until his successor has been elected and qualified.
2. Number. The number of directors shall be fixed from time to time by
either the shareholders or by the board of directors.
3. Meetings. The board of directors shall hold such regular and special
meetings as it from time to time decides. These meetings may be either in person
or by conference call. Special meetings may be called at any time by the
chairman of the board, president, or any two (2) directors.
4. Notice of Directors, Meetings. All regular board meetings may be
held without notice. Special meetings shall be preceded by at least two (2) days
notice of the date, time, and place of the meeting. Notice of an adjourned
meeting need not be given if the time and place to
-2-
<PAGE> 3
which the meeting is adjourned are fixed at the meeting at which the adjournment
is taken, and if the period of adjournment is taken, and if the period of
adjournment does not exceed one (1) month in any one adjournment.
5. Quorum and Vote. The presence of a majority of the directors shall
constitute a quorum for the transaction of business. The vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the board.
6. Executive and Other Committees. The board of directors, by a
resolution adopted by a majority of its members, may create one or more
committees, consisting of one or more directors, and may delegate to such
committee or committees any and all such authority as is permitted by law.
ARTICLE III
OFFICERS
1. Number. The corporation shall have a president and a secretary, and
such other officers as the board of directors shall from time to time deem
necessary. Any two or more offices may be held by the same person, except the
offices of president and secretary.
2. Election and Term. The officers shall be elected by the board of
directors. Each officer shall serve at the pleasure of the board until such
officers resignation or removal.
3. Duties. All officers shall have such authority and perform such
duties in the management of the corporation as are normally incident to their
offices and as the board of directors may from time to time provide.
ARTICLE IV
RESIGNATIONS, REMOVALS AND VACANCIES
-3-
<PAGE> 4
1. Resignations. Any officer or director may resign at any time by
giving written notice to the chairman of the board, the president, or the
secretary. Any such resignation shall take effect at the time specified therein,
or, if no time is specified, then upon its delivery.
2. Removal of Officers. Any officer or agent may be removed by the
board at any time with or without cause.
3. Removal of Directors. Any or all of the directors may be removed
either with or without cause by a proper vote of the shareholders.
4. Vacancies. Newly created directorships resulting from an increase in
the number of directors, and vacancies occurring in any office or directorship
for any reason, including removal of an officer or director, may be filled by
the vote of a majority of the directors then in office, even if less than a
quorum exists.
ARTICLE V
CAPITAL STOCK
1. Stock Certificates. Every shareholder shall be entitled to a
certificate or certificates of capital stock of the corporation in such form as
may be prescribed by the board of directors. Unless otherwise decided by the
board, such certificates shall be signed by the president and the secretary of
the corporation.
2. Transfer of Shares. Shares of stock may be transferred on the books
of the corporation by delivery and surrender of the properly assigned
certificate, but subject to any restrictions or transfer imposed by either the
applicable securities laws or any shareholder agreement.
3. Loss of Certificates. In the case of the loss, mutilation, or
destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms as the board of directors shall prescribe.
-4-
<PAGE> 5
ARTICLE VI
ACTION BY CONSENT
Whenever the shareholders or directors are required or permitted to
take any action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by all the persons or
entities entitled to vote thereon. The affirmative vote of the number of shares
or directors that would be necessary to take such action at a meeting shall be
the act of the shareholders or directors, as the case may be.
ARTICLE VII
AMENDMENT OF BYLAWS
These bylaws may be amended, added to, or repealed either by the
shareholders or the board of directors as provided by statute. Any change in the
bylaws made by the board of directors, however, may be amended or repealed by
the shareholders.
CERTIFICATION
I certify that these initial bylaws for the corporation were duly
adopted as of the 1st day of July, 1993.
/s/ W. Dale Amburn
________________________________
W. DALE AMBURN, INCORPORATOR
-5-
<PAGE> 1
EXHIBIT 3.41
WEST VIRGINIA
ARTICLES OF INCORPORATION
OF
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
The undersigned, acting as incorporator(s) of a corporation under Chapter 31,
Article 1, Section 27 of the West Virginia Code, adopt(s) the following Articles
of Incorporation for such corporation:
1. The undersigned agrees to become a West Virginia corporation by the
name of:
InPhyNet Anesthesia of West Virginia, Inc.
(The name of the corporation shall contain one of the words
"corporation," "company," "incorporated," "limited" or shall contain an
abbreviation or one such words. (Section 31-1-21, W. Va. Code)
2. A. The address at the physical location of the principal office of the
corporation will be 1200 South Pine Island Road, Suite 600, in the
city, town or village of Plantation, county of Broward, State of
Florida, Zip Code 33324.
The mailing address of the above location, if different, will be
___________________________.
B. The address at the physical location of the principal place of
business in West Virginia of the corporation, if different than the
above address, will be 501 Morris Street, in the city, town or village
of Charleston, Kanawha County, West Virginia, Zip Code 25325.
The mailing address of the above location, if different, will be
___________________________.
3. This corporation is organized as:
A. Non-stock, non-profit _________.
or
B. Stock, for profit X, and the aggregate value of the
authorized capital
<PAGE> 2
stock of said profit corporation will be $10.00 dollars, which
shall be divided into 1,000 shares of the par value of $.01
dollars each. (If shares are to be divided into more than one
class or if the corporation is to issue shares in any
preferred or special class in series, additional statements
are required within the articles of incorporation.) (As
provided by law, for the purpose of assessment of the license
tax, and for no other purpose, shares of stock having no par
value shall be presumed to be of the par value of $25 each;
but, if such stock was originally issued for a consideration
greater than $25 per share, the annual license taxes as are
required to be paid to the Tax Commissioner shall be computed
upon the basis of the consideration for which such stock was
issued. W. Va. Code Section 11-12-78.)
4. The period of duration of the corporation which may be perpetual, is
Perpetual.
5. The purpose(s) for which this corporation is formed (which may be
stated to be, or to include, the transaction of any actual, lawful
business for which corporations may be incorporated (in West Virginia)
as follows:
To provide or arrange for physician staffing and management
services to hospital anesthesia departments in the state of
West Virginia, and to engage in any lawful act or activity for
which the corporation may be organized to do business under
the laws of West Virginia.
6. The provisions for the regulation of the internal affairs of the
corporation, which the incorporators elect to set forth in the articles
of incorporation, are as follows:
all such provisions shall be set forth in the By-laws of the
corporation.
7. The provisions granting, limiting or denying preemptive rights to
shareholders, if any, are as follows:
none
8. The full names and addresses of the incorporator(s), including street
and street number, and the city, town or village, including the zip
code, and the number of shares subscribed for by each is (are) as
follows:
NUMBER OF SHARES
NAME ADDRESS (OPTIONAL)
See 1 in Addendum
9. The number of directors constituting the initial board of directors of
the corporation is three and the names and addresses of the persons who
are to serve as directors until the 1st annual meeting of
shareholders/members, or until their successors are elected and shall
qualify, are as follows:
<PAGE> 3
<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
J. Clifford Findeiss - 1200 South Pine Island Road, Ste. 600, Plantation, FL 33324
Erie Chapman - 1200 South Pine Road, Ste. 600, Plantation, FL 33324
George W. McCleary, Jr. - 1200 South Pine Island Road, Ste. 600, Plantation, Fl 33324
</TABLE>
10. The name and address of the appointed person to whom notice process may
be sent is:
C T CORPORATION SYSTEM, 707 Virginia Street East, Charleston, W. Va.
25301
ACKNOWLEDGMENT
I (We) the undersigned, for the purpose of forming a corporation under the laws
of the State of West Virginia, do make and file this "Articles of
Incorporation".
In witness whereof, I (We) have accordingly set (our) my respective
hands this 25th day of February, 1997.
(All Incorporators must sign below. Names and signatures must appear the same
throughout the Articles of Incorporation.)
PHOTOCOPIES OF THE SIGNATURES OF THE INCORPORATORS AND THE
NOTARY PUBLIC CANNOT BE ACCEPTED.
_____signature /s/ David C. Peck
___________________
State of Florida
County of Broward
I, Mary Ann D'Amato, a Notary Public, in and for the county and state aforesaid,
hereby certify that (names of all incorporators as shown in item 8 must be
inserted in this space by official taking acknowledgment)
David C. Peck
whose name(s) is signed to the foregoing Articles of Incorporation, this day
personally appeared before me in my said county and acknowledged his (her)
(their) signature(s)
My commission expires March 29, 1997
seal________
<PAGE> 4
/s/ Mary A. D'Amato
_____________________________________
(Notary Public)
ARTICLES OF INCORPORATION PREPARED BY David C. Peck
whose mailing address is 1200 South Pine Island Road, Ste. 600, Plantation, FL
33324.
<PAGE> 5
ADDENDUM
Name: David C. Peck
Address: 1200 So. Pine Island Road, Suite 600, Plantation, FL 33324
Number of Shares:
<PAGE> 1
EXHIBIT 3.42
BYLAWS OF
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
ARTICLE I.
STOCKHOLDERS
Section 1. Annual Meeting. An annual meeting of the stockholders shall
be held at such place, either within or without the State of West Virginia, on
such date and at such time as the Board of Directors may by resolution provide,
or if the Board of Directors fails to provide, then such meeting shall be held
at the principal office of the Corporation at 10:00 A.M. on the fourth Friday of
the fourth calendar month after the end of the Corporation's fiscal year, if not
a legal holiday under the laws of the State of West Virginia, and if a legal
holiday, on the next succeeding business day.
Section 2. Special Meeting. Special meetings of the stockholders may be
called at any time by the Board of Directors. A special meeting of the
stockholders shall be called if the holders of at least ten percent (10%) of the
votes entitled to be cast on any issue to be considered at the proposed special
meeting sign, date and deliver to the Corporation's Secretary one or more
written demands for the meeting describing the purpose or purposes for which it
is to be held. A special meeting called by the Board of Directors shall be held
at such place, either within or without the State of West Virginia, as stated in
the notice thereof. A special meeting called at the demand of stockholders
pursuant to this Section 2 shall be held at such place in the State of West
Virginia as is stated in the notice thereof.
Section 3. Notice of Meetings. Written notice of each meeting of
stockholders, stating the date, time and place of the meeting, and describing
the purpose or purposes of the meeting if it is a special Meeting, shall be
mailed to each stockholder entitled to vote at such meeting at such
stockholder's address shown on the Corporation's current record of stockholders
not less than ten (10) nor more than fifty (50) days prior to the date of such
meeting. If an amendment to the Articles of Incorporation, a plan of merger or
share exchange or a sale of assets of the Corporation is to be considered at any
annual or special meeting, the written notice shall state that consideration of
such action is one of the purposes of such meeting. A stockholder may waive
notice of a meeting before or after the meeting. The waiver must be in writing,
must be signed by the stockholder entitled to the notice, and must be delivered
to the Corporation for inclusion in the minutes or filing
<PAGE> 2
with the corporate records. A stockholder's attendance at a meeting (1) waives
objection to lack of notice or defective notice of the meeting, unless the
stockholder at the beginning of the meeting objects to holding a meeting or
transacting business at the meeting, and (2) waives objection to consideration
of a particular matter at the meeting, that is not within the purpose or
purposes described in the meeting notice, unless the stockholder objects to
considering the matter when it is presented. Neither the business transacted at,
nor the purpose of, any meeting need be stated in a waiver of notice of a
meeting, except that, with respect to a waiver of notice of a meeting at which
an amendment to the Articles of Incorporation, a plan of merger or share
exchange, a sale of assets, or any other action that would entitle the
stockholder to dissenter's rights, is submitted to a vote of stockholders, the
same material that the West Virginia Corporation Act would have required to be
sent to the stockholder in a notice of the meeting must be delivered to the
stockholder prior to such stockholder's execution of the waiver of notice, or
the waiver itself must expressly waive the right to such material.
Notice of any meeting shall be given by or at the direction of the
President or the Secretary. No notice need be given of the new date, time or
place of reconvening any adjourned meeting, if the new date, time and place to
which the meeting is adjourned are announced at the adjourned meeting before
adjournment, except that, if a new record date for the adjourned meeting is or
must be fixed under the applicable provisions of the West Virginia Corporation
Act, notice of the adjourned meeting must be given to persons who are
stockholders as of the new record date.
Section 4. List of Stockholders. The officer or agent having charge of
the stock transfer books for shares of the Corporation shall make an
alphabetical list of the stockholders entitled to notice of a meeting of
stockholders or any adjournment thereof, arranged by voting group (and within
each voting group by class or series of shares) and showing the address of and
number of shares held by each stockholder. Such list shall be available for
inspection by any stockholder, his agent, or his attorney at the time and place
of the meeting.
Section 5. Quorum; Required Stockholder Vote. Holders of shares
entitled to vote as a separate voting group may take action on a matter at a
meeting only if a quorum of those shares is present with respect to such matter.
A quorum for the transaction of business at any annual or special meeting of
stockholders shall exist when the holders of shares representing a majority of
the votes entitled to be cast by the voting group are represented either in
person or by proxy at such meeting. Once a share is represented for any purpose
at a meeting other than solely to object to holding the meeting or transacting
business at the meeting, it is deemed present for quorum
-2-
<PAGE> 3
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record date is or must be (under the provisions of the West
Virginia Corporation Act) set for that adjourned meeting. If a quorum is
present, action on a matter (other than the election of directors) by a voting
group is approved if the votes cast within the voting group in favor of the
action exceed the votes cast in opposition to the action, unless a greater vote
is required by the Articles of Incorporation. Directors are elected by a
plurality of the votes cast by the shares entitled to vote in the election at a
meeting at which a quorum is present.
Section 6. Proxies. A stockholder may vote either in person or by a
proxy that such stockholder has duly executed in writing. No proxy shall be
valid after eleven (11) months from the date of its execution unless a longer
period is expressly provided in the proxy.
Section 7. Action of Stockholders Without Meeting. Any action required
or permitted to be taken at a meeting of the stockholders may be taken without a
meeting if one or more written consents, describing the action so taken, are
signed by all of the stockholders entitled to vote on the action. A written
consent shall not be valid unless the consenting stockholder has been furnished
the same material that, under the West Virginia Corporation Act, would have been
required to be sent to stockholders in a notice of a meeting at which the
proposed action would have been submitted to the stockholders for action,
including notice of any applicable dissenters' rights, or the consent expressly
waives the right to receive the material otherwise required to be furnished.
Action by written consent pursuant hereto shall have the same force and effect
as a unanimous affirmative vote of the stockholders entitled to vote on the
action and shall be filed with the minutes of the proceedings of the
stockholders.
Section 8. Conduct of Stockholders Meetings. The President shall
preside at stockholders' meetings and shall establish such reasonable procedures
for the conduct of stockholders' meetings and shall establish such reasonable
procedures for the conduct of stockholders' meetings as such officer deems to be
necessary or appropriate, subject to the authority of the Board of Directors to
appoint a different presiding officer and to establish additional or different
procedures.
ARTICLE II.
DIRECTORS
Section 1. Power of Directors. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the Corporation
shall be managed under the
-3-
<PAGE> 4
direction of, the Board of Directors, subject to any limitation set forth in the
Articles of Incorporation, bylaws approved by the stockholders, or agreements
among the stockholders that are otherwise lawful.
Section 2. Composition of the Board. The Board of Directors of the
Corporation shall consist of two directors, and such number may be changed by
resolution of the Board of Directors or of the stockholders from time to time,
but no decrease in the number of directors shall shorten the term of any
incumbent director. Unless otherwise permitted by the West Virginia Corporation
Act, directors shall be natural persons who are 18 years of age or older. At
each annual meeting the stockholders shall elect the directors, who shall serve
until their successors are elected and qualified; provided that at any
stockholders' meeting with respect to which notice of such purpose has been
given, the entire Board of Directors or any individual director may be removed,
with or without cause, by the affirmative vote of the holders of a majority of
the shares entitled to vote at an election of directors.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of Notice.
The Board of Directors may hold regular meetings in accordance with such
schedule as may be established by the Board of Directors and no notice of such
regular meetings need be given. Special meetings of the Board of Directors may
be called by the President or by any directors and written notice of the time
and place of such meetings shall be given to each director by first class mail
at least six (6) days before the meeting or by telephone, telegraph, telex,
facsimile, cablegram or in person at least two (2) days before the meeting. Any
director may waive notice required to be given of a meeting either before or
after the meeting. The waiver must be in writing, signed by the director
entitled to the notice, and delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. A director shall be deemed to have
waived notice with respect to any meeting for which notice was required to be
given if he is present at or participates in such meeting unless the director at
the beginning of the meeting (or promptly upon the director's arrival) objects
to holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting. Neither the
business to be transacted at, nor the purpose of any meeting of the Board of
Directors need be stated in the notice or waiver of notice of such meeting. Any
meeting may be held at any place within or without the State of West Virginia.
Section 4. Quorum; Vote Requirement. A majority of the number of
directors last fixed in accordance with Article II, Section 2, of these Bylaws
shall constitute a quorum for the transaction of business at any meeting. When a
quorum is present, the vote of a majority of the
-4-
<PAGE> 5
directors present shall be the act of the Board of Directors, unless a greater
vote is required by law, by the Articles of Incorporation, or by these Bylaws or
any stockholders agreement that is lawful.
Section 5. Action of Board Without Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if one or more written consents,
describing the action so taken, are signed by all the directors or all members
of such committee and delivered to the Corporation for inclusion in the minutes
or filing with the corporate records.
Section 6. Committees. The Board of Directors may designate from among
its members such committees as it deems necessary or desirable, each composed of
one or more directors, which may exercise such authority as is delegated by the
Board of Directors, provided that no committee shall have the authority of the
Board of Directors to (1) approve or propose to stockholders action that the
West Virginia Corporation Act requires to be approved by stockholders; (2) fill
vacancies on the Board of Directors or any of its committees; (3) amend the
Articles of Incorporation pursuant to Section 31-1-(c) of the West Virginia
Corporation Act; (4) adopt, amend or repeal bylaws; or (5) approve a plan of
merger not requiring stockholder approval.
Section 7. Vacancies. A vacancy occurring in the Board of Directors may
be filled by the stockholders, or by the Board of Directors, or, if the
directors remaining in office constitute fewer than a quorum of the Board of
Directors, by the affirmative vote of a majority of all the directors remaining
in office.
ARTICLE III.
OFFICERS
Section 1. Executive Structure of the Corporation. The officers of the
Corporation shall be elected by the Board of Directors and shall consist of such
persons as are elected by the Board of Directors, with such titles as are
required by these Bylaws and as may be otherwise established by the Board of
Directors. Each officer shall hold office for the term for which such officer
has been elected or appointed and until such officer's successor has been
elected or appointed and has qualified, or until such officer's earlier
resignation, removal from office or death. Any two or more offices may be held
by the same person.
-5-
<PAGE> 6
Section 2. President. The Board of Directors shall designate an officer
as the President of the Corporation (in addition to any other title the officer
may have), and such officer shall give general supervision and direction to the
affairs of the Corporation, subject to the direction of the Board of Directors.
Section 3. Secretary. The Board of Directors shall designate an officer
as the Secretary of the Corporation, and such officer shall have responsibility
for preparing minutes of the directors' and stockholders' meetings and for
authenticating records of the Corporation.
Section 4. Other Duties and Authority. Each officer, employee and agent
of the Corporation shall have such duties and authority as may be conferred upon
such officer, employee or agent by the Board of Directors or delegated to such
officer, employee or agent by the President or by one or more officers to whom
such authority is delegated by the President.
Section 5. Removal of Officers. Any officer may be removed at any time
by the Board of Directors with or without cause, and such vacancy may be filled
by the Board of Directors. This provision shall not prevent the making of a
contract of employment for a definite term with any officer and shall have no
effect upon any cause of action which any officer may have as a result of such
officer's removal in breach of a contract of employment.
Section 6. Compensation. The salaries of the officers shall be fixed
from time to time by the President or by one or more officers to whom such
authority is delegated by the President, subject to the authority of the Board
of Directors to fix salaries to the extent it desires to do so. No officer shall
be prevented from receiving such salary by reason of the fact that such officer
is also a director of the Corporation.
ARTICLE IV.
STOCK
Section 1. Stock Certificates. The shares of stock of the Corporation
shall be represented by certificates in such form as may be approved by the
Board of Directors, which certificates shall be issued to the stockholders of
the Corporation in numerical order from the stock book of the Corporation, and
each of which shall bear the name of the Corporation and state that it is
organized under the laws of the State of West Virginia, the name of the
stockholder, the number and class (and the designation of the series, if any) of
the shares represented, and which shall be signed by the President of the
Corporation.
-6-
<PAGE> 7
Section 2. Transfer of Stock. Shares of stock of the Corporation shall
be transferred only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the stockholder of record or such stockholder's duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once be
conspicuously marked on its face "Canceled" and filed with the permanent stock
records of the Corporation. The Board of Directors may make such additional
rules concerning the issuance, transfer and registration of stock and
requirements regarding the establishment of lost, destroyed or wrongfully taken
stock certificates (including any requirement of an indemnity bond prior to
issuance of any replacement certificate) as it deems appropriate.
ARTICLE V.
DEPOSITORIES AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such bank, banks, or other financial
institutions as the Board of Directors may from time to time designate and shall
be drawn out on checks, drafts or other orders signed on behalf of the
Corporation by such person or persons as the Board of Directors (or as one or
more officers duly authorized in accordance with these Bylaws) may from time to
time designate.
Section 2. Seal. The seal of the Corporation shall be as follows:
ARTICLE VI.
INDEMNIFICATION OF DIRECTORS
Section 1. Actions Against Directors and Officers. The Corporation
shall indemnify, to the fullest extent permitted by the Corporation's Articles
of Incorporation and West Virginia law, any individual made a party to a
proceeding (as defined in the West Virginia Corporation Act) because such
individual is or was a director or an officer of the Corporation, against any
loss, damage, liability and expense whatsoever (including, without limitation,
reasonable attorneys fees and litigation expenses) incurred in the proceeding.
-7-
<PAGE> 8
Section 2. Advance for Expenses of Directors and Officers. The
Corporation shall pay for or reimburse the reasonable expenses incurred by a
director or officer who is a party to a proceeding in advance of the final
disposition of the proceeding if:
(a) The director or officer, as the case may be, furnishes the
Corporation a written affirmation of such director's or
officer's good faith belief, with respect to a director, that
his conduct does not constitute behavior of the kind set forth
in clauses (i), (ii), (iii) and (iv) of Article VII of the
Corporation's Articles of Incorporation and, with respect to
an officer, that his conduct does not constitute behavior of
the kind set forth in clauses (i), (ii) and (iv) of Article
VII of the Corporation's Articles of Incorporation; and
(b) The director or the officer, as the case may be, furnishes the
Corporation a written undertaking, executed personally or on
the director's or officer's behalf, to repay any advances if
it is ultimately determined that such director or officer is
not entitled to indemnification.
ARTICLE VII.
AMENDMENT OF BYLAWS
The Board of Directors may amend or repeal these Bylaws or
adopt new bylaws, (a) except to the extent the Articles of Incorporation or the
West Virginia Corporation Act reserves such power exclusively to the
stockholders, or (b) unless the stockholders in amending or repealing a
particular bylaw provide expressly that the Board of Directors may not amend or
repeal that bylaw. Notwithstanding the foregoing, the Board of Directors shall
only be entitled to amend Article VI hereof by unanimous consent. The
stockholders may amend or repeal these Bylaws or adopt new bylaws even though
these Bylaws may also be amended or repealed by the Board of Directors.
-8-
<PAGE> 1
EXHIBIT 3.43
CHARTER
OF
MED: ASSURE SYSTEMS, INC.
The undersigned natural person, having capacity of contract and acting
as the incorporator of a corporation under the Tennessee General Corporation
Act, adopt the following charter for such corporation:
1. The name of the corporation is MED: ASSURE SYSTEMS, INC.
2. The duration of the corporation is perpetual.
3. The address of the principal office of the corporation in the
State of Tennessee shall be 5408 Neilwoods Drive, Knoxville, Tennessee 37919,
County of Knox.
4. The corporation is for profit.
5. The purpose for which the corporation is organized is:
To conduct the general business of providing documentation and
verification of patient medical conditions, treatments and
services for hospitals, physicians, insurance companies and
other persons or entities and all business necessary and
incidental thereto. The corporation is also organized for any
other lawful purposes permitted by law, and shall have all the
powers of a corporation as outlined in Section 48-1-402 T.C.A.
6. The maximum number of shares which this corporation shall have
the authority to issue is 2,000 shares with no par value.
7. The corporation will not commence business until consideration
of One Thousand Dollars ($1,000.00) has been received for the issuance of
shares.
<PAGE> 2
8. Other provisions:
(a) Capital surplus of the corporation may be distributed by
resolution of the Board of Directors without stockholders' vote or approval.
(b) The corporation by resolution of its Board of Directors
can redeem, purchase, or acquire its own stock out of unrestricted or unreserved
capital surplus without stockholder approval.
(c) The Board of Directors of this corporation may take any
action which by law they are required or permitted to take, without a meeting,
upon written consent signed by all directors setting forth the action so taken.
DATED: February 9, 1987
/s/ W. Dale Amburn
_____________________________
INCORPORATOR
2
<PAGE> 3
DESIGNATION OF REGISTERED AGENT
OF
MED: ASSURE SYSTEMS, INC.
To The Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-1-1201 of the Tennessee
General Corporation Act, the undersigned incorporator of a domestic corporation
being organized under the Act submits the following statement for the purpose of
designating the registered agent for the corporation in the State of Tennessee:
1. The name of the corporation is: MED: ASSURE SYSTEMS, INC.
2. The address of the corporation is 5408 Neilwoods Drive,
Knoxville, Knox County, Tennessee 37919.
3. The name and address of its registered agent in the State of
Tennessee shall be W. Dale Amburn, 1716 Clinch Avenue, Knoxville, Knox County,
Tennessee 37916.
DATED: February 9, 1987.
/s/ W. Dale Amburn
______________________________
INCORPORATOR
1
<PAGE> 4
ARTICLES OF AMENDMENT TO THE CHARTER
OF
MED ASSURE SYSTEMS, INC.
Pursuant to the provisions or Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles or amendment to its charter:
1. The name of the corporation is Med Assure Systems, Inc.
2. The text of each amendment adopted is:
The principal office of the corporation is 9207 Park West Blvd., Suite
102, Knoxville, TN 37923. The mailing address of the corporation is
P.0. Box 30698, Knoxville, TN 37930.
3. The corporation is a for-profit corporation.
4. The manner (if not set forth in the amendment) for implementation of
any exchange, reclassification, or cancellation of issues shares is as follows:
5. The amendment was duly adopted on January 15, 1989 by (the
shareholders).
[NOTE: Please strike the choices which do not apply to this amendment.]
6. If the amendment is not to be effective when these articles are filed
by the Secretary of State, the date/time it will be effective is
____________________, 19_____(date)_____________________________________(time).
[NOTE: The delayed effective date shall not be later than the 90th day after the
date this document is filed by the Secretary of State.]
Med Assure Systems, Inc.
3/7/90
__________________________________ _____________________________________
Signature Date Name of Corporation
President
/s/ H. Lynn Massingale
__________________________________ _____________________________________
Signer's Capacity Signature
H. Lynn Massingale, M.D.
_____________________________________
Name (typed or printed)
1
<PAGE> 5
ARTICLES OF AMENDMENT TO THE CHARTER
OF
MED: ASSURE SYSTEMS, INC.
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned Corporation hereby submits the
following articles to amend its Charter and states as follows:
1. The name of the Corporation is Med: Assure Systems, Inc.
2. The text of the amendment adopted is:
(a) The Corporation hereby changes the street address of
its principal office to 1900 Winston Road, Post Office Box 30698, Knoxville,
Tennessee 37930.
(b) The Corporation hereby adds the following paragraph
to its Charter:
"No director may be sued by the corporation or its shareholders for breach of
his or her fiduciary duty to the corporation, provided, however, that this
provision shall not absolve a director from a breach of his or her duty of
loyalty, or acts or omissions not in good faith or which involves intentional
misconduct or a knowing violation of law, or for distributions in violation of
T.C.A. Section 48-18-304."
3. After the changes are made, the street address of the
registered office of the Corporation and the business office of its registered
agent shall be identical.
1
<PAGE> 6
The amendment was duly adopted on the 28th day of October, 1992, by the
board of directors without shareholder action, as such shareholder action was
not required.
DATED this 28th day of October, 1992.
MED: ASSURE SYSTEMS, INC.
By: /s/
--------------------------
Its: Secretary
-------------------------
2
<PAGE> 1
EXHIBIT 3.44
BY-LAWS
OF
MED: ASSURE, INC.
ARTICLE I
MEETING OF SHAREHOLDERS
1. Annual Meeting. The annual meeting of the shareholders shall be held
at such time and place, either within or without this State, as may be
designated from time to time by the directors.
2. Special Meetings. Special meetings of the shareholders may be called
by the president, a majority of the board of directors, or by the holders of not
less than ten percent (10%) of all the shares entitled to vote at such meeting.
The place of said meetings shall be designated by the directors.
3. Notice of Shareholder Meetings. Written or printed notice stating
the place, day, and hour of meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called and the person or persons
calling the meeting, shall be delivered either personally or by mail by or at
the direction of the president, secretary, officer, or person calling the
meeting to each shareholder entitled to vote at the meeting. If mailed, such
notice shall be delivered not less than ten (10) days nor more than two (2)
months before the date of the meeting, and shall be deemed to be delivered when
deposited in the United States mail postpaid and addressed to the shareholder at
his address as it appears on the stock transfer books of their corporation, and
shall be deemed delivered when actually received by the shareholder. The person
giving such notice shall certify that the notice required by this paragraph has
been given.
<PAGE> 2
4. Quorum Requirements. A majority of the shares entitled to vote shall
constitute a quorum for the transactions of business. Once a share is
represented for any purpose at a meeting, it shall be deemed present for quorum
purposes for the remainder of the meeting and for any adjournment of that
meeting unless a new record dates is or must be set for that adjourned meeting.
5. Voting and Proxies. If a quorum exists, action on a matter (other
than the election of Directors) shall be approved if the votes favoring the
action exceed the vote opposing the action. A shareholder may vote his or her
shares either in person or by written proxy, which proxy is effective when
received by the secretary or other person authorized to tabulate votes. No proxy
shall be valid after the expiration of eleven (11) months from the date of its
execution unless otherwise provided in the proxy.
ARTICLE II
BOARD OF DIRECTORS
1. Qualification and Election. Directors need not be shareholders or
residents of this State. They shall be elected by plurality of the votes cast at
the annual meetings of the shareholders at which a quorum is present. Each
director shall hold office until the expiration of the term for which he is
elected, and thereafter until his successor has been elected and qualified.
2. Number. The number of directors shall be fixed from time to time by
the shareholders, or by a majority of the entire board of directors, but shall
never be less than the number required by the law.
3. Meetings. The annual meeting of the board of directors shall be held
immediately after the adjournment of the annual meeting of the shareholders, at
which time the officers of the corporation shall be elected. The board may also
designate more frequent intervals for regular meetings. Special meetings may be
called at any time by the chairman of the board, president, or any two (2)
directors.
-2-
<PAGE> 3
4. Notice of Directors' Meetings. The annual and all regular board
meetings may be held without notice. Special meetings shall be held upon notice
sent by usual means of communication not less than three (3) days before the
meeting.
5. Quorum and Vote. The presence of a majority of the directors shall
constitute a quorum for the transaction of business. Notice of an adjourned
meeting need not be given if the time and place to which the meeting is
adjourned are fixed at the meeting at which the adjournment is taken, and if the
period of adjournment does not exceed one (1) month in any one adjournment. The
vote of a majority of the directors present at a meeting at which quorum is
present shall be the act of the board.
6. Executive and Other Committees. The board of directors, by a
resolution adopted by a majority of its members, may designate an executive
committee, consisting of two or more directors, and other committees, consisting
of two or more persons, and may delegate to such committee or committees any and
all such authority as is permitted by law.
ARTICLE III
OFFICERS
1. Number. The corporation shall have a president, vice president,
treasurer and a secretary, and such other officers as the board of directors
shall from time to time deem necessary. Any two or more offices may be held by
the same person, except the offices of president and secretary.
2. Election and Term. The officers shall be elected by the board at its
annual meeting. Each officer shall serve until the expiration of the term for
which he is elected, and thereafter until his successor has been elected and
qualified.
3. Duties. All officers shall have such authority and perform such
duties in the management of the corporation as are normally incident to their
offices, and in addition thereto,
-3-
<PAGE> 4
each officer shall have authority to act in the same capacity as the president
in the transacting of corporate business.
ARTICLE IV
RESIGNATIONS, REMOVALS AND VACANCIES
1. Resignations. Any officer or director may resign at any time by
giving written notice to the chairman of the board, the president, or the
secretary. Any such resignation shall take effect at the time specified therein,
or, if no time is specified, then upon its acceptance by the board of directors.
2. Removal of Officers. Any officer or agent may be removed by the
board at any time with or without cause.
3. Removal of Directors. Any or all of the directors may be removed
either with or without cause by a proper vote of the shareholders.
4. Vacancies. Newly created directorship resulting from an increase in
the number of directors, and vacancies occurring in any office or directorship
for any reason, including removal of an officer or director, may be filled by
the vote of a majority of the directors then in office, even if less than a
quorum exists.
ARTICLE V
CAPITAL STOCK
1. Stock Certificates. Every shareholder shall be entitled to a
certificate or certificates of capital stock of the corporation in such form as
may be prescribed by the board of directors. Unless otherwise decided by the
board, such certificates shall be signed by the president and the secretary of
the corporation.
2. Transfer of Shares. Shares of stock may be transferred on the books
of the corporation by delivery and surrender of the property assigned
certificate, but subject to any
-4-
<PAGE> 5
restrictions or transfer imposed by either the applicable securities laws or any
shareholder agreement.
3. Loss of Certificates. In the case of the loss, mutilation, or
destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms as the board of directors shall prescribe.
ARTICLE VI
ACTION BY CONSENT
Whenever the shareholders or directors are required or permitted to
take any action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by all the persons or
entities entitled to vote thereon. The affirmative vote of the number of shares
or directors that would be necessary to take such action at a meeting shall be
the act of the shareholders or directors, as the case may be.
ARTICLE VII
AMENDMENT OF BY-LAWS
These by-laws may be amended, added to, or repealed either by the
shareholders or the board of directors as provided by statute. Any change in the
by-laws made by the board of directors, however, may be amended or repealed by
the shareholders.
CERTIFICATION
I certify that these by-laws were duly adopted at the organizational
meeting of the corporation held on the 25th day of February, 1997.
/s/
-----------------------------
INCORPORATOR
-5-
<PAGE> 1
EXHIBIT 3.45
ARTICLES OF INCORPORATION
OF
METRO RADIOLOGY MANAGEMENT SERVICES, INC.
I, the undersigned natural person of the age of eighteen years or more,
do make and acknowledge these Articles of Incorporation for the purpose of
forming a business corporation under and by virtue of the laws of the State of
North Carolina:
1. The name of the corporation is Metro Radiology Management
Services, Inc.
2. The period of duration of the corporation is perpetual.
3. The purposes for which the corporation is organized are:
(a) to provide personnel, management and consulting services
to hospitals, clinics, radiology departments and other medical facilities.
(b) to engage in any business whatsoever, either as principal
or as agent or both, or as a syndicate, which the corporation may deem
convenient or proper in furtherance of any of the purposes hereinabove mentioned
or otherwise; to conduct its business in this state, in other states, in the
District of Columbia, in the territories and possessions of the United States,
and in foreign countries; and to have and to exercise all powers authorized by
the laws of the State of North Carolina under which the corporation is formed,
whether expressly set forth in this third paragraph or not, as such laws are now
in effect or may at any time hereafter be amended; and
(c) to acquire by lease, purchase, contract, concession, or
otherwise, and to own, develop, explore, exploit, improve, operate, lease,
enjoy, control, manage, or otherwise turn to account, mortgage, grant, sell,
exchange, convey, or otherwise dispose of either within or without the State of
North Carolina and in any country, domestic or foreign, any and all real estate
lands, options, concessions, grants, land patents, franchises, rights,
privileges, easements,
<PAGE> 2
tenements, estates, hereditaments, interests, and properties of every
description and nature whatsoever which the corporation may deem wise and proper
in connection with the conduct of any business or businesses herein enumerated;
and
(d) to engage in any other lawful activity, including, but not
limited to, constructing, manufacturing, raising, or otherwise producing and
repairing, servicing, storing or otherwise caring for any type of structure or
commodity whatsoever; processing, selling, brokering, factoring, distributing,
lending, borrowing or investing in any type of property whether real or
personal, tangible or intangible; extracting and processing natural resources;
transporting freight or passengers by land, sea or air; collecting and
disseminating information or advertisement through any medium whatsoever;
performing personal services of any nature; and entering into or serving in any
type of management, investigative, advisory, promotional, protective, insurance,
guarantyship, suretyship, fiduciary or representative capacity or relationship
for any persons or corporations whatsoever.
(e) The purposes specified herein shall be construed both as
purposes and powers and shall be in no wise limited or restricted by reference
to, or inference from, the terms of any other clause in this or any other
article, but the purposes and powers specified in each of the clauses herein
shall be regarded as independent purposes and powers, and the enumeration of
specific purposes and powers shall not be construed to limit or restrict in any
manner the meaning of general terms or of the general powers of the corporation;
nor shall the expression of one thing be deemed to exclude another, although it
be of like nature not expressed.
4. The corporation shall have the authority to issue one hundred
thousand (100,000) shares of common stock with a par value of One Dollar ($1.00)
per share.
5. The minimum amount of consideration to be received by the
corporation for its
-2-
<PAGE> 3
shares before it shall commence business is one Hundred Dollars ($100.00) in
cash or in property of equivalent value.
6. The address of the initial registered office of the
corporation in the State of North Carolina is 1901 Hillandale Road, City of
Durham, County of Durham, North Carolina 27705; and the name of its initial
registered agent at such address is Randall K. Sather, M.D.
7. The number of directors of the corporation may be fixed by the
Bylaws.
The number of directors constituting the initial Board of
Directors shall be one (1); and the name and address of the person who is to
serve as director until the first meeting of shareholders, or until his
successor is elected and qualify, are:
NAME ADDRESS
Randall K. Sather, M.D. 1901 Hillandale Road
Durham, North Carolina 27705
8. The name and address of the incorporator are:
NAME ADDRESS
Reich L. Welborn 301 West Main Street
Suite 800
Durham, North Carolina 27701
9. There shall be no preemptive rights with respect to the shares
of the capital stock of the corporation.
10. A director of the corporation shall not be personally liable
for monetary damages for breach of his duty as a director, except for (i) acts
or omissions not made in good faith that the director at the time of such breach
knew or believed were in conflict with the best interests of the corporation,
(ii) any liability under Section 55-32 of the Business Corporation Act, (iii)
any transaction from which the director derived an improper personal benefit, or
(iv) acts or omissions
-3-
<PAGE> 4
occurring prior to the date this provision became effective. As used herein, the
term "improper personal benefit" does not include a director's compensation or
other incidental benefit for or on account of his service as a director,
officer, employee, independent contractor, attorney, or consultant of the
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this the 19th
day of April, 1989.
/s/ Reich L. Welborn (SEAL)
---------------------------------
Reich L. Welborn
-4-
<PAGE> 5
STATE OF NORTH CAROLINA
COUNTY OF DURHAM
This is to certify that on the 19th day of April, 1989, before me, a
Notary Public in and for the County and State aforesaid, personally appeared
Reich L. Welborn, who I am satisfied is the person named in and who executed the
foregoing Articles of Incorporation, and I having first made known to him the
contents thereof, he did acknowledge that he signed and delivered the same as
his voluntary act and deed for the uses and purposes therein expressed and the
same are true of his own knowledge.
WITNESS my hand and notarial seal this the 19th day of April, 1989.
/s/ Joann W. Anderson
---------------------------------
Notary Public
My Commission Expires: 4-29-90
---------
-5-
<PAGE> 1
Exhibit 3.46
BYLAWS
OF
METRO RADIOLOGY MANAGEMENT SERVICES, INC.
ARTICLE I
OFFICES:
Section 1. Principal Office:
The principal office of the Corporation shall be located
at 1901 Hillandale Road, Durham, North Carolina.
Section 2. Registered Office:
The registered office of the Corporation required by law
to be maintained in the State of North Carolina may be,
but need not be identical with the principal office.
Section 3. Other Offices: The Corporation may have offices at such
other places, either within or without the State of North
Carolina, as the Board of Directors may from time to time
determine, or as the affairs of the Corporation may
require from time to time.
ARTICLE II
SHAREHOLDERS MEETINGS:
Section 1. Place of Meetings:
All meetings of shareholders shall be held at the
principal office of the Corporation, or at such other
place, either within or without the State of North
Carolina, as shall be designated in the notice of the
meeting or agreed upon by a majority of the shareholders
entitled to vote thereat.
Section 2. Annual Meetings:
The annual meeting of the shareholders of the Corporation,
for the purposes of electing directors and transacting
such other business as may be properly brought before the
meeting, shall be held on any day (except a Saturday,
Sunday or legal holiday) as determined by the Board of
Directors.
Section 3. Substitute Annual Meetings:
If the annual meeting shall not be held on the day
designated by these bylaws, a substitute annual meeting
may be called in accordance with the provisions of Section
4 of this Article. A meeting so called shall be designated
and treated for all purposes as the annual meeting.
<PAGE> 2
Section 4. Special Meetings:
Special meetings of the shareholders may be called at any
time by the President, Secretary, or Board of Directors of
the Corporation, or by any shareholder, pursuant to the
written request of the holders of not less than one-tenth
of all shares entitled to vote at the meeting.
Section 5. Notice of Meetings:
Written or printed notice stating the time and place of
the meeting shall be delivered not less than ten days nor
more than fifty days before the date thereof, either
personally or by mail, by or at the direction of the
President, the Secretary, or other person calling the
meeting, to each shareholder of record entitled to vote at
such meeting; provided that such notice must be given not
less than twenty days before the date of any meeting at
which a merger or consolidation is to be considered. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the
shareholder at his address as it appears on the record of
the shareholders of the Corporation, with postage thereon
paid.
In the case of an annual or substitute annual meeting, the
notice of the meeting need not specifically state the
business to be transacted thereat, unless it is a matter
other than elections of directors, on which the vote of
shareholders is expressly required by the provisions of
the laws of the State of North Carolina. In the case of a
special meeting, the notice of the meeting shall
specifically state the purpose or purposes for which the
meeting is called.
When a meeting is adjourned for thirty days or more,
notice of the adjourned meeting shall be given as in the
case of an original meeting. When a meeting is adjourned
for less than thirty days in any one adjournment, it is
not necessary to give any notice of the adjourned meeting,
other than by announcement at the meeting at which the
adjournment is taken.
Section 6. Voting Lists:
At least ten days before each meeting of shareholders, the
secretary of the Corporation shall prepare an alphabetical
list of the shareholders entitled to vote at such meetings
with the address of and the number of shares held by each,
which list shall be kept on file at the registered office
of the Corporation for a period of ten days prior to such
meeting and shall be subject to the inspection by any
shareholders during the whole time of the meeting.
Section 7. Quorum:
The holders of a majority of the outstanding shares
entitled to vote, represented in person or by proxy, shall
constitute a quorum at meetings of shareholders. If there
is no quorum at a meeting of shareholders, such meeting
may be adjourned from time to time by the vote of a
majority of the shares voting on the motion to adjourn;
and at any adjourned meeting at which a
-2-
<PAGE> 3
quorum is present, any business may be transacted which
might have been transacted at the original meeting.
The shareholders at a meeting at which a quorum is present
may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to
leave less than a quorum.
Section 8. Voting of Shares:
Subject to the provisions of Section 4 of Article III,
each outstanding share having voting rights shall be
entitled to one vote on each matter submitted to a vote at
a meeting of shareholders.
Except in the election of directors as governed by the
provisions of Section 3 of Article III, the vote of a
majority of the shares voted on any matter at a meeting of
shareholders at which a quorum is present shall be the act
of the shareholders on that matter unless the vote of a
greater number is required by law or by the charter or
bylaws of this Corporation.
Shares of its own stock owned by the Corporation, directly
or indirectly, through a subsidiary corporation or
otherwise, shall not be voted and shall not be counted in
determining the total number of shares entitled to vote,
except that shares held in a fiduciary capacity may be
voted and shall be counted to the extent provided by law.
Voting on all matters, except the election of directors,
shall be by voice vote or by a show of hands, unless the
holders of one-tenth of the shares represented at the
meeting shall, prior to the voting on any matter, demand a
ballot vote on that particular matter.
Section 9. Informal Action by Shareholders:
Any action which may be taken at a meeting of the
shareholders may be taken without a meeting if a consent,
in writing, setting forth the action so taken, shall be
signed by all of the persons who would be entitled to vote
upon such action at a meeting and filed with the Secretary
of the Corporation to be kept in the corporate minute
book.
Section 10. Proxies:
Shares may be voted either in person or by one or more
agents authorized by a written proxy executed by the
shareholder or his duly authorized attorney-in-fact. A
proxy is not valid after the expiration of eleven months
from the date of its execution unless the person executing
it specified therein the length of time for which it is to
continue in force or limits its use to a particular
meeting, but no proxy shall be valid after ten years from
the date of its execution.
-3-
<PAGE> 4
ARTICLE III
DIRECTORS:
Section 1. General Powers:
The business and affairs of the Corporation shall be
managed by the Board of Directors or by such Executive
Committee as the Board of Directors may establish pursuant
to these bylaws.
Section 2. Number, Term, And Qualifications:
The Corporation shall have directors, and from time to
time the number of directors shall be the number fixed or
changed by action of the shareholders, but no reduction in
the number of directors shall of itself have the effect of
shortening the term of any incumbent director. Each
director shall hold office until his death, resignation,
retirement, removal, disqualification or until his
successor is elected and qualified. Directors need not be
residents of the State of North Carolina or shareholders
of the Corporation.
Section 3. Election of Directors:
Except as provided in Section 6 of this Article, the
directors shall be elected at the annual meeting of
shareholders; those persons who receive the highest number
of votes shall be deemed to have been elected. If any
shareholder so demands, the election of directors shall be
by ballot.
Section 4. Cumulative Voting:
Every shareholder entitled to vote at an election of
directors shall have the right to vote the number of
shares standing of record in his name for as many persons
as there are directors to be elected and for whose
election he has a right to vote or to cumulate his votes
by giving one candidate as many votes as the number of
such directors multiplied by the number of his shares
shall equal or by distributing such votes on the same
principal among any number of such candidates. This right
of cumulative voting shall not be exercised unless some
shareholder or proxy holder announces in open meeting,
before the voting for the directors starts, his intention
so to vote cumulatively and if such announcement is made,
the chair shall declare that all shares entitled to vote
have the right to vote cumulatively and shall thereupon
grant a recess of not less than one nor more than four
hours, as he shall determine, or of such other period of
time as is unanimously then agreed upon.
Section 5. Removal:
Any director may be removed from office at any time, with
or without cause, by a vote of Shareholders holding a
majority of the shares entitled to vote at an election of
directors. However, unless the entire board is removed, an
individual director may not be removed if the number of
shares voting against the removal would be sufficient to
elect a director if such shares were voted
-4-
<PAGE> 5
cumulatively at an annual election. If any directors are
so removed, new directors may be elected at the same
meeting.
Section 6. Vacancies:
A vacancy occurring in the Board of Directors may be
filled by a majority of the remaining directors, even
though less than a quorum, or by the sole remaining
director; but a vacancy created by an increase in the
authorized number of directors shall be filled only by
election at an annual meeting or at a special meeting of
shareholders called for that purpose. The shareholders may
elect a director at any time to fill any vacancy not
filled by the directors. A director elected to fill a
vacancy shall be elected for the unexpired term of his
predecessor in office.
Section 7. Chairman:
The President of the Corporation shall serve as Chairman
of the Board of Directors. He shall preside at all
meetings of the Board of Directors and perform such other
duties as may be directed by the Board.
Section 8. Compensation:
The Board of Directors may compensate directors for their
services as such and may provide for the payment of all
expenses incurred by directors in attending regular and
special meetings of the Board.
Section 9. Executive Committee: The Board of Directors may, by
resolution adopted by a majority of the number of
directors fixed by these bylaws, designate two or more
directors to constitute an Executive Committee, which
committee, to the extent provided in such resolution,
shall have and may exercise all the authority of the Board
of Directors in the management of the Corporation.
ARTICLE IV
MEETINGS OF DIRECTORS:
Section 1. Regular Meetings:
A regular meeting of the Board of Directors shall be held
immediately after, and at the same place as, the annual or
substitute annual meeting of shareholders.
In addition, the Board of Directors may provide by
resolution the time and place, either within or without
the State of North Carolina, for the holding of additional
regular meetings.
-5-
<PAGE> 6
Section 2. Special Meetings:
Special meetings of the Board of Directors may be called
by, or at the request of, the President or any two
directors. Such meetings may be held either within or
without the State of North Carolina.
The person or persons calling a special meeting of the
Board of Directors shall, at least five days before the
meeting, give notice thereof by any usual means of
communication. Such notice need not specify the purpose
for which the meeting is called.
Section 3. Waiver of Notice:
Any director may waive notice of any meeting. Attendance
by a director at a meeting shall constitute a waiver of
notice of such meeting except where a director attends a
meeting for the express Purpose of objecting to the
transaction of any business because the meeting is not
lawfully called or convened.
Section 4. Quorum:
A majority of the duly elected or appointed and qualified
directors of the Corporation shall constitute a quorum for
the transaction of business at any meeting of the Board of
Directors. A majority of the directors present at any
meeting, whether or not a quorum is present, may adjourn
the meeting from time to time without notice, other than
announcement at the meeting, until a quorum shall attend.
Section 5. Manner of Acting:
Except as otherwise provided in these bylaws, the act of
the majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of
Directors.
The vote of a majority of the duly elected or appointed
and qualified directors of the Corporation shall be
required to adopt a resolution constituting the Executive
Committee. The vote of a majority of the directors then
holding office shall be required to adopt, amend, or
repeal a bylaw, or to adopt a resolution dissolving the
Corporation without resolution of the shareholders.
Section 6. Informal Action By Directors:
Action taken by a majority of the directors without a
meeting is, nevertheless, Board action if written consent
to the action in question is signed by all the directors
and filed with the minutes of the proceedings of the
Board, whether done before or after the action so taken.
-6-
<PAGE> 7
ARTICLE V
OFFICERS:
Section 1. Number:
The Corporation shall have a President, a Secretary, a
Treasurer, and such Vice Presidents, Assistant
Secretaries, Assistant Treasurers, and other officers as
the Board of Directors may from time to time elect. Any
two or more offices may be held by the same person, except
the office of President and Secretary. However, no officer
shall execute, acknowledge, or verify any instrument in
more than one capacity if such instrument is required by
law, by the Articles of Incorporation, or the bylaws to be
executed, acknowledged, or verified by two or more
officers. If there is more than one Vice President, the
Board of Directors may designate their seniority (such as
First Vice President, Senior Vice President, etc.) and/or
the particular department of the Corporation of which they
shall have charge.
Section 2. Election And Term:
The officers of the Corporation shall be elected by the
Board of Directors. Such elections may be held at any
regular or special meeting of the Board. Each officer
shall hold office until his death, resignation,
retirement, removal, disqualification, or until his
successor is elected and qualified, unless otherwise
specified by the Board of Directors. The Board of
Directors may fill any vacancy in any office occurring for
whatever reason.
Section 3. Removal:
Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board with or without
cause but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
Section 4. Compensation:
The compensation of all officers of the Corporation shall
be fixed by the Board of Directors.
Section 5. President:
The President shall be the chief executive officer of the
Corporation and shall preside at all meetings of the
shareholders and of the Board of Directors. Subject to the
direction and control of the Board of Directors and the
Executive Committee, if created, he shall have general
charge and authority over the business of the Corporation.
He shall make reports regarding the business and
activities of the Corporation for the preceding fiscal
year to the shareholders at each annual meeting. He shall
sign with any other proper officer certificates for shares
of the Corporation and any deeds, mortgages, bonds,
contracts, or other instruments which may be lawfully
executed on behalf of the Corporation except where
required or permitted by law to be
-7-
<PAGE> 8
otherwise signed and executed and except where the signing
and execution thereof shall be delegated by the Board of
Directors to some other officer or agent. In general, he
shall perform all duties incident to the office of
President and such other duties as may be prescribed by
the Board of Directors from time to time.
Section 6. Vice President:
The Vice President, or if there is more than one, the Vice
Presidents in order of their seniority by designation, (or
if not designated, in the order of their seniority by
election) shall perform the duties of the President in his
absence or during his disability to act. The Vice
Presidents shall have such other duties and powers as may
be assigned to or vested in them by the Board of
Directors, the Executive Committee or the President.
Section 7. Secretary:
The Secretary shall keep accurate records of the acts and
proceedings of all meetings of the shareholders and
directors. He shall give all notices required by law and
these bylaws. He shall have general charge of the
corporate books and records of the Corporation and of the
corporate seal. He shall affix the corporate seal to any
lawfully executed instrument requiring it. He shall have
general charge of the stock transfer books of the
Corporation and shall keep at the registered or principal
office of the Corporation the record of shareholders
showing the name and address of each shareholder and the
number and class of the shares held by each. He shall sign
such instruments as may require his signature and, in
general, shall perform all duties incident to the office
of Secretary and such duties as may be assigned to him
from time to time by the President, the Executive
Committee, or the Board of Directors.
Section 8. Treasurer:
The Treasurer shall have custody of all funds and
securities belonging to the Corporation and shall receive,
deposit or disburse the same under the direction of the
Board of Directors or the Executive Committee. He shall
keep full and accurate accounts of the finances of the
Corporation in books especially provided for that purpose
and he shall cause a true statement of its assets and
liabilities as of the close of each fiscal year and of the
results of its operations and of changes in surplus for
each fiscal year, all in reasonable detail, including
particulars as to convertible securities then outstanding,
to be made and filed within four months after the end of
such fiscal year. The statement so filed shall be kept
available for inspection for a period of ten years; and
the Treasurer shall mail or deliver a copy of the latest
such statement to any shareholder upon his written request
therefor. The Treasurer shall, in general, perform all
duties incident to his office and such other duties as may
be assigned to him from time to time by the President, the
Board of Directors, or the Executive Committee.
-8-
<PAGE> 9
Section 9. Assistant Secretaries And Treasurers:
The Assistant Secretaries and Assistant Treasurers shall,
in the absence or disability of the Secretary or the
Treasurer respectively, perform the duties and exercise
the powers of those offices and they shall, in general,
perform such other duties as shall be assigned to them by
the Secretary or the Treasurer respectively, or by the
President, the Board of Directors, or the Executive
Committee.
Section 10. Bonds:
The Board of Directors may, by resolution, require any or
all officers, agents, and employees of the Corporation to
give bond to the Corporation, with sufficient sureties,
conditioned on the faithful performance of the duties of
their respective offices or positions and to comply with
such other conditions as may from time to time be required
by the Board of Directors.
ARTICLE VI
CONTRACTS LOANS, AND DEPOSITS:
Section 1. Contracts:
The Board of Directors or Executive Committee may
authorize any officer or officers, agent or agents, to
enter into any contract or execute and deliver any
instrument on behalf of the Corporation and such authority
may be general or confined to specific instances.
Section 2. Loans:
No loans shall be contracted on behalf of the Corporation
and no evidence of indebtedness shall be issued in its
name unless otherwise authorized by resolution of the
Board of Directors or the Executive Committee. Such
authority may be general or confined to specific
instances.
Section 3. Checks And Drafts:
All checks, drafts or other orders for the payment of
money issued in the name of the Corporation shall be
signed by such officer or officers, agent or agents, of
the Corporation in such manner as shall from time to time
be determined by the Board of Directors or the Executive
Committee.
Section 4. Deposits:
All funds of the Corporation not otherwise employed, shall
be deposited from time to time to the credit of the
Corporation in such depositories as the Board of Directors
shall direct.
-9-
<PAGE> 10
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER:
Section 1. Certificates For Shares:
Certificates representing shares of the Corporation shall
be issued in such form as the Board of Directors shall
determine to every shareholder for the fully paid shares
owned by him. These certificates shall be signed by the
President or any Vice President and by the Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer.
They shall be consecutively numbered or otherwise
identified and the name and address of the persons to whom
they are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the
Corporation.
Section 2. Transfer of Shares:
Transfer of shares shall be made on the stock transfer
books of the Corporation only upon the surrender of the
certificates for the shares sought to be transferred by
the record holder thereof or by his duly authorized agent,
transferee or legal representative.
All certificates surrendered for transfer shall be
cancelled before new certificates for the transferred
shares shall be issued.
Section 3. Closing Transfer Books And Fixing Record Date:
For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof or entitled to receive payment of any
dividend or, in order to make a determination of
shareholders for any other purpose, the Board of Directors
may provide that the stock transfer books may be closed
for a stated period, but not to exceed, in any case, fifty
days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of
or to vote at a meeting of shareholders, such books shall
be closed for at least ten days immediately preceding such
meeting.
In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for
any such determination of shareholders, such record date
in any case to be not more than fifty days and, in case of
a meeting of shareholders, not less than ten days
immediately preceding the date on which the particular
action requiring such determination of shareholders is to
be taken.
If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of
shareholders or shareholders entitled to receive payment
of a dividend, the date on which notice of the meeting is
mailed or the date on which the
-10-
<PAGE> 11
resolution is adopted, as the case may be, shall be the
record date for such determination of shareholders.
Section 4. Lost Certificates:
The Board of Directors may authorize the issuance of a new
share certificate in place of a certificate claimed to
have been lost or destroyed upon receipt of an affidavit
of such fact from the person claiming such loss or
destruction. When authorizing such issuance of a new
certificate, the Board may require the claimant to give
bond in such sum as it may direct to indemnify the
Corporation against loss from any claim with respect to
the certificate claimed to have been lost or destroyed or
the Board may, by resolution reciting that the
circumstances justify such action, authorize the issuance
of the new certificate without requiring such bond.
ARTICLE VIII
GENERAL PROVISIONS:
Section 1. Dividends:
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding
shares in the manner and upon the terms and conditions
provided by law or by its charter.
Section 2. Waiver of Notice:
Whenever any notice is required to be given to any
shareholder or director under the provisions of the North
Carolina Business Corporation Act or under the provisions
of the charter or bylaws of this Corporation, a waiver
thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time
stated therein, shall be equivalent to the giving of such
notice.
Section 3. Indemnification:
Any person who at any time serves or has served as a
director, officer, employee or agent of the Corporation or
in such capacity at the request of the Corporation for any
other corporation, partnership, joint venture, trust or
other enterprise, shall have a right to be indemnified by
the Corporation to the fullest extent permitted by law
against (a) reasonable expenses, including attorney's
fees, actually and necessarily incurred by him in
connection with any threatened, pending or completed
action, suit or proceedings, whether civil, criminal,
administrative or investigative, and whether or not
brought by or on behalf of the Corporation seeking to hold
him liable by reason of the fact that he is or was acting
in such capacity, and (b) reasonable payments made by him
in satisfaction of any judgment, money decree, fine,
penalty or settlement for which he may have become liable
in any such action, suit or proceeding.
-11-
<PAGE> 12
The Board of Directors of the Corporation shall take all
such action as may be necessary and appropriate to
authorize the Corporation to pay the indemnification
required by this bylaw, including without limitation, to
the extent needed, making a good faith evaluation of the
manner in which the claimant for indemnity acted and of
the reasonable amount of indemnity due him and giving
notice to, and obtaining approval by, the shareholders of
the Corporation.
Any person who at any time after the adoption of this
bylaw serves or has served in any of the aforesaid
capacities for or on behalf of the Corporation shall be
deemed to be doing or to have done so in reliance upon,
and as consideration for, the right of indemnification
provided herein. Such right shall inure to the benefit of
the legal representatives of any such person and shall not
be exclusive of any other rights to which such person may
be entitled apart from the provision of this bylaw.
Section 4. Fiscal Year:
Unless otherwise ordered by the Board of Directors, the
fiscal year of the Corporation shall be the calendar year.
Section 5. Amendments:
Except as otherwise provided herein, these bylaws may be
amended or repealed and new bylaws may be adopted by the
affirmative vote of a majority of the directors then
holding office at any regular or special meeting of the
Board of Directors.
The Board of Directors shall have no power to adopt a
bylaw:
(1) requiring more than a majority of the voting
shares for a quorum at a meeting of
shareholders or more than a majority of the
votes cast to constitute action by the
shareholders, except where higher
percentages are required by law;
(2) providing for the management of the
Corporation otherwise than by the Board of
Directors or its Executive Committee;
(3) increasing or decreasing the number of
directors;
(4) classifying and staggering the election of
directors;
-12-
<PAGE> 13
No bylaws adopted or amended by the shareholders shall be
altered or repealed by the Board of Directors, except to
the extent that such bylaw expressly authorizes its
amendment or repeal by the Board of Directors.
BYLAWS OF METRO RADIOLOGY MANAGEMENT SERVICES, INC.
ADOPTED AS OF APRIL 28, 1989
ATTEST: /s/
----------------------------------------
(Secretary of Organizational Meeting)
sh:JWA
METRObyl
-13-
<PAGE> 1
EXHIBIT 3.47
STATE OF FLORIDA
ARTICLES OF INCORPORATION
OF
NEO-MED, INC.
The undersigned, acting as incorporator of a corporation under the
Florida General Corporation Act, adopts the following Articles of Incorporation:
FIRST: The name of the corporation is: NEO-MED, INC.
SECOND: The period of its duration is perpetual.
THIRD: The purpose for which the corporation is organized is to engage
in the transaction of any or all lawful business for which corporations may be
incorporated under the provisions of the Florida General Corporation Act.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is 1,000 shares at One and 00/00 ($1.00) Dollar par.
FIFTH: The street address of the initialed registered office of the
corporation is c/o C T CORPORATION SYSTEM, 1200 South Pine Island Road,
Plantation, Florida 33324, and the name of its initial registered agent at such
address is C T CORPORATION SYSTEM.
SIXTH: The number of directors constituting the initial board of
directors of the corporation is four, and the names and addresses of the persons
who are to serve as directors until the first annual meeting of shareholders or
until their successors are elected and shall qualify are:
J. Clifford Findeiss, M.D. Jere D. Creed, M.D.
1200 South Pine Island Road 1200 South Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
Naresh Nagpal, M.D. Joseph J. Radal, M.D.
1200 South Pine Island Road 1200 South Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
SEVENTH: The mailing address of the Corporation is 1200 South Pine
Island Road, Suite 600, Plantation, Florida 33324.
EIGHTH: The name and address of the incorporator is:
Neesa K. Warlen, Esq.
1200 South Pine Island Road
Suite 600
Plantation, Florida 33324
<PAGE> 2
DATED 11/12/93
------------------- /s/ Neesa K. Warlen
----------------------------------
Incorporator
STATE OF FLORIDA
COUNTY OF BROWARD
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid, to take acknowledgments,
personally appeared NEESA K. WARLEN personally known to me, or who produced Fla.
Driv. Lic. #K645-622-59-874-0 to me known to be the person described in and who
executed the foregoing instrument and who acknowledged before me that she
executed the same.
WITNESS my hand and official seal in the County and State last
aforesaid this 12th day of November, 1993.
/s/ Kathleen G. Drago
-----------------------------------------
(Signature of Notary Public)
Kathleen G. Drago
-----------------------------------------
(Printed Name of Notary Public)
My commission expires:
-2-
<PAGE> 1
Exhibit 3.48
BYLAWS
OF
NEO-MED, INC.
Article 1. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the
<PAGE> 2
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled
-2-
<PAGE> 3
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
-3-
<PAGE> 4
shares of such class or series shall constitute a quorum for the transaction of
such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
-4-
<PAGE> 5
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
-5-
<PAGE> 6
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholder's duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records
-6-
<PAGE> 7
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their
-7-
<PAGE> 8
shares upon compliance with further provisions of this act regarding the rights
of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
-8-
<PAGE> 9
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 4 directors. The number
of directors may be increased or decreased from time to time by amendment to
these bylaws, but no decrease shall have the effect of shortening the terms of
any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of
-9-
<PAGE> 10
Directors. A director elected to fill a vacancy shall hold office only until the
next election of directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
-10-
<PAGE> 11
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or
-11-
<PAGE> 12
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting
-12-
<PAGE> 13
shall be given to the directors who were not present at the time of the
adjournment and, unless the time and place of the adjourned meeting are
announced at the time of the adjournment, to the other directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
-13-
<PAGE> 14
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
-14-
<PAGE> 15
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or
-15-
<PAGE> 16
persons to whom issued; the number and class of shares, and the designation of
the series, if any, which such certificate represents; and the par value of each
share represented by such certificate, or a statement that the shares are
without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V - Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
-16-
<PAGE> 17
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
-17-
<PAGE> 18
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
-18-
<PAGE> 19
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-19-
<PAGE> 1
Exhibit 3.49
ARTICLES OF INCORPORATION
OF
NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
The undersigned, being over the age of 18 years, for the purpose of
forming a corporation under the Washington Business Corporation Act, hereby
certifies and adopts in duplicate the following Articles of Incorporation:
ARTICLE I.
NAME AND DURATION
The name of the corporation is Northwest Emergency Physicians,
Incorporated and its duration shall be perpetual.
ARTICLE II.
PURPOSES
The purposes of the corporation are as follows:
1. To transact any and all lawful business for which corporations may
be incorporated under the Washington Business Corporation Act, Title 23A of the
Revised Code of Washington, as amended.
2. In furtherance of and not in limitation of the general powers
conferred by the laws of the State of Washington, the corporation shall have
powers to engage in all such activities as are incidental or conducive to the
attainment of the purposes of this corporation, or any of them, and to exercise
any and all powers authorized or permitted to be done by a corporation under any
laws that may be now or hereafter applicable or available to this corporation.
ARTICLE III.
CORPORATE PURCHASE OF STOCK
The corporation shall have the right to acquire by purchase or
otherwise and to own, hold, cancel, reissue, sell, pledge and otherwise deal in
the shares of the corporation to the extent of available unreserved and
unrestricted earned surplus or capital surplus.
ARTICLE IV.
AUTHORIZED CAPITAL
The total number of shares which the corporation shall have authority
to issue is 50,000 of common stock without par value.
<PAGE> 2
ARTICLE V.
NO PREEMPTIVE RIGHTS
No shareholder of this corporation shall have any preemptive or other
rights to subscribe to or purchase any shares of any class or series of stock,
whether now or hereafter authorized, or any treasury stock of any class or
series offered for sale by the corporation, or any obligations convertable into
any class or series of stock of the corporation.
ARTICLE VI.
VOTING
At each election for directors, every shareholder entitled to vote at
such election shall have the right to vote in person or by proxy the number of
shares of stock held by him, for as many persons as there are directors to be
elected. No cumulative voting for directors shall be permitted.
ARTICLE VII.
REGISTERED OFFICE AND REGISTERED AGENT
The address of the initial registered office of the corporation is
11808 Northup Way, Suite 110, Bellevue, Washington 98005 and the name of its
initial registered agent at such address is Gregory P. Schroedl.
ARTICLE VIII.
BOARD OF DIRECTORS
The number of directors of the corporation shall be fixed in the manner
specified in the ByLaws of the corporation. The number of directors constituting
the initial Board of Directors of the corporation is one (1). The names and
address of the person who is to serve as the sole director until the first
annual meeting of shareholder and until his successor is elected and qualified
is as follows:
NAME: ADDRESS:
Gregory P. Schroedl 11808 Northup Way, Suite 110
Bellevue, Va 98005
ARTICLE IX.
INCORPORATOR
The name and address of the incorporator is:
Gregory P. Schroedl
-2-
<PAGE> 3
11808 Northup Way, Suite 110
Bellevue, WA 98005
ARTICLE X.
CONFLICT OF INTEREST: DISCLOSURE
Any contract or other transaction between this corporation and one or
more of its directors, or between this corporation and any corporation, firm,
association, or other entity, of which one or more of its directors are
stockholders, members, directors, officers, or employees, or in which they are
interested, shall be valid for all purposes, notwithstanding the presence of
such director or directors at the meeting of the Board of Directors which acts
upon or in reference to such contract or transaction and notwithstanding his or
their participation in such action, by voting or otherwise, even though his or
their presence or vote, or both, have been necessary to obligate this
corporation upon such contract or transaction; PROVIDED, that the fact that he
or such firm is so interested shall be disclosed to or shall have been known by
the directors acting on such contract or transaction.
ARTICLE XI.
AMENDMENTS
1. Articles of Incorporation. The corporation reserves the right to
amend, alter, change or repeal any provision contained in these Articles of
Incorporation, in the manner now or hereafter prescribed by law, and all rights
and powers conferred herein on shareholders and directors are subject to this
reserved power.
2. Bylaws. The authority to adopt, alter, amend or repeal the Bylaws of
the corporation is vested in the Board of Directors and it may be exercised at
any regular or special meeting of the Board.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the incorporator has executed these Articles of
Incorporation in duplicate on the 8th day of May, 1985.
/s/ Gregory P. Schroedl
----------------------------
GREGORY P. SCHROEDL
-4-
<PAGE> 1
Exhibit 3.50
BYLAWS
OF
NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at such place,
either within or without the State of Washington, on such date, and at such
time, as the Board of Directors may by resolution provide, or if the Board of
Directors fails to provide, then such meeting shall be held at the principal
office of the Corporation at 10:00 a.m., on the fourth Friday of the fourth
calendar month after the end of the Corporation's fiscal year, if not a legal
holiday under the laws of the State of Washington, and if a legal holiday, on
the next succeeding day.
Section 2. Special Meetings. Special meetings of the
shareholders may be called by the Board of Directors, by the President, or by
the Corporation upon the written request (which request shall set forth the
purpose or purposes of the meeting) of the shareholders of record (see Section
6(b) of Article I of these Bylaws) of outstanding shares representing a least
25% of all the votes entitled to be cast on any issue proposed to be considered
at the proposed special meeting. In the event such meeting is called by the
Board of Directors, such meeting may be held at such place, either within or
without the State of Washington, as is stated in the call and notice thereof. If
such Meeting is called at the request of shareholders as provided in this
Section 2, then such meeting shall be held at the principal office of the
corporation.
Section 3. Notice of Meetings. A written or printed notice
stating the place, day and hour of the meeting, and in case of a special meeting
the purpose or purposes for which the meeting is called, shall be delivered or
mailed by the Secretary of the Corporation to each holder of record of stock of
the Corporation at the time entitled to vote, at his address as it appears upon
the records of the corporation not, less 10 nor more than 60 days prior to such
meeting. If the Secretary fails to give such notice within 20 days after the
call of a meeting, the person calling or requesting such meeting, or any person
designated by them may give such notice. Notice of such meeting may be waived in
writing by any shareholder. Notice of any adjourned meeting of the shareholders
shall not be required if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is, taken, unless the
Board of Directors sets a new record date for such meeting in which case notice
shall be given in the manner provided in this Section 3.
Section 4. Quorum and Shareholder Vote. A quorum for action on
any subject matter at any annual or special meeting of exist when the holders of
shares entitled to vote a majority of the votes entitled to be cast on such
subject matter are represented in person or by proxy at such meeting. If a
quorum is present, the affirmative vote of such number of shares as is required
by the Washington Business Corporation Act (as in effect at the time the vote is
taken), for approval of the subject matter being voted upon shall be the act of
the shareholders, unless a greater vote is required
<PAGE> 2
by the Articles of Incorporation or these Bylaws. If a quorum is not present, a
meeting of shareholders may be adjourned from time to time by the vote of shares
having a majority of the votes of the shares represented at such meeting, until
a quorum is present. When a quorum is present at the reconvening of any
adjourned meeting, and if the requirements of Section 3 of this Article I have
been observed, then any business may be transacted at such reconvened meeting in
the same manner and to the same extent as it might have been transacted at the
meeting as originally noticed.
Section 5. Proxies. A shareholder may vote either in person or
by proxy duly executed in writing by the shareholder. Unless written notice to
the contrary is delivered to the Corporation by the shareholder, a proxy for any
meeting shall be valid for any reconvention of any adjourned meeting.
Section 6. Fixing Record Date
(a) Except as provided in paragraph (b) of this Section 6, for
the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors shall have the power to fix a
date, not more than 70 days prior to the date on which the particular action
requiring a determination of shareholders is to be taken, as the record date for
any such determination of shareholders. A record date for the determination of
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof shall not be set less than 10 days prior to such
meeting, provided that the record date for the determination of shareholders
entitled to notice of or to vote at any special meeting of shareholders called
by the Corporation at the request of holders of shares pursuant to Section 2 of
Article I hereof or any adjournment thereof shall be 20 days after the
"Determination Date" (as defined in paragraph (b) of this Section 6), and
provided further that such record date shall be 70 days prior to such special
meeting. In any case where a record date is set, under any provision of this
Section 6, only shareholders of record on the said date shall be entitled to
participate in the action for which the determination of shareholders of record
is made, whether the action is payment of a dividend, allotment of any rights or
any change or conversion or exchange of capital stock or other such action, and,
if the record date is set for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, only such shareholders of
record shall be entitled to such notice or vote, notwithstanding any transfer of
any shares on the books of the Corporation after such record date.
(b) (i) In order that the Corporation may determine the
shareholders entitled to request a special meeting of the shareholders or a
special meeting in lieu of the annual meeting of the shareholders pursuant to
Section 2 of Article I hereof, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which date shall not
be more than 10 days after the date upon which the resolution fixing the record
date is adopted by the Board of Directors. Any shareholder of record seeking to
have the shareholders request such a special meeting shall by written notice to
the Secretary request the Board of Directors to fix a record date. The Board of
Directors shall, within 10 business days after the date on which such a request
is received, adopt a resolution fixing the record date. If no record date has
been fixed by the Board of Directors within
-2-
<PAGE> 3
10 business days after the date on which such a request is received, the record
date for determining shareholders entitled to request such a special meeting
shall be the first day on which a signed written request setting forth the
request to fix a record date is delivered to the Corporation by delivery to its
principal place of business, or any officer or agent of the Corporation having
custody of the books in which proceedings of meetings of shareholders are
recorded.
(ii) Every written request for special meeting shall bear the
date of signature of each shareholder who signs the request and no such request
shall be effective to request such a meeting unless, within 70 days after the
record date established in accordance with paragraph (b)(i) of this Section,
written requests signed by a sufficient number of record holders as of such
record date to request a special meeting in accordance with Section 2 of Article
I hereof are delivered to the Corporation in the manner prescribed in paragraph
(b)(i) of this Section.
(iii) In the event of the delivery, in the manner provided by
this Section, to the Corporation of the requisite written request or requests
for a special meeting and/or any related revocation or revocations, the
Corporation shall engage nationally recognized independent inspectors of
elections for the purpose of promptly performing a ministerial review of the
validity of the requests and revocations. For the purpose of permitting a prompt
ministerial review by the independent inspectors, no request by shareholders for
a special meeting shall be effective until the earlier of (i) five business days
following delivery to the Corporation of requests signed by the holders of
record (on the record date established in paragraph (b)(i) of this Section) of
the requisite minimum number of shares that would be necessary to request such a
meeting under Section 2 of Article I hereof, or (ii) such date as the
independent inspectors certify to the Corporation that the requests delivered to
the Corporation in accordance with this Article represent at least the minimum
number of shares that would be necessary to request such meeting (the earlier of
such dates being herein referred to as the "Determination Date"). Nothing
contained in this paragraph shall in any way be construed to suggest or imply
that the Board of Directors or any shareholder shall not be entitled to contest
the validity of any request or revocation thereof, whether during or after such
five business day period, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto).
(iv) Unless the independent inspectors shall deliver, on or
before the Determination Date, a certified report to the Corporation stating
that the valid requests for a special meeting submitted pursuant to paragraph
(iii) above represent less than the requisite minimum number of shares that
would be necessary to request a special meeting under Section 2 of Article I
hereof, the Board of Directors shall, within five business days after the
Determination Date, adopt a resolution calling a special meeting of the
shareholders and fixing a record date for such meeting, in accordance with
Section 6(a) of Article I of these Bylaws.
-3-
<PAGE> 4
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. The Board of Directors shall
have the management of the business of the Corporation and, subject to any
restrictions imposed by law, by the Articles of Incorporation, or by these
Bylaws, may exercise all the powers of the Corporation.
Section 2. Number and Term of Directors. Except as provided in
this Section 2, one (1) Director shall constitute the full Board. At any annual
or special meeting the shareholders may, and at any meeting of directors, the
directors (by a vote of not less than 51% of the directors then in office) may,
fix a different number of Directors who shall constitute the full Board, but the
full Board shall consist of not less than one (1) nor more than three (3)
Directors.
Section 3. Meetings of the Directors. The Board of Directors
shall meet each year immediately following the annual meeting of shareholders,
and the Board may by resolution provide for the time and place of other regular
meetings. Special meetings of the Directors may be called by the President or by
any two of the Directors.
Section 4. Notice of Meetings. Notice of each meeting of the
Directors will be given by the Secretary by mailing the same at least ten days
before the meeting or by telephone, telegraph or cablegram or in person at least
five days before the meeting, to each Director, except that no notice need be
given of regular meetings fixed by the resolution of the Board or of the meeting
of the Board held at the place of and immediately following the annual meeting
of the shareholders. Any Director may waive notice, either before or after the
meeting, and shall be deemed to give waived notice if he is present at the
meeting.
Section 5. Action of Directors Without a Meeting. Any action
required by law to be taken at a meeting of the Board of Directors, or any
action which may be taken at a meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if written consent, setting
forth the action so taken, shall be signed by all the Directors or all the
members of the committee, as the case may be, and be filed with the minutes of
the proceedings of the Board or the Committee. Such consent shall have the same
force and effect as a unanimous vote of the Board or the Committee, as the case
may be.
Section 6. Compensation. A fee and reimbursement for expenses
for attendance at meetings of the Board of Directors or any committee thereof
may be fixed by resolution of the Board of Directors.
Section 7. Removal. Any or all directors may be removed from
office at any time with or without cause.
-4-
<PAGE> 5
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Corporation shall
consist of a President, one or more Vice-Presidents, a Secretary and a
Treasurer, and such other officers or assistant officers as may be elected by
the Board of Directors. Any two offices may be held by the same person. The
Board may designate a Vice-President as an Executive Vice-President and may
designate the order in which the other Vice-Presidents may act.
Section 2. President. The President shall be the chief
operating officer of the Corporation. He shall, under the direction of the chief
executive officer, supervise the management of the day-to-day business of the
Corporation. He shall have such further powers and duties as from time to time
may be conferred on him by the Board of Directors and he shall preside at all
Meetings of the shareholders and the Board of Directors.
Section 3. Vice-President. The Vice-President shall act in the
case of the absence or disability of the President. If there is more than one
Vice-President, such Vice-Presidents shall act in the order of precedence, as
set out by the Board of Directors.
Section 4. Treasurer. The Treasurer shall be responsible for
the maintenance of proper financial books and records of the Corporation.
Section 5. Secretary. The Secretary shall keep the minutes of
the meetings of the shareholders and the Directors and shall have custody of and
attest the seal of the corporation.
Section 6. Other Duties and Authorities. Each officer,
employee and agent shall have such other duties and authorities as may be
conferred on them by the Board of Directors.
Section 7. Removal. Any officer may be removed at any time by
the Board of Directors. A contract of employment for a definite term shall not
prevent the removal of any officer, but this provision shall not prevent the
making of a contract of employment with any officer and shall have no affect
upon any cause of action which any officer may have as a result of removal in
breach of a contract of employment.
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.
Section 2. Contracts. All contracts and other instruments
shall be signed on behalf of the Corporation by the President or by such other
officer, officers, agent or agents, as the Board from time to time may by
resolution provide.
-5-
<PAGE> 6
Section 3. Seal. The corporation seal of the Corporation shall
be as follows:
The seal may be manually affixed to any document or may be
lithographed or otherwise printed on any document with the same force, and
effect as if it had been affixed manually. The signature of the Secretary or
Assistant Secretary shall attest the seal and may be a facsimile if and to the
extent permitted by law.
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The
certificates of shares of capital stock of the corporation shall be in such form
as may be approved by the Board of Directors and shall be signed by the
President or a Vice-President and by the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer, provided that any such certificate may
be signed by the facsimile signature of either or both of such officers
imprinted thereon if the same is countersigned by a transfer agent of the
Corporation and provided further that certificates bearing the facsimile of the
signature of such officers imprinted thereon shall be valid in all respects as
if such person or persons were still in office, even though such officer or
officers shall have died or otherwise ceased to be officers.
Section 2. Transfers of Shares. Shares of stock in the
corporation shall be transferable only on the books of the Corporation by proper
transfer signed by the holder of record thereof or by a person duly authorized
to sign for such holder of record. The Corporation or its transfer agent or
agents shall be authorized to refuse any transfer unless and until it is
furnished such evidence as may reasonably require showing that the requested
transfer is proper.
Section 3. Lost, Destroyed or Stolen Certificates. Where the
holder of record of a share or shares of stock of the Corporation claims that
the certificate representing said share has been lost, destroyed or wrongfully
taken, the Board shall by resolution provide for the issuance of a certificate
to replace the original if the holder of record so requests before the
Corporation has notice that the certificate has been acquired by a bona fide
purchaser, files with the Corporation a sufficient indemnity bond, and furnishes
evidence of such loss, destruction or wrongful taking satisfactory to the
Corporation, in the reasonable exercise of its discretion. The Board may
authorize such officer or agent as it may designate to determine the sufficiency
of such an indemnity bond and to determine reasonably the sufficiency of the
evidence of loss, destruction or wrongful taking.
Section 4. Transfer Agent and Registrar. The Board may (but
shall not be required to) appoint a transfer agent or agents and a registrar or
registrars to transfers, and may require that all stock certificates bear the
signature of such transfer agent or of such transfer agent and registrar.
-6-
<PAGE> 7
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
Section 1. Actions Against Directors. The Corporation shall
indemnify to the fullest extent permitted by the Washington Business Corporation
Act, any individual, made a party to a proceeding (as defined in the Washington
Business Corporation Act) because he is or was a director, against liability (as
defined in the Washington Business Corporation Act), incurred in the proceeding,
if he acted in a manner he believed in good faith to be in or not opposed to the
best interests of the Corporation and, in the case of any criminal proceeding,
he had no reasonable cause to believe the conduct was unlawful.
Section 2. Advances for Expenses of Directors. The Corporation
shall pay for or reimburse the reasonable expenses incurred by a director who is
a party to a proceeding if:
(a) The director furnishes the Corporation a written
affirmation of his good faith belief that he has met
the standard of conduct set forth in Section 1 above;
and
(b) The director furnishes the Corporation a written
undertaking, executed personally on his behalf to
repay any advances if it is ultimately determined
that he is not entitled to indemnification.
The written undertaking required by paragraph (b) above must
be an unlimited general obligation of the director but need not be secured and
may be accepted without reference to financial ability to make repayment.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 1. Amendment. These Bylaws may be altered, amended,
repealed or new Bylaws adopted by the Board of Directors by the affirmative vote
of a majority of all directors then holding office, but any bylaws adopted by
the Board of Directors may be altered, amended, repealed or any new bylaws
adopted, by the shareholders at an annual, or special meeting of shareholders,
when notice of any such proposed alteration, amendment, repeal or addition shall
have been given in the notice of such meeting. The shareholders may prescribe
that any bylaw or bylaws adopted by them shall not be altered, amended or
repealed by the Board of Directors.
-7-
<PAGE> 1
Exhibit 3.51
ARTICLES OF INCORPORATION
OF
MEDICAL TREATMENT CENTER OF ORANGE PARK, INC.
ARTICLE ONE NAME
The name of the corporation is Medical Treatment Center of Orange Park, Inc.
ARTICLE TWO
NATURE OF BUSINESS
The general nature of the business to be transacted by this corporation
is:
A. To manage and operate a free-standing medical facility.
B. To conduct business in, have one or more offices in and buy, hold,
mortgage, sell, convey, lease or otherwise dispose of real and personal
property, including franchises, patents, copyrights, trademarks and licenses in
the State of Florida and in all other states and countries.
C. To contract debts and borrow money, issue and sell or pledge bonds,
debentures, notes and other evidences of indebtedness, and execute such
mortgages, transfers or corporate property, or other instruments to secure the
payment of corporate indebtedness as required.
D. To purchase the corporate assets of any other corporation and engage
in the same or other character of business.
E. To guarantee, endorse, purchase, hold, sell, transfer, mortgage,
pledge or otherwise acquire or dispose of the shares of the capital stock of, or
any bonds, securities, or other evidences of indebtedness created by any other
corporation of the State of Florida or any other state or government, and while
owner of such stock to exercise all the rights, powers, and privileges of
ownership, including the right to vote such stock.
F. To do everything necessary and proper for the accomplishment of any
of the purposes or the attaining of any of the objects or the furtherance of any
of the purposes enumerated in these Articles of Incorporation or any amendment
thereof, necessary or incidental to the protection and benefit of the
corporation, and in general, either alone or in association with other
corporations, firms or individuals, to carry on any lawful pursuit necessary or
incidental to the accomplishment of the purposes or the attainment of the
objects or the furtherance of such purposes or objects of the corporation.
G. To engage in any activity or business permitted under the laws of
the United States and of the State of Florida.
<PAGE> 2
The foregoing paragraphs shall be construed as enumerating both objects
and purposes of the corporation; and it is hereby expressly provided that the
foregoing enumeration of specific purposes shall not be held to limit or
restrict in any manner the purposes of the corporation otherwise permitted by
law.
ARTICLE THREE
CAPITAL STOCK
The corporation is authorized to issue 7,500 shares of $1.00 par value
common stock.
ARTICLE FOUR
PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of the
corporation of the same kind, class or series as that which he already holds,
shall have the right to purchase his prorata share thereof (as nearly as may be
done without issuance of fractional shares) at the price at which it is offered
to others.
ARTICLE FIVE
TERM OF EXISTENCE
The corporation shall have perpetual existence, commencing on the date
of filing of the Articles of Incorporation with the Department of State.
ARTICLE SIX
INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is Suite 469, 3900 N.W. 79th Avenue, Miami, Florida 33166. The name of the
initial registered agent of this corporation at this address is Neil J.
Principe, M.D.
ARTICLE SEVEN
INITIAL BOARD OF DIRECTORS
The business of the corporation shall be managed by its board of
directors. The corporation shall initially have one director. The number of
directors may be either increased or diminished from time to time by the bylaws
but shall never be less than one. The name and address of the initial director
of this corporation is Neil J. Principe, M.D., Suite 469, 3900 N.W. 79th Avenue,
Miami, Florida 33166.
-2-
<PAGE> 3
ARTICLE EIGHT
SUBSCRIBER
The name and address of the person signing these Articles of
Incorporation as subscriber is Neil J. Principe, M.D., Suite 469, 3900 N.W. 79th
Avenue, Miami, Florida 33166.
ARTICLE NINE
VOTING FOR DIRECTORS
The board of directors shall be elected by the stockholders of the
corporation at such times and in such manner as provided by the bylaws of the
corporation.
ARTICLE TEN
REMOVAL OF DIRECTORS
Any director of the corporation may be removed at any annual or special
meeting of the stockholders by the same vote as that required to elect a
director.
ARTICLE ELEVEN
CONTRACTS
No contract or other transaction between the corporation and any other
corporation shall be affected by the fact that any director of the corporation
is interested in, or is a director or officer of, such other corporation, and
any director, individually or jointly, may be a party to, or may be interested
in, any contract or transaction of the corporation or in which the corporation
is interested; and no contract or other transaction of the corporation with any
person, firm or corporation shall be affected by the fact that any director of
the corporation is a party in any way connected with such person, firm or
corporation, and every person who may become a director of the corporation is
hereby relieved from any liability that might otherwise exist from contracting
with the corporation for the benefit of himself or any firm, association, or
corporation in which he may be in any way interested.
ARTICLE TWELVE
ADDITIONAL CORPORATE POWERS
In furtherance and not in limitation of the general powers conferred by
the laws of the State of Florida and of the purposes and objects hereinabove
stated, the corporation shall have all the following powers:
A. To enter into, or become a partner in, any arrangement for sharing
profits, union of
-3-
<PAGE> 4
interest or corporation, joint venture, or otherwise, with any person, firm or
corporation for the purpose of carrying on any business which the corporation
has the direct or incidental authority to pursue.
B. At its option, to purchase and acquire any or all of its stock owned
and held by any such stockholder as should desire to sell, transfer or otherwise
dispose of his stock in accordance with the bylaws adopted by the stockholders
of the corporation setting forth the terms and conditions of such purchase;
provided, however, the capital of the corporation is not impaired.
C. At its option, to purchase and acquire the stock owned and held by
any stockholder who dies, in accordance with the bylaws adopted by the
stockholders of the corporation setting forth the terms and conditions of such
purchase; provided, however, the capital of the corporation is not impaired.
D. To enter into, for the benefit of its employees, one or more of the
following: (i) a pension plan, (ii) a profit sharing plan, (iii) a stock bonus
plan, (iv) a thrift and savings plan, (v) a restricted stock option plan, (vi)
other retirement or incentive compensation plans.
ARTICLE THIRTEEN
AMENDMENT
These Articles of Incorporation may be amended in the manner provided
by law. Every amendment shall be approved by the board of directors, proposed by
them to the stockholders, and approved at a stockholders meeting by a majority
of the stock entitled to vote thereon, unless all the directors and all the
stockholders sign a written statement manifesting their intention that a certain
amendment of these Articles of Incorporation be made.
ARTICLE FOURTEEN
ADOPTION OF BYLAWS
The power to alter, amend, or repeal the bylaws or to adopt new bylaws
shall be vested in the board of directors; provided, however, that any bylaws or
amendment thereto as adopted by the board of directors may be altered, amended
or repealed by a vote of the shareholders entitled to vote for the election of
directors, or a new bylaw in lieu thereof may be adopted by vote of such
shareholders.
ARTICLE FIFTEEN
BYLAWS AND CORPORATE MANAGEMENT
The corporation may in its bylaws make any other provision of
requirements for the management or conduct of the business of the corporation,
provided the same is not inconsistent with the provisions of this certificate,
or contrary to the laws of Florida or of the United States.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the undersigned subscriber has executed these
Articles of Incorporation this 16th day of July, 1980.
/s/ Neil J. Principe
----------------------------
Neil J. Principe, M.D.
STATE OF FLORIDA
COUNTY OF DADE
The foregoing instrument was acknowledged before me this 16th day of
July, 1980, by Neil J. Principe, M.D.
/s/ Marcia Anderson
----------------------------
Notary Public
My commission expires:
-5-
<PAGE> 6
ARTICLES OF AMENDMENT
OF
MEDICAL TREATMENT CENTER OF ORANGE PARK, INC.
1. Article One of the Articles of Incorporation of Medical Treatment
Center of Orange Park, Inc. shall be amended to read:
ARTICLE ONE NAME
The name of the corporation is Medical
Treatment Center of Jacksonville, Inc.
2. This amendment was adopted by the director of the corporation on
September 11, 1980, before the issuance of any shares of the corporation.
IN WITNESS WHEREOF, the undersigned director of this corporation has
executed these Articles of Amendment on September 17, 1980.
/s/ Neil J. Principe
---------------------------
NEIL J. PRINCIPE, M.D.
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing amendment was acknowledged before me this September 17,
1980, by Neil J. Principe, M.D.
/s/ Sheila
---------------------------
Notary Public
My commission expires:
<PAGE> 7
ARTICLES OF AMENDMENT
TO
MEDICAL TREATMENT CENTER OF JACKSONVILLE, INC.
1. Article One of the Articles of Incorporation of Medical Treatment Center of
Jacksonville, Inc. is hereby amended to read:
ARTICLE ONE NAME
The name of the corporation is Suburban Hospital Anesthesia, Inc.
2. The foregoing amendment was adopted by the stockholders of the corporation on
June 29, 1987.
IN WITNESS WHEREOF, the undersigned president and secretary of this
corporation have executed these articles of amendment on June 29, 1987.
/s/ J. Clifford Findeiss
----------------------------
J. CLIFFORD FINDEISS, M.D.
President
/s/ George W. McCleary
-----------------------------
GEORGE W. McCLEARY, JR.
Assistant Secretary
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing articles of amendment were acknowledged before me on June
29, 1987, by J. Clifford Findeiss, M.D., as president, and George W. McCleary,
Jr., as assistant secretary, of Medical Treatment Center of Jacksonville, Inc.
on behalf of the corporation.
/s/ Mary Ann
----------------------------
Notary Public
<PAGE> 8
ARTICLES OF AMENDMENT
TO
SUBURBAN HOSPITAL ANESTHESIA, INC.
1. Article One of the Articles of Incorporation of Suburban Hospital Anesthesia,
Inc. is hereby amended to read:
ARTICLE ONE
NAME
The name of the corporation is Anesthesiology Group of Bethesda, Inc.
2. The foregoing amendment was adopted by the stockholders of the corporation on
August 20, 1987.
IN WITNESS WHEREOF, the undersigned president and secretary of this
corporation have executed these Articles of Amendment on August 20, 1987.
/s/ J. Clifford Findeiss
----------------------------
J. CLIFFORD FINDEISS, M.D.
President
/s/ George W. McCleary
-----------------------------
GEORGE W. McCLEARY, JR.
Assistant Secretary
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing Articles of Amendment were acknowledged before me on
August 20, 1987, by J. Clifford Findeiss, M.D., as president, and George W.
McCleary, Jr., as assistant secretary, of Suburban Hospital Anesthesia, Inc. on
behalf of the corporation.
/s/ Mary Ann
----------------------------
Notary Public
<PAGE> 9
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION OF
ANESTHESIOLOGY GROUP OF BETHESDA, INC.
We, the undersigned President and Secretary of ANESTHESIOLOGY GROUP OF
BETHESDA, INC., a corporation organized under the laws of the State of Florida
and located in the County of Broward, in such State, hereby certify:
1. The name of the Corporation is ANESTHESIOLOGY GROUP OF BETHESDA,
INC.
2. The Certificate of Incorporation is amended by the following
resolution adopted by the Stockholders on September 19, 1994;
RESOLVED, that the Officers of the Corporation be, and they hereby are,
authorized to take the necessary measures to amend the Corporation's
Certificate of Incorporation by changing the name of the Corporation
from Anesthesiology Group of Bethesda, Inc. to Paragon Anesthesia, Inc.
to be effective as of the 1st day of October, 1994.
The Certificate of Incorporation is hereby amended so that the FIRST
Article is eliminated, and the following substituted for said FIRST Article:
FIRST: The name of the corporation is:
PARAGON ANESTHESIA, INC.
Signed and dated at Fort Lauderdale, Florida this 20th day of
September, 1994.
Anesthesiology Group of Bethesda, Inc.
BY: /s/ J. Clifford Findeiss
-----------------------------
J. Clifford Findeiss,
President
ATTEST: /s/ Neesa K. Warlen
---------------------------
Neesa K. Warlen,
Assistant Secretary
<PAGE> 10
STATE OF FLORIDA
SS:
COUNTY OF BROWARD
I HEREBY CERTIFY that on this 20th day of September, 1994, personally
appeared before me, the undersigned authority, J. Clifford Findeiss and Neesa K.
Warlen, to me well known to be the President and Assistant Secretary,
respectively, of Anesthesiology Group of Bethesda, Inc., who acknowledged before
me that they executed said Certificate of Amendment of Certificate of
Incorporation as their free and voluntary act and deed for the uses and purposes
therein set forth and expressed, and who are personally known to me.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the 20th day
of September, 1994 at Ft. Lauderdale, Florida.
/s/ Kathleen Y. Drago
-----------------------------
Notary Public, State of Florida
My Commission Expires: My Commission Expires 12/
-2-
<PAGE> 1
Exhibit 3.52
BYLAWS
OF
MEDICAL TREATMENT CENTER OF ORANGE PARK, INC.
Article I. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such
<PAGE> 2
notice shall be deemed to be delivered when deposited in the United States mail
addressed to the shareholder at his address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
-2-
<PAGE> 3
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
-3-
<PAGE> 4
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons
-4-
<PAGE> 5
as there are directors to be elected at that time and for whose election he has
a right to vote, or to cumulate his votes by giving one candidate as many votes
as the number of directors to be elected at that time multiplied by the number
of his shares, or by distributing such votes on the same principle among any
number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
-5-
<PAGE> 6
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders, duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
-6-
<PAGE> 7
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder of record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholder's Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a
-7-
<PAGE> 8
majority of the shares of each class of shares entitled to vote as a class
thereon and of the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
-8-
<PAGE> 9
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 2 directors. The number
of directors may be increased or decreased from time to time by amendment to
these bylaws, but no decrease shall have the effect of shortening the terms of
any incumbent director.
-9-
<PAGE> 10
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall
-10-
<PAGE> 11
be either void or voidable because of such relationship or interest or because
such director or directors are present at the meeting of the Board of Directors
or a committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
-11-
<PAGE> 12
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
-12-
<PAGE> 13
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons
-13-
<PAGE> 14
participating in the meeting can hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of
-14-
<PAGE> 15
Directors, send all notices of meetings out, and perform such other duties as
may be prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
-15-
<PAGE> 16
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if
-16-
<PAGE> 17
any, which such certificate represents; and the par value of each share
represented by such certificate, or a statement that the shares are without par
value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the corporation may
direct, to indemnify the corporation, the transfer agent, and registrar against
any claim that may be made on account of the alleged loss, destruction, or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the corporation.
Article V. Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
-17-
<PAGE> 18
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI. Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or
-18-
<PAGE> 19
when the declaration or payment thereof would be contrary to any restrictions
contained in the articles of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by
-19-
<PAGE> 20
the affirmative vote or the written consent of the holders of at least a
majority of the outstanding shares of the class in which the payment is to be
made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-20-
<PAGE> 1
EXHIBIT 3.53
ARTICLES OF INCORPORATION
OF
PARAGON CONTRACTING SERVICES, INC.
ARTICLE I - NAME
The name of this corporation shall be:
PARAGON CONTRACTING SERVICES, INC.
ARTICLE II - DURATION
This corporation shall exist in perpetuity.
ARTICLE III - PURPOSE
1. The general nature of the business and the object and purposes
proposed to be transacted and carried on, are to do any and all of the things
mentioned herein, as fully and to the same extent as natural persons might or
could do.
2. To take, acquire, buy, hold, own, maintain, work, develop,
sell, convey, lease, mortgage, exchange, improve and otherwise invest in and
dispose of real estate and real property or any interest or rights therein
without limit as to the amount to do all things and engage in all activities
necessary and proper or incidental to the business of investing in and
developing real estate.
3. To sell at wholesale and retail and do deal in any manner
whatever in all types and descriptions of property; to do all things and engage
in all activities necessary and proper or incidental to wholesale and retail
business.
4. To purchase, acquire, hold, and dispose of stocks, bonds, and
other
-1-
<PAGE> 2
obligations including judgments, interest, accounts or debts of any corporation,
domestic or foreign (except moneyed or transportation or banking, or insurance
corporations) owning or controlling any articles which are or might be or become
useful in the business of this company, and to purchase, acquire, hold and
dispose of stocks, bonds or other obligations including judgments, interest,
accounts or debts of any corporation, domestic or foreign (except moneyed or
transportation or banking or insurance corporations) engaged in a business
similar to that of this company, or engaged in the manufacture, use or sale of
property, or in the construction or operation of works necessary or useful in
the business of this company, or in which, or in connection with which, the
manufactured articles, product or property of this company may be used, or of
any corporation with which this corporation is or may be used, or of any
corporation with which this corporation is or may be authorized to consolidate
according to law, and this company may issue in exchange therefor the stocks,
bonds or other obligations of this company.
5. To purchase, take and lease, or in exchange, hire or otherwise
acquire any real or personal property, rights or privileges suitable or
convenient for any of the purposes of this business, and to purchase, acquire,
erect and construct, make improvement of buildings or machinery, stores or
works, insofar as the same may be appurtenant to or useful for the conduct of
the business as above specified, but only to the extent to which the company may
be authorized by the statutes under which it is organized.
6. To acquire and carry on all or any part of the business or
property of any
-2-
<PAGE> 3
company engaged in a business similar to that authorized to be conducted by this
company, or with which this company is authorized under the laws of this state
to consolidate, or whose stock the company under the laws of this state and the
provisions of this certificate is authorized to purchase and to undertake in
conjunction therewith, any liabilities or any person, firm, association, or
company described as aforesaid, possessing of property suitable for any of the
purposes of this company, or for carrying on any business which this company is
authorized to conduct, and as for the consideration for the same to pay cash or
to issue shares, stocks and obligations of this company.
7. To purchase, subscribe for or otherwise acquire and to hold
the shares, stocks or obligations of any company organized under the laws of
this state or of any other state, or of any territory of the United States, or
of any foreign country, except moneyed or transportation or banking or insurance
corporations, and to sell or exchange the same, or upon the distribution of
assets or divisions of profits, to distribute any such shares, stocks, or
obligations or proceeds thereof among the stockholders of this company.
8. To borrow or raise money for any purposes of the company, and
to secure the same and interest, or for any other purpose, to mortgage all or
any part of the property corporeal or incorporeal rights or franchises of this
company now owned or hereafter acquired, and to create, issue, draw and accept
and negotiate bonds and mortgages, bills of exchange, promissory notes or other
obligations or negotiable instruments.
-3-
<PAGE> 4
9. To guarantee the payment of dividends or interest on any
shares, stocks, debentures or other securities issued by, or any other contract
or obligation of, any corporation described as aforesaid, whenever proper or
necessary for the business of the company, and provided the required authority
be first obtained for that purpose, and always subject to the limitations herein
prescribed.
10. To acquire by purchase or otherwise own, hold, buy, sell,
convey, lease, mortgage or incumber real estate or other property, personal or
mixed.
11. To buy, sell, and generally trade in, store, carry and
transport all kinds of goods, wares, merchandise, provisions and supplies.
12. To do and perform and cause to be done or performed each, any
and all of the acts and things above enumerated, and any and all other acts and
things insofar as the same any be incidental to or included in any or all of the
general powers given, always provided on the grant of the foregoing enumerated
powers is upon the express condition precedent that the various powers above
enumerated shall be exercised by said company only in case the same are
authorized to be exercised by the acts above recited under which said company is
organized, and the same shall be exercised by said company only in the manner
and to the extent that the same may be authorized to be exercised under the said
acts above recited under which it was organized. The said corporation may
perform any part of its business outside the State of Florida, in the other
states or colonies of the United States of America, and in all foreign
countries.
13. And further for the purpose of transacting any and all lawful
businesses.
ARTICLE IV - CAPITAL STOCK
-4-
<PAGE> 5
This corporation is authorized to issue 1,000 shares of ONE DOLLAR AND
NO/100 ($1.00) par value common stock.
ARTICLE V - PREEMPTIVE RIGHTS
Every shareholder, upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he/she already
holds, shall have the right to purchase his/her pro rata share thereof (as
nearly as may be done without issuance or fractional shares) at the price at
which it is offered to others.
ARTICLE VI - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
is 1200 S. Pine Island Road, Ft. Lauderdale, Florida 33324 and the name of the
initial registered agent of this corporation at that address is CT Corporation.
ARTICLE VII - PRINCIPAL OFFICE
The principal office of the corporation is 1200 S. Pine Island Road,
Suite 600, Plantation, Florida 33324.
ARTICLE VIII - INITIAL BOARD OF DIRECTORS
This corporation shall have three (3) directors initially. The number
of directors may be either increased or diminished from time to time by the
bylaws, but shall not be less than three (3). The names and addresses of the
initial directors of this corporation are:
Jere D. Creed, M.D. J. Clifford Findeiss, M.D
1200 S. Pine Island Road 1200 S. Pine Island Road
Suite 600 Suite 600
Plantation, Florida 33324 Plantation, Florida 33324
-5-
<PAGE> 6
George W. McCleary, Jr.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE IX - INCORPORATOR
The name and address of the person signing these articles is:
Neesa K. Warlen, Esq.
1200 S. Pine Island Road
Suite 600
Plantation, Florida 33324
ARTICLE X - AMOUNT OF CAPITAL
The amount of capital with which this corporation will begin business
will be not less than Five Hundred Dollars ($500.00).
ARTICLE XI - BYLAWS
The power to adopt, alter, amend or repeal bylaws shall be vested in
the Board of Directors and the shareholders.
ARTICLE XII - APPROVAL OF SHAREHOLDERS REQUIRED FOR MERGER
The approval of the shareholders of this corporation to any plan of
merger shall be required in every case, whether or not such approval is required
by law.
ARTICLE XIII - INDEMNIFICATION
The corporation shall indemnify any officer or director, or any former
officer or director, to the full extent permitted by law.
ARTICLE XIV - AMENDMENT
This corporation reserves the right to amend or repeal any provision
contained in these articles of incorporation, or any amendment hereto, and any
right conferred upon
-6-
<PAGE> 7
the shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned subscriber has executed these
articles of incorporation this 28th day of November, 1995.
/s/ Neesa K. Warlen, Subscriber
STATE OF FLORIDA
SS
COUNTY OF BROWARD
BEFORE ME, a notary public authorized to take acknowledgements in the
state and county set forth above, personally appeared Neesa K. Warlen,
personally known to me to be the person who executed the foregoing or who
produced _____________________, who executed the foregoing articles of
incorporation, and he/she acknowledged before me that he/she executed those
articles of incorporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 28th day of November, 1995.
/s/ JOANN LOCH
Notary Public, State of
Florida
-7-
<PAGE> 1
EXHIBIT 3.54
BYLAWS
OF
PARAGON CONTRACTING SERVICES, INC.
Article 1. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall
<PAGE> 2
be deemed to be delivered when deposited in the United States mail addressed to
the shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
-2-
<PAGE> 3
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a
-3-
<PAGE> 4
specified item of business is required to be voted on by a class or series of
stock, a majority of the shares of such class or series shall constitute a
quorum for the transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time
-4-
<PAGE> 5
multiplied by the number of his shares, or by distributing such votes on the
same principle among any number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder shall be presumed to
possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a
-5-
<PAGE> 6
bank or trust company with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates therefor,
such shares shall not be entitled to vote on any matter and shall not be deemed
to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders, duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise
-6-
<PAGE> 7
represent their shares, as provided by law. Where the counterpart of a voting
trust agreement and the copy of the record of the holders of voting trust
certificates has been deposited with the corporation as provided by law, such
documents shall be subject to the same right of examination by a shareholder of
the corporation, in person or by agent or attorney, as are the books and records
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
-7-
<PAGE> 8
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
-8-
<PAGE> 9
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 3 director(s). The
number of directors may be increased or decreased from time to time by amendment
to these bylaws, but no decrease shall have the effect of shortening the terms
of any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
-9-
<PAGE> 10
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
-10-
<PAGE> 11
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
-11-
<PAGE> 12
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
-12-
<PAGE> 13
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so to be taken, signed
by all of the directors, or all the members of the committee, as the case may
-13-
<PAGE> 14
be, is filed in the minutes of the proceedings of the board or of the committee.
Such consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
-14-
<PAGE> 15
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
-15-
<PAGE> 16
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired
-16-
<PAGE> 17
by a purchaser for value in good faith and without notice of any adverse claim;
(c) gives bond in such form as the corporation may direct, to indemnify the
corporation, the transfer agent, and registrar against any claim that may be
made on account of the alleged loss, destruction, or theft of a certificate; and
(d) satisfies any other reasonable requirements imposed by the corporation.
Article V. Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial
-17-
<PAGE> 18
condition of the corporation as of the close of its fiscal year, and a profit
and loss statement showing the results of the operations of the corporation
during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI. Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
-18-
<PAGE> 19
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII. Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII. Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any
-19-
<PAGE> 20
bylaw adopted by shareholders if the shareholders specifically provide such
bylaw not subject to amendment or repeal by the directors.
-20-
<PAGE> 1
EXHIBIT 3.55
STATE OF FLORIDA
ARTICLES OF INCORPORATION
OF
PROVIDENT IMAGING CONSULTANTS, INC.
The undersigned, acting as incorporator of a corporation under the
Florida General Corporation Act, adopts the following Articles of Incorporation:
FIRST: The name of the corporation is: PROVIDENT IMAGING
CONSULTANTS, INC.
Principal Office Address: 1200 S. Pine Island Road, Ste. 600,
Plantation, FL 33324
SECOND: The period of its duration is perpetual.
THIRD: The purpose for which the corporation is organized is to engage
in the transaction of any or all lawful business for which corporations may be
incorporated under the provisions of the Florida General Corporation Act.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is 1,000 shares at One and 00/00 ($1.00) par.
FIFTH: The street address of the initial registered office of the
corporation is c/o C T CORPORATION SYSTEM, 1200 South Pine Island Road,
Plantation, Florida 33324, and the name of its initial registered agent at such
address is C T CORPORATION SYSTEM.
SIXTH: The number of directors constituting the initial board of
directors of the corporation is four, and the names and addresses of the persons
who are to serve as directors until the first annual meeting of shareholders or
until their successors are elected and shall qualify are:
Jere D. Creed, M.D. Carl Rosenkrantz, M.D.
1200 South Pine Island Road 600 S.W. Third Street
Suite 600 Pompano Beach, Florida
Plantation, Florida 33324 33060
Victor J. Weinstein, M.D. Stephen Edelstien, M.D.
1200 South Pine Island Road 600 S.W. Third Street
-1-
<PAGE> 2
Suite 600 Pompano Beach, Florida
Plantation, Florida 33324 33060
SEVENTH: The name and address of the incorporator is:
Neesa K. Warlen, Esq.
1200 South Pine Island Road
Suite 600
Plantation, Florida 33324
DATED May 4, 1993 /s/ Neesa K. Warlen
__________________________
Incorporator
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing instrument was acknowledged before me this 4th day of
May, 1993 by Neesa K. Warlen.
My commission expires: /s/ Maria T. Aguilar
__________________________
Maria T. Aguilar
OFFICIAL SEAL
MARIA T. AGUILAR My Commission Expires June 19,1995
Comm. No. CC 119525
-2-
<PAGE> 3
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION OF
PROVIDENT IMAGING CONSULTANTS, INC.
We, the undersigned President and Secretary of PROVIDENT IMAGING
CONSULTANTS, INC., a corporation organized under the laws of the State of
Florida and located in the County of Broward, in such State, hereby certify:
1. The name of the Corporation is PROVIDENT IMAGING CONSULTANTS,
INC.
2. The Certificate of Incorporation is amended by the following
resolution adopted by the Stockholders on February 4, 1994;
RESOLVED, that the Officers of the Corporation be, and they hereby are,
authorized to take the necessary measures to amend the Corporation's
Certificate of Incorporation by changing the name of the Corporation
from Provident Imaging Consultants, Inc. to Paragon Imaging
Consultants, Inc. to be effective as of the 1st day of January, 1994.
The Certificate of Incorporation is hereby amended so that the FIRST
Article is eliminated, and the following substituted for said FIRST Article:
FIRST: The name of the corporation is:
PARAGON IMAGING CONSULTANTS, INC.
Signed and dated at Fort Lauderdale, Florida this 3rd day of March,
1994.
Provident Imaging Consultants, Inc.
BY: /s/ Geri Rosenkrantz
________________________________
Geri Rosenkrantz, President
ATTEST: /s/ Jere D. Creed
_____________________________
Jere D. Creed, Secretary
-1-
<PAGE> 1
EXHIBIT 3.56
BY-LAWS OF
PROVIDENT IMAGING CONSULTANTS, INC.
ARTICLE I - OFFICES
The principal office of the Corporation shall be established and
maintained at 1200 S. Pine Island Road, Ste. 600 in the City of Plantation
County of _____________ State of Florida. The Corporation may also have offices
at such places within or without the State of Florida as the board may from time
to time establish, or as the business of the Corporation may require from time
to time.
ARTICLE II - SHAREHOLDERS
1. ANNUAL MEETINGS
The annual meeting of the Shareholders of this Corporation shall be
held on the day of _________________________ of each year or at such other time
and place designated by the Board of Directors of the Corporation. Business
transacted at the annual meeting shall include the election of Directors of the
Corporation and all other matters properly before the Board. If the designated
day shall fall on a Sunday or legal holiday, then the meeting shall be held on
the first business day thereafter.
2. SPECIAL MEETINGS
Special meetings of the Shareholders shall be held when directed by the
President or the Board of Directors, or when requested in writing by the holders
of not less than 10% of all the shares entitled to vote at the meeting. A
meeting requested by Shareholders shall be called for a date not less than 10
nor more than 60 days after the request is made unless the Shareholders
requesting the meeting designate a later date. The call for the meeting shall be
issued by the Secretary, unless the President, Board of Directors, or
Shareholders requesting the meeting shall designate another person to do so.
3. PLACE
Meetings of Shareholders shall be held at the principal place of
business of the Corporation or at such other place as may be designated by the
Board of Directors.
4. NOTICE
Written notice to each Shareholder entitled to vote stating the place,
day and hour of the meeting and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than 10
nor more than 60 days before the meeting. If any Shareholder shall transfer his
stock after notice, it shall not be necessary to notify the transferee. Any
Stockholder may waive notice of any meeting either before, during or after
meeting, by a writing signed by the Shareholders entitled to the notice.
<PAGE> 2
5. QUORUM AND VOTING
The majority of the Shares entitled to vote, represented in person or
by Proxy, shall constitute a Quorum at a meeting of Shareholders, but in no
event shall a Quorum consist of less than 1/3 of the shares entitled to vote at
the meeting.
After a Quorum has been established at a Shareholders meeting, the
subsequent withdrawal of Shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for the Quorum, shall
not effect the validity of any action taken at the meeting or any adjournment
thereof.
If a quorum exists, action on a matter, other than the election of
directors, is approved if the votes cast by the holders of the Shares
represented at the meeting and entitled to vote on the subject matter favoring
the action exceed the votes cast opposing the action, unless a greater number of
affirmative votes or voting by classes is required by the Florida Business
Corporation Act or the Corporation's Articles of Incorporation.
6. PROXY
Every Shareholder entitled to vote at a meeting of Shareholders, or to
express consent or dissent without a meeting, or his duly authorized attorney-
in-fact, may authorize another person or persons to act for him by Proxy. The
Proxy must be signed by the Shareholder or his attorney-in-fact. A Proxy shall
be effective when received by the Secretary of the Corporation or other person
authorized to tabulate votes. No Proxy shall be valid after the expiration of
eleven months from the date thereof, unless otherwise provided in the Proxy.
ARTICLE III - DIRECTORS
1. BOARD OF DIRECTORS
The business of the Corporation shall be managed and its corporate
power exercised by a Board of two Directors, each of whom shall be of full age.
It shall not be necessary for Directors to be Stockholders or residents of the
state of Florida.
2. ELECTION AND TERM OF DIRECTORS
Directors shall be elected at the annual meeting of Stockholders and
each Director elected shall hold office until his successor has been elected and
qualified, or until his prior resignation, removal, or death. Unless otherwise
provided in the Articles of incorporation, Directors shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election at a
meeting at which a quorum is present.
3. VACANCIES
If the office of any Director, member of a committee or other officer
becomes vacant, including a vacancy resulting from an increase in the numbers of
Directors, the remaining Directors in office, though less than a quorum, by a
majority vote, may appoint any qualified person to fill such vacancy, who shall
hold office for the unexpired term and until his successor shall be duly chosen.
-2-
<PAGE> 3
4. REMOVAL OF DIRECTORS
Any or all of the Directors may be removed with or without cause by
vote of a majority of all of the stock outstanding and entitled to vote at an
annual meeting or special meeting of Stockholders called for that purpose.
5. NUMBER OF DIRECTORS; NEWLY CREATED DIRECTORSHIPS
The authorized number of directors shall not be less than ______ nor
more than _______. The number of Directors may be increased by amendment of
these By-Laws, by the affirmative vote of a majority in interest of the
Stockholders, at the annual meeting or at a special meeting called for that
purpose, and by like vote the additional Directors may be chosen at such meeting
to hold office until the next annual election and until their successors are
elected and qualify.
6. RESIGNATION
A Director may resign at any time by giving written notice to the
Board, the President or the Secretary of the Corporation. Unless otherwise
specified in the notice, the resignation of such officer shall take effect upon
receipt thereof by the Board, and the acceptance of the resignation shall not be
necessary to make it effective.
7. QUORUM OF DIRECTORS AND VOTING
A majority of the Directors shall constitute a quorum for the
transaction of business. If at any meeting of the board there shall be less than
a quorum present, a majority of those present may adjourn the meeting from time
to time until a quorum is obtained, and no further notice thereof need be given
other than by announcement at the meeting which shall be so adjourned. If a
quorum is present when a vote is taken, the affirmative vote of a majority of
Directors present shall be the act of the Board of Directors.
8. PLACE AND TIME OF BOARD MEETINGS
The board may hold its meeting at the office of the Corporation or at
such other places, either within or without the State of Florida as it may from
time to time determine.
9. NOTICE OF MEETINGS OF THE BOARD
A regular annual meeting of the Board may be held without notice at
such time and place as it shall from time to time determine. Special meetings of
the Board shall be held upon notice to the Directors and may be called by the
President upon three days notice to each Director either personally or by mail
or by wore; special meetings shall be called by the President or by the
Secretary in a like manner on written request of two Directors. Notice of a
meeting need not be given to any Director who submits a waiver of notice whether
before or after the meeting or who attends the meeting without protesting prior
thereto or at its commencement, the lack of notice to him.
10. REGULAR ANNUAL MEETING
A regular annual meeting of the Board shall be held immediately
following the annual meeting of Stockholders at the place of such annual meeting
of Stockholders.
-3-
<PAGE> 4
11. EXECUTIVE AND OTHER COMMITTEES
The Board, by resolution, may designate two or more of their members to
any committee. To the extent provided in said resolution or these By-Laws, said
committee may exercise the powers of the Board concerning the management of the
business of the Corporation.
12. COMPENSATION
No compensation shall be paid to Directors, as such, for their
services, but by resolution of the Board, a fixed sum and expenses for actual
attendance at each regular or special meeting of the Board may be authorized.
Nothing herein contained shall be construed to preclude any Director from
serving the Corporation in any other capacity and receiving compensation
therefor.
ARTICLE IV - OFFICERS
1. OFFICERS, ELECTION AND TERM
a) The Board may elect or appoint a Chairman, a President, one or more
Vice Presidents, a Secretary and a Treasurer, and such other officers as it may
determine, who shall have such duties and powers as hereinafter provided. If
specifically authorized by the Board of Directors, an officer may appoint one or
more officers or assistant officers.
b) All officers shall be elected or appointed to hold office until the
meeting of the Board following the next annual meeting of Stockholders and until
their successors have been elected or appointed and qualified.
c) Any two or more offices may be held by the same person.
2. REMOVAL, RESIGNATION, SALARY, ETC.
a) Any officer elected or appointed by the Board may be removed by the
Board with or without cause.
b) In the event of the death, resignation or removal of an officer, the
Board in its discretion may elect or appoint a successor to fill the unexpired
term.
c) An officer may resign at any time by delivering a written notice to
the Corporation.
d) The salaries of all officers shall be fixed by the Board.
e) The Directors may require any officer to give security for the
faithful performance of his duties.
f) Any vacancy in any office may be filled by the Board of Directors.
3. DUTIES
The officers of this Corporation shall have the following duties:
The President shall be the chief executive officer of the Corporation,
shall have general and active management of the business and affairs of the
Corporation subject to the directions of the Board of Directors, and shall
preside at all meetings of the Shareholders and Board of Directors.
In absence of the President or in the event of his death, inability or
refusal to act, the Vice-President (or in the event there is more than one
Vice-President, the Vice-Presidents in
-4-
<PAGE> 5
the order of their appointment) shall perform the duties of the President, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the President.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the Shareholders and Board of Directors, send all notices of all meetings and
perform such other duties as may be prescribed by the Board of Directors or the
President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of Shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
ARTICLE V - STOCK CERTIFICATES
1. ISSUANCE
Every holder of shares in this corporation shall be entitled to have a
certificate representing all shares of which he is entitled. No certificate
shall be issued for any share until such share is fully paid.
2. FORM
Certificates representing shares in this Corporation shall be signed by
the President or Vice President and the Secretary or an Assistant Secretary and
may be sealed with the seal of this Corporation or a facsimile thereof.
3. TRANSFER OF STOCK
The Corporation shall register a stock certificate presented to it for
transfer if the certificate is properly endorsed by the holder of record or by
his duly authorized attorney.
4. LOST, STOLEN OR DESTROYED CERTIFICATES
If the Shareholder shall claim to have lost or destroyed a certificate
of shares issued by the Corporation, a new certificate shall be issued upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed, and at the discretion of the Board of
Directors, upon the deposit of a bond or other indemnity in such amount and with
such sureties, if any, as the Board may reasonably require.
ARTICLE VI - BOOKS AND RECORDS
1. BOOKS AND RECORDS
This Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its Shareholders, Board of
Director and committees of Directors.
This Corporation shall keep at its registered office or principal place
of business a record of its Shareholders, giving the names and addresses of all
shareholders and the number of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
-5-
<PAGE> 6
2. SHAREHOLDERS' INSPECTION RIGHTS
If he gives the Corporation written notice of his demand, made in good
faith and stating the purpose thereof, at least 5 business days before the date
on which he wishes to inspect and copy, a shareholder shall have the right to
examine, in person or by agent or attorney, during regular business hours for
any proper purpose, the Corporation's relevant books and records of accounts,
minutes and records of Shareholders and to make extract therefrom.
3. FINANCIAL INFORMATION
The Corporation shall furnish its shareholders annual financial
statements, which may be consolidated or combined statements of the Corporation
and one or more of its subsidiaries, as appropriate, that include a balance
sheet as of the end of the fiscal year, an income statement for that year, and a
statement of cash flows for that year. If financial statements are prepared for
the Corporation on the basis of generally accepted accounting principles, the
annual financial statements for the shareholders also must be prepared on that
basis.
If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the President or the person responsible for the
Corporation's accounting records:
(1) stating his reasonable belief whether the statements were prepared
on the basis of generally accepted accounting principles and, if not, describing
the basis of preparation; and
(2) describing any respects in which the statements were not prepared
on a basis of accounting consistent with the statements prepared for the
preceding year.
The Corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year. Thereafter, on
written request from a shareholder who was not mailed the statements, the
Corporation shall mail him the latest annual financial statements.
ARTICLE VII - DIVIDEND
The Board may out of funds legally available therefor, at any regular
or special meeting, declare dividends upon the capital stock of the Corporation
as and when it deems expedient. Before declaring any dividend there may be set
apart out of any funds of the Corporation available for dividends, such sum or
sums as the Board from time to time in their discretion deem proper for working
capital or as a reserve fund to meet contingencies or for equalizing dividends
or for such other purposes as the Board shall deem conducive to the interests of
the Corporation.
ARTICLE VIII - CORPORATE SEAL
The seal of the Corporation shall be circular in form and bear the name
of the Corporation, the year of its organization and the words "CORPORATE SEAL,
FLORIDA." The seal may be used by causing it to be impressed directly on the
instrument or writing to be sealed, or upon adhesive substance affixed thereto.
The seal on the certificates for shares or on any corporate obligation for the
payment of money may be facsimile, engraved or printed.
-6-
<PAGE> 7
ARTICLE IX - EXECUTION
All corporate instruments and documents shall be signed or
countersigned, executed, verified or acknowledged by, such officer or officers
or other person or persons as the Board may from time to time designate.
ARTICLE X - FISCAL YEAR
The fiscal year shall begin the first day of in each year.
ARTICLE XI - NOTICE AND WAIVER OF NOTICE
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated, and any notice so required shall
be deemed to be sufficient if given by depositing the same in the post office
box in a sealed post-paid wrapper, addressed to the person entitled thereto at
his last known post office address, and such notice shall be deemed to have been
given on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
Statute.
Whenever any notice is required to be given under the provisions of any
law, or under the provisions of the Articles of Incorporation of the
Corporation, or these By-Laws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time state
therein, shall be deemed equivalent thereto.
ARTICLE XII - CONSTRUCTION
Whenever a conflict arises between the language of these By-Laws and
the Articles of Incorporation, the Articles of Incorporation shall govern.
ARTICLE XIII - ACTION WITHOUT A MEETING
1. ACTION BY SHAREHOLDERS WITHOUT A MEETING.
Any action required or permitted to be taken at a meeting of the
shareholders may be taken without a meeting, without prior notice, and without a
vote if one or more consents in writing, setting forth the action so taken,
shall be signed and dated by the holders of the outstanding stock entitled to
vote with respect to the subject matter thereof and having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted, and shall be delivered to the Corporation for inclusion in the minute
book.
2. ACTION BY DIRECTORS WITHOUT A MEETING.
Any action required or permitted to be taken by the Board of Directors
or a committee of the Board at a meeting may be taken without a meeting if all
the members of the Board or the committee take the action, each director or
committee member signs a written consent describing the action taken, and the
consents are filed with the records of the Corporation.
-7-
<PAGE> 8
ARTICLE XIV - AMENDMENTS
These By-Laws may be altered or repealed and By-Laws may be made at any
annual meeting of the Stockholders or at any special meeting thereof if notice
of the proposed alteration or repeal to be made be contained in the notice of
such special meeting, by the affirmative vote of a majority of the stock issued
and outstanding and entitled to vote thereat, or by the affirmative vote of a
majority of the board at any regular meeting of the board or at any special
meeting of the board if notice of the proposed alteration or repeal to be made,
be contained in the notice of such special meeting.
-8-
<PAGE> 1
EXHIBIT 3.57
ARTICLES OF INCORPORATION
OF
QUANTUM PLUS, INC.
FIRST: The name of the Corporation shall be:
QUANTUM PLUS, INC.
SECOND: The purpose of the Corporation is to engage in any lawful
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
THIRD: The name and address in the State of California of the
Corporation's initial agent for service of process is:
Philip S. Chase
1600 S. Main Street
Suite 318
Walnut Creek, CA 94596
FOURTH: The Corporation is authorized to issue one class of stock,
designated "Common Stock", and the total number of shares which the Corporation
is authorized to issue is One Hundred Thousand (100,000) shares.
IN WITNESS WHEREOF, the undersigned Incorporator has executed Articles
of Incorporation at San Francisco, California, this 22nd day of January, 1997.
/s/ Walter M. Schey
_______________________________
Walter M. Schey, Incorporator
I declare that I am the person who executed the foregoing Articles of
Incorporation, and that said instrument is my act and deed.
/s/ Walter M. Schey
_______________________________
Walter M. Schey, Incorporator
<PAGE> 1
EXHIBIT 3.58
BY-LAWS
OF
QUANTUM PLUS, INC.
A CALIFORNIA CORPORATION
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office for the transaction
of business of the corporation is hereby fixed and located at 1600 South Main
St., Suite 318, City of Walnut Creek, County of Contra Costa, State of
California. The location may be changed by approval of a majority of the
authorized Directors, and additional offices may be established and maintained
at such other place or places, either within or without California, as the Board
of Directors may from time to time designate.
Section 2. OTHER OFFICES. Branch or subordinate offices may at any time
be established by the Board of Directors at any place or places where the
corporation is qualified to do business.
ARTICLE II
DIRECTORS - MANAGEMENT
Section 1. RESPONSIBILITY OF BOARD OF DIRECTORS. Subject to the
provisions of the General Corporation Law and to any limitations in the Articles
of Incorporation of the corporation relating to action required to be approved
by the Shareholders, as that term is defined in Section 153 of the California
Corporations Code, or by the outstanding shares, as that term is defined in
Section 152 of the Code, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction of
the Board of Directors. The Board may delegate the management of the day-to-day
operation of the business of the corporation to a management company or other
person, provided that the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised under the ultimate direction
of the Board.
Section 2. STANDARD OF CARE. Each Director shall perform the duties of
a Director, including the duties as a member of any committee of the Board upon
which the Director may serve, in good faith, in a manner such Director believes
to be in the best interests of the corporation, and with such care, including
reasonable inquiry, as an ordinary prudent person in a like position would use
under similar circumstances. (Sec. 309)
Section 3. EXCEPTION FOR CLOSE CORPORATION. Notwithstanding the
provisions of Section 1, in the event that this corporation shall elect to
become a close corporation as defined in Sec. 158, its Shareholders may enter
into a Shareholders' Agreement as defined in Sec. 186. Said Agreement may
provide for the exercise of corporate powers and the management of the business
and affairs of this corporation by the Shareholders, provided, however, such
agreement shall, to the extent and so long as the discretion or the powers of
the Board in its
<PAGE> 2
management of corporate affairs is controlled by such agreement, impose upon
each Shareholder who is a party thereof, liability for managerial acts performed
or omitted by such person pursuant thereto otherwise imposed upon Directors as
provided in Sec. 300(d); and the Directors shall be relieved to that extent from
such liability.
Section 4. NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number
of Directors shall be five (5) until changed by a duly adopted amendment to the
Articles of Incorporation or by an amendment to this by-law adopted by the vote
or written consent of holders of a majority of the outstanding shares entitled
to vote, as provided in Sec. 212.
Section 5. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
Section 6. VACANCIES. Vacancies in the Board of Directors may be filled
by a majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, except that a vacancy created by the removal of a
Director by the vote or written consent of the Shareholders or by court order
may be filled only by the vote of a majority of the shares entitled to vote
represented at a duly held meeting at which a quorum is present, or by the
written consent of holders of a majority of the outstanding shares entitled to
vote. Each Director so elected shall hold office until the next annual meeting
of the Shareholders and until a successor has been elected and qualified.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the event of the death, resignation, or removal of any Director, or if
the Board of Directors by resolution declares vacant the office of a Director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of Directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any Director or
Directors are elected, to elect the number of Directors to be voted for at that
meeting.
The Shareholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
Section 7. REMOVAL OF DIRECTORS. The entire Board of Directors or any
individual Director may be removed from office as provided by Secs. 302, 303 and
304 of the Corporations Code of the State of California. In such case, the
remaining Board members may elect a successor Director to fill such vacancy for
the remaining unexpired term of the Director so removed.
Section 8. NOTICE, PLACE AND MANNER OF MEETINGS. Meetings of the Board
of Directors may be called by the Chairman of the Board, or the President, or
any Vice President, or the Secretary, or any two (2) Directors and shall be held
at the principal executive office of the corporation, unless some other place is
designated in the notice of the meeting.
-2-
<PAGE> 3
Members of the Board may participate in a meeting through use of a conference
telephone or similar communications equipment so long as all members
participating in such a meeting can hear one another. Accurate minutes of any
meeting of the Board or any committee thereof, shall be maintained as required
by Sec. 1500 of the Code by the Secretary or other Officer designated for that
purpose.
Section 9. ORGANIZATION MEETINGS. The organization meetings of the
Board of Directors shall be held immediately following the adjournment of the
annual meetings of the Shareholders.
Section 10. OTHER REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at the corporate offices, or such other place as may be
designated by the Board of Directors, as follows:
Time of Regular Meeting: 10:00 a.m.
Date of Regular Meeting: March 1
If said day shall fall upon a holiday, such meetings shall be held on
the next succeeding business day thereafter. No notice need to be given of such
regular meetings.
Section 11. SPECIAL MEETINGS - NOTICES - WAIVERS. Special meetings of
the Board may be called at any time by any of the aforesaid officers, i.e., by
the Chairman of the Board or the President or any Vice President or the
Secretary or any two (2) Directors.
At least forty-eight (48) hours notice of the time and place of special
meetings shall be delivered personally to the Directors or personally
communicated to them by a corporate Officer by telephone or telegraph. If the
notice is sent to a Director by letter, it shall be addressed to him or her at
his or her address as it is shown upon the records of the corporation, or if it
is not so shown on such records or is not readily ascertainable, at the place in
which the meetings of the Directors are regularly held. In case such notice is
mailed, it shall be deposited in the United States mail, postage prepaid, in the
place in which the principal executive office of the corporation is located at
least four (4) days prior to the time of the holding of the meeting. Such
mailing, telegraphing, telephoning or delivery as above provided shall be due,
legal and personal notice to such Director.
When all of the Directors are present at any Directors' meeting,
however called or noticed, and either (i) sign a written consent thereto on the
records of such meeting, or, (ii) if a majority of the Directors are present and
if those not present sign a waiver of notice of such meeting or a consent to
holding the meeting or an approval of the minutes thereof, whether prior to or
after the holding of such meeting, which said waiver, consent or approval shall
be filed with the Secretary of the corporation, or, (iii) if a Director attends
a meeting without notice but without protesting, prior thereto or at its
commencement, the lack of notice, then the transactions thereof are as valid as
if had at a meeting regularly called and noticed.
Section 12. SOLE DIRECTOR PROVIDED BY ARTICLES OF INCORPORATION OR
BY-LAWS. In the event only one (1) Director is required by the By-Laws or
Articles of Incorporation, then any reference herein to notices, waivers,
consents, meetings or
-3-
<PAGE> 4
other actions by a majority or quorum of the Directors shall be deemed to refer
to such notice, waiver, etc., by such sole Director, who shall have all the
rights and duties and shall be entitled to exercise all of the powers and shall
assume all the responsibilities otherwise herein described as given to a Board
of Directors.
Section 13. DIRECTORS ACTION BY UNANIMOUS WRITTEN CONSENT. Any action
required or permitted to be taken by the Board of Directors may be taken without
a meeting and with the same force and effect as if taken by a unanimous vote of
Directors, if authorized by a writing signed individually or collectively by all
members of the Board. Such consent shall be filed with the regular minutes of
the Board.
Section 14. QUORUM. A majority of the number of Directors as fixed by
the Articles of Incorporation or By-Laws shall be necessary to constitute a
quorum for the transaction of business, and the action of a majority of the
Directors present at any meeting at which there is a quorum, when duly
assembled, is valid as a corporate act; provided that a minority of the
Directors, in the absence of a quorum, may adjourn from time to time, but may
not transact any business. A meeting at which a quorum is initially present may
continue to transact business, notwithstanding the withdrawal of Directors, if
any action taken is approved by a majority of the required quorum for such
meeting.
Section 15. NOTICE OF ADJOURNMENT. Notice of the time and place of
holding an adjourned meeting need not be given to absent Directors if the time
and place be fixed at the meeting adjourned and held within twenty-four (24)
hours, but if adjourned more than twenty-four (24) hours, notice shall be given
to all Directors not present at the time of the adjournment.
Section 16. COMPENSATION OF DIRECTORS. Directors, as such, shall not
receive any stated salary for their services, but by resolution of the Board a
fixed sum and expense of attendance, if any, may be allowed for attendance at
each regular and special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from serving the
corporation in any other capacity and receiving compensation therefor.
Section 17. COMMITTEES. Committees of the Board may be appointed by
resolution passed by a majority of the whole Board. Committees shall be composed
of two (2) or more members of the Board, and shall have such powers of the Board
as may be expressly delegated to it by resolution of the Board of Directors,
except those powers expressly made non-delegable by Sec. 311.
Section 18. ADVISORY DIRECTORS. The Board of Directors from time to
time may elect one or more persons to be Advisory Directors who shall not by
such appointment be members of the Board of Directors. Advisory Directors shall
be available from time to time to perform special assignments specified by the
President, to attend meetings of the Board of Directors upon invitation and to
furnish consultation to the Board. The period during which the title shall be
held may be prescribed by the Board of Directors. If no period is prescribed,
the title shall be held at the pleasure of the Board.
-4-
<PAGE> 5
Section 19. RESIGNATIONS. Any Director may resign effective upon giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the corporation, unless the notice specifies a later time
for the effectiveness of such resignation. If the resignation is effective at a
future time, a successor may be elected to take office when the resignation
becomes effective.
ARTICLE III
OFFICERS
Section 1. OFFICERS. The Officers of the corporation shall be a
President, a Secretary, and a Chief Financial Officer. The corporation may also
have, at the discretion of the Board of Directors, a Chairman of the Board, one
or more Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers, and such other Officers as may be appointed in accordance
with the provisions of Section 3 of this Article III. Any number of offices may
be held by the same person.
Section 2. ELECTION. The Officers of the corporation, except such
officers as may be appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by the Board of Directors,
and each shall hold office until he or she shall resign or shall be removed or
otherwise disqualified to serve, or a successor shall be elected and qualified.
Section 3. SUBORDINATE OFFICERS, ETC. The Board of Directors may
appoint such other Officers as the business of the corporation may require, each
of whom shall hold office for such period, having such authority and perform
such duties as are provided in the By-Laws or as the Board of Directors may from
time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights,
if any, of an Officer under any contract of employment, any officer may be
removed, either with or without cause, by the Board of Directors, at any regular
or special meeting to the Board, or, except in case of an officer chosen by the
Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
Any Officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the Officer is a
party.
Section 5. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in the By-Laws for regular appointments to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer be elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned by the Board of Directors or prescribed by the By-Laws. If
there is no President, the Chairman of the Board shall
-5-
<PAGE> 6
in addition be the Chief Executive Officer of the corporation and shall have the
powers and duties prescribed in Section 7 of this Article III.
Section 7. PRESIDENT. Subject to such supervisory powers, if any, as
may be given by the Board of Directors to the Chairman of the Board, if there be
such an Officer, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. He or she shall preside at all meetings of the Shareholders and in
the absence of the Chairman of the Board, or if there be none, at all meetings
of the Board of Directors. The President shall be ex officio a member of all the
standing committees, including the Executive Committee, if any, and shall have
the general powers and duties of management usually vested in the office of
President of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or the By-Laws.
Section 8. VICE PRESIDENT. In the absence or disability of the
President, the Vice Presidents, if any, in order of their rank as fixed by the
Board of Directors, or if not ranked, the Vice President designated by the Board
of Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to, all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of Directors or the By-Laws.
Section 9. SECRETARY. The Secretary shall keep, or cause to be kept, a
book of minutes at the principal office or such other place as the Board of
Directors may order, of all meetings of Directors and Shareholders, with the
time and place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present at Directors'
meetings, the number of shares present or represented at Shareholders' meetings
and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal office
or at the office of the corporation's transfer agent, a share register, or
duplicate share register, showing the names of the Shareholders and their
addresses; the number and classes of shares held by each; the number and date of
certificates issued for the same; and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the Shareholders and of the Board of Directors required by the
By-Laws or by law to be given. He or she shall keep the seal of the corporation
in safe custody, and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors or by the By-Laws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall
keep and maintain, or cause to be kept and maintained in accordance with
generally accepted accounting principles, adequate and correct accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
earnings (or surplus) and shares. The books of account shall at all reasonable
times be open to inspection by any Director.
-6-
<PAGE> 7
This Officer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositaries as may be designated
by the Board of Directors. He or she shall disburse the funds of the corporation
as may be ordered by the Board of Directors, shall render to the President and
Directors, whenever they request it, an account of all of his or her
transactions and of the financial condition of the corporation, and shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or the By-Laws.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. PLACE OF MEETINGS. All meetings of the Shareholders shall be
held at the principal executive office of the corporation unless some other
appropriate and convenient location be designated for that purpose from time to
time by the Board of Directors.
Section 2. ANNUAL MEETINGS. The annual meetings of the Shareholders
shall be held, each year, at the time and on the day following:
Time of Meeting: 9:30 AM
Date of Meeting: March 1
If this day shall be a legal holiday, then the meeting shall be held on
the next succeeding business day, at the same hour. At the annual meeting, the
Shareholders shall elect a Board of Directors, consider reports of the affairs
of the corporation and transact such other business as may be properly brought
before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of the Shareholders may
be called at any time by the Board of Directors, the Chairman of the Board, the
President, a Vice President, the Secretary, or by one or more Shareholders
holding not less than one-tenth (1/10) of the voting power of the corporation.
Except as next provided, notice shall be given as for the annual meeting.
Upon receipt of a written request addressed to the Chairman, President,
Vice President, or Secretary, mailed or delivered personally to such Officer by
any person (other than the Board) entitled to call a special meeting of
Shareholders, such officer shall cause notice to be given, to the Shareholders
entitled to vote, that a meeting will be held at a time requested by the person
or persons calling the meeting, not less than thirty-five (35) nor more than
sixty (60) days after the receipt of such request. If such notice is not given
within twenty (20) days after receipt of such request, the persons calling the
meeting may give notice thereof in the manner provided by these By-Laws or apply
to the Superior Court as provided in Sec. 305 (c).
Section 4. NOTICE OF MEETINGS - REPORTS. Notice of meetings, annual or
special, shall be given in writing not less than ten (10) nor more than sixty
(60) days before the date of the meeting to Shareholders entitled to vote
thereat. Such notice shall be given by the Secretary or the Assistant Secretary,
or if there be no such Officer, or in the case of his or her neglect or refusal,
by any Director or Shareholder.
-7-
<PAGE> 8
Such notices or any reports shall be given personally or by mail or
other means of written communication as provided in Sec. 601 of the Code and
shall be sent to the Shareholder's address appearing on the books of the
corporation, or supplied by him or her to the corporation for the purpose of
notice, and in the absence thereof, as provided in Sec. 601 of the Code.
Notice of any meeting of Shareholders shall specify the place, the day
and the hour of meeting, and (1) in case of a special meeting, the general
nature of the business to be transacted and no other business may be transacted,
or (2) in the case of an annual meeting, those matters which the Board at date
of mailing, intends to present for action by the Shareholders. At any meetings
where Directors are to be elected, notice shall include the names of the
nominees, if any, intended at date of notice to be presented by management for
election.
If a Shareholder supplies no address, notice shall be deemed to have
been given if mailed to the place where the principal executive office of the
corporation, in California, is situated, or published at least once in some
newspaper of general circulation in the County of said principal office.
Notice shall be deemed given at the time it is delivered personally or
deposited in the mail or sent by other means of written communication. The
Officer giving such notice or report shall prepare and file an affidavit or
declaration thereof.
When a meeting is adjourned for forty-five (45) days or more, notice of
the adjourned meeting shall be given as in case of an original meeting. Save, as
aforesaid, it shall not be necessary to give any notice of adjournment or of the
business to be transacted at an adjourned meeting other than by announcement at
the meeting at which such adjournment is taken.
Section 5. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, however called and noticed, shall
be valid as though had at a meeting duly held after regular call and notice, if
a quorum be present either in person or by proxy, and if, either before or after
the meeting, each of the Shareholders entitled to vote, not present in person or
by proxy, sign a written waiver of notice, or a consent to the holding of such
meeting or an approval of the minutes thereof. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting. Attendance shall constitute a waiver of notice, unless
objection shall be made as provided in Sec. 601 (c).
Section 6. SHAREHOLDERS ACTING WITHOUT A MEETING-DIRECTORS. Any action
which may be taken at a meeting of the Shareholders, may be taken without a
meeting or notice of meeting if authorized by a writing signed by all of the
Shareholders entitled to vote at a meeting for such purpose, and filed with the
Secretary of the corporation, provided, further, that while ordinarily Directors
can only be elected by unanimous written consent under Sec. 603 (d), if the
Directors fail to fill a vacancy, then a Director to fill that vacancy may be
elected by the written consent of persons holding a majority of shares entitled
to vote for the election of Directors.
Section 7. OTHER ACTIONS WITHOUT A MEETING. Unless otherwise provided
in the California Corporations Code or the Articles, any action which may be
taken at
-8-
<PAGE> 9
any annual or special meeting of Shareholders may be taken without a meeting and
without prior notice, if a consent in writing, setting forth the action so
taken, signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorized or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted.
Unless the consents of all Shareholders entitled to vote have been
solicited in writing,
(1) Notice of any Shareholder approval pursuant to Secs. 310,
317, 1201 or 2007 without a meeting by less than unanimous written
consent shall be given at least ten (10) days before the consummation
of the action authorized by such approval, and
(2) Prompt notice shall be given of the taking of any other
corporate action approved by Shareholders without a meeting by less
than unanimous written consent, to each of those Shareholders entitled
to vote who have not consented in writing.
Any Shareholder giving a written consent, or the Shareholder's
proxy-holders, or a transferee of the shares of a personal representative of the
Shareholder or their respective proxy-holders, may revoke the consent by a
writing received by the corporation prior to the time that written consents of
the number of shares required to authorize the proposed action have been filed
with the Secretary of the corporation, but may not do so thereafter. Such
revocation is effective upon its receipt by the Secretary of the corporation.
Section 8. QUORUM. The holders of a majority of the shares entitled to
vote thereat, present in person, or represented by proxy, shall constitute a
quorum at all meetings of the Shareholders for the transaction of business
except as otherwise provided by law, by the Articles of Incorporation, or by
these By-Laws. If, however, such majority shall not be present or represented at
any meeting of the Shareholders, the Shareholders entitled to vote thereat,
present in person, or by proxy, shall have the power to adjourn the meeting from
time to time, until the requisite amount of voting shares shall be present. At
such adjourned meeting at which the requisite amount of voting shares shall be
represented, any business may be transacted which might have been transacted at
a meeting as originally notified.
If a quorum be initially present, the Shareholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken is approved by a
majority of the Shareholders required to initially constitute a quorum.
Section 9. VOTING. Only persons in whose names shares entitled to vote
stand on the stock records of the corporation on the day of any meeting of
Shareholders, unless some other day be fixed by the Board of Directors for the
determination of Shareholders of record, and then on such other day, shall be
entitled to vote at such meeting.
Provided the candidate's name has been placed in nomination prior to
the voting and one or more Shareholder has given notice at the meeting prior to
the voting of the Shareholder's intent to cumulate the Shareholder's votes,
every Shareholder entitled to vote at any election for Directors of any
corporation for profit may cumulate their votes and give one
-9-
<PAGE> 10
candidate a number of votes equal to the number of Directors to be elected
multiplied by the number of votes to which his or her shares are entitled, or
distribute his or her votes on the same principle among as many candidates as he
or she thinks fit.
The candidates receiving the highest number of votes up to the number
of Directors to be elected are elected.
The Board of Directors may fix a time in the future not exceeding sixty
(60) days preceding the date of any meeting of Shareholders or the date fixed
for the payment of any dividend or distribution, or for the allotment or rights,
or when any change or conversion or exchange of shares shall go into effect, as
a record date for the determination of the Shareholders entitled to notice of
and to vote at any such meeting, or entitled to receive any such dividend or
distribution, or any allotment of rights, or to exercise the rights in respect
to any such change, conversion or exchange of shares. In such case only
Shareholders of record on the date so fixed shall be entitled to notice of and
to vote at such meeting, or to receive such dividends, distribution or allotment
of rights, or to exercise such rights, as may be notwithstanding any transfer of
any share on the books of the corporation after any record date fixed as
aforesaid. The Board of Directors may close the books of the corporation against
transfers of shares during the whole or any part of such period.
Section 10. PROXIES. Every Shareholder entitled to vote, or to execute
consents, may do so, either in person or by written proxy, executed in
accordance with the provisions of Secs. 604 and 705 of the Code and filed with
the Secretary of the corporation.
Section 11. ORGANIZATION. The President, or in the absence of the
President, any Vice President, shall call the meeting of the Shareholders to
order, and shall act as chairman of the meeting. In the absence of the President
and all of the Vice Presidents, Shareholders shall appoint a chairman for such
meeting. The Secretary of the corporation shall act as Secretary of all meetings
of the Shareholders, but in the absence of the Secretary at any meeting of the
Shareholders, the presiding Officer may appoint any person to act as Secretary
of the meeting.
Section 12. INSPECTORS OF ELECTION. In advance of any meeting of
Shareholders the Board of Directors may, if they so elect, appoint inspectors of
election to act at such meeting or any adjournment thereof. If inspectors of
election be not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any such meeting may, and on the request of any
Shareholder or his or her proxy shall, make such appointment at the meeting in
which case the number of inspectors shall be either one (1) or three (3) as
determined by a majority of the Shareholders represented at the meeting.
Section 13. (A) SHAREHOLDERS' AGREEMENTS. Notwithstanding the above
provisions, in the event this corporation elects to become a close corporation,
an agreement between two (2) or more Shareholders thereof, if in writing and
signed by the parties thereof, may provide that in exercising any voting rights
the shares held by them shall be voted as provided therein or in Sec. 706, and
may otherwise modify these provisions as to Shareholders' meetings and actions.
(B) EFFECT OF SHAREHOLDERS' AGREEMENTS. Any
Shareholders' Agreement authorized by Sec. 300 (b), shall only be effective to
modify the terms of
-10-
<PAGE> 11
these By-Laws if this corporation elects to become a close corporation with
appropriate filing of or amendment to its Articles as required by Sec. 202 and
shall terminate when this corporation ceases to be a close corporation. Such an
agreement cannot waive or alter Secs. 158, (defining close corporations), 202
(requirements of Articles of Incorporation), 500 and 501 relative to
distributions, 111 (merger), 1201 (e) (reorganization) or Chapters 15 (Records
and Reports) or 16 (Rights of Inspection), 18 (Involuntary Dissolution) or 22
(Crimes and Penalties). Any other provisions of the Code or these By-Laws may be
altered or waived thereby, but to the extent they are not so altered or waived,
these By-Laws shall be applicable.
ARTICLE V
CERTIFICATES AND TRANSFER OF SHARES
Section 1. CERTIFICATES FOR SHARES. Certificates for shares shall be of
such form and device as the Board of Directors may designate and shall state the
name of the record holder of the shares represented thereby; its number; date of
issuance; the number of shares for which it is issued; a statement of the
rights, privileges, preferences and restrictions, if any; a statement as to the
redemption or conversion, if any; a statement of liens or restrictions upon
transfer or voting, if any; if the shares be assessable or, if assessments are
collectible by personal action, a plain statement of such facts.
All certificates shall be signed in the name of the corporation by the
Chairman of the Board or Vice Chairman of the Board or the President or Vice
President and by the Chief Financial Officer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, certifying the number of shares and the
class or series of shares owned by the Shareholder.
Any or all of the signatures on the certificate may be facsimile. In
case any Officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall have ceased to be that Officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the corporation with the same effect as if that person were an Officer,
transfer agent, or registrar at the date of issue.
Section 2. TRANSFER ON THE BOOKS. Upon surrender to the Secretary or
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 3. LOST OR DESTROYED CERTIFICATES. Any person claiming a
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of the fact and shall, if the Directors so require, give the
corporation a bond of indemnity, in form and with one or more sureties
satisfactory to the Board, in at least double the value of the stock represented
by said certificate, whereupon a new certificate may be issued in the same tenor
and for the same number of shares as the one alleged to be lost or destroyed.
Section 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint one or more transfer agents or transfer clerks, and one or more
registrars, which shall be an incorporated bank or trust company, either
domestic or foreign, who, shall be appointed at
-11-
<PAGE> 12
such times and places as the requirements of the corporation may necessitate and
the Board of Directors may designate.
Section 5. CLOSING STOCK TRANSFER BOOKS - RECORD DATE. In order that
the corporation may determine the Shareholders entitled to notice of any meeting
or to vote or entitled to receive payment of any dividend or other distribution
or allotment of any rights or entitled to exercise any rights in respect of any
other lawful action, the Board may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days prior to the date of
such meeting nor more than sixty (60) days prior to any other action.
If no record date is fixed; the record date for determining
Shareholders entitled to notice of or to vote at a meeting of Shareholders shall
be at the close of business on the business day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on the
business day next preceding the day on which the meeting is held. The record
date for determining Shareholders entitled to give consent to corporate action
in writing without a meeting, when no prior action by the Board is necessary,
shall be the day on which, the first written consent is given.
The record date for determining Shareholders for any other purpose
shall be at the close of business on the day on which the Board adopts the
resolution relating thereto, or the sixtieth (60th) day prior to the date of
such other action, whichever is later.
Section 6. LEGEND CONDITION. In the event any shares of this
corporation are issued pursuant to a permit or exemption therefrom requiring the
imposition of a legend condition, the person or persons issuing or transferring
said shares shall make sure said legend appears on the certificate and shall not
be required to transfer any shares free of such legend unless an amendment to
such permit or a new permit be first issued so authorizing such a deletion.
Section 7. CLOSE CORPORATION CERTIFICATES. All certificates
representing shares of this corporation, in the event it shall elect to become a
close corporation, shall contain the legend required by Sec. 418 (c).
Section PROVISION RESTRICTING TRANSFER OF SHARES. Before there can be a
valid sale or transfer of any of the shares of this corporation by the holders
thereof, the holder of the shares to be sold or transferred shall first give
notice in writing to the Secretary of this corporation of his or her intention
to sell or transfer such shares. Said notice shall specify the number of shares
to be sold or transferred, the price per share and the terms upon which such
holder intends to make such sale or transfer. The Secretary shall within five
(5) days thereafter, mail or deliver a copy of said notice to each of the other
Share holders of record of this corporation. Such notice may be delivered to
such Shareholders personally or may be mailed to the last known addresses of
such Shareholders, as the same may appear on the books of this corporation.
Within ___ days after the mailing or delivery of said notices to such
Shareholders, any such Shareholder or Shareholders desiring to acquire any part
or all of the shares referred to in said notice shall deliver by mail or
otherwise to the Secretary of this corporation a written offer or offers to
purchase a specified number or numbers of such shares at the price and upon the
terms stated in said notice.
-12-
<PAGE> 13
If the total number of shares specified in such offers exceeds the
number of shares referred to in said notice, each offering Shareholder shall be
entitled to purchase such proportion of the shares referred to in said notice to
the Secretary, as the number of shares of this corporation, which he or she
holds bears to the total number of shares held by all Shareholders desiring to
purchase the shares referred to in said notice to the Secretary.
If all of the shares referred to in said notice to the Secretary are
not disposed of under such apportionment, each Shareholder desiring to purchase
shares in a number in excess of his or her proportionate share, as provided
above, shall be entitled to purchase such proportion of those shares which
remain thus undisposed of, as the total number of shares which he or she holds
bears to the total number of shares held by all of the Shareholders desiring to
purchase shares in excess of those to which they are entitled under such
apportionment.
The aforesaid right to purchase the shares referred to the aforesaid
notice to the Secretary shall apply only if all of the shares referred to in
said notice are purchased. Unless all of the shares referred to in said notice
to the Secretary are purchased, as aforesaid, in accordance with offers made
within ___ said days, the Shareholder desiring to sell or transfer may dispose
of all shares of stock referred to in said notice to the Secretary to any person
or persons whomsoever; provided, however, that he or she shall not sell or
transfer such shares at a lower price or on terms more favorable to the
purchaser or transferee than those specified in said notice to the Secretary.
Any sale or transfer, or purported sale or transfer, of the shares of
said corporation shall be null and void unless the terms, conditions and
provisions of this section are strictly observed and followed.
Section PLEDGED OR HYPOTHECATED SHARES. Any Shareholder desiring to
borrow money on or hypothecate any or all of the shares of stock held by such
Shareholder shall first mail notice in writing to the Secretary of this
corporation of his or her intention to do so. Said notice shall specify the
number of shares to be pledged or hypothecated, the amount to be borrowed per
share, the terms, rate of interest, and other provisions upon which each
Shareholder intends to make such loan or hypothecation. The Secretary shall,
within five (5) days thereafter, mail or deliver a copy of said notice to each
of the other Shareholders of record of this corporation. Such notice may be
delivered to such Shareholder personally, or may be mailed to the last known
addresses of such Shareholders as the same may appear on the books of this
corporation. Within fifteen (15) days after the mailing or delivering of said
notice to said Shareholders, any such Shareholder or Shareholders desiring to
lend any part or all of the amount sought to be borrowed, as set forth in said
notice, at the terms therein specified, shall deliver by mail, or otherwise, to
the Secretary of this corporation a written offer or offers to lend a certain
amount of money for the term, at the rate of interest, and upon the other
provisions specified in said notice.
If the total amount of money subscribed in such offers exceeds the
amount sought to be borrowed, specified in said notice, each offering
Shareholder shall be entitled to lend such proportion of the amount sought to be
borrowed, as set forth in said notice, as the number of shares which he or she
holds bears to the total number of shares held by all such Shareholders desiring
to lend all or part of the amount specified in said notice.
-13-
<PAGE> 14
If the entire amount of monies sought to be borrowed, as specified in
said notice, is not subscribed as set forth in the preceding paragraphs, each
Shareholder desiring to lend an amount in excess of his or her proportionate
share, as specified in the preceding paragraph, shall be entitled to lend such
proportion of the subscribed amount as the total number of shares which he or
she holds bears to the total number of shares held by all of the Shareholders
desiring to lend an amount in excess of that to which they are entitled under
such apportionment. If there be but one Shareholder so desiring to lend, such
Shareholder shall be entitled to lend up to the full amount sought to be
borrowed.
If none, or only a part of the amount sought to be borrowed, as
specified in said notice, is subscribed as aforesaid, in accordance with offers
made within said fifteen (15) day period, the Shareholder desiring to borrow may
borrow from any person or persons he or she may so desire as to any or all
shares of stock held by him or her which have not been covered by lending
Shareholders; provided, however, that said Shareholders shall not borrow any
lesser amount, or any amount on terms less favorable to the borrower, than those
specified in said notice to the Secretary.
Any pledge or hypothecation, or other purported transfer as security
for a loan of the shares of this corporation, shall be null and void unless the
terms, conditions and provisions of these By-Laws are strictly observed and
followed.
ARTICLE VI
RECORDS - REPORTS - INSPECTION
Section 1. RECORDS. The corporation shall maintain, in accordance with
generally accepted accounting principles, adequate and correct accounts, books
and records of its business and properties. All of such books, records and
accounts shall be kept at its principal executive office in the State of
California, as fixed by the Board of Directors from time to time.
Section 2. INSPECTION OF BOOKS AND RECORDS. All books and records
provided for in Sec. 1500 shall be open to inspection of the Directors and
Shareholders from time to time and in the manner provided in said Sec. 1600 -
1602.
Section 3. CERTIFICATION AND INSPECTION OF BY-LAWS. The original or a
copy of these By-Laws, as amended or otherwise altered to date, certified by the
Secretary, shall be kept at the corporation's principal executive office and
shall be open to inspection by the Shareholders of the corporation at all
reasonable times during office hours, as provided in Sec. 213 of the
Corporations Code.
Section 4. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes or other evidences of indebtedness, issued in the name
of or payable to the corporation, shall be signed or endorsed by such person or
persons and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 5. CONTRACTS, ETC. -- HOW EXECUTED. The Board of Directors,
except as in the By-Laws otherwise provided, may authorize any Officer or
Officers, agent or agents, to enter into any contract or execute any instrument
in the name of and on behalf of the
-14-
<PAGE> 15
corporation. Such authority may be general or confined to specific instances.
Unless so authorized by the Board of Directors, no officer, agent or employee
shall have any power or authority to bind the corporation by any contract or
agreement, or to pledge its credit, or to render it liable for any purpose or to
any amount, except as provided in Sec. 313 of the Corporations Code.
ARTICLE VII
ANNUAL REPORTS
Section 1. REPORT TO SHAREHOLDERS, DUE DATE. The Board of Directors
shall cause an annual report to be sent to the Shareholders not later than one
hundred twenty (120) days after the close of the fiscal or calendar year adopted
by the corporation. This report shall be sent at least fifteen (15) days before
the annual meeting of Shareholders to be held during the next fiscal year and in
the manner specified in Section 4 of Article IV of these By-Laws for giving
notice to Shareholders of the corporation. The annual report shall contain a
balance sheet as of the end of the fiscal year and an income statement and
statement of changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such report, the
certificate of an authorized Officer of the corporation that the statements were
prepared without audit from the books and records of the corporation.
Section 2. WAIVER. The annual report to Shareholders referred to in
Section 1501 of the California General Corporation Law is expressly dispensed
with so long as this corporation shall have less than one hundred (100)
Shareholders. However, nothing herein shall be interpreted as prohibiting the
Board of Directors from issuing annual or other periodic reports to the
Shareholders of the corporation as they consider appropriate.
ARTICLE VIII
AMENDMENTS TO BY-LAWS
Section 1. AMENDMENT BY SHAREHOLDERS. New By-Laws may be adopted or
these By-Laws may be amended or repealed by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the Articles of Incorporation of the corporation set forth the
number of authorized Directors of the corporation, the authorized number of
Directors may be changed only by an amendment of the Articles of Incorporation.
Section 2. POWERS OF DIRECTORS. Subject to the right of the
Shareholders to adopt, amend or repeal By-Laws, as provided in Section 1 of this
Article VIII, and the limitations of Sec. 204 (a) (5) and Sec. 212, the Board of
Directors may adopt, amend or repeal any of these By-Laws other than a By-Law or
amendment thereof changing the authorized number of Directors.
Section 3. RECORD OF AMENDMENTS. Whenever an amendment or new By-Law is
adopted, it shall be copied in the book of By-Laws with the original By-Laws, in
the appropriate place. If any By-Law is repealed, the fact of repeal with the
date of the meeting at which the repeal was enacted or written assent was filed
shall be stated in said book.
-15-
<PAGE> 16
ARTICLE IX
CORPORATE SEAL
The corporate seal shall be circular in form, and shall have inscribed
thereon the name of the corporation, the year or date of its incorporation, and
the word "California".
ARTICLE X
MISCELLANEOUS
Section 1. REFERENCES TO CODE SECTIONS. "Sec." references herein refer
to the equivalent Sections of the California Corporations Code effective January
1, 1977, as amended.
Section 2. REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of
other corporations standing in the name of this corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
corporation by the Chairman of the Board, the President or any Vice President
and the Secretary or an Assistant Secretary.
Section 3. SUBSIDIARY CORPORATIONS. Shares of this corporation owned by
a subsidiary shall not be entitled to vote on any matter. A subsidiary for these
purposes is defined as a corporation, the shares of which possessing more than
25% of the total combined voting power of all classes of shares entitled to
vote, are owned directly or indirectly through one (1) or more subsidiaries.
Section 4. INDEMNIFICATION AND LIABILITY. The liability of the
directors of the corporation for monetary damages shall be eliminated to the
fullest extent permissible under California law.
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) for breach of duty
to the corporation and share holders through bylaw provisions or through
agreements with the agents, or both, in excess of the indemnification otherwise
permitted by Section 317 of the California Corporations Code, subject to the
limits on such excess indemnification set forth in Section 204 of the California
Corporations Code.
Section 5. ACCOUNTING YEAR. The accounting year of the corporation
shall be fixed by resolution of the Board of Directors.
-16-
<PAGE> 1
Exhibit 3.59
ARTICLES OF INCORPORATION
OF
RADIOLOGY CONSULTING ASSOCIATES, INC.
The undersigned, being a citizen of the United States and desiring to
form a professional corporation in accordance with Chapters 1785 and 1701 of the
Ohio Revised Code, does hereby state the following:
FIRST: The name of the corporation shall be RADIOLOGY CONSULTING
ASSOCIATES, INC.
SECOND: The place in Ohio where its principal office is to be located
is the City of Cleveland Heights, County of Cuyahoga.
THIRD: The purpose for which it is formed shall be:
to practice the profession of medicine and radiology
and to do generally any and all things necessary and
incidental to said practice including those things
authorized in Section 1701.13 Ohio Revised Code.
FOURTH: The number of shares which the corporation is authorized to
have outstanding is Five Hundred (500), all of which are
common shares without par value.
FIFTH: The amount of stated capital with which the corporation shall
begin business is Five Hundred Dollars ($500).
IN WITNESS WHEREOF, I have hereunto subscribed my name this 4th day of
April, 1978.
/s/ Stephen C. Ellis
---------------------------------
Stephen C. Ellis, Incorporator
<PAGE> 2
NAME CHANGE
OF
CUMMINGS GROUP HOME, INC.
Robert Lamantia, President and Jean Cummings, Secretary of Cummings
Group Home, Inc., an Ohio corporation, with its principal office located at Box
324, Put-In-Bay, Ohio, Put-In-Bay Township, Ottawa County, Ohio, do hereby
certify that at a meeting of the members of said corporation, which was duly
called and held on the 17th day of May, 1978, at which meeting a quorum of
members was present, and that at such meeting the following resolution of
amendment of the Articles of Incorporation to change the name was adopted by the
affirmative vote of more than three-fourths of the members present thereat:
"BE IT RESOLVED, that the name of Cummings Group Home, Inc.,
being the same, is hereby changed to Hickory Farms Homes, Inc., by striking from
the First Article of the Articles of Incorporation, the following:
Cummings Group Home, Inc. and Inserting in lieu thereof:
Hickory Farms Homes, Inc.
BE IT FURTHER RESOLVED, that said Articles of Incorporation
be unamended and unchanged in all other respects."
Said President and Secretary respectfully further certify that the
foregoing resolution has not been repealed, modified or amended and that the
same is now in full force and effect.
<PAGE> 3
IN WITNESS WHEREOF, the said Robert Lamantia, President, and Jean
Cummings, Secretary, of Cummings Group Home, Inc., acting for and on behalf of
said corporation, have hereunto set their names to be hereunto affixed this 25th
day of January, 1979.
/s/ Robert Lamantia
----------------------------------
Robert Lamantia, President
/s/ Jean Cummings
----------------------------------
Jean Cummings, Secretary
-2-
<PAGE> 4
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION OF
RADIOLOGY CONSULTING ASSOCIATES, INC.
March 31, 1981
Norbert E. Reich, President and Frank F. Seidelmann,
Secretary, of RADIOLOGY CONSULTING ASSOCIATES, INC., an Ohio professional
corporation, do hereby certify that by unanimous action in writing of the
Shareholders on March 31, 1981, pursuant to the provisions of Section 1701.54 of
the Ohio Revised Code, the following resolutions were adopted to amend the
Articles of Incorporation of RADIOLOGY CONSULTING ASSOCIATES, INC.:
RESOLVED: That ARTICLE FOURTH of the Corporation's Articles of
Incorporation, as amended, be amended in its entirety to read as
follows:
FOURTH: The number of shares which the Corporation is
authorized to have outstanding is Ten Thousand (10,000), all
of which are common shares without par value.
RESOLVED FURTHER: That a new ARTICLE SIXTH be added to said Articles of
Incorporation, as amended, as follows:
SIXTH: These Articles of Incorporation may be amended by the
vote or consent of the holders of shares entitling them to
exercise Eighty Percent (80%) of the voting power of the
Corporation.
IN WITNESS WHEREOF, said Norbert E. Reich, President and Frank
F. Seidelmann, Secretary of RADIOLOGY CONSULTING ASSOCIATES, INC. have hereunto
subscribed their names this 31 day of March, 1981.
/s/ Norbert E. Reich
------------------------------------
NORBERT E. REICH, President
RADIOLOGY CONSULTING ASSOCIATES, INC.
/s/ Frank F. Seidelmann
------------------------------------
FRANK F. SEIDELMANN, Secretary
RADIOLOGY CONSULTING ASSOCIATES, INC.
<PAGE> 5
CERTIFICATE OF AMENDMENT
BY SHAREHOLDERS
to the ARTICLES OF INCORPORATION of
Radiology Consulting Associates, Inc.
(Name of Corporation)
Dr. Norbert E. Reich who is (X) Secretary ( ) Assistant Secretary [ ]
of the [ ]with its principal location at 30100 Chagrin Blvd.,
Suite 102, Pepper Pike, Ohio 44124 hereby certify that (check the appropriate
box and complete the appropriate statements)
( ) a meeting of the shareholders was duly called for the purpose of
adopting this amendment and held on _____________, 19__, at which
meeting a quorum of the shareholders was present in person or by proxy
and by the affirmative vote of the holders of shares entitling them to
exercise _______% of the voting power of the corporation.
(X) in a writing signed by all of the shareholders who would be entitled to
notice of a meeting held for that purpose the following resolution to
amend the articles was adopted:
Amend / update corporate address as follows:
30100 Chagrin Blvd.
Suite 102
Pepper Pike, Ohio 44124, [ Co.]
* formerly South Russell, Grauga Co.
<PAGE> 6
IN WITNESS WHEREOF, the above named officers, acting for and on the
behalf of the corporation, have hereto subscribed their names this 19th day of
September, 1984.
/s/ Norbert E. Reich
------------------------------------
NORBERT E. REICH, President
/s/ Frank E. Seidelmann
------------------------------------
FRANK E. SEIDELMANN, Secretary
Note: Ohio law does not permit one officer to sign in two capacities. Two
separate signatures are required, even if this necessitates the
election of a second officer before the filing can be made.
-2-
<PAGE> 7
CERTIFICATE OF AMENDMENT
to
ARTICLES OF INCORPORATION
of
RADIOLOGY CONSULTING ASSOCIATES, INC.
The undersigned, Norbert E. Reich, President and Frank E. Seidelmann,
Secretary, of RADIOLOGY CONSULTING ASSOCIATES, INC., an Ohio professional
corporation, hereby certify that, pursuant to the provisions of Ohio Revised
Code Section 1701.54, on Dec. 17, 1987, the following Resolutions were adopted
by unanimous action in writing by the Shareholders of this Corporation:
RESOLVED: That the following amended Articles of Incorporation are
hereby adopted to supersede and take the place of the existing Articles
of Incorporation of the Corporation and all amendments thereto:
FIRST: The name of the corporation shall be REICH,
SEIDELMANN & JANICKI CO.
SECOND: The place in Ohio where its principal office is to be
located is the City of Solon, County of Cuyahoga.
THIRD: The purpose for which it is formed shall be:
To practice the profession of medicine and
radiology and to do generally any and all
things necessary and incidental to said
practice including those things authorized
in Section 1701.13 Ohio Revised Code.
FOURTH: The number of shares which the corporation is
authorized to have outstanding is Ten Thousand
(10,000), all of which are common shares without par
value.
FIFTH: The amount of stated capital with which the
corporation shall begin business is Five Hundred
Dollars ($500).
<PAGE> 8
SIXTH: These Articles of Incorporation may be amended by the
vote or consent of the holders of shares entitling
them to exercise Eighty Percent (80%) of the voting
power of the Corporation.
SEVENTH: The Corporation may, from time to time, pursuant to
authorization by its Directors and without action by
the Shareholders, purchase or otherwise acquire
shares of the Corporation of any class or classes in
such manner, upon such terms and in such amounts as
the Directors shall determine, to the extent
permitted by law; subject, however, to such
limitation or restriction, if any, as may be imposed
by the terms or provisions of any class of shares or
other securities of the Corporation outstanding at
the time of the purchase or acquisition in question.
IN WITNESS WHEREOF, said officers have executed this Certificate this
27th day of December, 1987.
/s/ Norbert E. Reich
------------------------------------
NORBERT E. REICH, President
/s/ Frank E. Seidelmann
------------------------------------
FRANK E. SEIDELMANN, Secretary
-2-
<PAGE> 9
CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF
REICH, SEIDELMANN & JANICKI CO.
Norbert E. Reich, [ILLEGIBLE] Janicki Co. (the "Corporation"), do
hereby certify that in an Action by Written Consent of the Shareholders of the
Corporation dated October 29, 1997, the following resolution amending and
restating the Articles of Incorporation was adopted by all of the Shareholders
of the Corporation:
RESOLVED, that Amended and Restated Articles of Incorporation
attached hereto as Exhibit A and incorporated herein by
reference, are hereby adopted by the Corporation. These
Amended and Restated Articles of Incorporation shall supersede
the existing Articles of Incorporation.
EXECUTED this 31st day of October, 1997.
/s/ Norbert E. Reich
------------------------------------
Norbert E. Reich, President
/s/ Frank E. Seidelmann
------------------------------------
Frank E. Seidelmann, Secretary
<PAGE> 10
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
REICH, SEIDELMANN & JANICKI CO.
1 - Name. The name of the corporation is Reich, Seidelmann & Janicki
Co.
2 - Principal Office. The corporation's principal office is located in
the City of Solon, County of Cuyahoga, State of Ohio.
3 - Purpose. The purpose for which the corporation is formed is to
engage in any lawful act or activity for which corporations may be formed under
Sections 1701.01 to 1701.93, inclusive, of the Ohio Revised Code.
4 - Shares. The maximum number of shares which the corporation is
authorized to have outstanding is ten thousand (10,000) all of which shall be
common shares without par value.
5 - Purchase of Shares. The corporation, by action of its directors,
has the right and authority to purchase any of its outstanding shares at such
price and upon such terms as are agreed upon between the corporation and the
selling shareholder, whenever the corporation has funds legally available for
such purchase.
6 - Voting. The holders of a majority of the outstanding voting shares
are authorized to take any action which, but for this provision, would require
the vote or other action of the holders of more than a majority of such shares.
7 - Conflict of Interest. A director or officer of the corporation
shall not be disqualified, because of his office, from dealing or contracting
with the corporation as a vendor, purchaser, employee, agent or otherwise; nor
shall any transaction of the corporation be void or voidable or in any way
affected or invalidated by reason of the fact that any such director or officer,
or any firm of which such director or officer is a member, or any corporation of
which such director or officer is a shareholder, director, or officer, is any
way interested in such
-1-
<PAGE> 11
transaction if the fact that such director, officer, firm, or corporation is so
interested is [ILLEGIBLE] to or is known by such directors of the corporation
who are present at the meeting of the directors at which action upon such
transaction is taken: nor shall any such director or officer be accountable or
responsible to the corporation with respect to any such transaction of the
corporation or for any gains or profits realized by him because he, or any firm
of which he is a member, or any corporation of which he is a shareholder,
officer, or director, is interested in such transaction; and any such director
may be counted in determining the existence of a quorum at any meeting of the
directors of the corporation which will authorize or take action with respect to
any such transaction, and may vote thereat to authorize, ratify, or approve any
such transaction with like force and effect as if he, or any firm of which he is
a member, or any corporation of which he is a shareholder, officer, or director,
were not interested in such transaction. As used herein, "transaction" includes
any contract or other act of the corporation.
8 - Pre-emptive Rights. The pre-emptive right to purchase additional
shares or other securities of the corporation is expressly denied to all
shareholders of all classes.
9 - Superseding Articles of Incorporation. These Amended and Restated
Articles of Incorporation take the place of and supersede the existing Articles
of Incorporation as such may have been heretofore amended.
-2-
<PAGE> 1
Exhibit 3.60
CODE OF REGULATIONS
OF
RADIOLOGY CONSULTING ASSOCIATES, INC.
ARTICLE I
Shareholders
Section 1 - Annual Meeting
The annual meeting of the shareholders shall be held at the principal
office of the Corporation in Cleveland Heights, Ohio, or at such other place as
the Board of Directors may designate and cause to be stated in the notice of
such meeting given to shareholders at 1:00 p.m. Eastern Standard Time, on the
First Thursday in January each year, if not a legal holiday, and if a legal
holiday, then on the next successive business day, for the purpose of electing
Directors and of considering reports to be laid before said meeting. Upon due
notice there may also be considered and acted upon at an annual meeting any
matter which could properly be considered and acted upon at a special meeting,
in which case and for which purpose the annual meeting shall also be considered
as, and shall be, a special meeting. In the event the annual meeting is not held
or if Directors are not elected thereat, a special meeting may be called and
held for that purpose.
Section 2 - Place of Meetings
Any meeting of the shareholders of the Corporation may be held within
or without the State of Ohio.
ARTICLE II
Board of Directors
Section 1 - Powers, Number and Term of Office
All the capacity of the Corporation shall be vested in and all its
authority, except as otherwise provided by law or by the Articles in regard to
action required to be taken, authorized or approved by shareholders, shall be
exercised by a Board of Directors of not less than three (3) persons, which
shall manage and conduct the business of the Corporation. Directors shall be
elected at the annual meeting of the shareholders, or if not so elected, at a
special meeting of the shareholders called for that purpose, and shall hold
office for one year and until their successors are chosen and qualified,
subject, however, to provisions of law, the Articles and the Regulations as to
removals and the creation of vacancies.
Each person elected a Director of the Corporation in order to qualify
as a Director shall within sixty (60) days from the date of his election qualify
as such by either (a) accepting in
<PAGE> 2
writing his election as a Director or (b) being present or acting as a Director
in a duly called meeting of the Board of Directors.
Section 2 - Changes in Number of Directors
The number of Directors may be fixed or changed by resolution adopted
by the vote of the shareholders present in person or by proxy at a meeting
called to elect Directors, entitled to exercise two-thirds of the voting power
of the shares represented at such meeting and entitled to vote at such election
but no reduction of the number of directors shall have the effect of removing
any Director prior to the expiration of his term of office.
Section 3 - Vacancies
The office of a Director shall become vacant if he dies or resigns.
The Board of Directors may remove any Director and thereby create a
vacancy in the Board:
1. if he be declared of unsound mind by any order;
2. if he does not qualify within sixty (60) days as provided by these
Regulations.
Any vacancy in the Board of Directors may be filled for the unexpired
term by the remaining Director or Directors, though less than a majority of the
whole Board, by a vote of a majority of their number. Within the meaning of this
section, a vacancy or vacancies shall be deemed to exist in case the
shareholders shall increase the authorized number of Directors but shall fail at
the meeting at which such increase is authorized, or an adjournment thereof, to
elect the additional Directors so provided for, or in case the shareholders fail
at any time to elect the whole authorized number of Directors.
Section 4 - Meetings
Meetings of the Board of Directors may be held at any time within or
without the State of Ohio.
Regular meetings of the Board of Directors shall be held immediately
after the annual meetings of the shareholders and at such other stated times as
may be fixed by the Board of Directors, and such regular meetings may be held
without further notice.
Special meetings of the Board of Directors may be called by the
President of the Corporation, or by not less than one-third of the Directors.
Notice of the time and place of such meetings shall be served upon or telephoned
to each Director at least twenty-four hours, or given by mail, telegram or
cablegram to each Director at his address as shown by the books of the
Corporation at least forty-eight hours, prior to the time of the meeting. Such
notice may be waived in writing by any Director, either before or after the
meeting. Attendance at the meeting
-2-
<PAGE> 3
by a Director without protesting proper notice, shall constitute waiver of such
notice by such Director.
Section 5 - Quorum
A majority of the whole authorized number of Directors is necessary to
constitute a quorum for a meeting of the Directors, except that a majority of
the Directors in office constitutes a quorum for filling a vacancy in the Board.
The act of a majority of the Directors present at a meeting at which a quorum is
present is the act of the Board, unless the act of a greater number is required
by the Articles or these Regulations.
Section 6 - Committees
The Board of Directors may from time to time create an Executive
Committee, a Finance Committee and such other Committees as it may deem to be
advisable and may delegate to any such Committee any of the powers of the Board
of Directors, other than that of filling vacancies among the Directors or in any
committee of the Directors. Any such committee shall be composed of not less
than three members of the Board of Directors to serve until otherwise ordered by
the Board of Directors and shall act only in the interval between meetings of
the Board of Directors and shall be subject at all times to the control and
direction of the Board of Directors. The Board of Directors may appoint one or
two more Directors as alternate members of any such Committee, who may take the
place of any absent member or members at any meeting of such committee.
Any such Committee may act by a majority of its members at a meeting or
by a writing or writings signed by all its members. Any act or authorization of
an act by any such Committee within the scope of the powers delegated to it
shall be as effective for all purposes as the act or authorization of the Board
of Directors.
ARTICLE III
Section 1 - Officers
The Corporation shall have a President (who shall be a member of the
Board of Directors), a Secretary and a Treasurer, who shall be elected by the
Board of Directors. The Corporation may also have one or more Vice Presidents.
Assistant Secretaries, Assistant Treasurers, and such other officers as the
Board may deem advisable, all of whom shall be elected for one year and until
their successors are selected and qualified, unless otherwise specified by the
Board of Directors; provided, however, that any officer shall be subject to
removal, with or without cause, at any time by the vote of a majority of the
Board of Directors. The election of an officer for a given term, or a general
provision in the Articles or these Regulations with respect to term of office,
shall not be deemed to create contract rights.
Any two or more offices may be held by the same person, but no officer
shall execute, acknowledge or verify any instrument in more than one capacity if
such instrument is required by
-3-
<PAGE> 4
law or by the Articles or these Regulations to be executed, acknowledged or
verified by two or more officers.
Section 2 - The President
The President, when present, shall preside at all meetings of the
shareholders and of the Board of Directors. Subject to the direction of the
Board of Directors and the Executive Committee, he shall have general charge and
authority over the business of the Corporation. He shall from time to time make
such reports of the business of the Corporation as the Board of Directors may
require. The President shall perform such other duties and have such powers as
are assigned to or vested in him by the Board of Directors.
Section 3 - The Vice President
The Vice President, or, if there be more than one, the Vice Presidents,
in order of their seniority by designation (or if not designated, in order of
their seniority of election), shall perform the duties of the President in his
absence or during his disability to act. The Vice Presidents shall have such
other duties and powers as may be assigned to or vested in them by the Board of
Directors or the Executive Committee.
Section 4 - The Secretary
The Secretary shall issue notices of all meetings for which notice is
required to he given, shall keep the minutes of all meetings, shall have charge
of the corporate seal and corporate record books, and have such other powers and
perform such other duties as are assigned to or vested in him by the Board of
Directors or the Executive Committee.
Section 5 - The Treasurer
The Treasurer shall be the financial officer of the Corporation. He
shall have the custody of all moneys and securities of the Corporation and shall
keep adequate and correct accounts of the Corporation's receipts and
disbursements, including records of customers' credits and collections. The
funds of the Corporation shall be deposited in the name of the Corporation by
the Treasurer in such depositories as the Board of Directors may from time to
time designate. He shall have such other powers and perform such other duties as
are assigned to or vested in him by the Board of Directors or the Executive
Committee.
Section 6 - Other Officers
Other officers of the Corporation shall have such powers and duties as
may be assigned to or vested in them by the Board of Directors or the Executive
Committee.
-4-
<PAGE> 5
Section 7 - Authority to Sign
Share certificates shall be signed as hereinafter in ARTICLE IV
provided. Except as otherwise specifically provided by the Board of Directors or
the Executive Committee of the Corporation, checks, notes, drafts, contracts or
other instruments authorized by the Board of Directors or the Executive
Committee may be executed and delivered on behalf of the Corporation by the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer.
Section 8 - Duties of Officers may be Delegated
In case of the absence or disability of an officer of the Corporation,
or for any other reason that may seem sufficient to the Board, the Board of
Directors may, for the time being, delegate his powers and duties to any other
officer or to any Director.
Section 9 - Compensation, Salaries and Indemnity
(a) The Board of Directors may fix the pay of all officers. The Board
may also allow compensation to members of any committee. The Board may vote
compensation to any Directors for attendance at meetings or for any special
services.
(b) Each person who is, has been, or shall hereafter be, a director or
officer of the Corporation, or who is serving, may have served, or shall serve
at its request as a director or officer of another corporation, shall be
indemnified by the Corporation to the full extent to which indemnification is
permitted by subsections E(1) through E(8) of Section 1701.13 of the Ohio
Revised Code.
The foregoing rights of indemnification shall inure to the benefit of
the personal representatives of such persons, and shall be in addition to any
other rights to which any such persons may be entitled to at law or agreement or
otherwise.
ARTICLE IV
Section 1 - Certificates
Each shareholder of the Corporation shall be entitled to a certificate
signed by the President or a Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer, evidencing the number and
class of paid-up shares held by him in the Corporation, but no certificate for
shares shall be executed or delivered until such shares are fully paid;
provided, however, that when any such certificate is countersigned by an
incorporated transfer agent or registrar, the signature of any such officer upon
such certificate may be facsimile, engraved, stamped or printed.
The stock of the Corporation shall be issued to, held by, or
transferred only to a person who is duly licensed or otherwise authorized to
provide radiology services in the State of Ohio
-5-
<PAGE> 6
and who, unless disabled, is actively engaged in such practice, except as
otherwise permitted by these regulations or by the provisions of Chapter 1785 of
the Ohio Professional Associations Act.
In case any officer or officers, who shall have signed, or whose
facsimile signature shall have been engraved, stamped or printed on any
certificate or certificates for shares, shall cease to be such officer or
officers of the Corporation, because of death, resignation, or otherwise, before
such certificate or certificates shall have been delivered by the Corporation,
such certificate or certificates, if authenticated by the endorsement thereon of
the signature of an incorporated transfer agent or registrar, shall nevertheless
be conclusively deemed to have been adopted by the Corporation by the use and
delivery thereof and shall be effective in all respects when delivered.
Such certificates shall be in such form as shall be approved by the
Board of Directors and shall contain the following endorsement: "This
certificate may only be issued to, held by, or transferred to a person who is
licensed or otherwise authorized to provide radiology services in the State of
Ohio and who, unless disabled, is actively engaged in such practice, except as
otherwise permitted under Chapter 1785 of the Ohio Professional Associations
Act".
Section 2 - Transfer and Registration
The Board of Directors shall have authority to make such rules and
regulations, not inconsistent with law, the Articles or these Regulations, as it
deems expedient concerning the execution, delivery, transfer and registration of
share certificates and may appoint incorporated transfer agents and registrars
thereof.
Transfer books may be kept in any state of the United States or in any
foreign country for the purpose of transferring shares issued by the
Corporation; but if no transfer agent is appointed to act in this State, the
Corporation shall keep an office in this State at which shares shall be
transferable; and at which it shall keep books in which shall be recorded the
names and addresses of all shareholders, and all transfers of shares.
ARTICLE V
Section 1 - Voting Upon Stocks
Unless otherwise ordered by the Board of Directors, the President, a
Vice President, the Secretary or the Treasurer, of the Corporation, or a proxy
appointed by any such officer, shall have full power and authority on behalf of
the Corporation to attend, to act and to vote at any meeting of shareholders of
and to execute consents, waivers, and releases relating to the affairs of any
other corporation, domestic or foreign, for profit or nonprofit, in which the
Corporation may hold stock or membership, and at any such meeting shall possess
and may exercise any and all of the rights and powers incident to the ownership
of such stock and which as the owner thereof the Corporation would have
possessed and might have exercised if present. The Board of Directors by
resolution from time to time may confer like powers upon any other person or
persons.
-6-
<PAGE> 7
ARTICLE VI
Section 1 - Amendments
The Regulations of the Corporation may be amended or added to by the
affirmative vote of the shareholders of record entitled to exercise two-thirds
of the voting power on such proposal or, without a meeting, by the written
consent of the shareholders of record entitled to exercise two-thirds of the
voting power on such proposal; provided, however, that if an amendment is
adopted by written consent without a meeting of the shareholders, it shall be
the duty of the Secretary to enter the amendment in the records of the
Corporation and to mail a copy of such amendment to each shareholder of record
who would be entitled to vote thereon and did not participate in the adoption
thereof.
-7-
<PAGE> 1
Exhibit 3.61
AMENDMENT TO
THE CERTIFICATE OF INCORPORATION OF
KING WENDEL RAGONA ROSENDORF RADIOLOGY ASSOCIATES
OF HOLLYWOOD, P.A.
The undersigned corporation, for the purposes of amending its
Certificate of Incorporation, hereby amends Article I of its Certificate of
Incorporation to read as follows:
"The name of this Corporation is KING RAGONA ROSENDORF MARGULIES
RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A."
In accordance with Chapter 608.18 of the Florida Statutes, the
Corporation through its undersigned Secretary hereby certifies that the
foregoing amendment to the Certificate of Incorporation has been approved by the
Board of Directors and Stockholders of the Corporation.
IN TESTIMONY WHEREOF, this Article of Amendment is signed by the
President and Secretary, this the 9th day of November, 1972.
KING WENDEL RAGONA ROSENDORF
RADIOLOGY ASSOCIATES OF
HOLLYWOOD, P.A.
(SEAL)
By:/s/Stanley I. Margulies
------------------------------------
Stanley I. Margulies, President
/s/Leonard Rosendorf
------------------------------------
Leonard Rosendorf, Secretary
STATE OF FLORIDA )
) ss.
COUNTY OF BROWARD )
STANLEY I. MARGULIES, being the President, and LEONARD ROSENDORF, being
the Secretary of KING WENDEL RAGONA ROSENDORF RADIOLOGY ASSOCIATES OF HOLLYWOOD,
P.A., each being duly sworn, deposes and says that the facts stated in the
foregoing Articles of Amendment are true and correct.
Sworn to and subscribed to before me this the 9th day of November,
1972, at Fort Lauderdale, Florida.
/s/ Mariam L.
------------------------------------
<PAGE> 2
Notary Public
My commission expires:
Notary Public State of Florida
My Commission Expires Jan. 25, 1974
Bonded thru Fred W. Diestelhurst
-2-
<PAGE> 3
ARTICLES OF AMENDMENT TO
THE ARTICLES OF INCORPORATION
The undersigned, PETER A. LIVINGSTON, President, and DAVID A. EPSTEIN,
Secretary, of KING RAGONA ROSENDORF MARGULIES RADIOLOGY ASSOCIATES OF HOLLYWOOD,
P.A., a Florida corporation, hereby certify that the following resolution was
adopted by the unanimous written consent of all of the Directors and all of the
stockholders of the Corporation, by corporate action effective as of the 14th
day of April, 1982.
RESOLVED, That ARTICLE I of the Articles of Incorporation be amended to
read as follows:
"ARTICLE I NAME
The name of this Corporation shall be KING ROSENDORF
MARGULIES BORUSHOK RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A."
IN WITNESS WHEREOF, the undersigned have signed these Articles of
Amendment this 14th day of April, 1982, and have attached the corporate seal
hereto.
KING RAGONA ROSENDORF MARGULIES
RADIOLOGY ASSOCIATES OF HOLLYWOOD,P.A.
BY:/s/Peter A. Livingston
-------------------------------------
PETER A. LIVINGSTON, President
Attest:
BY:/s/David A. Epstein
-------------------------------------
DAVID A. EPSTEIN, Secretary
-1-
<PAGE> 4
STATE OF FLORIDA )
) SS:
COUNTY OF )
On this day personally appeared before me PETER A. LIVINGSTON,
President of KING RAGONA ROSENDORF MARGULIES RADIOLOGY ASSOCIATES OF HOLLYWOOD,
P.A., a Florida corporation, and acknowledged that he executed the above and
foregoing Articles of Amendment as such officer for and on behalf of said
Corporation. after having been duly authorized so to do.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal at
the county and state aforesaid, this 14th day of April, 1982.
/s/ Marcia Hanson
-------------------------------------
Notary Public
My commission expires:
-2-
<PAGE> 5
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION OF
KING ROSENDORF MARGULIES BORUSHOK RADIOLOGY
ASSOCIATES OF HOLLYWOOD, P.A.
Pursuant to the provision of Section 607.181 of the Florida General
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
1. The name of the corporation is KING ROSENDORF MARGULIES BORUSHOK
RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A.
2. The following amendment of the Articles of Incorporation was adopted
by all of the directors and shareholders of the corporation on the 17th day of
July, 1984, in the manner prescribed by Section 607.181(3) of the Florida
General Corporation Act:
RESOLVED, that Article I of the Articles of Incorporation of
King Rosendorf Margulies Borushok Radiology Associates of
Hollywood, P.A. shall be amended to read as follows:
"ARTICLE I NAME
The name of this corporation shall be ROSENDORF
MARGULIES BORUSHOK SCHOENBAUM RADIOLOGY
ASSOCIATES OF HOLLYWOOD, P.A."
Dated: July 17, 1984
KING ROSENDORF MARGULIES BORUSHOK
RADIOLOGY ASSOCIATES OF HOLLYWOOD,
P.A.
By: /s/Peter A. Livingston
-------------------------------------
Peter A. Livingston, President
(CORPORATE SEAL) Attest: /s/David A. Epstein
-------------------------------------
David A. Epstein, Secretary
-1-
<PAGE> 6
STATE OF FLORIDA )
) SS
COUNTY OF DADE )
On this day personally appeared before me, PETER A. LIVINGSTON and
DAVID A. EPSTEIN, President and Secretary. respectively, of KING ROSENDORF
MARGULIES BORUSHOK RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A., a Florida
corporation, and acknowledged that they executed the above and foregoing
Articles of Amendment as such officers for and on behalf of said corporation
after having been duly authorized so to do.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal at
the county and state aforesaid, this 18th day of July 1984.
/s/
-------------------------------------
Notary Public
My commission expires:
-6-
<PAGE> 7
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
ROSENDORF MARGULIES BORUSHOK SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A.
Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act, the undersigned Corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
1. The name of this Corporation is ROSENDORF MARGULIES BORUSHOK
SCHOENBAUM RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A. (hereinafter called
the "Corporation").
2. Article I of the Corporation's Articles of Incorporation is deleted
and replaced by new Article I, as follows:
"ARTICLE I. NAME
The name of the Corporation shall be: ROSENDORF MARGULIES
BORUSHOK SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, INC."
3. Article II of the Corporation's Articles of Incorporation is deleted
and replaced by new Article II as follows:
"ARTICLE II NATURE OF BUSINESS
The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be organized under
the laws of the State of Florida."
4. Except as hereby amended, the Articles of Incorporation of the Corporation
shall remain the same.
5. The amendments made herein to the Articles of Incorporation of the
Corporation were adopted by the unanimous written consent of all of the
Shareholders and all of the members of the Board of Directors of the Corporation
on the date of these Articles of Amendment, pursuant to Sections 607.0704 and
607.1003 of the Florida Business Corporation Act, which date is August 30, 1995.
D. IN WITNESS WHEREOF, the undersigned officers of the Corporation have
executed these Articles of Amendment, this 30th day of August, 1995.
-1-
<PAGE> 8
ROSENDORF MARGULIES BORUSHOK
SCHOENBAUM RADIOLOGY ASSOCIATES
OF HOLLYWOOD, P.A.
By: /s/Stanley I. Margulies
-------------------------------------
STANLEY I. MARGULIES, M.D.,
President
By: /s/Peter A. Livingston
-------------------------------------
PETER A. LIVINGSTON, M.D.,
Secretary
-8-
<PAGE> 9
ARTICLES OF MERGER
OF
IMMI RADIOLOGY ACQUISITION CORPORATION,
IMAGING HEALTH SERVICES, INC. AND
HOLLYWOOD PROFESSIONAL COLLECTIONS. INC.
INTO
ROSENDORF, MARGULIES, BORUSHOK, SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
1. These Articles of Merger relate to the merger (the "Merger") of IMMI
RADIOLOGY ACQUISITION CORPORATION, a Florida corporation ("IMMI Acquisition"),
IMAGING HEALTH SERVICES, INC., a Florida corporation ("IHS"), HOLLYWOOD
PROFESSIONAL COLLECTIONS, INC., a Florida corporation ("HPC"), with and into
ROSENDORF, MARGULIES, BORUSHOK. SCHOENBAUM RADIOLOGY ASSOCIATES OF HOLLYWOOD,
INC., a Florida corporation ("RAH").
2. Pursuant to an Agreement and Plan of Merger dated August ___, 1995
(the "Plan of Merger"), a copy of which is attached to these Articles of Merger
as Exhibit A, IMMI Acquisition, IHS and HPC shall, pursuant to the provisions of
the Florida Business Corporation Act (the "BCA") and upon the Effective Time (as
defined in the Plan of Merger), be merged with and into RAH, which shall
continue to exist pursuant to the laws of the State of Florida.
3. IMMI Acquisition has Issued and outstanding 1,000 shares of Common
Stock, par value $.01 per share (the "IMMI Acquisition Shares"), all of which
are owned by InPhyNet Medical Management, Inc., a Delaware corporation.
4. IHS has Issued and outstanding 5,200 shares of Common Stock, par
value $1.00 per share (the "IHS Shares"), of which 200 IHS Shares are owned by
each of the Shareholders (as defined in the Plan of Merger).
5. HPC has issued and outstanding 5,200 shares of Common Stock, par
value $1.00 per share (the "HPC Shares"), of which 200 HPC Shares are owned by
each of the Shareholders.
6. RAH has Issued and outstanding 5,200 shares of Common Stock, par
value $1.00 per share (the "RAH Shares"), of which 200 RAH Shares are owned by
each of the Shareholders.
7. All of the IMMI Acquisition Shares approved the Plan of Merger by
unanimous written consent in lieu of a meeting of the sole shareholder and Board
of Directors of IMMI Acquisition dated as of August 30, 1995, in accordance with
Sections 607.0704 and 607.0821 of the BCA.
8. All of the IHS Shares approved the Plan of Merger by unanimous
written consent in lieu of a meeting of the shareholders and Board of Directors
of IHS dated as of August 30, 1995, in accordance with Sections 607.0704 and
607.0821 of the BCA.
-1-
<PAGE> 10
9. All of the HPC Shares approved the Plan of Merger by unanimous
written consent in lieu of a meeting of the shareholders and Board of Directors
of HPC dated as of August 30, 1995, in accordance with Sections 607.0704 and
607.0821 of the BCA.
10. All of the RAH Shares approved the Plan of Merger by unanimous
written consent in lieu of a meeting of the shareholders and Board of Directors
of RAH dated as of August 30, 1995, in accordance with Sections 607.0704 and
607.0821 of the BCA.
11. The Merger shall become effective upon the filing of these Articles
of Merger with the Department of State of the State of Florida.
IN WITNESS WHEREOF, IMMI Acquisition, IHS, HPC and RAH have each caused
these Articles of Merger to be signed in their corporate names and on their
behalf by their respective Presidents as of the 31st day of August, 1995.
IMMI ACQUISITION CORPORATION
By:/s/J. Clifford Findeiss
-------------------------------------
Name: J. Clifford Findeiss, M.D.
Title: President
ROSENDORF, MARGULIES, BORUSHOK, SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
By:/s/Stanley Margulies
-------------------------------------
Name: Stanley Margulies, M.D.
Title: President
IMAGING HEALTH SERVICES, INC.
By:/s/Stanley Margulies
-------------------------------------
Name: Stanley Margulies, M.D.
Title: President
HOLLYWOOD PROFESSIONAL COLLECTIONS, INC.
By:/s/Stanley Margulies
-------------------------------------
Name: Stanley Margulies, M.D.
Title: President
-2-
<PAGE> 11
Exhibit A
<PAGE> 12
Draft Dated
8/25/95
AGREEMENT AND PLAN OF MERGER
Among
Inphynet Medical Management Inc.,
IMMI Radiology Acquisition corporation,
Rosendorf, Margulies, Borushok and Schoenbaum
Radiology Associates of Hollywood, P.A.,
Imaging Health Services, Inc.,
Hollywood Professional Collections, Inc.
and
The Shareholders of
Rosendorf, Margulies, Borushok and Schoenbaum
Radiology Associates of Hollywood, P.A.,
Imaging Health Services, Inc.
and
Hollywood Professional Collections, Inc.
Listed on Exhibit A
Dated as of August __, 1995
<PAGE> 13
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS
ARTICLE II
THE MERGER
<S> <C>
SECTION 2.1 The Merger...............................................................
2.2 Effective Time of the Merger.............................................
ARTICLE III
THE SURVIVING CORPORATION
3.1 Certificate of Incorporation of the Surviving Corporation................
3.2 Bylaws of the Surviving Corporation......................................
3.3 Directors and officers of the Surviving Corporation......................
ARTICLE IV
CONVERSION OF SHARES
4.1 Exchange Ratio...........................................................
4.2 Exchange of Shares.......................................................
4.3 Dividends; Transfer Taxes................................................
4.4 No Fractional Securities.................................................
4.5 Supplementary Action.....................................................
4.6 Delivery of Inphynet Shares..............................................
ARTICLE V
CLOSING
5.1 Closing..................................................................
5.2 Deliveries by the Companies..............................................
5.3 Deliveries by Buyers.....................................................
5.4 Termination in Absence of Closing........................................
5.5 Adjustments to Exchange Consideration; Set-off; Cancellation of
Inphynet Shares..........................................................
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER
6.1 Corporate Organization...................................................
6.2 Capitalization of the Companies Title to the Shares......................
6.3 Subsidiaries and Equity Investments......................................
6.4 Authorization and Validity of Agreements.................................
6.5 No Conflict or Violation.................................................
</TABLE>
-i-
<PAGE> 14
<TABLE>
<S> <C>
6.6 Consents and Approvals...................................................
6.7 Financial Statements.....................................................
6.8 Absence of Certain Changes or Events.....................................
6.9 Tax Matters..............................................................
6.10 Post-1994 Charges........................................................
6.11 Absence of Undisclosed Liabilities.......................................
6.12 Interests in Real Property...............................................
6.13 Leases...................................................................
6.14 Personal Property........................................................
6.15 Intentionally left blank.................................................
6.16 Licenses, Permits and Governmental Approvals.............................
6.17 Compliance with Law......................................................
6.18 Litigation...............................................................
6.19 Contracts................................................................
6.20 Employee Plans...........................................................
6.21 Insurance................................................................
6.22 Professional Liability Lawsuits..........................................
6.23 Propriety of Past Payments...............................................
6.24 Environmental Matters....................................................
6.25 Labor Matters............................................................
6.26 Intentionally left blank.................................................
6.27 Survival.................................................................
6.28 Purchase for Investment..................................................
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 7.1 Corporate Organization; Capitalization...................................
7.2 Authorization and Validity of Agreements.................................
7.3 No Conflict or Violation.................................................
7.4 Investment Intent........................................................
7.5 No Default or Consents...................................................
7.6 No Proceedings...........................................................
7.7 Inphynet SEC Filings.....................................................
7.8 Absence of Certain Changes...............................................
ARTICLE VIII
ADDITIONAL COVENANTS
SECTION 8.1 Certain Changes and Conduct of Business..................................
8.2 Access to Properties and Records.........................................
8.3 Negotiations.............................................................
8.4 Consents and Approvals...................................................
8.5 Disposition of Shares....................................................
8.6 Further Assurances.......................................................
</TABLE>
-ii-
<PAGE> 15
<TABLE>
<S> <C>
8.7 Reasonable Efforts.......................................................
8.8 Non-Competition; Non-Solicitation of Employees...........................
8.9 Notice of Breach.........................................................
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF BUYER
SECTION 9.1 Representations and Warranties of Shareholders...........................
9.2 Performance of Shareholders' and Companies' Obligations..................
9.3 Consents and Approvals...................................................
9.4 No Violation of Orders...................................................
9.5 No Material Adverse Change...............................................
9.6 Employment Contracts.....................................................
9.7 Opinion of Counsel.......................................................
9.8 Other Closing Documents..................................................
9.9 Legal Matters............................................................
9.10 Letter from Companies' Accountants.......................................
ARTICLE X
CONDITIONS TO OBLIGATIONS OF SELLER
SECTION 10.1 Representations and Warranties of Buyer..................................
10.2 Performance of Buyer's Obligations.......................................
10.3 Consents and Approvals...................................................
10.4 No Violation of Orders...................................................
10.5 Registration Rights......................................................
10.6 Board of Directors Appointment...........................................
10.7 Opinion of Counsel.......................................................
10.8 No Material Adverse Change...............................................
10.9 Other Closing Documents..................................................
10.10 Letter from Companies' Accountants.......................................
10.11 Legal Matters............................................................
ARTICLE XI
TERMINATION AND ABANDONMENT
SECTION 11.1 Methods of Termination; Upset Date.......................................
11.2 Procedure Upon Termination...............................................
ARTICLE XII
INDEMNIFICATION
SECTION 12.1 Indemnification by Shareholders..........................................
12.2 Indemnification by Buyer.................................................
12.3 Procedures...............................................................
</TABLE>
-iii-
<PAGE> 16
<TABLE>
<S> <C>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1 Survival of Provisions...................................................
13.2 Publicity................................................................
13.3 Successors and Assigns; No Third-Party Beneficiaries.....................
13.4 Investment Bankers, Financial Advisors, Brokers and Finders..............
13.5 Notices..................................................................
13.6 Entire Agreement.........................................................
13.7 Waivers and Amendments...................................................
13.8 Severability.............................................................
13.9 Titles and Headings......................................................
13.10 Counterparts.............................................................
13.11 Convenience of Forum; Consent to Jurisdiction............................
13.12 Enforcement of the Agreement.............................................
13.13 Governing Law............................................................
</TABLE>
-iv-
<PAGE> 17
LIST OF EXHIBITS
Exhibit A List of Shareholders
Exhibit B 1994 Financial Statements
Exhibit C Exchange Consideration
Exhibit D Registration Rights Agreement
Exhibit E Set-Off Escrow Agreement
Exhibit F Form of Shareholder Employment Agreement
-v-
<PAGE> 18
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August ___, 1995, by and
among (i) Inphynet Medical Management Inc., a Delaware corporation ("Inphynet");
(ii) IMMI Radiology Acquisition corporation, a Delaware corporation and wholly
owned subsidiary of Inphynet ("Acquisition"); (iii) Rosendorf, Margulies,
Borushok and Schoenbaum Radiology Associates of Hollywood, P.A., a Florida
corporation ("RAH"); Imaging Health Services, Inc., a Florida corporation
("IHS"); and Hollywood Professional Collections, Inc., a Florida corporation
("HPC") (RAH, IHS and HPC are referred to herein collectively as the "Companies"
and individually as a "Company"); and (iv) the Persons listed on Exhibit A
hereto (such Persons are referred to herein collectively as the "Shareholders"
and individually as a "Shareholder"). Inphynet and Acquisition are sometimes
referred to herein collectively as the "Buyers" and individually as a "Buyer."
WHEREAS, the respective Boards of Directors of the Buyers and the
Companies deem it advisable and in the best interests of their respective
stockholders that Acquisition and the companies merge into RAH upon the terms
and subject to the conditions set forth herein (the "Merger");
WHEREAS, the Shareholders beneficially own all of the capital stock of
the Companies and will receive significant consideration in connection with the
Merger; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section
363(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code") and
that this Agreement constitutes the plan of reorganization in respect thereto;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Accounts Receivable" shall mean all of the Companies' accounts and
notes receivable, claims, debtor obligations and other rights to receive
payments from third parties, existing on the Closing Date;
"Affiliates" shall mean, with respect to any Person, any individual,
corporation, partnership, joint venture, professional association, trust or
unincorporated organization that controls, is controlled by or is under common
control with such Person;
-1-
<PAGE> 19
"Business Day" shall mean days other than Saturdays, Sundays and other
legal holidays or days on which the principal office of NationsBank of Florida,
National Association, is closed;
"Closing" -- See Section 5;
"Closing Balance Sheet" -- See Section 5.5(a);
"Closing Balance Sheet Report" -- See Section 5.5(a);
"Closing Date" -- See Section 5;
"COBRA" shall mean the provisions of the Code, ERISA and the Public
Health Service Act enacted by Sections 10001 through 10003 of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (P.L.99-272), including any subsequent
amendments to such provisions;
"Code" shall mean the Internal Revenue Code of 1986, as amended;
"Collateral Agreements" shall mean the Registration Rights Agreement,
the Set-off Escrow Agreement, the Shareholder Employment Agreements and any and
all other agreements, instruments or documents required or expressly provided
under this Agreement to be executed and delivered in connection with the
transactions contemplated by this Agreement;
"Common Stock" shall mean the common stock, par value $.01 per share,
of Inphynet; "Company's Accountants" shall mean Ernst & Young, LLP;
"Damages" shall mean any and all damages, liabilities, obligations,
penalties, fines, judgments, claims, deficiencies, losses, costs, including
costs of appeals, expenses and assessments (including, without limitation,
income and other taxes, interest, penalties and attorneys' and accountants' fees
and disbursements);
"December 31, 1994 Balance Sheet" shall mean the Company's audited
combined balance sheet at December 31, 1994, prepared on an accrual basis and
certified by the Companies' Accountant, and attached hereto as Exhibit B;
"December 31, 1994 Income Statement" shall mean the statement of
income, stockholders' equity end cash flows of the Companies at December 31,
1994, prepared on an accrual basis and certified by the Companies' Accountant,
and attached hereto as Exhibit B;
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended;
"Event of Breach" -- See Section 12.1;
"Financial Statements" -- See Section 6.7;
-2-
<PAGE> 20
"GAAP" shall mean generally accepted accounting principles which are in
effect on the Closing Date;
"Government" shall mean any agency, division, subdivision, audit group
or procuring office of the Government of the United States or any foreign
government, including the employees or agents thereof;
"Governmental Authorities" shall mean any nation or country (including
but not limited to the United States) and any commonwealth, territory or
possession thereof and any political subdivision of any of the foregoing,
including but not limited to courts, departments, commissions, boards, bureaus,
agencies, ministries or other instrumentalities;
"Holdback Shares" -- See Section 5;
"Independent Accounting Firm" -- See Section 5.5(b);
"Inventory" means all (i) inventoriable supplies held by the Companies
on the Closing Date, specifically for use in the operations of the Companies,
and (ii) any warranties received from its suppliers with respect to such
inventory (to the extent assignable) and related claims, credits, rights of
recovery and set-off with respect thereto;
"Knowledge of the Shareholders" means the actual knowledge of any of
the Shareholders with respect to the matter in question, and all knowledge with
respect to such matter that any of such Persons could reasonably expect to
obtain upon a reasonable investigation and inquiry into the matter in question,
including having discussed the substance of such matter with the individuals(s)
at the Company responsible for such matters including, without limitation,
Marcia Hansen;
"Leases" -- See Section 6.13;
"Legal Requirements" shall mean, when described as being applicable to
any Person, any and all laws (statutory, judicial or otherwise), ordinances,
regulations, judgments, orders, directives, injunctions, writs, decrees or
awards of, and any contracts with, any Governmental Authority, in each case as
and to the extent applicable to such Person or such Person's business,
operations or Properties;
"Licenses and Permits" -- See Section 6.16;
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
(statutory or other) or conditional sale agreement;
"Net Worth" means, as of a specified date, the assets of the Company
less its liabilities, computed in accordance with GAAP on a basis consistent
with the Financial Statements;
"Net Worth Deficit" -- See Section 5.5(c);
-3-
<PAGE> 21
"Occurrences" -- See Section 6.24(b);
"Permits" shall mean any and all permits, legal status, orders or
contracts under any Legal Requirement or otherwise granted by any Governmental
Authority;
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
Government;
"Plans" -- See Section 6.22;
"Professional Liability Lawsuits" -- See Section 6.24(a);
"Proportionate Share" shall mean, as to each Shareholder, the
percentage of Company Shares, as defined in Section 4.1(a) of this Agreement,
beneficially owned by such Shareholder as set forth on Exhibit A hereto;
"Shareholder Employment Agreements" See section 9.6;
"Specified Price" shall mean the average closing price of the Common
Stock as reported on the NASDAQ-NM during the twenty trading days prior to the
Closing Date or, if earlier, during the twenty (20) trading days prior to the
public announcement of the transaction contemplated hereby;
"Tax Returns" shall mean any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed with any governmental body in connection with the
determination, assessment, withholding, collection or administration of any
Taxes;
"Taxes" shall mean for all purposes of this Agreement all taxes and
Government impositions of all kinds, however denominated, including any
interest, penalties or additions to tax that may become payable in respect
thereof, imposed by any governmental body, which taxes shall include, without
limiting the generality of the foregoing, all income taxes, taxes on wages,
employer payroll and employee withholding taxes, unemployment insurance, social
security, sales and use taxes, excise taxes, franchise taxes, gross receipts
taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer
taxes, workmen's compensation taxes and other obligations of the same or a
similar nature, whether arising before, on or after the Closing; and "Tax" shall
mean any one of them.
ARTICLE II - THE MERGER
SECTION 2.1. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 2.2 hereof) IHS, HPC and
Acquisition shall be merged with and into RAH in accordance with the Florida
Business Corporation Act (the "Florida Act"), with RAH being the surviving
corporation in the Merger (the "Surviving Corporation") and the separate
existence of IHS, HPC and Acquisition shall thereupon cease.
-4-
<PAGE> 22
The Merger shall have the effects set forth in Section 607.1106 of the Florida
Act. ______________________________ upon the completion of the filing of
properly executed Certificate of Merger and Articles of Merger relating to the
Merger with the Secretaries of State of the States of Delaware and Florida,
respectively, which filings shall be made on the Closing Date (as hereinafter
defined) after satisfaction of the conditions set forth in Articles IX and X
hereof. When used in this Agreement, the term "Effective Time" shall mean the
date and time at which the Certificate of Merger and Articles of Merger are
successfully filed.
ARTICLE III - THE SURVIVING CORPORATION
SECTION 3.1 Certificate of Incorporation of the surviving corporation.
The Certificate of Incorporation of Acquisition shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with such Certificate and applicable law, except that upon the
Effective Time, the Surviving Corporation's corporate name shall be "Radiology
Associates of Hollywood, Inc."
SECTION 3.2 Bylaws of the Surviving Corporation. The bylaws of
Acquisition as in effect at the Effective Time shall be the bylaws of the
Surviving Corporation until thereafter amended in accordance with applicable
law.
SECTION 3.3 Directors and officers of the surviving Corporation. The
directors and officers of Acquisition shall be the directors and officers of the
Surviving Corporation until their respective successors are duly elected in
accordance with Acquisition's bylaws and applicable law, and the provisions of
this Agreement.
ARTICLE IV - CONVERSION OF SHARES
SECTION 4.1 Exchange Ratio. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder thereof:
(a) Each share of common stock of the Companies ("Company Shares")
issued and outstanding immediately prior to the Effective Time shall be
converted at the Effective Time into the right to receive the number of shares
set forth on Exhibit C hereto (the "Exchange Ratio") of Common Stock (the
"Inphynet Shares"), totalling an aggregate of 1,625,000 Inphynet Shares (the
"Exchange Consideration"). The Exchange Consideration shall be calculated by
dividing $29,250,000 by the Specified Price, provided that in the event the
Closing Date occurs on or before September 7, 1995, if the Specified Price
exceeds $18.00, the Exchange Consideration shall be determined by dividing
$29,250,000 by $18.00, and if the Specified Price is below $14.00 the Exchange
Consideration shall be computed by dividing $29,250,000 by $14.00.
(b) At the Effective Time, each certificate previously representing any
Company Shares shall thereafter represent the right to receive the number of
whole Inphynet Shares into which such Company Shares have been converted.
Certificates representing Company Shares shall be exchanged for certificates
representing whole Inphynet Shares issued in consideration therefor upon the
surrender of such certificates in accordance with the provisions hereof. If,
prior to the
-5-
<PAGE> 23
Effective Time, Inphynet or the Companies should split or combine the Inphynet
Shares or the Company Shares, or pay a stock dividend or other stock
distribution in Inphynet Shares or Company Shares, then the Exchange Ratio will
be appropriately adjusted to reflect such split, combination, dividend or other
distribution.
(c) Each Company Share, if any, held in treasury immediately prior to
the Effective Time shall be canceled and retired and cease to exist and no
Inphynet Shares shall be issued in exchange therefor.
(d) Each share of common stock of Acquisition issued and outstanding
immediately prior to the Effective Time shall be converted into and exchangeable
for one share of common stock of the Surviving Corporation.
SECTION 4.2 Exchange of Shares.
(a) Subject to Section 4.6 hereof, on the Closing Date and after the
Effective Time, Inphynet shall make available, and each holder of Company Shares
will be entitled to receive upon surrender to Inphynet of one or more
certificates representing Company Shares for cancellation, certificates
representing the number of Inphynet Shares into which such Company Shares are
converted in the Merger. The Inphynet Shares into which the Company Shares shall
be converted in the Merger shall be deemed to have been issued at the Effective
Time.
(b) In the event that any stock certificate representing Company Shares
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the person claiming such certificate to be lost, stolen or
destroyed, Inphynet will issue or cause to be issued in exchange for such lost,
stolen or destroyed certificate the number of Inphynet Shares into which such
Company Shares are converted in the Merger in accordance with this Article IV.
When authorizing such issuance in exchange therefor, Inphynet may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate to indemnify Inphynet
against any claim that may be made against Inphynet with respect to the
certificate alleged to have been lost, stolen or destroyed.
(c) At and after the Effective Time, the holders of stock certificates
representing Company Shares to be exchanged for Inphynet Shares pursuant to this
Agreement ("Certificates") shall cease to have any rights as stockholders of the
Company except for the right to surrender such Certificates in exchange for
certificates for Inphynet Shares as provided hereunder.
SECTION 4.3 Dividends; Transfer Taxes. No dividends that are declared
on Inphynet Shares will be paid to persons entitled to receive Inphynet Shares
until such persons surrender their Certificates. Upon such surrender, there
shall be paid to the person in whose name the certificates representing such
Inphynet Shares shall be issued any dividends which shall have become payable
with respect to such Inphynet Shares between the Effective Time and the time of
such surrender. In no event shall the person entitled to receive such dividends
be entitled to receive interest on such dividends. If any certificates for any
Inphynet Shares are to be issued in a
-6-
<PAGE> 24
name other than that in which the Certificate surrendered in exchange therefor
is registered, it shall be a condition of such exchange that the person
requesting such exchange shall pay to Inphynet any transfer or other taxes
required by reason of the issuance of such certificates for such Inphynet
Shares, or shall establish to the satisfaction of Inphynet that such tax has
been paid or is not applicable.
SECTION 4.4 No Fractional Securities. No certificates or scrip
representing fractional Inphynet Shares shall be issued upon the surrender for
exchange of Certificates pursuant to this Article IV and no dividend, stock
split or other change in the capital structure of Inphynet shall relate to any
fractional security, and such fractional interests shall not entitle the owner
thereof to vote or to any rights of a security holder.
SECTION 4.5 Supplementary Action. If at any time after the Effective
Time, any further assignments or assurances in law or any other things are
necessary or desirable to vest or to perfect or confirm of record in the
Surviving Corporation the title to any property or rights of the Companies, or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered, in
the name of and on behalf of the Companies and the Shareholders, to execute and
deliver any and all things necessary or proper to vest or to perfect or confirm
title to such property or rights in the Surviving Corporation, and otherwise to
carry out the purposes and provisions of this Agreement.
SECTION 4.6 Delivery of Inphynet Shares. At the Closing, Inphynet shall
(i) deliver (or cause to be delivered) to the Shareholders, stock certificates
(bearing the "restricted stock" legend contemplated by section 6.29 hereof) duly
registered in the name of each Shareholder and representing such Shareholder's
Proportionate Share of the number of Inphynet Shares, in each case rounded up to
the nearest whole share, equal to 92% of the whole number of Inphynet Shares
such Shareholder would otherwise have the right to receive pursuant to Section
4.1(a) hereof, and (ii) deliver (or cause to be delivered) to NationsBank of
Florida, N.A., as escrow agent (the "Escrow Agent"), for purposes of the escrow
arrangement contemplated by Section 5.5 hereof and thereafter for redelivery to
the Shareholders in accordance with their Proportionate Share, stock
certificates (bearing the "restricted stock" legend contemplated by Section 6.29
hereof) duly registered in the name of each Shareholder and representing such
Shareholder's Proportionate Share of the number of Inphynet Shares, in each case
rounded down to the nearest whole share, equal to 8% of the whole number of
Inphynet Shares such Shareholder would otherwise have the right to receive
pursuant to Section 4.1(a) hereof.
ARTICLE V - CLOSING
SECTION 5.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of the Buyer,
1200 South Pine Island Road, Suite 600, Ft. Lauderdale, Florida 33324-4460, at
10:00 am., local time, on August __, 1995 (the "Closing Date"), provided that
all of the conditions set forth in Articles IX and X hereof are satisfied or
waived, or at such other date, time and place as Inphynet and the Companies
shall agree.
-7-
<PAGE> 25
SECTION 5.2 Deliveries by the Companies. At or prior to the Closing,
the Companies shall deliver (or cause to be delivered) to Buyer:
(i) certificates representing all of the outstanding shares of the
capital stock of each of the Companies held by the Shareholders;
(ii) the resignations of all the officers and directors of each of the
Companies;
(iii) the stock book, stock ledger, minute book and corporate seal of
each of the Companies;
(iv) a certificate or certificates executed by the respective
Presidents of the Companies to the effect that, to the Knowledge of the
Shareholders, the conditions with respect to the representations, warranties and
covenants of the Companies set forth in Articles VI and VIII have been
satisfied, as well as a certificate of the Shareholders to the effect that, to
the knowledge of such Shareholders, the conditions with respect to the
representations, warranties and covenants of the Shareholders set forth in
Sections 9.1 and 9.2 have been satisfied;
(v) articles of incorporation of the Companies, certified by the
appropriate governmental official within ten (10) business days of the Closing
Date, and bylaws of the Companies certified by their respective Secretaries;
(vi) certificates of good standing with respect to the Companies,
issued within ten (10) days of the Closing Date, by the Secretary of State of
the State of Florida;
(vii) the Articles of Merger contemplated by Section 2.2 hereof, duly
executed by the Companies;
(viii) the Registration Rights Agreement in the form attached hereto as
Exhibit D (the "Registration Rights Agreement"), dated as of the Closing Date
and signed by the Shareholders;
(ix) the Set-Off Escrow Agreement in the form attached hereto as
Exhibit E (the "Set-Off Escrow Agreement"), dated as of the Closing Date and
signed by the Shareholders and the Escrow Agent;
(x) the Shareholder Employment Agreements, dated as of the Closing Date
and signed by each of the Shareholders; and
(xi) all other documents, instruments, agreements, certificates and
other evidence within the control of the Companies and/or the Shareholders and
as Inphynet or its counsel may reasonably request as to the satisfaction of the
conditions to Buyers' obligations set forth herein.
SECTION 5.3 Deliveries by Buyers. At or prior to the Closing, the
Buyers shall deliver (or cause to be delivered) to the Shareholders:
-8-
<PAGE> 26
(i) a certificate executed by an authorized officer of each of the
Buyers on behalf of the Buyers to the effect that, to the knowledge of Inphynet,
the conditions set forth in Sections 10.1 and 10.2 have been satisfied;
(ii) a certificate of good standing of each of the Buyers, issued as of
a recent date by the Secretary of State of its state of incorporation;
(iii) the Articles of Merger contemplated by Section 2.2 hereof, duly
executed by Acquisition;
(iv) the certificates representing Inphynet Shares required to be
delivered pursuant to Sections 4.2(a) and 4.6(a) hereof;
(v) the Registration Rights Agreement, dated as of the Closing Date and
signed by Inphynet;
(vi) the Set-Off Escrow Agreement, dated as of the Closing Date and
signed by Inphynet; and
(vii) the Shareholder Employment Agreements, dated as of the Closing
Date and signed by Radiology Group, P.A. and Emergency Medical Services
Associates, Inc.; and
(viii) all other documents, instruments, agreements, certificates and
other evidence within the control of Inphynet and as the Companies or their
counsel may reasonably request as to the satisfaction of the conditions to the
Companies' obligations set forth herein.
SECTION 5.4 Termination in Absence of Closing.
(a) If, by the close of business on September 7, 1995 (which date may
be extended to December 1, 1995 upon the agreement of Inphynet and the
Companies, acting through their respective Boards of Directors), the Closing has
not occurred, then either Inphynet or the Companies (acting through their
respective Boards of Directors) may thereafter terminate this Agreement by
giving written notice to such effect, to the other parties hereto, provided that
neither Inphynet nor the Companies may give such termination notice if the
reason for Closing having not occurred is such party's (or, in the case of the
Companies, any Shareholder's) willful breach of the provisions of this
Agreement;
(b) Notwithstanding the approval of the Shareholders, this Agreement
and the transactions contemplated herein may also be terminated and abandoned by
the Companies at any time on or prior to the Closing Date if:
(i) any representations or warranties made herein for the
benefit of the Companies and/or the Shareholders, or any certificate, schedule
or document furnished to the Companies and/or the Shareholders pursuant to this
Agreement in untrue in any material respect
-9-
<PAGE> 27
and such untruth is not cured within 15 days after delivery of notice thereof
(it being agreed that disclosure of such matter subsequent to the date hereof
shall not constitute a cure); or
(ii) Buyers shall have defaulted in any material respect in
the performance of any material obligation, under this Agreement and such
default shall have continued for 15 days after delivery of notice thereof.
(c) Notwithstanding the approval of the respective Boards of Directors
of Buyers, this Agreement and the transactions contemplated herein may also be
terminated and abandoned by Buyers at any time on or prior to the Closing Date
if:
(i) any representations or warranties made herein for the
benefit of either Buyer, or any certificate, schedule or document furnished to
Buyers pursuant to this Agreement is untrue in any material respect and such
untruth is not cured within 15 days after delivery of notice thereof (it being
agreed that disclosure of such matter subsequent to the date hereof shall not
constitute a cure); or
(ii) the Companies or any Shareholder shall have defaulted in
any material respect in the performance of any material obligation under this
Agreement and such default shall have continued for 15 days after delivery of
notice thereof.
(d) This Agreement may also be terminated (i) upon the written
agreement of the Companies and Inphynet, and (ii) as otherwise expressly
provided herein.
(e) Notwithstanding anything herein to the contrary, any termination of
this Agreement shall not relieve any party hereto of any liability for such
party's willful breach of any representation, warranty, covenant or agreement
made in this Agreement.
SECTION 5.5. Adjustments to Exchange Consideration; Setoff;
Cancellation of Inphynet Shares. The Exchange Consideration shall be subject to
adjustment after the Closing as follows:
(a) Each Shareholder hereby agrees that, subject to the following
provisions of this Section 5.5, any claims for indemnification by Buyers against
the Shareholders (or any of them) hereunder shall be satisfied by Inphynet
canceling all or any portion of the Inphynet Shares delivered to the Escrow
Agent, provided the Escrow Agent continues to hold Inphynet Shares, it being
agreed that each such Inphynet Share shall be deemed to have a value equal to
the Specified Price. To effect the purposes of this Section 5.5, certain of the
Inphynet Shares required to be delivered by Inphynet pursuant to the Merger
shall be delivered to and held by the Escrow Agent under the Set-off Escrow
Agreement (which each of the parties hereto agrees to execute and deliver on or
prior to the Closing Date).
(b) Within ninety (90) calendar days after the Closing Date, the Buyer
shall deliver to the Shareholders a balance sheet relating to the Surviving
Corporation as of the Closing Date and which shall include only the assets and
liabilities of the companies existing immediately prior to
-10-
<PAGE> 28
the Merger (the "Closing Balance Sheet"), prepared in accordance with GAAP,
applied on a basis consistent with the accounting principles, procedures,
policies and methods employed in preparing the December 31, 1994 Balance Sheet.
During the preparation of the Closing Balance Sheet and the period of any
dispute with respect to the application of this Section 5.5, the Buyer shall
provide the Shareholders and their accountants and advisors full access to the
books, records, facilities and employees of the Surviving Corporation, shall
cooperate with the Shareholders to the extent reasonably requested by the
Shareholders, and the Shareholders shall cooperate with the Buyers, to prepare
the Closing Balance Sheet or to investigate the basis for any dispute including
access to accountants' work papers. The Closing Balance Sheet shall be examined
by the Shareholders, who shall, not later than forty-five (45) calendar days
after receipt of the Closing Balance Sheet render a report thereon (the "Closing
Balance Sheet Report"). The Closing Balance Sheet Report shall list those items,
if any, to which the Shareholders take exception and the Shareholders' proposed
adjustment. If the Buyer fails to deliver to the Shareholders the Closing
Balance Sheet within the 90-day period set forth above, no claim shall
subsequently be made pursuant to Section 5.5(c) with respect to the Net Worth of
the Companies as of the Closing Date, and 50% of the Inphynet Shares delivered
to the Escrow Agent shall immediately be delivered to the Shareholders. If the
Shareholders have received the Closing Balance Sheet within the 90-day period
set forth above, but fail to deliver to the Buyer the closing Balance Sheet
Report within forty-five (45) calendar days following receipt of the Closing
Balance Sheet, the Shareholder shall be deemed to have accepted the closing
Balance Sheet for the purposes of any Exchange Consideration adjustment under
this Section 5.5. The Buyer shall have thirty (30) calendar days following its
receipt of the Closing Balance Sheet Report to notify the Shareholders of any
objections to the same. If the Buyer does not give the Shareholders notice
within such thirty (30) calendar days, the Buyer shall be deemed to have
accepted the Closing Balance Sheet as adjusted by the Shareholders for the
purposes of any Exchange Consideration adjustment under this Section 5.5. If the
Buyer gives the Shareholders timely notice of objections to the Closing Balance
Sheet Report, and if the Buyer and the Shareholders are unable, within fifteen
calendar days after receipt by the Buyer of the notice by the Shareholders of
objections, to resolve the disputed exceptions, such disputed exceptions will be
referred to an independent "big six" accounting firm mutually acceptable to
Buyer and the Shareholders (the "Independent Accounting Firm"). The Independent
Accounting Firm shall, within sixty (60) days following its selection, deliver
to the Shareholders and the Buyer a written report determining such disputed
exceptions, and its determinations will be conclusive and binding upon the
parties thereto for the purposes of any Exchange Price adjustment under this
Section 5.5. The fees and disbursements of the Independent Accounting Firm
acting under this Section shall be shared 50% by the Buyer and 50% by the
Shareholders.
(c) If the Net Worth of the Companies as shown in the Closing Balance
Sheet (as accepted by the parties hereto or as determined by the Independent
Accounting Firm, in each case in accordance with Section 5.5(b) above), is less
than $500,000 (the "Net Worth Deficit"), then Inphynet Shares with an aggregate
value, based on the Specified Price, equal to the amount of the Net Worth
Deficit shall be surrendered to Inphynet by the Escrow Agent for cancellation.
In the event the aggregate Specified Price of the Inphynet Shares held by the
Escrow Agent is less than the amount of the Net Worth Deficit, the Shareholders
agree that the amount of such shortfall shall constitute an undisputable claim
of the Buyers against the Shareholders in
-11-
<PAGE> 29
accordance with Article XII of this Agreement. If the Net Worth Deficit is less
than an amount equal to the value of 50% of the Inphynet shares held by the
Escrow Agent (the "50% Threshold"), the Escrow Agent shall promptly deliver
Inphynet Shares to the Shareholders in an amount equal to the difference between
the Net Worth Deficit and the 50% Threshold.
(d) During the nine month period following the Closing Date, with
respect to claims other than claims relating to the Net Worth of the Companies
as set forth in the Closing Balance Sheet, Inphynet shall give the Shareholders
not less than thirty (30) days' notice (each a "Buyer's Notice") of its
intention to cancel Inphynet Shares pursuant to this Section 5.5, including in
such notice a description of Buyers, indemnification claim. If the Shareholders
do not object to such cancellation at least two business days prior to the date
of the proposed cancellation set forth in the Buyer's Notice (the "Set-Off
Date"), then such proposed cancellation shall become effective on such date and
shall not be subject to further review, challenge or adjustment absent fraud.
Any cancellation of Inphynet Shares hereunder shall be effective only as to the
Inphynet Shares delivered to the Escrow Agent.
(e) If Shareholders or their agents timely object to the cancellation
proposed in a Buyer's Notice to the Buyers as required by Section 5.5(d) and to
the Escrow Agent as contemplated by Section 1 of the Set-Off Escrow Agreement,
and if Inphynet and the Shareholders are unable to resolve such dispute on or
prior to the Set-Off Date, then (i) the cancellation shall be effective only as
to the undisputed indemnity claims, and (ii) to the extent the indemnification
claim (together with prior unresolved indemnity claims) can be satisfied with
Inphynet Shares then held by the Escrow Agent, any disputed cancellation shall
be resolved in accordance with the terms of the Set-Off Escrow Agreement. In the
event that a dispute among the parties leads to a retention or interpleading of
Inphynet Shares by the Escrow Agent, the party who is later determined to have
been in error in attempting to enforce or dispute the share cancellation shall
pay the reasonable legal and accounting fees, costs and expenses incurred by the
prevailing party in presenting, arguing and resolving such dispute. Any Inphynet
Shares as to which no Buyer's Notice his been delivered during the nine month
period referred to above shall be released and delivered to the Shareholders.
(f) All actions permitted to be taken by the Shareholders pursuant to
this Section 5.5, shall be taken only with the written consent of the
Shareholders holding not less than a majority of the Shares of RAH and shall be
taken through an agent specified in writing (the "Shareholder Agent") on or
before the Closing Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Each of the Shareholders, jointly and severally, hereby, represents,
warrants and agrees as follows:
-12-
<PAGE> 30
SECTION 6.1. Corporate Organization.
Each of the Companies is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, and has all
requisite corporate power and authority to own its properties and assets and to
conduct its business as now conducted. Copies of the Articles of Incorporation
and By-laws (or equivalent documents) of each of the Companies, with all
amendments thereto to the date hereof, have been furnished to the Buyer, and
such copies are accurate and complete as of the date hereof.
SECTION 6.2. Capitalization of the Companies; Title to the Shares.
(a) The authorized capital stock of RAH consists of 10,000 shares of
common stock, par value $1.00 per share, of which 5,200 shares (the "RAH
Shares") are outstanding; the authorized capital stock of IHS consists of 7,500
shares of common stock, par value $1.00 per share, of which 5,200 shares (the
"IHS Shares") are outstanding; and the authorized capital stock of HPC consists
of 10,000 shares of common stock, par value, $1.00 per share, of which 5,200
shares (the "HPC Shares") are outstanding. The RAH Shares, the IHS Shares and
the HPC Shares are herein referred to collectively "Company Shares" and
"Shares." In each case, all of the Shares have been duly authorized and validly
issued, and are fully paid and nonassessable and no personal liability attaches
to the ownership thereof. The Shares are the sole outstanding shares of capital
stock of the Companies, and there are no outstanding options, warrants,
agreements, conversion rights, preemptive rights or other rights to subscribe
for, purchase or otherwise acquire any of the Shares or any unissued or treasury
shares of capital stock of any of the Companies or any Subsidiary (as such term
is defined in Section 6.3(a) below) of any Company, except as set forth in
Section 6.2 of the Disclosure Schedule. Section 6.2 of the Disclosure Schedule
sets forth all changes in ownership of the Companies' capital stock since
January 1, 1992.
(b) Each of the Shareholders has, and will have at the Closing, valid
and marketable title to all the Shares held by each Shareholder, free and clear
of any liens, claims, charges, security interests, voting agreements, proxies or
other legal or equitable encumbrances, limitations or restrictions, except as
set forth in Section 6.2 of the Disclosure Schedule, none of which will hinder
any Shareholder's ability to perform his, her or the Companies' obligations
hereunder.
SECTION 6.3. Subsidiaries and Equity Investments.
(a) Section 6.3 of the Disclosure Schedule sets forth: (i) the name of
each corporation of which the Company owns, directly or indirectly, shares of
capital stock having in the aggregate 10% or more of the total combined voting
power of the issued and outstanding shares of capital stock entitled to vote
generally in the election of directors of such corporation (hereinafter referred
to collectively as "Subsidiaries" and individually as a "Subsidiary"); (ii) the
name of each corporation, partnership, joint venture or other entity (other than
the Subsidiaries) in which the Company has, or pursuant to any agreement has the
right to acquire at any time by any means, directly or indirectly, an equity
interest or investment; (iii) in the case of each of such
-13-
<PAGE> 31
corporations described in clauses (i) and (ii) above, (A) the jurisdiction of
incorporation, (B) the capitalization thereof and the percentage of each class
of capital voting stock owned by the Company, (C) a description of any
contractual limitations on the holder's ability to vote or alienate such
securities, (D) a description of any outstanding options or other rights to
acquire securities of such corporation, and (E) a description of any other
contractual charge or impediment which would materially limit or impair any of
the Company's ownership of such entity or interest or its ability effectively to
exercise the full rights of ownership of such entity or interest; and (iv) in
the case of each of such unincorporated entities, information substantially
equivalent to that provided pursuant to clause (iii) above with regard to
corporate entities.
(b) Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own its properties and assets and
to conduct its business as now conducted. Each Subsidiary is duly qualified to
do business as a foreign corporation in every jurisdiction in which the
character of the properties owned or leased by it or the nature of the business
conducted by it makes such qualification necessary. All the outstanding shares
of capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and (except as specified in Section
6.3 of the Disclosure Schedule) are owned of record and beneficially, directly
or indirectly, by a Company, free and clear of any liens, claims, charges,
security interests or other legal or equitable encumbrances, limitations or
restrictions. There are no outstanding options, warrants, agreements, conversion
rights, preemptive rights or other rights to subscribe for, purchase or
otherwise acquire any issued or unissued shares of capital stock of any
Subsidiary.
SECTION 6.4. Authorization and Validity of Agreements. Each of the
Companies and each Shareholder has the power to enter into this Agreement and to
carry out his or her obligations hereunder. This Agreement (a) has been duly
authorized and executed by each of the Companies and all necessary corporate
proceedings, including approval of this Agreement by the Companies'
shareholders, have occurred, (b) has been duly executed by each Shareholder and
(c) constitutes the valid and binding obligation of each Company and Shareholder
and is enforceable against each Company and Shareholder in accordance with its
terms.
SECTION 6.5. No Conflict or Violation. Except to the extent set forth
in Section 6.5 of the Disclosure Schedules, the execution, delivery and
performance of this Agreement by the Shareholders does not and will not violate
or conflict with any provision of the Articles of Incorporation or By-laws of
the Companies or any Shareholders Agreement (copies of which have previously
been delivered to the Buyer), and does not and will not violate any provision of
law, or any order, judgment or decree of any court or other governmental or
regulatory authority, nor violate nor will result in a breach of or constitute
(with due notice or lapse of time or both) a default under any contract, lease
loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which any Company or any Shareholder is a party or by which any
of them is bound or to which any of their respective properties or assets is
subject, nor will result in the creation or imposition of any lien, charge or
encumbrance of any kind whatsoever upon any of the properties or assets of any
Company, nor will result in the
-14-
<PAGE> 32
cancellation, modification, revocation or suspension of any of the licenses,
franchises, permits, authorizations or approvals referred to in Section 3.16.
SECTION 6.6. Consents and Approvals. Except for required filings under
the Florida Act and the General Corporation Law in connection with the Merger,
Section 6.6 of the Disclosure Schedule sets forth a true and complete list of
each consent, waiver, authorization or approval of any governmental or
regulatory authority, domestic or foreign, or of any other person, firm or
corporation, and each declaration to or filing or registration with any such
governmental or regulatory authority, that is required in connection with the
execution and delivery of this Agreement by the Companies or the Shareholders or
the performance by the Companies or the Shareholders of their obligations
hereunder.
SECTION 6.7. Financial Statements. The Shareholders have heretofore
furnished to the Buyer (a) financial statements for the Companies as of and for
the years ended December 31, 199-- through 1994, accompanied by the reports
thereon of the Companies' Accountants, and (b) copies of the March 31, 1995
financial statements listed in Section 6.7 of the Disclosure Schedule, certified
by the chief executive officer and chief financial officer of the Companies (the
audited financial statements listed in clause (a) above being hereinafter
referred to as the "1994 Financial Statements", and all the financial statements
referred to in clauses (a) and (b) above being hereinafter collectively referred
to as the "Financial Statements"). The Financial Statements, including the notes
thereto, (i) were prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby (except as nay be indicated in the notes
thereto and, as to interim unaudited statements, except for the absence of
footnotes thereto), (ii) present fairly the financial position, results of
operations and changes in financial position of the Company as of such dates and
for the periods then ended (subject, in the case of the unaudited interim
Financial Statements, to normal year-end audit adjustments consistent with prior
periods and which are not material), (iii) are correct in all material respects
and in accordance with the books of account and records of the Company, and (iv)
can be legitimately reconciled with the financial statements and the financial
records maintained and the accounting methods applied by the Company for federal
income tax purposes.
SECTION 6.8. Absence of Certain Changes or Events. Since December 31,
1994 and except as set forth in Section 6.8 of the Disclosure Schedule:
(a) the Companies have operated in the ordinary course of business
consistent with past practice and there has not been any material adverse change
in the assets, properties, business, operations, prospects, net income or
financial condition of the Companies. None of the Shareholders or the Companies
knows or has reason to know of any event, condition, circumstance or prospective
development which threatens or may threaten to have a material adverse effect on
the assets, properties, operations, prospects, net income or financial condition
of the Companies;
(b) the Companies have not taken any actions of a type referred to in
Section 8.1 that would have required the consent of the Buyer if such action
were to have been taken during the period between the date hereof and the
Closing Date;
-15-
<PAGE> 33
(c) there has not been any change in any method of accounting or
accounting practice of the Companies; and
(d) there has not been any loss of the employment, services or benefits
of any key employee.
SECTION 6.9. Tax Matters.
(a) Except as set forth in Section 6.9 of the Disclosure Schedule, all
Tax Returns required to be filed before the Closing Date in respect of the
Companies have been filed, and the Companies have paid, accrued or otherwise
adequately reserved for the payment of all Taxes required to be paid in respect
of the periods covered by such Returns and have paid, or adequately reserved for
the payment of, all Taxes with respect to periods ended on or before the Closing
Date for which Tax Returns have not yet been filed. Section 6.9 of the
Disclosure Schedule sets forth the respective anticipated filing date of the
Companies' Tax Returns for the year ended December 31, 1994, and for the period
beginning January 1, 1995 and ending on the Closing Date. All Taxes of the
Companies have been paid or adequately provided for and the Shareholders know of
no proposed additional tax assessment against the Companies not adequately
provided for in the Financial Statements. Copies of all Tax Returns for the
fiscal years ended December 31, 1990 through 1993 have been furnished to the
Buyer and such copies are accurate and complete as of the date hereof; the
Companies have also furnished to the Buyer correct and complete copies of all
notices and correspondence sent or received since December 31, 1993 by the
Companies to or from any federal, state or local tax authorities. There are no
pending or threatened audits of Tax Returns or assessments of Taxes. No Company
is a party to any agreement with respect to the sharing or allocation of, or
indemnification in respect of Taxes or tax costs. The statute of limitations has
closed with respect to all Tax Returns of the Companies for years prior to 1990.
(b) The Companies have not filed a consent to the application of
Section 341(f) of the Internal Revenue Code of 1986 (the "Code").
(c) The Companies are not and have not been United States real property
holding companies (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(ii) of the Code.
(d) No indebtedness of the Companies is "corporate acquisition
indebtedness" within the meaning of Section 279(b) of the Code.
SECTION 6.10. Post-1994 Charges. Section 6.10 of the Disclosure
Schedule sets forth a true and complete list of each dividend, management fee,
interest or any other similar charge that has been incurred or paid since
December 31, 1994 by the Companies.
SECTION 6.11. Absence of Undisclosed Liabilities. Except as set forth
in Section 6.11 of the Disclosure Schedule, the Companies have no material
indebtedness or material liability, absolute or contingent, known or unknown,
which is not shown or provided for on the
-16-
<PAGE> 34
balance sheet of the Companies as of that date included in the 1994 Financial
Statements other than liabilities incurred or accrued in the ordinary course of
business since December 31, 1994 and executory obligations under contracts
listed in the Disclosure Schedule. Except as shown in such Disclosure Schedule,
balance sheets or in the notes to the Financial Statements, the Companies are
not directly or indirectly liable upon or with respect to (by discount,
repurchase agreements or otherwise), or obligated in any other way to provide
funds in respect of, or to guarantee or assume, any debt, obligation or dividend
of any person, except endorsements in the ordinary course of business in
connection with the deposit of items for collection.
SECTION 6.12. Interests in real Property.
The Companies do not own any real property.
SECTION 6.13. Leases.
(a) Section 6.13 of the Disclosure Schedule sets forth a list of all
properties in which the Company has a leasehold interest, as of the date hereof
(each, a "Lease" and collectively, the "Leases").
(b) No Lease has been modified or amended in writing except as set
forth in Section 6.13 of the Disclosure Schedule. Neither the Companies, nor, to
the Knowledge of the Shareholders, any other party thereto is in breach of or
default (and no event has occurred which, with due notice or lapse of time or
both, may constitute such a breach or default) under any Lease, and no party to
any Lease has given the Companies written notice of or made a claim with respect
to any breach or default, the consequences of which, individually or in the
aggregate, might result in the termination of such Lease or have a material
adverse effect on the Companies.
(c) None of the property subject to a Lease is subject to any sublease,
license or other agreement granting to any Person any right to the use,
occupancy or enjoyment of such property or any portion thereof.
SECTION 6.14. Personal Property. Section 6.14 of the Disclosure
Schedule sets forth a complete and correct list and brief description of each
item of machinery, equipment, furniture, fixtures and other tangible personal
property owned, leased or used by the Companies having an original purchase cost
or aggregate lease cost to the Companies exceeding $5,000 (the "Machinery and
Equipment"). Except as set forth in Section 6.14 of the Disclosure Schedule, the
Companies own outright and have good title, free and clear of all title defects
and objections, security interests, liens, charges and encumbrances of any
nature whatsoever (other than the lien of current property taxes and assessments
not in default, if any, liens of landlords and other lessors arising under
statute, and other liens, claims and encumbrance or charges that do not in any
material respect detract from the value of the Machinery and Equipment or
interfere with any material way with the present use thereof) to the Machinery
and Equipment shown on Section 6.14 of the Disclosure Schedule as owned by it
and to all the machinery, equipment, furniture, fixtures, inventory, receivables
and other tangible or intangible personal property reflected on the balance
sheet included in the 1994 Financial Statements and all such property acquired
since the
-17-
<PAGE> 35
date thereof, except for sales and dispositions in the ordinary course of
business since such date. None of the title defects, objections, security
interests, liens, charges or encumbrances (if any) listed on Section 6.14 of the
Disclosure Schedule adversely affects the value of any of the items of personal
property to which it relates or interferes with its use in the conduct of
business of the companies. Except as set forth in Section 6.14 of the Disclosure
Schedule, the Companies hold good leaseholds in all of the Machinery and
Equipment shown on Section 6.14 of the Disclosure Schedule as leased by it, in
each case under valid and enforceable leases. The Companies are not in breach of
or default (and no event has occurred which, with due notice or lapse of time or
both, may constitute such a lapse or default) under any lease of any material
items of Machinery and Equipment purported to be leased by it. The machinery and
Equipment and other personal property now owned, leased or used by the Companies
is sufficient and adequate to carry on its businesses as presently conducted and
all items thereof are in good operating condition and repair reasonable wear and
tear excepted. The Companies do not hold any personal property of any other
person, firm or corporation pursuant to any consignment or similar arrangement.
SECTION 6.15. Intentionally left blank.
SECTION 6.16. Licenses, Permits and Governmental Approvals.
(a) Section 6.16 of the Disclosure Schedule sets forth a true and
complete list of all licenses, permits, franchises, authorizations and approvals
issued or granted to the Companies by the Government of the United States, any
state or local government, or any department, agency, board, commission, bureau
or instrumentality of any of the foregoing (the "Licenses and Permits"), and all
pending applications therefor. Such list specifies the date issued, granted or
applied for, the expiration date and the current status thereof. Each License
and Permit has been duly obtained, is valid and in full force and effect, and,
to the Knowledge of the Shareholders, is not subject to any pending or
threatened administrative or judicial proceeding to revoke, cancel, suspend or
declare such License and Permit invalid in any respect. To the Knowledge of the
Shareholders, the Licenses and Permits are sufficient and adequate in all
respects to permit the continued lawful conduct of the Companies' business in
the manner now conducted and as has been proposed by the Companies to be
conducted, and, to the Knowledge of the Shareholders, none of the operations of
the Companies business are being conducted in a manner that violates any of the
terms or conditions under which any License and Permit was granted. Except as
set forth in Section 6.16 of the Disclosure Schedule, no such License and Permit
will in any way be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement.
(b) To the Knowledge of the Shareholders, no physician employed by or
acting as an independent contractor for the Companies ever has (i) had his/her
license to practice medicine in any jurisdiction denied, surrendered, limited,
suspended, revoked or subject to probationary conditions or is subject to any
pending proceedings regarding any of the foregoing, (ii) had his/her Federal or
State Drug Enforcement Agency controlled substance authorization denied,
revoked, suspended, reduced or not renewed or has been subject to institution
of, or is subject to any pending proceedings regarding any of the foregoing,
(iii) had his/her membership in any local, state or national medical
professional society or organization revoked, suspended or not renewed or is
subject to any pending proceedings regarding any of the foregoing, (iv) advised
the
-18-
<PAGE> 36
companies (each such physician having been asked by the companies regarding such
matters), that he/she had received treatment for alcoholism, drug abuse, sexual
misconduct or psychiatric disorders, or (v) advised the Companies (each such
physician having been asked by the Companies regarding such matters), that
he/she had been the subject of administrative sanctions or been suspended from
or lost eligibility for participating in Medicare, Medicaid or other
governmental or non-governmental medical insurance programs or is subject to any
pending proceedings regarding any of the foregoing.
SECTION 6.17. Compliance with Law. To the Knowledge of the
Shareholders, the operations of the Companies have been conducted in material
accordance with all applicable laws, regulations, orders and other requirements
of all courts and other governmental or regulatory authorities having
jurisdiction over the Companies and its assets, properties and operations,
including, without limitation, all such laws, regulations, orders and
requirements promulgated by or relating to consumer protection, equal
opportunity, health, environmental protection, architectural barriers to the
handicapped, fire, zoning and building and occupation safety. The Companies have
not received notice of any violation of any such law, regulation, order or other
legal requirement, and are not in default with respect to any order, writ,
judgment, award, injunction or decree of any national, state or local court or
governmental or regulatory authority or arbitrator, domestic or foreign,
applicable to the Companies or any of their assets, properties or operations.
The Shareholders do not have knowledge of any proposed change in any such laws,
rules or regulations (other than laws of general applicability) that would
materially and adversely affect the transactions contemplated by this Agreement
or all or a material part of the Companies' business; provided that the health
care field is subject to significant regulation and there has been a significant
amount of public discussion about changes to applicable laws and regulations,
some of which could have materially adverse effect on the Companies' business.
The Companies' business does not depend upon or result from any payments, direct
or indirect, in the nature of bribes, kickbacks, or similar payments to any
government or agency thereof or any other Person or in the nature of
contributions to any domestic or foreign political party or candidate.
SECTION 6.18. Litigation. Except as set forth in Section 6.18 of the
Disclosure Schedule, there are no claims, actions, suits, proceedings, labor
disputes or investigations pending or, to the Knowledge of the Shareholders,
threatened before any federal, state or local court or governmental or
regulatory authority, domestic or foreign, or before any arbitrator of any
nature, brought by or against the Companies or any of their officers, directors,
employees, agents or affiliates involving, affecting or relating to any assets,
properties or operations of the Companies or the transactions contemplated by
this Agreement, which, if asserted, could reasonably be expected to have a
material adverse effect on the Companies, nor is any basis known to the
Shareholders for any such action, suit, proceeding or investigation. Section
6.18 of the Disclosure Schedule sets forth a list and a summary description of
all such pending actions, suits, proceedings, disputes or investigations.
Neither the Companies nor any of their respective assets or properties is
subject to any order, writ, judgment, award, injunction or decree of any
federal, state or local court or governmental or regulatory authority or
arbitrator, that materially affects or might materially affect their respective
assets, properties, operations, prospects, net
-19-
<PAGE> 37
income or financial condition or which would or might interfere with the
transactions contemplated by this Agreement.
SECTION 6.19. Contracts. Section 6.19 of the Disclosure Schedule sets
forth a true and complete list and a summary description of all material
contracts, agreements and other instruments to which any Company is a party or
otherwise relating to or affecting any of its assets, properties or operations,
including, without limitation, all written or oral, express or implied, material
(a) contracts, agreements and commitments not made in the ordinary course of
business; (b) purchase and supply contracts; (c) contracts, loan agreements,
repurchase agreements, mortgages, security agreements, trust indentures,
promissory notes and other documents or arrangements relating to the borrowing
of money or for lines of credit; (d) leases and subleases of real or personal
property; (e) agreements and other arrangements for the sale of any assets other
than in the ordinary course of business or for the grant of any options or
preferential rights to purchase any assets, property or rights; (f) documents
granting any power of attorney with respect to the affairs of the Company; (g)
contracts or commitments limiting or restraining the Company from engaging or
competing in any lines of business or with any person, firm, or corporation; (h)
partnership and joint venture agreements; and (i) all amendments, modifications,
extensions or renewals of any of the foregoing (the foregoing contracts,
agreements and documents are hereinafter referred to collectively as the
"Commitments" and individually as a "Commitment"). Each Commitment is valid,
binding and enforceable against the parties thereto in accordance with its
terms, and in full force and effect on the date hereof. The Company has
performed all obligations required to be performed by it to date under, and in
not in default in respect of, any Commitment, and, to the Knowledge of the
Shareholders, no event has occurred which, with due notice or lapse of time or
both, would constitute such a default. To the Knowledge of the Shareholders, no
other party to any Commitment is in default in respect thereof, and no event has
occurred which, with due notice or lapse of time or both, would constitute such
a default. Each Company has delivered to the Buyer true and complete originals
or copies of all its Commitments.
SECTION 6.20. Employee Plans.
(a) The Companies have complied in all material respects with the
requirements of Section 4980B of the Code and Sections 601 to 608 of ERISA
relating to continuation coverage for group health plans. Except as set forth in
Schedule 6.20(a) of the Disclosure Schedule, neither the Company nor any
affiliate thereof maintains, contributes, or is a party to, any "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or any other written, unwritten,
formal or informal plan or agreement involving direct or indirect compensation
other than workers' compensation, unemployment compensation and other government
programs, under which the Company or any affiliate thereof has any present or
further obligation or liability with respect to the employees of the Company
(collectively, the "Plans").
(b) All of the employees of the Company are listed on Schedule 6.20(b)
of the Disclosure Schedule. For each of such employees, the Company has either
paid or adequately provided for the payment of all accrued benefits such
employees are entitled to receive as of the
-20-
<PAGE> 38
Closing Date, including, without limitation, all accrued vacation, sick or
personal time and benefits due under any Plans. Except as set forth on such
Schedule 6.20(b), all contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Plans to any funds or trusts established thereunder or in connection
therewith have been made by the due date thereof (including any valid
extension), and all contributions for any period ending on or before the Closing
Date which are not yet due will have been paid or accrued on or prior to the
closing Date.
(c) Except as set forth in Schedule 6.20(c) or as otherwise
communicated to the Buyer in writing, (i) each of the Plans is in substantial
compliance with all applicable provisions of law, including but not limited to
the Employee Retirement income Security Act of 1974, as amended ("ERISA"), (ii)
each of the Plans intended to be qualified and tax-exempt pursuant to Sections
401(a) and 501(a) is so qualified and tax-exempt, (iii) the Company is not
subject to any liability, other than claims for benefits in the ordinary course,
on account of any Plan or any plan or arrangement previously maintained or
contributed to by it or any affiliate which is similar to a Plan and (iv) to the
best knowledge of the Company after due inquiry, no circumstances exist which
would be likely to result in any liability to the Company similar to that
described in clause (iii).
(d) True, correct and complete copies of the following documents, with
respect to each of the Plans, have been delivered or made available to the Buyer
by the Company; (i) all plans and related trust documents, and amendments
thereto, (ii) summary plan descriptions, (iii) the three most recent Form 5500s
and (iv) written communications to employees relating to the Plans.
SECTION 6.21. Insurance. Section 6.21 of the Disclosure Schedule lists
the fidelity bonds and the aggregate coverage amount and type and generally
applicable deductibles of all policies of title, liability, fire, casualty,
business interruption, workers' compensation and other forms of insurance
insuring the properties, assets and operations of the business of each Company.
The Company has furnished a true, complete and accurate copy of all such
policies and bonds to the Buyer. Except as set forth in Section 6.21 of the
Disclosure Schedule, to the Knowledge of the Shareholders, all such policies and
bonds are in full force and effect, underwritten by financially sound and
reputable insurers (to the Knowledge of the Shareholders) and sufficient for all
applicable requirements of law and will not in any way be effected by or
terminated or lapse by reason of the consummation of the transactions
contemplated by this Agreement. The Companies shall use reasonable efforts to
maintain the coverage under all policies and bonds listed in Section 6.21 of the
Disclosure Schedule in full force and effect until the Closing Date. No Company
is in material default under any provisions of any such policy of insurance or
has received notice of cancellation of any such insurance. Except as set forth
in Section 6.21 of the Disclosure Schedule, there is no claim by any Company
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
Since December 31, 1994, except as set forth in Section 6.21 of the Disclosure
Schedule, the Company has not received any written notice from or on behalf of
any insurance carrier issuing such policies, that insurance rates will hereafter
be substantially increased (except to the extent that insurance rates may be
increased for similarly
-21-
<PAGE> 39
situated risks), that there will hereafter be a cancellation, or an increase in
a deductible (or an increase in premiums in order to maintain an existing
deductible) or non-renewal of existing policies, or that alteration of any
equipment or any improvements to real estate occupied by or leased to or by any
Company, purchase of additional equipment, or modification of any of the methods
of doing business of any Company, will be required or suggested.
SECTION 6.22. Professional Liability Lawsuits.
(a) Except as set forth in Schedule 6.22 to the Disclosure Schedule:
(i) there is no notice, demand, claim, action, suit, inquiry, hearing,
proceeding, notice of violation or investigation of a civil, criminal or
administrative nature before any court or governmental or other regulatory or
administrative agency, commission or authority, domestic or foreign, against or
involving any professional services performed in connection with or on behalf of
any Company, or class of claims or lawsuits involving the same or similar
services performed in connection with or on behalf of the Companies which is
pending or, to the Knowledge of the Shareholders, threatened (collectively,
"Professional Liability Lawsuits") which, if determined adversely, would have a
material adverse effect on the Companies and (ii) to the Knowledge of the
Shareholders there has not been any Occurrence.
(b) For purposes of this Section 6.22, the term "Occurrence" shall mean
any accident, happening or event which takes place at any time which is caused
or allegedly caused by any such accident, happening or event otherwise involving
any professional services performed in connection with or on behalf of any
Company, that is likely to result in a claim or loss.
SECTION 6.23. Propriety of Past Payments. To the Knowledge of the
Shareholders: no funds or assets of any Company have been used by the Companies
for illegal purposes; no unrecorded funds or assets of the Companies have been
established for any purpose; no accumulation or use of the Companies' corporate
funds or assets has been made without being properly accounted for in the
respective books and records of the companies; all payments by or on behalf of
the Companies have been duly and properly recorded and accounted for in the
Companies' books and records; no false or artificial entry has been made in the
books and records of the Companies for any reason; no payment has been made by
or on behalf of the Companies with the understanding that any part of such
payment is to be used for any purpose other than that described in the documents
supporting such payment; and the Companies have not made, directly or
indirectly, any illegal contributions to any political party or candidate.
SECTION 6.24. Environmental Matters. To the Knowledge of the
Shareholders, the Companies have obtained and maintained in effect all licenses,
permits and other authorizations required under all applicable laws, regulations
and other requirements of governmental or regulatory authorities relating to
pollution or to the protection of the environment ("Environmental Laws") and are
in compliance with all Environmental Laws and with all such licenses, permits
and authorizations. To the Knowledge of the Shareholders, the Companies have not
performed or suffered any act which could give rise to, or has otherwise
incurred, liability to any person (governmental or not) under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq. or any other Environmental Laws, nor
-22-
<PAGE> 40
has Company received notice of any such liability or any claim therefor or
submitted notice pursuant to section 103 of such Act to any governmental agency
with respect to any of their respective assets.
SECTION 6.25 Labor Matters.
(a) Except as set forth in Section 6.25 of the Disclosure Schedule: (i)
the Companies are not parties to any outstanding employment agreements or
contracts with officers or employees that are not terminable at will, or that
provide for the payment of any bonus or commission; (ii) the Companies are not
parties to any agreement, policy or practice that requires them to pay
termination or severance pay to salaried, non-exempt or hourly employees (other
than as required by law); (iii) the Companies are not a party to any collective
bargaining agreement or other labor union contract applicable to persons
employed by the Companies nor do the companies know of any activities or
proceedings of any labor union to organize any such employees. The companies
have furnished to the Buyer complete and correct copies of all such agreements
("Employment and Labor Agreements"). The Companies have not breached or
otherwise failed to comply with any provisions of any Employment or Labor
Agreement, and there are no grievances outstanding thereunder.
(b) Except an set forth in Section 6.25 of the Disclosure Schedule: (i)
the Companies are in material compliance with all applicable laws relating to
employment and employment practices, wages, hours, and terms and conditions of
employment; (ii) there is no unfair labor practice charge or complaint pending
before the National Labor Relations Board ("NLRB"); (iii) there is no labor
strike, material slowdown or material work stoppage or lockout actually pending
or, to the Knowledge of the Shareholders, threatened against or affecting the
Companies, and the Companies have not experienced any strike, material slow down
or material work stoppage, lockout or other collective labor action by or
written respect to employees of the Companies since December 31, 1994; (iv)
there is no representation claim or petition pending before the NLRB and no
question concerning representation exists relating to the employees of the
Companies; (v) there are no charges with respect to or relating to the Companies
pending before the Equal Employment Opportunity Commission or any state, local
or foreign agency responsible for the prevention of unlawful employment
practices; and (vi) the Companies have received no formal notice from any
federal, state, local or foreign agency responsible for the enforcement of labor
or employment laws of an intention to conduct an investigation of the Companies
and no such investigation is in progress.
SECTION 6.26. [Intentionally left blank.]
SECTION 6.27. Survival. Each of the representations and warranties set
forth in this Article VI shall be deemed represented and made by the
Shareholders at the Closing as if made at such time and shall survive the
Closing for a period terminating on the later of (a) the first anniversary of
the Closing Date and (b) with respect to claims asserted pursuant to Section 9.1
before the expiration of the applicable representation or warranty, on the date
such claim is finally liquidated or otherwise resolved.
-23-
<PAGE> 41
SECTION 6.28 Purchase for Investment.
(a) Each Shareholder is acquiring the Inphynet Shares issuable pursuant
to the Merger for his, her or its own account and not with a view to, or for
sale in connection with, any "distribution," as such term is used in Section
2(11) of the Securities Act of 1933, as amended (the "Securities Act"), of any
Inphynet Shares in violation of the Securities Act.
(b) Such Shareholder understands that (i) the Inphynet Shares issued in
the Merger will be restricted securities within the meaning of Rule 144 of the
Securities Act ("Rule 144"); (ii) such securities are not registered pursuant to
the Securities Act; (iii) such securities must be held indefinitely and that no
transfer of such securities may be made by Shareholder unless (A) the sale of
such securities has been registered under the Securities Act and any applicable
state securities laws, or (B) an exemption from registration is available under
applicable state securities laws and the Securities Act, including in accordance
with the terms and conditions of Rule 144; and (iv) in any event, the exemption
from registration under Rule 144 will not be available unless such securities
have been beneficially owned for at least two years.
(c) Such Shareholder understands that the certificates representing
Inphynet Shares issued pursuant to this Agreement shall bear a legend
substantially as follows:
The shares represented by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law. They may
not be offered for sale, sold, transferred or pledged without (1)
registration under the Securities Act of 1933 and any applicable state
law, or (2) at holder's expense, an opinion (satisfactory to the
Company) of counsel (satisfactory to the Company) that registration is
not required.
(d) Such Shareholder is a resident of Florida.
(e) The undersigned is an "Accredited Investor" within the meaning of
Rule 501(a) of Regulation D promulgated under the Securities Act.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyers hereby represent, warrant and agree as follows:
SECTION 7.1. Corporate Organization; Capitalization.
(a) Inphynet and Acquisition are corporations duly organized, validly
existing and in good standing under the laws of the States of Delaware and
Florida, respectively, and each has all requisite power and authority (corporate
and other) to own its properties and assets and to conduct its business as now
conducted. Complete and correct copies of the Inphynet's Certificate
-24-
<PAGE> 42
of Incorporation and By-laws and Acquisition's Articles of Incorporation and
By-laws have been delivered to the Shareholders.
(b) The authorized capital stock of Inphynet consists of (i) 50,000,000
shares of common stock, par value $.01 per share, of which 12,994,416 shares are
outstanding as of August 10, 1995, and (ii) 10,000,000 shares of preferred
stock, par value $.10 per share, none of which is issued or outstanding. The
authorized capital stock of Acquisition consists of 1,000 shares of common
stock, par value $.01 per share, all of which are outstanding.
SECTION 7.2. Authorization and Validity of Agreements. Each Buyer has
the corporate power to enter into this Agreement and all Collateral Agreements
and to carry out its obligations hereunder. The execution and delivery of this
Agreement and the performance of the Buyer's obligations hereunder have been
duly authorized by the Board of Directors of the Buyer, and no other corporate
proceedings on the part of the Buyer are necessary to authorize such execution,
delivery and performance. This Agreement has been duly executed by the Buyer and
is the legal, valid and binding obligation of the Buyer, enforceable against the
Buyer in accordance with its terms.
SECTION 7.3. No Conflict or Violation. The execution, delivery and
performance by the Buyer of this Agreement do not and will not violate or
conflict with any provision of the Certificate of Incorporation or By-laws of
any Buyer, and do not and will not violate any provision of any law, agreement
or instrument to which the Buyer is a party or by which it is bound, or of any
order, judgment or decree of any court or other governmental or regulatory
authority to which the Buyer is subject.
SECTION 7.4. Investment Intent. The Shares will be acquired hereunder
solely for the account of the Buyer and its specified designees, for investment,
and not with a view to the resale or distribution thereof, subject to the right
of the Buyer and any such designees to sell, assign, transfer or distribute any
or all of the Shares to any corporation which is an Affiliate of the Buyer.
Section 7.5 No Default or Consents. Neither the execution and delivery
of this Agreement by Buyers nor the Buyers' carrying out of the transactions
contemplated hereby will:
(i) violate or conflict with any of the terms, conditions or provisions
of either Buyer's certificate of incorporation or bylaws;
(ii) violate any Legal Requirements applicable to either Buyer;
(iii) violate, conflict with, result in a breach of, constitute a
default under (whether with or without notice or the lapse of time or both), or
accelerate or permit the acceleration of the performance required by, or give
any other party the right to terminate, any contract or Permit applicable to
either Buyer;
-25-
<PAGE> 43
(iv) result in the creation of any lien, charge or other encumbrance on
the shares of capital stock or any property of either Buyer; or
(v) except for notice filings under Regulation D promulgated under the
Securities Act, Inphynet's Form 8-K reporting obligations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), any filings necessary to
perfect an exemption from registration for stock issuances under Florida state
securities or blue sky laws, and the filing of the Certificate of Merger and the
Articles of Merger under the General Corporation Law and Florida Act,
respectively, require either buyer to obtain or make any waiver, consent,
action, approval or authorization of, or registration, declaration, notice or
filing with, any private non-governmental third party or any Governmental
Authority that has not been obtained or made.
Section 7.6 No Proceedings. No suit, action or other proceeding is
pending or, to each Buyer's knowledge, threatened before any Governmental
Authority seeking to restrain either Buyer or prohibit its entry into this
Agreement or prohibit the Closing, or seeking Damages against either Buyer or
its Properties as a result of the consummation of this Agreement.
Section 7.7 Inphynet SEC Filings. Inphynet has heretofore delivered to
the Shareholders and the Companies copies of Inphynet's Annual Report on Form
10-K for the year ended December 31. 1994 and Inphynet's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995. As of their respective dates,
such reports complied in all material respects with all applicable requirements
of the Exchange Act, as applicable, and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
Section 7.8 Absence of Certain Changes. Since March 31, 1995, neither
Inphynet nor any of its subsidiaries has, except to the extent reported in
Inphynet press releases (copies of which have heretofore been provided to the
Shareholders), suffered a change, or any event involving a prospective change,
in the business, assets, financial condition or results of operation which has
had, or is reasonably likely to have, individually or in the aggregate, a
material adverse effect on Inphynet's consolidated business, assets, financial
condition or results of operations.
ARTICLE VIII
ADDITIONAL COVENANTS
SECTION 8.1. Certain Changes and Conduct of Business.
(a) From and after the date of this Agreement and until the Closing
Date, the Shareholders shall cause each of the Companies to conduct, in all
material respects, its business in the ordinary course consistent with past
practices and, without the prior written consent of the Buyer, which consent
will not be unreasonably withheld, the Shareholders will not, except as required
or permitted pursuant to the terms hereof, permit any Company to:
-26-
<PAGE> 44
(i) make any material change in the conduct of its businesses and
operations or enter into any material transaction other than in the ordinary
course of business consistent with past practices;
(ii) make any change in its Articles of Incorporation or By-laws; issue
any additional shares of capital stock or equity securities or grant any option,
warrant or right to acquire any capital stock or equity securities or issue any
security convertible into or exchangeable for its capital stock or alter in any
material term of any of its outstanding securities or make any change in its
outstanding shares of capital stock or its capitalization, whether by reason of
a reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, stock dividend or otherwise;
(iii) (A) incur, assume or guarantee any indebtedness for borrowed
money, issue any notes, bonds, debentures or other corporate securities or grant
any option, warrant or right to purchase any thereof, except pursuant to
transactions in the ordinary course of business consistent with past practices
or (B) issue any securities convertible or exchangeable for debt securities of
any Company;
(iv) make any sale, assignment, transfer, abandonment or other
conveyance of any of its assets or any part thereof, except transactions
pursuant to existing contracts set forth in the Disclosure Schedule and
dispositions of inventory or of worn-out or obsolete equipment for fair or
reasonable value in the ordinary course of business consistent with past
practices;
(v) subject any of its assets, or any part thereof, to any Lien or
suffer such to be imposed other than such Liens as may arise in the ordinary
course of business consistent with past practices by operation of law which will
not have a material adverse effect on any Company;
(vi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock or declare, set aside or pay any
dividends or other distribution in respect of such shares, provided that,
subject to Buyer's approval and provided such action will not prevent the use of
pooling of interest accounting treatment, the Company may, consistent with past
practice, pay a dividend prior to the Closing Date in an aggregate amount not to
exceed the Company's taxable earnings for the period from December 31, 1994
through the Closing Date, less any amounts previously dividended or distributed
by the Company to its Shareholders during such period;
(vii) acquire any assets, raw materials or properties, or enter into
any other transaction, other than in the ordinary course of business consistent
with past practices;
(viii) enter into any new (or amend any existing) employee benefit
plan, program or arrangement or any new (or amend any existing) employment,
severance or consulting agreement, grant any general increase in the
compensation of officers or employees (including any such increase pursuant to
any bonus, pension, profit-sharing or other plan or commitment) or grant any
increase in the compensation payable or to become payable to any employee,
except in accordance with pre-existing contractual provisions or consistent with
past practices;
-27-
<PAGE> 45
(ix) make or commit to make any material capital expenditure;
(x) pay (except as permitted by subsection (vi) above), loan or advance
any amount to, or sell, transfer or lease any properties or assets to, or enter
into any agreement or arrangement with, any of its Affiliates;
(xi) guarantee any indebtedness for borrowed money or any other
obligation of any other person;
(xii) fail to keep in full force and effect insurance comparable in
amount and scope to coverage maintained by it (or on behalf of it) on the date
hereof;
(xiii) take any other action that would cause any of the
representations and warranties made by it in this Agreement not to remain true
and correct;
(xiv) make any loan, advance or capital contribution to or investment
in any Person;
(xv) make any change in any method of accounting or accounting
principle, method, estimate or practice except for any such change required by
reason of a concurrent change in generally accepted accounting principles or
write-down the value of any inventory or write-off as uncollectible any accounts
receivable except in the ordinary course of business consistent with past
practices;
(xvi) settle, release or forgive any claim or litigation or waive any
right;
(xvii) commit itself to do any of the foregoing.
(b) From and after the date hereof and until the Closing Date, the
Shareholders will cause the Companies to use their reasonable efforts to:
(i) continue to maintain, in all material respects, their properties in
accordance with present practices in a condition suitable for their current use;
(ii) file, when due or required, federal, state, foreign and other Tax
Returns and other reports required to be filed and pay when due all taxes,
assessments, fees and other charges lawfully levied or assessed against them,
unless the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted;
(iii) continue to conduct their business in the ordinary course
consistent with past practices;
(iv) keep their books of account, records and files in the ordinary
course and in accordance with existing practices; and
-28-
<PAGE> 46
(v) continue to maintain existing business relationships with suppliers
and patients to the extent that such relationships are, at the time, judged to
be economically beneficial.
SECTION 8.2. Access to Properties and Records. The Shareholders shall
afford, and shall cause the Companies to afford, to the Buyer and the Buyer's
accountants, counsel and representatives full access during normal business
hours throughout the period prior to the Closing Date (or the earlier
termination of this Agreement pursuant to Article XI) to all the Companies'
properties, books, contracts, commitments and records (including, but not
limited to, tax returns) and, during such period, shall furnish promptly to the
Buyer all other information concerning the Companies' business, properties and
personnel as the Buyer may reasonably request, provided that no investigation or
receipt of information pursuant to this Section 8.2 shall affect any
representation or warranty of the Shareholders or the conditions to the
obligations of the Buyer.
SECTION 8.3. Negotiations. From and after the date hereof, prior to the
Closing or the termination of this Agreement, neither the Shareholders nor the
Companies, their officers or directors nor anyone acting on behalf of the
Shareholders, the Companies or such persons shall, directly or indirectly,
encourage, solicit, engage in discussions or negotiations with, or provide any
information to, any person, firm, or other entity or group (other than the Buyer
or its representatives) concerning any merger, sale of substantial assets,
purchase or sale of shares of common stock or similar transaction involving any
of the Companies. The Shareholders shall promptly communicate to the Buyer any
inquiries or communications concerning any such transaction which they may
receive or of which they may become aware.
SECTION 8.4. Consents and Approvals. (a) The Companies, with the
assistance of the Buyer, (i) shall use their best efforts to obtain all
necessary consents, waivers, authorizations and approvals of all governmental
and regulatory authorities, domestic and foreign, and of all other persons,
firms or corporations required in connection with the execution, delivery and
performance by them of this Agreement, and (ii) shall diligently assist and
cooperate with the Buyer in preparing and filing all documents required to be
submitted by the Buyer to any governmental or regulatory authority, domestic or
foreign, in connection with such transactions and in obtaining any governmental
consents, waivers, authorizations or approvals which may be required to be
obtained by the Buyer in connection with such transactions (which assistance and
cooperation shall include, without limitation, timely furnishing to the Buyer
all information concerning the Shareholders and the Company which counsel to the
Buyer determines is required to be included in such documents or would be
helpful in obtaining any such required consent, waiver, authorization or
approval).
SECTION 8.5. Disposition of Shares. Each Shareholder who is an
affiliate (for the purposes of applying SEC Accounting Series Release No. 135
and SEC Staff Accounting Bulletin (SAB) Nos. 65 and 76) of any of the Companies,
agrees not to dispose of any Inphynet Shares until the date on which financial
results covering at least thirty (30) days of post-Merger combined operations of
Inphynet and the Companies have been published by the Buyer, which shall occur
no later than the filing of the Buyer's quarterly report on Form 10-Q reporting
such results.
-29-
<PAGE> 47
SECTION 8.6. Further Assurances. Upon the request of the Buyer at any
time after the Closing Date, the Shareholders will forthwith execute and deliver
such further instruments of assignment, transfer, conveyance, endorsement,
direction or authorization and other documents as the Buyer or its counsel may
reasonably request in order to effectuate the purposes of this Agreement.
SECTION 8.7. Reasonable Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto will use its reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable consistent with applicable law
to consummate and make effective in the most expeditious manner practicable the
transactions contemplated hereby.
SECTION 8.8. Non-Competition; Non-solicitation of Employees.
(a) Each of the Shareholders agrees for a period of five years (or,
with respect to any particular Shareholder, such shorter period of time and
lesser scope, as such Shareholder is subject to non-competition obligation
pursuant to the Shareholder Employment Agreement to which such Shareholder is a
party), after the Closing Date, except to the extent such Shareholder is
performing services pursuant to the terms of a Shareholder Employment Agreement,
(i) not to (x) directly or indirectly for his/her own benefit (whether as an
officer, director, owner, employer, partner or other participant in any business
or venture) provide or attempt to market any form of radiologic medical services
or consulting or staffing services within five (5) miles (two (2) miles with
respect to Dade, Broward and Palm Beach counties) of any hospital or other
medical facility with which the Company, the Buyers or their affiliates does
radiology business (radiation oncology business in the case of Shareholders
Brizel, Tepperman and Woolfitt), which contract or relationship exists at the
date compliance with this Section 8.8 is being determined or within one (1) year
prior to such date, or with whom the Company, the Buyers or their affiliates has
discussed the possibility of providing radiology (radiation oncology in the case
of Shareholders Brizel, Tepperman and Woolfitt) staffing or services at any time
within the year prior to the date compliance with this Section 8.8 is being
determined or (y) directly or indirectly own or manage any entity providing or
offering to provide teleradiology services to any hospital or other medical
facility with which the Company, the Buyers or their affiliates has a
contractual or business relationship to provide radiology services, which
relationship exists at the date compliance with this Section 8.8 is being
determined or within one (1) year prior to such date, or to whom the Company,
the Buyers or their Affiliates have made a personal presentation regarding the
possibility of providing teleradiology services at any time within the year
prior to the date compliance with this Section 8.8 is being determined; provided
that, in the event a Shareholder's Employment Agreement is terminated pursuant
to Section 9.2(7) of such Agreement, the restrictions in clause (x) above shall
apply only to RAH locations and any facility of the Buyers or any Affiliate of
the Buyers at which the Buyer (or its Affiliates) provide radiology services and
at which such Shareholder has provided services during the one-year period prior
to such termination, and (ii) not to make, offer, solicit or induce to enter
into, any written or oral arrangement, agreement or understanding regarding
employment or retention as a consultant with any person who was, on the date
hereof, a full-time employee of the Company without the written consent of the
Buyer.
-30-
<PAGE> 48
(b) The Shareholders agree that a monetary remedy for a breach of the
agreement set forth in paragraph (a) above will be inadequate and impracticable
and further agree that such a breach would cause the Buyer irreparable harm, and
that the Buyer shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages. In the event of such a breach,
the Shareholders agree that the Buyer shall be entitled to such injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions as a court of competent Jurisdiction shall determine; and
(c) If any provision of this Section 8.8 is invalid in part, it shall
be curtailed, both as to time and location, to the minimum extent required for
its validity under the laws of the State of Florida and shall be binding and
enforceable with respect to the Shareholders as so curtailed.
(d) No shareholder shall be responsible or subject to any liability,
set-off or other remedy as a result of the breach of these provisions by any
other Shareholder.
SECTION 8.9. Notice of Breach. Through the Closing Date, the parties
hereto shall promptly give the other parties written notice with particularity
upon having knowledge of any matter that may constitute a breach of any
representation, warranty, agreement or covenant contained in this Agreement.
Through the closing Date, the Shareholders shall promptly supplement the
Disclosure Schedule (a "Supplement") after the occurrence of any event which
changes or is likely to change in any material respect any statement made by the
Shareholders in this Agreement or in the Disclosure Schedule. Within a ten (10)
day period after receipt of such notice, the Buyer may and shall inform the
Shareholders of the Buyer's election to either (a) waive such breach and
consummate the transactions contemplated by the Agreement, (b) terminate the
Agreement or (c) amend the Agreement (with the concurrence of Shareholders) or
to enter into such other arrangements as may be mutually satisfactory to the
parties hereto.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Buyer in its sole discretion:
SECTION 9.1. Representations and Warranties of Shareholders. All
representations and warranties made by the Shareholders in this Agreement shall
be true and correct on and as of the Closing Date as if again made by the
Shareholders on and as of such date.
SECTION 9.2. Performance of Shareholders' and Companies' obligations.
The Shareholders and Companies shall have performed in all respects all
obligations required under this Agreement to be performed by them on or before
the Closing Date.
-31-
<PAGE> 49
SECTION 9.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement shall
be in full force and effect on the Closing Date.
SECTION 9.4. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or governmental or regulatory
authority, domestic or foreign, nor any statute, rule, regulation, decree or
executive order promulgated or enacted by any government or governmental or
regulatory authority, which declares this Agreement invalid in any respect or
prevents the consummation of the transactions contemplated hereby, or which
materially and adversely affects the assets, properties, operations, prospects,
net income or financial condition of the Company shall be in effect; and no
action or proceeding before any court or governmental or regulatory authority,
domestic or foreign, shall have been instituted or threatened by any government
or governmental or regulatory authority, domestic or foreign, or by any other
person, or entity which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement
SECTION 9.5. No Material Adverse Change. During the period from
December 31, 1994, to the closing Date, there shall not have been any material
adverse change in the assets, properties, business, operations, prospects, net
income or financial condition of the Companies.
SECTION 9.6. Employment Contracts. On or before the Closing Date, all
existing employment agreements and severance agreements between the Company and
any Shareholder shall have been terminated without any liability after the
Closing Date on the part of the Companies, and each of the Shareholders shall
have entered into employment agreements with the Buyer or its designee in the
form attached hereto as Exhibit F.
SECTION 9.7. Opinion of Counsel. The Buyer shall have received a
favorable opinion, dated as of the Closing Date, from Greenberg Traurig, counsel
to the Shareholders, in form and substance reasonably satisfactory to the Buyer
and its counsel, that:
(a) Each of the Companies is duly organized, validly existing and in
good standing under the laws of the State of Florida, and has all requisite
corporate power and authority to own its properties and assets and to conduct
its business as now conducted.
(b) The authorized capital stock of the Companies is as set forth in
Section 6.1. All the Shares have been duly authorized and validly issued, and
are fully paid and non-assessable and no personal liability attaches to the
ownership thereof. The Shares are the sole outstanding shares of capital stock
of the Companies, and, to counsel's knowledge after due inquiry, except as
specifically provided in this Agreement there are no outstanding options,
warrants, agreements, conversion rights, preemptive rights, or other rights to
subscribe for, purchase or otherwise acquire any of the Shares or any unissued
or treasury shares of capital stock of the Companies. The transfer and delivery
of the Shares by the Shareholders to the Buyer as contemplated by this Agreement
will transfer to the Buyer good, marketable title to all the Shares, free and
clear of
-32-
<PAGE> 50
any liens, claims, charges, security interests or other legal or equitable
encumbrances, limitations or restrictions.
(c) This Agreement has been duly executed by the Companies and each of
the Shareholders and constitutes the legal, valid and binding obligation of the
Companies and the Shareholders, enforceable against each of them in accordance
with its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforceability of
creditors' rights generally and except that the remedy of specific performance
or similar equitable relief may be subject to equitable defenses and to the
discretion of the court before which enforcement is sought and provided that no
opinion shall be given with respect to the non-competition provisions of this
Agreement.
(d) The execution, delivery and performance by the Shareholders of this
Agreement do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate nor will result in a breach of or constitute (with due notice or
lapse of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
known to such counsel after inquiry of appropriate of officers of the Company
and of the Shareholders, to which the Shareholders or the Company is a party or
by which any of them is bound or to which any of their respective properties or
assets is subject, nor will result in the creation or imposition of any lien,
charge or encumbrance of any kind whatsoever upon any of the properties or
assets of the Company, nor will result in the cancellation, modification,
revocation or suspension of any of the licenses, franchises, permits,
authorizations or approvals referred to in Section 3.16.
(e) To counsel's knowledge after inquiry of the Shareholders and the
appropriate officers of the Companies, neither the Shareholders nor the Company
(i) has received notice of any violation of any such law, regulation, order or
other legal requirement applicable to it, or (ii) is in default with respect to
any order, writ, judgment, award, injunction or decree of any federal, state or
local court or governmental or regulatory authority or arbitrator, domestic or
foreign, applicable to the Company or any of its assets, properties or
operations.
(f) To counsel's knowledge after inquiry of the Shareholders and the
appropriate officers of the Companies, each of the Employee plans is in
compliance with the requirements provided by any and all statutes, orders or
governmental rules or regulations currently in effect, including, but not
limited to, ERISA and the Code, and applicable to such Employee Plans, where the
failure so to comply would have a material adverse effect on the business of the
Company.
In giving such opinion, such counsel may rely upon certificates of
public officials, upon opinions of local counsel and, as to matters of fact,
upon certificates of the shareholders or officers of the Company, and such
counsel may assume that this Agreement has been duly authorized, executed and
delivered by the Buyer.
SECTION 9.8. Other Closing Documents. The Buyer shall have received
such other certificates, instruments and documents in confirmation of the
representations and
-33-
<PAGE> 51
warranties of the Shareholders or in furtherance of the transactions
contemplated by this Agreement as the Buyer or its counsel may reasonably
request.
SECTION 9.9. Legal Matters. All certificates, instruments, opinions and
other documents required to be executed or delivered by or on behalf of the
Shareholders under the provisions of this Agreement, and all other actions and
proceedings required to be taken by or on behalf of the Shareholders in
furtherance of the transactions contemplated hereby, shall be reasonably
satisfactory in form and substance to counsel for the Buyer.
SECTION 9.10. Letter from Companies' Accountants. On or before the
Closing Date, the Buyer shall have received from Companies' Accountants a letter
in form and substance satisfactory to Buyer stating that the transaction
contemplated by this Agreement is eligible to be accounted for as a pooling of
interests.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF SHAREHOLDERS
The obligations of the Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by the Shareholders in their sole discretion:
SECTION 10.1. Representations and Warranties of Buyer. All
representations and warranties made by the Buyer in this Agreement shall be true
and correct on and as of the Closing Date as if again made by the Buyer on and
as of such date.
SECTION 10.2. Performance of Buyers' Obligations. The Buyer shall have
performed in all respects all obligations required under this Agreement to be
performed by it on or before the Closing Date.
SECTION 10.3. Consents and Approvals. All consents, waivers,
authorizations and approvals of any governmental or regulatory authority,
domestic or foreign, and of any other person, firm or corporation, required in
connection with the execution, delivery and performance of this Agreement, shall
be in full force and effect on the Closing Date.
SECTION 10.4. No Violation of Orders. No preliminary or permanent
injunction or other order issued by any court or other governmental or
regulatory authority, domestic or foreign, nor any statute, rule, regulation,
decree or executive order propagated or enacted by any government or
governmental or regulatory authority, domestic or foreign, that declares this
Agreement invalid or unenforceable in any respect or which prevents the
consummation of the transactions contemplated hereby, or which materially and
adversely affects the assets, properties, operations, prospects, net income or
financial condition of the Buyer and its subsidiaries, taken as a whole, shall
be in effect; and no action or proceeding before any court or governmental or
regulatory authority, domestic or foreign, shall have been instituted or
threatened by any government or governmental or regulatory authority, domestic
or foreign, or by any other person, or entity which seeks to prevent or delay
the consummation of the
-34-
<PAGE> 52
transactions contemplated this Agreement or which challenges the validity or
enforceability of this Agreement.
SECTION 10.5. Registration Rights.
(a) Each of the Shareholders shall have had an opportunity on the
Closing Date to have become parties to a registration rights agreement dated
August 26, 1994, a copy of which is attached hereto as Exhibit D (the
"Registration Rights Agreement"), with the Buyer covering the Inphynet Shares.
(b) In addition to the Shareholders' rights as "Holders" pursuant to
the terms of the Registration Rights Agreement and notwithstanding the
limitations set forth in Section 2.1(i) of the Registration Rights Agreement,
the Shareholders shall have the right to demand registration pursuant to the
Registration Rights Agreement of all or a portion of the Common Stock under the
Securities Act of 1933, as amended (the "Act"), at any time after the six month
anniversary of the Closing Date, provided that (i) prior to such request the
Shareholders have not had an opportunity to register and sell shares of Common
Stock with a Market Value (as such term is defined in the Registration Rights
Agreement) greater than $12,000,000 and (ii) the Market Value of shares
requested to be registered is greater than $12,000,000 and less than $15,000,000
and provided further, that not more than 50% of the Inphynet Shares may be sold
pursuant to such demand registration and any prior piggy back registrations.
SECTION 10.6. Board of Directors Appointment. Effective on the Closing
Date, Stanley Margulies, M.D. shall have been appointed to the Buyer's Board of
Directors.
SECTION 10.7. Opinion of Counsel. The Buyer shall have received a
favorable opinion, dated as of the Closing Date, from David C. Peck, Esq.,
Co-General Counsel of Inphynet, in form and substance reasonably satisfactory to
the Shareholders and their counsel, that:
(a) Each of the Buyers is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own its properties and assets and to conduct
its business as now conducted. The authorized capital stock of the Buyers is as
set forth in Section 7.1(b).
(b) The transfer and delivery of the Inphynet Shares to the
Shareholders will transfer to the Shareholders good, marketable title to all the
Shares, free and clear of any liens, claims, charges, security interests or
other legal or equitable encumbrances, limitations or restrictions.
(c) This Agreement has been duly executed by each of the Buyers and
constitutes the legal, valid and binding obligation of the Buyers, enforceable
against each of them in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws relating to or
affecting the enforceability of creditors' rights generally and except that the
remedy of specific performance or similar equitable relief may be subject to
equitable defenses and to the discretion of the court before which enforcement
is sought, provided that no opinion need be given regarding the non-competition
provision of the Agreement.
-35-
<PAGE> 53
(d) The execution, delivery and performance by the Buyers of this
Agreement do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate nor will result in a breach of or constitute (with due notice or
lapse of time or both) a default under any contract, lease, loan agreement,
mortgage, security agreement, trust indenture or other agreement or instrument
known to such counsel after inquiry of appropriate officers of the Buyers, to
which either of the Buyers is a party or by which any of them is bound or to
which any of their respective properties or assets is subject, nor will result
in the creation or imposition of any lien, charge or encumbrance of any kind
whatsoever upon any of the properties or assets of the Company.
In giving such opinion, such counsel may rely upon certificates of
public officials, upon opinions of local counsel and, as to matters of fact,
upon certificates of officers of the Buyers, and such counsel may assume that
this Agreement has been duly authorized, executed and delivered by the
Shareholders.
SECTION 10.8. No Material Adverse Change. During the period from March
31, 1995, to the Closing Date, there shall not have been any material adverse
change in the assets, properties, business, operations, prospects, net income or
financial condition of Inphynet.
SECTION 10.9. Other Closing Documents. The Shareholders shall have
received such other certificates, instruments and documents in confirmation of
the representations and warranties of the Buyers or in furtherance of the
transactions contemplated by this Agreement as the Shareholders or their counsel
may reasonably request.
SECTION 10.10. Letter from Companies' Accountants. On or before the
Closing Date, the Shareholders shall have received from Companies' Accountants a
letter in form and substance satisfactory to the Shareholders stating that the
transaction contemplated by this Agreement is eligible to be accounted for as a
pooling of interests.
SECTION 10.11. Legal Matters. All certificates, instruments, opinions
and other documents required to be executed or delivered by or on behalf of the
Buyers under the provisions of this Agreement, and all other actions and
proceedings required to be taken by or on behalf of the Buyers in furtherance of
the transactions contemplated hereby, shall be reasonably satisfactory in form
and substance to counsel for the Shareholders.
ARTICLE XI
TERMINATION AND ABANDONMENT
SECTION 11.1. Methods of Termination; Upset Date. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
before the Closing:
(a) By the mutual written consent of the Shareholders and the Buyer;
-36-
<PAGE> 54
(b) By the Buyer, if all the conditions set forth in Article VI of this
Agreement shall not have been satisfied or waived on or before the Closing Date;
(c) By the Shareholders, acting by majority vote, if all the conditions
set forth in Article VII of this Agreement shall not have been satisfied or
waived on or before the Closing Date;
(d) By either the Shareholders, acting by majority vote, or the Buyer
if the other party hereto fails to comply in any material respect with any of
its covenants or agreements contained herein, or breaches its representations
and warranties in any material way;
(e) By either the Shareholders, acting by majority vote, or the Buyer
if a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties hereto
shall use their best efforts to lift), which permanently restrains, enjoins or
otherwise prohibits the transactions contemplated by this Agreement; or
(f) By either the Shareholders, acting by majority vote of the Shares
of RAH, or the Buyer at any time after September 7, 1995.
SECTION 11.2. Procedure Upon Termination. In the event of termination
and abandonment of this Agreement by the Shareholders or the Buyer pursuant to
Section 11.1, written notice thereof shall forthwith be given to the other party
and this Agreement shall terminate and the transactions contemplated hereby
shall be abandoned, without further action by the Shareholders or the Buyer. If
this Agreement is terminated as provided herein, no party to this Agreement
shall have any liability or further obligation to any other party to this
Agreement except as provided in Sections 13.1, 13.4 and 13.5 hereof; provided,
however, that no termination of this Agreement pursuant to this Article XI shall
relieve any party of liability for a breach of any provision of this Agreement
occurring before such termination.
ARTICLE XII
INDEMNIFICATION
SECTION 12.1. Indemnification by Shareholders. Notwithstanding the
Closing or the delivery of the Shares and regardless of any investigation at any
time made by or on behalf of the Buyer or of any knowledge or information that
the Buyer may have, each of the Shareholders, jointly and severally, agrees to
indemnify and to fully defend, save and hold the Buyer, the Company, and any
Affiliate of the Buyer, harmless if the Buyer, any Affiliate of the Buyer or the
Company, shall at any time or from time to time suffer any damage, liability,
loss, cost, expense (including all reasonable attorneys' fees), claim or cause
of action arising out of or resulting from, or shall pay or become obligated to
pay any sum on account of, any and all Shareholder Events of Breach. As used
herein, "Shareholder Event of Breach" shall be and mean any one or more of the
following:
-37-
<PAGE> 55
(a) any untruth or inaccuracy in any representation of the Shareholders
or the breach of any warranty of the Shareholders (including, without
limitation, (i) any misrepresentation in, or omission from, any statement,
certificate, schedule, exhibit, annex or other document furnished pursuant to
this Agreement by the Shareholders or the Company (or any representative of the
Shareholders or the Company) to the Buyer (or any representative of the Buyer)
and any misrepresentation in or omission from any certificate furnished to the
Buyer at the Closing; (ii) any and all liabilities of or claims against the
Company, the Buyer (or any of its Affiliates) arising out of any action, suit,
proceeding, dispute or investigation or order, writ, judgment, award,
in-junction or decree of the character described in Sections 6.18 or 6.22 in any
such case to the extent not set forth in Sections 6.18 or 6.22 of the Disclosure
Schedule, net of insurance proceeds, if any, to the extent received by the
Company, the Buyer or any of Buyer's Affiliates);
(b) any failure of the Shareholders duly to perform or observe any
term, provision, covenant, agreement or condition on the part of the
Shareholders to be performed or observed (except as set forth in Section
8.8(d));
(c) any and all liabilities or claims against the Company, the Buyer or
any Affiliate of the Buyer arising out of (i) the failure by Gulf Atlantic
Insurance Company to pay insured claims in a timely manner, or (ii) any notice,
demand, claim, action, suit, inquiry, hearing or proceeding with respect to a
Professional Liability Lawsuit occurring after January 1, 1995 and prior to the
Closing Date, which is not set forth on Schedule 6.22 to the Disclosure Schedule
and which is a ["claim" or "incident"] under the Gulf Atlantic policy described
in Section 6.21 of the Disclosure Schedule, net of insurance proceeds, if any,
to the extent received by the Company, the Buyer or any of Buyer's Affiliates);
provided, however, that (A) the Shareholders shall have no obligation to make
any payment to the Buyer under Section 12.1(a) with respect to any
representation or warranty made in good faith without knowledge or notice of
falsity unless the aggregate amount to which the Buyer is entitled by reason of
all such claims exceeds $100,000, it being understood that once such amount is
exceeded, the aggregate of all such claims shall be payable on demand by the
Shareholders, subject to the limitation hereinafter set forth, and (ii) in no
event shall the aggregate liability of the Shareholders tinder this Article XII
exceed $15,000,000.
SECTION 12.2. Indemnification by Buyer. Notwithstanding the Closing or
the delivery of the Shares and regardless of any investigation at any time made
by or on behalf of the Shareholders of any knowledge or information that the
Shareholders may have, the Buyers agree to indemnify and to fully defend, save
and hold each of the Shareholders harmless if a Shareholder shall at any time or
from time to time suffer any Damages arising out of or resulting from, or shall
pay or become obligated to pay any sum on account of, any and all Buyer Events
of Breach. As used herein, "Buyer Event of Breach" shall be and mean any one or
more of the following:
(a) any untruth or inaccuracy in any representation of the Buyers or
the breach of any warranty of the Buyers (including, without limitation, any
misrepresentation in, or omission from, any statement, certificate, schedule,
exhibit, annex or other document furnished pursuant to this Agreement by the
Buyers (or any representative of the Buyers) to a Shareholder (or any
-38-
<PAGE> 56
representative of a Shareholder) and any misrepresentation in or omission from
any document furnished by the Buyers to a Shareholder in connection with the
Closing); and
(b) any failure of the Buyers duly to perform or observe any term,
provision, covenant, agreement or condition on the part of the Buyers to be
performed or observed;
provided, however, that (A) the Buyers shall have no obligation to make
any payment to any Shareholder under Section 12.2(a) with respect to any
representation or warranty made in good faith without knowledge or notice of
falsity unless Damages claimed is in excess of $100,000, it being understood
that once such amount is exceeded the aggregate of all such claims shall be
payable on demand by the Buyers, and (B) in no event shall the aggregate
liability of the Buyers under this Article XII exceed $15,000,000.
SECTION 12.3. Procedures. (a) If an Event of Breach occurs or is
alleged and any party (the "Indemnified Party") asserts that another party (the
"Indemnifying Party") has become obligated pursuant to Section 12.1 or 12.2, or
if any third-party suit, action, investigation, claim or proceeding is begun,
made or instituted as a result of which the Indemnifying Party may become
obligated to an another party hereunder, the Indemnified Party shall give
written notice to the Indemnifying Party. The Indemnifying Party agrees to
defend, contest or otherwise protect the Indemnified Party against any such
suit, action, investigation, claim or proceeding at the Indemnifying Party's
sole cost and expense. The Indemnified Party shall have the right, but not the
obligation, to participate at its own expense in the defense thereof by counsel
of the Indemnified Party's choice and shall in any event cooperate with and
assist the Indemnifying Party to the extent reasonably possible. If the
Indemnifying Party fails timely to defend, contest or otherwise protect against
such suit, action, investigation, claim or proceeding, the Indemnifying Party
shall have the right to do so, including, without limitation, the right to make
any compromise or settlement thereof, and the Indemnifying Party shall be
entitled to recover the entire cost thereof from the Indemnifying Party
including without limitation, reasonable attorneys' fees, disbursements and
amounts paid as the result of such suit, action, investigation, claim or
proceeding.
(b) The Indemnifying Party shall not be required to make any payment of
Damages to the Indemnified Party under this Article XII until: (i) the
Indemnified Party shall have given the Indemnifying Party a detailed written
notice of the total amount of Damages claimed in connection with the facts
giving rise to the right of indemnification, including the amount of any final,
nonappealable disposition of any third-party claims; (ii) the Indemnifying Party
shall, not later than forty-five (45) calendar days after receipt of such
notice, render a report thereon which shall agree with the amount of Damages
claimed, or take exceptions thereto and detail the Indemnifying Party's
adjustments thereto (the "Indemnifying Party's Report"). If the Indemnifying
Party fails to deliver to the Indemnified Party the Indemnifying Party's Report
within forty-five (45) calendar days following receipt of the Indemnified
Party's notice, the Indemnifying Party shall be deemed to have accepted the
contents of such notice for purposes of this Article XII, and payment of the
amount of Damages set forth therein shall be immediately due and payable by the
Indemnifying Party to the Indemnified Party. The Indemnified Party shall have
thirty (30) calendar days after receipt of the Indemnifying Party's Report to
notify the
-39-
<PAGE> 57
Indemnifying Party of any objections to the same. If the Indemnified Party does
not given the Indemnifying Party notice of objections within such thirty (30)
calendar days, the Indemnified Party shall be deemed to have accepted the
adjustments to its claim set forth in the Indemnifying Party's Report for
purposes of this Article XII, and payment of the amount of Damages set forth
therein, if any, shall be immediately due and payable by the Indemnifying Party
to the Indemnified Party. If the Indemnified Party gives the Indemnifying Party
notice of objections to the adjustments in the Indemnifying Party's Report, and
if the Indemnifying Party and the Indemnified Party are unable, within fifteen
(15) calendar days after receipt by the Indemnifying Party of the notice of the
Indemnified Party of such objections, to resolve the disputed objections, such
disputed objections will be submitted to a court of competent jurisdiction in
accordance with Section 13.12 of this Agreement.
(c) Any payment of Damages by an Indemnifying Party shall be made in
such a manner and form that will not preclude Inphynet from accounting for the
Merger as a pooling-of-interests.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.1. Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
(except covenants and agreements which are expressly required to be performed
and are performed in full on or before the Closing Date) shall survive the
Closing Date and the consummation of the transactions contemplated by this
Agreement, subject to Section 6.27. In the event of a breach of any of such
representations, warranties or covenants, the party to whom such
representations, warranties or covenants have been made shall have all rights
and remedies for such breach available to it under the provisions of this
Agreement or otherwise, whether at law or in equity, regardless of any
disclosure to, or investigation made by or on behalf of such party on or before
the Closing Date.
SECTION 13.2. Publicity. Neither party shall cause the publication of
any press release or other announcement with respect to this Agreement or the
transactions contemplated hereby without the consent of the other party, unless
a press release or announcement is required by law. If any such announcement or
other disclosure is required by law, the disclosing party agrees to give the
nondisclosing party prior notice and an opportunity to comment on the proposed
disclosure.
SECTION 13.3. Successors and Assigns; No Third-Party Beneficiaries.
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective successors and assigns; provided, however, that
neither party shall assign or delegate any of the obligations created under this
Agreement without the prior written consent of the other party. Notwithstanding
the foregoing, the Buyer shall have the unrestricted right to assign this
Agreement and to delegate all or any part of its obligations hereunder to any
Affiliate of the Buyer, but in such event the Buyer shall remain fully liable
for the performance of all of such obligations in the manner prescribed in this
Agreement. Nothing in this Agreement shall confer
-40-
<PAGE> 58
upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity (except for the rights of Affiliates
under Article XII of this Agreement), any rights or remedies of any nature or
kind whatsoever under or by reason of this Agreement.
SECTION 13.4. Investment Bankers, Financial Advisors, Brokers and
Finders.
(a) The Shareholders represent and warrant to the Buyer that, they have
not employed the services of a broker or finder in connection with this
Agreement or any of the transactions contemplated hereby, except for Raymond
James & Associates whose fees and expenses in connection with the transactions
contemplated by this Agreement have been or will be paid by the Companies prior
to the Closing Date or the Surviving Corporation immediately thereafter. The
Shareholders, jointly and severally, agree to indemnify and to defend and hold
the Buyer and the Company harmless against and in respect of all claims, losses,
liabilities and expenses which may be asserted against the Buyer (or any
Affiliate of the Buyer), and the Company by any broker or other person who
claims to be entitled to an investment banker's, financial advisor's, broker's,
finder's or similar fee or commission in respect of the execution of this
Agreement, or the consummation of the transactions contemplated hereby, by
reason of his acting at the request of the Shareholders or the Company.
(b) The Buyer represents and warrants to the Shareholders that it has
not employed the services of an investment banker, financial advisor, broker or
finder in connection with this Agreement or any of the transactions contemplated
hereby. The Buyer agrees to indemnify and to save and hold the Shareholders
harmless against and in respect of all claims, losses, liabilities, fees, costs
and expenses which may be asserted against them by any broker or other person
who claims to be entitled to an investment banker's, financial advisor's,
broker's, finder's or similar fee or commission in respect of the execution of
this Agreement or the consummation of the transactions contemplated hereby, by
reason of his acting at the request of the Buyer.
(c) Except as otherwise expressly provided in this Agreement, all legal
and other fees, costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such fees, costs or expenses; provided that, the aggregate of all such fees,
costs and expenses (including all amounts paid to Raymond James & Associates as
described in paragraph (a) above) that the Companies and the Surviving
corporation are required to pay shall not exceed an aggregate of $525,000, and
any such fees, costs and expenses above such amount shall be paid by the
Shareholders.
SECTION 13.5. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been given
or made if in writing and delivered personally or sent by registered or
certified mail (postage prepaid, return receipt requested) to the parties at the
following addresses:
(a) If to the Buyer, to:
Inphynet Medical Management Inc.
1200 South Pine Island Road, Suite 600
Ft. Lauderdale, Florida 33324-4460
-41-
<PAGE> 59
Attention: Chief Executive Officer
with a copy to:
EMSA Limited Partnership
1200 South Pine Island Road, Suite 600
Ft. Lauderdale, Florida 33324-4460
Attention: General Counsel
(b) If to the Shareholders, to:
with a copy to:
Greenberg Traurig
1221 Brickell Avenue
Miami, Florida 33131
Attention: Gary M. Epstein
or to such other persons or at such other addresses as shall be furnished by
either party by like notice to the other, and such notice or communication shall
be deemed to have been given or made as of the date so delivered or mailed. No
change in any of such addresses shall be effective insofar as notices under this
Section 13.5 are concerned unless such changed address is located in the United
States of America and notice of such change shall have been given to such other
party hereto as provided in this Section 13.5.
SECTION 13.6. Entire Agreement. This Agreement, together with the
exhibits hereto, represents the entire agreement and understanding of the
parties with reference to the transactions set forth herein and no
representations or warranties have been made in connection with this Agreement
other than those expressly set forth herein or in the exhibits, certificates and
other documents delivered in accordance herewith. This Agreement supercedes all
prior negotiations, discussions, correspondence, communications, understandings
and agreements between the parties relating to the subject matter of this
Agreement and all prior drafts of this Agreement, all of which are merged into
this Agreement. No prior drafts of this Agreement and no words or phrases from
any such prior drafts shall be admissible into evidence in any action or suit
involving this Agreement.
SECTION 13.7. Waivers and Amendments. The Shareholders, acting by
majority vote, and the Buyer may by written notice to the other (a) extend the
time for the performance of any of the obligations or other actions of the
other; (b) waive any inaccuracies in the representations and warranties of the
other contained in this Agreement; (c) waive compliance with any of the
covenants of the other contained in this Agreement; (d) waive performance of any
of the obligations of the other created under this Agreement; or (e) waive
fulfillment of any of the conditions to its own obligations under this
Agreement. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
-42-
<PAGE> 60
subsequent breach, whether or not similar. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the parties
hereto.
SECTION 13.8. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 13.9. Titles and Headings. The Article and Section headings and
the Table of Contents contained in this Agreement are solely for convenience of
reference and shall not affect the meaning or interpretation of this Agreement
or of any term or provision hereof.
SECTION 13.10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
SECTION 13.11. Convenience of Forum; Consent to Jurisdiction. The
parties to this Agreement, acting for themselves and for their respective
successors and assigns, without regard to domicile, citizenship or residence,
hereby expressly and irrevocably elect as the sole judicial forum for the
adjudication of any matters arising under or in connection with this Agreement,
and consent and subject themselves to the jurisdiction of, the courts of the
State of Florida located in Broward County, and/or the United States District
Court for the Southern District of Florida, in respect of any matter arising
under this Agreement. Service of process, notices and demands of such courts may
be made upon any party to this Agreement by personal service at any place where
it may be found or giving notice to such party as provided in Section 13.5.
SECTION 13.12. Enforcement of the Agreement. The parties hereto agree
that irreparable damage would occur if any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. it is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereto, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 13.13. Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws of the State of Florida
without giving effect to the choice-of-law provisions thereof.
-43-
<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
INPHYNET MEDICAL MANAGEMENT INC.
By:
-------------------------------------
Title:
IMMI RADIOLOGY ACQUISITION CORPORATION
-------------------------------------
Name:
Title:
RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A.
/s/
-------------------------------------
Name:
Title:
IMAGING HEALTH SERVICES, INC.
/s/ Sheldon Morel
-------------------------------------
Name:
Title:
HOLLYWOOD PROFESSIONAL COLLECTIONS, INC.
/s/
-------------------------------------
Name:
Title:
-44-
<PAGE> 62
SHAREHOLDERS
By: /s/
-------------------------------------
By: /s/
-------------------------------------
By: /s/
-------------------------------------
By: /s/
-------------------------------------
By: /s/
-------------------------------------
By: /s/
-------------------------------------
By: /s/
-------------------------------------
-45-
<PAGE> 63
SHAREHOLDERS
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/ Lester Goldberg
-------------------------------------
By:/s/ Jeffrey
-------------------------------------
By:/s/
-------------------------------------
-46-
<PAGE> 64
SHAREHOLDERS
By: /s/
-------------------------------------------
By: /s/
-------------------------------------------
By: /s/
-------------------------------------------
By: /s/
-------------------------------------------
By: /s/ Jonathan _____________
by David Alan, Attorney-in-fact
-------------------------------------------
By: /s/ Sheldon Morel
-------------------------------------------
By: /s/
-------------------------------------------
-47-
<PAGE> 65
SHAREHOLDERS
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:
-------------------------------------
By:
-------------------------------------
By:
-------------------------------------
-48-
<PAGE> 66
DISCLOSURE SCHEDULE
for
MERGER AGREEMENT
between
Inphynet Medical Management Inc.,
IMMI Radiology Acquisition Corporation,
Radiology Associates of Hollywood, P.A.,
Imaging Health Services, Inc.
and
Hollywood Professional Collections, Inc.
and
The Shareholders of
Radiology Associates of Hollywood, P.A.,
Imaging Health Services, Inc.
and
Hollywood Professional Collections, Inc.
Dated as of , 1995 (the "Agreement")
Unless otherwise defined in this Disclosure Schedule, all capitalized
terms used herein shall have the meanings ascribed to them in the Agreement.
This Disclosure Schedule shall be deemed to be part of the Agreement.
Disclosure of any matter pursuant to one provision, subprovision,
section or subsection hereof, or in the Financial Statements is not shall not be
considered as disclosure pursuant to any other provision, subprovision, section
or subsection of this Disclosure Schedule to the extent the Agreement requires
such disclosure.
This Disclosure Schedule supersedes and replaces any other Disclosure
Schedules previously provided to the Buyer. Any such earlier Disclosure Schedule
has no force or effect.
-1-
<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
IMPHYNET MEDICAL MANAGEMENT INC.
By:/s/J. Clifford Findeiss
----------------------------------------
J. Clifford Findeiss President, C.E.O.
IMMI RADIOLOGY ACQUISITION CORPORATION
/s/
----------------------------------------
Name:
Title:
ROSENDORF, MARGULIES, BORUSHOK AND
SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, P.A.
/s/
----------------------------------------
Name:
Title:
IMAGING HEALTH SERVICES, INC.
/s/
----------------------------------------
Name:
Title:
HOLLYWOOD PROFESSIONAL COLLECTIONS, INC.
/s/
----------------------------------------
Name:
Title:
-2-
<PAGE> 68
Delivered to the Buyer this day of , 1995.
INPHYNET MEDICAL MANAGEMENT INC.
By:
----------------------------------------
Title:
IMMI RADIOLOGY ACQUISITION CORPORATION
----------------------------------------
Name:
Title:
RADIOLOGY ASSOCIATES OF HOLLYWOOD, P.A.
/s/
----------------------------------------
Name:
Title:
IMAGING HEALTH SERVICES, INC.
/s/ Sheldon Morel
----------------------------------------
Name:
Title:
HOLLYWOOD PROFESSIONAL COLLECTIONS, INC.
/s/
----------------------------------------
Name:
Title:
-3-
<PAGE> 69
SHAREHOLDERS
By:/s/ Ryan
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/ Sheldon Morel
-------------------------------------
By:/s/ Michael
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
By:/s/ Michael B.
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
Received of the Shareholder this day of , 1993.
By:/s/ Paul H.
-------------------------------------
By:/s/ Lester Goldberg
-------------------------------------
By:/s/ Jeffrey Dach
-------------------------------------
By:/s/
-------------------------------------
By:/s/
-------------------------------------
-4-
<PAGE> 70
EXHIBIT A
Shareholders of Radiology Associates of Hollywood, P.A.,
Imaging Health Services, Inc.
and
Hollywood Professional Collections, Inc.
<PAGE> 1
Exhibit 3.62
BYLAWS
OF
ROSENDORF, MARGULIES, BORUSHOK & SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
(A FLORIDA CORPORATION)
ARTICLE I
OFFICES
1.1. Principal Office and Other Offices. The principal office
of ROSENDORF, MARGULIES, BORUSHOK & SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, INC., (the "Corporation") shall be located at such place within or
outside the State of Florida (the "State") as the Board of Directors (the
"Board") may from time to time designate. The Corporation may have other offices
for the transaction of the affairs of the Corporation located at such other
places both within and without the State as the Board may from time to time
designate or as the business of the Corporation may require.
1.2. Registered Office and Agent. The Corporation shall have
and continuously maintain in the State a registered office and have a registered
agent, as required by law. Such office may, but need not, be identical with the
principal office of the Corporation in the State of Florida. The Corporation may
from time to time change its registered office or its registered agent, or both,
by a resolution of the Board that adopts the change and authorizes the president
or vice-president to execute and submit for filing with the Department of State
a statement of change setting forth the information required by law. Any new
registered agent designated by such statement shall acknowledge in writing such
statement, and any new or successor registered agent shall simultaneously file
with the Department of State a written statement, in the form and manner
prescribed by law, accepting the appointment and stating the registered agent's
familiarity with and acceptance of the obligations provided for under the laws
of the State.
ARTICLE II
SHAREHOLDERS
2.1. Annual Meetings. The annual meeting of shareholders for
the purpose of electing directors and for the transaction of such other matters
as may properly come before the meeting shall be held beginning at 10 a.m. on
the 2nd Tuesday in March of each year or at such other time and date as may be
fixed by or under the authority of the Board; provided, the annual meeting of
the shareholders for any year shall be held no later than thirteen (13) months
after the last annual meeting of the shareholders. However, failure to hold a
timely annual meeting shall in no way affect the terms of officers or directors
of the Corporation or the validity of actions of the Corporation.
2.2. Special Meeting. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute, may be
called by the president or the Board or by the person designated in one or more
written request(s) of the holders of not less than ten (10) percent of all the
votes entitled to be cast on any issue proposed to be considered at such special
meeting,
-1-
<PAGE> 2
which requests must be delivered to the Corporation's secretary describing the
purpose or purposes for which such meeting is to be held.
2.3. Place of Meeting. The Board may designate any place,
either within or without the State, as the place of meeting for any annual
meeting or for any special meeting called by the Board. A waiver of notice
signed by all shareholders entitled to vote at a meeting may designate any place
either within or without the State as the place for the holding of such meeting.
If no designation is made for the place of meeting, or if the meeting is
otherwise called, then the place of meeting shall be the principal business
office of the Corporation within the State or such other suitable place in the
county of such principal office as may be designated by the person calling such
meeting, but any meeting may be adjourned to reconvene at any place designated
by vote of a majority of the shares represented thereat.
2.4. Notice of Meeting. A written notice of each shareholders'
meeting stating the place, day, and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be delivered either personally or by first-class mail to each shareholder of
record entitled to vote at such meeting not less than ten (10) or more than
sixty (60) days before the date of the meeting. Notice shall be given by or at
the direction of the president, the secretary, or the officer or persons calling
the meeting. If notice is by mail, such notice shall be deemed to have been
delivered when deposited with postage prepaid thereon in the United States mail,
addressed to the shareholder at the address of the shareholder as it appears on
the stock transfer books of the Corporation.
2.5. Waiver of Notice. A written waiver of notice signed by a
shareholder who was entitled to notice of a meeting of the shareholders, whether
the waiver is given before or after the time required for the notice, shall be
equivalent to the giving of such notice provided such written waiver is
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. A shareholder's attendance at a meeting shall constitute a
waiver of notice of such meeting unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting business at the meeting.
Further, in the case of a special meeting, a shareholder's attendance shall
constitute a waiver of objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
2.6. Adjournment. Any meeting of the shareholders may be
adjourned to another time or place by a majority vote of the shares entitled to
vote and which are represented at the meeting. When all of the shares entitled
to vote are represented in person or by proxy at a meeting, and such meeting is
adjourned to another time or place, it shall not be necessary to give any notice
of the adjourned meeting, if the time and the place to which the meeting is
adjourned are announced at the meeting at which the adjournment is taken. Any
business may be transacted at such adjourned meeting that might have been
transacted at the original meeting. If all of the shares entitled to vote are
not represented at the meeting at which adjournment is taken, then notice of the
adjourned meeting as required by Section 2.04 of these Bylaws shall be given to
each shareholder of record. In all cases, however, if, after the adjournment,
the Board fixes a new record date for the adjourned meeting, then notice of the
adjourned meeting shall be given as provided in this Article II to each
shareholder of record under the new record date who is entitled to vote at the
adjourned meeting.
-2-
<PAGE> 3
2.7. Fixing of Record Date. For the purpose of determining the
shareholders who are entitled to receive notice of or to vote at any
shareholders' meeting or any adjournment thereof, to express consent to
corporate action in writing without a meeting, or to receive payment of any
dividend or other distribution or allotment of any rights, and pursuant to any
other purpose requiring a determination of shareholders, the Board may fix, in
advance, a record date for any such determination of shareholders. Such record
date shall not be more than seventy (70) days before the date on which the
particular action requiring such determination of shareholders is to be taken.
If no such record date is fixed, then the date on which notice of a
shareholders' meeting is delivered or the date on which the Board adopts a
resolution declaring a dividend, as the case may be, shall be the record date
for such determination of shareholders. In the case of an adjourned meeting, the
record date for the original meeting shall apply to the adjournment thereof,
unless the Board fixes a new record date in accordance with these Bylaws;
provided, however, that the Board shall be required to fix a new record date for
such adjourned meeting if the adjournment is to a date more than 120 days after
the date fixed for the original meeting.
2.8. Record of Shareholders Having Voting Rights. After fixing
a record date for a shareholders' meeting, the secretary of the Corporation
shall, at least ten (10) days before such meeting, prepare a complete,
alphabetical list of the shareholders entitled to notice of such meeting,
arranged by the voting groups of the shareholders entitled to vote on the
matters to come before the meeting, with the address of, and the number, class
and series, if any, of shares held by each. For a period of ten (10) days prior
to the meeting, or such shorter time as exists between the record date and the
meeting and continuing through the meeting, the shareholders list shall be made
available for inspection at the Corporation's principal office, at a place
identified in the meeting notice in the city where the meeting will be held, or
at the office of the Corporation's transfer agent or registrar, and such list
shall be subject to inspection upon written demand by any shareholder or the
shareholder's agent or attorney, at the shareholder's expense, at any time
during usual business hours during the period it is available for inspection.
Such list shall also be available at the meeting, and any shareholder or the
shareholder's agent or attorney is entitled to inspect the list at any time
during the meeting or any adjournment thereof. If the requirements of this
Section 2.08 have not been substantially complied with, then upon the demand, in
person or by proxy, of any shareholder who failed to get access to such list,
the meeting shall be adjourned until the requirements of this Section are
complied with; provided, however, that any failure to comply with the
requirements of this Section shall not affect the validity of any action taken
at such meeting.
2.9. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of the shareholders. If a quorum exists, action on a matter, other
than the election of directors, is approved if the votes cast by the holders of
the shares represented at the meeting and entitled to vote on the subject matter
favoring the action exceed the votes cast opposing the action, unless the vote
of a greater number is required by law, the Articles of Incorporation, or these
Bylaws. After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, which reduces the number of shares
entitled to vote below the number required for a quorum, shall not affect the
validity of any action taken at the meeting or any adjournment thereof.
2.10. Conduct of Meeting. The president, and in the
president's absence, a vice-president in the order provided under Section 4.6,
and in their absence, any person chosen by the shareholders present, shall call
the meeting of the shareholders to order and shall act as chairman of
-3-
<PAGE> 4
the meeting, and the secretary of the corporation shall act as secretary of all
meetings of the shareholders, but, in the absence of the secretary, the person
acting as chairman of the meeting may appoint any other person to act as
secretary of the meeting.
2.11. Proxies. Every shareholder entitled to vote at a
shareholders' meeting, or entitled to express consent or dissent without a
meeting, or the duly authorized attorney-in-fact of such shareholder, may
authorize another person or other persons to act as the shareholder's proxy. A
shareholder may appoint a proxy to vote or otherwise act for the shareholder by
signing an appointment form, either personally or by the shareholder's
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be a sufficient appointment form. An
appointment of a proxy is effective when received by the secretary or other
officer or agent authorized to tabulate votes, and unless otherwise stated in
the appointment form, the appointment of a proxy shall be valid only for a
period of eleven (11) months. Every appointment of a proxy shall be revocable at
the pleasure of the shareholder who executed it, except as otherwise provided by
law.
The authority of a proxy to act shall not be revoked by the
death or incapacity of the shareholder who executed the appointment, unless,
before the authority is exercised under the appointment, notice of such death or
incapacity is received by the secretary of the Corporation or other agent of the
Corporation authorized to tabulate votes.
Any proxy may appoint, in writing, a substitute to act in the
proxy's place, if the appointment of the proxy expressly provides for such
substitution. If an appointment confers proxy authority upon more than one
person, and if the appointment does not otherwise provide, a majority of the
authorized persons, or, if only one is present, then that one, may exercise all
the powers conferred by the appointment; provided, however, if the proxies
present at the meeting are equally divided as to the right and manner of voting,
then the voting of such shares shall be prorated.
2.12. Voting of Shares. Subject to the provisions of this
Article II of these Bylaws, the Articles of Incorporation, and the laws of the
State, each outstanding share shall be entitled to one vote on each matter
submitted to a vote at a meeting of the shareholders.
2.13. Action Without Meeting. Any action of the shareholders
required or permitted to be taken at an annual or special meeting of the
shareholders may be taken without a meeting, without prior notice, and without a
vote, if one or more written consents setting forth the action so taken is or
are dated and signed by the holders of outstanding shares having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted, provided such consent or consents are delivered to the Corporation at
its principal office in the State, to the Corporation's principal place of
business, or to the secretary, within 60 days of the date of the earliest dated
consent delivered in such manner. Any written consent may be revoked prior to
the date the corporation receives the required number of consents to authorize
the proposed action, provided that such revocation must be in writing and shall
not be effective until received by the Corporation in the manner set forth
above. Within ten (10) days after obtaining such authorization by written
consent, the Corporation shall give notice to the shareholders who have not
consented in writing or who were not entitled to vote on the action taken in the
consent. Such notice shall fairly summarize the material features of the
authorized action and, if the action is one for which dissenters' rights are
provided by applicable corporate laws of the State,
-4-
<PAGE> 5
such notice shall contain a clear statement of the right of shareholders
dissenting from the action to be paid the fair value of their shares upon
compliance with applicable corporate laws of the State. Whenever action is taken
pursuant to this Section 2.13, the written consent of the shareholders
consenting thereto or the written reports of inspectors appointed to tabulate
such consents shall be filed with the minutes of proceedings of shareholders.
Any certificate that is required by law to be filed as a result of an action of
the shareholders taken under this Section 2.13 shall state that written consent
for such action was given in accordance with the laws of the State.
ARTICLE III
BOARD OF DIRECTORS
3.1. General Powers and Number. The business and affairs of
the Corporation shall be managed by the Board subject to any limitations set
forth under the laws of the State, the Articles of Incorporation, and these
Bylaws concerning corporate action that must be authorized or approved by the
shareholders. The number of directors of the Corporation shall be two (2).
3.2. Election of Directors. Directors shall be elected at the
annual meeting of shareholders by a plurality of the voters cast by the shares
entitled to vote in the election where each shareholder who is entitled to vote
at an election of directors has the right to vote the number of shares owned by
the shareholder for as many persons as there are directors to be elected and for
whose election the shareholder has a right to vote.
3.3. Tenure and Qualifications. Each director shall hold
office (a) until the next annual meeting of the shareholders and until a
successor shall have been elected or (b) until the director's prior death,
resignation or removal. Directors shall be 18 years of age or older but need not
be residents of the State or shareholders of the Corporation.
3.4. Resignation and Removal. A director may resign at any
time by delivering a written notice of resignation to the Board or its chairman
(if any) or to the secretary of the Corporation. Directors may be removed, with
or without cause, at a shareholders' meeting called with notice of that purpose,
by a vote of the holders of the shares then entitled to vote to elect that
director provided the number of votes cast to remove the director exceeds the
number of votes cast not to remove the director.
3.5. Vacancies. Any vacancy occurring in the Board, including
any vacancy created by reason of an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining directors, though
the remaining directors constitute less than a quorum of the Board; provided,
however, if a vacancy is created by removal of a director by action of the
shareholders, then the shareholders shall have the right to fill such vacancy at
the same meeting or any adjournment thereof.
3.6. Regular Meetings. A regular meeting of the Board shall be
held without notice other than this bylaw immediately after the annual meeting
of shareholders, and each adjourned session thereof. The place of such regular
meeting shall be the same as the place of the meeting of shareholders which
precedes it, or such other suitable place as may be announced at such meeting of
-5-
<PAGE> 6
shareholders. The Board may provide, by resolution, the time and place, either
within or without the State, for the holding of additional regular meetings
without notice other than such resolution.
3.7. Special Meetings. Special meetings of the Board may be
called by or at the request of the president, secretary, or any director. The
president or secretary calling any special meeting of the Board may fix any
place, either within or without the State, as the place for holding any special
meeting of the Board called by them, and if no other place is fixed the place of
the meeting shall be the principal business office of the Corporation in the
State.
3.8. Notice; Waiver. Except to the extent provided in Section
3.6 of these Bylaws, notice of each meeting of the Board shall be given to each
director (a) by personal delivery, telegram or cablegram not less than
twenty-four (24) hours before the meeting or (b) by first-class mail, addressed
to the business address or such other address as the director shall have
designated in a writing filed with the secretary, and mailed not less than five
(5) business days before the meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail with postage prepaid and
properly addressed. If sent by telegram or cablegram, such notice shall be
deemed to be delivered when delivered or communicated to the telegraph or
cablegram company. However, any notice to any director required under these
Bylaws or under any provision of law may be waived if such director signs a
waiver of notice at any time, either before or after the time of the meeting. If
a director has not been given notice as required under these Bylaws or under
provisions of law, but the director attends the meeting, the director's
attendance shall constitute a waiver of notice of such meeting and a waiver of
all objections to the time and place of the meeting and the manner in which it
was called or convened, except, when a director states, at the beginning of such
meeting, or promptly upon arrival at the meeting, any objection to the
transaction of business because the meeting was not lawfully called or convened.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the Board need be specified in either the notice of, or a
waiver of notice of, any regular or special meeting.
3.9. Attendance via Telephone Conference Call. Except to the
extent otherwise provided by law, any meeting of the Board may be attended by
any or all of the directors by means of a conference telephone (or similar
communications equipment) through the use of which all directors participating
in the meeting can hear each other at the same time. Such attendance by any or
all directors shall constitute presence by each such director in person at such
meeting and such meeting shall constitute a valid meeting of the Board for all
purposes of the laws and these Bylaws. Any action taken by the Board at such
meeting shall constitute a valid action of the Board for all purposes of the law
and these Bylaws.
3.10. Quorum and Voting. Except as otherwise provided by law,
the Articles of Incorporation, or these Bylaws, a majority of the number of
directors fixed in Section 3.1 of these Bylaws shall constitute a quorum for the
transaction of business at any meeting of the Board. The act of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board if a quorum is present when the vote is taken, unless the act of a
greater number is required by law, the Articles of Incorporation, or these
Bylaws.
3.11. Adjournment. A majority of the directors present,
whether or not a quorum exists, may adjourn any meeting of the Board to another
time and place. Notice of the adjourned meeting shall be given to each director
in accordance with Section 3.8 of these Bylaws, unless all of
-6-
<PAGE> 7
the directors of the full Board are present at the time of adjournment and the
time and place of the adjourned meeting are announced at the time of the
adjournment.
3.12. Committees. The Board, by resolution adopted by a
majority of the full Board, may designate from among its members an executive
committee and other committees. Each such committee shall consist of at least
two (2) or more of the directors who shall serve on the committee at the
pleasure of the Board, and, to the extent provided in such resolution, shall
have and may exercise all the authority of the Board, except that no committee
shall have authority to:
(a) Approve or recommend to the shareholders actions or
proposals required by the Florida Business
Corporation Act to be approved by the shareholders;
(b) Fill vacancies in the Board or any committee thereof;
(c) Amend or repeal these Bylaws;
(d) Authorize or approve the reacquisition of shares
unless pursuant to a general formula or method
specified by the Board; or
(e) Authorize or approve the issuance, sale or contract
for the sale of shares, or determine the designation
and relative rights, preferences, and limitations of
voting groups of shares entitled to vote and be
counted together collectively on certain matters,
except that the Board may authorize a committee to do
so within limits specifically prescribed by the
Board.
The Board, by resolution of the majority of the full Board,
may designate one or more directors as alternate members of a committee, who may
act in the place and stead of any absent member or members at any meeting of
such committee. Any committee established under this Section 3.12 may fix its
own rules for the conduct of its activities and shall make such reports of its
activities to the Board as the Board may request.
3.13. Action by Directors Without Meeting. Any action required
or permitted to be taken at a meeting of the Board (or a committee thereof) may
be taken without a meeting if all of the directors (or members of the committee)
sign one or more written consents describing the action so to be taken and such
consent or consents is or are filed in the minutes of the proceedings of the
Board (or committee). Such action by consent shall have the same effect as a
unanimous vote at a duly called and noticed meeting of the Board (or committee),
and may be described as such in any document. Action taken under this Section is
effective when the last director signs a consent describing the action, unless
the directors' consents specify a different effective date.
3.14. Presumption of Assent. A director who is present at a
meeting of the Board, or a committee thereof of which the director is a member,
at which action on any corporate matter is taken, shall be deemed to have
assented to the action taken unless the director votes against such action,
abstains from voting on the action, or objects at the beginning of the meeting
(or promptly upon the director's arrival) to the holding of the meeting or to
the transaction of specified business at the meeting.
-7-
<PAGE> 8
3.15. Compensation. The Board, irrespective of any personal
interest of any of its members, may establish reasonable compensation to be paid
to each director for such director's services to the Corporation as director,
officer or otherwise, or the Board may delegate such authority to an appropriate
committee. The Board also shall have authority to provide for, or to delegate
authority to an appropriate committee to provide for, reasonable pensions,
disability or death benefits, and other benefits or payments to directors,
officers and employees and to their estates, families, dependents, or
beneficiaries on account of prior services rendered by such director, officers
and employees of the Corporation. Each director shall be reimbursed for the
necessary expenses in connection with attending meetings of the Board or any
committee thereof.
ARTICLE IV
OFFICERS
4.1. Number. The Corporation shall have president, such number
of vice-presidents as may be chosen by the Board (which number may be zero), a
secretary, a treasurer and such other officers and agents as the Board may, from
time to time, determine necessary, each of whom shall be chosen by the Board.
Any number of offices may be held by the same person.
4.2. Appointment and Term of Office. The officers of the
Corporation to be chosen by the Board shall be appointed at each annual meeting
of the Board. The Board may, from time to time, appoint, or may authorize a duly
appointed officer to appoint, such additional officers, assistant officers and
agents as the Board may deem necessary. Each officer shall hold office until a
successor shall have been duly chosen or until the officer's prior death,
resignation or removal.
4.3. Resignation and Removal. An officer may resign at any
time by delivering notice to the secretary of the Corporation. A resignation is
effective when the notice is delivered unless the notice specifies a later
effective date. If a resignation is made effective at a later date and the Board
accepts the future effective date, the Board may fill the pending vacancy before
the effective date if the Board provides that the successor does not take office
until the effective date. Any officer or agent may be removed by the Board at
any time, with or without cause. Any officer or assistant officer, if appointed
by another officer, may likewise be removed by such officer.
4.4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise, shall be filled by the
Board for the unexpired portion of the term.
4.5. President. The president shall be the chief executive
officer of the Corporation and, subject to the control of the Board, shall in
general supervise and control all of the business and affairs of the Corporation
and perform such other duties as may be prescribed by the Board from time to
time. The president shall, when present, preside at all meetings of shareholders
and the Board, and shall generally do and perform all acts incident to the
office of president, or which are authorized or required by law. The president
also shall have authority, subject to such conditions as may be prescribed by
the Board, to appoint such agents and employees of the Corporation as the
president shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents and employees shall
hold office at the discretion of the president. The president may sign with the
secretary (or with any other proper officer of the Corporation thereunto
authorized by the Board) certificates for shares of the Corporation and any
deeds, mortgages, bonds, contracts
-8-
<PAGE> 9
or other instruments which the Board has authorized to be executed, except when
the signing and execution thereof shall be expressly delegated by the Board or
by these Bylaws to some other officer or agent of the Corporation, or shall be
required by law to be otherwise signed or executed.
4.6. Vice-Presidents. In the absence of the president or in
the event of the president's death, inability or refusal to act, or in the event
for any reason it shall be impracticable for the president to act personally,
the vice-president (or, in the event there is more than one vice-president, the
vice-presidents in the order designated by the Board, or in the absence of
designation, then in the order of their appointment), shall perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions on the president. Any vice-president may sign,
with the secretary or any assistant secretary, certificates for shares of the
Corporation, and shall perform such other duties and have such authority as from
time to time may be delegated or assigned to the vice-president by the president
or by the Board. The execution of any instrument of the Corporation by any
vice-president shall be conclusive evidence, as to third parties, of the
vice-president's authority to act in the stead of the president.
4.7. Secretary. The secretary shall (a) prepare the minutes of
the meetings of the shareholders, of the Board and of committees of the Board in
one or more books provided for such purpose; (b) see that all notices are duly
given in accordance with the provisions of these Bylaws or as required by law;
(c) be custodian of the records and seal of the Corporation, see that the seal
of the Corporation is affixed to all documents the execution of which on behalf
of the Corporation under its seal is duly authorized; (d) be responsible for the
authentication of the Corporation's records; (e) keep or arrange for the keeping
of a register of the post office address of each shareholder furnished to the
secretary; (f) sign with the president, or a vice-president, certificates for
shares of the Corporation, the issuance of which have been authorized by
resolution of the Board; (g) have general charge of the stock transfer books of
the Corporation; and (h) in general perform all duties incident to the office of
secretary and have such other duties and exercise such authority as from time to
time may be delegated or assigned to the secretary by the president or by the
Board.
4.8. Treasurer. The treasurer shall (a) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(b) receive and give receipts for monies due and payable to the Corporation from
any source whatsoever, and deposit all such monies in the name of the
Corporation in such banks, trust companies or other depositories as shall be
selected by or under the authority of a resolution of the Board; and (c) in
general perform all the duties incident to the office of treasurer and have such
other duties and exercise such other authority as from time to time may be
delegated or assigned to the treasurer by the president or by the Board. If
required by the Board, the treasurer shall give a bond for the faithful
discharge of the treasurer's duties in such sum and with such surety or sureties
as the Board shall determine.
4.9. Assistant Secretaries and Assistant Treasurers. There
shall be such a number of assistant secretaries and assistant treasurers as the
Board may from time to time authorize. Such assistant secretaries and assistant
treasurers may be appointed by the Board or, with the authorization of the
Board, by a duly appointed officer. The assistant secretaries may sign with the
president or a vice-president certificates for shares of the Corporation the
issuance of which have been authorized by a resolution of the Board. The
assistant treasurers shall respectively, if required by the Board, give bonds
for the faithful discharge of their duties in such sums and with such sureties
as the Board shall determine. The assistant secretaries and assistant
treasurers, in general, shall perform such duties and
-9-
<PAGE> 10
have such authority as shall from time to time be delegated or assigned to them
by the secretary or the treasurer, respectively, or by the president or the
Board.
4.10. Other Assistants and Acting Officers. The Board, or an
officer with the authorization of the Board, shall have the power to appoint any
person to act as assistant to any officer, or as agent for the Corporation in
the officer's stead, or to perform the duties of such officer whenever, for any
reason, it is impracticable for such officer to act personally, and such
assistant or acting officer or other agent so appointed by the Board shall have
the power to perform all the duties of the office to which he or she is so
appointed to act, except as such power may be otherwise defined or restricted by
the Board.
4.11. Salaries. The salaries of the principal officers shall
be fixed from time to time by the Board or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that the officer is also a director of the Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS; SPECIAL CORPORATE ACTS
5.1. Contracts. The Board may authorize any officer or
officers, agent or agents, to enter into any contract or execute or deliver any
instrument in the name of and on behalf of the Corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages and instruments of assignment or
pledge made by the Corporation shall be executed in the name of the Corporation
by the president or the vice-president and by the secretary, an assistant
secretary, the treasurer or an assistant treasurer; the secretary or an
assistant secretary, when necessary or required, shall affix the corporate seal
thereto; and when so executed no other party to such instrument or any third
party shall be required to make any inquiry into the authority of the signing
officer or officers.
5.2. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the Corporation and no evidences of such indebtedness
shall be issued in its name unless authorized by or under the authority of a
resolution of the Board. Such authorization may be general or confined to
specific instances.
5.3. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, and all notes or other evidences of indebtedness
issued in the name of the Corporation, shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall from
time to time be determined by or under the authority of a resolution of the
Board.
5.4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositaries as may be selected by or
under the authority of a resolution of the Board.
5.5. Voting of Securities Owned by the Corporation. Subject
always to the specific direction of the Board, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
Corporation may be voted at any meeting of security holders of such other
corporation by the president of this Corporation if the president is present, or
in the president's
-10-
<PAGE> 11
absence by any vice-president of this Corporation who may be present, and (b)
whenever, in the judgment of the president, or in the president's absence, of
any vice-president, it is desirable for this Corporation to appoint a proxy or
to execute written consent in respect to any shares or other securities issued
by any other corporation and owned by this Corporation, such appointment or
consent shall be executed in the name of this Corporation by the president or
one of the vice-presidents of this Corporation, without necessity of any
authorization by the Board, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons designated in the manner
above stated as the proxy or proxies of this Corporation shall have full right,
power and authority to vote the shares or other securities issued by such other
corporation and owned by this Corporation the same as such shares or other
securities might be voted by this Corporation.
ARTICLE VI
SHARES; CERTIFICATES FOR SHARES; TRANSFER OF SHARES
6.1. Shares May be Represented by Certificates. Shares of the
Corporation may, but need not be, represented by certificates. Except as
otherwise provided by law, the rights and obligations of shareholders are
identical whether or not their shares are represented by certificates.
6.2. Certificates for Shares. If shares of the Corporation are
represented by Certificates, such Certificates shall be in a form, consistent
with law, as shall be determined by the Board. Such certificates shall state the
name of the issuing corporation and that the corporation is organized under the
laws of the State and be signed by the president or a vice-president and by the
secretary or an assistant secretary. All certificates for shares shall be
consecutively numbered or otherwise identified. The name and address of the
persons to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be registered upon the stock transfer books of
the Corporation. All certificates surrendered to the Corporation for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except as provided in Section 6.8 of these Bylaws.
6.3. Facsimile Signatures and Seal on Certificates. The
signature of any officer upon a certificate may be a facsimile if the
certificate is manually countersigned (a) by a transfer agent other than the
Corporation or its employee, or (b) by a registrar other than the Corporation or
its employee. The seal of the Corporation on any certificate for shares may be a
facsimile.
6.4. Signature by Former Officers. If the person who signed
(either manually or in facsimile) a share certificate no longer holds office
when the certificate is issued, the certificate is nevertheless valid.
6.5. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer, or prior to the
registration of transfer of shares not represented by certificates, the
Corporation may treat the registered owner of such shares as the person
exclusively entitled to vote, to receive notifications and otherwise to exercise
all the rights and powers of an owner. Where a certificate for shares is
presented to the Corporation with a request to register for transfer, the
Corporation shall not be liable to the owner or any other persons suffering loss
as a result of such registration or transfer if (a) there were on the
certificate the necessary endorsements, and (b) the Corporation had not duty to
inquire into adverse claims or has discharged any such duty. The
-11-
<PAGE> 12
Corporation may require reasonable assurance that said endorsements are genuine
and effective and in compliance with such other regulations as may be prescribed
under the authority of the Board. Similarly, the Corporation shall not be liable
to the owner or any other persons suffering loss as a result of a registration
of transfer of shares not represented by a certificate if evidence of such
transfer is presented to the Corporation and the Corporation had no duty to
inquire into adverse claims or has discharged any such duty. The Corporation may
make reasonable inquires into the validity of any such transfer and may require
reasonable assurance that such transfer is valid and is in compliance with any
other regulations as may be prescribed under the authority of the Board.
6.6. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the Corporation, or by an agreement between or among the
Corporation and the shareholders, upon the transfer of such shares. Shareholders
holding shares not represented by certificates shall be informed of any such
restrictions upon the transfer of their shares in accordance with Section 6.7.
6.7. Shares Without Certificates. The Board may authorize the
issuance without certificates of some or all shares of any or all of the
corporation's classes or series of shares. Such authorization shall not affect
shares already represented by certificates until and unless they are surrendered
to the Corporation. The secretary shall, within a reasonable time following the
issue or transfer of shares without certificates, provide to each new
shareholder a written statement containing the name of the Corporation, stating
that the Corporation is organized under the laws of the State, and setting forth
the name of the person to whom the shares are issued, the number and class of
shares, including the designation of the series, if any, of the shares issued to
that person, the designations, relative rights, preferences and limitations
applicable to each class, the variations and rights, preferences and limitations
determined for each series, and the authority of the Board to determine
variations for future series, and shall inform the shareholder, in a conspicuous
statement, that the corporation will furnish the shareholder a full statement of
such information on request and without charge. If there are any restrictions on
the transfer of such shares imposed by the Corporation or by an agreement
between or among the corporation and the shareholders, the existence of such
restriction shall be noted conspicuously in that statement.
6.8. Lost, Destroyed or Stolen Certificates. When the
registered owner claims that its certificate for shares has been lost,
destroyed, or wrongfully taken, a new certificate shall be issued in place
thereof if the owner (a) so requests before the Corporation has notice that such
shares have been acquired by a bona fide purchaser; (b) files with the
Corporation an indemnity bond in such amount as is prescribed by the Board; and
(c) satisfies such other reasonable requirements as the Board may prescribe.
6.9. Consideration for Shares. The shares of the Corporation
may be issued for such consideration as shall be fixed from time to time by the
Board, provided that any shares having a par value shall not be issued for a
consideration less than the par value thereof. The Board may authorize shares to
be issued for consideration consisting of any tangible or intangible property or
benefit to the corporation, including cash, promissory notes, services
performed, promises to perform services evidenced by a written contract, or
other securities of the corporation. When payment of the consideration for which
shares are to be issued shall have been received by the Corporation, such shares
shall be deemed fully paid and nonassessable by the Corporation. No share,
whether
-12-
<PAGE> 13
represented by a certificate or not, shall be issued, and no certificate for any
share shall be issued, until such share is fully paid.
ARTICLE VII
SEAL
7.1. The Board shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the State and the words "Corporate Seal."
ARTICLE VIII
AMENDMENTS
8.1. By Shareholders. These Bylaws may be altered, amended or
repealed and new Bylaws may be adopted by action of the shareholders at a
meeting of the shareholders duly called and noticed under the provisions of
these Bylaws.
8.2. By Directors. Except as provided herein, these Bylaws may
also be altered, amended or repealed and new Bylaws may be adopted by action of
the Board; provided that no bylaw adopted by the shareholders shall be amended
or repealed by the Board if that bylaw so provides.
8.3. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board, which would be inconsistent with the Bylaws then
in effect but is taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the Bylaws so that
the Bylaws would be consistent with such action, shall be given the same effect
as though the Bylaws had been temporarily amended or suspended so far, but only
so far, as is necessary to permit the specific action so taken or authorized.
ARTICLE IX
INDEMNIFICATION
9.1. Mandatory Indemnification. The Corporation shall, to the
fullest extent permitted by law, indemnify any person set forth in Section 9.2
against any liability (including but not limited to any obligation to pay a
judgment, settlement, penalty, fine, or excise tax assessed with respect to an
employee benefit plan), and any expense (including but not limited to counsel
fees), and the Corporation shall advance to such person any reasonable expense,
where such liability or expense is incurred by such person in connection with
any proceeding. "Proceeding" for purposes of this Article IX shall include any
threatened, pending or completed action, suit or proceeding of any nature,
whether civil, criminal, administrative or investigative. Such rights of
indemnification and the advancement of expenses shall inure to the benefit of
the heirs, executors, administrators and personal representatives of such a
person and shall not be deemed exclusive of any other rights to indemnification
against liabilities or the advancement of expenses to which a party may be
entitled under any written agreement, board resolution, vote of shareholders or
law. The Corporation shall take any affirmative action necessary to effect such
indemnification or advancement of expenses under
-13-
<PAGE> 14
the requirements of applicable law, including, without limitation, the
requirements of Sections 607.0850(2), 607.0850(4) and 607.0850(5), Florida
Statutes.
9.2. Indemnities. The mandatory indemnification provided for
in Section 9.1 is available to any person who was or is a party or threatened to
be made a party to any proceeding by reason of the fact that the person is or
was a director, officer, employee, or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee, or
agent of any other corporation or enterprise, with respect to liabilities and
expenses arising from such proceeding.
9.3. Permissive Supplementary Benefits. The Corporation may,
but shall not be required to, supplement the rights of indemnification and
advancement of expenses under this Article IX by (a) purchasing insurance on
behalf of any one or more of such persons, whether or not the Corporation would
be obligated to indemnify or advance expenses for such person under this Article
IX, (b) entering into individual or group indemnification agreements with any
one or more of such persons, and (c) advancing related expenses to such a
person.
9.4. Amendment. This Article IX may be amended or repealed
only by action of the shareholders and not by action of the Board.
-14-
<PAGE> 1
Exhibit 3.63
STATE OF FLORIDA
ARTICLES OF INCORPORATION
OF
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
The undersigned, acting as incorporator of a corporation under the
Florida General Corporation Act, adopts the following Articles of Incorporation.
FIRST: The name of the corporation is: SARASOTA EMERGENCY MEDICAL
CONSULTANTS, INC.
SECOND: The period of its duration is perpetual.
THIRD: The purpose for which the corporation is organized is to
engage in the transaction of any or all lawful business for which corporations
may be incorporated under the provisions of the Florida General Corporation Act.
FOURTH: The aggregate number of shares which the corporation shall
have authority to issue is: 1,000 @ $1.00
FIFTH: The street address of the initial registered office of the
corporation is c/o C T CORPORATION SYSTEM, 8751 West Broward Boulevard,
Plantation, Florida 33324, and the name of its initial registered agent at such
address is C T CORPORATION SYSTEM.
SIXTH: The number of directors constituting the initial board of
directors of the corporation is one, and the names and addresses of the persons
who are to serve as directors until the first annual meeting of shareholders or
until their successors are elected and shall qualify are:
George W. McCleary
100 N.W. 70th Avenue
Plantation, FL 33317
SEVENTH: The name and address of the incorporator is:
Melanie Sharman
1311 Executive Center Drive, Suite #200
Tallahassee, Florida 32301
DATED: May 18, 1990
/s/ Melanie Sharman
----------------------
Incorporator
<PAGE> 2
STATE OF FLORIDA
COUNTY OF LEON
The foregoing instrument was acknowledged before me this 18th day of
May by Melanie Sharman.
My Commission Expires:
------------------------
-2-
<PAGE> 3
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
The undersigned, WELLINGTON CHEN, President and Secretary of SARASOTA
EMERGENCY MEDICAL CONSULTANTS, INC. certifies that:
1. He is the President and Secretary of SARASOTA EMERGENCY MEDICAL
CONSULTANTS, INC., a Florida corporation, whose Articles of Incorporation were
filed with the Secretary of State, State of Florida, on May 18, 1990.
2. The following amendment to the Articles of Incorporation was
unanimously adopted by the Board of Directors and approved by the Shareholders,
at a special meeting at which all of the Directors and Shareholders were present
and voting throughout, duly called for the purpose of adopting this Amendment
and held on July 15, 1996.
3. There are 1000 shares of common stock outstanding. All of said
outstanding shares are entitled to vote, and all of the shares entitled to vote,
voted for the Amendment.
4. Paragraph Fourth of the Articles of Incorporation is hereby amended
in its entirety to read as follows:
"FOURTH: The maximum number of shares which the Corporation is
authorized to have outstanding is Ten Thousand (10,000) Common Shares having a
par value of $1.00. Said shares shall consist of Five Thousand (5,000) shares of
Class D, voting common stock, and Five Thousand (5,000) shares of Class E,
voting common stock. There shall be no preferences or limitations as to either
class of stock, and each class of stock shall have the same equity rights in the
Corporation."
<PAGE> 4
5. This amendment shall become effective on the date of filing these
Articles. All shares of the Corporation which were issued and outstanding before
filing of these Articles of Amendment, shall be canceled, declared null and void
and re-issued.
IN WITNESS WHEREOF, the undersigned, WELLINGTON CHEN, as President and
Secretary of the Corporation has executed these Articles of Amendment this 15th
day of July 1996.
/s/ Wellington Chen
-------------------------------
WELLINGTON CHEN, President and
Secretary
-2-
<PAGE> 1
Exhibit 3.64
BYLAWS
OF
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
Article 1. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of
this corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall
be held when directed by the President or the Board of Directors, or when
requested in writing by the holders of not less than ten percent of all the
shares entitled to vote at the meeting. A meeting requested by shareholders
shall be called for a date not less than ten nor more than sixty days after the
request is made, unless the shareholders requesting the meeting designate a
later date. The call for the meeting shall be issued by the Secretary, unless
the President, Board of Directors, or shareholders requesting the meeting shall
designate another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
without the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor more than
sixty days before the meetings, either personally or by first class mail, by or
at the direction of the President, the Secretary, or the officer or persons
calling the meeting to each shareholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail addressed to the shareholder at his address as it
appears on the stock transfer books of the corporation, with postage thereon
prepaid.
<PAGE> 2
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
-2-
<PAGE> 3
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the shares of such
class or series shall constitute a quorum for the transaction of such item of
business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law.
-3-
<PAGE> 4
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing
by the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons as there are directors to be elected at
that time and for whose election he has a right to vote, or to cumulate his
votes by giving one candidate as many votes as the number of directors to be
elected at that time multiplied by the number of his shares, or by distributing
such votes on the same principle among any number of such candidates.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the Board of Directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice
-4-
<PAGE> 5
president, secretary and treasurer of the corporate shareholder shall be
presumed to possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank or trust company with
irrevocable instruction and authority to pay the redemption price to the holders
thereof upon surrender of certificates therefor, such shares shall not be
entitled to vote on any matter and shall not be deemed to be outstanding shares.
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders' duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact.
No proxy shall be valid after the expiration of eleven months from the date
thereof unless otherwise provided in the proxy.
-5-
<PAGE> 6
Every proxy shall be revocable at the pleasure of the shareholder executing it,
except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of them present at the
meeting, or if only one is present then that one, may exercise all the powers
conferred by the proxy; but if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing
a substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this
corporation may create a voting trust for the purpose of conferring upon a
trustee or trustees the right to vote or otherwise represent their shares, as
provided by law. Where the counterpart of a voting trust agreement and the copy
of the record of the holders of voting trust certificates has been deposited
with the corporation as provided by law, such documents shall be subject to the
same right of examination by a shareholder of the corporation, in person or by
agent or attorney, as are the books and records of the corporation, and such
counterpart and such copy of such record shall be subject to examination by any
holder of record of voting trust certificates either in person or by agent or
attorney, at any reasonable time for any proper purpose.
Section 12. Shareholder' Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or
-6-
<PAGE> 7
relating to any phase of the affairs of the corporation as provided by law.
Nothing therein shall impair the right of this corporation to treat the
shareholders of record as entitled to vote the shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of
incorporation of this corporation to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or to take such action at a meeting at which all shares entitled to vote thereon
were present and voted. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote as a class thereon and of
the total shares entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their shares upon compliance with further provisions of this act
regarding the rights of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of a corporation shall be
managed under the direction of, the Board of Directors.
-7-
<PAGE> 8
Section 2. Qualification. Directors need not be residents of this state
or shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the matters
presented,
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence, or
(c) a committee of the board upon which he does not serve, duly
designated in accordance with a provision of the articles of incorporation or
the by-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have
-8-
<PAGE> 9
assented to the action taken unless he votes against such action or abstains
from voting in respect thereto because of an asserted conflict of interest.
Section 6. Number. This corporation shall have 2 directors. The number
of directors may be increased or decreased from time to time by amendment to
these bylaws, but no decrease shall have the effect of shortening the terms of
any incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term for
which he is elected and until his successor shall have been elected and
qualified or until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors. A director
elected to fill a vacancy shall hold office only until the next election of
directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors
fixed by these by-laws shall constitute a quorum for the transaction of
business. The act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
-9-
<PAGE> 10
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders,
-10-
<PAGE> 11
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise.
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to
a general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including, without limitation, the price, the rate or
manner of payment of dividends, provisions for redemption, sinking fund,
conversion, voting or preferential rights, and provisions for other features of
a class of shares, or a series of a class of shares, with full power in such
committee to adopt any final resolution setting forth all the terms thereof and
to authorize the statement of the terms of a series for filing with the
Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the
Board of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice
-11-
<PAGE> 12
of the time and place of special meetings of the Board of Directors shall be
given to each director by either personal delivery, telegram or cablegram at
least two days before the meeting or by notice mailed to the director at least
five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken
at a meeting of the directors of a corporation, or any action which may be taken
at a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so
-12-
<PAGE> 13
to be taken, signed by all of the directors, or all the members of the
committee, as the case may be, is filed in the minutes of the proceedings of the
board or of the committee. Such consent shall have the same effect as a
unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of
a president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
-13-
<PAGE> 14
Section 3. Removal of Officers. Any officer or agent elected or
appointed by the Board of Directors may be removed by the board whenever in its
judgment the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the
Board of Directors, unless the bylaws shall have expressly reserved such power
to the shareholders.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
Section 1. Issuance. Every holder of shares in this corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. No certificate shall be issued for any share until such share is fully
paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
-14-
<PAGE> 15
Every certificate representing shares issued by this corporation shall
set forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or persons to whom issued; the number and
class of shares, and the designation of the series, if any, which such
certificate represents; and the par value of each share represented by such
certificate, or a statement that the shares are without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form
-15-
<PAGE> 16
as the corporation may direct, to indemnify the corporation, the transfer agent,
and registrar against any claim that may be made on account of the alleged loss,
destruction, or theft of a certificate; and (d) satisfies any other reasonable
requirements imposed by the corporation.
Article V Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of
its shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
Section 2. Shareholders' Inspection Rights. Any person who shall have
been a holder of record of shares or of voting trust certificates therefor at
least six months immediately preceding his demand or shall be the holder of
record of, or the holder of record of voting trust certificates for, at least
five percent of the outstanding shares of any class or series of the
corporation, upon written demand stating the purpose thereof, shall have the
right to examine, in person or by agent or attorney, at any reasonable time or
times, for any proper purpose its relevant books and records of accounts,
minutes and records of shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
-16-
<PAGE> 17
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time,
declare and the corporation may pay dividends on its shares in cash, property or
its own shares, except when the corporation is insolvent or when the payment
thereof would render the corporation insolvent or when the declaration or
payment thereof would be contrary to any restrictions contained in the articles
of incorporation, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own
treasury shares.
(c) Dividends may be declared and paid in the corporation's own
authorized but unissued shares out of any unreserved and unrestricted surplus of
the corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
-17-
<PAGE> 18
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted,
by either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-18-
<PAGE> 1
Exhibit 3.65
CHARTER OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
The undersigned natural person, having capacity to contract, and acting
as the Incorporator of a corporation under the Tennessee General Corporation
Act, adopts the following Charter for such corporation:
1. The name of the corporation is SOUTHEASTERN EMERGENCY
PHYSICIANS, INC.
2. The duration of the corporation is perpetual.
3. The address of the principal office of the corporation in the
state of Tennessee shall be 1924 Alcoa Highway, Box U43, Knoxville, Tennessee
37920, County of Knox.
4. The corporation is for profit.
5. The purpose for which the corporation is organized is:
To conduct the general business of a professional medical
corporation, and specifically of operating and managing
emergency room facilities located in hospitals. The
corporation is also organized for any other lawful purpose
related to the foregoing, and shall have all the powers of a
corporation as outlined in Section 48-402 T.C.A.
6. The maximum number of shares which the corporation shall have
the authority to issue is 2,000 shares, with no par value.
7. The corporation will not commence business until consideration
of One Thousand Dollars ($1,000.00) has been received for the issuance of
shares.
8. Other provisions:
(a) Capital surplus of the corporation may be distributed
by resolution of the Board of Directors without stockholders' vote or approval.
<PAGE> 2
(b) The corporation by resolution of its Board of
Directors can redeem, purchase, or acquire its own stock out of unrestricted or
unreserved capital surplus without stockholder approval.
(c) The Board of Directors of the corporation may take
any action which by law they are required or permitted to take, without a
meeting, upon written consent signed by all directors setting forth the action
so taken.
Dated: January 3, 1985
/s/ W.W. Davis
-------------------------------
W.W. DAVIS, INCORPORATOR
-2-
<PAGE> 3
ARTICLES OF AMENDMENT TO THE CHARTER
OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
CHANGING THE PRINCIPAL OFFICE
Pursuant to the provisions of Section 48-1-303 of the
Tennessee General Corporation Act, the undersigned corporation adopts the
following articles of amendment to its charter:
1. The name of the corporation is Southeastern Emergency
Physicians, Inc.
2. The amendment adopted is: Paragraph 3 of the charter is
deleted and the following is inserted:
3. The address of the principal office of the corporation in the
State of Tennessee shall be 218 Peters Road, Suite A, Knoxville, Tennessee
37923, County of Knox.
4. The amendment was duly adopted at a meeting of the directors
on July 1, 1986.
Dated this 1st day of July, 1986.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
BY: /s/ Lynn Massingale
______________________________
LYNN MASSINGALE, PRESIDENT
<PAGE> 4
CHANGE OF ADDRESS
OF
REGISTERED AGENT
OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
To the Secretary of State of the State of Tennessee:
Pursuant to the provisions of Section 48-1-1201 of the Tennessee
General Corporation Act, the undersigned domestic corporation submits the
following statement for the purpose of changing the address of the registered
agent for the corporation in the State of Tennessee:
1. The name of the corporation is Southeastern Emergency
Physicians, Inc.
2. The name and new street address of its registered agent in the
State of Tennessee shall be Lynn Massingale, 218 Peters Road, Suite A,
Knoxville, Tennessee 37923.
Dated this 1st day of July, 1986.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
BY: /s/ Lynn Massingale
______________________________
LYNN MASSINGALE, PRESIDENT
<PAGE> 5
ARTICLES OF AMENDMENT TO THE CHARTER
OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is Southeastern Emergency
Physicians, Inc.
2. The text of each amendment adopted is:
The principal office of the corporation is 9207 Park West
Blvd., Suite 102, Knoxville, TN 37923. The mailing address of
the corporation is P. 0. Box 30698, Knoxville, TN 37930.
3. The corporation is a for-profit corporation.
4. The manner (if not set forth in the amendment) for
implementation of any exchange, reclassification, or cancellation of issued
shares is as follows:
5. The amendment was duly adopted on January 15, 1989 by (the
shareholders).
[NOTE: Please strike the choices which do not apply to this amendment.]
6. If the amendment is not to be effective when these articles
are filed by the Secretary of State, the date/time it will be effective is
____________, 19__ (date) ___________ (time).
[NOTE: The delayed effective date shall not be later than the 90th day after the
date this document is filed by the Secretary of State.]
2/7/90 Southeastern Emergency Physicians, Inc.
- --------------------------------------- ---------------------------------------
Signature Date Name of Corporation
President /s/ H. Lynn Massingale
- --------------------------------------- ---------------------------------------
Signer's Capacity Signature
H. Lynn Massingale, M.D.
---------------------------------------
Name (Typed or Printed)
<PAGE> 6
ARTICLES OF AMENDMENT TO THE CHARTER
OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned Corporation hereby submits the
following articles to amend its Charter and states as follows:
1. The name of the Corporation is Southeastern Emergency Physicians,
Inc.
2. The text of the amendment adopted is:
(a) The Corporation hereby changes its registered agent and
office to: W. Dale Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
(b) The Corporation hereby changes the street address of its
principal office to 1900 Winston Road, Post office Box 30698, Knoxville,
Tennessee 37930.
(c) The Corporation hereby adds the following paragraph to its
Charter: "No director may be sued by the corporation or its shareholders for
breach of his or her fiduciary duty to the corporation, provided, however, that
this provision shall not absolve a director from a breach of his or her duty of
loyalty, or acts or omissions not in good faith or which involves intentional
misconduct or a knowing violation of law, or for distributions in violation of
T.C.A. Section 48-18-304."
3. After the changes are made, the street address of the registered
office of the Corporation and the business office of its registered agent shall
be identical.
4. The amendment was duly adopted on the 28th day of October, 1992, by
the board of directors without shareholder action, as such shareholder action
was not required.
DATED this 28th day of October, 1992.
<PAGE> 7
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
By: /s/ H.R. Mamigalumio
__________________________________________
Its: President
-2-
<PAGE> 1
Exhibit 3.66
BY-LAWS
OF
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
ARTICLE I
MEETING OF SHAREHOLDERS
1. Annual Meeting. The annual meeting of the shareholders shall be held
at such time and place, either within or without this state, as may be
designated from time to time by the directors. Unless the time is otherwise
specified by the directors, said meeting shall be held on the first Monday in
December of each year, or as close thereto as practicable. [T.C.A. 48-701(1),
(2).]
2. Special Meetings. Special meetings of the shareholders may be called
by the president, a majority of the Board of Directors, or by the holders of not
less than one-tenth (1/10) of all the shares entitled to vote at such meeting.
The place of said meetings shall be designated by the directors. [T.C.A.
4E-701(3).]
3. Notice of Shareholders Meetings. Written or printed notice stating
the place, day, and hour of the meeting, and, in the case of a special meeting,
the purpose or purposes for which the meeting is called and the person or
persons calling the meeting, shall be delivered either personally or by mail by
or at the direction of the president, secretary, officer, or person calling the
meeting to each shareholder entitled to vote at the meeting. If mailed, such
notice shall be delivered not less than ten (10) nor more than sixty (60) days
before the date of the meeting, and shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his address
as it appears on the stock transfer books of the corporation, with postage
thereon prepaid. If delivered personally, such notice shall be delivered not
less than five (5) nor more than sixty (60) days before the date of the meeting,
and shall be deemed delivered when actually received by the shareholder. The
person giving such notice shall certify that the notice required by this
paragraph has been given.
[T.C.A. 48-703(1).]
4. Quorum Requirements. A majority of the shares entitled to vote shall
constitute a quorum for the transaction of business. [T.C.A. 48-102(q).] A
meeting may be adjourned despite the absence of a quorum, and notice of an
adjourned meeting need not be given if the time and place to which the meeting
is adjourned are announced at the meeting at which adjournment is taken. [T.C.A.
48-102(q).] When a quorum is present at any meeting, a majority in interest of
the stock there represented shall decide any question brought before such
meeting, unless the question is one upon which, by express provision of this
corporation's Charter, these By-Laws, or by the laws of Tennessee, a larger or
different vote is required, in which case such express provision shall govern
the decision of such question. [T.C.A. 48-710; T.C.A. 48-804(2).)
5. Voting and Proxies. Every shareholder entitled to vote at a meeting
may do so either in person or by written proxy, which proxy shall be filed with
the secretary of the meeting before being voted. Such proxy shall entitle the
holders thereof to vote at any adjournment of such meeting, but shall not be
valid after the final adjournment thereof. No proxy shall be valid after the
<PAGE> 2
expiration of eleven (11) months from the date of its execution unless otherwise
provided in the proxy. [T.C.A. 48-706].
ARTICLE II
BOARD OF DIRECTORS
1. Qualification and Election. Directors need not be shareholders or
residents of this state, but must be of legal age. [T.C.A. 48-801.] They shall
be elected by a plurality of the votes cast at the annual meetings of the
shareholders. Each director shall hold office until the expiration of the term
for which he is elected, and thereafter until his successor has been elected and
qualified. [T.C.A. 48-804].
2. Number. The number of directors shall be fixed from time to time by
the shareholders, or by a majority of the entire Board of Directors, but shall
never be less than the number required by the law. [T.C.A. 48-802.] If there are
less than three (3) shareholders, the number of directors need only match the
number of shareholders. [T.C.A. 48-802(1)(a)]. An increase or decrease in the
number of directors can be accomplished by resolution without having to amend
the By-Laws.
3. Meetings. The annual meeting of the Board of Directors shall be held
immediate after the adjournment of the annual meeting of the shareholders, at
which time the officers of the corporation shall be elected. [T.C.A. 48-811(2)].
The Board may also designate more frequent intervals for regular meetings.
Special meetings may be called at any time by the chairman of the Board,
president, or any two (2) directors. [T.C.A. 48-808(1)].
4. Notice of Directors, Meetings. The annual and all regular board
meetings may be held without notice. Special meetings shall be held upon notice
sent by any usual means of communication not less than three (3) days before the
meeting. [T.C.A. 48-808(2)].
5. Quorum and Vote. The presence of a majority of the directors shall
constitute a quorum for the transaction of business. [T.C.A. 48-102(q)], and
notice of an adjourned meeting need not be given if the time and place to which
the meeting is adjourned are fixed at the meeting at which the adjournment is
taken, and if the period of adjournment does not exceed thirty (30) days in any
adjournment. [T.C.A. 48-808(3)].
6. Executive and Other Committees. The Board of Directors, by a
resolution adopted by a majority of its members, may designate an executive
committee, consisting of two (2) or more directors, and other committees,
consisting of two (2) or more persons, who may or may not be directors, and may
delegate to such committee or committees any and all such authority as it deems
desirable, including the right to delegate to an executive committee the power
to exercise all the authority of the Board of Directors in the management of the
affairs and property of the corporation. [T.C.A. 48-810].
-2-
<PAGE> 3
ARTICLE III
OFFICERS
1. Number. The corporation shall have a president and a secretary, and
such other officers as the Board of Directors shall from time to time deem
necessary. Any two (2) or more offices may be held by the same person, except
the offices of president and secretary. [T.C.A. 48- 811(1)].
2. Election and Term. The officers shall be elected by the Board at its
annual meeting. Each officer shall serve until the expiration of the term for
which he is elected, and thereafter until his successor has been elected and
qualified. The maximum elected term for an officer is two (2) years. [T.C.A.
48-811(2)].
3. Duties. All officers shall have such authority and perform such
duties in the management of the corporation as are normally incident to their
offices and as the Board of Directors may from time to time provide. [T.C.A.
48-811(3)].
ARTICLE IV
RESIGNATIONS, REMOVALS, AND VACANCIES
1. Resignations. Any officer or director may resign at any time by
giving written notice to the chairman of the Board, the president, or the
secretary. Any such resignation shall take effect at the time specified therein,
or, if no time is specified, then upon its acceptance by the Board of Directors.
2. Removal of Officers. Any officer or agent may be removed by the
Board whenever in its judgment the best interests of the corporation will be
served thereby. [T.C.A. 48- 811(4)].
3. Removal of Directors. Any or all of the directors may be removed
either with or without cause by a proper vote of the shareholders; and may be
removed with cause by a majority vote of the entire Board. [T.C.A. 48-807].
4. Vacancies. Newly created directorships resulting from an increase in
the number of directors, and vacancies occurring in any office or directorship
of any reason, including removal of an officer or director, may be filled by the
vote of a majority of the directors then in office, even if less than a quorum
exists. [T.C.A. 48-806].
ARTICLE V
CAPITAL STOCK
1. Stock Certificates. Every shareholder shall be entitled to a
certificate or certificates of capital stock of the corporation in such form as
may be prescribed by the Board of Directors. Unless otherwise decided by the
Board, such certificates shall be signed by the president and the secretary of
the corporation. [T.C.A. 48-509].
-3-
<PAGE> 4
2. Issue and Transfer of Shares. Shares of stock shall be issued only
upon unanimous vote of the directors. Shares of stock may be transferred on the
books of the corporation by delivery and surrender of the properly assigned
certificate, but subject to any restrictions on transfer imposed by either the
applicable security laws or any stockholder agreement.
3. Loss of Certificates. In the case of the loss, mutilation, or
destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms as the Board shall prescribe.
ARTICLE VI
ACTION BY CONSENT
Whenever the shareholders or directors are required or permitted to
take any action by vote, such action may be taken without a meeting on written
consent, setting forth the action so taken, signed by all the persons or
entities entitled to vote thereon. [T.C.A. 48-1402(1)].
ARTICLE VII
AMENDMENT OF BY-LAWS
These By-Laws may be amended, added to, or repealed either by: (1) a
majority vote of the shares represented at any duly constituted shareholders,
meeting, or (2) a majority vote of the entire Board of Directors. Any change in
the By-Laws made by the Board of Directors, however, may be amended or repealed
by the shareholders. [T.C.A. 48-812].
CERTIFICATION
I certify that these By-Laws were duly adopted by the incorporator at
the organization meeting of the corporation and adopted, ratified and approved
at the first meeting of shareholders, and are the By-Laws in effect this 1st day
of July, 1986.
/s/ John Minchey
-------------------------------------
JOHN MINCHEY, SECRETARY
-4-
<PAGE> 1
Exhibit 3.67
CHARTER
OF
NUSEP, INC.
The undersigned, acting as the incorporator under the Tennessee
Business Corporation Act, adopts the following Charter for such corporation:
1. The name of the corporation is NUSEP, Inc.
2. The corporation is authorized to issue 2,000 common shares, which
shares collectively shall have unlimited voting rights and the right to receive
the net assets of the corporation upon dissolution.
3. The street address and zip code of the corporation's initial
registered office is 9207 Park West Boulevard. Post Office Box 30698, Knoxville,
Tennessee 37930.
4. The corporation's initial registered office is located in Knox
County, Tennessee.
5. The name of the corporation's initial registered agent at that
office is Michael Lynn Hatcher.
6. The name, address, and zip code of the incorporator is W. Dale
Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
7. The street address and zip code of the principal office of the
corporation is 9207 Park West Boulevard, Post Office Box 20698, Knoxville,
Tennessee 37930.
8. The corporation is for profit.
9. No director may be sued by the corporation or its shareholders for
breach of his or her fiduciary duty to the corporation, provided, however, that
this provision shall not absolve a
<PAGE> 2
director from a breach of his or her duty of loyalty, or acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, or for distributions in violation of T.C.A. Section48-18-304.
DATED: this 6th day of November, 1990.
/s/ W. Dale Amburn
----------------------------------
W. DALE AMBURN, INCORPORATOR
-2-
<PAGE> 3
ARTICLES OF AMENDMENT TO THE CHARTER
OF
NUSEP, INC.
TO THE SECRETARY OF STATE OF THE STATE OF TENNESSEE:
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is NUSEP, Inc.
2. The text of the amendment adopted is as follows: the
corporation changes its name to Southeastern Emergency
Physicians of Memphis, Inc.
3. The amendment was duly adopted by the incorporator without
shareholder action, such shareholder action not being
required.
DATED: this 7th day of February, 1991.
NUSEP, INC.
/s/ W. Dale Amburn
----------------------------------
W. DALE AMBURN, INCORPORATOR
<PAGE> 4
ARTICLES OF AMENDMENT TO THE CHARTER
OF
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
Pursuant to the provisions of Section 48-20-106 of the Tennessee
Business Corporation Act, the undersigned Corporation hereby submits the
following articles to amend its Charter and states as follows:
1. The name of the Corporation is Southeastern Emergency Physicians of
Memphis, Inc.
2. The text of the amendment adopted is:
(a) The Corporation hereby changes its registered agent and
office to: W. Dale Amburn, 1716 Clinch Avenue, Knoxville, Tennessee 37916.
(b) The Corporation hereby changes the street address of its
principal office to 1900 Winston Road, Post Office Box 30698, Knoxville,
Tennessee 37930.
3. After the changes are made, the street address of the registered
office of the Corporation and the business office of its registered agent shall
be identical.
4. The amendment was duly adopted on the 15th day of January, 1992
by the board of directors without shareholder action, as such shareholder action
was not required.
DATED this 15 day of January, 1992.
SOUTHEASTERN EMERGENCY PHYSICIANS,
OF MEMPHIS, INC.
By: /s/
___________________________________
Its: ___________________________________
<PAGE> 5
ARTICLES OF MERGER
OF
SOUTHEAST MARKETING SERVICES, INC.
INTO
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
Pursuant to the provisions of Section 48-21-107 of the
Tennessee Business Corporation Act, the undersigned corporations adopt the
following Articles of Merger:
1. The attached Plan of Merger (Exhibit "A"), was approved by
each of the undersigned corporations in the manner prescribed by the Tennessee
Business Corporation Act.
2. Approval by the Shareholders of each corporation that is a
party to the merger is required by the Tennessee Business Corporation Act.
3. As to Southeast Marketing Services, Inc., a Tennessee
corporation, the plan was duly adopted by the Board of Directors and approved by
the written consent of the sole shareholder entitled to vote on December 12,
1995.
4. As to Southeastern Emergency Physicians of Memphis, Inc., a
Tennessee corporation, the plan was duly adopted by the Board of Directors and
approved by the written consent of the sole shareholder entitled to vote on
December 12, 1995.
5. These Articles of Merger shall take effect on December 31,
1995.
<PAGE> 6
IN WITNESS WHEREOF, these Articles of Merger are executed and
approved on behalf of the parties to the merger by the undersigned, pursuant to
the authorization of the directors and the sole shareholder of each corporation.
Dated: December 12, 1995.
SOUTHEAST MARKETING SERVICES, INC.
a Tennessee corporation
By: /s/ Michael Hatcher
_________________________________
Its: Secretary
SOUTHEASTERN EMERGENCY PHYSICIANS
OF MEMPHIS, INC.
a Tennessee corporation
By: /s/ H.L. Massingale
_________________________________
Its: President
-2-
<PAGE> 7
PLAN OF MERGER
OF
SOUTHEAST MARKETING SERVICES, INC.
INTO
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
Pursuant to the provisions of Section 48-21-102 of the Tennessee Business
Corporation Act, the undersigned corporations adopt the following Plan of
Merger:
1. The name of each corporation planning to merge is:
(a) Southeast Marketing Services, Inc.
(b) Southeastern Emergency Physicians of Memphis, Inc.
2. The name of the surviving corporation is:
(a) Southeastern Emergency Physicians of Memphis. Inc.
3. The name of the corporation whose shares will be issued in
connection with the merger is:
(a) Southeastern Emergency Physicians of Memphis, Inc.
4. The terms and conditions of the merger are:
(a) Agreement to Merge. Southeastern Emergency Physicians
of Memphis, Inc., and Southeast Marketing Services, Inc., agree to execute and
deliver to the Tennessee Secretary of State for filing Articles of Merger which
shall provide that Southeastern Emergency Physicians of Memphis, Inc. shall be
the surviving corporation in the Merger.
(b) Effective Date of Merger. Effective date of the
Merger shall be December
<PAGE> 8
31, 1995.
(c) Management of Surviving Corporation. The surviving
corporation, Southeastern Emergency Physicians of Memphis, Inc., shall be
managed by a Board of Directors consisting of two Directors.
(d) Costs and Expenses. The constituent corporations
shall bear their own costs and expenses in connection with due diligence and
other related activities preliminary to the Merger. Provided, however, that the
surviving corporation shall bear all legal and accounting costs and expenses
associated with the preparation and filing of the Articles of Merger, Plan of
Merger and all other related documents.
(e) Effect of the Merger. As of the effective date of the
Merger, the separate existence of Southeast Marketing Services, Inc., shall
cease and all property owned by it shall be vested in Southeastern Emergency
Physicians of Memphis, Inc. without reversion or impairment and all liabilities
of the non-surviving corporation shall be vested in the surviving corporation.
The surviving corporation shall possess and enjoy all the rights, privileges,
immunities, powers and franchises, both of a public and a private nature, and be
subject to all restrictions, disabilities, duties, debts, and liabilities of the
non-surviving corporation.
5. The manner and basis of converting the shares of the merging
corporation into securities, cash, or other property of the surviving
corporation is as follows: The sole shareholder of Southeast Marketing Services,
Inc., shall receive seventy-five (75) shares of the common stock of Southeastern
Emergency Physicians of Memphis, Inc., in exchange for all of
-2-
<PAGE> 9
the issued and outstanding shares of common stock of Southeast Marketing
Services, Inc., held by such shareholder.
Dated: December 12, 1995.
SOUTHEASTERN EMERGENCY PHYSICIANS
OF MEMPHIS, INC.
By: /s/ H.L. Massingale
__________________________________
Its: President
SOUTHEAST MARKETING SERVICES, INC.
By: /s/ Michael Hatcher
__________________________________
Its: Secretary
-3-
<PAGE> 1
Exhibit 3.68
BYLAWS
OF
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
ARTICLE I
MEETING OF SHAREHOLDERS
1. Annual Meeting. The annual meeting of the shareholders
shall be held at such time and place, either within or without this State, as
may be designated from time to time by the directors.
2. Special Meetings. Special meetings of the shareholders may
be called by the president, a majority of the board of directors, or by the
holders of not less than ten percent (10%) of all the shares entitled to vote at
such meeting. The place of said meetings shall be designated by the directors.
3. Notice of Shareholder Meetings. Written notice stating the
date, time, and place of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered either
personally or by mail by or at the direction of the president, secretary,
officer, or person calling the meeting to each shareholder entitled to vote at
the meeting. Such notice shall be delivered not less than ten (10) days nor more
than two (2) months before the date of the meeting, and shall be deemed to be
delivered when deposited in the United States mail postpaid and correctly
addressed (if mailed), or upon actual receipt (if hand-delivered). The person
giving such notice shall certify that the notice required by this paragraph has
been given.
4. Quorum Requirements. A majority of the shares entitled to
vote shall constitute a quorum for the transactions of business. Once a share is
represented for any purpose at a meeting, it shall be deemed present for quorum
purposes for the remainder of the meeting and
<PAGE> 2
for any adjournment of that meeting unless a new record date is or must be set
for that adjourned meeting.
5. Voting and Proxies. If a quorum exists, action on a matter
(other than the election of Directors) shall be approved if the votes favoring
the action exceed the vote opposing the action. A shareholder may vote his or
her shares either in person or by written proxy, which proxy is effective when
received by the secretary or other person authorized to tabulate votes. No proxy
shall be valid after the expiration of eleven (11) months from the date of its
execution unless otherwise provided in the proxy.
ARTICLE II
BOARD OF DIRECTORS
1. Qualification and Election. Directors need not be
shareholders or residents of this State. They shall be elected by a plurality of
the votes cast at a meeting at which a quorum is present. Each director shall
hold office until the expiration of the term for which the director is elected,
and thereafter until his successor has been elected and qualified.
2. Number. The number of directors shall be fixed from time to
time by either the shareholders or by the board of directors.
3. Meetings. The board of directors shall hold such regular
and special meetings as it from time to time decides. These meetings may be
either in person or by conference call. Special meetings may be called at any
time by the chairman of the board, president, or any two (2) directors.
4. Notice of Directors' Meetings. All regular board meetings
may be held without notice. Special meetings shall be preceded by at least two
(2) days notice of the date, time, and place of the meeting. Notice of an
adjourned meeting need not be given if the time and place to which the meeting
is adjourned are fixed at the meeting at which the adjournment is taken,
-2-
<PAGE> 3
and if the period of adjournment is taken, and if the period of adjournment does
not exceed one (1) month in any one adjournment.
5. Quorum and Vote. The presence of a majority of the
directors shall constitute a quorum for the transaction of business. The vote of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the board.
6. Executive and Other Committees. The board of directors, by
a resolution adopted by a majority of its members, may create one or more
committees, consisting of one or more directors, and may delegate to such
committee or committees any and all such authority as is permitted by law.
ARTICLE III
OFFICERS
1. Number. The corporation shall have a president and a
secretary, and such other officers as the board of directors shall from time to
time deem necessary. Any two or more offices may be held by the same person,
except the offices of president and secretary.
2. Election and Term. The officers shall be elected by the
board of directors. Each officer shall serve at the pleasure of the board until
such officers resignation or removal.
3. Duties. All officers shall have such authority and perform
such duties in the management of the corporation as are normally incident to
their offices and as the board of directors may from time to time provide.
ARTICLE IV
RESIGNATIONS, REMOVALS AND VACANCIES
1. Resignations. Any officer or director may resign at any
time by giving written notice to the chairman of the board, the president, or
the secretary. Any such resignation shall take effect at the time specified
therein, or, if no time is specified, then upon its delivery.
-3-
<PAGE> 4
2. Removal of Officers. Any officer or agent may be removed by
the board at any time with or without cause.
3. Removal of Directors. Any or all of the directors may be
removed either with or without cause by a proper vote of the shareholders.
4. Vacancies. Newly created directorships resulting from an
increase in the number of directors, and vacancies occurring in any office or
directorship for any reason, including removal of an officer or director, may be
filled by the vote of a majority of the directors then in office, even if less
than a quorum exists.
ARTICLE V
CAPITAL STOCK
1. Stock Certificates. Every shareholder shall be entitled to
a certificate or certificates of capital stock of the corporation in such form
as may be prescribed by the board of directors. Unless otherwise decided by the
board, such certificates shall be signed by the president and the secretary of
the corporation.
2. Transfer of Shares. Shares of stock may be transferred on
the books of the corporation by delivery and surrender of the properly assigned
certificate, but subject to any restrictions or transfer imposed by either the
applicable securities laws or any shareholder agreement.
3. Loss of Certificates. In the case of the loss, mutilation,
or destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms as the board of directors shall prescribe.
-4-
<PAGE> 5
ARTICLE VI
ACTION BY CONSENT
Whenever the shareholders or directors are required or
permitted to take any action by vote, such action may be taken without a meeting
on written consent, setting forth the action so taken, signed by all the persons
or entities entitled to vote thereon. The affirmative vote of the number of
shares or directors that would be necessary to take such action at a meeting
shall be the act of the shareholders or directors, as the case may be.
ARTICLE VII
AMENDMENT OF BYLAWS
These bylaws may be amended, added to, or repealed either by
the shareholders or the board of directors as provided by statute. Any change in
the bylaws made by the board of directors, however, may be amended or repealed
by the shareholders.
CERTIFICATION
I certify that these initial bylaws for the corporation were
duly adopted as of the ___ day of ________, 19__.
/s/ W. Dale Amburn
-----------------------------------
W. DALE AMBURN, INCORPORATOR
-5-
<PAGE> 1
Exhibit 3.69
CHARTER
OF
TEAM HEALTH FINANCIAL SERVICES, INC.
The undersigned person, acting as the incorporator under the Tennessee
Business Corporation Act, adopts the following charter for Team Health Financial
Services, Inc. (the "Corporation").
1. The name of the Corporation is Team Health Financial Services, Inc.
2. The Corporation is authorized to issue two thousand (2,000) common
shares, which shares collectively shall have unlimited voting rights and the
right to receive the net assets of the Corporation upon dissolution.
3. The address of the Corporation's initial registered office is:
500 Tallan Building
Two Union Square
Chattanooga, Tennessee 37402
Hamilton County
4. The Corporation's initial registered agent in the registered office
is Corporation Service Company.
5. The name and principal business address of the incorporation is:
W. Dale Amburn
London, Amburn & Thomforde, P.C.
1716 Clinch Avenue
Knoxville, Tennessee 37916
6. The address of the Corporation's initial principal office is:
1900 Winston Road, Suite 300
Knoxville, Tennessee 37919
7. The Corporation is for profit.
8. No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except: (i) for any breach of the director's duty of loyalty
to the Corporation or its shareholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law; or
(iii) for violation of the director's duty under Tennessee Code Annotated
Section 48-18-304.
Dated: October 9, 1997.
<PAGE> 2
/s/ W. Dale Amburn
-------------------------------
W. Dale Amburn, Incorporator
-2-
<PAGE> 1
Exhibit 3.70
BYLAWS
OF
TEAM HEALTH FINANCIAL SERVICES, INC.
ARTICLE I
SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the
shareholders for the election of directors and for the transaction of such other
business as may properly come before the meeting, shall be held at such place,
either within or without the State of Tennessee, on such date, and at such time,
as the Board of Directors may by resolution provide, or if the Board of
Directors fails to provide, then such meeting shall be held at the principal
office of the Corporation at 10:00 a.m. on the fourth Friday of the fourth
calendar month after the end of the Corporation's fiscal year, if not a legal
holiday under the laws of the State of Tennessee, and if a legal holiday, on the
next succeeding business day.
Section 2. Special Meetings. Special meetings of the
shareholders may be called by the Board of Directors, by the Chairman of the
Board of Directors, by the President, or by the Corporation upon the written
request (which request shall set forth the purpose or purposes of the meeting)
of the shareholders of record (see Section 6(b) of Article I of these Bylaws) of
outstanding shares representing more than 10% of all the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting. In
the event such meeting is called by the Board of Directors, such meeting may be
held at such place, either within or without the State of Tennessee, as is
stated in the call and notice thereof.
Section 3. Notice of Meetings. A written or printed notice
stating the place, day and hour of the meeting, and in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered or mailed by the Secretary of the Corporation to each holder of record
of stock of the Corporation at the time entitled to vote, at his address as it
appears upon the records of the Corporation, not less than 10 nor more than 60
days prior to such meeting. If the Secretary fails to give such notice within 20
days after the call of a meeting, the person calling or requesting such meeting,
or any person designated by them, may give such notice. Notice of such meeting
may be waived in writing by any shareholder. Notice of any adjourned meeting of
the shareholders shall not be required if the time and place to which the
meeting is adjourned are announced at the meeting at which the adjournment is
taken, unless the Board of Directors sets a new record date for such meeting in
which case notice shall be given in the manner provided in this Section 3.
Section 4. Quorum and Shareholder Vote. A quorum for action on
any subject matter at any annual or special meeting of shareholders shall exist
when the holders of shares entitled to vote a majority of the votes entitled to
be cast on such subject matter are represented in person or by proxy at such
meeting. If a quorum is present, the affirmative vote of such number of shares
as is required by the Tennessee Business Corporation Act (as in effect at the
time the vote is taken), for approval of the subject matter being voted upon,
shall be the act of the shareholders, unless a greater vote is required by the
Articles of Incorporation or these Bylaws. If a quorum is not present, a meeting
of shareholders may be adjourned from time to time by the vote of shares having
a majority of the votes of the shares represented at such meeting, until a
quorum is present. When a quorum is
<PAGE> 2
present at the reconvening of any adjourned meeting, and if the requirements of
Section 3 of this Article I have been observed, then any business may be
transacted at such reconvened meeting in the same manner and to the same extent
as it might have been transacted at the meeting as originally noticed.
Section 5. Proxies. A shareholder may vote either in person or
by proxy duty executed in writing by the shareholder. Unless written notice to
the contrary is delivered to the Corporation by the shareholder, a proxy for any
meeting shall be valid for any reconvention of any adjourned meeting.
Section 6. Fixing Record Date.
(a) Except provided in paragraph (b) of this Section 6, for
the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors shall have the power to fix a
date, not more than 70 days prior to the date on which the particular action
requiring a determination of shareholders is to be taken, as the record date for
any such determination of shareholders. A record date for the determination of
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof shall not be set less than 10 days prior to such
meeting; provided that the record date for the determination of shareholders
entitled to notice of or to vote at any special meeting of shareholders called
by the Corporation at the request of holders of shares pursuant to Section 2 of
Article I hereof or any adjournment thereof shall be 20 days after the
"Determination Date" (as defined in paragraph (b) of this Section 6), and
provided further that such record date shall be 70 days prior to such special
meeting. In any case where a record date is set, under any provision of this
Section 6, only shareholders of record on the said date shall he entitled to
participate in the action for which the determination of shareholders of record
is made, whether the action is payment of a dividend, allotment of any rights or
any change or conversion or exchange of capital stock or other such action, and,
if the record date is set for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, only such shareholders of
record shall be entitled to such notice or vote, notwithstanding any transfer of
any shares on the books of the Corporation after such record date.
(b)(i) In order that the Corporation may determine the
shareholders entitled to request a special meeting of the shareholders or a
special meeting in lieu of the annual meeting of the shareholders pursuant to
Section 2 of Article I hereof, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Directors, and which date shall not
be more than 10 days after the date upon which the resolution fixing the record
date is adopted by the Board of Directors. Any shareholder of record seeking to
have the shareholders request such a special meeting shall, by written notice to
the Secretary, request the Board of Directors to fix a record date. The Board of
Directors shall, within 10 business days after the date on which such a request
is received, adopt a resolution fixing the record date. If no record date has
been fixed by the Board of Directors within 10 business days after the date on
which such a request is received, the record date for determining shareholders
entitled to request such a special meeting shall be the first day on which a
signed written request setting forth the request to fix a record date is
delivered to the Corporation by delivery to its principal place of
-2-
<PAGE> 3
business, or any officer or agent of the Corporation having custody of the books
in which proceedings of meetings of shareholders are recorded.
(ii) Every written request for a special meeting shall bear
the date of signature of each shareholder who signs the request and no such
request shall be effective to request such a meeting unless, within 70 days
after the record date established in accordance with paragraph (b)(i) of this
Section, written requests signed by a sufficient number of record holders as of
such record date to request a special meeting in accordance with Section 2 of
Article I hereof are delivered to the Corporation in the manner prescribed in
paragraph (b)(i) of this Section.
(iii) In the event of the delivery, in the manner provided by
this Section, to the Corporation of the requisite written request or requests
for a special meeting and/or any related revocation or revocations, the
Corporation shall engage nationally recognized independent inspectors of
elections for the purpose of promptly performing a ministerial review of the
validity of' the requests and revocations. For the purpose of permitting a
prompt ministerial review by the independent inspectors, no request by
shareholders for a special meeting shall be effective until the earlier of (i)
five business days following delivery to the Corporation of requests signed by
the holders of record (on the record date established in paragraph (b)(i) of
this Section) of the requisite minimum number of shares that would be necessary
to request such a meeting under Section 2 of Article I hereof, or (ii) such date
as the independent inspectors certify to the Corporation that the requests
delivered to the Corporation in accordance with this Article represent at least
the minimum number of shares that would be necessary to request such meeting
(the earlier of such dates being herein referred to as the "Determination
Date"). Nothing contained in this paragraph shall in any way be construed to
suggest or imply that the Board of Directors or any shareholder shall not be
entitled to contest the validity of any request or revocation thereof, whether
during or after such five business day period, or to take any other action
(including, without limitation, the commencement, prosecution or defense of any
litigation with respect thereto).
(iv) Unless the independent inspectors shall deliver, on or
before the Determination Date, a certified report to the Corporation stating
that the valid requests for a special meeting submitted pursuant to paragraph
(iii) above represent less than the requisite minimum number of shares that
would be necessary to request a special meeting under Section 2 of Article I
hereof, the Board of Directors shall, within five business days after the
Determination Date, adopt a resolution calling a special meeting of the
shareholders and fixing a record date for such meeting, in accordance with
Section 6(a) of Article I of these Bylaws.
Section 7. Notice of Shareholder Business. At an annual
meeting of the shareholders, only such business shall be conducted as shall have
been brought before the meeting (a) by or at the direction of the Board of
Directors or (b) by any shareholder of the Corporation who complies with the
notice procedures set forth in this Section 7 and only to the extent that such
business is appropriate for shareholder action under the provisions of the
Tennessee Business Corporation Act. For business to be properly brought before
an annual meeting by a shareholder, the shareholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 60 days prior to
the meeting; provided, however, that in the event that less than 40 days' notice
or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received not later
than the close of
-3-
<PAGE> 4
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in the Bylaws to the
contrary, no business shall be conducted at an annual meeting, except in
accordance with the procedures set forth in this Section 7. At an annual
meeting, the Chairman shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 7, and if he should so determine, he shall
so declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
Section 8. Notice of Shareholder Nominees. Except for
Directors who are elected by Directors pursuant to the provisions of Section 2
of Article II of these Bylaws, only persons who are nominated in accordance with
the procedures set forth in this Section 8 shall be eligible for election as
Directors. Nominations of' persons for election to the Board of Directors of the
Corporation may be made at a meeting of shareholders (a) by or at the direction
of the Board of Directors or (b) by any shareholder of the Corporation entitled
to vote for the election of Directors at the meeting who complies with the
notice procedures set forth in this Section 8. Such nominations, other than
those made by or at the direction of the Board of Directors, shall be made
pursuant to timely notice in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 60 days prior
to the meeting; provided, however, that in the event that less than 40 days'
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a Director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended; and (b) as to the shareholder giving the notice (i) the name and
address, as they appear on the Corporation's books, of such shareholder and (ii)
the class and number of shares of the Corporation which are beneficially owned
by such shareholder. No person shall be eligible for election as a Director of
the Corporation unless nominated in accordance with the procedures set forth in
the Bylaws. The Chairman shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the procedures
prescribed by the Bylaws, and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. The Board of Directors shall
have the management of the business of the Corporation and, subject to any
restrictions imposed by law, by the Articles of Incorporation, or by these
Bylaws, may exercise all the powers of the Corporation.
-4-
<PAGE> 5
Section 2. Number and Term of Directors. Except as provided in
this Section 2, two (2) Directors shall constitute the full Board. At any annual
or special meeting the shareholders may, and at any meeting of directors, the
directors (by a vote of not less than 51% of the directors then in office) may,
fix a different number of Directors who shall constitute the full Board, but the
full Board shall consist of not less than 2 nor more than 10 Directors.
Section 3. Meetings of the Directors. The Board of Directors
shall meet each year immediately following the annual meeting of shareholders,
and the Board may by resolution provide for the time and place of other regular
meetings. Special meetings of the Directors may be called by the Chairman of the
Board or by the President or by any two of the Directors.
Section 4. Notice of Meetings. Notice of each meeting of the
Directors shall he given by the Secretary by mailing the same at least ten days
before the meeting or by telephone, telegraph or cablegram or in person at least
five days before the meeting, to each Director, except that no notice need be
given of regular meetings fixed by the resolution of the Board or of the meeting
of the Board held at the place of and immediately following the annual meeting
of the shareholders. Any Director may waive notice, either before or after the
meeting, and shall be deemed to have waived notice if he is present at the
meeting.
Section 5. Action of Directors Without a Meeting. Any action
required by law to be taken at a meeting of the Board of Directors, or any
action which may be taken at a meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if written consent, setting
forth the action so taken, shall be signed by all the Directors, or all the
members of the committee, as the case may be, and be filed with the minutes of
the proceedings of the Board or the committee. Such consent shall have the same
force and effect as a unanimous vote of the Board or the committee, as the case
may be.
Section 6. Committees. The Board of Directors may, in its
discretion, appoint committees, each consisting of one or more Directors, which
shall have and may exercise such delegated powers as shall be conferred on or
authorized by the resolutions appointing them, except that no such committee
may: (1) approve or propose to shareholders action that the Tennessee Business
Corporation Act requires to be approved by shareholders, (2) fill vacancies on
the Board of Directors or any of its committees, (3) amend the Articles of
Incorporation of the Corporation pursuant the Tennessee Business Corporation
Act, (4) adopt, amend or repeal these Bylaws, or (5) approve a plan of merger
not requiring shareholder approval. A majority of any such committee may
determine its action, fix the time and place of its meetings, and determine its
rules of procedure. Each committee shall keep minutes of its proceedings and
actions and shall report regularly to the Board of Directors. The Board of
Directors shall have power at any time to fill vacancies in, change the
membership of, or discharge any such committee.
Section 7. Compensation. A fee and reimbursement for expenses
for attendance at meetings of the Board of Directors or any committee thereof
may be fixed by resolution of the Board of Directors.
Section 8. Removal. Any or all directors may be removed from
office at any time with or without cause.
-5-
<PAGE> 6
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Corporation shall
consist of a Chairman of the Board of Directors, a President, one or more
Vice-Presidents, a Secretary and a Treasurer, and such other officers or
assistant officers as may be elected by the Board of Directors. Any two offices
may be held by the same person. The Board may designate a Vice-President as an
Executive Vice-President, and may designate the order in which the other
Vice-Presidents may act.
Section 2. Chairman of the Board. The Chairman of the Board of
Directors shall be the chief executive officer of the Corporation and shall,
under the direction of the Board of Directors, have responsibility for the
general direction of the business, policies and affairs of the Corporation. He
shall preside at all meetings of the shareholders and all meetings of the Board
of Directors and shall have such other duties as the Board of Directors shall
from time to time prescribe.
Section 3. President. The President shall be the chief
operating officer of the Corporation. He shall, under the direction of the chief
executive officer, supervise the management of the day-to-day business of the
Corporation. He shall have such further powers and duties as from time to time
may be conferred on him by the Board of Directors or the chief executive
officer. In the absence of the Chairman of the Board he shall preside at all
meetings of the shareholders and the Board of Directors.
Section 4. Vice-President. The Vice-President shall act in the
case of the absence or disability of the Chairman of the Board and the
President. If there is more than one Vice-President, such Vice-Presidents shall
act in the order of precedence, as set out by the Board of Directors.
Section 5. Treasurer. The Treasurer shall be responsible for
the maintenance of proper financial books and records of the Corporation.
Section 6. Secretary. The Secretary shall keep the minutes of
the meetings of the shareholders and the Directors and shall have custody of and
attest the seal of the corporation.
Section 7. Other Duties and Authorities. Each officer,
employee and agent shall have such other duties and authorities as may be
conferred on them by the Board of Directors.
Section 8. Removal. Any officer may be removed at any time by
the Board of Directors. A contract of employment for a definite term shall not
prevent the removal of any officer, but this provision shall not prevent the
making of a contract of employment with any officer and shall have no effect
upon any cause of action which any officer may have as a result of removal in
breach of a contract of employment.
-6-
<PAGE> 7
ARTICLE IV
DEPOSITORIES, SIGNATURE AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such depository or depositories as
the Board may designate and shall be drawn out on checks, drafts or other orders
signed by such officer, officers, agent or agents as the Board may from time to
time authorize.
Section 2. Contracts. All contracts and other instruments
shall be signed on behalf of the Corporation by the President or by such other
officer, officers, agent or agents, as the Board from time to time may by
resolution provide.
Section 3. Seal. The corporation seal of the Corporation shall
be as follows:
The seal may be manually affixed to any document or may be
lithographed or otherwise printed on any document with the same force, and
effect as if it had been affixed manually. The signature of the Secretary or
Assistant Secretary shall attest the seal and may be a facsimile if and to the
extent permitted by law.
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The
certificates of shares of capital stock of the corporation shall be in such form
as may be approved by the Board of Directors and shall be signed by the
President or a Vice-President and by the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer, provided that any such certificate may
be signed by the facsimile signature of either or both of such officers
imprinted thereon if the same is countersigned by a transfer agent of the
Corporation and provided further that certificates bearing the facsimile of the
signature of such officers imprinted thereon shall be valid in all respects as
if such person or persons were still in office, even though such officer or
officers shall have died or otherwise ceased to be officers.
Section 2. Transfers of Shares. Shares of stock in the
corporation shall be transferable only on the books of the Corporation by proper
transfer signed by the holder of record thereof or by a person duly authorized
to sign for such holder of record. The Corporation or its transfer agent or
agents shall be authorized to refuse any transfer unless and until it is
furnished such evidence as may reasonably require showing that the requested
transfer is proper.
Section 3. Lost, Destroyed or Stolen Certificates. Where the
holder of record of a share or shares of stock of the Corporation claims that
the certificate representing said share has been lost, destroyed or wrongfully
taken, the Board shall by resolution provide for the issuance of a certificate
to replace the original if the holder of record so requests before the
Corporation has notice that the certificate has been acquired by a bona fide
purchaser, files with the Corporation a sufficient indemnity bond, and furnishes
evidence of such loss, destruction or wrongful taking satisfactory to the
Corporation, in the reasonable exercise of its discretion. The Board may
authorize such officer or
-7-
<PAGE> 8
agent as it may designate to determine the sufficiency of such an indemnity bond
and to determine reasonably the sufficiency of the evidence of loss, destruction
or wrongful taking.
Section 4. Transfer Agent and Registrar. The Board may (but
shall not be required to) appoint a transfer agent or agents and a registrar or
registrars to transfers, and may require that all stock certificates bear the
signature of such transfer agent or of such transfer agent and registrar.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
Section 1. Actions Against Directors. The Corporation shall
indemnify to the fullest extent permitted by the Washington Business Corporation
Act, any individual, made a party to a proceeding (as defined in the Washington
Business Corporation Act) because he is or was a director, against liability (as
defined in the Washington Business Corporation Act), incurred in the proceeding,
if he acted in a manner he believed in good faith to be in or not opposed to the
best interests of the Corporation and, in the case of any criminal proceeding,
he had no reasonable cause to believe the conduct was unlawful.
Section 2. Advances for Expenses of Directors. The Corporation
shall pay for or reimburse the reasonable expenses incurred by a director who is
a party to a proceeding if:
(a) The director furnishes the Corporation a written
affirmation of his good faith belief that he has met
the standard of conduct set forth in Section 1 above;
and
(b) The director furnishes the Corporation a written
undertaking, executed personally on his behalf to
repay any advances if it is ultimately determined
that he is not entitled to indemnification.
The written undertaking required by paragraph (b) above must
be an unlimited general obligation of the director but need not be secured and
may be accepted without reference to financial ability to make repayment.
ARTICLE VII
AMENDMENT OF BYLAWS
Section 1. Amendment. These Bylaws may be altered, amended,
repealed or new Bylaws adopted by the Board of Directors by the affirmative vote
of a majority of all directors then holding office, but any bylaws adopted by
the Board of Directors may be altered, amended, repealed or any new bylaws
adopted, by the shareholders at an annual, or special meeting of shareholders,
when notice of any such proposed alteration, amendment, repeal or addition shall
have been given in the notice of such meeting. The shareholders may prescribe
that any bylaw or bylaws adopted by them shall not be altered, amended or
repealed by the Board of Directors.
-8-
<PAGE> 1
ARTICLES OF INCORPORATION
OF
TEAM RADIOLOGY, INC.
Pursuant to Section 55-2-02 of the General Statutes of North Carolina,
the undersigned hereby submits these Articles of Incorporation for the purpose
of forming a business corporation under the laws of the State of North Carolina:
1. The name of the corporation is Team Radiology, Inc.
2. The number of shares the corporation is authorized to Issue is one
hundred thousand (100,000).
3. The street and mailing address of the initial registered office of
the corporation in the State of North Carolina is one University Place, Suite
350, Durham, Durham County, North Carolina 27707; and the name of its initial
registered agent at such address is D. Skip Sallee, M.D.
4. No person who is serving or who has served as a director of the
corporation shall be personally liable to the corporation or any of its
shareholders for monetary damages for breach of duty as a director, except for
liability with respect to (i) acts or omissions that the director at the time of
such breach knew or believed were clearly in conflict with the best interests of
the corporation, (ii) any transaction from which the director derived an
improper personal benefit, (iii) prior to the effective date of this article or
(iv) acts or omissions with respect to which the North Carolina Business
Corporation Act does not permit the limitation of liability. As used herein, the
term "improper personal benefit" does not include a director's reasonable
compensation or other reasonable incidental benefit for or on account of his
service as a director, officer, employee, independent contractor, attorney, or
consultant of the corporation. No amendments or repeal of this article nor the
adoption of any provision to these Articles of Incorporation inconsistent with
this article, shall eliminate or reduce the protection granted herein with
respect to any matter that occurred prior to such amendment, repeal, or
adoption.
5. The name and address of the incorporator is D. Royce Powell Suite
500, 3200 Beechleaf Court, Raleigh, North Carolina 27604.
This the 6th day of October, 1993.
/s/ D. Royce Powell
----------------------------
D. Royce Powell
Incorporator
<PAGE> 2
ARTICLES OF MERGER
OF
TELERADIOLOGY ASSOCIATES, INC.
INTO
TEAM RADIOLOGY, INC.
Pursuant to the provisions of Section 55-11-05 of the North Carolina Business
Corporation Act, the undersigned corporations adopt the following Articles of
Merger:
1. The attached Plan of Merger (Exhibit "A"), was approved by each of
the undersigned corporations in the manner prescribed by the North Carolina
Business Corporation Act.
2. Approval by the Shareholders of each corporation that is a party to
the merger is required by the North Carolina Business Corporation Act.
3. As to Teleradiology Associates, Inc. (the non-surviving
corporation), the plan was duly adopted and approved by the Sole Shareholder by
the written consent of said Shareholder on December 26, 1996.
4. As to Team Radiology, Inc. (the surviving corporation), the plan was
duly adopted and approved by the Sole Shareholder by the written consent of said
Shareholder on December 26, 1996.
5. These Articles of Merger shall take effect on January 1, 1997, or
such later date as they may be filed with the Secretary of State.
<PAGE> 3
IN WITNESS WHEREOF, these Articles of Merger are executed and approved
on behalf of parties to the merger by the undersigned, pursuant to the
authorization of the Sole Shareholder and the directors of each corporation.
Dated: Dec. 26, 1996.
TELERADIOLOGY ASSOCIATES, INC.
By: /s/ H. Lynn Massingale
-------------------------------
H. Lynn Massingale, M.D.
Its: President
TEAM RADIOLOGY, INC.
By: /s/ H. Lynn Massingale
-------------------------------
H. Lynn Massingale, M.D.
Its: President
-2-
<PAGE> 4
PLAN OF MERGER
OF
TELERADIOLOGY ASSOCIATES, INC.
INTO
TEAM RADIOLOGY, INC.
Pursuant to the provisions of Section 55-11-01 of the North Carolina Business
Corporation Act, the undersigned corporations adopt the following Plan of
Merger:
1. The name of the corporations planning to merge are:
(a) Teleradiology Associates, Inc., a North Carolina
Corporation; and
(b) Team Radiology, Inc., a North Carolina Corporation
2. The name of the surviving corporation is:
(a) Team Radiology, Inc.
3. The name of the corporation whose shares will be issued in
connection with the merger is:
(a) Team Radiology, Inc.
4. The terms and conditions of the merger are:
(a) Agreement to Merge. Teleradiology Associates, Inc.
and Team Radiology, Inc. agree to execute and deliver
to the North Carolina Secretary of State for filing
Articles of Merger which shall provide that Team
Radiology, Inc. shall be the surviving corporation in
the Merger.
(b) Effective Date of Merger. Effective date of the
Merger shall be January 1, 1997, or such later date
as the Articles of Merger are filed.
(c) Costs and Expenses. The constituent corporations
shall bear their own costs and expenses in connection
with due diligence and other related activities
preliminary to the Merger. Provided, however, that
the surviving corporation shall bear all legal and
accounting costs and expenses associated with the
preparation and filing of the Articles of Merger,
Plan of Merger and all other related documents.
(d) Effect of the Merger. As of the effective date of the
Merger, the separate existence of Teleradiology
Associates, Inc. shall cease and all property
<PAGE> 5
owned by it shall be vested in Team Radiology, Inc.
without reversion or impairment and all liabilities
of the non-surviving corporation shall be vested in
the surviving corporation. The surviving corporation
shall possess and enjoy all the rights, privileges,
immunities, powers and franchises, both of a public
and a private nature, and be subject to all
restrictions, disabilities, duties, debts, and
liabilities of the non-surviving corporation.
5. The manner and basis of converting the shares of the non-surviving
corporation into securities, cash, or other property of the surviving
corporation is as follows: The sole shareholder of non-surviving corporation
shall exchange all of its shares of common stock for fifty thousand (50,000)
shares of the common stock of the surviving corporation.
Dated: Dec. 26, 1996.
TELERADIOLOGY ASSOCIATES, INC.
By: /s/ H. Lynn Massingale
-------------------------------
H. Lynn Massingale, M.D.
Its: President
TEAM RADIOLOGY INC.
By: /s/ Michael L. Hatcher
-------------------------------
Michael L. Hatcher
Its: Vice President and Chief Operating
Officer
-4-
<PAGE> 1
Exhibit 3.72
BYLAWS
OF
TEAM RADIOLOGY, INC.
ARTICLE I.
OFFICES
Section 1. Principal Office. The principal office of the corporation
shall be located at One University Place, Suite 350, Durham, North Carolina
27707.
Section 2. Registered Office. The registered office of the corporation
required by law to be maintained in the State of North Carolina may be, but need
not, be, identical with the principal office.
Section 3. Other Offices. The corporation may have offices at such
other places, either within or without the State of North Carolina, as the Board
of Directors may designate or as the affairs of the corporation may require from
time to time.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of shareholders shall be
held at the principal office of the corporation, or at such other place, either
within or without the State of North Carolina, as shall be (i) fixed by the
President, the Secretary or the Board of Directors and designated in the notice
of the meeting or (ii) agreed upon by a majority of the shareholders entitled to
vote at the meeting.
Section 2. Annual Meetings. The annual meeting of shareholders for the
election of directors and the transaction of other business shall be held in
October of each year on any day (except a Saturday, Sunday, or a legal holiday)
in that month as determined by the Board of Director.
Section 3. Substitute Annual Meeting If the annual meeting shall not be
held on the day designated by these bylaws, a substitute annual meeting may be
called in accordance with the provisions of Section 4 of this Article II. A
meeting so called shall be designated and treated for all purposes as the annual
meeting.
Section 4. Special Meetings. Special meetings of the shareholders may
be called at any time by the President, Secretary or Board of Directors of the
corporation, or by any shareholder pursuant to the written request of the
holders of not less than one-tenth of all the votes entitled to be cast on any
issue proposed to be considered at the meeting.
<PAGE> 2
Section 5. Notice of Meetings. Written or printed notice stating the
time and place of the meeting shall be given not less than ten nor more than
sixty days before the date of any shareholders' meeting, either personally or by
telegraph, teletype, or other form of wire or wireless communication or by
facsimile transmission or by mail or private carrier, by or at the direction of
the Board of Directors, the President, the Secretary, or other person calling
the meeting to each shareholder of record entitled to vote at such meeting;
provided that such notice must be given to all shareholders with respect to any
meeting at which a merger or share exchange is to be considered and in such
other instances as required by law. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the shareholder
at his address as it appears on the current record of shareholders of the
corporation, with postage thereon prepaid.
In the case of a special meeting, the notice of meeting shall include a
description of the purpose or purposes for which the meeting is called; but, in
the case of an annual or substitute annual meeting, the notice of meeting need
not include a description of the purpose or purposes for which the meeting is
called unless such a statement is required by the provisions of the North
Carolina Business Corporation Act.
When a meeting is adjourned to a different date, tine or place, notice
need not be given of the new date, time or place if the new date, tine or place
is announced at the meeting before adjournment and if a new record date is not
fixed for the adjourned meeting; but if a new record date is fixed for the
adjourned meeting (which must be done if the new date is more than 120 days
after the date of the original meeting), notice of the adjourned meeting must be
given as provided in this section to persons who are shareholders as of the new
record date.
Section 6. Waiver of Notice. Any shareholder may waive notice of any
meeting before or after the meeting. The waiver must be in writing, signed by
the shareholder, and delivered to the corporation for inclusion in the minutes
or filing with the corporate records. A shareholders' attendance, in person, or
by proxy, at a meeting (a) waives objection to lack of notice or defective
notice of the meeting, unless the shareholder or his proxy at the beginning of
the meeting objects to holding the meeting or transacting business at the
meeting, and (b) waives objection to consideration of a particular matter at the
meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder or his proxy objects to considering the matter
before it is voted upon.
Section 7. Shareholders' List. Before each meeting of shareholders, the
Secretary of the corporation shall prepare an alphabetical list of the
shareholders entitled to notice of such meeting or any adjournment thereof. The
list shall be arranged by voting group (and within each voting group by class or
series of shares) and show the address of and number of shares held by each
shareholder. The list shall be kept on file at the principal office of the
corporation, or at a place identified in the meeting notice in the city where
the meeting will be held, for the period beginning two business days after
notice of the meeting is given and continuing through the meeting, and shall be
available for inspection by any shareholder, his agent or attorney, or at any
time during regular business hours. The list shall also be available at the
meeting and shall be subject to inspection by any shareholder, his agent or
attorney, at any time during the meeting or any adjournment thereof.
-2-
<PAGE> 3
Section 8. Voting Group. All shares of one or more classes or series
that under the articles of incorporation or the North Carolina Business
Corporation Act are entitled to vote and be counted together collectively on a
matter at a meeting if the shareholders constitute a voting group. All shares
entitled by the articles of incorporation or the North Carolina Business
Corporation Act to vote generally on a matter are for that purpose a single
voting group. Classes or series of shares shall not be entitled to vote
separately by voting group unless expressly authorized by the articles of
incorporation or specifically required by law.
Section 9. Quorum. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of those shares
exists. A majority of the votes entitled to be cast on the matter by the voting
group represented in person or by proxy, shall constitute a quorum of that
voting group for action on that matter.
Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
In the absence of a quorum at the opening of any meeting of
shareholders, such meeting may be adjourned from time to time by a vote of the
majority of the votes cast on the motion to adjourn; and, subject to the
provisions of Section 5 of this Article II, at any adjourned meeting any
business may be transacted which might have been transacted at the original
meeting if a quorum exists with respect to the matter proposed.
Section 10. Proxies. Shares may be voted either in person or by one or
more proxies authorized by a written appointment executed by the shareholder or
by his duly authorized attorney in fact. A proxy As valid for eleven months from
the date of its execution, unless the person executing it specifies therein a
different period for which it is to continue in force.
Section 11. Voting of Shares. subject to the provisions of the articles
of incorporation and Section 3 of Article III, if applicable, each outstanding
share entitled to vote shall be entitled to one vote on each matter submitted to
a vote at a meeting of shareholders.
Except in the election of directors as governed by the provisions of
Section 3 of Article III, if a quorum exists, action on a matter by a voting
group is approved if the votes cast within the voting group favoring the action
exceed the votes cast opposing the action, unless a greater vote is required by
law, the articles of incorporation or these bylaws.
Absent special circumstances, shares of the corporation are not
entitled to vote it they are owned, directly or indirectly, by another
corporation in which the corporation owns, directly or indirectly, a majority of
the shares entitled to vote for directors of the second corporation; provided
that this provision does not limit the power of the corporation to vote its own
shares held by it in a fiduciary capacity.
Section 12. Informal Action by Shareholders. any action that is
required or permitted to be taken at a meeting of the shareholders may be taken
without a meeting, if a consent in writing, setting forth the action so taken,
shall be signed by all of the shareholders who would be entitled to vote upon
such action at a meeting, and delivered to the corporation for inclusion in the
minutes or filing with corporate records.
-3-
<PAGE> 4
If the corporation is required by law to give notice to nonvoting
shareholders of action to be taken by unanimous, written consent of voting
shareholders, then the corporation shall give the nonvoting shareholders, if
any, written notice of the proposed action at least ten days before the action
is taken.
ARTICLE III.
BOARD OF DIRECTORS
Section 1. General Powers. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation shall
be managed under the direction of its Board of Directors.
Section 2. Number and Qualifications. The number of directors
constituting the Board of Directors shall be seven (7). The shareholders or
Board of Directors may from time to time change the number of directors by
amendment of these bylaws, but the Board may not increase or decrease the number
of directors by more than thirty percent (30%) during any twelve-month period.
Directors need not be residents of the State of North Carolina or shareholders
of the corporation.
Section 3. Election of Directors. Except as provided in Section 6 of
this Article III, the directors shall be elected at the annual meeting of
shareholders. Those persons who receive the highest number of votes at a meeting
at which a quorum is present shall be deemed to have been elected.
Section 4. Term of Directors. Each initial director shall hold office
until the first shareholders meeting at which directors are elected, or until
such director's death, resignation or removal. The term of every other director
shall expire at the next annual shareholders' meeting following the director's
election or upon such director's death, resignation or removal. The term of a
director elected to fill a vacancy expires at the next shareholders' meeting at
which directors are elected. A decrease in the number of directors does not
shorten an incumbent director's term. Despite the expiration of a director's
term, such director shall continue to serve until a successor shall be elected
and qualifies or until there is a decrease in the number of directors.
Section 5. Removal. Any director may be removed at any tine with or
without cause by a vote of the shareholders if the number of votes cast to
remove such director exceeds the number of votes cast not to remove him. If a
director is elected by a voting group of shareholders, only the shareholders of
that voting group may participate in the vote to remove him. A director may not
be removed by the shareholders at a meeting unless the notice of the meeting
states that the purpose, or one of the purposes, of the meeting is removal of
the director. If any directors are so removed, new directors may be elected at
the same meeting. The entire board of directors may be removed, with or without
cause, by a majority of the votes entitled to be cast at any election of
directors, notwithstanding that the corporation has cumulative voting.
Section 6. Vacancies. Any vacancy occurring in the Board of Directors,
including without limitation a vacancy resulting from an increase in the number
of directors or from failure by the shareholders to elect the full authorized
number of directors, may be filled by the
-4-
<PAGE> 5
shareholders or by the Board of Directors, whichever group shall act first. If
the directors remaining in office do not constitute a quorum, the directors may
fill the vacancy by the affirmative vote of a majority of the remaining
directors. If the vacant office was held by a director elected by a voting
group, only the remaining director or directors elected by that voting group or
the holders of shares of that voting group are entitled to fill the vacancy.
Section 7. Chairman of the Board. There may be a Chairman of the Board
of Directors elected by the directors from their number at any meeting of the
Board. The Chairman shall preside at all meetings of the Board of Directors and
perform such other duties as may be directed by the Board.
Section 8. Compensation. The Board of Directors may compensate
directors for their services as such and may provide for the payment or
reimbursement of any or all expenses incurred by directors in connection with
such services.
Section 9. Indemnification of Directors. Any director who was or is
involved or is threatened to be involved, as a party or otherwise, in any
threatened, pending or complete action, suit or proceeding, including any appeal
relating thereto, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director of the corporation, shall be indemnified by
the corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding or the defense thereof, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal act or proceeding, had no reasonable cause to believe his conduct was
unlawful.
ARTICLE IV.
MEETINGS OF DIRECTORS
Section 1. Regular Meetings. A regular meeting of the Board of
Directors shall be held immediately after, and at the same place as, the annual
meeting of shareholders. In addition, the Board of Directors nay provide, by
resolution, the time and place, either within or without the State of North
Carolina, for the holding of additional regular meetings.
Section 2. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, if any, the
President or by any two (2) directors. Such a meeting may be hold either within
or without the State of North Carolina, as fixed by the person or persons
calling the meeting.
Section 3. Notice of Meetings, Regular meetings of the Board of
Directors may be held without notice. The person or persons calling a special
meeting of the Board of Directors shall, at least ten (10) days before the
meeting, give notice thereof by any usual means of communication. Such notice
need not specify the purpose for which the meeting is called. Any duly convened
regular or special meeting may be adjourned by the directors to a later time
without further notice.
-5-
<PAGE> 6
Section 4. Waiver of Notice. Any director may waive notice of any
meeting before or after the meeting. The waiver must be in writing, signed by
the director entitled to the notice, and delivered to the corporation for
inclusion in the minutes or filing with the corporate records. A director's
attendance at or participation in a meeting waives any required notice of such
meeting unless the director at the beginning of the meeting, or promptly upon
arrival, objects to holding the meeting or to transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.
Section 5. Quorum. Unless the articles of incorporation or these bylaws
provide otherwise, a majority of the number of directors fixed by or pursuant to
these bylaws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 6. Manner of Acting. Except as otherwise provided in the
Articles of Incorporation or these bylaws, including Section 9 of this Article
IV, the affirmative vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors.
Section 7. Presumption of Assent. A director of the corporation who is
present at a meeting of the Board of Directors or a committee of the Board of
Directors when action on any corporate matter is taken shall be presumed to have
assented to the action taken unless (a) he objects at the beginning of the
meeting, or promptly upon his arrival, to holding it or to transacting business
at the meeting or (b) his dissent or abstention is entered in the minutes of the
meeting or (c) he files his written notice of dissent or abstention with the
presiding officer of the meeting before its adjournment or with the corporation
immediately after the adjournment of the meeting. Such right to dissent or
abstention shall not apply to a director who votes in favor of such action.
Section 8. Action Without Meeting. Action required or permitted to be
taken at a meeting of the Board of Directors may be taken without a meeting if
the action is taken by all members of the Board. The action must be evidenced by
one or more written consents signed by each director before or after such
action, describing the action taken, and included in the minutes or filed with
the corporate records.
Section 9. Committees of the Board. The: Board of Directors may create
an Executive Committee and other committees of the board and appoint members of
the Board of Directors to serve on them. The creation of a committee of the
board and appointment of members to it must be approved by the greater of (a)
majority of the number of directors in office when the action is taken or (b)
the number of directors required to take action pursuant to Section 6 of this
Article IV. Each committee of the board must have two or more members and, to
the extent authorized by law and specified by the Board of Directors, shall have
and may exercise all of the authority of the Board of Directors in the
management of the corporation. Each committee member serves at the pleasure of
the Board of Directors. The provisions in these bylaws governing meetings,
action without meetings notice and waiver of notice, and quorum and voting
requirements of the Board of Directors apply to committees of the board
established under this section.
ARTICLE V.
OFFICERS
-6-
<PAGE> 7
Section 1. Officers of the Corporation. The officers of the corporation
shall consist of a President, a Secretary, a Treasurer and such Vice-Presidents,
Assistant Secretaries, Assistant Treasurers, and other officers as the Board of
Directors may from time to time elect. Any two or more offices may be held by
the same person, but no officer may act in more than one capacity where action
of two or more officers is required.
Section 2. Appointment and Term. The officers of the Corporation shall
be appointed by the Board of Directors or by a duly appointed officer authorized
by the Board of Directors to appoint one or more officers or assistant officers.
Each officer shall hold office until his death, resignation, retirement,
removal, disqualification or his successor shall have been appointed.
Section 3. Compensation of Officers. The compensation of all officers
of the corporation shall be fixed by or under the authority of the Board of
Directors and no officer shall serve the corporation in any other capacity and
receive compensation therefor unless such additional compensation be authorized
by the Board of Directors. The appointment of an officer does not itself create
contract rights.
Section 4. Removal. Any officer may be removed by the Board at any time
with or without cause; but such removal shall not affect the officer's contract
rights, if any, with the corporation.
Section 5. Resignation. An officer may resign at any time by
communicating his resignation to the corporation, orally or in writing. A
resignation is effective when communicated unless it specifies in writing a
later effective date. If a resignation is made effective at a later date that is
accepted by the corporation, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor does not take
office until the affective date. An officer's resignation does not affect the
corporation's contract rights, if any, with the officer.
Section 6. Bonds. The Board of Directors may by resolution require any
officer, agent, or employee of the corporation to give bond to the corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of his respective office or position, and to comply with such other conditions
as may from time to time be required by the Board of Directors.
Section 7. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall, when present, preside at all meetings of
the shareholders. He shall sign, with the Secretary, an Assistant Secretary, or
any other proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments which, the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
bylaws to some other officer or agent of the corporation, or shall be required
by law to he otherwise signed or executed; and in general he shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
Section 8. Vice Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice-Presidents the order
of their length of service as Vice-
-7-
<PAGE> 8
Presidents, unless otherwise determined by the Board of Directors, shall perform
the duties of the President, and when so acting shall have all the powers of and
be subject to all the restrictions upon the President. Any Vice-President may
sign, with the Secretary or an Assistant Secretary, certificates for shares of
the corporation; and shall perform such other duties as from time to time may be
prescribed by the President or Board of Directors.
Section 9. Secretary. The Secretary shall: (a) keep the minutes of the
meetings of shareholders, of the Board of Directors and of all committees in one
or more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these bylaws; or as required by law; (c)
maintain and authenticate corporate records and be custodian of the seal of the
corporation and see that the seal of the corporation is affixed to all documents
the execution of which on behalf of the corporation under its seal is duly,
authorized; (d) sign with the President or a Vice-President, certificates for
shares of the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors, (e) maintain and have general charge of
the stock transfer books of the corporation; (f) keep or cause to be kept a
record of the corporation's shareholders, giving the names and addresses of all
shareholders and the number and class of shares held by each, and prepare or
cause to be prepared voting lists prior to each general meeting of shareholders
as required by law; (g) attest the signature or certify the incumbency or
signature of any officer of the corporation; and (h) in general perform all
duties incident to the office of secretary and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
Section 10. Assistant Secretaries. In the absence of the Secretary or
in the event of his death, inability or refusal to act, the Assistant
Secretaries in the order of their length of service as Assistant Secretary,
unless otherwise determined by the Board of Directors, shall perform the duties
of the Secretary, and when so acting shall have all the powers of and be subject
to all the restrictions upon the Secretary. They shall perform such other duties
as may be prescribed by the Secretary, by the President, or by the Board of
Directors. Any Assistant Secretary may sign, with the President or a
Vice-President, certificates for shares of the corporation.
Section 11. Treasurer. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the corporation; receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever, and deposit all such moneys in the name of the corporation in such
depositories as shall be selected in accordance with the provisions of Section 4
of Article VI of these bylaws; (b) maintain appropriate accounting records as
required by law; (c) prepare, or cause to be prepared, annual financial
statements of the corporation that include a balance sheet as of the end of the
fiscal year and an income and cash flow statement for that year, which
statements, or a written notice of their availability, shall be mailed to each
shareholder within 120 days after the end of such fiscal year; and (d) in
general perform all of the duties incident to the office of Treasurer and such
other duties as from time to time may be prescribed by the President or by the
Board of Directors.
Section 12. Assistant Treasurers. In the absence of the Treasurer or in
the event of his death, inability or refusal to act, the Assistant Treasurers in
the order of their length of service as Assistant Treasurer, unless otherwise
determined by the Board of Directors, shall perform the duties of the Treasurer,
and when so acting shall have all the powers of and be subject to all the
-8-
<PAGE> 9
restrictions upon the Treasurer. They shall perform such other duties as may be
prescribed to them by the Treasurer, by the President, or by the Board of
Directors .
ARTICLE VI.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by the Board of Directors. Such authority may be general or confined
to specific instances.
Section 3. Checks and Drafts. All checks, drafts or other orders for
the payment of money, issued in the name of the corporation, shall be signed by
such officer or officers, agent or agents of the corporation and in such manner
as shall from time to time be determined by the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such depositories as may be selected by or under the authority of the Board
of Directors.
ARTICLE VII.
SHARES AND THEIR TRANSFER
Section. 1. Certificates for Shares. The Board of Directors may
authorize the issuance of some or all of the shares of the corporation's classes
or series without issuing certificates to represent such shares. If shares are
represented by certificates, the certificates shall be in such form as required
by law and as determined by the Board of Directors. Certificates shall be
signed, either manually or in facsimile, by the President or a Vice-President
and by the Secretary or Treasurer or an Assistant Secretary or an Assistant
Treasurer. All certificates for shares shall be consecutively numbered or
otherwise identified and entered into the stock transfer books of the
corporation. When shares are represented by certificates, the corporation shall
issue and deliver, to each shareholder to whom such shares have been issued or
transferred, certificates representing the shares owned by him. When shares are
not represented by certificates, then within a reasonable time after the
issuance or transfer of such shares, the corporation shall send the shareholder
to whom such shares have been issued or transferred a written statement of the
information required by law to be on certificates.
Section 2. Stock Transfer Books. The corporation shall keep a book or
set of books, to be known as the stock transfer books of the corporation,
containing the name of each shareholder of record, together with such
shareholder's address and the number and class or series of shares held by him.
Transfers of shares of the corporation shall be made only on the stock transfer
books of the corporation by the holder of record thereof or by his legal
representative, who shall furnish
-9-
<PAGE> 10
proper evidence of authority to transfer, or by his attorney authorized to
effect such transfer by power of attorney duly executed and filed with the
Secretary, and on surrender for cancellation of the certificate for such shares
(if the shares are represented by certificates.).
Section 3. Lost Certificates. The Board of Directors may direct a now
certificate to be issued in place of any certificate theretofore issued by the
corporation claimed to have been lost or destroyed, upon receipt of an affidavit
of such fact from the person claiming the certificate of stock to have been lost
or destroyed. When authorizing such issue of a new certificate, the Board of
Directors shall require that the owner of such lost or destroyed certificate, or
his legal representative, give the corporation a bond in such sum and with such
surety or other security as the Board may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate claimed
to have been lost or destroyed, except where the Board of Directors by
resolution finds that in the judgment of the directors the circumstances justify
omission of a bond.
Section 4. Fixing Record Date. The Board of Directors may fix a future
date as the record date for one or more voting groups in order to determine the
shareholders entitled to notice of a shareholders' meeting, to demand a special
meeting, to vote, or to take any other action. Such record date may not be more
than seventy days before the meeting or action requiring a determination of
shareholders. A determination of shareholders entitled to notice of or to vote
at a shareholders' meeting is effective for any adjournment of the meeting
unless the Board of Directors fixes a new record date for the adjourned meeting,
which it must do if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting.
If no record date is fixed by the Board of Directors for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, the close of business on the day before the first notice of the
meeting is delivered to shareholders shall be the record date for such
determination of shareholders.
The Board of Directors may fix a date as the record date for
determining shareholders entitled to a distribution or share dividend. If no
record date is fixed by the Board of Directors for such determination, it is the
date the Board of Directors authorizes the distribution or share dividend.
Section 5. Holder of Record. Except as otherwise required by law, the
corporation may treat the person in whose name the shares stand of record on its
books as the absolute owner of the shares and the person exclusively entitled to
receive notification and distributions, to vote, and to otherwise exercise the
rights, powers, and privileges of ownership of such shares.
Section 6. Shares Held by Nominees. The corporation shall recognize the
beneficial owner of shares registered in the name of a nominee as the owner and
shareholder of such shares for certain purposes if the nominee in whose name
such shares are registered files with the Secretary a written certificate in a
form prescribed by the corporation, signed by the nominee, indicating the
following: (i) the name, address, and taxpayer identification number of the
nominee, (ii) the name, address, and taxpayer identification number of the
beneficial owner; (iii) the number and class or series of shares registered in
the name of the nominee as to which the beneficial
-10-
<PAGE> 11
owner shall be recognized as the shareholder; and (iv) the purposes for which
the beneficial owner shall be recognized as the shareholder.
The purposes for which the corporation shall recognize the beneficial
owner as the shareholder may include the following: (i) receiving notice of,
voting at, and otherwise participating in shareholders' meetings; (ii) executing
consents with respect to the shares; (iii) exercising dissenters' rights under
Article 13 of the Business corporation Act; (iv) receiving distributions and
share dividends with respect to the shares; (v) exercising inspection rights;
(vi) receiving reports, financial statements, proxy statements, and other
communications from the corporation; (vii) making any demand upon the
corporation required or permitted by law; and (viii) exercising any other rights
or receiving any other benefits of a shareholder with respect to the shares.
The certificate shall be effective ten (10) business days after its
receipt by the corporation and until it is changed by the nominee, unless the
certificate specifies a later effective time or an earlier termination date.
If the certificate affects less than all of the shares registered in
the name of the nominee, the corporation may require the shares affected by the
certificate to be registered separately on the books of the corporation and be
represented by a share certificate that bears a conspicuous legend stating that
there is a nominee certificate in effect with respect to the shares represented
by that share certificate.
ARTICLE VIII.
INDEMNIFICATION
Any person who at any time serves or has served as it director of the
corporation, or who, while serving as a director of the corporation, serves or
has served, at the request of the corporation, as a director, officer, partner,
trustee, employee, or agent, of another corporation, partnership, joint venture,
trust, or other enterprise, or as a trustee or administrator under an employee
benefit plan, shall have a right to be indemnified by the corporation to the
fullest extent permitted by law against (a) reasonable expenses, including
attorneys' fees, incurred by him in connection with any threatened, pending, or
completed civil, criminal, administrative, investigative, or arbitrative action,
suit, or proceeding (and any appeal therein), whether or not brought by or on
behalf of the corporation, seeking to hold him liable by reason of the fact that
he is or was acting in such capacity, and (b) reasonable payments, made by him
in satisfaction of any judgment, money decree, fine (including an excise tax
assessed with respect to an employee benefit plan), penalty, or settlement for
which he may have become liable in any such action, suit, or proceeding.
The Board of Directors of the corporation shall take all such action as
may be necessary and appropriate to authorize the corporation to pay the
indemnification required by this bylaw, including, without limitation, making a
determination that indemnification. is permissible in the circumstances and a
good faith evaluation of the manner in which the claimant for indemnity acted
and of the reasonable amount of indemnity due him. The Board of Directors may
appoint a committee or special counsel to make such determination and
evaluation. To the extent needed, the
-11-
<PAGE> 12
Board shall give notice to, and obtain approval by, the shareholders of the
corporation for any decision to indemnify.
Any person who at any time after the adoption of the bylaw serves or
has served in the aforesaid capacity for or on behalf of the corporation shall
be deemed to be doing or to have done so in reliance upon, and as consideration
for, the right of indemnification provided herein. Such right shall inure to the
benefit of the legal representatives of any such person and shall not be
exclusive of any other right to which such person may be entitled apart from the
provision of this bylaw.
ARTICLE IX.
GENERAL PROVISIONS
Section 1. Distributions. The Board of Directors may from time to time
authorize, and the corporation may grant, distributions and share dividends to
its shareholders pursuant to law and subject to the provisions of its articles
of incorporation.
Section 2. Seal. The corporate seal of the corporation shall consist of
two concentric circles between which is the name of the corporation and in the
center of which is inscribed. SEAL; and such seal, as impressed or affixed on
the margin hereof is hereby adopted as the corporate seal of the corporation.
Section 3. Fiscal Year. The fiscal year of the corporation shall be
fixed by the Board of Directors.
Section 4. Amendments. Except as otherwise provided in the articles of
incorporation or by law, these bylaws may be amended or repealed and new bylaws
may be adopted by the Board of Directors.
No bylaw adopted, amended, or repealed by the shareholders, shall be
readopted, amended, or repealed by the Board of Directors unless the articles of
incorporation or a bylaw adopted by the shareholders authorizes the Board of
Directors to adopt, amend, or repeal that particular bylaw or the bylaws
generally.
Section 5. Definitions. Unless the context otherwise requires, terms
used, in these bylaws shall have the meanings assigned to them in the North
Carolina Business Corporation Act to the extent defined therein.
I, Charles F. Daniel, do hereby certify that I am the duly elected and
qualified Secretary of Team Radiology, Inc., a corporation organized under the
laws of the State of North Carolina, and that the foregoing is a true and
correct copy of the bylaws adopted at a meeting of the Board of Directors
thereof, convened and held in accordance with law and the Articles of
Incorporation of said corporation on the 5th day of November, 1993.
IN WITNESS WHEREOF, I have affixed my name as Secretary and have caused
the corporate seal of said corporation to be hereunto affixed us of the 5th day
of November, 1993.
-12-
<PAGE> 13
/s/
---------------------------------
Secretary
-13-
<PAGE> 14
AMENDMENT TO BYLAWS
OF
TEAM RADIOLOGY, INC.
Effective April 1994, the first two sentences of Article III Section 2
are deleted in their entirety and the following language substituted therefore:
The number of Directors shall be fixed from time to by either
the Shareholders or by the Board of Directors.
SECRETARY'S CERTIFICATE
The undersigned, being the duly elected Secretary of Team Radiology,
Inc., hereby certifies that the above Amendment to the Bylaws of the Corporation
was approved by the Sole Shareholder acting by Written Consent on June 12, 1995.
/s/ Michael L. Hatcher
---------------------------------------
Michael L. Hatcher, Secretary
-14-
<PAGE> 1
Exhibit 3.73
CERTIFICATE OF INCORPORATION
OF
THBS, INC.
FIRST: The name of the corporation is THBS, Inc. (the "Corporation").
SECOND: The registered office of the Corporation in the State of
Delaware is located at 1013 Centre Road, Wilmington, County of New Castle,
Delaware 19805. The registered agent of the Corporation at that address is
Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware; provided that the Corporation's activities shall
be confined to the management and maintenance of its intangible investments and
the collection and distribution of the income from such investments or from
tangible property physically located outside Delaware, all as defined in, and in
such manner as to qualify for exemption from income taxation under, Section
1902(b)(8) of Title 30 of the Delaware Code, or under the corresponding
provision of any subsequent law.
FOURTH: The Corporation shall have the authority to issue 1,000 shares
of common stock, having a par value of $1.00 per share.
FIFTH: The Corporation shall indemnify directors and officers of the
Corporation to the fullest extent permitted by law.
SIXTH: The directors of the Corporation shall incur no personal
liability to the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, provided, however, that the directors of
the Corporation shall continue to be subject to liability (i) for any breach of
their duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the directors derived
any improper personal benefit. In discharging the duties of their respective
positions, the board of directors, committees of the board, individual directors
and any individual officers may, in considering the best interest of the
Corporation, consider the effects of any actions upon employees, suppliers and
customers of the Corporation, communities in which offices or other
establishments of the Corporation are located, and all other pertinent factors.
In addition, the personal liability of the directors shall further be limited to
the fullest extent permitted by any future amendments to Delaware law.
SEVENTH: The business and affairs of the Corporation shall be managed
by or under the direction of the board of directors, the number of members of
which shall be set forth in the by-laws of the Corporation. The directors need
not be elected by ballot unless required by the by-laws of the Corporation.
EIGHTH: Meetings of the stockholders will be held within the State of
Delaware. The books of the Corporation will be kept (subject to the provisions
contained in the General
<PAGE> 2
Corporation Law) in the State of Delaware at such place or places as may be
designated from time to time by the board of directors or in the by-laws of the
Corporation.
NINTH: In the furtherance and not in limitation of the objects,
purposes and powers prescribed herein and conferred by the laws of the State of
Delaware, the board of directors is expressly authorized to make, amend and
repeal the by-laws.
TENTH: The Corporation shall have no power and may not be authorized by
its stockholders or directors (i) to perform or omit to do any act that would
cause the Corporation to lose its status as a corporation exempt from the
Delaware Corporation income tax under Section 1902(b)(8) of Title 30 of the
Delaware Code, or under the corresponding provision of any subsequent law, or
(ii) to conduct any activities outside of Delaware which could result in the
Corporation being subject to tax outside of Delaware.
ELEVENTH: The name and mailing address of the Incorporator is W. Dale
Amburn, London, Amburn & Thomforde, P.C., 1716 Clinch Avenue, Knoxville,
Tennessee 37916.
TWELFTH: The powers of the Incorporator shall terminate upon election
of directors.
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 17th day of October, 1997.
/s/ W. Dale Amburn
-----------------------------------
W. Dale Amburn, Incorporator
-2-
<PAGE> 1
Exhibit 3.74
BYLAWS OF
THBS, INC.
ARTICLE 1
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting, shall be held at such place, either within or
without the State of Delaware, on such date and at such time as the Board of
Directors may be resolution provide, or, if the Board of Directors fails to
provide, then such meeting shall be held at the principal office of the
Corporation at 10:00 a.m. on the second Tuesday in April of each year or, if
such date is a legal holiday, on the next succeeding business day. The Board of
Directors may specify by resolution prior to any special meeting of stockholders
is held within the year that such meeting shall be in lieu of the annual
meeting.
Section 2. Special Meeting. Special meetings of the stockholders may be
called at any time by the Board of Directors, the President or upon written
request of the holders of at least twenty-five percent (25%) of the outstanding
common stock. Such written request shall specify the time and purpose of the
proposed meeting. Such meeting shall be held at such place, and within or
without the State of Delaware, as is stated in the call and notice thereof .
Section 3. Notice of Meetings. Written notice of each meeting of
stockholders, stating the time and place of the meeting, and the purpose of any
special meeting shall be mailed to each stockholder entitled to vote at or to
notice of such meeting at the address shown on the books of the Corporation in
not less than ten (10) nor more than sixty (60) days prior to such meeting
unless such stockholder waives notice of the meeting. If an agreement of merger
or consolidation or a sale, lease, exchange, or other, disposition of all or
substantially all the property and assets of the corporation is to be considered
at any annual or special meeting, the written notice shall state the purpose of
such meeting and shall be given to the stockholder, whether or not entitled to
vote thereon, not less than twenty (20) days before such meeting. Any
stockholder may execute a waiver of notice in person or by proxy, either before
or after any meeting, and shall be deemed to have waived notice if he is present
at such meeting in person or by proxy. Neither the business transacted at, nor
the purpose of, any meeting need be stated in the waiver of notice of such
meeting.
Notice of any meeting may be given by the President, the Secretary or
the person or persons calling such meeting. No notice need be given of the time
and place of reconvening of any adjourned meeting, if the time and place to
which the meeting is adjourned are announced at the adjourned meeting, unless
the adjournment is for more than thirty days.
Section 4. List of Stockholders. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten (10) days
before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in the name of
each
<PAGE> 2
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specific in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 3. Quorum; Required Stockholder Vote. A quorum for the
transaction of business at any annual or special meeting of stockholders shall
exist when the holders of a majority of the outstanding shares entitled to vote
are represented either in person or by proxy of such meeting. If a quorum is
present, the affirmative vote of a majority of the shares represented at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless a greater vote is required by law, by the Certificate of
Incorporation or by these Bylaws. When a quorum is once present to organize a
meeting, the stockholders present may continue to do business at the meeting or
at any adjournment thereof notwithstanding withdrawal of enough stockholders to
leave less than a quorum. The holders of a majority of the voting shares
represented at a meeting, whether or not a quorum is present, may adjourn such
meeting from time to time.
Section 6. Proxies. A stockholder may vote either in person or by a
proxy which such stockholder has duly executed in writing. No proxy shall be
valid after three years from the date of its execution unless a longer period is
expressly provided in the proxy.
Section 7. Action of Stockholders Without Meeting. Any action required
to be, or which may be, taken at a meeting of stockholders, may be taken without
a meeting if written consent, setting forth the action so taken, shall be signed
and dated by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. Such consent shall have the same force and effect as an
affirmative vote of the stockholders and shall be filed with the minutes of the
proceedings of the stockholders.
ARTICLE II
DIRECTORS
Section 1. Power of Directors. The business of the Corporation shall be
managed by or under the direction of its Board of Directors which may exercise
all the powers of the Corporation, subject to any restrictions, imposed by law,
by the Certificate of Incorporation or by these Bylaws.
Section 2. Composition of the Board. The Board of Directors of the
Corporation shall consist of not less than one (1) nor more than ten (10)
natural persons of the age of eighteen or over. The exact number of directors
within the specific minimum and maximum shall be fixed by resolution of the
stockholders from time to time, but no decrease in the number of directors shall
-2-
<PAGE> 3
shorten the term of any incumbent director. Directors need not be residents of
the State of Delaware or stockholders of the Corporation. At each annual meeting
the stockholder shall elect the directors, who shall serve until their
successors are elected and qualified; provided that at any stockholders'
meeting, the entire Board of Directors or any individual director may be
removed, with or without cause, by the affirmative vote of the holders of a
majority of the shares entitled to vote at an election of directors.
Section 3. Meetings of the Board; Notice of Meetings; Waiver of Notice.
The annual meeting if the Board of Directors for the purpose of electing
officers and transacting such other business as may be brought before the
meeting shall be held each year immediately following the annual meeting of
stockholders. The Board of Directors may by resolution provide for the time and
place of other regular meetings and no notice of such regular meetings need be
given. Special meetings of the Board of Directors may be called by the President
or by any two directors unless the Board consists of one director, in which case
special meetings may be called by the sole director. Written notice of the time
and place of such meetings shall be given to each director by first class or air
mail at least four (4) days before the meeting or by telephone, telegraph,
cablegram or in person at least two (2) days before the meeting. Any director
may execute a waiver of notice, either before or after any meeting, and shall be
deemed to have waived notice if he is present at such meeting. Neither the
business to be transacted at, nor the purpose of, any meeting of the Board of
Directors need be stated in the notice or waiver of notice of such meeting. Any
meeting may be held at any place within or without the State of Delaware.
Section 4. Quorum; Vote Requirement. A majority of the number of
directors last fixed by the stockholders shall constitute a quorum for the
transaction of business at any meeting. When a quorum is present, the vote of a
majority of the directors present shall be the act of the Board of Directors,
unless a greater vote is required by law, by the Certificate of Incorporation or
by these Bylaws.
Section 5. Action of Board without Meeting, Any action required or
permitted to be taken at a meeting of the Board of Directors or by committee
thereof may be taken without a meeting if written consent, setting forth the
action so taken, is signed by all the directors or committee members and filed
with the minutes of proceedings of the Board of Directors or committee. Such
consent shall have the same force and effect as a unanimous affirmative vote of
the Board of Directors or committee, as the case may be.
Section 6. Committees. The Board of Directors, by resolution adopted by
a majority of all of the directors, may designate such committees as it deems
necessary or desirable, each composed of one (1) or more of the directors. Any
such committee may authorize the seal of the Corporation to be affixed to all
papers which may require it and, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation; provided that no committee shall have the authority of the Board of
Directors in reference to (1) an amendment to the Certificate of Incorporation
(except that a committee may, to the extent authorized in the resolution
-3-
<PAGE> 4
or resolutions providing for the issuance of shares of stock adopted by The
Board of Directors as provided in Section 151(a) of the Delaware General
Corporation Law fix any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes of any other series of the same or any other class
or classes of stock of the corporation), (2) the adoption of an agreement of
merger or consolidation, (3) the sale, lease or exchange or other disposition of
all or substantially all of the property and assets of the Corporation, (4) a
voluntary dissolution of the Corporation or a revocation thereof, or (5) an
amendment to the Bylaws of the Corporation; and, unless the resolution or the
Certificate of Incorporation expressly so provides, no such committee shall have
the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors or by the sole remaining
director, as the case may be, or if the vacancy is not so filled, or if no
director remains, by the stockholders. A director elected to fill a vacancy
shall serve for the unexpired term of his predecessor in office, or, if such
vacancy occurs by reason of an amendment to these Bylaws increasing the number
of directors, until the next election of directors by the stockholders and the
election and qualification of the successor.
Section 8. Telephone Conference Meetings. Unless the Certificate of
Incorporation otherwise provides, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board or any committee by means of telephone conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section 8 shall constitute presence in person at such meeting.
ARTICLE III
OFFICERS
Section 1. Executive Structure of the Corporation. The officers of the
Corporation shall be elected by the Board of Directors and shall consist of a
President, a Secretary, a Treasurer and such other officers or assistant
officers, including Vice President, as may be elected by the Board of Directors.
Each officer shall hold office for the term for which such officer has been
elected or appointed or until such officer's successor has been elected or
appointed and has qualified, or until such officer's earlier resignation,
removal from office, or death. Any two or more officers may be held by the same
person. The Board of Directors may designate a Vice President as an Executive
Vice President and may designate the order in which other Vice Presidents may
act.
Section 2. President. The President shall be the Chief Executive
Officer of the Corporation and shall give general supervision and direction to
the affairs of the Corporation, subject to the direction of the Board of
Directors. The President shall preside at all meetings of the stockholders.
-4-
<PAGE> 5
Section 3. Vice President. The Vice President shall act in the case of
absence or disability of the President.
Section 4. Secretary. The Secretary shall record all the proceedings of
the meetings of the stockholders and of the Board of Directors in a book to be
kept for that purpose, and shall have custody of and attest the seal of the
Corporation.
Section 5. Treasurer. The Treasurer shall be responsible for the
maintenance of proper financial books and records of the Corporation.
Section 6. Other Duties and Authority. Each officer, employee and agent
of the Corporation shall have such other duties and authority as may be
conferred upon such officer, employee or agent by the Board of Directors or
delegated to such officer, employee or agent by the President.
Section 7. Removal of Officers. Any officer may be removed at any time
by the Board of Directors, and such a vacancy may be filled by the Board of
Directors. This provision shall not prevent the making of a contract of
employment for a definite term with any officer and shall have no effect upon
any cause of action which any officer may have as a result of such officer's
removal in breach a of a contract of employment.
Section 8. Compensation. The salaries of the officers shall be fixed
from time to time by the Board of Directors. No officer shall be prevented from
receiving such salary by reason of the fact that such officer is also a director
of the Corporation.
ARTICLE IV
STOCK
Section 1. Stock Certificates. The shares of stock of the Corporation
shall be represented by certificate or shall be uncertificated. Certificates
shall be in such form as may be approved by the Board of Directors, which
certificates shall be issued to stockholders of the Corporation in numerical
order from the stock book of the Corporation, and each of which shall bear the
name of the stockholder, the number of shares represented, and the date of
issue; and which shall be signed by the President or a Vice President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, and which shall be sealed with the seal of the Corporation.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth stated on
certificates pursuant to Section 151, 156, 202(a) or 218(a) of the Delaware
General Corporation Law or a statement that the Corporation will furnish without
charge to each stockholder who so requests, the powers, designations,
preferences and relative participating, optional or other special rights of each
class of stock or series thereof and the qualifications, limitations or other
-5-
<PAGE> 6
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 2. Transfer of Stock. Shares of stock of the Corporation shall
be transferred only on the books of the Corporation upon surrender to the
Corporation of the certificate or certificates representing the shares to be
transferred accompanied by an assignment in writing of such shares properly
executed by the stockholder of record or such stockholders duly authorized
attorney-in-fact and with all taxes on the transfer having been paid. The
Corporation may refuse any requested transfer until furnished evidence
satisfactory to it that such transfer is proper. Upon the surrender of a
certificate for transfer of stock, such certificate shall at once be
conspicuously marked on its face "Cancelled" and filed with the permanent stock
records of the Corporation. Upon receipt of proper transfer instructions from
the registered owner of uncertificated shares such uncertificated shares shall
be cancelled and issuance of new equivalent uncertificated shares or
certificated shares shall be made to the person entitled thereto and the
transaction shall be recorded upon the books of the Corporation. The Board of
Directors may make such additional rules concerning the issuance, transfer and
registration of stock and requirements regarding the establishment of lost,
destroyed or wrongfully taken stock certificates (including any requirement of
an indemnity bond prior to issuance of any replacement certificate) as it deems
appropriate.
Section 3. Registered Stockholders. The Corporation may deem and treat
the holder of record of any stock as the absolute owner for all purposes and
shall not be required to take any notice of any right or claim of right of any
other person.
Section 4. Record Date. For The purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or in order
to make a determination of stockholders for any other purpose, the Board of
Directors of the Corporation may fix in advance a date as the record date for
any such determination of stockholders, such date in any case to be not more
than sixty (60) days and, in the case of a meeting of stockholders, not less
than ten (10) days prior to the date on which the particular action, requiring
such determination of stockholders, is to be taken.
ARTICLE VI
DEPOSITORIES; SIGNATURES AND SEAL
Section 1. Depositories. All funds of the Corporation shall be
deposited in the name of the Corporation in such bank, banks, or other financial
institutions as the Board of Directors may from time to time designate and shall
be drawn out on checks, drafts or other orders signed on behalf of the
Corporation by such person or persons as the Board of Directors may from time to
time designate.
Section 2. Contracts and Deeds. All contracts, deeds and other
instruments shall be signed on behalf of the Corporation by the President or by
such other officer, officers, agent or agents as the Board of Directors may from
time to time by resolution provide.
-6-
<PAGE> 7
Section 3. Seal. The seal of the Corporation shall be as follows:
If the seal is affixed to a document, the signature of the Secretary or
the Assistant Secretary shall attest the seal. The seal and its attestation may
be lithographed or otherwise printed on any document and shall have, to the
extent permitted by law, the same force and effect as if it had been affixed and
attested manually.
ARTICLE VI
INDEMNITY
Section 1. Right to Indemnification. Each person who was or is made a
Party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "Proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director, officer or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or (if
serving for another corporation at the request of the Corporation) agent or in
any other capacity while serving as a director, officer, employee or (if serving
for another corporation at the request of the Corporation) agent or in any other
capacity while serving as a director, officer, employee or (if serving for
another corporation agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended, (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) against all expense, liability
and loss (including, attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or (if serving
for another corporation at the request of the Corporation) agent and shall inure
to the benefit of his or her heirs, executors: and administrators; provided,
however, that except as provided in Section 2 hereof with respect to proceedings
seeking to enforce rights to indemnification, the Corporation shall indemnify
any such persons seeking indemnification, in connection with a proceeding (or
part thereof) initiated by such person only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a
-7-
<PAGE> 8
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of the proceeding shall be
made only upon delivery to the Corporation of an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this Article VI or otherwise.
Section 2. Payment of Indemnification. If a claim under Section I of
this Article VI is not paid in full by the Corporation within 90 days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered in the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or stockholders)
to have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or stockholders) that the
claimant has not met such applicable standard of conduct, should be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 3. Indemnification Not Exclusive The right to indemnification
and the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article VI shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4 Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
ARTICLE VII
AMENDMENT OF BYLAWS
The Board of Directors shall have the power to alter, amend or repeal
the Bylaws or adopt new bylaws, but any bylaws adopted by the Board of Directors
may be altered, amended, or repealed and new bylaws adopted by the stockholders.
The stockholders may prescribe that any bylaw or bylaws adopted by them shall
not be altered amended or repealed by the Board of Directors.
-8-
<PAGE> 1
Exhibit 3.75
ARTICLES OF INCORPORATION
OF
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
I, the undersigned hereby make, subscribe, acknowledge and file with
the Secretary of State of the State of Florida these Articles of Incorporation
for the purpose of forming a corporation for profit in accordance with the laws
of the State of Florida.
ARTICLE I
Name
The name of this corporation shall be:
The Emergency Associates for Medicine, Inc.
ARTICLE II
Existence of Corporation
This corporation shall begin existence on January 1, 1986, and shall
have perpetual existence.
ARTICLE III
Purposes
The corporation may engage in the transaction of any or all lawful
business for which corporations may be incorporated under the laws of the State
of Florida.
ARTICLE IV
Capital Stock
(a) The total number of shares of capital stock authorized to be issued
by the corporation shall be 1,000,000 shares of Class A common capital voting
stock having a par value of $1.00 per share and 1,000,000 shares of Class B
common capital non-voting stock having a par
<PAGE> 2
value of $1.00 per share. Each of the shares of Class A common capital voting
stock shall entitle the holder thereof to one (1) vote at any meeting of the
stockholders. All or any part of the capital stock may be paid for in cash, in
property, or in labor or services actually performed for the corporation and
valued at a fair valuation to be fixed by the Board of Directors at a meeting
called for such purpose. All stock when issued shall be paid for and shall be
nonassessable.
(b) In the election of directors of this corporation there shall be no
cumulative voting of the stock entitled to vote at such election.
ARTICLE V
Registered Office and Registered Agent
The street address of the corporation's initial registered office is
501 East Kennedy Boulevard, Suite 1700, Tampa, Florida 33602, and the name of
the corporation's initial registered agent at such address is Thomas J.
Ellwanger. The corporation may change its registered office or its registered
agent or both by filing with the Department of State of the State of Florida a
statement complying with Section 607.037, Florida Statutes.
ARTICLE VI
Initial Board of Directors
The number of directors constituting the initial Board of Directors
shall be two (2), and the name and address of each person who is to serve as a
member thereof is as follows:
Name Address
James V. Hillman 4 Columbia Drive, Suite 115
Harbourside Medical Tower
Tampa, Florida 33679
J. Paul Michlin 4 Columbia Drive, Suite 115
Harbourside Medical Tower
Tampa, Florida 33679
ARTICLE VII
-2-
<PAGE> 3
Incorporators
The name and address of the incorporator of this corporation is as
follows:
Name Address
Thomas J. Ellwanger 501 East Kennedy Boulevard
Suite 1700
Tampa, Florida 33679
ARTICLE VIII
Amendment of Articles of Incorporation
The corporation reserves the right to amend, alter, change or appeal
any provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are subject to this reservation.
IN WITNESS WHEREOF, I, the undersigned, have executed these Articles
for the uses and purposes therein stated.
/s/ Thomas J. Ellwanger
---------------------------------
Thomas J. Ellwanger
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
BEFORE ME, the undersigned authority, on this 30TH day of December,
1991, personally appeared THOMAS J. ELLWANGER, to me well known to be the person
described in and who signed the foregoing Articles of Incorporation, and
acknowledged to me that he executed the same freely and voluntarily for the uses
and purposes therein expressed.
WITNESS my hand and official seal the date aforesaid.
/s/
---------------------------------
Notary Public
My Commission Expires:
---------------------------------
-3-
<PAGE> 4
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
ARTICLES OF MERGER
Pursuant to the provisions of Section 607.1104 of the Florida Business
Corporation Act (the "FBCA"), THE EMERGENCY ASSOCIATES FOR MEDICINE, INC., a
Florida Corporation ("the Surviving Corporation"), MEDICAL TOXICOLOGY
CONSULTANTS, INC., a Florida corporation ("Med Tox"), GOODMAN, HILLMAN, MICHLIN
& FAGAN, INC., a Florida corporation ("Goodman"), MEDICAL PROFESSIONAL BILLING,
INC., a Florida corporation ("Billing"), TEAM TGH, INC., a Florida corporation
("TEAM-TGH"), and COMBI MOBILE, INC. ("Combi"), (Med Tox, Goodman, Billing,
TEAM-TGH and Combi are referred to collectively is the "Merged Corporations")
(the "Merged Corporations and the Surviving Corporation are referred to
collectively as the "Constituent Corporations"), each hereby adopt the following
Certificate of Merger for the purposes of merging the Merged Corporations with
and into the Surviving Corporation, effective as of the date of filing of this
Certificate with the Secretary of State, State of Florida.
1. Name of Constituent Corporations. The names of the undersigned
corporations and the states under the laws of which they are respectively
organized are:
<TABLE>
<CAPTION>
Merged Corporations: State of Incorporation
-------------------- ----------------------
<S> <C>
Medical Toxicology Consultants, Inc a Florida Florida
corporation
Goodman, Hillman, Michlin & Fagan, Inc., a Florida
Florida corporation
Medical Professional Billing, Inc., a Florida corporation Florida
TEAM-TGH, Inc. a Florida corporation Florida
Combi Mobile, Inc., a Florida corporation Florida;
Surviving Corporation:
The Emergency Associates for Medicine, a Florida Florida
corporation
</TABLE>
2. Plan of Merger. The Surviving Corporation holds 80% or more of the
shares of each of the Merged Corporations. Pursuant to Section 607.1104 of the
FBCA, the Board of Directors of the Surviving Corporation on July 30, 1996,
adopted a Plan of Merger, a copy of which is attached hereto as Exhibit A.
3. Shareholder Approval. Since more than 80% of the issued and
outstanding shares of each of the Merged Corporations are held by the Surviving
Corporations, and no amendments to the Articles of Incorporation of the
Surviving Corporation are being made, shareholder approval is
-4-
<PAGE> 5
not required. Compliance with the requirements of Section 607.1104(3) of the
FBCA have been waived by the Shareholders of each of the Merged Corporations.
Executed this 30 day of July, 1996.
THE EMERGENCY ASSOCIATES FOR
MEDICINE, INC.
/s/ James Hillman
------------------------
By: James Hillman
------------------------------
Its: President
------------------------------
-5-
<PAGE> 6
EXHIBIT A
MERGER
OF
MEDICAL TOXICOLOGY CONSULTANTS, INC.
GOODMAN, HILLMAN, MICHLIN & FAGAN, INC.
MEDICAL PROFESSIONAL BILLING, INC.
TEAM TGH, INC.
COMBI MOBILE, INC.
with and into
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
PLAN OF MERGER
1. Definitions. For the purposes hereof, the following terms shall be
defined as follows:
(a) "Constituent Corporations" - Medical Toxicology Consultants, Inc.,
Goodman, Hillman, Michlin & Fagan, Inc., Medical Professional Billing, Inc.,
TEAM-TGH, Inc., Combi Mobile, Inc, and The Emergency Associates for Medicine,
Inc.
(b) "Merged Corporations" - Medical Toxicology Consultants, Inc.,
Goodman, Hillman, Michlin & Fagan, Inc., Medical Professional Billing, Inc.,
TEAM-TGH, Inc., Combi Mobile, Inc.
(c) "Surviving Corporation" - upon the effective date of the merger,
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC., a Florida corporation.
2. Organizational Documents of Surviving Corporation. The Articles of
Incorporation and the Bylaws of The Emergency Associates of Medicine, Inc., upon
the effective date of the merger, shall become the Articles of Incorporation and
the Bylaws of the Surviving Corporation, until altered, amended, or repealed.
3. Capital Stock of Merged Corporations. All of the issued and
outstanding shares of Capital Stock of the Merged Corporations are held as
follows,
-6-
<PAGE> 7
TEAM TGH, INC. ("TEAM TGH")
Shareholder No of Shares
The Emergency Associates for Medicine, Inc. 1,000
MEDICAL PROFESSIONAL BILLING, INC. ("Billing")
Shareholder No of Shares
The Emergency Associates for Medicine, Inc. 1,000
GOODMAN, HILLMAN, MICHLIN & FAGAN, INC.,
("Goodman")
Shareholder No of Shares
The Emergency Associates for Medicine, Inc. 60.75
Philip J. Fagan, Jr., M.D. 14.25
MEDICAL TOXICOLOGY CONSULTANTS, INC. ("Med Tox")
Shareholder No of Shares
The Emergency Associates for Medicine, Inc. 2,132
Gregory G. Gaar, M.D. 500
COMBI MOBILE, INC. ("Combi")
Shareholder No of Shares
The Emergency Associates for Medicine. Inc. 81
Natalia N. Cruz 19
-7-
<PAGE> 8
From and after the date of the Merger, the issued and outstanding shares of the
Merged Corporations shall be converted as follows:
<TABLE>
<CAPTION>
Corporation Conversion
<S> <C>
Goodman, Hillman, Michlin & Fagan, Inc. All of the issued and outstanding shares held
by the Surviving Corporation, shall be
canceled. The 14.25 shares held by Philip J.
Fagan, Jr., M.D., shall be converted into 21-
2/3 shares of stock of the Surviving
Corporation.
TEAM TGH, Inc. All of the issued and outstanding shares,
being held by the Surviving Corporation,
shall be canceled.
Medical Preferred Billing, Inc. All of the issued and outstanding shares,
being held by Surviving Corporation, shall
be cancelled.
Medical Toxicology Consultants, Inc. All of the issued and outstanding shares held
by the Surviving Corporation shall be
canceled. The 500 share held by Gregory G.
Gaar shall be converted into 266 - 2/3
Shares of stock of the Surviving
Corporation.
Combi Mobile, Inc. All of the issued and outstanding Shares
held by the Surviving Corporation shall be
canceled. The 19 shares held by Natalia N.
Cruz shall be converted into 266 - 2/3
Shares of the Surviving Corporation.
</TABLE>
4. Directors and Officers. The Board of Directors of the Surviving
Corporation after the consummation of the transactions described herein shall
consist of the persons who are the members of the Board of Directors of the
Surviving Corporation at the time the merger becomes effective, and such person
shall serve until their respective successors are duty elected and qualified.
The persons who are officers of the Surviving Corporation after the consummation
of the transaction described herein shall consist of the persons who are the
officers of the Surviving Corporation at the time the merger becomes effective,
and such persons shall serve until their respective successors are duly elected
and qualified.
5. Effect of Merger. Upon the effective date of the merger, the
separate existence of the Merged Corporation shall cease, and the Merged
Corporation shall be merged in accordance with the provisions of this Plan of
Merger into the Surviving Corporation, which shall survive such merger and shall
continue in existence and shall, without other transfer, succeed to and possess
all of the rights, privileges, immunities, powers and purposes of each of the
Constituent
-8-
<PAGE> 9
Corporations consistent with the Articles of Incorporation of the Surviving
Corporation, and all property, real personal and mixed, causes of action, and
every other use of each of the Constituent Corporations shall vest in the
Surviving Corporation without further act or deed; the Surviving Corporation
shall assume and be liable for all of the liabilities, obligations and penalties
of each of the Constituent Corporations. No liability or obligation against
either of the Constituent Corporations due or to become due, claim or demand for
any cause, existing against either of the Constituent Corporations, or any
member, director, or officer thereof, shall be released or impaired by such
merger. No action or proceeding, civil or criminal, then pending by or against
either of the Constituent Corporations, or any member, director, or officer
thereof, shall abate or be discontinued by such merger but may be enforced,
prosecuted, settled, or compromised as if such merger had not occurred, or the
Surviving Corporation may be substituted in such action in place of either of
the Constituent Corporations.
6. Dissenter's Rights. Shareholders of the Merged Corporations who,
except for the applicability of Section 607.1104 of the FBCA, would be entitled
to vote and who dissent from the merger pursuant to Section 607.1320 may be
entitled, if they comply with the provisions of the FBCA regarding the rights of
dissenting shareholders, to be paid the fair value of their shares.
7. Further Assurances. To the extent permitted by law, from time to
time, as and when requested by the Surviving Corporation or by its successors
and assigns, the Merged Corporations shall execute and deliver or cause to be
executed and delivered all such deeds and instruments, and to take or cause to
be taken, such further or other action as the Surviving Corporation may deem
necessary or desirable in order to vest in and confirm to the Surviving
Corporation title to, and possession of, and property of the Merged Corporations
acquired or to be acquired by reason of or as a result of the merger herein
provided for; and the proper officers and directors of the Merged Corporations
and the proper officers and directors of the Surviving Corporation are fully
authorized, in the name of the Surviving Corporation or otherwise, to take any
and all such action.
DOMESTIC CORPORATION AND FOREIGN CORPORATION
ARTICLES OF MERGER
The undersigned corporations, pursuant to Section 607.1107 of the
Florida Business Corporation Act (the "FBCA") hereby execute the following
Articles of Merger:
1. Parties of Merger. The names of the corporations proposing to merge
and the names of the states or countries under the laws of which such
corporations are organized are as follows:
<TABLE>
<CAPTION>
Name of Corporation State/County of Incorporation
<S> <C>
TEAM MERGER CORPORATION Delaware
The Emergency Associates for Medicine Florida
</TABLE>
2. Compliance with Delaware Law. The laws of the State of Delaware
under which TEAM Merger Corporation is organized permit the merger herein
contemplated and TEAM Merger Corporation is complying with those laws in
effecting the merger.
-9-
<PAGE> 10
3. Compliance with Florida Law. The Emergency Associates for Medicine,
Inc., as the surviving corporation, compliances with the applicable provisions
of FBCA Sections 607.1101 - 607. 1104, and with FBCA Section 607.1105.
4. Plan of Merger. The terms and conditions of the proposed merger and
the manner and basis for converting the shares are set forth in the Plan and
Agreement of Merger. Attached hereto as Exhibit A is a Plan of Merger, which
implements the terms of a Plan and Agreement of Merger adopted by the merged
corporation and the surviving corporation.
5. Board of Directors Approval. The Plan and Agreement of Merger, dated
as of July 31, 1996, by and among MedPartners/Mullikin, Inc., TEAM Merger
Corporation, and The Emergency Associates For Medicine, Inc. (the "Plan of
Merger"), has been approved and adopted, by the respective Boards of Directors
of, MedPartners/Mullikin, Inc., on July 25, 1996, and TEAM Merger Corporation
and The Emergency Associates For Medicine, Inc. on July 31, 1996, and certified,
executed and acknowledged by the duly authorized officers of
MedPartners/Mullikin, Inc., TEAM Merger Corporation, and The Emergency
Associates For Medicine, Inc.
6. Shareholder Approval. The Agreement and Plan of Merger was approved
and adopted by the stockholders of The Emergency Associates For Medicine, Inc.
on the 31st day of July, 1996, and such approval and adoption was certified by
the Secretary of The Emergency Associates For Medicine, Inc. The Plan of Merger
was approved and adopted by the sole stockholder of Team Merger Corporation on
the 25th day of July, 1996, and such approval and adoption was certified by the
Secretary of TEAM Merger Corporation.
7. Effective Date. The effective date of the merger herein contemplated
shall be the date on which these Articles of Merger are filed with the Secretary
of State, State of Florida.
-10-
<PAGE> 11
Signed as of this 31st day of July, 1996.
The Emergency Associate For Medicine, Inc.
/s/ Harold O. Knight, Jr.
------------------------------
By Harold O. Knight, Jr.
------------------------------------------
Its Vice President
------------------------------------------
By /s/
------------------------------------------
Its Secretary
------------------------------------------
TEAM Merger Corporation
/s/ Harold O. Knight, Jr.
-------------------------------
By Harold O. Knight, Jr.
------------------------------------------
Its Vice President
------------------------------------------
By /s/
------------------------------------------
Its Secretary
------------------------------------------
-11-
<PAGE> 12
ACKNOWLEDGMENT
STATE OF ALABAMA
COUNTY OF JEFFERSON
The foregoing instrument was acknowledged before me this 31st day of
July, 1996 by Harold O. Knight, Jr., of TEAM Merger Corporation, a Delaware
corporation, on behalf of the corporation. He/She is personally known to me or
has produced _____________________________ , as identification.
GIVEN under my hand and seal, this 31st day of July, 1996.
[NOTARIAL SEAL]
/s/ Donna Gayle
------------------------------------------
Notary Public
My Commission Expires February 15, 1997
---------------------
* * * * *
-12-
<PAGE> 13
ACKNOWLEDGMENT
STATE OF ALABAMA
COUNTY OF JEFFERSON
The foregoing instrument was acknowledged before me this 31st day of
July, 1996 by Tracy P. Thrasher, of The Emergency Associates for Medicine, Inc.,
a Florida corporation, on behalf of the corporation. He/She is personally known
to me or has produced_____________________________ , as identification.
GIVEN under my hand and seal, this 31st day of July, 1996.
[NOTARIAL SEAL]
/s/ Donna Gayle
------------------------------------------
Notary Public
My Commission Expires February 15, 1997
---------------------
* * * * *
-13-
<PAGE> 14
EXHIBIT A
MERGER
OF
TEAM MERGER CORPORATION
with and into
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
PLAN OF MERGER
1. Definitions. For the purposes hereof, the following terms shall be
defined as follow:
(a) "Constituent Corporations" - TEAM Merger Corporation, a Delaware
corporation and The Emergency Associates for Medicine, Inc., a Florida
corporation.
(b) "Merged Corporations" - TEAM Merger Corporation, a Delaware
corporation.
(c) "Surviving Corporation" - upon the effective date of the merger,
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC., a Florida corporation.
2. Organizational Documents of Surviving Corporation. The Articles of
Incorporation and the Bylaws of The Emergency Associates of Medicine, Inc., upon
the effective date of the merger, shall become the Articles of Incorporation and
the Bylaws of the Surviving Corporation, until altered, amended, or repealed.
3. Effect of Merger on Shares of Constituent Corporations.
(a) Shares of Surviving Corporation. From and after the date
of the Merger, each issued and outstanding share of common stock of The
Emergency Associates for Medicine, Inc. shall be converted into 82.0434283
shares of common stock of MedPartners/Mullikin, Inc., a Delaware corporation,
which is the sole shareholder of the Merged Corporation.
(b) Shares of Merged Corporation. From and after the date of
the Merger, the issued and outstanding shares of the Merged Corporation shall be
converted into an equal number of shares of the Surviving Corporation.
4. Effect of Merger. Upon the effective date of the merger, the
separate existence of the Merged Corporation shall cease, and the Merged
Corporation shall be merged in accordance with the provisions of this Plan of
Merger into the Surviving Corporation, which shall survive such merger and shall
continue in existence and shall, without other transfer, succeed to and possess
all of the rights, privileges, immunities, powers and purposes of each of the
Constituent Corporations consistent with the Articles of Incorporation of the
Surviving Corporation, and all property, real personal and mixed, causes of
action, and every other asset of each of the Constituent Corporations shall vest
in the Surviving Corporation without further act or deed; the Surviving
Corporation shall assume and be liable for all of the liabilities, obligations
and penalties of each of the Constituent Corporations. No liability or
obligation against either of the
-14-
<PAGE> 15
Constituent Corporations due or to become due, claim of demand for any cause
existing against either of the Constituent Corporations, or any member,
director, or officer thereof, shall be released or impaired by such merger. No
action or proceeding, civil or criminal, then pending by or against either of
the Constituent Corporations, or any member, director, or officer thereof, shall
abate or be discontinued by such merger but may be enforced, prosecuted,
settled, or compromised as if such merger had not occurred, or the Surviving
Corporation may be substituted in such action in place of either of the
Constituent Corporations.
5. Dissenter's Rights. Shareholders of the Merged Corporation who,
except for the applicability of Section 607.1104 of the FBCA, would be entitled
to vote and who dissent from the merger pursuant to Section 601.1320 may be
entitled, if they comply with the provisions of the FSCA regarding the rights of
dissenting shareholders, to be paid the fair value of their shares.
6. Further Assurances. To the extent permitted by law, from time to
time, as and when requested by the Surviving Corporation or by its successors
and assigns, the Merged Corporation shall execute and deliver or cause to be
executed and delivered all such deeds and instruments, and to take or cause to
be taken, such further or other actions as the surviving Corporation may deem
necessary or desirable in order to vest in and confirm to the Surviving
Corporation title to, and possession of, and property of the Merged Corporation
acquired or to be acquired by reason of or as a result of the merger herein
provided for; and the proper officers and directors of the Merged Corporation
and the proper officers and directors of the Surviving Corporation are fully
authorized, in the name of the Surviving Corporation or otherwise, to take any
and all such action.
-15-
<PAGE> 16
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
The Emergency Associates For Medicine, Inc., a corporation organized
and existing under the laws of the State of Florida hereby certifies as follows:
That the present name of the Corporation is The Emergency Associates
For Medicine, Inc. (the "Corporation"), the date of filing its original Articles
of Incorporation with the Secretary of State was December 31, 1987, effective
January 1, 1988.
That the Amended and Restated Articles of Incorporation were duly
adopted by the Board of Directors and the Sole Shareholder in accordance with
Sections 607.1003, 607.1006 and 607.1007 of the Florida 1989 Business
Corporation Act.
That the original Articles of Incorporation are hereby amended by being
deleted in their entirety and restated as follows:
FIRST: The name of the Corporation is The Emergency Associates For
Medicine, Inc.
SECOND: The address of the principal office of the Corporation is 3000
Galleria Tower, Suite 1000, Birmingham, Alabama 35244.
THIRD: The Corporation shall have perpetual duration.
FOURTH: The address of the Corporation's registered office in the State
of Florida is 1201 Hays Street, Tallahassee, Florida 32301. The name of its
registered agent at such address is Corporation Service Company.
-16-
<PAGE> 17
FIFTH: The nature of the business or purpose to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the Florida 1989 Business Corporation Act.
SIXTH: The total number of shares of stock which the Corporation shall
have authority to issue is 1,000 shares, consisting of 1,000 shares of Common
Stock, par value $1.00 per share.
SEVENTH: The Board of Directors shall have the power to make, alter or
repeal the Bylaws of the Corporation at any meeting at which a quorum is present
by the affirmative vote of a majority of the whole Board of Directors. Election
of Directors need not be by written ballot. The names and mailing addresses of
the Board of Directors, to serve until their successors are elected and
qualified pursuant to the Florida 1989 Business Corporation Act and the By-laws
adopted by this Corporation, are as follows:
Larry R. House 3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
Harold O. Knight, Jr. 3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
Tracy P. Thrasher 3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
EIGHTH: A Director of the Corporation shall have no personal liability
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director; provided, however, that this Article EIGHTH shall
not eliminate or limit the liability of a Director, except to the extent
permitted by applicable law, (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 607.0834 of the Florida 1989 Business Corporation Act
as the same now exists or may hereafter be amended, or (iv) for any transaction
from which the Director derived an improper personal
-17-
<PAGE> 18
benefit. No amendment to, or repeal of, this Article EIGHTH shall apply to, or
have any effect on, the liability or alleged liability of any Director for, or
with respect to, any acts or omissions of such director occurring prior to such
amendment or repeal.
IN WITNESS WHEREOF, The Emergency Associates For Medicine, Inc. has
caused the Articles of Incorporation to be signed by Harold O. Knight, Jr., its
Vice President, and by Tracy P. Thrasher, its Secretary, this 31st day of
August, 1996.
/s/ Harold O. Knight
-----------------------------
Harold O. Knight, Jr.,
Vice President
/s/ Tracy P. Thrasher
-----------------------------
Tracy P. Thrasher,
Secretary
-18-
<PAGE> 1
Exhibit 3.76
BYLAWS
OF
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
ARTICLE I
Offices
The principal office shall be in the City of Tampa, County of
Hillsborough, and State of Florida.
The corporation may also have offices at such other places both within
and without the State of Florida as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
Stockholders
Section 1. Annual Meeting. The annual meeting of the stockholders shall
be held within the three (3) month period beginning with the first day of the
last month of the fiscal year of the corporation for the purpose of electing
Directors and for the transaction of such other business as may come before the
meeting; the actual day thereof to be set forth in the Notice of Meeting or in
the Call and Waiver of Notice of Meeting. If the election of Directors shall not
be held at any such annual meeting of the stockholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a special
meeting of the stockholders as soon thereafter as may be convenient.
Section 2. Special Meetings. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by law or by the Articles
of Incorporation, may be called by the President or by the Board of Directors,
and shall be called by the President or Secretary at the request in writing of a
majority of the Board of Directors then in office, or at the request in writing
of stockholders owning not less than one-tenth (1/10th) of the entire capital
stock of the corporation issued and outstanding and entitled to vote thereat.
Such request shall state the purpose or purposes of the proposed meeting.
Business transacted at any special meeting of stockholders shall be limited to
the purposes stated in the notice thereof.
Section 3. Place of Meeting. The Board of Directors may designate any
place either within or without the State of Florida, unless otherwise prescribed
by law or by the Articles of Incorporation, as the place of meeting for any
annual meeting or for any special meeting of the stockholders. A waiver of
notice signed by all stockholders entitled to vote at a meeting may designate
any place either within or without the State of Florida, unless otherwise
prescribed by law or by the Articles of Incorporation, as the place for the
holding of such meeting. If no designation is made or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
corporation in the State of Florida.
<PAGE> 2
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called shall be delivered not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either by hand delivery, express or other delivery service, telecopier,
telegram, telex, mailgram, cablegram or other delivery method or by first-class
mail, by or at the direction of the President or the Secretary, or the officer
or persons calling the meeting, to each stockholder of record entitled to vote
at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the stockholder at his
business or home address of the stockholder's address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
Section 5. Waiver of Notice of Meeting. Whenever any notice to a
stockholder is required pursuant to the provisions of Section 4 hereinabove,
each stockholder may waive such notice in writing at any time before or after
the time for the delivery of such notice, and such written waiver of notice
shall be equivalent to the giving of such notice. Attendance at any meeting by
any stockholder to whom notice of such meeting must be given pursuant to the
provisions of Section 4 hereinabove shall constitute a waiver of notice of such
meeting by such stockholder, except when the stockholder attends such meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business at the meeting because the meeting is not lawfully
called or convened.
Section 6. Voting Lists. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten (10)
days before each meeting of stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof arranged in
alphabetical order, with the address and the number and class and series of
shares held by each; which list, for a period of ten (10) days prior to such
meeting, shall be kept on file at the principal office of the corporation and
shall be subject to inspection of any stockholder during the whole time of the
meeting. The original stock transfer book shall be prima facie evidence as to
who are the stockholders entitled to examine such list or transfer books or to
vote at any meeting of the stockholders.
Section 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, unless otherwise provided in
the Articles of Incorporation, but in no event shall a quorum consist of less
than one-third (1/3) of the shares entitled to vote at the meeting. If less than
a majority of the outstanding shares are represented at a meeting, a majority of
the shares so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 8. Voting of Shares. Each stockholder entitled to vote shall at
every meeting of the stockholders be entitled to one (1) vote in person or by
proxy, signed by him, for each share of the voting stock held by him that has
been transferred on the books of the corporation prior to such meeting. Such
right to vote shall be subject to the right of the Board of Directors to close
the transfer books or to fix a record date for voting stockholders pursuant to
the provisions of Article VIII hereinafter.
-2-
<PAGE> 3
Section 9. Proxies. At all meetings of stockholders, a stockholder may
vote by proxy, executed in writing by the stockholder or by his duly authorized
attorney-in-fact; but no proxy shall be valid after eleven (11) months from its
date, unless the proxy provides for a longer period. Such proxies shall be filed
with the Secretary of the corporation before or at the time of the meeting.
Section 10. Informal Action by Stockholders.
(a) Any action which may be taken or is required by law to be
taken at any annual or special meeting of the stockholders may be taken
without a meeting and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of a majority
of the outstanding stock of the corporation. If any class of stock is
entitled to vote thereon as a class, such written consent shall be
required of the holders of a majority of the stock of each class of
stock entitled to vote as a class thereon and of the total stock
entitled to vote thereon.
(b) Unless all of the holders of the outstanding stock of the
corporation have signed a written consent to an action in accordance
with the provisions of paragraph (a) hereinabove, then within ten (10)
days after obtaining such written consent notice must be given to those
stockholders who have not so consented in writing. The notice shall
fairly summarize the material features of the authorized action, and,
if the action be a merger, consolidation, or sale or exchange of assets
for which dissenters' rights are provided by Florida law, the notice
shall contain a clear statement of the right of stockholders dissenting
therefrom to be paid the fair value of their shares upon compliance
with Florida law regarding the rights of dissenting stockholders.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of directors
of the corporation shall be not less than one (1), nor more than fifteen (15);
the number of the same to be fixed by the stockholders at any annual or special
meeting. Each Director shall hold office until the next annual meeting of
stockholders or until his successor has been elected, unless sooner removed by
the stockholders at any general or special meeting. None of the Directors need
be residents of the State of Florida.
Section 3. Annual Meeting. After each annual meeting of stockholders,
the Board of Directors shall hold its annual meeting at the same place as and
immediately following such annual meeting of stockholders for the purpose of the
election of officers and the transaction of such other business as may come
before the meeting; and if a majority of the Directors be present at such place
and time, no prior notice of such meeting shall be required to be given to the
Directors. The place and time of such meeting may also be fixed by written
consent of the Directors.
-3-
<PAGE> 4
Section 4. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall be determined
from time to time by the Board of Directors.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, if there be one, or the President or
any two (2) Directors. The person or persons authorized to call special meetings
of the Board of Directors may fix the place, time and date for holding any
special meetings of the Board of Directors called by them.
Section 6. Notice of Meeting or Waiver Thereof. Notice of any special
meeting shall be given at least two (2) days prior thereto by written notice
delivered personally or mailed to each Director at his business or home address.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail so addressed with postage thereon prepaid. If notice be given
by telegram, such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. If notice is given by cablegram, such notice
shall be deemed to be delivered when the cablegram is dispatched. Any Director
may waive notice of such meeting either before, at or after such meeting. The
attendance of a Director at a meeting shall constitute a waiver of notice of
such meeting, except where a Director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened. Notice need not specify the purpose of any meeting.
Section 7. Quorum. A majority of the Directors shall constitute a
quorum, but a smaller number may adjourn from time to time without further
notice until a quorum is secured.
Section 8. Manner of Acting. The act of a majority of the Directors
voting for or against, (disregarding any abstentions) at a meeting at which a
quorum is present shall be the act of the Board of Directors.
Section 9. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
Directors, may be filled by the affirmative vote of a majority of the remaining
Directors, though less than a quorum of the Board of Directors. A Director
elected to fill a vacancy shall be elected for the unexpired term of his
predecessor in office.
Section 10. Compensation. By resolution of the Board of Directors, the
Directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors, or a stated salary as Directors. No payment
shall preclude any Director from serving the corporation in any other capacity
and receiving compensation therefor.
Section 11. Presumption of Assent. A Director who is present at a
meeting at which action on any corporate matter is taken shall be presumed to
have assented to the action taken, unless he votes against such action or
abstains from voting in respect thereto. A Director may abstain from voting on
any matter in his sole discretion.
Section 12. Informal Action by Board. Any action required or permitted
to be taken by any provisions of law, of the Articles of Incorporation or these
bylaws at any meeting of the Board of
-4-
<PAGE> 5
Directors or of any committee thereof may be taken without a meeting if, prior
to such action, a written consent thereto is signed by all members of the Board
or of such committee, as the case may be, setting forth the actions so to be
taken and filed in the minutes of the proceedings of the Board or of the
committee.
Section 13. Telephonic Meetings. Members of the Board of Directors or
an executive committee shall be deemed present at a meeting of such Board or
committee if a conference telephone, or similar communications equipment, by
means of which all persons participating in the meeting can hear each other at
the same time, is used.
Section 14. Removal. Any director may be removed, with or without
cause, by the stockholders at any general or special meeting of the stockholders
whenever, in the judgment of the stockholders, the best interest of the
corporation will be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person removed. This bylaw shall not be
subject to change by the Board of Directors.
ARTICLE IV
Officers
Section 1. Number. The officers of the corporation shall be a
President, a Secretary and a Treasurer, each of whom shall be elected by the
Board of Directors. The Board of Directors may also elect a Chairman of the
Board, one or more Vice Presidents, one or more Assistant Secretaries and
Assistant Treasurers and such other officers as the Board of Directors shall
deem appropriate. Any two (2) or more offices may be held by the same person.
Section 2. Election and Term of Office. The officers of the corporation
shall be elected annually by the Board of Directors at its first meeting after
each annual meeting of stockholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as may be
convenient. Each officer shall hold office until his successor shall have been
duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever, in its judgment,
the best interest of the corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. Duties of Officers. The Chairman of the Board of the
corporation, or the President if there shall not be a Chairman of the Board,
shall preside over all meetings of the Board of Directors and of the
stockholders, which he shall attend. The President shall be the chief executive
officer of the corporation. Subject to the foregoing, the officers of the
corporation shall have such powers and duties as usually pertain to their
respective offices and such additional powers and duties
-5-
<PAGE> 6
specifically conferred by law, by the Articles of Incorporation, by these
bylaws, or as may be assigned to them from time to time by the Board of
Directors.
Section 6. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors, and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.
Section 7. Delegation of Duties. In the absence of or disability of any
officer of the corporation or for any other reason deemed sufficient by the
Board of Directors, the Board may delegate his powers or duties to any other
officer or to any other Director for the time being.
ARTICLE V
Executive and Other Committees
Section 1. Creation of Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate an Executive
Committee and one (1) or more other committees, each to consist of one (1) or
more of the Directors of the corporation.
Section 2. Executive Committee. The Executive Committee, if there shall
be one, shall consult with and advise the officers of the corporation in the
management of its business and shall have and may exercise, to the extent
provided in the resolution of the Board of Directors creating such Executive
Committee, such powers of the Board of Directors as can be lawfully delegated by
the Board.
Section 3. Other Committees. Such other committees shall have such
functions and may exercise the powers of the Board of Directors, as can be
lawfully delegated, and to the extent provided in the resolution or resolutions
creating such committee or committees.
Section 4. Meetings of Committees. Regular meetings of the Executive
Committee and other committees may be held without notice at such time and at
such place as shall from time to time be determined by the Executive Committee
or such other committees, and special meetings of the Executive Committee or
such other committees may be called by any member thereof upon two (2) days'
notice to each of the other members of such committee; or on such shorter notice
as may be agreed to in writing by each of the other members of such committee,
given either personally or in the manner provided in Section 6 of Article III of
these bylaws (pertaining to notice for Directors' meetings).
Section 5. Vacancies on Committees. Vacancies on the Executive
Committee or on such other committees shall be filled by the Board of Directors
then in office at any regular or special meeting.
Section 6. Quorum of Committees. At all meetings of the Executive
Committee or such other committees, a majority of the committee's members then
in office shall constitute a quorum for the transaction of business.
-6-
<PAGE> 7
Section 7. Manner of Acting of Committees. The acts of a majority of
the members of the Executive Committee or such other committees present at any
meeting at which there is a quorum shall be the act of such committee.
Section 8. Minutes of Committees. The Executive Committee, if there
shall be one, and such other committees shall keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
Section 9. Compensation. Members of the Executive Committee and such
other committees may be paid compensation in accordance with the provisions of
Section 10 of Article III (pertaining to compensation of Directors).
ARTICLE VI
Indemnification and Advancement of Expenses for Directors,
Officers, Employees and Agents
The corporation shall indemnify and advance expenses to any person who
was or is a party to any proceeding or threatened proceeding by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation; subject in
each instance to satisfaction of all applicable requirements under Chapter 607,
Florida Statutes.
Additionally, the corporation may make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, as it may desire, subject, however, to the restrictions
contained in Chapter 607, and in particular Section607.014(7), Florida Statutes.
ARTICLE VII
Certificates of Stock
Section 1. Certificates for Shares. Every holder of stock in the
corporation shall be entitled to have a certificate signed by the President or a
Vice President and the Secretary or an Assistant Secretary exhibiting the
holder's name and certifying the number of shares owned by him in the
corporation. The certificates shall be numbered and entered in the books of the
corporation as they are issued.
Section 2. Transfer of Shares. Transfers of shares of the corporation
shall be made upon its books by the holder of the shares in person or by his
lawfully constituted representative upon surrender of the certificate of stock
for cancellation. The person in whose name shares stand on the books of the
corporation shall be deemed by the corporation to be the owner thereof for all
purposes, and the corporation shall not be bound to recognize any equitable or
other claim to or interest in such shares on the part of any other person
whether or not it shall have express or other notice thereof, save as expressly
provided by the laws of the State of Florida.
Section 3. Facsimile Signature. Where a certificate is manually signed
on behalf of a transfer agent or a registrar other than the corporation itself
or an employee of the corporation, the signature of any such President, Vice
President, Secretary or Assistant Secretary may be a facsimile.
-7-
<PAGE> 8
In case any officer or officers who have signed or whose facsimile signature or
signatures shall cease to be such officer or officers of the corporation, such
certificate or certificates may, nevertheless, be adopted by the corporation and
be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures have been
used thereon had not ceased to be such officer or officers of the corporation.
Section 4. Lost Certificates. The Board of Directors may direct that a
new certificate or certificates be issued in place of any certificate or
certificates theretofore by the corporation and alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates or his legal representative to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
ARTICLE VIII
Record Date
The Board of Directors is authorized from time to time to fix in
advance a date, not more than sixty (60) nor less than ten (10) days before the
date of any meeting of stockholders, or not more than sixty (60) days prior to
the date for the payment of any dividend or the date for the allotment of
rights, or the date when any change or conversion of or exchange of stock shall
go into effect, or a date in connection with the obtaining of the consent of
stockholders for any purpose, as a record date for the determination of the
stockholders entitled to notice of and to vote at any such meeting and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment, or to exercise the rights in respect of any such change,
conversion or exchange of stock, or to give such consent, as the case may be;
and, in such case, such stockholders and only such stockholders as shall be
stockholders of record on the date so fixed shall be entitled to such notice of
and to vote at such meeting and any adjournment thereof, or to receive payment
of such dividend, or to receive such allotment of rights, or to exercise such
rights, or to give such consent, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record date
fixed as aforesaid.
ARTICLE IX
Dividends
The Board of Directors may from time to time declare and the
corporation may pay dividends on its outstanding shares of capital stock in the
manner and upon the terms and conditions provided by the Articles of
Incorporation and by law. Dividends may be paid in cash, in property or in
shares of stock, subject to the provisions of the Articles of Incorporation and
to law.
-8-
<PAGE> 9
ARTICLE X
Fiscal Year
The fiscal year of the corporation shall be the twelve month period
selected by the Board of Directors as the taxable year of the corporation for
federal income tax purposes.
ARTICLE XI
Seal
The corporate seal shall bear the name of the corporation, which shall
be between two concentric circles, and in the inside of the inner circle shall
be the calendar year of incorporation; an impression of said seal appearing on
the margin hereof.
ARTICLE XII
Stock in Other Corporations
Shares of stock in other corporations held by this corporation shall be
voted by such officer or officers of this corporation as the Board of Directors
shall from time to time designate for the purpose, or by a proxy thereunto duly
authorized by said Board.
ARTICLE XIII
Amendments
These bylaws may be altered, amended, or repealed in whole or in part,
and new bylaws may be adopted by the Board of Directors or by the vote of
stockholders owning a majority of the stock of the corporation entitled to vote
thereon.
ARTICLE XIV
Restrictions on Stock
Section 1. Restrictions. Except as hereinafter provided in Sections 4
and 6, no owner of stock in the corporation or of an interest in such stock,
whether legal or equitable, and whether such owner be an individual, fiduciary,
corporation or other entity, may sell, exchange or otherwise dispose of any such
stock or interest therein during his or her lifetime without the written consent
of the corporation and each of the stockholders of the corporation, or, in the
absence of such written consent, without first offering such stock or interest
therein to the corporation at the same price and upon the same terms and
conditions that said stockholder desires to sell, exchange or otherwise dispose
of such stock or interest therein. The corporation shall have a period of thirty
(30) days after receiving notice of such offer within which to accept such
offer; and if such offer is not accepted by the corporation within said thirty
(30) day period, then the said offer shall be made to the other owners of stock
of the corporation, exercisable by each in proportion to the stock of the
corporation (excluding the stock of
-9-
<PAGE> 10
the selling stockholder) owned by each. The stockholder to whom such offer is
made shall have a period of thirty (30) days thereafter in which to accept such
offer.
Section 2. Term of Restrictions. The restrictions contained in the
foregoing paragraph shall be continuing restrictions applicable at all times to
the outstanding stock of the corporation, and no action by the corporation shall
be deemed to have freed any stock of the corporation or interest therein from
such restrictions, and all subsequent owners of such stock shall take same
subject to these restrictions.
Section 3. Legend on Stock Certificates. All certificates of stock of
the corporation shall bear the following endorsement:
Neither the capital stock represented by this certificate nor
any interest therein may be sold, exchanged or otherwise
disposed of unless the restrictions and provisions contained
in Article XIV of the bylaws of the corporation are first
complied with. A copy of said Article XIV may be obtained at
the office of the corporation.
Section 4. Absence of Restrictions on Certain Gratuitous Transfers of
Stock. Except as provided in any written agreement entered into by the
corporation and its stockholders pursuant to Section 6 hereinafter, there shall
be no restriction whatsoever on any gratuitous transfer of stock by an
individual stockholder during his or her lifetime to or for the benefit of his
or her spouse, lineal descendants or lineal ascendants; provided, however, that
any recipient of stock in the corporation pursuant to a gratuitous transfer in
accordance with this Section 4 shall receive such stock subject to the
restrictions imposed by this Article XIV and shall be bound by all the terms,
duties and obligations imposed by this Article XIV.
Section 5. Negation of Restriction on Transfer of Stock Upon Death.
This Article XIV does not impose any restriction upon a testamentary transfer of
stock in the corporation by an individual stockholder or upon transfer of stock
in the corporation pursuant to applicable laws of intestate succession;
provided, however, that any recipient of stock in the corporation pursuant to a
transfer from a deceased stockholder in accordance with this Section 5 shall
receive such stock subject to the restrictions imposed by this Article XIV and
shall be bound by all the terms, duties and obligations imposed by this Article
XIV.
Section 6. Stock Restriction Agreement Among Stockholders. The
stockholders of the corporation may further implement this Article XIV by
entering into a written agreement among themselves providing for more specific
terms (including a different purchase price) and conditions for the sale of the
stock of a stockholder during his lifetime or upon his death; and, in such
event, the terms (including purchase price) and conditions of sale set forth in
such written agreement shall be controlling and shall take precedence over the
foregoing provisions of this Article XIV; provided, that in no event shall this
Section 6 be applied unless such agreement between the stockholders shall have
been entered into by all the stockholders to which this Article XIV is
applicable and the corporation shall have consented or been a party thereto.
-10-
<PAGE> 11
ARTICLE XV
Reimbursement of Disallowed Expenses
Any payments made to an officer of the corporation such as salary,
commission, bonus, interest or rent or for entertainment expenses incurred by
him which shall be disallowed in whole or in part as a deductible expense by the
Internal Revenue Service shall be reimbursed by such officer to the corporation
to the full extent of such disallowance. It shall be the duty of the Directors,
as a Board, to enforce payment of each such amount disallowed. Reimbursement of
such disallowed amounts may, subject to the determination of the Directors, be
withheld in proportionate amounts from the future compensation payments of the
officer until the amount owed to the corporation has been recovered.
-11-
<PAGE> 1
EXHIBIT 3.77
ARTICLES OF AMENDMENT OF
VIRGINIA EMERGENCY PHYSICIANS, P.C.
ONE
The current name of the corporation is Virginia Emergency Physicians,
P.C. (the "Corporation"), a professional corporation organized under Title 13.1,
Chapter 7 of the Code of Virginia (the "Code"). The Articles of Incorporation of
the Corporation are being amended, pursuant to Section 13.1-552 of the Code, in
order to convert the Corporation into a nonprofessional corporation governed by
the Virginia Stock Corporation Act (Title 13.1, Chapter 9 of the Code),. The new
name of the Corporation shall be Virginia Emergency Physicians, Inc.
TWO
The text of the Articles of Amendment is attached as an Appendix
hereto.
THREE
i. The Articles of Amendment were adopted on April 19, 1994.
ii. The Articles of Amendment were adopted by unanimous consent of
the shareholders.
By: /s/ Robert E. Sullivan
_________________________
Robert E. Sullivan, M.D.
President
<PAGE> 2
ARTICLES OF AMENDMENT OF
VIRGINIA EMERGENCY PHYSICIANS, P.C.
The undersigned, pursuant to Chapters 7 and 9 of Title 13.1 of the Code
of Virginia, states as follows:
1. The name of the Corporation is Virginia Emergency Physicians,
Inc.
2. The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the
Virginia Stock Corporation Act.
3. The number and class of shares the Corporation is authorized
to issue:
Number of Shares Authorized Class
25,000 common
4. A. The Corporation's initial registered address,
including street and number, is CT Corporation
System, 5511 Staples Mill Road, Richmond, Virginia
23228.
B. The registered office is located in the city of
Richmond, County of Henrico.
5. A. The name of the Corporation's initial registered
agent (whose business office is identical with the
above-registered office) is Edward R. Parker.
B. The initial registered agent is an individual who is
a resident of Virginia and a member of the Virginia
State Bar.
6. The initial Board of Directors shall have two members, as
follows:
Name Address
Joseph J. Badal, M.D. 122 Greenbriar
Williamsburg, Virginia 23185
Naresh Nagpal, M.D. 2378 NW 60th Street
Boca Raton, Florida 33496
/s/ Robert E. Sullivan
-----------------------------
Robert E. Sullivan, M.D.
-----------------------------
(Print Name)
-2-
<PAGE> 3
ARTICLES OF INCORPORATION OF
VIRGINIA EMERGENCY PHYSICIANS, P.C.
The undersigned, pursuant to Chapters 7 and 9 of Title 13.1 of the Code
of Virginia, state(s) as follows:
1. The name of the Corporation is Virginia Emergency Physicians,
P.C.
2. The Corporation is organized for the sole and specific purpose
of rendering the professional services of emergency medicine.
3. The number (and classes, if any) of shares the Corporation is
authorized to issue:
Number of Shares Authorized Class(s)
25,000 common
4. A. The Corporation's initial registered office
address, including street and number is 5511 Staples
Mill Road, Richmond, Virginia 23228.
B. The registered office is located in the County of
Henrico.
5. A. The name of the Corporation's initial registered
agent (whose business office is identical with the
above-registered office) is Edward R. Parker.
B. The initial registered agent is an individual who is
a resident of Virginia and a member of the Virginia
State Bar.
6. The initial Board of Directors shall have one member.
7. The undersigned Incorporator is duly licensed or legally
authorized to render (in Virginia) the professional services
of emergency medicine.
/s/ Robert Sullivan
-----------------------------------
Robert Sullivan, M.D.
-----------------------------------
[Print Name]
-3-
<PAGE> 1
EXHIBIT 3.78
AMENDED AND RESTATED
BYLAWS
OF
VIRGINIA EMERGENCY PHYSICIANS, INC.
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE I OFFICES..........................................................
Section 1.1 Registered Office........................................
Section 1.2 Other Offices............................................
ARTICLE II SHAREHOLDERS' MEETINGS...........................................
Section 2.1 Place of Meetings........................................
Section 2.2 Annual meetings..........................................
Section 2.3 Notice of Meeting........................................
Section 2.4 Special Meetings.........................................
Section 2.5 Notice of Special Meetings...............................
Section 2.6 Closing of Transfer Books and Fixing of
Record Date..............................................
Section 2.7 Shareholders' List.......................................
Section 2.8 Quorum...................................................
Section 2.9 Voting...................................................
Section 2.10 Proxies..................................................
Section 2.11 Unanimous Consent........................................
Section 2.12 Voting Agreements........................................
ARTICLE III DIRECTORS........................................................
Section 3.1 General Powers...........................................
Section 3.2 Number, Election and Term of Office......................
Section 3.3 Vacancies................................................
Section 3.4 Place of Meetings........................................
Section 3.5 Committees of Directors..................................
Section 3.6 Annual Meeting...........................................
Section 3.7 Special Meeting..........................................
Section 3.8 Action Without Meeting...................................
Section 3.9 Quorum and Manner of Acting..............................
Section 3.10 Removal of Directors.....................................
Section 3.11 Resignation..............................................
ARTICLE IV OFFICERS.........................................................
Section 4.1 Executive Officers.......................................
Section 4.2 Election, Term of Office and
Eligibility..............................................
Section 4.3 Subordinate Officers.....................................
Section 4.4 Removal..................................................
Section 4.5 The President............................................
Section 4.6 The Vice Presidents......................................
Section 4.7 Treasurer................................................
Section 4.8 The Secretary............................................
Section 4.9 Assistant Treasurers.....................................
i
<PAGE> 3
Section 4.10 Assistant Secretaries.....................................
Section 4.11 Vacancies.................................................
Section 4.12 Salaries..................................................
Section 4.13 Bonds.....................................................
Section 4.14 Delegation of Duties......................................
ARTICLE V SHARES OF STOCK....................................................
Section 5.1 Regulation.................................................
Section 5.2 Stock Certificates.........................................
Section 5.3 Transfer of Shares.........................................
Section 5.4 Lost Certificate...........................................
Section 5.5 Transfer Restrictions......................................
Section 5.6 Miscellaneous..............................................
Section 5.7 Legend.....................................................
ARTICLE VI BOOKS AND RECORDS................................................
Section 6.1 Location...................................................
Section 6.2 Inspection.................................................
Section 6.3 Corporate Seal.............................................
ARTICLE VII DIVIDENDS AND RESERVES...........................................
Section 7.1 Dividends..................................................
Section 7.2 Reserves...................................................
ARTICLE VIII MISCELLANEOUS PROVISIONS.........................................
Section 8.1 Fiscal Year................................................
Section 8.2 Depositories...............................................
Section 8.3 Checks, Drafts and Notes...................................
Section 8.4 Contracts and Other Instruments............................
Section 8.5 Notices....................................................
Section 8.6 Waivers of Notice..........................................
Section 8.7 Stock in other Corporations................................
Section 8.8 Amendment of Bylaws........................................
ARTICLE IX INDEMNIFICATION..................................................
Section 9.2 Authority to Indemnify.....................................
Section 9.3 Mandatory Indemnification..................................
Section 9.4 Advance for Expenses.......................................
Section 9.5 Court Orders For Advances, Reimbursement
or Indemnification.........................................
Section 9.6 Determination and Authorization of
Indemnification............................................
Section 9.7 Indemnification of Officers, Employees
and Agents.................................................
Section 9.8 Insurance..................................................
ii
<PAGE> 4
AMENDED AND RESTATED
BYLAWS
OF
VIRGINIA EMERGENCY PHYSICIANS, INC.
ARTICLE 1.
OFFICES
Section a. Registered Office. The registered office of
Virginia Emergency Physicians, Inc. (the "Corporation") shall be located in the
Commonwealth of Virginia, at a location that the Board of Directors shall from
time to time determine. The initial registered agent in charge thereof is Edward
R. Parker.
Section b. Other Offices. The Corporation may also have
offices at such other places as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE 2.
SHAREHOLDERS' MEETINGS
Section a. Place of Meetings. All meetings of the shareholders
for the election of directors shall be held at the offices of the Corporation or
elsewhere in the United States as the Board of Directors may designate. Meetings
of shareholders for any other purpose may be held at such place in the United
States as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section b. Annual meetings. An annual meeting of the
shareholders, commencing with the year 1995, shall be held on the first Tuesday
in April in each year, but if a legal holiday, then on the next secular day
following, at 12:00 p.m., at which they shall elect a Board of Directors, and
transact such other business as may properly be brought before the meeting.
Section c. Notice of Meeting. Written notice of the annual
meeting stating the place, date and hour of the meeting, shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting,
either personally, by mail,
<PAGE> 5
telegraph or private carrier, to each shareholder entitled to vote at such
meeting; except that notice of a shareholders' meeting to act on an amendment of
the Articles of Incorporation, a plan of merger or share exchange, a proposed
sale of assets other than in regular course of business, or dissolution of the
Corporation shall be given not less than twenty-five (25) nor more than sixty
(60) days before the meeting date. If mailed, notice is given when deposited in
the United States mail, postage prepaid, directed to the shareholder at his or
her address as it appears on the records of the Corporation.
If an annual meeting is adjourned to a different date, time or
place, notice need not be given if the new date, time or place is announced at
the meeting before adjournment. If a new record date is fixed for the adjourned
meeting, which is required if the adjournment is for more than one hundred
twenty (120) days, a notice of the adjourned meeting shall be given to each
shareholder of record as of the new record date.
Section d. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the Articles of Incorporation, may be called by the Board of
Directors or the President and shall be called by the Secretary at the request
in writing of a majority of the Board of Directors, or in the case of the
Corporation having thirty-five (35) or fewer shareholders of record at the
demand in writing of shareholders owning at least twenty percent (20%) of the
number of shares of the Corporation issued and outstanding and entitled to vote.
Such request shall state the purpose or purposes of the proposed meeting.
Section e. Notice of Special Meetings. Written notice of a
special meeting, stating the place, date and hour of the meeting and the purpose
or purposes for which the meeting is called, shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting, either
personally, by mail, telegraph or private carrier, to each shareholder entitled
to vote at such meeting; except that notice of a shareholders' meeting to act on
an amendment of the Articles of Incorporation, a plan of merger or share
exchange, a proposed sale of assets not in the ordinary course of business, or
the dissolution of the Corporation shall be given not less than twenty-five (25)
nor more than sixty (60) days before the meeting date. The business transacted
at any special meeting of shareholders shall be limited to the purposes stated
in the notice.
2
<PAGE> 6
If a special meeting is adjourned to a different date, time or
place, notice need not be given if the new date, time or place is announced at
the meeting before adjournment; except that if a new record date is fixed for
the adjourned meeting, which is required if the adjournment is for more than one
hundred twenty (120) days, a notice of the adjourned meeting shall be given to
each shareholder of record as of the new record date.
Section f. Closing of Transfer Books and Fixing of Record
Date. The directors may fix in advance a time, which shall be not more than
seventy (70) days before the date of any meeting of shareholders or the date for
the payment of any dividend or the making of any distribution to shareholders or
the last day on which the consent or dissent of shareholders may be effectively
expressed for any purpose, as the record date for determining the shareholders
having the right to notice of and to vote at such meeting or the right to
receive such dividend or distribution or the right to give such consent or
dissent, and in such case only shareholders of record on such record date shall
have such right, notwithstanding any transfer of stock on the books of the
Corporation after the record date; or without fixing such record date the
directors may for any of such purposes close the transfer books for all or any
part of such period. If no record date is fixed and the transfer books are not
closed, the record date for determining shareholders having the right to notice
of or to vote at a meeting of shareholders shall be at the close of business on
the day next preceding the day on which notice is given, and the record date for
determining shareholders for any other purpose shall be at the close of business
on the day on which the Board of Directors acts with respect thereto. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this Section, such determination shall apply to any
adjournment of the meeting unless the Board of Directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
Section g. Shareholders' List. At least ten (10) days before
every meeting of shareholders, a complete list of the shareholders entitled to
vote at said meeting, arranged in alphabetical order and showing the address of
each shareholder and the number of shares registered in the name of each
shareholder, shall be prepared by the Secretary. Such list shall be open to the
examination of any shareholder, during ordinary business hours, for a period of
at least ten (10) days prior to the meeting at the registered office of the
Corporation, at its principal office, or at the office of its transfer agent or
registrar. The list shall
3
<PAGE> 7
also be produced and kept at the time and place of the meeting and shall be
subject to inspection by any shareholder during the whole time of the meeting
for the purposes thereof. If the Corporation has shares registered under the
Securities and Exchange Act of 1934 as amended, a shareholder may inspect the
shareholder list prior to a shareholders' meeting only if the shareholder has
been a holder of record for at least six (6) months preceding the demand to
inspect or is the holder of record of at least five percent (5%) of all the
outstanding shares and if the demand is made in good faith and for a proper
purpose, which is described with particularity and is germane to the meeting.
Section h. Quorum. The holders of a majority of the shares
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum at all
meetings of the shareholders for the transaction of business except as otherwise
provided by statute, by the Articles of Incorporation or by these Bylaws. If,
however, such quorum shall not be present or represented at any meeting of the
shareholders, the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, of the place, date
and hour of the adjourned meeting, until a quorum shall again be present or
represented by proxy. At the adjourned meeting at which a quorum shall be
present or represented by proxy, the Corporation may transact any business which
might have been transacted at the original meeting.
Section i. Voting. When a quorum is present at any meeting,
and subject to the provisions of statute, the Articles of Incorporation, or by
these Bylaws in respect of the vote that shall be required for a specified
action, the vote of the holders of a majority of the shares having voting power,
present in person or represented by proxy, shall decide any question brought
before such meeting, unless the question is one upon which, by express provision
of statute, or of the Articles of Incorporation, or of these Bylaws, a different
vote is required in which case such express provision shall govern and control
the decision of such question. Each shareholder shall have one vote for each
share of Stock having voting power registered in the shareholder's name on the
books of the Corporation, except as otherwise provided in the Articles of
Incorporation.
Section j. Proxies. Each shareholder entitled to vote at a
meeting of shareholders or to express consent or dissent to corporate action in
writing without a meeting may authorize
4
<PAGE> 8
another person or persons to act for him or her by proxy, but no such proxy
shall be voted or acted upon after eleven (11) months from its date, unless the
proxy provides for a longer period. Notwithstanding the provisions of the prior
sentence, a proxy coupled with an interest sufficient in law to support an
irrevocable power, including, without limitation, an interest in the shares
relating to the proxy or in the Corporation generally, may be made irrevocable
if it so provides, need not specify the meeting to which it relates, and shall
be valid and enforceable until the interest terminates, or for such shorter
period as may be specified in the proxy. Proxies shall be filed with the
Secretary of the Corporation, or such other officer of agent authorized to
tabulate votes, before or at the time of the meeting. The death or incapacity of
a shareholder appointing a proxy does not affect the validity of such proxy
unless notice of such death or incapacity is received by the officer or agent
authorized to tabulate votes before the proxy votes.
Section k. Unanimous Consent. Whenever the vote of
shareholders at a meeting thereof is required or permitted to be taken for or in
connection with any corporate action by any provisions of statute, or of the
Articles of Incorporation, or these Bylaws, the meeting, notice of the meeting,
vote of shareholders and action by the Board of Directors may be dispensed with
if all the shareholders entitled to vote upon the action, if such meeting were
held, shall consent in writing to such corporate action being taken. Such
written consent shall be included in the minutes or filed with the corporate
records reflecting the action taken.
Section l. Voting Agreements. An agreement between two or more
shareholders, if in writing and signed by the parties thereto, whether or not
such parties include all of the shareholders of the Corporation, may provide
that the shares held by such shareholders shall be voted under procedures set
forth in said agreement.
ARTICLE 3.
DIRECTORS
Section a. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the Corporation and do all such acts and
things as are not by statute, nor by the Articles of Incorporation, nor by these
Bylaws directed or required to be exercised or done by the shareholders.
5
<PAGE> 9
Section b. Number, Election and Term of Office. The Board of
Directors shall consist of the same number of members as there are shareholders
of the Corporation, but in no event, shall there be more than three directors at
any given time. The directors shall be elected at the annual meeting of the
shareholders by such shareholders as have the right to vote thereon. Each
director shall hold office until the next annual election of directors and until
his successor is chosen and qualified or until the director sooner dies,
resigns, is removed or becomes disqualified to serve as a director. Any election
of directors by shareholders shall be by ballot if so requested by any
shareholder entitled to vote thereon.
Section c. Vacancies. If the office of any director or
directors becomes vacant by reason of death, resignation, retirement,
disqualification, removal from office, or otherwise, or a new directorship is
created, the holders of a plurality of shares issued and outstanding and
entitled to vote in elections of directors, or the Board of Directors or a
majority of the directors remaining in office if they constitute fewer than a
quorum of the Board, may choose a successor or successors, or a director to fill
the newly created directorship, who shall hold office for the unexpired term or
until the next election of directors.
Section d. Place of Meetings. The Board of Directors may hold
regular or special meetings in or outside of the Commonwealth of Virginia, at
the office of the Corporation or at such other places as they may from time to
time determine, or as shall be fixed in the respective notices or waivers of
notice of such meetings.
Section e. Committees of Directors. The Board of Directors
may, by resolution or resolutions passed by a majority of the whole Board,
designate one or more committees, including an executive committee, each
committee to consist of two (2) or more of the directors of the Corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall approve or recommend to
shareholders action that Virginia law requires to be approved by shareholders;
fill vacancies on the Board or any of its committees; amend the Articles of
Incorporation; adopt, amend or
6
<PAGE> 10
repeal the Bylaws; approve a plan of merger not requiring shareholder approval;
authorize or approve a distribution; or authorize or approve the issuance or
sale or contract for sale of shares or determine the designation and relative
rights, preferences and limitations of a class or series of shares except within
limits specifically authorized by the Board of Directors. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors. The committees shall keep
regular minutes of their proceedings and report the same to the Board of
Directors when required.
Section f. Annual Meeting. The first meeting of each newly
elected Board of Directors shall be held either in or outside of the
Commonwealth of Virginia immediately after the annual meeting of the
shareholders in each year. No notice of any kind to either old or new members of
the Board of Directors for this annual meeting shall be necessary.
Regular meetings of the Board of Directors may be held with or
without notice of the date, time, place or purpose of the meeting. Notice of
such meeting may be given personally, by mail, telegram or personal carrier, to
each elected director at his or her address as the same may appear on the
records of the Corporation, or in the absence of such address, at his or her
residence or usual place of business, at least three (3) days before the day on
which such meeting is to be held. The meeting may be held either in or outside
of the Commonwealth of Virginia at such place as the Board may fix from time to
time or as may be specified or fixed in such notice or waiver thereof.
Section g. Special Meeting. Special meetings of the Board of
Directors may be held at any time on the call of the President or by resolution
of the Board of Directors. Notice of any such meeting, shall be given
personally, by mail, telegram or personal carrier, to each director at his or
her address as the same appears on the records of the Corporation not less than
one (1) day prior to the day on which such meeting is to be held if such notice
is by telegram, and not less than two (2) days prior to the day on which the
meeting is to be held if such notice is by mail. The notice need not describe
the purpose of the meeting. If the Secretary shall fail or refuse to give such
notice, then the notice may be given by the officer or any one of the directors
making the call. Any such meeting may be held at such place in or out of the
Commonwealth of Virginia as the Board may fix from time to time or as may be
specified or fixed in such notice or waiver thereof. Any meeting of the Board of
Directors shall be a legal
7
<PAGE> 11
meeting without any notice thereof having been given, if all the directors shall
be present thereat, and no notice of a meeting shall be required to be given to
any director who shall attend such meeting.
Section h. Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any committee
thereof, may be taken without a meeting, if a written consent to such action is
signed by all members of the Board or of such committee, as the case may be, and
such written consent is included in the minutes of proceedings of the Board of
Directors or filed with the corporate records reflecting the action taken.
Members of the Board of Directors, or any committee designated
by the Board, may participate in a meeting of the Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this section shall constitute presence in person at such
meeting.
Section i. Quorum and Manner of Acting. Except as otherwise
provided in these Bylaws, a majority of the total number of directors as
specified by the Bylaws shall constitute a quorum at any regular or special
meeting of the Board of Directors. Except as otherwise provided by statute, by
the Articles of Incorporation, or by these Bylaws, the vote of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. In the absence of a quorum, a majority of the
directors present may adjourn the meeting from time to time until a quorum shall
be present. Notice of any adjourned meeting need not be given, except that
notice shall be given to all directors if the adjournment is for more than one
hundred twenty (120) days.
Section j. Removal of Directors. Any director may be removed
from his office with or without cause if a majority of the shareholders vote in
favor of removal at a duly held special meeting of the shareholders with notice
thereof specifying the purpose of the meeting being at least in part to vote on
such director's removal; provided, however, that the director to be removed
shall be given reasonable notice of the reasons for the proposed removal and an
opportunity to be heard by the shareholders before a removal vote is taken.
Voting by the Shareholders with respect to removal of a director shall be by
closed ballot.
8
<PAGE> 12
Section k. Resignation. Any director of the corporation may
resign from office by delivering or causing to be delivered to any officer of
the Corporation, or to the Board of Directors, a written resignation, which
shall take effect upon receipt thereof or at such subsequent time as shall be
specified in the notice of resignation.
ARTICLE 4.
OFFICERS
Section a. Executive Officers. The executive officers of the
Corporation shall be a President, such number of Vice Presidents, if any, as the
Board of Directors may determine, a Treasurer and a Secretary. One person may
hold any number of said offices.
Section b. Election, Term of Office and Eligibility. The
executive officers of the Corporation shall be elected annually by the Board of
Directors at its regular meeting or at a special meeting held in lieu thereof.
Each officer, except such officers as may be appointed in accordance with the
provisions of Section 4.3, shall hold office until his or her successor shall
have been duly chosen and qualified or until his or her death, resignation or
removal. None of the officers need be members of the Board.
Section c. Subordinate Officers. The Board of Directors may
appoint such Assistant Treasurers, Assistant Secretaries and other officers,
and such agents as the Board may determine, to hold office for such period and
with such authority and to perform such duties as the Board may from time to
time determine. The Board may, by specific resolution, empower the chief
executive officer of the Corporation or Executive Committee to appoint any such
subordinate officers or agents.
Section d. Removal. The President, any Vice President, The
Treasurer and/or the Secretary may be removed at any time, either with or
without cause, but only by the affirmative vote of the majority of the total
number of directors as at the time specified by the Bylaws. Any subordinate
officer appointed pursuant to Section 4.3, may be removed at any time, either
with or without cause, by the majority vote of the directors present at any
meeting of the Board or by any committee or officer empowered to appoint such
subordinate officers.
Section e. The President. The President shall be the chief
executive officer of the Corporation. The President shall
9
<PAGE> 13
have executive authority to see that all orders and resolutions of the Board of
Directors are carried into effect, and, subject to the control vested in the
Board of Directors by statute, by the Articles of Incorporation, or by these
Bylaws, shall administer and be responsible for the management of the business
and affairs of the Corporation. The President shall preside at all meetings of
the shareholders and of the Board of Directors; and in general, shall perform
all duties incident to the office of the President and such other duties as from
time to time may be assigned by the Board of Directors.
Section f. The Vice Presidents. In the event of the absence or
disability of the President, each Vice President, if any, in the order
designated by the Board of Directors, or in the absence of any designation, then
in the order of their election, shall perform the duties of the President. The
Vice Presidents shall also perform such other duties as from time to time may be
assigned to them by the Board of Directors or by the chief executive officer of
the Corporation.
Section g. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for moneys due and payable to the Corporation from any
source whatsoever and deposit all such moneys in the name of the corporation in
such banks, trust companies or other depositories as shall be selected in
accordance with the provisions of Article V of these By-Laws; (b) sign checks or
drafts on the accounts of the Corporation up to amounts authorized from time to
time by the Board of Directors; (c) sign, with the President or a Vice
President, certificates for shares of the Corporation, the issue of which shall
have been authorized by resolution of the Board of Directors; (d) prepare or
cause to be prepared monthly unaudited financial statements; and (e) in general,
perform all duties incident to the office of Treasurer and all other duties as
from time to time may be assigned to him by the Board of Directors or the
President.
Section h. The Secretary. The Secretary shall:
i. Keep the minutes of the meetings of the shareholders and of
the Board of Directors;
ii. See that all notices are duly given in accordance with the provisions
of these Bylaws or as required by law;
iii. Be custodian of the records and of the seal of the Corporation and see
that the seal or a facsimile or equivalent thereof, is
10
<PAGE> 14
affixed to or reproduced on all documents, the execution of which on
behalf of the Corporation under its seal is duly authorized;
iv. Have charge of the stock record books of the Corporation; and
v. In general, perform all duties incident to the office of Secretary, and
such other duties as are provided by these Bylaws and as from time to
time are assigned to him or her by the Board of Directors or by the
chief executive officer of the Corporation.
Section i. Assistant Treasurers. If one or more Assistant
Treasurers shall be appointed pursuant to the provisions of Section 4.3
respecting subordinate officers, then, at the request of the Treasurer, or in
his or her absence or disability, the Assistant Treasurer designated by the
Treasurer (or in the absence of such designations, then any one of such
Assistant Treasurers) shall perform the duties of the Treasurer and when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, the Treasurer. The Assistant Treasurers appointed pursuant to the
provisions of section 4.3 may sign with the President or a Vice President
certificates for shares of the Corporation, the issue of which shall have been
authorized by a resolution of the Board of Directors.
Section j. Assistant Secretaries. If one or more Assistant
Secretaries shall be appointed pursuant to the provisions of Section 4.3
respecting subordinate officers, then, at the request of the Secretary, or in
his or her absence or disability, the Assistant Secretary designated by the
Secretary (or in the absence of such designations, then any one of such
Assistant Secretaries) shall perform the duties of the Secretary and when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, the Secretary.
Section k. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or other wise, may be filled by
the Board of Directors for the unexpired portion of the term. Vacancies or new
offices may be filled at any meeting of the Board of Directors.
Section l. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, and no officer shall be
prevented from receiving such salary by being also a director of the
Corporation.
11
<PAGE> 15
Section m. Bonds. If the Board of Directors or the chief
executive officer shall so require, any officer or agent of the Corporation
shall give bond to the Corporation in such amount and with such surety as the
Board of Directors or the chief executive officer, as the case may be, may deem
sufficient, conditioned upon the faithful performance of their respective duties
and offices.
Section n. Delegation of Duties. In case of the absence of any
officer of the Corporation or for any other reason which may seem sufficient to
the Board of Directors, the Board of Directors may, for the time being, delegate
that officer's powers and duties, or any of them, to any other officer or to any
director.
ARTICLE 5.
SHARES OF STOCK
Section a. Regulation. Subject to the terms of any contract of
the Corporation, the Board of Directors may make such rules and regulations as
it may deem expedient concerning the issue, transfer, and registration of
certificates for shares of the Stock of the Corporation, including the issue of
new certificates for lost, stolen, or destroyed certificates, and including the
appointment of transfer agents and registrars.
Section b. Stock Certificates. The shares for the Corporation
shall be represented by certificates or shall be uncertificated. Certificates
for shares of the stock of the Corporation shall be respectively numbered
serially for each class of stock, or series thereof, as they are issued, and may
be impressed with the corporate seal or a facsimile thereof, and shall be signed
by two (2) officers (one of which shall be the President or a Vice President,
and the other of which shall be the Treasurer or an Assistant Treasurer). The
signatures of the officers upon a certificate may be facsimiles. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the Corporation with the same effect as if he or she
were such officer at the date of its issue.
Each certificate shall exhibit the name of the Corporation,
and that it is organized under the laws of the Commonwealth of Virginia, the
class (or series of any class) and number of shares represented thereby, and the
name of the holder.
12
<PAGE> 16
Each certificate shall be otherwise in such form as may be prescribed by the
Board of Directors.
When the Corporation is authorized to issue different classes
of shares, or different series within a class, a full statement of the
designations, preferences, limitations, and relative rights of the shares of
each class authorized to be issued and a full statement of the variations in
rights, preferences, and limitations determined for each series within a class
(and the authority for the Board of Directors to determine variations for future
series) shall be set forth upon the face or back of each certificate, or each
certificate shall have a statement that this information will be furnished to
any shareholder upon written request and without charge.
Section c. Transfer of Shares. Shares of the capital stock of
the Corporation shall be transferable on the books of the Corporation by the
holder thereof in person or by his or her duly authorized attorney, upon the
surrender or cancellation of a certificate or certificates for a like number of
shares. As against the Corporation, a transfer of shares can be made only on the
books of the Corporation and in the manner hereinabove provided, and the
Corporation shall be entitled to treat the registered holder of any share as the
owner thereof and shall not be bound to recognize any equitable or other claim
to or interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, save as expressly provided by
statute.
Section d. Lost Certificate. Any shareholder claiming that a
certificate representing shares of stock has been lost, stolen or destroyed may
make an affidavit or affirmation of the fact and, if the Board of Directors so
requires, advertise the same in a manner designated by the Board, and give the
Corporation a bond of indemnity in form and with security for an amount
satisfactory to the Board (or an officer or officers designated by the Board),
whereupon a new certificate may be issued of the same tenor and representing the
same number, class and/or series of shares as were represented by the
certificate alleged to have been lost, stolen or destroyed.
Section e. Transfer Restrictions. No disposition, sale,
assignment, pledge, hypothecation or other transfer of all or any part of the
shares of the capital stock of the Corporation, whether voluntarily,
involuntarily, by operation of law or otherwise, shall be made by any
shareholder, or by any heir, executor, legal representative, devisee,
testamentary beneficiary,
13
<PAGE> 17
trustee in bankruptcy, successor or assign of any shareholder, other than in
accordance with any Shareholders Agreement then in effect among the shareholders
of the Corporation.
Section f. Miscellaneous. No person who transfers, holds, or
purports to exercise any rights or privileges with respect to any shares of
capital stock of the Corporation in violation of the rights, restrictions and
provisions set forth under this Article V, shall have the right to vote, to
receive dividends or to enjoy or exercise any other rights or privileges as a
holder of any shares of capital stock with respect to which any such violation
or default shall exist.
Section g. Legend. Each outstanding stock certificate of the
Corporation shall bear the following endorsement in bold print: "The shares of
stock represented by this certificate and the transfer thereof are subject to
certain restrictions imposed by the Articles of Incorporation and the Bylaws of
the Corporation and a certain Stock Transfer Restriction Agreement among the
Shareholders, copies of all of which shall be furnished by the Corporation
without charge upon written request of the holder hereof."
ARTICLE 6.
BOOKS AND RECORDS
Section a. Location. The books, accounts and records of the
Corporation may be kept at such place or places within or without the
Commonwealth of Virginia as the Board of Directors may from time to time
determine.
Section b. Inspection. The books, accounts, and records of the
Corporation shall be open to inspection by any member of the Board of Directors
at all times and open to inspection by the shareholders at such times, and
subject to such regulations as the Board of Directors may prescribe, except as
otherwise provided by statute.
Section c. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Virginia." The seal may be used by causing it, or a
facsimile thereof to be impressed or affixed in any manner reproduced.
14
<PAGE> 18
ARTICLE 7.
DIVIDENDS AND RESERVES
Section a. Dividends. Subject to the provisions of the
Articles of Incorporation relating thereto, if any, dividends may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital stock,
subject to any provisions of the Articles of Incorporation.
The Board of Directors of the Corporation, subject to any
restrictions contained in the Articles of Incorporation and other lawful
commitments of the Corporation, may not declare and pay dividends upon the
shares of its capital stock if after giving it effect the Corporation would not
be able to pay its debts as they become due in the usual course of business or
the Corporation's total assets would be less than the sum of its total
liabilities plus the amount that would be needed, if the Corporation were to be
dissolved at time of distribution, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
Section b. Reserves. The Board of Directors of the Corporation
may set apart, out of any of the funds of the Corporation available for
dividends, a reserve or reserves for any proper purpose and may abolish any such
reserve.
ARTICLE 8.
MISCELLANEOUS PROVISIONS
Section a. Fiscal Year. The fiscal year of the Corporation
shall end on the 31st of December in each calendar year.
Section b. Depositories. The Board of Directors or an officer
designated by the Board shall appoint banks, trust companies, or other
depositories in which shall be deposited from time to time the money or
securities of the Corporation.
Section c. Checks, Drafts and Notes. All checks, drafts, or
other orders for the payment of money and all notes or other evidences of
indebtedness issued in the name of the Corporation shall be signed by such
officer or officers, or agent or agents as shall from time to time be designated
by resolution of the Board of Directors or by an officer appointed by the Board.
15
<PAGE> 19
Section d. Contracts and Other Instruments. The Board of
Directors may authorize any officer, agent or agents to enter into any contract
or execute and deliver any instrument in the name and on behalf of the
Corporation and such authority may be general or confined to specific instances.
Section e. Notices. Whenever under the provisions of statute,
or of the Articles of Incorporation, or of these Bylaws notice is required to be
given to any director or shareholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, by depositing the same
in a post office or letter box, in a postpaid sealed wrapper, or by delivery to
a telegraph company or to a private carrier, addressed to such director or
shareholder at such address as appears on the records of the Corporation, or, in
default of other address, to such director or shareholder at the General Post
Office in the City of Richmond, Virginia, and such notice shall be deemed to be
given at the time when the same shall be thus mailed or delivered to a telegraph
company or private carrier.
Section f. Waivers of Notice. Whenever any notice is required
to be given under the provisions of statute, or of the Articles of
Incorporation, or of these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice. Attendance of a person at
a meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the shareholders, directors or
members of a committee of directors need be specified in any written waiver of
notice.
Section g. Stock in Other Corporations. Any shares of stock in
any other corporation which may from time to time be held by this Corporation
may be represented and voted at any meeting of shareholders of such corporation
by the President or a Vice President, or by any other person or persons
thereunto authorized by the Board of Directors, or by any proxy designated by
written instrument of appointment executed in the name of this Corporation by
its President or a Vice President. Shares of stock belonging to the Corporation
need not stand in the name of the Corporation, but may be held for the benefit
of the Corporation in the individual name of the President or of any other
nominee designated for the purpose by the Board of Directors. Certificates
16
<PAGE> 20
for shares so held for the benefit of the Corporation shall be endorsed in blank
or have proper stock powers attached so that said certificates are at all times
in due form for transfer, and shall be held for safekeeping in such manner as
shall be determined from time to time by the Board of Directors.
Section h. Amendment of Bylaws. The shareholders, at any
regular or special meeting (if notice of such alteration or amendment of the
Bylaws is contained in the notice of such meeting) may adopt, amend, or repeal
these Bylaws.
Except to the extent provided by the Articles of Incorporation
or by Virginia law, the Board of Directors may adopt, amend, or repeal these
Bylaws at any meeting except to the extent that the shareholders, in adopting or
amending particular Bylaws, have provided expressly that the Board of Directors
may not amend or repeal that Bylaw.
ARTICLE IX
INDEMNIFICATION
Section a. Definitions. In this Article IX:
i. "Corporation" includes any domestic or foreign predecessor entity of
the Corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
ii. "Director" means an individual who is or was a director of the
Corporation or an individual who, while a director of the Corporation,
is or was serving at the Corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. A director is considered to be serving an employee
benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services by,
him to the plan or to participants in or beneficiaries of the plan.
"Director" includes, unless the context requires otherwise, the estate
or personal representative of a director.
iii. "Expenses" include counsel fees.
iv. "Liability" means the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed
17
<PAGE> 21
with respect to an employee benefit plan, or reasonable expenses
incurred with respect to a proceeding.
v. "Official capacity" means:
(1) when used with respect to a director, the office of
director in the Corporation; and
(2) when used with respect to an individual other than director,
as contemplated in Section 9.7, the office in the Corporation
held by the officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the
Corporation. "Official capacity" does not include service for
any other foreign or domestic corporation or any partnership,
joint venture, trust, employee benefit plan, or other
enterprise.
vi. "Party" includes an individual who was, is, or is threatened to be made
a named defendant or respondent in a proceeding.
vii. "Proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Section b. Authority to Indemnify.
i. Except as provided in subsection (d), the Corporation may indemnify an
individual made a party to a proceeding because he is or was a
director, against liability incurred in the proceeding if:
(1) he conducted himself in good faith; and
(2) he believed:
(a) in the case of conduct in his official capacity with
the Corporation, that his conduct was in its best
interests; and
(b) in all other cases, that his conduct was at least not
opposed to its best interests; and
(3) in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
ii. A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of
18
<PAGE> 22
the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subparagraph (a)(2)(ii).
iii. The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not,
of itself, determinative that the director did not meet the standard of
conduct described in this section.
iv. The Corporation may not indemnify a director under this section:
(1) in connection with a proceeding by or in the right of the
Corporation in which the director was adjudged liable to
the Corporation; or
(2) in connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in
his official capacity, in which he was adjudged liable on the
basis that personal benefit was improperly received by him.
v. Indemnification permitted under this section in connection with a
proceeding by or in the right of the Corporation is limited to
reasonable expenses incurred in connection with the proceeding.
Section c. Mandatory Indemnification. Unless limited by its
Articles of Incorporation, the Corporation shall indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party because he is or was a director of the Corporation
against reasonable expenses incurred by him in connection with the proceeding.
Section d. Advance for Expenses.
i. The Corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of
final disposition of the proceeding if:
(1) the director furnishes the Corporation a written affirmation
of his good faith belief that he has met the standard of
conduct described in Section 9.2;
(2) the director furnishes the Corporation a written undertaking,
executed personally or on his behalf, to
19
<PAGE> 23
repay the advance if it is ultimately determined that he did
not meet the standard of conduct; and
(3) a determination is made that the facts then known to those
making the determination would not preclude indemnification
under this subdivision.
ii. The undertaking required by subparagraph (a)(2) must be an unlimited
general obligation of the director but need not be secured and may be
accepted without reference to financial ability to make repayment.
iii. Determinations and authorizations of payments under this section shall
be made in the manner specified in Section 9.6.
Section e. Court Orders For Advances, Reimbursement or
Indemnification.
i. An individual who is made a party to a proceeding because he is or was
a director of the Corporation may apply to a court for an order
directing the Corporation to make advances or reimbursement for
expenses or to provide indemnification. Such application may be made to
the court conducting the proceeding or to another court of competent
jurisdiction.
ii. The court shall order the Corporation to make advances and/or
reimbursement for expenses or to provide indemnification if it
determines that the director is entitled to such advances,
reimbursement or indemnification and shall also order the corporation
to pay the director's reasonable expenses incurred to obtain the order.
iii. With respect to a proceeding by or in the right of the Corporation,
the court may (i) order indemnification of the director to the extent
of his reasonable expenses if it determines that, considering all the
relevant circumstances, the director is entitled to indemnification
even though he was adjudged liable to the Corporation and (ii) also
order the Corporation to pay the director's reasonable expenses
incurred to obtain the order of indemnification.
iv. Neither (i) the failure of the Corporation, including its board of
directors, its independent legal counsel and its shareholders, to have
made an independent determination prior to the commencement of any
action permitted by this section that the applying director is entitled
to receive advances and/or reimbursement nor (ii) the determination by
the
20
<PAGE> 24
Corporation including its board of directors, its independent legal
counsel and its shareholders, that the applying director is not
entitled to receive advances and/or reimbursement or indemnification
shall create a presumption to that effect or otherwise of itself be a
defense to that director's application for advances for expenses,
reimbursement or indemnification.
Section f. Determination and Authorization of Indem-
nification.
i. The Corporation may not indemnify a director under Section 9.2 unless
authorized in the specific case after a determination has been made
that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth in
Section 9.2.
ii. The determination shall be made:
(1) by the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
(2) if a quorum cannot be obtained under subparagraph (b)(1) by
majority vote of a committee duly designated by the board of
directors, in which designation directors who are parties may
participate, consisting solely of 2 or more directors not at
the time parties to the proceeding;
(3) by special legal counsel:
(a) selected by the board of directors or its committee
in the manner prescribed in subparagraphs (1) or
(2); or
(b) if a quorum of the board of directors cannot be
obtained under subparagraph (b)(3)(i) and a committee
cannot be designated under subparagraph (b)(2),
selected by majority vote of the full board of
directors in which selection directors who are
parties may participate; or
(4) by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the
proceeding may not be voted on the determination.
iii. Authorization of indemnification and evaluation as to reason ableness
of expenses shall be made in the same manner as the
21
<PAGE> 25
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall
be made by those entitled under subparagraph (b)(3) to select counsel.
Section g. Indemnification of Officers, Employees and Agents.
Unless the Corporation's Articles of Incorporation provide otherwise:
i. an officer of the Corporation who is not a director is entitled to
mandatory indemnification under Section 9.3, and is entitled to apply
for court-ordered indemnification under Section 9.5, in each case to
the same extent as a director;
ii. the Corporation may indemnify and advance expenses under this
subdivision to an officer, employee or agent of the Corporation who is
not a director, to the same extent as to a director; and
iii. the Corporation may also indemnify and advance expenses to an officer,
employee, or agent who is not a director to the extent, consistent with
public policy, that may be provided by its Articles of Incorporation,
these By-laws, general or specific action of its Board of Directors, or
contract.
Section h. Insurance. The Corporation may purchase and
maintain insurance on behalf of an individual who is or was a director, officer,
employee, or agent of the Corporation, or who, while a director, officer,
employee, or agent of the Corporation, is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against liability asserted against
or incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the Corporation would have power to
indemnify him against the same liability under Section 9.2 or Section 9.3.
22
<PAGE> 1
EXHIBIT 3.79
ARTICLES OF INCORPORATION
OF
EMSA JOLIET, INC.
The undersigned subscriber(s) to these Articles of Incorporation, a
natural person(s) competent to contract, hereby form(s) a corporation under the
laws of the State of Florida.
ARTICLE I
NAME
The name of this corporation shall be:
EMSA JOLIET, INC.
ARTICLE II
NATURE OF BUSINESS
The general nature of the business to be transacted by this corporation
is:
A. To engage in every phase and aspect of rendering-managing, staffing and
consulting services to hospitals and medical facilities.
B. To conduct business in, have one or more offices in and hold, mortgage,
sell, convey, lease or otherwise dispose of real and personal property,
including franchises, patents, copyrights, trademarks and licenses in the State
of Florida and in all other states and countries.
C. To contract debts and borrow money, issue and sell or pledge bonds,
debentures, notes and other evidences of indebtedness, and execute such
mortgages, transfers or corporate property, or other instruments to secure the
payment of corporate indebtedness as required.
D. To purchase the corporate assets of any other corporation and engage in
the same or other character of business.
<PAGE> 2
E. To guarantee, endorse, purchase, hold, sell, transfer, mortgage, pledge
or otherwise acquire or dispose of the share of the capital stock of, or any
bonds, securities, or other evidences of indebtedness created by any other
corporation of the State of Florida or any other state or government, and while
owner of such stock to exercise all the rights, powers, and privileges of
ownership, including the right to vote such stock.
F. To do everything necessary and proper for the accomplishment of any of
the purposes or the attaining of any of the objectives or the furtherance of any
of the purposes enumerated in these Articles of Incorporation or any amendment
thereof to do everything necessary or incidental to the protection and benefit
of the corporation, and in general, either alone or in association with other
corporations, firms or individuals, to carry on any lawful pursuit necessary or
the attainment of the objects or the furtherance of such purposes or objects of
the corporation.
G. To engage in any activity or business permitted under the laws of the
United States and of the State of Florida.
The foregoing paragraphs shall be construed as enumerating both objects
and purposes of the corporation; and it is hereby expressly provided that the
foregoing enumeration of specific purposes shall not be held to limit or
restrict in any manner the purposes of the corporation otherwise permitted by
law.
ARTICLE III
CAPITAL STOCK
The corporation is authorized to issue 1,000 shares of par common stock at
one dollar par value.
-2-
<PAGE> 3
ARTICLE IV
PRE-EMPTIVE RIGHTS
Every shareholder upon the sale for cash of any new stock of this
corporation of the same kind, class or series as that which he already holds,
shall have the right to purchase his pro rata share thereof (as nearly as may be
done without issuance of fractional shares) at the price at which is offered to
others.
ARTICLE V
TERMS OF EXISTENCE
The corporation shall have perpetual existence, commencing on the date of
filing of the Articles of Incorporation with the Department of State.
ARTICLE VI
INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation is
100 Northwest 70th Avenue, Plantation, Florida 33317 . The name of the initial
registered agent of this corporation at this address is George W. McCleary, Jr.
ARTICLE VII
INITIAL BOARD OF DIRECTORS
The business of the corporation shall be managed by its board of
directors. The corporation shall initially have one director. The number of
directors may be either increased or decreased from time to time by the by-laws
but shall never be less than one. The name and address of the initial director
of this corporation is: J. CLIFFORD FINDEISS, 100 Northwest 70th Avenue,
Plantation, Florida 33317.
-3-
<PAGE> 4
ARTICLE VIII
SUBSCRIBER
The name and address of the person signing these Articles of Incorporation
as subscriber is: EMSA LIMITED PARTNERSHIP, 100 Northwest 70th Avenue,
Plantation, Florida 33317.
ARTICLE IX
VOTING FOR DIRECTORS
The board of directors shall be elected by the shareholders of the
corporation at such times and in such manner as provided by the by-laws of the
corporation.
ARTICLE X
REMOVAL OF DIRECTORS
Any directors of the corporation may be removed at any annual or special
meeting of the stockholders by the same vote as that required to elect a
director.
ARTICLE XI
CONTRACTS
No contract or other transaction between the corporation and any other
corporation shall be affected by the fact that any director of the corporation
is interested in, or is a director or officer of, such other corporation, and
any director, individually or jointly, may be a party to, or may be interested
in, any contract or transaction of the corporation or in which the corporation
is interested; and no contract or other transaction of the corporation with any
person, firm or corporation shall be affected by the fact that any director of
the corporation is a party in any way connected with such person, firm or
corporation, and every person who may become a director
-4-
<PAGE> 5
of the corporation is hereby relieved from any liability that might otherwise
exist from contracting with the corporation for the benefit of himself or any
firm, association, or corporation in which he may be in any way interested
provided disclosure of the interest in and/or position with such other
corporation is made and/or known by the other directors.
ARTICLE XII
ADDITIONAL CORPORATE POWERS
In furtherance and not in the limitation of the general powers conferred
by the laws of the State of Florida and of the purposes and objects hereinabove
stated, the corporation shall have all the following powers:
A. To enter into, or become a partner in, any arrangement for sharing
profits, union of interest or corporation, joint venture, or otherwise, with any
person, firm or corporation for the purpose of carrying on any business which
the corporation has the direct or incidental authority to pursue.
B. At its option, to purchase and acquire any or all of its stock owned
and held by any such stockholder as should desire to sell, transfer or other
dispose of his stock in accordance with the by-laws adopted by the stockholders
of the corporation setting forth the terms and conditions of such purchase;
provided, however, the capital of the corporation is not impaired
C. At its option, to purchase and acquire the stock owned and held by any
stockholder who dies, in accordance with the bylaws adopted by the stockholders
of the corporation setting forth the terms and conditions of such purchase;
provided, however, the capital of the corporation is not impaired.
-5-
<PAGE> 6
D. To enter into, for the benefit of its employees, one or more of the
following: (i) a pension plan, (ii) a profit sharing plan, (iii) a stock bonus
plan, (iv) a thrift and savings plan, (v) a restricted stock option plan, (vi)
other retirement or incentive compensation plans.
ARTICLE XIII
AMENDMENT
These Articles of Incorporation may be amended in the manner provided by
law. Every amendment shall be approved by the board of directors, proposed by
them to the stockholders, and approved at a stockholders meeting by a majority
of the stock entitled to vote thereon, unless all the directors and all the
stockholders sign a written statement manifesting their intention that a certain
amendment of these Articles of Incorporation be made.
ARTICLE XIV
ADOPTION OF BY-LAWS
The power to alter, amend, or repeal the by-laws or to adopt new by-laws
shall be vested in the board or directors; provided, however, that any by-laws
or amendment thereto as adopted by the board of directors may be altered,
amended or repealed by a vote of the shareholders entitled to vote for the
election of directors, or a new by-law in lieu thereof may be adopted by vote of
such shareholders.
-6-
<PAGE> 7
ARTICLE XV
BY-LAWS AND CORPORATE MANAGEMENT
The corporation may in its by-laws make any other provisions or
requirements for the management or conduct of the business of the corporation,
provided the same is not inconsistent with the provisions of this certificate,
or contrary to the laws of Florida or of the United States.
IN WITNESS WHEREOF, the undersigned subscriber has executed these Articles
of Incorporation on December 1, 1988.
/s/ George W. Cleary
______________________________
GEORGE W. CLEARY, JR.
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing instrument was acknowledged before me on December 1, 1988 by
George W. McCleary, Jr.
/s/ Mary Ann D'Amato
______________________________
Notary Public
My commission expires January 8, 1982
-7-
<PAGE> 1
EXHIBIT 3.80
BYLAWS
OF
EMSA JOLIET, INC.
Article 1. Meetings of Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders of this
corporation shall be held at the time and place designated by the Board of
Directors of the corporation. The annual meeting shall be held within two (2)
months after the close of the corporation's fiscal year. The annual meeting of
shareholders for any year shall be held no later than thirteen months after the
last preceding annual meeting of shareholders. Business transacted at the annual
meeting shall include the election of directors of the corporation.
Section 2. Special Meetings. Special meetings of the shareholders shall be
held when directed by the President or the Board of Directors, or when requested
in writing by the holders of not less than ten percent of all the shares
entitled to vote at the meeting. A meeting requested by shareholders shall be
called for a date not less than ten nor more than sixty days after the request
is made, unless the shareholders requesting the meeting designate a later date.
The call for the meeting shall be issued by the Secretary, unless the President,
Board of Directors, or shareholders requesting the meeting shall designate
another person to do so.
Section 3. Place. Meetings of shareholders may be held within or without
the State of Florida.
Section 4. Notice. Written notice stating the place, day and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than ten nor more than sixty
days before the meetings, either personally or by first class mail, by or at the
direction of the President, the Secretary, or the officer or persons calling the
meeting to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail addressed to the
<PAGE> 2
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Notice of Adjourned Meetings.
When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in this section to each shareholder of record on the new record date
entitled to vote at such meeting.
Section 6. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other purpose, the Board of Directors may provide that the stock transfer
books shall be closed for a stated period but not to exceed, in any case, sixty
days. If the stock transfer books shall be closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders, such
books shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the record date for any determination of shareholders,
such date in any case to be not more than sixty days and, in case of a meeting
of shareholders, not less than ten days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at a meeting of
shareholders, or shareholders entitled
-2-
<PAGE> 3
to receive payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of Directors declaring
such dividend is adopted, as the case may be, shall be the record date for such
determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting.
Section 7. Voting Record. The officers or agent having charge of the stock
transfer books for shares of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting or any adjournment thereof, with the address of
and the number and class and series, if any, of shares held by each. The list,
for a period of ten days prior to such meeting, shall be kept on file at the
registered office of the corporation, at the principal place of business of the
corporation or at the office of the transfer agent or registrar of the
corporation and any shareholder shall be entitled to inspect the list at any
time during usual business hours. The list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting.
If the requirements of this section have not been substantially complied
with, the meeting on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
Section 8. Shareholder Quorum and Voting. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. When a specified item of business is required to
be voted on by a class or series of stock, a majority of the
-3-
<PAGE> 4
shares of such class or series shall constitute a quorum for the transaction of
such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless otherwise provided by law.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
Section 9. Voting of Shares. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders.
Treasury shares, shares of stock of this corporation owned by another
corporation the majority of the voting stock of which is owned or controlled by
this corporation, and shares of stock of this corporation held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
A shareholder may vote either in person or by proxy executed in writing by
the shareholder or his duly authorized attorney-in-fact.
At each election for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
shares owned by him for as many persons are directors to be elected at that time
and for whose election he has a right to vote, or to cumulate his votes by
giving one candidate as many votes as the number of directors to be elected at
that time multiplied by the number of his shares, or by distributing such votes
on the same principle among any number of such candidates.
-4-
<PAGE> 5
Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the bylaws of the
corporate shareholder; or, in the absence of any applicable bylaw, by such
person as the Board of Directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a certified copy of the
bylaws or other instrument of the corporate shareholder. In the absence of any
such designation, or in case of conflicting designation by the corporate
shareholder, the chairman of the board, president, any vice president, secretary
and treasurer of the corporate shareholder shall be presumed to possess, in that
order, authority to vote such shares.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred
On and after the date on which written notice of redemption of redeemable
shares has been mailed to the holders thereof and a sum sufficient to redeem
such shares has been deposited with a bank or trust company with irrevocable
instruction and authority to pay the redemption price to the holders thereof
upon surrender of certificates therefor, such shares shall not be entitled to
vote on any matter and shall not be deemed to be outstanding shares.
-5-
<PAGE> 6
Section 10. Proxies. Every shareholder entitled to vote at a meeting of
shareholders or to express consent or dissent without a meeting or a
shareholders, duly authorized attorney-in-fact may authorize another person or
persons to act for him by proxy.
Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except as otherwise by law.
The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
If a proxy for the same shares confers authority upon two or more persons
and does not otherwise provide, a majority of them present at the meeting, or if
only one is present then that one, may exercise all the powers conferred by the
proxy; but if the proxy holders present at the meeting are equally divided as to
the right and manner of voting in any particular case, the voting of such shares
shall be prorated.
If a proxy expressly provides, any proxy holder may appoint in writing a
substitute to act in his place.
Section 11. Voting Trusts. Any number of shareholders of this corporation
may create a voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares, as provided by
law. Where the counterpart of a voting trust agreement and the copy of the
record of the holders of voting trust certificates has been deposited with the
corporation as provided by law, such documents shall be subject to the same
right of examination by a shareholder of the corporation, in person or by agent
or attorney, as are the books and records
-6-
<PAGE> 7
of the corporation, and such counterpart and such copy of such record shall be
subject to examination by any holder of record of voting trust certificates
either in person or by agent or attorney, at any reasonable time for any proper
purpose.
Section 12. Shareholder's Agreements. Two or more shareholders, of this
corporation may enter an agreement providing for the exercise of voting rights
in the manner provided in the agreement or relating to any phase of the affairs
of the corporation as provided by law. Nothing therein shall impair the right of
this corporation to treat the shareholders of record as entitled to vote the
shares standing in their names.
Section 13. Action by Shareholders Without a Meeting.
Any action required by law, these bylaws, or the articles of incorporation
of this corporation to be taken at any annual or special meeting of shareholders
of the corporation, or any action which may be taken at any annual or special
meeting of such shareholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or to take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. If any class of shares is entitled to vote thereon as a class, such
written consent shall be required of the holders of a majority of the shares of
each class of shares entitled to vote as a class thereon and of the total shares
entitled to vote thereon.
Within ten days after obtaining such authorization by written consent,
notice shall be given to those shareholders who have not consented in writing.
The notice shall fairly summarize the material features of the authorized action
and, if the action be a merger, consolidation or sale or exchange of assets for
which dissenters rights are provided under this act, the notice shall contain a
clear statement of the right of shareholders dissenting therefrom to be paid the
fair value of their
-7-
<PAGE> 8
shares upon compliance with further provisions of this act regarding the rights
of dissenting shareholders.
Article II. Directors
Section 1. Function. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of a corporation shall be managed
under the direction of, the Board of Directors.
Section 2. Qualification. Directors need not be residents of this state or
shareholders of this corporation.
Section 3. Compensation. The Board of Directors shall have authority to
fix the compensation of directors.
Section 4. Duties of Directors. A director shall perform his duties as a
director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented,
(b) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence, or
(c) a committee of the board upon which he does not serve, duly designated
in accordance with a provision of the articles of incorporation or the by-laws,
as to matters within its designated authority, which committee the director
reasonably believes to merit confidence.
-8-
<PAGE> 9
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
corporation.
Section 5. Presumption of Assent. A director of the corporation who is
present at a meeting of its Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless he
votes against such action or abstains from voting in respect thereto because of
an asserted conflict of interest.
Section 6. Number. This corporation shall have 2 directors. The number of
directors may be increased or decreased from time to time by amendment to these
bylaws, but no decrease shall have the effect of shortening the terms of any
incumbent director.
Section 7. Election and Term. Each person named in the articles of
incorporation as a member of the initial board of directors shall hold office
until the first annual meeting of shareholders, and until his successor shall
have been elected and qualified or until his earlier resignation, removal from
office or death.
At the first annual meeting of shareholders and at each annual meeting
thereafter the shareholders shall elect directors to hold office until the next
succeeding annual meeting. Each director shall hold office for the term which he
is elected and until his successor shall have been elected and qualified or
until his earlier resignation, removal from office or death.
Section 8. Vacancies. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of
-9-
<PAGE> 10
Directors. A director elected to fill a vacancy shall hold office only until the
next election of directors by the shareholders.
Section 9. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director or the entire Board of Directors may be
removed, with or without cause, by a vote of the holders of a majority of the
shares then entitled to vote at an election of directors.
Section 10. Quorum and Voting. A majority of the number of directors fixed
by these by-laws shall constitute a quorum for the transaction of business. The
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
Section 11. Director Conflicts of Interest. No contract or other
transaction between this corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
-10-
<PAGE> 11
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 12. Executive and Other Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required by
law to be approved by shareholders,
(b) designate candidates for the office of director, for purposes of proxy
solicitation or otherwise,
(c) fill vacancies on the Board of Directors or any committee thereof,
(d) amend the bylaws,
(e) authorize or approve the reacquisition of shares unless pursuant to a
general formula or method specified by the Board of Directors, or
(f) authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares, except
that the Board of Directors, having acted regarding general authorization for
the issuance or sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general formula or method
specified by the Board of Directors, by resolution or by adoption of a stock
option or other plan, authorize a committee to fix the terms of any contract for
the sale of the shares and to fix the terms upon which such shares may be issued
or sold, including, without limitation, the price, the rate or manner of payment
of dividends, provisions for redemption, sinking fund, conversion, voting or
-11-
<PAGE> 12
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the Department of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
Section 13. Place of Meetings. Regular and special meetings by the Board
of Directors may be held within or without the State of Florida.
Section 14. Time, Notice and Call of Meetings. Regular meetings of the
Board of Directors shall be held without notice on the same day as the Annual
Meeting of Shareholders. Written notice of the time and place of special
meetings of the Board of Directors shall be given to each director by either
personal delivery, telegram or cablegram at least two days before the meeting or
by notice mailed to the director at least five days before the meeting.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all obligations to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice of
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting
-12-
<PAGE> 13
shall be given to the directors who were not present at the time of the
adjournment and, unless the time and place of the adjourned meeting are
announced at the time of the adjournment, to the other directors.
Meetings of the Board of Directors may be called by the chairman of the
board, by the president of the corporation, or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 15. Action Without a Meeting. Any action required to be taken at a
meeting of the directors of a corporation, or any action which may be taken at a
meeting of the directors or a committee thereof, may be taken without a meeting
if a consent in writing, setting forth the action so to be taken, signed by all
of the directors, or all the members of the committee, as the case may be, is
filed in the minutes of the proceedings of the board or of the committee. Such
consent shall have the same effect as a unanimous vote.
Article III. Officers
Section 1. Officers. The officers of this corporation shall consist of a
president, a secretary and a treasurer, each of whom shall be elected by the
Board of Directors and each of whom shall serve until their successors are
chosen and qualify. Such other officers and assistant officers and agents as may
be deemed necessary may be elected or appointed by the Board of Directors from
time to time. Any two or more offices may be held by the same person. The
failure to elect a president, secretary or treasurer shall not affect the
existence of this corporation.
Section 2. Duties. The officers of this corporation shall have the
following duties:
-13-
<PAGE> 14
The President shall be the chief executive officer of the corporation,
shall have the general and active management of the business and affairs of the
corporation subject to the directions of the Board of Directors and shall
preside at all meetings of the stockholders and Board of Directors.
The Secretary shall have custody of, and maintain, all of the corporate
records except the financial records; shall record the minutes of all meetings
of the stockholders and Board of Directors, send all notices of meetings out,
and perform such other duties as may be prescribed by the Board of Directors or
the President.
The Treasurer shall have custody of all corporate funds and financial
records; shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of stockholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
Section 3. Removal of Officers. Any officer or agent elected or appointed
by the Board of Directors may be removed by the board whenever in its judgment
the best interests of the corporation will be served thereby.
Any officer or agent elected by the shareholders may be removed only by
vote of the shareholders, unless the shareholders shall have authorized the
directors to remove such officer or agent.
Any vacancy, however occurring, in any office may be filled by the Board
of Directors, unless the bylaws shall have expressly reserved such power to the
shareholders.
Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an officer
or agent shall not of itself create contract rights.
ARTICLE IV. Stock Certificates
-14-
<PAGE> 15
Section 1. Issuance. Every holder of shares in this corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
No certificate shall be issued for any share until such share is fully paid.
Section 2. Form. Certificates representing shares in this corporation
shall be signed by the President or Vice President and the Secretary or an
Assistant Secretary and may be sealed with the seal of this corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
corporation itself or an employee of the corporation. In case any officer who
signed or whose facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer at the
date of its issuance.
Every certificate representing shares issued by this corporation shall set
forth or fairly summarize upon the face or back of the certificate, or shall
state that the corporation will furnish to any shareholder upon request and
without charge a full statement of, the designations, preferences, limitations
and relative rights of the shares of each class or series authorized to be
issued, and the variations in the relative rights and preferences between the
shares of each series so far as the same have been fixed and determined, and the
authority of the Board of Directors to fix and determine the relative rights and
preferences of subsequent series.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof:
the name of the corporation; that the corporation is organized under the laws of
this state; the name of the person or
-15-
<PAGE> 16
persons to whom issued; the number and class of shares, and the designation of
the series, if any, which such certificate represents; and the par value of each
share represented by such certificate, or a statement that the shares are
without par value.
Section 3. Transfer of Stock. The corporation shall register a stock
certificate presented to it for transfer if the certificate is properly endorsed
by the holder of record or by his duly authorized attorney.
Section 4. Lost, Stolen, or Destroyed Certificates. The corporation shall
issue a new stock certificate in the place of any certificate previously issued
if the holder of record of the certificate (a) makes proof in affidavit form
that it has been lost, destroyed or wrongfully taken; (b) requests the issue of
a new certificate before the corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the corporation may direct, to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
Article V. Books and Records
Section 1. Books and Records. This corporation shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, board of directors and committees of directors.
This corporation shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
shareholders, giving the names and addresses of all shareholders, and the
number, class and series, if any, of the shares held by each.
Any books, records and minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time.
-16-
<PAGE> 17
Section 2. Shareholders' Inspection Rights. Any person who shall have been
a holder of record of shares or of voting trust certificates therefor at least
six months immediately preceding his demand or shall be the holder of record of,
or the holder of record of voting trust certificates for, at least five percent
of the outstanding shares of any class or series of the corporation, upon
written demand stating the purpose thereof, shall have the right to examine, in
person or by agent or attorney, at any reasonable time or times, for any proper
purpose its relevant books and records of accounts, minutes and records of
shareholders and to make extracts therefrom.
Section 3. Financial Information. Not later than four months after the
close of each fiscal year, this corporation shall prepare a balance sheet
showing in reasonable detail the financial condition of the corporation as of
the close of its fiscal year, and a profit and loss statement showing the
results of the operations of the corporation during its fiscal year.
Upon the written request of any shareholder or holder of voting trust
certificates for shares of the corporation, the corporation shall mail to such
shareholder or holder of voting trust certificates a copy of the most recent
such balance sheet and profit and loss statement.
The balance sheets and profit and loss statements shall be filed in the
registered office of the corporation in this state, shall be kept for at least
five years, and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
Article VI - Dividends
The Board of Directors of this corporation may, from time to time, declare
and the corporation may pay dividends on its shares in cash, property or its own
shares, except when the corporation is insolvent or when the payment thereof
would render the corporation insolvent or when the declaration or payment
thereof would be contrary to any restrictions contained in the articles of
incorporation, subject to the following provisions:
-17-
<PAGE> 18
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this section, only out of the unreserved and unrestricted
earned surplus of the corporation or out of capital surplus, howsoever arising
but each dividend paid out of capital surplus shall be identified as a
distribution of capital surplus, and the amount per share paid from such surplus
shall be disclosed to the shareholders receiving the same concurrently with the
distribution.
(b) Dividends may be declared and paid in the corporation's own treasury
shares.
(c) Dividends may be declared and paid in the corporation's own authorized
but unissued shares out of any unreserved and unrestricted surplus of the
corporation upon the following conditions:
(1) If a dividend is payable in shares having a par value, such shares
shall be issued at not less than the par value thereof and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate par value of the shares to be issued as a
dividend.
(2) If a dividend is payable in shares without par value, such shares
shall be issued at such stated value as shall be fixed by the Board of Directors
by resolution adopted at the time such dividend is declared, and there shall be
transferred to stated capital at the time such dividend is paid an amount of
surplus equal to the aggregate stated value so fixed in respect of such shares;
and the amount per share so transferred to stated capital shall be disclosed to
the shareholders receiving such dividend concurrently with the payment thereof.
(d) No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the articles of incorporation so
provide or such payment is authorized by the affirmative vote or the written
consent of the holders of at least a majority of the outstanding shares of the
class in which the payment is to be made.
-18-
<PAGE> 19
(e) A split-up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the corporation shall not be construed to be a share dividend within the
meaning of this section.
Article VII - Corporate Seal
The corporate seal shall have the name of the corporation and the word
"Seal" inscribed thereon, and may be facsimile, engraved, printed or an
impression seal.
Article VIII - Amendment
These bylaws may be repealed or amended, and new bylaws may be adopted, by
either the Board of Directors or the shareholders, but the Board of Directors
may not amend or repeal any bylaw adopted by shareholders if the shareholders
specifically provide such bylaw not subject to amendment or repeal by the
directors.
-19-
<PAGE> 1
EXHIBIT 3.81
CERTIFICATE OF LIMITED PARTNERSHIP
OF
PARAGON HEALTHCARE LIMITED PARTNERSHIP
1. The name of the limited partnership is Paragon Healthcare Limited
Partnership.
2. The business address of the limited partnership is 1200 South Pine Island
Road, 6th Floor, Plantation, Florida 33317.
3. The name of the registered agent for service of process is C T Corporation
System.
4. The Florida street address of the registered agent is c/o C T Corporation
System, 1200 South Pine Island Road, Plantation, Florida 33324.
5. Acceptance by the registered agent for service of process:
C T CORPORATION SYSTEM
SPECIAL ASSISTANT SECRETARY
PETER F. SOUZA
Name and Title
6. The mailing address of the limited partnership is 1200 South Pine Island
Road, 6th Floor, Plantation, Florida 33324.
7. The latest date upon which the limited partnership is to be dissolved is
September 30, 2038.
8. NAME OF GENERAL PARTNER SPECIFIC ADDRESS
Emergency Medical Services 1200 South Pine Island Road
Associates, Inc. 6th Floor
Plantation, Florida 33324
Signed this 2nd day of August, 1993.
EMERGENCY MEDICAL SERVICES ASSOCIATES, INC.
By: /s/ J. Clifford Findeiss
_______________________________
Name: J. Clifford Findeiss
Title: President
-2-
<PAGE> 2
AMENDMENT TO THE CERTIFICATE OF LIMITED PARTNERSHIP
OF
PARAGON HEALTHCARE LIMITED PARTNERSHIP
Pursuant to the provisions of the Florida Revised Uniform Limited
Partnership Act (1986), the undersigned, as the sole general partner of Paragon
Healthcare Limited Partnership, whose Certificate of Limited Partnership was
filed with the Florida Department of State on August 3, 1993, does hereby amend
said Certificate of Limited Partnership of Paragon Healthcare Limited
Partnership as follows:
1. Section 8 is hereby amended to read as follows: "The name and business
address of each general partner is: InPhyNet Hospital Services, Inc., 1200 South
Pine Island Road, Suite 600, Fort Lauderdale, FL 33324."
2. Except as expressly provided herein, all of the terms and provisions of
the Certificate of Limited Partnership shall remain in full force and effect and
are hereby ratified and confirmed.
3. This Amendment is being filed within thirty (30) days after the
assignment of the General Partnership Interest, which occurred on October 30,
1996.
The execution of this Certificate by the undersigned constitutes an
affirmation under the penalties of perjury that the facts stated herein are
true.
IN WITNESS WHEREOF, the undersigned has executed this Amendment to the
Certificate of Limited Partnership of Paragon Healthcare Limited Partnership
this 30th day of October, 1996.
INPHYNET HOSPITAL SERVICES, INC.
as General Partner
/s/ J. Clifford Findeiss
_________________________________
J. Clifford Findeiss, President
Sworn to and Subscribed Before Me this
30th day of October, 1996.
/s/ Mary Ann D'Amato
______________________________________
Notary Public
-5-
<PAGE> 1
EXHIBIT 3.82
CERTIFICATE OF LIMITED PARTNERSHIP
OF
TEAM HEALTH SOUTHWEST, L.P.
This Certificate of Limited Partnership of Team Health Southwest, L.P.
("Limited Partnership") is being executed by the undersigned for the purpose of
forming a limited partnership pursuant to the Delaware Revised Uniform Limited
Partnership Act.
I. The name of the limited partnership is Team Health Southwest, L.P.
2. The address of the registered office of the limited partnership in
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The limited
partnership's registered agent at that address is Corporation Service Company.
3. The name and address of the general partner is:
NAME ADDRESS
Team Radiology, Inc. 1900 Winston Road, Suite 300
Knoxville, TN 37919
IN WITNESS WHEREOF, the undersigned, constituting the sole general partner
of the Limited Partnership, have caused this Certificate of Limited Partnership
to be duly executed as of the 20th day of May, 1998.
TEAM RADIOLOGY, INC., its General Partner
By: /s/ Tracy P. Thrasher
______________________________________
Name: Tracy P. Thrasher
Its: Vice President and Secretary
<PAGE> 1
EXHIBIT 3.83
CERTIFICATE OF LIMITED PARTNERSHIP
OF
TEAM HEALTH BILLING SERVICES, L.P.
Pursuant to Tennessee Code Annotated Section 61-2-201, the undersigned
general partner hereby executes this Certificate of Limited Partnership and
certifies as follows:
1. The name of the limited partnership is Team Health Billing Services,
L.P.
2a. The address of the limited partnership's initial registered office
is:
500 Tallan Building
Two Union Square
Chattanooga, Tennessee 37402
Hamilton County
2b. The name of the limited partnership's initial registered agent, to
be located at the address listed in 2a, is Corporation Service Company.
3. The address of the limited partnership's principal office is:
1930 Winston Road, Suite 300
Knoxville, Tennessee 37919
4. The name and address of the limited partnership's general partner
is:
Team Health, Inc.
1900 Winston Road, Suite 300
Knoxville, Tennessee 37919
Dated:October 21, 1997.
GENERAL PARTNER:
Team Health, Inc.
By: /s/ David P.
____________________________
Its: Asst. Secretary
___________________________
<PAGE> 1
EXHIBIT 3.84
FISCHERMANGOLD
A California General Partnership
The undersigned, Herschel Fischer, MD, an individual ("Fischer"), and Karl
G. Mangold, M.D., an individual ("Mangold"), hereby confirm the following:
1. Fischer and Mangold have been associated as general partners
(individually, a "Partner" and collectively, the "Partners") in the general
partnership named FischerMangold, a California general partnership (the
"Partnership"), under the California Uniform General Partnership Act, as amended
(the "Act"), since January 1, 1971 and the Partnership shall continue until
December 31, 2010, unless earlier terminated in accordance with the Act and this
agreement.
2. The Partners respective percentage interests in the profits, losses,
other taxable items and cash distributions of the Partnership are: sixty percent
(60%) for Mangold and forty percent (40%) for Fischer.
3. The Partnership's purpose is to manage and staff certain emergency and
clinic health care facilities.
4. The Partnership's principal place of business shall be at the address
set forth above.
5. Each Partner shall be separately authorized to take any and all actions
on behalf of the Partnership, provided that any Partnership action which
obligates the Partnership to pay or incur an obligation of $100,000 or more
shall be approved by both Partners.
6. The Partnership shall not be dissolved by the withdrawal, admission or
substitution of a Partner.
7. This Agreement shall be dated as of January 1, 1996.
/s/ Herschel Fischer /s/ Karl G. Mangold
________________________ ________________________
HERSCHEL FISCHER KARL G. MANGOLD
<PAGE> 2
FISCHERMANGOLD
A California General Partnership
The undersigned, Herschel Fischer. Inc., a California corporation
("Fischer, Inc."), and Karl G. Mangold, Inc., a California corporation
("Mangold, Inc."), hereby confirm the following:
1. Herschel Fischer, an individual ("H. Fischer"), and Karl G. Mangold, an
individual ("K. Mangold"), have been associated as general partners
(individually, a "Partner" and collectively, the "Partners") in the general
partnership named FischerMangold, a California general partnership (the
"Partnership"), under the California Uniform General Partnership Act, as amended
(the "Act"), since January 1, 1971, pursuant to their partnership agreement as
reflected in that certain Agreement dated for reference purposes as of January
1, 1996.
2. Pursuant to the Assignment dated as of February 15, 1997, K. Mangold
assigned all of his interest in the Partnership to Mangold, Inc. with the intent
that Mangold, Inc. be a substituted general partner for K. Mangold, and pursuant
to the Assignment dated as of February 20, 1997, H. Fischer assigned all of his
interest in the Partnership to Fischer, Inc. with the intent that Fischer, Inc.
be a substituted general partner for H. Fischer.
3. Fischer, Inc. and Mangold, Inc. hereby acknowledge their respective
substitutions as Partners of the Partnership and agree that the Partnership was
not dissolved by such substitutions and that the Partnership shall continue
until December 31, 2010, unless less earlier terminated in accordance with the
Act and this agreement.
4. The Partners respective percentage interests in the profits, losses,
other taxable items and cash distributions of the Partnership are: sixty percent
(60%) for Mangold, Inc. and forty percent (40%) for Fischer, Inc.
5. The Partnership's purpose is to manage and staff certain emergency and
clinic health care facilities.
6. The Partnership's principal place of business shall be at the address
set forth above.
7. Each Partner shall be separately authorized to take any and all actions
on behalf of the Partnership, provided that any Partnership action which
obligates the Partnership to pay or incur an obligation of $100,000 or more
shall be approved by both Partners.
8. The Partnership shall not be dissolved by the withdrawal, admission or
substitution of a Partner.
-3-
<PAGE> 3
9. This agreement shall be dated as of February 21, 1996.
HERSCHEL FISCHER, INC. KARL G. MANGOLD, INC.,
a California corporation a California corporation
By: /s/ Herschel Fischer By: /s/ Karl G. Mangold
_____________________ ______________________
Herschel Fischer, Karl G. Mangold,
President President
-4-
<PAGE> 1
EXHIBIT 3.85
MT. DIABLO EMERGENCY PHYSICIANS
A California General Partnership
The undersigned, Herschel Fischer, Inc., a California corporation ("HFI"),
and Karl G. Mangold, Inc., a California corporation ("KMI"), hereby confirm the
following:
1. Herschel Fischer, M.D., an individual ("Fischer"), and Karl G. Mangold,
M.D., an individual ("Mangold"), entered into a Partnership Agreement dated as
of September 1, 1984, among Fischer, Mangold and Stuart Shikora, M.D.
("Shikora") for the purposes of staffing the emergency department of the Mt.
Diablo Hospital District in Concord, California (the "Partnership"). The
Partnership is known as "Mt. Diablo Emergency Physicians."
2. Fischer and Mangold purchased all of the right, title and interest of
Shikora in the Partnership and upon such purchase, were the only partners in the
Partnership.
3. Pursuant to the Assignment dated as of June 1, 1997, Mangold assigned
all of his interests in the Partnership to KMI with the intent that KMI be a
substituted general partner for Mangold, and pursuant to the Assignment dated as
of June 1, 1997, Fischer assigned all of his interest in the Partnership to HFI
with the intent that HFI be a substituted general partner for Fischer.
4. HFI and KMI (each a "Partner" and collectively, the "Partners") hereby
acknowledge their respective substitutions as partners of the Partnership and
agree that the Partnership was not dissolved by such substitutions and that the
Partnership shall continue until dissolved by two-thirds vote of the partners,
unless earlier terminated in accordance with the Act and this agreement.
5. The Partners' respective percentage interests in the profits, losses,
other taxable items and cash distributions of the Partnership are: fifty percent
(50%) for HFI and fifty percent (50%) for KMI.
6. The Partnership's purpose is to manage and staff the emergency
department of the Mt. Diablo Hospital District in Concord, California.
7. The Partnership's principal place of business shall be at the following
address: 24 Happy Valley Road, Pleasanton, California.
8. Each Partner shall be separately authorized to take any and all actions
on behalf of the Partnership, provided that any Partnership action which
obligates the Partnership to pay or incur an obligation of $100,000 or more
shall be approved by both Partners.
9. The Partnership shall not be dissolved by the withdrawal, admission or
substitution of a Partner.
10. This agreement shall be dated as of June 1, 1997 and amends and
restates the prior Partnership Agreement dated as of September 1, 1984.
<PAGE> 2
HERSCHEL FISCHER, INC. KARL G. MANGOLD, INC.,
a California corporation a California corporation
By: /s/ Herschel Fischer By: /s/ Karl G. Mangold
_________________________ ______________________________
Herschel Fischer, Karl G. Mangold,
President President
-2-
<PAGE> 1
EXHIBIT 4.1
EXECUTION COPY
TEAM HEALTH, INC.
SERIES A AND SERIES B
12% SENIOR SUBORDINATED NOTES DUE 2009
INDENTURE
Dated as of March 12, 1999
United States Trust Company of New York
Trustee
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310 (a)(1)......................................................................................... 7.10
(a)(2)........................................................................................ 7.10
(a)(3)........................................................................................ N.A.
(a)(4)........................................................................................ N.A.
(a)(5)........................................................................................ 7.10
(i)(b)........................................................................................ 7.10
(ii)(c)........................................................................................ N.A.
311(a)........................................................................................... 7.11
(b)........................................................................................... 7.11
(iii)(c)........................................................................................... N.A.
312(a)........................................................................................... 2.05
(b)........................................................................................... 11.03
(iv)(c)........................................................................................... 11.03
313(a)........................................................................................... 7.06
(b)(1)........................................................................................ 10.03
(b)(2)........................................................................................ 7.07
(v) (c)........................................................................................... 7.06; 11.02
(vi)(d)........................................................................................... 7.06
314(a)........................................................................................... 4.03; 11.02
(c)(1)........................................................................................ 11.04
(c)(2)........................................................................................ 11.04
(c)(3)........................................................................................ N.A.
(vii)(e)........................................................................................... 11.05
(f)........................................................................................... NA
315(a)........................................................................................... 7.01
(b)........................................................................................... 7.05, 11.02
(A)(c)........................................................................................... 7.01
(d)........................................................................................... 7.01
(e)........................................................................................... 6.11
316(a)(last sentence)............................................................................ 2.09
(a)(1)(A)..................................................................................... 6.05
(a)(1)(B)..................................................................................... 6.04
(a)(2)........................................................................................ N.A.
(b)........................................................................................... 6.07
(B)(c)........................................................................................... 2.12
317 (a)(1)........................................................................................ 6.08
(a)(2)........................................................................................ 6.09
(b)........................................................................................... 2.04
318 (a)........................................................................................... 11.01
(b)........................................................................................... N.A.
(c)........................................................................................... 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of this Indenture
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.01. DEFINITIONS......................................................................................1
SECTION 1.02. OTHER DEFINITIONS...............................................................................16
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...............................................16
SECTION 1.04. RULES OF CONSTRUCTION...........................................................................17
ARTICLE 2. THE NOTES.............................................................................................17
SECTION 2.01. FORM AND DATING.................................................................................17
SECTION 2.02. EXECUTION AND AUTHENTICATION....................................................................18
SECTION 2.03. REGISTRAR AND PAYING AGENT......................................................................19
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.............................................................19
SECTION 2.05. HOLDER LISTS....................................................................................19
SECTION 2.06. TRANSFER AND EXCHANGE...........................................................................19
SECTION 2.07. REPLACEMENT NOTES...............................................................................31
SECTION 2.08. OUTSTANDING NOTES...............................................................................31
SECTION 2.09. TREASURY NOTES..................................................................................32
SECTION 2.10. TEMPORARY NOTES.................................................................................32
SECTION 2.11. CANCELLATION....................................................................................32
SECTION 2.12. DEFAULTED INTEREST..............................................................................32
SECTION 2.13. CUSIP NUMBERS...................................................................................32
ARTICLE 3. REDEMPTION AND PREPAYMENT.............................................................................33
SECTION 3.01. NOTICES TO TRUSTEE..............................................................................33
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED...............................................................33
SECTION 3.03. NOTICE OF REDEMPTION............................................................................33
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION..................................................................34
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.....................................................................34
SECTION 3.06. NOTES REDEEMED IN PART..........................................................................35
SECTION 3.07. OPTIONAL REDEMPTION.............................................................................35
SECTION 3.08. MANDATORY REDEMPTION............................................................................35
SECTION 3.09. OFFER TO PURCHASE...............................................................................35
ARTICLE 4. COVENANTS.............................................................................................37
SECTION 4.01. PAYMENT OF NOTES................................................................................37
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.................................................................37
SECTION 4.03. REPORTS.........................................................................................38
SECTION 4.04. COMPLIANCE CERTIFICATE..........................................................................38
SECTION 4.05. TAXES...........................................................................................39
SECTION 4.06. STAY, EXTENSION AND USURY LAWS..................................................................39
SECTION 4.07. RESTRICTED PAYMENTS.............................................................................39
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES..................................41
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK......................................42
SECTION 4.10. ASSET SALES.....................................................................................45
SECTION 4.11. TRANSACTIONS WITH AFFILIATES....................................................................46
SECTION 4.12. LIENS...........................................................................................47
SECTION 4.13. CORPORATE EXISTENCE.............................................................................47
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL......................................................47
SECTION 4.15. ANTI-LAYERING...................................................................................48
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS.................................................................48
SECTION 4.17. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS..........................................49
SECTION 4.18. ADDITIONAL GUARANTEES...........................................................................49
SECTION 4.19. BUSINESS ACTIVITIES.............................................................................49
SECTION 4.20. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.........................................49
ARTICLE 5. SUCCESSORS............................................................................................50
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS........................................................50
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED...............................................................50
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................51
SECTION 6.01. EVENTS OF DEFAULT...............................................................................51
SECTION 6.02. ACCELERATION....................................................................................52
SECTION 6.03. OTHER REMEDIES..................................................................................53
SECTION 6.04. WAIVER OF PAST DEFAULTS.........................................................................53
SECTION 6.05. CONTROL BY MAJORITY.............................................................................54
SECTION 6.06. LIMITATION ON SUITS.............................................................................54
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT...................................................54
SECTION 6.08. COLLECTION SUIT BY TRUSTEE......................................................................55
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................55
SECTION 6.10. PRIORITIES......................................................................................55
SECTION 6.11. UNDERTAKING FOR COSTS...........................................................................56
ARTICLE 7. TRUSTEE...............................................................................................56
SECTION 7.01. DUTIES OF TRUSTEE...............................................................................56
SECTION 7.02. RIGHTS OF TRUSTEE...............................................................................57
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE....................................................................58
SECTION 7.04. TRUSTEE'S DISCLAIMER............................................................................58
SECTION 7.05. NOTICE OF DEFAULTS..............................................................................58
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES......................................................58
SECTION 7.07. COMPENSATION AND INDEMNITY......................................................................58
SECTION 7.08. REPLACEMENT OF TRUSTEE..........................................................................59
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC................................................................60
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...................................................................60
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............................................61
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE..............................................................61
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE........................................61
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE..................................................................61
SECTION 8.03. COVENANT DEFEASANCE.............................................................................61
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE......................................................62
SECTION 8.05. DEPOSITED MONEY AND CASH EQUIVALENTS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS........63
SECTION 8.06. REPAYMENT TO COMPANY............................................................................63
SECTION 8.07. REINSTATEMENT...................................................................................64
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER......................................................................64
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.............................................................64
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES................................................................65
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.............................................................66
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS...............................................................66
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES................................................................66
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.................................................................67
ARTICLE 10. SUBORDINATION........................................................................................67
SECTION 10.01. AGREEMENT TO SUBORDINATE.......................................................................67
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY...........................................................67
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT..............................................................68
SECTION 10.04. ACCELERATION OF SECURITIES.....................................................................69
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER............................................................69
SECTION 10.06. NOTICE BY COMPANY..............................................................................69
SECTION 10.07. SUBROGATION....................................................................................69
SECTION 10.08. RELATIVE RIGHTS................................................................................69
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY...................................................70
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.......................................................70
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.............................................................70
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION..........................................................71
SECTION 10.13. AMENDMENTS.....................................................................................71
ARTICLE 11. SUBSIDIARY GUARANTEES................................................................................71
SECTION 11.01. GUARANTEE......................................................................................71
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE..........................................................72
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY..............................................................72
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.................................................72
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.............................................73
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS..............................................................74
ARTICLE 12. MISCELLANEOUS........................................................................................74
SECTION 12.01. TRUST INDENTURE ACT CONTROLS...................................................................74
SECTION 12.02. NOTICES........................................................................................74
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES..................................75
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.............................................76
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................................76
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
SECTION 12.06. RULES BY TRUSTEE AND AGENTS....................................................................76
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS.......................76
SECTION 12.08. GOVERNING LAW..................................................................................77
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................................................77
SECTION 12.10. SUCCESSORS.....................................................................................77
SECTION 12.11. SEVERABILITY...................................................................................77
SECTION 12.12. COUNTERPART ORIGINALS..........................................................................77
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC...............................................................77
</TABLE>
iv
<PAGE> 7
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF IAI CERTIFICATE
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
v
<PAGE> 8
INDENTURE dated as of March 12, 1999 among Team Health, Inc.,
a Tennessee corporation (the "Company"), the Guarantors and United States Trust
Company of New York, a bank and trust company organized under the New York
Banking Law, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 12%
Series A Senior Subordinated Notes due 2009 (the "Series A Notes") and the 12%
Series B Senior Subordinated Notes due 2009 (the "Series B Notes" and, together
with the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"144A Global Note" means a global note in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means up to $125.0 million in aggregate
principal amount of Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. For purposes of this definition, the
terms "controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Sale" means:
(i) the sale, lease, conveyance or other disposition (a
"Disposition") of any assets or rights (including, without limitation, by way of
a sale and leaseback) (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by Sections 4.14
and/or 5.01 hereof and not by Section 4.10 hereof; and
<PAGE> 9
(ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Restricted
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions:
(A) that have a fair market value in excess of $1.0 million,
or
(B) for net proceeds in excess of $1.0 million.
Notwithstanding the foregoing, the following items shall not
be deemed to be Asset Sales:
(i) a disposition of assets by the Company to a Restricted
Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary;
(ii) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(iii) a Restricted Payment that is permitted by Section 4.07
hereof;
(iv) a disposition in the ordinary course of business;
(v) the sale and leaseback of any assets within 90 days of the
acquisition thereof;
(vi) foreclosures on assets;
(vii) any exchange of property pursuant to Section 1031 on the
Internal Revenue Code of 1986, as amended, for use in a Permitted Business; and
(viii) the licensing of intellectual property.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.
"Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
2
<PAGE> 10
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii)
Government Securities having maturities of not more than six months from the
date of acquisition, (iii) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the Senior Credit Facilities or
with any domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the rating of "P-2" (or higher) from Moody's
Investors Service, Inc. or "A-3" (or higher) from Standard & Poor's Corporation
and in each case maturing within six months after the date of acquisition and
(vi) any fund investing exclusively in investments which constitute Cash
Equivalents of the kinds described in clauses (i) through (v) of this
definition.
"Cedel" means Cedel Bank, SA.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than the Principals or a Related Party of
any of the Principals; (ii) the adoption of a plan relating to the liquidation
or dissolution of the Company; (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the Principals and their
Related Parties, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more
than 50% of the Voting Stock of the Company (measured by voting power rather
than number of shares); or (iv) the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors.
"Company" means Team Health, Inc. and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period, plus:
(i) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus (ii) provision for taxes based on
income or profits of such Person and its Subsidiaries for such period, to the
extent that such provision for taxes was deducted in computing such Consolidated
Net Income, plus (iii) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income; plus (iv) depreciation, amortization (including amortization of goodwill
and other intangibles but
3
<PAGE> 11
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; plus (v) expenses and charges of the
Company related to the Transactions which are paid, taken or otherwise accounted
for within 90 days of the consummation of the Transactions; plus (vi) any
non-capitalized transaction costs incurred in connection with actual or proposed
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees and costs incurred in connection with the
Transactions); plus (vii) any extraordinary and non-recurring charges for such
period to the extent that such charges were deducted in computing such
Consolidated Net Income; plus (viii) amounts paid pursuant to the Management
Services Agreement to the extent such amounts were deducted in computing such
Consolidated Net Income. Notwithstanding the foregoing, the provision for taxes
on the income or profits of, and the depreciation and amortization and other
non-cash charges of, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that Net Income of such Subsidiary was included in
calculating Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, with respect to any
Person for any period, the sum of, without duplication: (a) the interest expense
of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP (including amortization
of original issue discount, non-cash interest payments, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments, if any, pursuant to Hedging Obligations; provided that in no event
shall any amortization of deferred financing costs be included in Consolidated
Interest Expense); plus (b) the consolidated capitalized interest of such Person
and its Restricted Subsidiaries for such period, whether paid or accrued.
Notwithstanding the foregoing, the Consolidated Interest Expense with respect to
any Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary shall
be included only to the extent (and in the same proportion) that the net income
of such Restricted Subsidiary was included in calculating Consolidated Net
Income.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof; (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders; (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded; (iv) the cumulative effect of a change in accounting principles
shall be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the Company or one of its Restricted
Subsidiaries for purposes of Section 4.09 and shall be included for purposes of
Section 4.07 only to the extent of the amount of dividends or distributions paid
in cash to the Company or one of its Restricted Subsidiaries.
4
<PAGE> 12
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who: (i) was a member of
such Board of Directors on the date of this Indenture, (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election; or (iii) was nominated by the Principals pursuant to the
Stockholders Agreement.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Credit Agent" means Fleet National Bank, in its capacity as
Administrative Agent for the lenders party to the Senior Credit Facilities, or
any successor thereto or any person otherwise appointed.
"Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A hereto, except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means (i) any Indebtedness
outstanding under the Senior Credit Facilities and (ii) any other Senior Debt
permitted under this Indenture the principal amount of which is $25.0 million or
more and that has been designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the Holder thereof, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature.
Notwithstanding the preceding sentence, any Capital Stock that would not qualify
as Disqualified Stock but for change of control or asset sale provisions shall
not constitute Disqualified Stock if the provisions are not more favorable to
the holders of such Capital Stock than the provisions of Section 4.10 and 4.14.
"Domestic Restricted Subsidiary" means, with respect to the
Company, any Wholly Owned Subsidiary of the Company that was formed under the
laws of the United States of America.
"Earn-out Obligation" means any contingent consideration based
on future operating performance of the acquired entity or assets payable
following the consummation of an acquisition based on criteria set forth in the
documentation governing or relating to such acquisition.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
5
<PAGE> 13
"Equity Offering" means an offering of the Equity Interests
(other than Disqualified Stock) of the Company that results in net proceeds to
the Company of at least $25,000,000.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes issued in the Exchange Offer
in accordance with Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Senior Credit Facilities) in
existence on the date of this Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of: (i) the Consolidated Interest Expense
of such Person for such period; plus (ii) any interest expense on Indebtedness
of another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon;
plus (iii) the product of (a) all dividend payments, whether or not in cash, on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues
preferred stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(i) acquisitions that have been made by the Company or any of
its Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date shall be calculated to include the Consolidated Cash Flow of the acquired
entities on a pro forma basis (to be calculated in accordance with Article 11-02
of Regulation S-X, as in effect on the Issue Date) after giving effect to cost
savings resulting from employee terminations, facilities consolidations and
6
<PAGE> 14
closings, standardization of employee benefits and compensation policies,
consolidation of property, casualty and other insurance coverage and policies,
standardization of sales and distribution methods, reductions in taxes other
than income taxes and other cost savings reasonably expected to be realized from
such acquisition, shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period shall be calculated without giving effect to clause (iii) of the proviso
set forth in the definition of Consolidated Net Income;
(ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and
(iii) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Foreign Subsidiary" means any Subsidiary of the Company that
is not organized under the laws of a state or territory of the United States or
the District of Columbia.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture,
except that calculations made for purposes of determining compliance with the
terms of the covenants and with other provisions of this Indenture shall be made
without giving effect to depreciation, amortization or other expenses recorded
as a result of the application of purchase accounting in accordance with
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, issued in
accordance with certain sections of this Indenture.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Guarantors" means each Subsidiary of the Company that
executes a Subsidiary Guarantee in accordance with provisions of this Indenture,
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
7
<PAGE> 15
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means the global Note substantially in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Notes sold to Institutional Accredited
Investors.
"Indebtedness" means, with respect to any specified Person,
any indebtedness of such Person, in respect of: (i) borrowed money; (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof); (iii) bankers'
acceptances; (iv) representing Capital Lease Obligations; or (v) the balance
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, if and to the extent any of the foregoing items (other than
letters of credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of such Person (whether or not such Indebtedness is assumed
by the specified Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person; provided that
Indebtedness shall not include (i) the pledge by the Company of the Capital
Stock of an Unrestricted Subsidiary of the Company to secure Non-Recourse Debt
of such Unrestricted Subsidiary or (ii) any Earn-out Obligation. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $100.0 million in aggregate principal
amount of Notes originally issued under this Indenture on the date hereof.
"Insolvency or Liquidation Proceedings" means (i) any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding, relative to the Company or
to the creditors of the Company, as such, or to the assets of the Company, or
(ii) any liquidation, dissolution, reorganization or winding up of the Company,
whether voluntary or involuntary, and involving insolvency or bankruptcy, or
(iii) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of the Company.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or
8
<PAGE> 16
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in the final paragraph of Section 4.07 hereof.
"Issue Date" means the date on which the initial $100.0
million in aggregate principal amount of the Notes were originally issued under
the Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which
commercial banks in the City of New York, in Hartford, Connecticut or at a place
of payment are authorized or required by law, regulation or executive order to
remain closed. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means the additional amounts (if any)
payable by the Company in the event of a Registration Default under, and as
defined in, the Registration Rights Agreement.
"Management Services Agreement" means the Management Services
Agreement dated on the date of this Indenture, between the Company and each of
the Principals.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), the amounts required to be applied
to the payment of Indebtedness (other than Indebtedness incurred pursuant to the
Senior Credit Facilities) secured by a Lien on the asset or assets that were the
subject of the Asset Sale, and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
9
<PAGE> 17
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness (other than the Notes) of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock (other than stock of
an Unrestricted Subsidiary pledged by the Company to secure debt of such
Unrestricted Subsidiary) or assets of the Company or any of its Restricted
Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any are issued, shall
be treated as a single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer, or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company.
"Participant" means, with respect to the Depositary, Euroclear
or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Permitted Business" means any business in which the Company
and its Restricted Subsidiaries are engaged on the date of this Indenture or any
business reasonably related, incidental or ancillary thereto.
"Permitted Investments" means: (i) any Investment in the
Company or in a Restricted Subsidiary of the Company, (ii) any Investment in
Cash Equivalents, (iii) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such Investment (a)
such Person becomes a Restricted Subsidiary of the Company or (b) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
10
<PAGE> 18
Company or a Restricted Subsidiary of the Company, (iv) any Restricted
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10, (v)
any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company, and (vi) other
Investments made after the date of this Indenture in any Person having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (vi) since the date of
this Indenture, not to exceed $12.5 million.
"Permitted Liens" means (i) Liens securing Senior Debt
(including, without limitation, Indebtedness under the Senior Credit Facilities)
permitted by the terms of this Indenture to be incurred or other Indebtedness
allowed to be incurred under clause (i) of the second paragraph of the covenant
set forth in Section 4.09, (ii) Liens in favor of the Company or any Restricted
Subsidiary; (iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Restricted Subsidiary of
the Company, provided that such Liens were not incurred in contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company or any Restricted
Subsidiary; (iv) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company, provided such Liens
were not incurred in contemplation of such acquisition; (v) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens existing on the date of this Indenture; (vii) Liens for
taxes, assessments or governmental charges or claims that are not yet delinquent
or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; (viii) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of Section 4.09;
(ix) Liens securing Permitted Refinancing Indebtedness where the Liens securing
the Indebtedness being refinanced were permitted under this Indenture; (x) Liens
incurred in the ordinary course of business of the Company or any Restricted
Subsidiary of the Company with respect to obligations that do not exceed $7.5
million at any one time outstanding and that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary; (xi) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries; (xii) easements, rights-of-way,
zoning and similar restrictions and other similar encumbrances or title defects
incurred or imposed, as applicable, in the ordinary course of business and
consistent with industry practices; (xiii) any interest or title of a lessor
under any Capital Lease Obligation; (xiv) Liens securing reimbursement
obligations with respect to commercial letters of credit which encumber
documents and other property relating to such letters of credit and products and
proceeds thereof; (xv) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset and
set-off; (xvi) Liens securing Hedging Obligations which Hedging Obligations
relate to Indebtedness that is otherwise permitted under this Indenture; (xvii)
leases or subleases granted to others that do not materially interfere with the
ordinary course of business of the Company and its Restricted Subsidiaries; and
(xviii) Liens arising from filing Uniform Commercial Code financing statements
regarding leases.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus
11
<PAGE> 19
accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith) except, in the case of the Senior Credit Facilities,
the principal amount of such Permitted Refinancing Indebtedness does not exceed
the greater of (A) the principal amount of Indebtedness permitted (whether or
not borrowed) under clause (i) of Section 4.09 or (B) the amount actually
borrowed under the Senior Credit Facilities); (ii) such Permitted Refinancing
Indebtedness has a final maturity date no earlier than the final maturity date
of, and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Principals" means Cornerstone Equity Investors, LLC, Madison
Dearborn Partners, Inc. and Beecken Petty & Company LLC and their respective
affiliates.
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 12, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a global Note bearing the
Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in
a denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
"Related Party" with respect to any Principal means: (A) any
controlling stockholder or partner, 80% (or more) owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Principal or (B)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding a 51% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
12
<PAGE> 20
"Reorganization Securities" means securities distributed to
Holders of the Notes in an Insolvency or Liquidation Proceeding pursuant to a
plan of reorganization consented to by each class of the Senior Debt, but only
if all of the terms and conditions of such securities including, without
limitation, term, tenor, interest, amortization, subordination, standstills,
covenants and defaults are at least as favorable (and provide the same relative
benefits) to the holders of Senior Debt and to the holders of any security
distributed in such Insolvency or Liquidation Proceeding on account of any such
Senior Debt as the terms and conditions of the Notes and this Indenture are, and
provide to the holders of Senior Debt.
"Representative" means the Trustee, agent or representative
for any Senior Debt.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facilities" means the Senior Credit Facilities
dated the date of this Indenture between the Company and Fleet National Bank and
NationsBanc Montgomery Securities LLC, as co-arrangers, NationsBanc Montgomery
Securities LLC, as syndication agent and Fleet National Bank, as administrative
agent, providing for revolving credit borrowings and term loans, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time including increases
in principal amount.
"Senior Debt" means: (i) all Indebtedness outstanding under
the Senior Credit Facilities, including any Guarantees thereof and all Hedging
Obligations with respect thereto, (ii) any other Indebtedness permitted to be
incurred by the Company under the terms of this Indenture, unless the instrument
under which such Indebtedness in incurred expressly provides that it is on a
parity with or
13
<PAGE> 21
subordinated in right of payment to the Notes and (iii) all Obligations with
respect to the preceding clauses (i) and (ii). Notwithstanding anything to the
contrary in the preceding, Senior Debt shall not include (v) any liability for
federal, state, local or other taxes owed or owing by the Company, (w) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (x)
any trade payables, (y) any Earn-out Obligations, or (z) any Indebtedness that
is incurred in violation of this Indenture.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (ii) any partnership or limited liability company (a)
the sole general partner or the managing general partner or managing member of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor
of the Company's payment obligations under this Indenture and on the Notes,
executed pursuant to the provisions of this Indenture.
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this
Indenture is qualified under the TIA.
"Transactions" means the recapitalization of the Company which
will be funded by: (i) the net proceeds from the Offering of the Notes; (ii)
$150.0 million of borrowings by the Company under the term loan facilities of
the Senior Credit Facilities; (iii) a $99.7 million cash equity investment in
the Company by each of the Principals; (iv) a cash equity investment by senior
management of the Company of approximately $8.5 million; and (v) the equity of
the Company retained by Pacific Physician Services, Inc. with a fair market
value of $6.8 million.
"Trustee" means the party named as such in the preamble to
this Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Global Note" means a permanent global Note in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in
14
<PAGE> 22
the Global Note" attached thereto, and that is deposited with or on behalf of
and registered in the name of the Depositary, representing a series of Notes
that do not bear the Private Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Subsidiary" means any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution; but only to the extent that such Subsidiary: (a) has no
Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company; (c) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (x) to subscribe for additional Equity Interests or (y) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; and (d) has not guaranteed
or otherwise directly or indirectly provided credit support for any Indebtedness
of the Company or any of its Restricted Subsidiaries. Any designation of a
Subsidiary of the Company as Unrestricted Subsidiary shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the preceding conditions and was permitted by
Section 4.07. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it shall thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under the covenant set forth in Section
4.09, the Company shall be in default of such covenant. The Board of Directors
of the Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall be permitted only if (i) such Indebtedness is permitted under Section
4.09, and (ii) no Default or Event of Default would be in existence following
such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that shall elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person and/or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
15
<PAGE> 23
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"Affiliate Transaction"............................................ 4.11
"Asset Sale Offer"................................................. 4.10
"Authentication Order"............................................. 2.02
"Change of Control Offer".......................................... 4.14
"Change of Control Payment"........................................ 4.14
"Change of Control Payment Date"................................... 4.14
"Covenant Defeasance".............................................. 8.03
"Event of Default"................................................. 6.01
"Excess Proceeds".................................................. 4.10
"incur"............................................................ 4.09
"Legal Defeasance"................................................. 8.02
"Offer Amount"..................................................... 3.09
"Offer Period"..................................................... 3.09
"Paying Agent"..................................................... 2.03
"Permitted Debt"................................................... 4.09
"Purchase Date".................................................... 3.09
"Registrar"........................................................ 2.03
"Repurchase Offer"................................................. 3.09
"Restricted Payments".............................................. 4.07
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
16
<PAGE> 24
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
17
<PAGE> 25
One Officer shall sign the Notes for the Company by manual or
facsimile signature.
If the Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by one Officer (an "Authentication Order"), authenticate Notes for original
issue up to the aggregate principal amount of $225.0 million, of which $100.0
million will be issued as Initial Notes on the date hereof. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Restricted Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and shall notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Restricted Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying
18
<PAGE> 26
Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. All Global Notes shall be
exchanged by the Company for Definitive Notes if (i) the Company delivers to the
Trustee notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend.
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
19
<PAGE> 27
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in the Global Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary
to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions contained
in the Letter of Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee shall take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee shall take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the
20
<PAGE> 28
Exchange Notes or (3) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer
required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive
21
<PAGE> 29
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
22
<PAGE> 30
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer
required in order to maintain compliance with the
Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iii) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
23
<PAGE> 31
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
24
<PAGE> 32
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer
required in order to maintain compliance with the
Securities Act. Upon satisfaction of the conditions
of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global
Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
25
<PAGE> 33
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer shall be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer shall be made pursuant to Rule
903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer shall be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
26
<PAGE> 34
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests, an Opinion of
Counsel in form reasonably acceptable to the Company
to the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
27
<PAGE> 35
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI");
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
28
<PAGE> 36
REGULATION S UNDER THE SECURITIES ACT. THIS INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN
THIS INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.07 OF THIS INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THIS INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THIS INDENTURE AND (IV) THIS GLOBAL NOTE MAY
BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar
29
<PAGE> 37
governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part or (c) to register the transfer of or to exchange a Note between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile with the original to follow by first class mail.
SECTION 2.07. REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's requirements are met. If required by the Trustee or the
Company, an indemnity bond must be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note issued pursuant to this Section 2.07 is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
30
<PAGE> 38
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes shall be delivered
to the Company. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
31
<PAGE> 39
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 75 days before a redemption date (unless a
shorter notice period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption shall be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 45 nor more
than 75 days prior to the redemption date by the Trustee (unless a shorter time
period shall be satisfactory to the Trustee) from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
32
<PAGE> 40
SECTION 3.03. NOTICE OF REDEMPTION
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE
One Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
33
<PAGE> 41
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section
3.07, the Notes shall not be redeemable at the Company's option prior to March
15, 2004. Thereafter, the Company may redeem all or a part of these Notes, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on March
15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004.................................................... 108.000%
2005.................................................... 106.000%
2006.................................................... 104.000%
2007.................................................... 102.000%
2008 and thereafter..................................... 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to March
15, 2002 the Company may on one or more occasions redeem up to 33 1/3% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price of 112.0% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings; provided that at
least 66 2/3% of the aggregate principal amount of Notes remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Company and its Subsidiaries); and such redemption shall occur within 90 days of
the date of the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth below in Section 4.14, the Company is not
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
34
<PAGE> 42
SECTION 3.09. OFFER TO PURCHASE.
In the event that, pursuant to Sections 4.10 and 4.14 hereof,
the Company shall be required to commence an offer to all Holders to purchase
Notes (a "Repurchase Offer"), it shall follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 or 4.14 hereof (the "Offer
Amount") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.09 and Sections 4.10 or 4.14 hereof and the length of time the
Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Repurchase Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
a Repurchase Offer may only elect to have all of such Note purchased or a
portion of such Note in denominations of $1,000 or integral multiples thereof;
(f) that Holders electing to have a Note purchased pursuant to
any Repurchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, the Depositary,
if appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal
35
<PAGE> 43
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the
Repurchase Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Repurchase Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if a Person other than the
Company or a Subsidiary thereof, holds as of 12:00 p.m. (noon) Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in the
same manner on the dates and in the amounts set forth in the Registration Rights
Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
36
<PAGE> 44
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to the
Holders of Notes (i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the SEC on Form 8-K if the Company were required to
file such reports, in each case, within the time periods specified in the SEC's
rules and regulations. In addition, following consummation of the Exchange
Offer, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC shall not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and
37
<PAGE> 45
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenant (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment on such Equity Interests in connection with any merger
or consolidation involving the Company) or to the direct or indirect holders of
the Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company); (ii) purchase, redeem
or otherwise acquire or retire for value
38
<PAGE> 46
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company (other than any such Equity Interests owned by
the Company or any Restricted Subsidiary of the Company); (iii) make any payment
on or with respect to, or purchase, redeem, defease or otherwise acquire or
retire for value any Indebtedness that is subordinated to the Notes or the
Subsidiary Guarantees, except scheduled payments of interest or principal at
Stated Maturity thereof; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, after giving pro forma effect thereto
as if such Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09; and
(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted Payments
permitted by clauses (i), (ii), (iii), (iv), (viii) (other than those permitted
by clause (f) of the definition of "Permitted Investments"), (xi) and (xii) of
the next succeeding paragraph), is less than the sum, without duplication, of
(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first full fiscal quarter
commencing after the date of this Indenture to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus (ii) 100%
of the aggregate net proceeds (including the fair-market value of property other
than cash, provided, that fair market value of property other than cash shall be
determined in good faith by the Board of Directors whose resolution with respect
thereto shall be delivered to the Trustee and such determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if such fair market value exceeds $15.0
million) received by the Company as a contribution to the Company's capital or
received by the Company from the issue or sale since the date of this Indenture
of Equity Interests of the Company (other than Disqualified Stock) or of
Disqualified Stock or debt securities of the Company that have been converted
into such Equity Interests (other than Equity Interests (or Disqualified Stock
or debt securities) sold to a Restricted Subsidiary of the Company and other
than Disqualified Stock or convertible debt securities that have been converted
into Disqualified Stock), plus (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (A) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted Investment,
plus (iv) if any Unrestricted Subsidiary (A) is redesignated as a Restricted
Subsidiary, the fair market value of such redesignated Subsidiary (as determined
in good faith by the Board of Directors) as of the date of its redesignation or
(B) pays any cash dividends or cash distributions to the Company or any of its
Restricted Subsidiaries, 100% of any such cash dividends or cash distributions
made after the date of this Indenture.
The preceding provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of
the substantially concurrent sale or issuance (other than to
39
<PAGE> 47
a Restricted Subsidiary of the Company) of, other Equity Interests of the
Company (other than Disqualified Stock); provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness of the Company or any
Restricted Subsidiary with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (iv) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (v) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company held by any member or former member
of the Company's (or any of their Restricted Subsidiaries') management or
affiliated physician pursuant to any management equity subscription agreement,
stockholders agreement or stock option agreement or other similar agreements in
effect as of the date of this Indenture; provided, however, the aggregate price
paid shall not exceed (a) $2.5 million in any calendar year (with unused amounts
in any calendar year being carried over to succeeding calendar years subject to
a maximum (without giving effect to clause (b)) of $5.0 million in any calendar
year, plus (b) the aggregate cash proceeds received by the Company from any
issuance or reissuance of Equity Interests to members of management or
affiliated physicians of the Company and its Restricted Subsidiaries and the
proceeds to the Company of any "key man" life insurance policies; provided that
the cancellation of Indebtedness owing to the Company from members of management
or affiliated physicians of the Company or any Restricted Subsidiary in
connection with such repurchase of Equity Interests will not be deemed to be a
Restricted Payment; (vi) Investments in any Person (other than the Company or a
Restricted Subsidiary) engaged in a Permitted Business in an amount not to
exceed $7.5 million; (vii) other Investments in Unrestricted Subsidiaries having
an aggregate fair market value, taken together with all other Investments made
pursuant to this clause (vii) that are at that time outstanding, not to exceed
$6.0 million; (viii) Permitted Investments; (ix) so long as no Default or Event
of Default has occurred and is continuing, the declaration and payment of
dividends on Disqualified Stock, the incurrence of which satisfied Section 4.09
hereof; (x) repurchases of Equity Interests deemed to occur upon the exercise of
stock options if such Equity Interests represent a portion of the exercise price
thereof; and (xi) distributions to fund the Transactions.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the Board of Directors whose resolution with respect thereto shall be
delivered to the Trustee. The Board of Directors' determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if such fair market value exceeds $15.0
million. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by Section 4.07 were computed, together with a copy of any
fairness opinion or appraisal required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (i)(a) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2)
with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries. However, the
40
<PAGE> 48
preceding restrictions will not apply to encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date of this
Indenture, (b) the Senior Credit Facilities as in effect as of the date of this
Indenture, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, provided that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more restrictive taken as a
whole (as determined in the good faith judgment of the Company's Board of
Directors) with respect to such dividend and other payment restrictions than
those contained in the Senior Credit Facilities as in effect on the date of this
Indenture, (c) this Indenture and the Notes, (d) any applicable law, rule,
regulation or order, (e) any instrument of a Person acquired by the Company or
any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (f) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practices, (g) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above, (h) Permitted
Refinancing Indebtedness, provided that the material restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, in the good faith judgment of the Company's board of directors,
taken as a whole, to the Holders of Notes than those contained in the agreements
governing the Indebtedness being refinanced, (i) contracts for the sale of
assets, including without limitation customary restrictions with respect to a
Subsidiary pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary, (j) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business and
(k) other Indebtedness or Disqualified Stock of Restricted Subsidiaries
permitted to be incurred subsequent to the Issuance Date pursuant to the
provisions of Section 4.09.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and the Company shall not issue any Disqualified Stock and shall not
permit any of its Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock or preferred stock and the Company's
Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) and
issue Disqualified Stock or preferred stock if the Fixed Charge Coverage Ratio
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, if such incurrence or issuance is on
or prior to the second anniversary of the Issue Date, or 2.25 to 1 if such
incurrence or issuance is after the second anniversary of the Issue Date but on
or prior to the fourth anniversary of the Issue Date, or 2.5 to 1 if such
incurrence or issuance is after the fourth anniversary of the Issue Date, in
each case, determined on a pro forma basis (including a pro forma application of
the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The first paragraph of Section 4.09 shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
41
<PAGE> 49
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness and letters of credit pursuant to the
Senior Credit Facilities; provided that the aggregate amount of all
Indebtedness then classified as having been incurred in reliance upon
this clause (i) that remains outstanding under the Senior Credit
Facilities after giving effect to such incurrence does not exceed an
amount equal to $190 million;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes originally issued on the Issue
Date and the Subsidiary Guarantees;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Restricted
Subsidiary (whether through the direct purchase of assets or the
Capital Stock of any Person owning such Assets), in an aggregate
principal amount or accreted value, as applicable, not to exceed $15.0
million;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in connection with the acquisition of
assets or a new Restricted Subsidiary; provided that such Indebtedness
was incurred by the prior owner of such assets or such Restricted
Subsidiary prior to such acquisition by the Company or one of its
Subsidiaries and was not incurred in connection with, or in
contemplation of, such acquisition by the Company or one of its
Subsidiaries; provided further that the principal amount (or accreted
value, as applicable) of such Indebtedness, together with any other
outstanding Indebtedness incurred pursuant to this clause (v), does not
exceed $20.0 million;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness that was permitted by this Indenture to be incurred;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that (i) if
the Company or any Guarantor is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the Notes, in the case
of the Company, or the Subsidiary Guarantee of such Guarantor, in the
case of a Guarantor; and (ii)(A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary and (B) any
sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company
or such Restricted Subsidiary, as the case may be;
(viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging: (i) interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding; (ii) exchange rate risk with respect to
any agreement or Indebtedness of such Person payable in a
42
<PAGE> 50
currency other than U.S. dollars; or (iii) commodities risk relating to
commodities agreements, entered into in the ordinary course of
business, for the purchase of raw material used by the Company and its
Restricted Subsidiaries;
(ix) the Guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary
of the Company that was permitted to be incurred by another provision
of Section 4.09;
(x) the incurrence by the Company's Unrestricted Subsidiaries
of Non-Recourse Debt; provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company;
(xi) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including without limitation to letters of credit in respect to
workers' compensation claims or self-insurance, or other Indebtedness
with respect to reimbursement type obligations regarding workers'
compensation claims; provided, however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or
incurrence;
(xii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, asset or
Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or
Subsidiary for the purpose of financing such acquisition; provided that
(x) such Indebtedness is not reflected on the balance sheet of the
Company or any Restricted Subsidiary (contingent obligations referred
to in a footnote or footnotes to financial statements and not otherwise
reflected on the balance sheet shall not be deemed to be reflected on
such balance sheet for purposes of this clause (x)) and (y) the maximum
assumable liability in respect of such Indebtedness shall at no time
exceed the gross proceeds including non-cash proceeds (the fair market
value of such non-cash proceeds being measured at the time received and
without giving effect to any such subsequent changes in value) actually
received by the Company and/or such Restricted Subsidiary in connection
with such disposition;
(xiii) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries which is subordinated to the Notes and the
Guarantees; provided that such Indebtedness matures after the date on
which the Notes mature and that no cash interest is payable with
respect to such Indebtedness until after the date on which the Notes
mature;
(xiv) obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(xv) guarantees incurred in the ordinary course of business in
an aggregate principal amount not to exceed $10.0 million at any time
outstanding; and
(xvi) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness, including Attributable Debt
incurred after the date of this Indenture, in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted
43
<PAGE> 51
Refinancing Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (xvi), not to exceed $25.0
million.
For purposes of determining compliance with this Section 4.09,
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (i) through
(xvi) above or is entitled to be incurred pursuant to the first paragraph of
this Section 4.09, the Company shall be permitted to classify such item of
Indebtedness in any manner that complies with this Section 4.09. In addition,
the Company may, at any time, change the classification of an item of
Indebtedness (or any portion thereof) to any other clause or to the first
paragraph of this Section 4.09 hereof provided that the Company would be
permitted to incur such item of Indebtedness (or portion thereof) pursuant to
such other clause or the first paragraph of this Section 4.09 hereof, as the
case may be, at such time of reclassification. Accrual of interest, accretion or
amortization of original issue discount and the accretion of accreted value
shall not be deemed to be an incurrence of Indebtedness for purposes of this
Section 4. 09.
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value of the assets or
Equity Interests issued or sold or otherwise disposed of; (ii) such fair market
value is determined by the Company's Board of Directors and evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee provided that the Board of Directors' determination
must be based on an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market value exceeds
$25 million; and (iii) at least 80% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this Section 4.10, each of the following shall be
deemed to be cash:
(x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes
or any Subsidiary Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted
Subsidiary from further liability; and
(y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted
Subsidiary into cash or Cash Equivalents within 180 days (to
the extent of the cash received in that conversion).
The 80% limitation referred to in clause (iii) above will not
apply to any Asset Sale in which the cash or Cash Equivalents portion of the
consideration received therefrom, determined in accordance with the preceding
proviso, is equal to or greater than what the after-tax proceeds would have been
had such Asset Sale complied with the aforementioned 80% limitation.
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any such Restricted Subsidiary may apply such Net
Proceeds, at its option: (a) to repay or repurchase Senior Debt of the Company
or any Restricted Subsidiary; (b) to acquire a controlling interest in another
44
<PAGE> 52
Permitted Business; (c) to make a capital expenditure in a Permitted Business;
or (d) to acquire other assets in a Permitted Business.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce the revolving Indebtedness under the Senior
Credit Facilities or otherwise invest such Net Proceeds in any manner that is
not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the preceding paragraph shall constitute Excess
Proceeds. When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for general corporate purposes. If the aggregate principal
amount of Notes tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata
basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero.
To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Indenture relating to such
Asset Sale Offer, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations
described in this Indenture by virtue thereof.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee: (a) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $3.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the disinterested members of the
Board of Directors and (b) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of the prior
paragraph: (a) customary directors' fees, indemnification or similar
arrangements or any employment agreement or other compensation plan or
arrangement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary; (b) transactions between or among the
Company and/or its Restricted Subsidiaries; (c) Permitted Investments and
Restricted Payments that are permitted by the provisions of Section 4.07 hereof;
(d) customary loans, advances, fees and compensation paid to, and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Company
45
<PAGE> 53
or any of its Restricted Subsidiaries; (e) transactions pursuant to any contract
or agreement in effect on the date of this Indenture as the same may be amended,
modified or replaced from time to time so long as any such amendment,
modification or replacement is no less favorable to the Company and its
Restricted Subsidiaries than the contract or agreement as in effect on the Issue
Date; (f) transactions pursuant to management contracts with affiliated
physicians entered into in the ordinary course of business consistent with past
practice (or as such practice may be modified to comply with regulations
governing the operations of the Company); and (g) payments in connection with
the Transactions (including the payment of fees and expenses with respect
thereto).
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing trade payables or
Indebtedness that does not constitute Senior Debt (other than Permitted Liens)
upon any of their property or assets, now owned or hereafter acquired unless:
(i) in the case of Liens securing Indebtedness that is expressly subordinated or
junior in right of payment to the Notes, the Notes are secured on a senior basis
to the obligations so secured until such time as such obligations are no longer
secured by a Lien and (ii) in all other cases, the Notes are secured on an equal
and ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any of its Subsidiaries, if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 60 days following any
Change of Control, the Company shall mail a notice to each Holder stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.14 and
that all Notes tendered will be accepted for payment; (2) the purchase price and
the purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest; (4) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes
46
<PAGE> 54
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes purchased; and (7) that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof. The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Indenture relating to such Change of Control Offer, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.
(b) By 12:00 p.m. (noon) Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(c) Notwithstanding anything to the contrary in this Section
4.14, the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and Section 3.09 hereof and all other provisions of this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
SECTION 4.15. ANTI-LAYERING.
The Company shall not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is both (a) subordinate or
junior in right of payment to any Senior Debt and (b) senior in any respect in
right of payment to the Notes.
No Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is both (a) subordinate or
junior in right of payment to any Senior Debt of such Guarantor; and (b) senior
in any respect in right of payment to the Subsidiary Guarantees.
SECTION 4.16. SALE AND LEASEBACK TRANSACTIONS.
47
<PAGE> 55
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company or any Restricted Subsidiary may enter into a sale and
leaseback transaction if (i) the Company or such Restricted Subsidiary could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09 and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12, (ii) the
gross cash proceeds of such sale and leaseback transaction are at least equal to
the fair market value (as determined in good faith by the Board of Directors and
set forth in an Officers' Certificate delivered to the Trustee) of the property
that is the subject of such sale and leaseback transaction and (iii) the
transfer of assets in such sale and leaseback transaction is permitted by, and
the Company applies the proceeds of such transaction in compliance with Section
4.10.
SECTION 4.17. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
The Company shall not permit any Domestic Restricted
Subsidiary, directly or indirectly, to incur Indebtedness or Guarantee or pledge
any assets to secure the payment of any other Indebtedness of the Company or any
Restricted Subsidiary unless either such Restricted Subsidiary (x) is a
Subsidiary Guarantor or (y) simultaneously executes and delivers a supplemental
indenture in the form of Exhibit E hereto and becomes a Subsidiary Guarantor,
which Guarantee shall (x) with respect to any Guarantee of Senior Debt, be
subordinated in right of payment on the same terms as the Notes are subordinated
to such Senior Debt and (y) with respect to any Guarantee of any other
Indebtedness, be senior to or pari passu with such Restricted Subsidiary's other
Indebtedness or Guarantee of or pledge to secure such other Indebtedness.
Notwithstanding the preceding paragraph, any such Guarantee by
a Restricted Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale, exchange or transfer is made in compliance
with the applicable provisions of this Indenture.
SECTION 4.18. ADDITIONAL GUARANTEES.
If the Company shall acquire or create a Domestic Restricted
Subsidiary after the date of this Indenture, or if any Subsidiary of the Company
becomes a Domestic Restricted Subsidiary, then such newly acquired or created
Domestic Restricted Subsidiary shall become a Guarantor and execute a
supplemental indenture in the form of Exhibit E hereto and deliver an opinion of
counsel, in accordance with terms of this Indenture.
SECTION 4.19. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than a Permitted Business, except to
such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
SECTION 4.20. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash) in the Subsidiary so designated will be
deemed to be Restricted
48
<PAGE> 56
Payments at the time of such designation (to the extent not designated a
Permitted Investment) and will reduce the amount available for Restricted
Payments under the first paragraph of Section 4.07 hereof. All such outstanding
Investments will be valued at their fair market value at the time of such
designation, as determined in good faith by the Board of Directors. That
designation will only be permitted if such Restricted Payment would be permitted
at that time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company may not: (1) consolidate or merge with or into
another Person (whether or not the Company is the surviving corporation); or (2)
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
Person unless: (A) either (i) the Company is the surviving corporation, or (ii)
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (B) the entity or Person formed by or surviving any such consolidation
or merger (if other than the Company) or the entity or Person to which such
sale, assignment, transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Company under the Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (C) immediately after such transaction no Default or Event of Default
exists; and (D) the Company or the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made (a)
shall, after giving pro forma effect thereto as if such transaction had occurred
at the beginning of the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.09 or (b) would
(together with its Restricted Subsidiaries) have a higher Fixed Charge Coverage
Ratio immediately after such transaction (after giving pro forma effect thereto
as if such transaction had occurred at the beginning of the applicable
four-quarter period) than the Fixed Charge Coverage Ratio of the Company and its
subsidiaries immediately prior to the transaction. The preceding clause (D)
shall not prohibit (a) a merger between the Company and a Wholly Owned
Subsidiary or (b) a merger between the Company and an Affiliate incorporated
solely for the purpose of reincorporating the Company in another state of the
United States so long as, in each case, the amount of Indebtedness of the
Company and its Restricted Subsidiaries is not increased thereby. In addition,
the Company may not, directly or indirectly, lease all or substantially all of
its properties or assets, in one or more related transactions, to any other
Person. The provisions of this Section 5.01 shall not be applicable to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Wholly Owned Restricted Subsidiaries.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor
49
<PAGE> 57
corporation and not to the Company), and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following is an "Event of Default":
(a) default in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not permitted by
Article 10 hereof) and such default continues for a period of 30 days;
(b) default in payment of the principal of or premium, if any,
on the Notes or otherwise (whether or not permitted by Article 10 hereof);
(c) failure by the Company to comply with the provisions of
Section 4.14 hereof;
(d) failure by the Company for 30 days after notice from the
Trustee or holders of at least 25% in principal amount of the Notes (including
Additional Notes, if any) then outstanding to comply with the provisions of
Section 4.07, 4.09 or 4.10 hereof;
(e) failure by the Company for 60 days after notice from the
Trustee or holders of at least 25% in principal amount of the Notes then
outstanding voting as a single class to comply with any of its other agreements
in this Indenture or the Notes;
(f) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of this Indenture, if that default (i) is
caused by a failure to pay principal of or premium, if any, on such Indebtedness
after giving effect to the grace period provided in such Indebtedness on the
date of such default (a "Payment Default"); or (ii) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more;
(g) failure by the Company or any of its Subsidiaries to pay
final judgments aggregating in excess of $10.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(h) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; and
50
<PAGE> 58
(i) the Company or any of its Restricted Subsidiaries that are
Significant Subsidiaries or any group of Restricted Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary pursuant to or within the
meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(j) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its Restricted
Subsidiaries that are Significant Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary in an involuntary case;
(ii) appoints a custodian of the Company or any of its
Restricted Subsidiaries that are Significant Subsidiaries or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary or for all or substantially all of the property
of the Company or any of its Restricted Subsidiaries that are
Significant Subsidiaries or any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Restricted Subsidiaries that are Significant Subsidiaries or any group
of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
In the event of a declaration of acceleration of the Notes
because an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause (f) of the preceding
paragraph, the declaration of acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described in clause (f) of the
preceding paragraph have rescinded the declaration of acceleration in respect of
such Indebtedness within 30 days of the date of such declaration and if (i) the
annulment of the acceleration of Notes would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal or interest on the Notes that became due
solely because of the acceleration of the Notes have been cured or waived.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the principal, premium, if any, accrued interest and Liquidated
Damages, if any, of the Notes to be due and payable immediately; provided, that
so long as any Indebtedness permitted to be incurred pursuant to the Senior
Credit Facilities
51
<PAGE> 59
shall be outstanding, such acceleration shall not be effective until the earlier
of (i) an acceleration of any such Indebtedness under the Senior Credit
Facilities or (ii) five Business Days after receipt by the Company of written
notice of such acceleration. Notwithstanding the foregoing, in the case of an
Event of Default described in clause (i) or (j) of Section 6.01, with respect to
the Company or any of its Subsidiaries all outstanding Notes shall become due
and payable without further action or notice.
In the case of any Event of Default occurs on or after March
15, 2004 by reason of any willful action or inaction taken or not taken by or on
behalf of the Company with the intention of avoiding payment of the premium that
the Company would have had to pay if the Company then had elected to redeem the
Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Notes. If an Event of Default occurs prior to March 15, 2004
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, an additional premium shall
also become immediately due and payable to the extent permitted by law upon
acceleration of the Notes in an amount, for each of the years beginning on March
15 of the years set forth below, as set forth below (such total amount due is
expressed as a percentage of the principal amount of the Notes on the date of
payment that would otherwise be due but for the provisions of this sentence):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1999............................................................. 112.000%
2000............................................................. 111.200%
2001............................................................. 110.400%
2002............................................................. 109.600%
2003............................................................. 108.800%
</TABLE>
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of, premium and Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration). The
Company shall deliver to the Trustee an Officers' Certificate stating that the
requisite percentage of Holders have consented to such waiver and attaching
copies of such consents. In case of any such waiver, the Company, the Trustee
and
52
<PAGE> 60
the Holders shall be restored to their former positions and rights hereunder and
under the Notes, respectively. This Section 6.04 shall be in lieu of Section
316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, holders of a majority in principal
amount of the then outstanding Notes may direct in writing the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of Holders
of Notes not taking part in such direction, and the Trustee shall have the right
to decline to follow any such direction, if the Trustee, being advised by
counsel, determines that such action so directed may not be lawfully taken or if
the Trustee, in good faith shall by a Responsible Officer, determine that the
proceedings so directed may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction. In the event the Trustee takes any action
or follows any direction pursuant to this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
any loss or expense caused by taking such action or following such direction.
This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture
and the Notes, as permitted by the TIA.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
53
<PAGE> 61
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the respective
due dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other securities or property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind,
54
<PAGE> 62
according to the amounts due and payable on the Notes for principal, premium and
Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts purported to be stated
therein).
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
55
<PAGE> 63
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money or assets held in trust by the Trustee need not be segregated from other
funds or assets except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel or both. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers' Certificate or Opinion
of Counsel. The Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Section 6.01(a) or 6.01(b) or (ii) any Event of Default of which the Trustee
shall have received written notification or otherwise obtained actual knowledge.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
56
<PAGE> 64
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold the notice if
and so long as the board of directors, the executive committee or a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each September 1 beginning with the
September 1 following the date of this Indenture, and for so long as Notes
remain outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The Trustee
also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by
mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any securities exchange or of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel and any taxes or other expenses
incurred by a trust created pursuant to Section 8.04 hereof.
57
<PAGE> 65
The Company shall indemnify the Trustee and its agents against
any and all losses, liabilities or expenses (including compensation, fees,
disbursements and expenses of Trustee's agents and counsel) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture. The Trustee's right to receive payment of any
amounts due under this Section 7.07 shall not be subordinated to any other
liability or Indebtedness of the Company.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
58
<PAGE> 66
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
59
<PAGE> 67
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations under the Subsidiary Guarantees on the date
the conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company and the Guarantors
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes and Subsidiary Guarantees, respectively, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, interest and Liquidated Damages, if any, on such Notes when such payments
are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article Eight. Subject to compliance with this Article Eight, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their respective obligations under the covenants set
forth in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17,
4.18, 4.19 and 4.20 hereof with respect to the outstanding Notes on and after
the date the conditions set forth in Section 8.04 are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes
60
<PAGE> 68
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(g) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as shall be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium and Liquidated Damages, if any, and interest on the
outstanding Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular
redemption date;
(ii) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an opinion of counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such opinion
of counsel shall confirm that, subject to customary assumptions and
exclusions, the Holders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(iii) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an opinion of counsel
in the United States reasonably acceptable to the Trustee confirming
that, subject to customary assumptions and exclusions, the Holders of
the outstanding Notes shall not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
shall be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit);
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(vi) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the
61
<PAGE> 69
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(vii) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel (which opinion may be subject to
customary assumptions and exclusions), each stating that all conditions
precedent provided for relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND CASH EQUIVALENTS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Cash Equivalents (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Cash Equivalents deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Cash Equivalents
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, interest, or Liquidated Damages, if any, on any Note and remaining
unclaimed for two years after such principal, and premium, if any, interest, or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
62
<PAGE> 70
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, without the
consent of any Holder of Notes, the Company and the Trustee may amend or
supplement this Indenture or the Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations
to Holders of Notes in the case of a merger or consolidation or the sale of all
or substantially all of the assets of the Company;
(d) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect the
legal rights under this Indenture of any such Holder;
(e) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act; or
(f) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the date
hereof; or
(g) to allow any Subsidiary to guarantee the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02(b) hereof stating that such amended or supplemental
Indenture complies with this Section 9.01, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall
not be obligated to enter into such amended or supplemental Indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10
and 4.14 hereof) and the Notes with the consent
63
<PAGE> 71
of the Holders of at least a majority in principal amount of the Notes
(including Additional Notes, if any) then outstanding voting as a single class
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes), and, subject to Sections
6.04 and 6.07 hereof, any existing Default or Event of Default or compliance
with any provision of this Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including Additional Notes, if any) voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, the Notes). Without the consent of at least 75% in aggregate
principal amount of the Notes then outstanding (including Additional Notes, if
any) voting as a single class (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, the Notes), no waiver or
amendment to this Indenture may make any change in the provisions of Article 10
hereof that adversely affects the rights of any Holder of Notes. Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02(b)
hereof stating that any such amended or supplemental Indenture complies with
this Section 9.02, the Trustee shall join with the Company in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture directly affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such amended or supplemental
Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the Notes
except as provided in the first paragraph of this Section 9.02 with respect to
Sections 3.09, 4.10 and 4.14 hereof;
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a
64
<PAGE> 72
majority in aggregate principal amount of the Notes (including Additional Notes,
if any) and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of (i) past Defaults or (ii) the rights of Holders of Notes
to receive payments of principal of or premium, if any, or interest on the
Notes;
(g) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.14 hereof);
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(i) release any guarantor from any of its obligations under
its Guarantee of these Notes or this Indenture, except in accordance with the
terms of this Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, in addition to
65
<PAGE> 73
the documents required by Section 11.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's rights, duties or immunities under this Indenture or
otherwise. In signing any amendment, supplement or waiver, the Trustee shall be
entitled to receive an indemnity reasonably satisfactory to it.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note
agrees, that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Debt (whether outstanding on the date hereof
or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(A) Upon any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities, to creditors in any Insolvency or Liquidation
Proceeding with respect to the Company all amounts due or to
become due under or with respect to all Senior Debt shall
first be paid in full in cash before any payment is made on
account of the Notes, except that the Holders of Notes may
receive Reorganization Securities. Upon any such Insolvency or
Liquidation Proceeding, any payment or distribution of assets
of the Company of any kind or character, whether in cash,
property or securities (other than Reorganization Securities),
to which the Holders of the Notes or the Trustee would be
entitled shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution, or by the Holders
of the Notes or by the Trustee if received by them, directly
to the holders of Senior Debt (pro rata to such holders on the
basis of the amounts of Senior Debt held by such holders) or
their Representative or Representatives, as their interests
may appear, for application to the payment of the Senior Debt
remaining unpaid until all such Senior Debt has been paid in
full in cash, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of
Senior Debt.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) in the event of and during the continuation of any default
in the payment of principal of, interest or premium, if any, on any Senior Debt,
or any Obligation owing from time to time under or in respect of Senior Debt, or
in the event that any event of default (other than a payment default) with
respect to any Senior Debt shall have occurred and be continuing and shall have
resulted in such Senior Debt becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable; or
66
<PAGE> 74
(b) if any event of default other than as described in clause
(a) above with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt (or their
Representative or Representatives) to declare such Designated Senior Debt due
and payable prior to the date on which it would otherwise have become due and
payable, then no payment shall be made by or on behalf of the Company on account
of the Notes (other than payments in the form of Reorganization Securities).
(1) in case of any payment or nonpayment
default specified in (a), unless and until such
default shall have been cured or waived in writing in
accordance with the instruments governing such Senior
Debt or such acceleration shall have been rescinded
or annulled, or
(2) in case of any nonpayment event of
default specified in (b), during the period (a
"Payment Blockage Period") commencing on the date the
Company or the Trustee receives written notice (a
"Payment Notice") of such event of default (which
notice shall be binding on the Trustee and the
Holders of Notes as to the occurrence of such a
payment default or nonpayment event of default) from
the Credit Agent (or other holders of Designated
Senior Debt or their Representative or
Representatives) and ending on the earliest of:
(A) 179 days after such date;
(B) the date, if any, on which such Designated Senior
Debt to which such default relates is paid in full in cash or
such default is cured or waived in writing in accordance with
the instruments governing such Designated Senior Debt by the
holders of such Designated Senior Debt; and
(C) the date on which the Trustee receives written
notice from the Credit Agent (or other holders of Designated
Senior Debt or their Representative or Representatives), as
the case may be, terminating the Payment Blockage Period.
(c) During any consecutive 360-day period, the aggregate of
all Payment Blockage Periods shall not exceed 179 days and there shall be a
period of at least 181 consecutive days in each consecutive 360-day period when
no Payment Blockage Period is in effect. No event of default which existed or
was continuing with respect to the Senior Debt for which notice commencing a
Payment Blockage Period was given on the date such Payment Blockage Period
commenced shall be or be made the basis for the commencement of any subsequent
Payment Blockage Period unless such event of default is cured or waived for a
period of not less than 90 consecutive days.
SECTION 10.04. ACCELERATION OF SECURITIES.
If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 10.04 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to,
67
<PAGE> 75
the holders of Senior Debt as their interests may appear or their Representative
under this Indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any Obligations with respect to the Notes to violate this Article 10, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of
Senior Debt; or
(c) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.
68
<PAGE> 76
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the lenders under the Revolving Credit Facility are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Notes.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 shall not be amended or
modified without the written consent of the holders of all Designated Senior
Debt.
ARTICLE 11.
SUBSIDIARY GUARANTEES
69
<PAGE> 77
SECTION 11.01. GUARANTEE.
Subject to this Article Eleven, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that: (a)
the principal of and interest on the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if lawful, and
all other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenant that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The Obligations of each Guarantor under its Subsidiary
Guarantee pursuant to this Article Eleven shall be junior and subordinated to
the Guarantee of any Senior Debt of such Guarantor on the same
70
<PAGE> 78
basis as the Notes are junior and subordinated to Senior Debt of the Company.
For the purposes of the foregoing sentence, the Trustee and the Holders shall
have the right to receive and/or retain payments by any of the Guarantors only
at such times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article Ten hereof.
SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article Eleven, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section
11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.18 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture and Subsidiary Guarantees in accordance with
Section 4.18 hereof and this Article Eleven, to the extent applicable.
SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 11.06, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person unless:
(a) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
71
<PAGE> 79
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor pursuant to a
supplemental indenture satisfactory to the Trustee; or
(ii) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture.
In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles Four and Five hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the capital stock of any Guarantor, in each case
to a Person that is not (either before or after giving effect to such
transactions) a Restricted Subsidiary of the Company, then such Guarantor (in
the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Subsidiary Guarantee; provided that the Net
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
4.10 hereof. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article Eleven.
72
<PAGE> 80
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA provision
shall be excluded from this Indenture.
The provisions of TIA Section 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address
If to the Company and/or any Guarantor:
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
Telecopier No.: (423) 539-8003
Attention: David Jones
With a copy to:
Kirkland & Ellis
153 E. 53rd Street
New York, New York 10022
Telecopier No.: (212) 446-4900
Attention: Frederick Tanne, Esq.
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Telecopier No.: (212) 852-1627
Attention: Pat Stermer
with a copy to:
Olshan Grundman Frome Rosenzweig & Wolosky LLP
505 Park Avenue
73
<PAGE> 81
New York, NY 10022
Telecopier No.: (212) 755-1467
Attention: Jeff Spindler
The Company, any Guarantor or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied;
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied; and
(c) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
74
<PAGE> 82
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the Notes, the Subsidiary
Guarantees, this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture. All agreements of each Guarantor in this Indenture
shall bind its successors, except as otherwise provided in Section 11.05.
SECTION 12.10. SUCCESSORS.
75
<PAGE> 83
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors. All agreements of each Guarantor in this Indenture shall
bind its successors, except as otherwise provided in Section 11.05.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
76
<PAGE> 84
SIGNATURES
Dated as of March 12, 1999
Very truly yours,
TEAM HEALTH, INC.
By:
-----------------------------------
Name:
Title:
Indenture Signature Page 1
<PAGE> 85
ALLIANCE CORPORATION
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
KARL G. MANGOLD, INC.
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
EMERGENCY COVERAGE CORPORATION
EMERGICARE MANAGEMENT, INCORPORATED
EMSA CONTRACTING SERVICE, INC.
EMSA LOUISIANA, INC.
HOSPITAL BASED PHYSICIAN SERVICES, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
MED ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF, MARGULIES, BORUSHOK &
SCHOENBAUM RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS OF
MEMPHIS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
TEAM RADIOLOGY, INC.
THBS, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
DRS. SHEER, AHEARN & ASSOCIATES, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
Indenture Signature Page 2
<PAGE> 86
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMSA SOUTH BROWARD, INC.
NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
EMSA JOLIET, INC.
By:
-------------------------------------------
Name:
Title:
FISCHER MANGOLD PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
By: KARL G. MANGOLD, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
MT. DIABLO EMERGENCY PHYSICIANS,
A CALIFORNIA GENERAL PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
Indenture Signature Page 3
<PAGE> 87
By: KARL G. MANGOLD, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By: INPHYNET HOSPITAL SERVICES, INC.,
General Partner
By:
-------------------------------------------
Name:
Title:
TEAM HEALTH SOUTHWEST, L.P.
By: Team Radiology, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., General Partner
By:
-------------------------------------------
Name:
Title:
Indenture Signature Page 4
<PAGE> 88
UNITED STATES TRUST COMPANY OF NEW
YORK as TRUSTEE
By:
-------------------------------------------
Name:
Title:
Indenture Signature Page 5
<PAGE> 89
EXHIBIT A
(Face of Note)
(a) CUSIP/CINS
12% Series A Senior Subordinated Notes due 2009
No. ___ $____________
TEAM HEALTH, INC.
promises to pay to [ ], or registered assigns, the principal sum
of ___________ Dollars on March 15, 2009
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
DATED: MARCH 12, 1999
TEAM HEALTH, INC.
By:
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
------------------------------
(Authorized Signatory)
A2-1
<PAGE> 90
(Back of Note)
12% Series A Senior Subordinated Notes due 2009
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A) (1), (2), (3), OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI");
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN
A2-2
<PAGE> 91
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Team Health, Inc., a Tennessee corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 12%
per annum from the date hereof until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company shall pay interest and Liquidated Damages
semi-annually on March 15 and September 15 of each year, or if any such day is
not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be September 15, 1999. The Company shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the September 1 or March
1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes shall be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds shall
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, United States Trust
Company of New York, the Trustee under the Indenture, shall act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of March 12, 1999 (the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of
A2-3
<PAGE> 92
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. This Note is an obligation of the
Company limited to $100.0 million in aggregate principal amount. The Indenture
pursuant to which this Note is issued provides that up to $125.0 million of
Additional Notes may be issued thereunder.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section
3.07, the Notes shall not be redeemable at the Company's option prior to March
15, 2004. Thereafter, the Company may redeem all or a part of these Notes, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on March
15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2004................................................. 108.000%
2005................................................. 106.000%
2006................................................. 104.000%
2007................................................. 102.000%
2008 and thereafter.................................. 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time prior to March
15, 2002 the Company may on one or more occasions redeem up to 33 1/3% of the
aggregate principal amount of Notes originally issued under the Indenture at a
redemption price of 112.0% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings; provided that at
least 66 2/3% of the aggregate principal amount of Notes remains outstanding
immediately after the occurrence of such redemption (excluding Notes held by the
Company and its Subsidiaries); and such redemption shall occur within 90 days of
the date of the closing of such Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). Within 60 days following any
Change of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice.
A2-4
<PAGE> 93
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within five days of each date on which the aggregate amount of
Excess Proceeds exceeds $15.0 million, the Company will be required to make an
offer to all Holders of Notes (a "Repurchase Offer") to purchase the maximum
principal amount of Notes that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the date of purchase, in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes (including any
Additional Notes) tendered pursuant to a Repurchase Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase shall receive a Repurchase Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, the Company need not exchange or register the transfer of any Notes
for a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single class, and
any existing default or compliance with any provision of the Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations
to Holders of the Notes in case of a merger or consolidation or sale of all or
substantially all of the assets of the Company, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act or to
allow any Subsidiary to guarantee the Notes, to provide for the Issuance of
Additional Notes in accordance with the
A2-5
<PAGE> 94
limitations set forth in the Indenture, or to allow any Guarantor to execute a
supplemental indenture to the Indenture with respect to the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include: (a)
default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes (whether or not permitted by Article 10 of
the Indenture); (b) default in payment of the principal of or premium, if any,
on the (whether or not permitted by Article 10 of the Indenture); (c) failure by
the Company to comply with the provisions of Section 4.14 of the Indenture; (d)
failure by the Company for 30 days after notice from the Trustee or holders of
at least 25% in principal amount of the Notes (including Additional Notes, if
any) then outstanding to comply with the provisions of Section 4.07, 4.09 or
4.10 of the Indenture; (e) failure by the Company for 60 days after notice from
the Trustee or holders of at least 25% in principal amount of the Notes then
outstanding voting as a single class to comply with any of its other agreements
in the Indenture or the Notes; (f) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, if that default (i) is
caused by a failure to pay principal of or premium, if any, on such Indebtedness
after giving effect to the grace period provided in such Indebtedness on the
date of such default (a "Payment Default"); or (ii) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more; (g)
failure by the Company or any of its Subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (h) except as permitted by the Indenture, a
Subsidiary Guarantee being held in any judicial proceeding to be unenforceable
or invalid or ceasing for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, denying or
disaffirming its obligations under its Subsidiary Guarantee; and (i) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Restricted Subsidiaries that are Significant Subsidiaries. In the event of a
declaration of acceleration of the Notes because an Event of Default has
occurred and is continuing as a result of the acceleration of any Indebtedness
described in clause (f) above, the declaration of acceleration of the Notes
shall be automatically annulled if the holders of any Indebtedness described in
clause (f) above have rescinded the declaration of acceleration in respect of
such Indebtedness within 30 days of the date of such declaration and if (i) the
annulment of the acceleration of Notes would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal or interest on the Notes that became due
solely because of the acceleration of the Notes have been cured or waived. If
any Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Notes may declare all the
principal, premium, if any, accrued interest and Liquidated Damages, if any, of
the Notes to be due and payable immediately; provided, that so long as any
Indebtedness permitted to be incurred pursuant to the Senior Credit Facilities
shall be outstanding, such acceleration shall not be effective until the earlier
of (i) an acceleration of any such Indebtedness under the Senior Credit
Facilities or (ii) five Business Days after receipt by the Company of written
notice of such acceleration. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, with
respect to the Company or any of its Subsidiaries all outstanding Notes shall
become due and payable without further action or notice. Holders of the Notes
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required
A2-6
<PAGE> 95
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of the Company or any of the Guarantors,
as such, shall have any liability for any obligations of the Company or such
Guarantor under the Notes, the Subsidiary Guarantees or the Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of March 12, 1999, between the Company and the parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of Additional Notes (collectively, the "Registration Rights
Agreement").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
A2-7
<PAGE> 96
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
Attention: David Jones
A2-8
<PAGE> 97
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date:
------------------
Your Signature:
----------------------------
(Sign exactly as your name appears on the
face of this Note)
SIGNATURE GUARANTEE.
A2-9
<PAGE> 98
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.14
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state
the amount you elect to have purchased: $________
Date: _______________ Your Signature:____________________________
(Sign exactly as your name appears on the
Note)
Tax Identification No: ______________
SIGNATURE GUARANTEE.
A2-10
<PAGE> 99
FORM OF CERTIFICATE OF TRANSFER
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Re: 12% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of March
12, 1999 (the "Indenture"), between Team Health, Inc., as issuer (the
"Company"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
______________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL IN THE
REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities
B-1
<PAGE> 100
Act and (iv) if the proposed transfer is being made prior to the expiration of
the Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION
OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes
at the time of transfer of less than $250,000, an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of
B-2
<PAGE> 101
any state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i)
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
<PAGE> 102
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
-------------------------------------
Name:
Title:
Dated: ,
------------- -----
B-4
<PAGE> 103
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ); or
(iv) / / Unrestricted Global Note (CUSIP ); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
<PAGE> 104
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Re: 12% Senior Subordinated Notes due 2009
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of March
12, 1999 (the "Indenture"), between Team Health, Inc., as issuer (the
"Company"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States Securities
Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest in an Unrestricted Global Note is being acquired in
compliance with any applicable blue sky securities laws of any state of the
United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
C-1
<PAGE> 105
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, / / IAI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
C-2
<PAGE> 106
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
--------------------------------------------
[Insert Name of Owner]
By:
-----------------------------------------
Name:
Title:
Dated: ,
--------------- -----
C-3
<PAGE> 107
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Re: 12% Senior Subordinated Notes due 2009
Reference is hereby made to the Indenture, dated as of March
12, 1999 (the "Indenture"), between Team Health, Inc., as issuer (the
"Company"), and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (c) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the
D-1
<PAGE> 108
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
-----------------------------------------
[INSERT NAME OF ACCREDITED INVESTOR]
BY:
--------------------------------------
NAME:
TITLE:
Dated: ,
------------------ -----
D-2
<PAGE> 109
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of March 12, 1999 (the "Indenture")
among Team Health, Inc., the Guarantors listed on Schedule I thereto and United
States Trust Company of New York, as trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article Eleven of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. Each Holder of a Note, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Subsidiary Guarantee shall
cease to be so subordinated and subject in right of payment upon any defeasance
of this Note in accordance with the provisions of the Indenture.
[NAME OF GUARANTOR]
BY:
-----------------------------------
NAME:
TITLE:
E-1
<PAGE> 110
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of ________________, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Team Health, Inc. (or its permitted successor), a
Tennessee corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and United States Trust Company of
New York, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of March 12, 1999 providing
for the issuance of an aggregate principal amount of up to $100.0 million of 12%
Senior Subordinated Notes due 2009 (the "Notes");
WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall unconditionally guarantee all of the Company's Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all other Guarantors, to jointly and
severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture,
the Notes or the obligations of the Company hereunder
or thereunder, that:
(i) the principal of and interest on the Notes
will be promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest on the
overdue principal of and interest on the
Notes, if any, if lawful, and all other
obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in
accordance with the terms hereof and
thereof; and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other
obligations, that same will be promptly paid
in full when
F-1
<PAGE> 111
due or performed in accordance with the
terms of the extension or renewal, whether
at stated maturity, by acceleration or
otherwise. Failing payment when due of any
amount so guaranteed or any performance so
guaranteed for whatever reason, the
Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver
or consent by any Holder of the Notes with respect to
any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce
the same or any other circumstance which might
otherwise constitute a legal or equitable discharge
or defense of a guarantor.
(c) The following is hereby waived: diligence
presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of
the Company, any right to require a proceeding first
against the Company, protest, notice and all demands
whatsoever.
(d) This Subsidiary Guarantee shall not be discharged
except by complete performance of the obligations
contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the
Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either
the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in
relation to the Holders in respect of any
obligations guaranteed hereby until payment
in full of all obligations guaranteed
hereby.
(g) As between the Guarantors, on the one hand,
and the Holders and the Trustee, on the
other hand, (x) the maturity of the
obligations guaranteed hereby may be
accelerated as provided in Article 6 of the
Indenture for the purposes of this
Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition
preventing such acceleration in respect of
the obligations guaranteed hereby, and (y)
in the event of any declaration of
acceleration of such obligations as provided
in Article 6 of the Indenture, such
obligations (whether or not due and payable)
shall forthwith become due and payable by
the Guarantors for the purpose of this
Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor
so long as the exercise of such right does
not impair the rights of the Holders under
the Guarantee.
(i) Pursuant to Section 10.02 of the Indenture,
after giving effect to any maximum amount
and any other contingent and fixed
liabilities that are
F-2
<PAGE> 112
relevant under any applicable Bankruptcy or
fraudulent conveyance laws, and after giving
effect to any collections from, rights to
receive contribution from or payments made
by or on behalf of any other Guarantor in
respect of the obligations of such other
Guarantor under Article 10 of the Indenture
shall result in the obligations of such
Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or
conveyance.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary
agrees that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) or sell, assign,
transfer convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person
unless:
(i) the Company or a Guarantor is the surviving corporation or
the entity or the Person formed by or surviving any such consolidation
or merger (if other than a Guarantor or the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the
laws of the United States, any state thereof or the District of
Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or the Company) or
the entity or Person to which such sale, transfer, conveyance or other
disposition assumes all the obligations of such Guarantor under the
Notes, the Indenture and the Subsidiary Guarantee, pursuant to a
supplemental indenture in the form of Exhibit E to the Indenture;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iv) the Company (i) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the
transaction and (ii) will, at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 of the Indenture;
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of the Indenture to
be performed by the Guarantor, such successor corporation shall succeed to and
be substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under the
F-3
<PAGE> 113
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture,
and notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
5. RELEASES.
(a) In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all to the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture, including without
limitation Section 4.10 of the Indenture. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation Section 4.10 of the
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any Guarantor from its obligations under its
Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under the
Indenture as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
F-4
<PAGE> 114
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-5
<PAGE> 115
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: _______________, ____
[GUARANTEEING SUBSIDIARY]
BY: _________________________________
NAME:
TITLE:
TEAM HEALTH, INC.
BY: _________________________________
NAME:
TITLE:
F-6
<PAGE> 116
ALLIANCE CORPORATION
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
KARL G. MANGOLD, INC.
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
EMERGENCY COVERAGE CORPORATION
EMERGICARE MANAGEMENT, INCORPORATED
EMSA CONTRACTING SERVICE, INC.
EMSA LOUISIANA, INC.
HOSPITAL BASED PHYSICIAN SERVICES, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
MED ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF, MARGULIES, BORUSHOK &
SCHOENBAUM RADIOLOGY ASSOCIATES
OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS,
INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS
OF MEMPHIS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
TEAM RADIOLOGY, INC.
THBS, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
DRS. SHEER, AHEARN & ASSOCIATES, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
F-7
<PAGE> 117
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMSA SOUTH BROWARD, INC.
NORTHWEST EMERGENCY PHYSICIANS,
INCORPORATED
EMSA JOLIET, INC.
By:
---------------------------------------
Name:
Title:
FISCHER MANGOLD PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By:
---------------------------------------
Name:
Title:
By: KARL G. MANGOLD, Inc., General Partner
By:
---------------------------------------
Name:
Title:
MT.DIABLO EMERGENCY PHYSICIANS,
A CALIFORNIA GENERAL PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By:
---------------------------------------
Name:
Title:
F-8
<PAGE> 118
By: KARL G. MANGOLD, Inc., General Partner
By:
---------------------------------------
Name:
Title:
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By:INPHYNET HOSPITAL SERVICES, INC.,
General Partner
By:
---------------------------------------
Name:
Title:
TEAM HEALTH SOUTHWEST, L.P.
By: Team Radiology, Inc., General Partner
By:
---------------------------------------
Name:
Title:
TEAM HEALTH BILLING SERVICES, L.P.
By: T.H.B.S., Inc., General Partner
By:
---------------------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK,
AS TRUSTEE
BY:
---------------------------------------
NAME:
TITLE:
F-9
<PAGE> 119
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the
Indenture as of the Issue Date:
1. Alliance Corporation
2. Emergency Management Specialists, Inc.
3. EMSA South Broward, Inc.
4. Herschel Fischer, Inc.
5. IMBS, Inc.
6. InPhyNet Hospital Services, Inc.
7. InPhyNet Medical Management Institute, Inc.
8. Karl G. Mangold, Inc.
9. Paragon Healthcare Limited Partnership
10. Charles L. Springfield, Inc.
11. Clinic Management Services, Inc.
12. Daniel & Yeager, Inc.
13. Drs. Sheer, Ahearn & Associates, Inc.
14. Emergency Coverage Corporation
15. Emergency Physician Associates, Inc.
16. Emergency Physicians of Manatee, Inc.
17. Emergency Professional Services, Inc.
18. Emergicare Management, Incorporated
19. EMSA Contracting Service, Inc.
20. EMSA Louisiana, Inc.
21. Hospital Based Physician Services, Inc.
22. InPhyNet Anesthesia of West Virginia, Inc.
23. Med Assure Systems, Inc.
24. MetroAmerican Radiology, Inc.
25. Neo-Med, Inc.
26. Northwest Emergency Physicians, Incorporated
27. Paragon Anesthesia, Inc.
Schedule I Page 1
<PAGE> 120
28. Paragon Contracting Services, Inc.
29. Paragon Imaging Consultants, Inc.
30. Quantum Plus, Inc.
31. Reich, Seidelmann & Janicki Co.
32. Rosendorf, Margulies, Borushok & Schoenbaum Radiology Associates of
Hollywood, Inc.
33. Sarasota Emergency Medical Consultants, Inc.
34. Southeastern Emergency Physicians, Inc.
35. Southeastern Emergency Physicians of Memphis, Inc.
36. Team Health Financial Services, Inc.
37. Team Radiology, Inc.
38. THBS, Inc.
39. The Emergency Associates for Medicine, Inc.
40. Virginia Emergency Physicians, Inc.
41. EMSA Joliet, Inc.
42. Team Health Southwest, L.P.
43. Team Health Billing Services, L.P.
44. Fischer Mangold Partnership
45. Mt. Diablo Emergency Physicians, a California General Partnership
Schedule I Page 2
<PAGE> 1
EXHIBIT 5.1
LETTERHEAD OF KIRKLAND & ELLIS
To Call Writer Direct:
212-446-4800
June 9, 1999
Team Health, Inc.
and each of its Subsidiaries
listed on Annex 1 hereto
(the "Subsidiary Guarantors")
1900 Winston Road
Knoxville, TN 37919
Re: Series B 12% Senior Subordinated Notes due 2009
Ladies and Gentlemen:
We are acting as special counsel to Team Health, Inc., a Tennessee
corporation (the "Company") and the Subsidiary Guarantors (together with the
Company, the "Registrants") in connection with the proposed registration by the
Company of up to $100,000,000 in aggregate principal amount of the Company's
Series B 12% Senior Subordinated Notes due 2009 (the "Exchange Notes"), pursuant
to a Registration Statement on Form S-4 filed with the Securities and Exchange
Commission (the "Commission") on June 9, 1999 under the Securities Act of 1933,
as amended (the "Securities Act") (such Registration Statement, as amended or
supplemented, is hereinafter referred to as the "Registration Statement"), for
the purpose of effecting an exchange offer (the "Exchange Offer") for the
Company's Series A 12% Senior Subordinated Notes due 2009 (the "Old Notes"). The
Exchange Notes are to be issued pursuant to the Indenture (the "Indenture"),
dated as of March 12, 1999, among the Registrants and the United States Trust
Company of New York, as Trustee, in exchange for and in replacement of the
Company's outstanding Old Notes, of which $100,000,000 in aggregate principal
amount is outstanding.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary for the purposes of this
opinion, including (i) the corporate and organizational documents of each of the
Registrants, (ii) minutes and records of the corporate proceedings of each of
the Registrants with respect to the issuance of the Exchange Notes, (iii) the
Registration Statement and exhibits thereto and (iv) the Registration Rights
Agreement, dated as of March 12, 1999, among the Registrants, Donaldson, Lufkin
& Jenrette Securities Corporation, NationsBanc Montgomery Securities LLC and
Fleet Securities, Inc.
For purposes of this opinion, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to the originals of all
documents submitted to us as copies and the authenticity of the originals of all
documents submitted to us as copies. We have
<PAGE> 2
Team Health, Inc.
June 9, 1999
Page 2
also assumed the genuineness of the signatures of persons signing all documents
in connection with which this opinion is rendered, the authority of such persons
signing on behalf of the parties thereto other than the Registrants, and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Registrants. As to any fact material to the opinions expressed
herein which we have not independently established or verified, we have relied
upon statements and representations of officers and other representatives of the
Registrants and others.
Based upon and subject to the foregoing qualifications, assumptions and
limitations and the further limitations set forth below, we are of the opinion
that:
(1) The Company is a corporation existing and in good standing under
the laws of the state of Tennessee.
(2) The sale and issuance of the Exchange Notes has been validly
authorized by the Company.
(3) When the Exchange Notes are issued pursuant to the Exchange Offer,
the Exchange Notes will constitute valid and binding obligations of the
Registrants and the Indenture will be enforceable in accordance with its terms.
Our opinions expressed above are subject to the qualifications that we
express no opinion as to the applicability of, compliance with, or effect of (i)
any bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent
conveyance, moratorium or other similar law affecting the enforcement or
creditors' rights generally, (ii) general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), (iii)
public policy considerations which may limit the rights of parties to obtain
certain remedies and (iv) except for purposes of the opinion in paragraph 1, any
laws except the laws of the State of New York.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. We also consent to the reference to our firm under the
heading "Legal Matters" in the Registration Statement. In giving this consent,
we do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of the rules and regulations of
the Commission.
We do not find it necessary for the purposes of this opinion, and
accordingly we do not purport to cover herein, the application of the securities
or "Blue Sky" laws of the various states to the issuance of the Exchange Notes.
<PAGE> 3
Team Health, Inc.
June 9, 1999
Page 3
This opinion is limited to the specific issues addressed herein, and no
opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State of New York be changed by legislative action, judicial
decision or otherwise.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purposes.
Yours very truly,
KIRKLAND & ELLIS
<PAGE> 4
ANNEX 1
SUBSIDIARY GUARANTORS
1. Clinic Management Services, Inc.
2. Emergency Coverage Corporation
3. Emergicare Management, Incorporated
4. Hospital Based Physician Services, Inc.
5. Med:Assure Systems, Inc.
6. Southeastern Emergency Physicians, Inc.
7. Southeastern Emergency Physicians of Memphis, Inc.
8. Team Health Financial Services, Inc.
9. Team Health Billing Services, L.P.
10. Fischer Mangold Partnership
11. Mt. Diablo Emergency Physicians, a California General Partnership
12. Quantum Plus, Inc.
13. Charles L. Springfield, Inc.
14. Karl G. Mangold, Inc.
15. Herschel Fischer, Inc.
16. EMSA South Broward, Inc.
17. IMBS, Inc.
18. InPhyNet Hospital Services, Inc.
19. InPhyNet Medical Management Institute, Inc.
20. Paragon Healthcare Limited Partnership
21. Drs. Sheer, Ahearn & Associates, Inc.
22. Emergency Physicians of Manatee, Inc.
23. EMSA Contracting Service, Inc.
24. EMSA Louisiana, Inc.
25. Neo-Med, Inc.
26. Paragon Anesthesia, Inc.
27. Paragon Contracting Services, Inc.
28. Paragon Imaging Consultants, Inc.
29. Rosendorf, Marguiles, Borushok & Schoenbaum Radiology Associates of
Hollywood, Inc.
30. Sarasota Emergency Medical Consultants, Inc.
31. The Emergency Associates for Medicine, Inc.
32. EMSA Joliet, Inc.
33. Daniel & Yeager, Inc.
34. Northwest Emergency Physicians, Incorporated
35. Emergency Physician Associates, Inc.
36. Team Radiology, Inc.
37. MetroAmerican Radiology, Inc.
38. Virginia Emergency Physicians, Inc.
39. Team Health Southwest, L.P.
40. THBS, Inc.
41. Alliance Corporation
<PAGE> 5
42. Emergency Management Specialists, Inc.
43. InPhyNet Anesthesia of West Virginia, Inc.
44. Emergency Professional Services, Inc.
45. Reich, Seidelmann & Janicki Co.
<PAGE> 1
EXHIBIT 9.1
TEAM HEALTH, INC.
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of March 12,
1999, by and among Team Health, Inc., a Tennessee corporation (the "Company"),
Team Health Holdings, L.L.C., a Delaware limited liability company ("Holdings"),
Pacific Physicians Services Inc., a Delaware corporation ("PPSI"), and certain
other stockholders of the Company who are from time to time party hereto
(Holdings, PPSI and such other stockholders who are parties hereto from time to
time are collectively referred to as the "Stockholders" and individually as a
"Stockholder"). Each Stockholder and the Company are referred to individually as
a "Party" and collectively as the "Parties." Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in
Section 6 hereof.
WHEREAS, the Company and the Stockholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's board of directors (the "Board"), (ii) assuring continuity in the
management and ownership of the Company and (iii) limiting the manner and terms
by which the Stockholder Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
SECTION 1. BOARD OF DIRECTORS.
(a) From and after the date hereof and until the provisions of this
Section 1 cease to be effective, each Stockholder (other than PPSI, which will
not be subject to this Section 1) shall vote all of his or its Stockholder
Shares and any other voting securities of the Company over which such
Stockholder has voting control and shall take all other necessary or desirable
actions within his or its control (whether in his or its capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary and desirable
actions within its control (including, without limitation, calling special board
and stockholder meetings), in order to cause:
(i) the authorized number of directors on the Board to be the
amount necessary to allow for the designations provided for pursuant to
Section 1(a)(ii) below;
(ii) the following persons to be elected to the Board (each a
"Director"):
(A) as long as MDCP is a beneficial owner of
Stockholder Shares (directly or indirectly), then up to two
representatives designated by MDCP from
<PAGE> 2
time to time (the "MDCP Directors"), with Timothy P. Sullivan
and Nicholas W. Alexos serving as the initial MDCP Directors;
(B) as long as Cornerstone is a beneficial owner of
Stockholder Shares (directly or indirectly), then up to two
representatives designated by Cornerstone from time to time
(the "Cornerstone Directors"), with Dana O'Brien and Tyler
Wolfram serving as the initial Cornerstone Directors;
(C) as long as HEP is a beneficial owner of
Stockholder Shares (directly or indirectly), then one
representative designated by HEP from time to time (the "HEP
Director"), with Kenneth O'Keefe serving as the initial HEP
Director;
(D) the Company's Chief Executive Officer (the
"Management Director"), with Lynn Massingale, MD serving as
the initial Management Director; and
(E) one representative nominated by the Sponsors
(determined on the basis of a vote of a majority of the Common
Units of Holdings (as defined in Holding's Amended and
Restated Limited Liability Company Agreement, dated March 12,
1999, by and among its members) held by such Persons) as long
as such representative is acceptable to the Management
Investors (determined on the basis of a vote of a majority of
the Common Units of Holdings held by such Persons) (the
"Outside Director"); provided that no such Outside Director
shall be a member of the Company's or any Sponsor's management
or an employee or officer of the Company or its Subsidiaries
or any Sponsor; provided further that if such Persons are
unable to agree on an Outside Director, such position shall
remain vacant until such Persons can so agree;
(iii) the composition of the board of directors of each of the
Company's subsidiaries (a "Sub Board") shall be as determined by the
Board;
(iv) the removal from the Board or a Sub Board (with or
without cause) of any Director shall be only upon the written request
of the person or persons originally entitled to designate such Director
pursuant to Section 1(a)(ii) above; provided that if any director
elected pursuant to subsection (ii)(D) above ceases to be the specified
officer of the Company, he shall be removed as a director promptly
after such officership position ceases and his replacement will be
substituted therefor; and
(vi) in the event that any representative designated hereunder
for any reason ceases to serve as a member of the Board or a Sub Board
during his term of office, the resulting vacancy on the Board or the
Sub Board shall be filled by a representative designated by the person
or persons originally entitled to designate such Director pursuant to
Section 1(a)(ii) above.
-2-
<PAGE> 3
(b) The Board will use reasonable efforts to hold at least four
meetings of the Board during every fiscal year, at least one of which should be
held in each 120-day period during the Company's fiscal year. The Company shall
pay all out-of-pocket expenses incurred by each Director in connection with
attending regular and special meetings of the Board or any Sub Board. So long as
any Director designated hereunder serves on the Board and for at least three
years thereafter, the Company shall use its best efforts to obtain and to
maintain directors and officers indemnity insurance coverage at a commercially
reasonable price satisfactory to the holders of a majority of the Common
Stockholder Shares and the Company's charter and bylaws shall provide for
indemnification and exculpation of Directors to the fullest extent permitted
under applicable law.
(c) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 1, the election of a person
to such directorship shall be accomplished in accordance with the Company's
bylaws and applicable law.
SECTION 2. RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES.
(a) Retention of Executive Stock. No Management Investor shall sell,
transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in any Stockholder Shares (a "Transfer"), except (i) to the
Company, (ii) pursuant to the provisions of Sections 2(b), 2(d) or 3 below, or
(iii) pursuant to a Public Sale.
(b) Participation Rights. At least 40 days prior to Transfer of any
Stockholder Shares by any Stockholder which, together with its Affiliates and
Permitted Transferees, holds at least 10% of the Company's Common Stockholder
Shares as of immediately prior to such Transfer (a "Significant Stockholder")
(other than pursuant to (i) a Public Sale or (ii) a Transfer under Section 2(d)
or Section 3), the transferring Significant Stockholder will deliver a written
notice (the "Sale Notice") to the Company and the other Stockholders (the "Other
Stockholders"), specifying in reasonable detail the identity of the prospective
transferee(s), the Stockholder Shares to be sold and the terms and conditions of
the Transfer. In the event that the Other Stockholders hold shares of the class
of Stockholder Shares to be transferred, they may elect to participate in the
contemplated Transfer by delivering written notice to the transferring
Significant Stockholder within 15 days after delivery of the Sale Notice.
If any Other Stockholders have elected to participate in such Transfer
("Participating Stockholders"), the transferring Significant Stockholder and
each Participating Stockholder will be entitled to sell in the contemplated
Transfer, at the same price and on the same terms, a number of Stockholder
Shares of such class equal to the product of (i) the quotient determined by
dividing the number of Stockholder Shares of such class held by such Person by
the aggregate number of Stockholder Shares of such class owned by the
transferring Significant Stockholder and all Participating Stockholders and (ii)
the number of Stockholder Shares of such class to be sold in the contemplated
Transfer; provided that for purposes of the foregoing, (A) Stockholder Shares
which have not vested (and will not vest as a result of such transaction) or are
subject to repurchase by the Company for less than fair market value shall not
be considered to be Stockholder Shares and (B) all Stockholder Shares held by
any Permitted Transferee of any Other Stockholder shall be deemed
- 3 -
<PAGE> 4
held by such Other Stockholder himself or itself; provided further that if the
Significant Stockholder intends to Transfer a strip of two or more classes of
Stockholder Shares and any Other Stockholder (including his or its Permitted
Transferees) holds all such classes of Stockholder Shares, such Other
Stockholder may only participate in such Transfer if such Other Stockholder
participates with respect to all such classes of Stockholder Shares. The
transferring Significant Stockholder shall use its best efforts to obtain the
agreement of the prospective transferee(s) to the participation of the
Participating Stockholders in any contemplated Transfer, and the transferring
Significant Stockholder shall not Transfer any of its Stockholder Shares to the
prospective transferee(s) unless (1) the prospective transferee(s) agrees to
allow the participation of the Participating Stockholders or (2) the
transferring Significant Stockholder agrees to purchase the number of such class
of Stockholder Shares from any Participating Stockholders which the
Participating Stockholders would have been entitled to sell pursuant to this
Section 2(b). Each Stockholder involved in any transaction pursuant to this
Section 2(b) shall be required to bear its pro rata share (based upon the number
of shares sold or the number of shares to be acquired pursuant to options or
other rights) of the expenses incurred by the Stockholders in connection with
such transaction to the extent such costs are incurred for the benefit of all
such Stockholders and are not otherwise paid by the Company or the acquiring
party and each Stockholder shall be obligated to join on a pro rata basis (based
on the number of shares sold or the number of shares to be acquired pursuant to
options or other rights) in any representations, warranties, indemnification
provisions or other obligations (including without limitation any escrow
arrangements) that the Significant Stockholder agrees to provide in connection
with such transaction (other than any such obligations that relate specifically
to a particular Stockholder such as indemnification with respect to
representations and warranties given by a Stockholder regarding such
Stockholder's title to and ownership of Stockholder Shares).
(c) First Refusal Rights. At least 40 days prior to any Transfer of
Stockholder Shares by any Stockholder which, together with its Affiliates and
Permitted Transferees, holds less than 10% of the Company's Common Stockholders
Shares as of immediately prior to such Transfer (other than pursuant to (i) a
Public Sale, (ii) a Transfer to the Company, or (iii) a Transfer under Section
2(b), Section 2(d) or Section 3), the Stockholder making such Transfer (the
"Minority Transferor") shall deliver a written notice (the "Transfer Notice") to
the Company and each Significant Stockholder that it desires to Transfer
Stockholder Shares of such class, specifying in reasonable detail the identity
of the prospective transferee(s), the number to be transferred and the terms and
conditions of the Transfer, including the proposed price per Stockholder Share
of such class (which price shall be payable solely in cash at the closing of the
transaction or in installments over time). The Company may elect to purchase all
or any portion of the Stockholder Shares to be transferred, upon the same terms
and conditions as those set forth in the Transfer Notice, by delivering a
written notice of such election to the Minority Transferor within 15 days after
the Transfer Notice has been given to the Company. If for any reason the Company
does not elect to purchase all of the Stockholder Shares to be transferred, the
Significant Stockholder(s) shall be entitled to purchase the Stockholder Shares
which the Company has not elected to purchase (the "Available Shares"), upon the
same terms and conditions as those set forth in the Transfer Notice, by giving
written notice of such election to the Minority Transferor within 30 days after
the Transfer Notice has been given to the Significant Stockholder(s). If more
than one Significant Stockholder elects to purchase the Available Shares, the
Available Shares will be allocated among such electing stockholders pro rata
according to the number of Common Stockholder Shares owned by each such
- 4 -
<PAGE> 5
electing stockholder. The closing of the purchase of any Stockholder Shares
pursuant to this Section 2(c) shall take place within 60 days after the date on
which the parties to such purchase have been finally determined pursuant to this
Section 2(c) which, in any event, shall be within 95 days after the Transfer
Notice was delivered to the Company and the Significant Stockholders.
Notwithstanding the foregoing, if the Company and the Significant Stockholder(s)
do not elect to purchase, collectively, all of the Stockholder Shares of a class
specified in the Transfer Notice, then the Minority Transferor may transfer all
of the Stockholder Shares of such class specified in the Transfer Notice to the
transferee(s) identified in the Transfer Notice for (i) a price no less than the
price specified in the Transfer Notice and (ii) other terms no more favorable to
the transferee(s) thereof than specified in the Transfer Notice, during the
90-day period immediately following the date on which the Transfer Notice has
been given to the Company and the Significant Stockholder(s). Any Stockholder
Shares not transferred within such 90-day period will be subject to the
provisions of this Section 2(c) upon subsequent transfer.
(d) Permitted Transfers. The restrictions contained in this Section 2
shall not apply with respect to any Transfer of Stockholder Shares by any
Stockholder:
(i) in the case of a Stockholder who is an individual,
pursuant to applicable laws of descent and distribution, or among such
individual's Family Group,
(ii) in the case of a Stockholder which is an entity, among
such entity's Affiliates,
(iii) pursuant to any pledge agreement with Team Health's
senior lenders,
(iv) in the case of Holdings, up to ten percent of each class
of Stockholder Shares held by Holdings on the date hereof, to employees
of, consultants to and advisors to (or any entity formed for their
benefit) Holdings, the Company or any of its Affiliates; or
(v) in the case of PPSI, if a Sale of Holdings occurs and PPSI
does not have the opportunity to participate in such sale to the same
extent as if such event were taking place with respect to the Company,
then during the 180 day period immediately following such Sale of
Holdings, PPSI may Transfer its Stockholder Shares to any third party;
provided that the restrictions contained in this Section 2 shall continue to be
applicable to the Stock holder Shares after any of the foregoing Transfers; and
provided further that prior to or in connection with such Transfer, the
transferee of such Stockholder Shares shall have executed a Transfer Notice in
the form attached hereto as Exhibit A pursuant to which such transferee agrees
to be bound by the provisions of this Agreement and the Registration Agreement
affecting the Stockholder Shares so Transferred. Notwithstanding the foregoing,
no Party shall avoid the provisions of this Agreement by making one or more
Transfers to one or more Permitted Transferees and then disposing of all or any
portion of such Party's interest in any such Permitted Transferee, or, in the
case of an entity Stockholder, by permitting a Transfer of any ownership
interests in such entity Stockholder. In addition, the restrictions contained in
this Section 2 shall not apply with respect to PPSI's pledge of,
- 5 -
<PAGE> 6
or grant of a security interest in, the Stockholder Shares held by PPSI (it
being understood that prior to any foreclosure or other repossession of any such
pledged Stockholder Shares, the foreclosing or repossessing party shall have
agreed in writing to be bound by the provisions of this Agreement affecting such
pledged Stockholder Shares). All transferees permitted under this Section 2(d)
are collectively referred to herein as "Permitted Transferees." Each Permitted
Transferee shall be deemed a Stockholder for purposes of this Agreement.
(e) Other Agreements. Notwithstanding anything herein to the contrary,
the rights of any Stockholder to Transfer any Stockholder Shares pursuant to the
terms of this Agreement shall be subject to all such other limitations and
restrictions, if any, to which such Stockholder or such Stockholder Shares are
subject.
(f) Termination of Restrictions. The restrictions set forth in this
Section 2 shall continue with respect to each Stockholder Share until the
earlier of (i) the transfer of such Stockholder Share in a Public Sale, or (ii)
the consummation of a Sale of the Company or a Public Offering.
SECTION 3. SALE OF COMPANY; REORGANIZATION PRIOR TO PUBLIC OFFERING.
(a) Approved Sale. Subject to Section 3(c) below, if the Company's
Board of Directors recommends or approves and the holders of a majority of the
Common Stockholder Shares (the "Majority Holders") approve a Sale of the Company
(an "Approved Sale"), each Stockholder agrees to vote for, consent to and raise
no objections against the Approved Sale. If the Approved Sale is structured as a
(i) merger or consolidation, each Stockholder shall waive any dissenters'
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) sale of stock, each Stockholder shall agree to sell all of
its Stockholder Shares on the terms and conditions approved by the Majority
Holders. Each Stockholder shall take all necessary or desirable actions in
connection with the consummation of the Approved Sale as reasonably requested by
the Majority Holders and/or the Company.
(b) Reorganization Prior to Public Offering. Subject to Section 3(c)
below, if the Company's Board of Directors recommends or approves and the
Majority Holders approve a reorganization of the Company in connection with a
proposed initial Public Offering by the Company (the "Approved Reorganization"),
each Stockholder agrees to vote for, consent to and raise no objections against
the Approved Reorganization. If the Approved Reorganization is structured as a
(i) merger or consolidation, each Stockholder shall waive any dissenters'
rights, appraisal rights or similar rights in connection with such merger or
consolidation or (ii) sale of stock, each Stockholder shall agree to sell all of
its Stockholders Shares on the terms and conditions approved by the Majority
Holders. Each Stockholder shall take all necessary or desirable actions in
connection with the consummation of the Approved Reorganization as reasonably
requested by the Majority Holders and/or the Company.
- 6 -
<PAGE> 7
(c) Obligations of Stockholders. In connection with an Approved Sale or
Approved Reorganization: (i) upon the consummation of the Approved Sale or
Approved Reorganization, all of the holders of each class of Stockholder Shares
shall receive the same form and amount of consideration per share of Stockholder
Shares as the other holders of such class, or if any holders of a class of
Stockholder Shares are given an option as to the form and amount of
consideration to be received, all holders of such class shall be given the same
option; and (ii) all holders of then currently exercisable rights to acquire
Stockholder Shares shall be given reasonable prior notice of such Approved Sale
or Approved Reorganization and a reasonable opportunity, at such holder's
election and except as otherwise provided for in any related stock option
agreement, to either (A) exercise such rights prior to the consummation of the
Approved Sale or Approved Reorganization and participate in such sale as holders
of Stockholder Shares or (B) upon the consummation of the Approved Sale or
Approved Reorganization, receive in exchange for such rights consideration equal
to the amount determined by multiplying (1) the same amount of consideration per
share of a class of Stockholder Shares received by holders of such class of
Stockholder Shares in connection with the Approved Sale less the exercise price
per share of such class of Stockholder Shares of such rights to acquire such
class of Stockholder Shares by (2) the number of shares of such class of
Stockholder Shares represented by such rights.
(d) Purchaser Representative. If any transaction undertaken pursuant to
this Section 3 involves entering into any negotiation or transaction for which
Rule 506 under the Securities Act (or any similar rule then in effect)
promulgated by the Securities and Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), those Stockholders involved in such transaction who are
not "accredited investors" (as such term is defined in Rule 501 under the
Securities Act) (the "Unaccredited Stockholders") shall, at the request of the
Company or the Majority Holders, appoint one "purchaser representative" (as such
term is defined in Rule 501 under the Securities Act (or any similar rule then
in effect)) for all such Unaccredited Stockholders reasonably acceptable to the
Company. The Company shall first propose a purchaser representative to the
Unaccredited Stockholders. If holders of a majority of the Common Stockholders
Shares held by the Unaccredited Stockholders do not approve the purchaser
representative designated by the Company, such holders shall appoint one
purchaser representative to represent all Unaccredited Stockholders, subject to
the approval of the Company (which approval shall not be unreasonably withheld).
The Company shall be responsible for the fees of the purchaser representative so
appointed.
(e) Transaction Costs and Indemnity. Each Stockholder involved in any
transaction pursuant to this Section 3 shall be required to bear its pro rata
share (based upon the number of shares sold or the number of shares to be
acquired pursuant to options or other rights) of the expenses incurred by the
Stockholders in connection with such transaction to the extent such costs are
incurred for the benefit of all such Stockholders and are not otherwise paid by
the Company or the acquiring party and each Stockholder shall be obligated to
join on a pro rata basis (based on the number of shares sold or the number of
shares to be acquired pursuant to options or other rights) in any
representations, warranties, indemnification provisions or other obligations
(including without limitation any escrow arrangements) that the Majority Holders
agree to provide in connection with such transaction (other than any such
obligations that relate specifically to a particular Stockholder such as
indemnification with respect to representations and warranties given by a
Stockholder
- 7 -
<PAGE> 8
regarding such Stockholder's title to and ownership of Stockholder Shares);
provided that no Stockholder shall be obligated in connection with such
transaction to agree to indemnify or hold harmless the transferees with respect
to an amount in excess of the net after tax consideration received by such
Stockholder in connection with such transaction. Costs incurred by any such
Stockholder on its own behalf shall not be considered costs of the transaction
hereunder.
(f) Holdings Public Offering. Without the prior written consent of
PPSI, Holdings shall not consummate an underwritten public offering registered
under the Securities Act (a "Holdings Public Offering") unless PPSI is permitted
to participate in such Holdings Public Offering to the same extent as if such
event were taking place with respect to the Company.
SECTION 4. PREEMPTIVE RIGHTS.
(a) If the Company authorizes the issuance or sale of any equity
securities of the Company or any securities containing options or rights to
acquire any equity securities of the Company to any Sponsor (the "New
Securities"), the Company shall first offer to sell to each Stockholder who at
the time is a holder of Stockholder Shares, at the same price and on the same
terms, a portion of the total number of such New Securities equal to the
quotient of (i) the number of Common Stockholder Shares held by such Person and
its Permitted Transferees divided by (ii) the total number of Common Stockholder
Shares.
(b) In order to exercise its purchase rights pursuant to this Section,
a Stockholder must within ten business days after receipt of written notice from
the Company (the "Issuance Notice") describing in reasonable detail the New
Securities being offered, the purchase price thereof, the payment terms and such
Stockholder's percentage allotment, deliver a written notice to the Company
describing its election to purchase all or any portion of its pro rata share
determined pursuant to the immediately preceding paragraph.
(c) If a Stockholder purchases all or any portion of any New Securities
offered pursuant to this Section, such Stockholder shall be required to
concurrently purchase an equal proportion of each other class of debt or equity
securities of the Company or any of its Subsidiaries which are issued
contemporaneously in conjunction with such New Securities, if any, so long as
the Issuance Notice described all such classes of securities being offered.
(d) During the 90 days after the expiration of the offering periods
described above, the Company shall be entitled to sell any New Securities which
the Stockholders have not elected to purchase, on terms and conditions no more
favorable to the Sponsors than those offered to the Stockholders. At the
Company's election, the Company may consummate the sale of any New Securities
(and related debt or other equity securities) contemplated hereunder to any
Stockholder pursuant to this Section 4 at any time after receipt of the notices
contemplated by paragraph (b) above, including concurrently with the sale of
such New Securities to parties other than the Stockholders. Any New Securities
offered or sold by the Company to the Sponsors after such 180-day period must
be reoffered to the Stockholders pursuant to the terms of this paragraph.
- 8 -
<PAGE> 9
SECTION 5. ADDITIONAL RESTRICTIONS ON TRANSFER.
(a) Restricted Securities Legend. The Stockholder Shares have not been
registered under the Securities Act and, therefore, in addition to the other
restrictions on Transfer contained in this Agreement, cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is then available. Each certificate evidencing Stockholder Shares
and each certificate issued in exchange for or upon the Transfer of any
Stockholder Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON ___________, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER SPECIFIED IN THE STOCKHOLDERS AGREEMENT, DATED AS OF MARCH 12,
1999 (THE "STOCKHOLDERS AGREEMENT"), AS AMENDED AND MODIFIED FROM TIME
TO TIME, AMONG THE ISSUER (THE "COMPANY"), AND CERTAIN INVESTORS, AND
THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH
SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO
ANY TRANSFER. A COPY OF THE STOCKHOLDERS AGREEMENT SHALL BE FURNISHED
BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
CHARGE."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares. The legend set forth above shall be removed from the certificates
evidencing any securities of the Company which cease to be Stockholder Shares in
accordance with the definition thereof.
(b) Opinion of Counsel. No holder of Stockholder Shares may Transfer
any Securities (except (i) pursuant to an effective registration statement under
the Securities Act, (ii) to a wholly-owned Affiliate or (iii) as part of a
Public Sale) without first delivering to the Company (unless waived by the Board
of Directors) an opinion of counsel (reasonably acceptable in form and substance
to the Board of Directors) that neither registration nor qualification under the
Securities Act and applicable state securities laws is required in connection
with such Transfer. The conditions to Transfer set forth in this Section 5(b)
are in addition to any other restrictions on Transfer contained in this
Agreement.
(c) Actions By Transferee. Prior to Transferring any Stockholder Shares
(other than pursuant to a Public Sale), the Transferring holder of Stockholder
Shares shall cause the prospective transferee to be bound by this Agreement and
to execute and deliver to the Company and the other holders of Stockholder
Shares counterparts to this Agreement.
- 9 -
<PAGE> 10
(d) Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Stockholder Shares as the owner
of such shares for any purpose.
SECTION 6. DEFINITIONS.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise, and if such Person is a partnership,
"Affiliate" shall also mean each general partner and limited partner of such
Person.
"Common Stock" means the Common Stock of the Company, $0.01 par value,
and any capital stock of any class of the Company or any of its successors
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Common Stockholder Shares" means Stockholder Shares which are (i)
Common Stock, (ii) warrants, options or other rights to subscribe for or to
acquire, directly or indirectly, Common Stock, whether or not then exercisable
or convertible, and (iii) stock or other securities which are convertible into
or exchangeable for, directly or indirectly, Common Stock, whether or not then
convertible or exchangeable. As to any particular Common Stockholder Shares,
such shares shall cease to be Common Stockholder Shares when they have been
disposed of in a Public Sale or repurchased by the Company or any Subsidiary.
References in this Agreement to a majority of, or a certain percentage of, the
Common Stockholder Shares, shall be deemed to be references to a majority of the
Common Stock represented by the Common Stockholder Shares or a certain
percentage of the Common Stock represented by the Common Stockholder Shares,
calculated on a fully-diluted basis, as applicable.
"Cornerstone" means Cornerstone Equity Investors IV, L.P. and each of
its Affiliates.
"Family Group" means, with respect to any Stockholder, such
Stockholder's spouse, siblings, parents and descendants (whether natural or
adopted), any trust, corporation, partnership or limited liability company
solely for the benefit of such Stockholder and/or such Stockholder's spouse,
siblings, parents, and/or descendants (whether natural or adopted) (and the
beneficiaries of such trusts upon their dissolution), and such Stockholder's
heirs, devises or estate upon such Stockholder's death.
"HEP" means Healthcare Equity Partners, L.P., Healthcare Equity Q.P.
Partners, L.P. and each of their Affiliates.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 15% of the Common
Stockholder Shares (a
- 10 -
<PAGE> 11
"15% Owner"), who is not an Affiliate of any such 15% Owner and who is not the
spouse or descendent (by birth or adoption) of any such 15% Owner or a trust for
the benefit of any such 15% Owner and/or such other Persons.
"Management Investors" means any person who, at the time of his
acquisition of Stockholder Shares, was an employee of the Company or any of its
Subsidiaries or received such stock in contemplation of becoming an employee of
the Company or any of its Subsidiaries.
"MDCP" means Madison Dearborn Capital Partners II, L.P. and each of its
Affiliates.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means the sale in an underwritten public offering
registered under the Securities Act of shares of any class of the Common Stock.
"Public Sale" means any sale of Stockholder Shares to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
under the Securities Act.
"Registration Agreement" means that certain Registration Agreement,
dated as of the date hereof, by and among the Company, Holdings and PPSI, as
amended, modified and/or supplemented from time to time.
"Sale of the Company" means the sale of the Company to an Independent
Third Party or group of Independent Third Parties pursuant to which such party
or parties acquire (i) capital stock of the Company possessing the voting power
under normal circumstances (e.g., without giving effect to the provisions of
Section 1 of this Agreement) to elect a majority of the Company's Board of
Directors (whether by merger, consolidation, sale or transfer of the Company's
capital stock) or (ii) more than 50% of the Company's assets determined on a
consolidated basis.
"Sale of Holdings" means a "Sale of the Company" as defined in the
Securityholders Agreement of Holdings, dated as of the date hereof, by and among
its members a party thereto.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Sponsors" means MDCP, Cornerstone and HEP.
"Stockholder Shares" means (i) any capital stock of the Company
purchased or otherwise acquired by any Stockholder, (ii) any warrants, options
or other rights to subscribe for or to acquire, directly or indirectly, any
capital stock of the Company, purchased or otherwise acquired by any
Stockholder, whether or not then exercisable or convertible, and (iii) any stock
or other securities which are convertible into or exchangeable for, directly or
indirectly, any capital stock of the Company, purchased or otherwise acquired by
any Stockholder, whether or not then convertible
- 11 -
<PAGE> 12
or exchangeable, (iv) any securities or rights issued or issuable directly or
indirectly with respect to the securities and rights referred to in clauses (i),
(ii) and (iii) above by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Stockholder Shares, such shares shall cease
to be Stockholder Shares when they have been disposed of in a Public Sale or
repurchased by the Company or any Subsidiary.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.
"Transfer" means any sale, transfer, assignment, pledge or other
disposition (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law).
SECTION 7. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to the Company's securities which is
inconsistent with or violates the rights granted to the holders of Stockholder
Shares in this Agreement.
(b) Additional Stockholders. In connection with the issuance of any
additional equity securities of the Company to any Person, the Company may
permit such Person to become a party to this Agreement and succeed to all of the
rights and obligations of a "Stockholder" under this Agreement by obtaining the
consent of the holders of a majority of the Common Stockholder Shares and an
executed counterpart signature page to this Agreement, and, upon such execution,
such Person shall for all purposes be a "Stockholder" party to this Agreement.
(c) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment, or waiver of any provision of this Agreement will be
effective against the Company or the holders of Stockholder Shares, unless such
modification, amendment, or waiver is approved in writing by the Company and the
holders of at least a majority of the Common Stockholder Shares; provided,
however, that in the event that such amendment or waiver would materially and
adversely affect a holder or group of holders of Stockholder Shares in a manner
substantially different than any other holders of Stockholder Shares, then such
amendment or waiver
- 12 -
<PAGE> 13
will require the consent of such holder of Stockholder Shares or a majority of
the Stockholder Shares held by such group of holders materially and adversely
affected; provided further, however, that none of Sections 2(b), 2(d), 2(e),
2(g), 3(f) or 4 or this proviso shall be amended in a manner adverse to PPSI
without the prior written consent of PPSI. Notwithstanding the foregoing, if an
amendment or modification of this Agreement serves merely to add a party hereto,
then such amendment or modification will be effective against the Company, and
the holders of Stockholder Shares if such amendment or modification is approved
in writing by the Company, the holders of at least a majority of the Common
Stockholder Shares, and such new party hereto. The failure of any party to
enforce any of the provisions of this Agreement will in no way be construed as a
waiver of such provisions and will not affect the right of such party thereafter
to enforce each and every provision of this Agreement in accordance with its
terms.
(d) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed, and enforced in such jurisdiction as if such invalid,
illegal, or unenforceable provision had never been contained herein.
(e) Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, those documents expressly referred to herein, and the other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the holders of Stockholder Shares (or any portion thereof) as
such shall be for the benefit of, and enforceable by, any subsequent holder of
any Stockholder Shares (or of such portion thereof).
(g) Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
shall constitute one and the same agreement.
(h) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce their rights under this Agreement
specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Stockholder may
in its sole discretion apply to any court of competent jurisdiction for specific
performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
- 13 -
<PAGE> 14
(i) Notices. All notices, demands, and other communications given or
delivered under this Agreement shall be in writing and shall be deemed to have
been given, (i) when received if given in person, (ii) on the date of electronic
confirmation of receipt if sent by telex, facsimile or other wire transmission,
(iii) three days after being deposited in the U.S. mail, certified or registered
mail, postage prepaid, or (iv) one day after being deposited with a reputable
overnight courier. Notices, demands, and communications to the Parties shall,
unless another address is specified in writing, be sent to the address or
telecopy number indicated below for the initial parties to this Agreement and to
any subsequent holder of Stockholder Shares subject to this Agreement at such
address as is indicated in the Company's records:
The Company:
Team Health, Inc.
1900 Winston Road, Suite 300
Knoxville, Tennessee 37919
Attention: President
Fax No. (423) 539-8052
<TABLE>
<CAPTION>
Holdings: with a copy to:
<S> <C>
Team Health Holdings, L.L.C. Kirkland & Ellis
c/o Madison Dearborn Capital Partners II, L.P. 200 East Randolph
Three First National Plaza, Suite 3800 Chicago, Illinois 60601
Chicago, Illinois 60602 Attention: Sanford E. Perl, Esq.
Attention: Timothy Sullivan Fax No. (312) 861-2200
Fax No. (312) 895-1001
</TABLE>
PPSI:
c/o MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
Fax No.. (205) 982-7709
Attention: Legal Services
(j) Governing Law. The corporate law of the State of Tennessee shall
govern all issues and questions concerning the relative rights and obligations
of the Company and its stockholders. All other issues and questions concerning
the construction, validity, enforcement, and interpretation of this Agreement
and the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
New York or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of New York.
- 14 -
<PAGE> 15
(k) No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
(l) Board Approval. Whenever this Agreement calls for or refers to the
consent or approval of any matter by any holder of Stockholder Shares, such
consent or approval shall be deemed given by such holder if each of such
holder's designees on the Company's board of directors (the "Board") has, in his
capacity as a director of the Company, given his consent or approval with
respect to such matter at a duly convened meeting of the Board or pursuant to an
effective unanimous written consent of the Board, unless, with respect to any
given matter, such holder notifies the Company in writing that the consent or
approval at the Board level by such holder's designees on the Board does not
constitute the consent or approval by such holder itself.
(m) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
(n) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 8. TERMINATION. This Agreement shall continue in effect until
the consummation of a Sale of the Company, after which time this Agreement shall
terminate automatically and shall have no further force and effect; provided
that the restrictions set forth in Section 2 and Section 3(b) shall terminate
earlier upon the consummation of a Public Offering by the Company.
* * * *
- 15 -
<PAGE> 16
IN WITNESS WHEREOF, the Parties have executed this Stockholders
Agreement as of the date and year first above written.
TEAM HEALTH, INC.
By: ______________________________
Its: _____________________________
TEAM HEALTH HOLDINGS, L.L.C.
By: ______________________________
Its: _____________________________
PACIFIC PHYSICIAN SERVICES, INC.
By: ______________________________
Its: _____________________________
<PAGE> 17
EXHIBIT A
FORM OF TRANSFER NOTICE AND JOINDER AGREEMENT
This notice is being delivered to Team Health, Inc., a Tennessee
corporation (the "Company"), pursuant to Section 2(d) of the Stockholders
Agreement, dated as of March 12, 1999 (as amended from time to time, the
"Stockholders Agreement"), among the Company, Team Health, Holdings, L.L.C., a
Delaware limited liability company, Pacific Physicians Services, Inc., a
Delaware corporation, and certain other stockholders of the Company who are from
time to time party thereto. Capitalized terms used herein and not defined shall
have the meanings assigned to such terms in the Stockholders Agreement.
The undersigned, being a Permitted Transferee under the Stockholders
Agreement, hereby notifies the Company that [name of Stockholder] has
transferred to the undersigned ______ Stockholder Shares (_____ shares of Common
Stock and _____ shares of Preferred Stock). In connection with such transfer,
the undersigned hereby becomes a party to the Stockholders Agreement and
Registration Agreement and agrees to be bound by the provisions of such
Stockholders Agreement and Registration Agreement affecting such Stockholder
Shares.
Any notice provided for in the Stockholders Agreement or Registration
Agreement should be delivered to the undersigned at the address set forth below:
___________________________
___________________________
___________________________
Telephone: ________________
Facsimile: ________________
Date: _______________
_______________________
[Permitted Transferee]
<PAGE> 1
EXHIBIT 9.2
TEAM HEALTH HOLDINGS, L.L.C
SECURITYHOLDERS AGREEMENT
THIS SECURITYHOLDERS AGREEMENT (this "Agreement") is made as of March
12, 1999, by and among Team Health Holdings, L.L.C., a Delaware limited
liability company (the "Company"), each of the persons listed on Schedule A
attached hereto and certain other securityholders of the Company who are from
time to time party hereto (collectively the "Securityholders" and individually
as a "Securityholder"). Each Securityholder and the Company are referred to
individually as a "Party" and collectively as the "Parties." Capitalized terms
used but not otherwise defined herein shall have the meanings ascribed to such
terms in Section 6 hereof.
WHEREAS, the Company and the Securityholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's board of managers (the "Board"), (ii) assuring continuity in the
management and ownership of the Company and (iii) limiting the manner and terms
by which the Securityholder Shares may be transferred.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree as follows:
SECTION 1. BOARD OF MANAGERS.
(a) From and after the date hereof and until the provisions of this
Section 1 cease to be effective, each Securityholder shall vote all of his or
its Securityholder Shares and any other voting securities of the Company over
which such Securityholder has voting control and shall take all other necessary
or desirable actions within his or its control (whether in his or its capacity
as a securityholder, manager, member of a board committee or officer of the
Company or otherwise, and including, without limitation, attendance at meetings
in person or by proxy for purposes of obtaining a quorum and execution of
written consents in lieu of meetings), and the Company shall take all necessary
and desirable actions within its control (including, without limitation, calling
special board and securityholder meetings), in order to cause:
(i) the authorized number of managers on the Board to be the
amount necessary to allow for the designations provided for pursuant to
Section 1(a)(ii) below;
(ii) the following persons to be elected to the Board (each a
"Manager"):
(A) as long as MDCP is a beneficial owner of
Securityholder Shares (directly or indirectly), then up to two
representatives designated by MDCP from time to time (the
"MDCP Managers"), with Timothy P. Sullivan and Nicholas W.
Alexos serving as the initial MDCP Managers;
<PAGE> 2
(B) as long as Cornerstone is a beneficial owner of
Securityholder Shares (directly or indirectly), then up to two
representatives designated by Cornerstone from time to time
(the "Cornerstone Managers"), with Dana O'Brien and Tyler
Wolfram serving as the initial Cornerstone Managers;
(C) as long as HEP is a beneficial owner of
Securityholder Shares (directly or indirectly), then one
representative designated by HEP from time to time (the "HEP
Manager"), with Kenneth O'Keefe serving as the initial HEP
Manager;
(D) the Company's Chief Executive Officer (the
"Management Manager"), with Lynn Massingale, MD serving as the
initial Management Manager; and
(E) one representative nominated by the Sponsors
(determined on the basis of a vote of a majority of the Common
Securityholder Shares held by such Persons), as long as such
representative is acceptable to the Management Investors
(determined on the basis of a vote of a majority of the Common
Securityholder Shares held by such Persons) (the "Outside
Manager"); provided that no such Outside Manager shall be a
member of the Company's or any Sponsor's management or an
employee or officer of the Company or its Subsidiaries or any
Sponsor; provided further that if such Persons are unable to
agree on an Outside Manager, such position shall remain vacant
until such Persons can so agree;
(iii) the composition of the board of directors, managers or
similar governing body of each of the Company's subsidiaries (a "Sub
Board") shall be as determined the Board, except that for purposes of
this Agreement, the board of directors of Team Health, Inc. ("Team
Health") shall not be deemed to be a "Sub Board," and the composition
of Team Health's board of directors shall be governed by that certain
Stockholders Agreement, dated March __, 1999, by and among Team Health,
the Company, Pacific Physicians Services, Inc. and certain other
stockholders of Team Health a party thereto, as amended from time to
time.
(iv) the removal from the Board or a Sub Board (with or
without cause) of any Manager shall be only upon the written request of
the person or persons originally entitled to designate such Manager
pursuant to Section 1(a)(ii) above; provided that if any manager
elected pursuant to subsection (ii)(D) above ceases to be the specified
officer of the Company, he shall be removed as a manager promptly after
such officership position ceases and his replacement will be
substituted therefor; and
(vi) in the event that any representative designated hereunder
for any reason ceases to serve as a member of the Board or a Sub Board
during his term of office, the resulting vacancy on the Board or the
Sub Board shall be filled by a representative designated by the person
or persons originally entitled to designate such Manager pursuant to
Section 1(a)(ii) above.
- 2 -
<PAGE> 3
(b) The Board will use reasonable efforts to hold at least four
meetings of the Board during every fiscal year, at least one of which should be
held in each 120-day period during the Company's fiscal year. The Company shall
pay all out-of-pocket expenses incurred by each Manager in connection with
attending regular and special meetings of the Board or any Sub Board. So long as
any Manager designated hereunder serves on the Board and for at least three
years thereafter, the Company shall use its best efforts to obtain and to
maintain managers and officers indemnity insurance coverage at a commercially
reasonable price satisfactory to the holders of a majority of the Common
Securityholder Shares and the Company's operating agreement shall provide for
indemnification and exculpation of Managers to the fullest extent permitted
under applicable law.
(c) If any party fails to designate a representative to fill a
managership pursuant to the terms of this Section 1, the election of a person to
such managership shall be accomplished in accordance with the Company's
operating agreement and applicable law.
SECTION 2. RESTRICTIONS ON TRANSFER OF SECURITYHOLDER SHARES.
(a) Retention of Executive Security. No Management Investor shall sell,
transfer, assign, pledge or otherwise dispose of (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
any interest in any Securityholder Shares (a "Transfer"), except (i) to the
Company, (ii) pursuant to the provisions of Sections 2(b), 2(d) or 3 below, or
(iii) pursuant to a Public Sale.
(b) Participation Rights. At least 40 days prior to Transfer of any
Securityholder Shares by any Securityholder which, together with its Affiliates
and Permitted Transferees, holds at least 10% of the Company's Common
Securityholder Shares as of immediately prior to such Transfer (a "Significant
Securityholder") (other than pursuant to (i) a Public Sale or (ii) a Transfer
under Section 2(d) or Section 3), the transferring Significant Securityholder
will deliver a written notice (the "Sale Notice") to the Company and the other
Securityholders (the "Other Securityholders"), specifying in reasonable detail
the identity of the prospective transferee(s), the Securityholder Shares to be
sold and the terms and conditions of the Transfer. In the event that the Other
Securityholders hold securities of the class of Securityholder Shares to be
transferred, they may elect to participate in the contemplated Transfer by
delivering written notice to the transferring Significant Securityholder within
15 days after delivery of the Sale Notice.
If any Other Securityholders have elected to participate in such
Transfer ("Participating Securityholders"), the transferring Significant
Securityholder and each Participating Securityholder will be entitled to sell in
the contemplated Transfer, at the same price and on the same terms, a number of
Securityholder Shares of such class equal to the product of (i) the quotient
determined by dividing the number of Securityholder Shares of such class held by
such Person by the aggregate number of Securityholder Shares of such class owned
by the transferring Significant Securityholder and all Participating
Securityholders and (ii) the number of Securityholder Shares of such class to be
sold in the contemplated Transfer; provided that for purposes of the foregoing,
(A) Securityholder Shares which have not vested (and will not vest as a result
of such transaction) or are subject to repurchase by the Company for less than
fair market value shall not be considered to be
- 3 -
<PAGE> 4
Securityholder Shares and (B) all Securityholder Shares held by any Permitted
Transferee of any Other Securityholder shall be deemed held by such Other
Securityholder himself or itself; provided further that if the Significant
Securityholder intends to Transfer a strip of two or more classes of
Securityholder Shares and any Other Securityholder (including his or its
Permitted Transferees) holds all such classes of Securityholder Shares, such
Other Securityholder may only participate in such Transfer if such Other
Securityholder participates with respect to all such classes of Securityholder
Shares. The transferring Significant Securityholder shall use its best efforts
to obtain the agreement of the prospective transferee(s) to the participation of
the Participating Securityholders in any contemplated Transfer, and the
transferring Significant Securityholder shall not Transfer any of its
Securityholder Shares to the prospective transferee(s) unless (1) the
prospective transferee(s) agrees to allow the participation of the Participating
Securityholders or (2) the transferring Significant Securityholder agrees to
purchase the number of such class of Securityholder Shares from any
Participating Securityholders which the Participating Securityholders would have
been entitled to sell pursuant to this Section 2(b). Each Securityholder
involved in any transaction pursuant to this Section 2(b) shall be required to
bear its pro rata share (based upon the number of securities sold or the number
of securities to be acquired pursuant to options or other rights) of the
expenses incurred by the Securityholders in connection with such transaction to
the extent such costs are incurred for the benefit of all such Securityholders
and are not otherwise paid by the Company or the acquiring party and each
Securityholder shall be obligated to join on a pro rata basis (based on the
number of securities sold or the number of securities to be acquired pursuant to
options or other rights) in any representations, warranties, indemnification
provisions or other obligations (including without limitation any escrow
arrangements) that the Significant Securityholder agrees to provide in
connection with such transaction (other than any such obligations that relate
specifically to a particular Securityholder such as indemnification with respect
to representations and warranties given by a Securityholder regarding such
Securityholder's title to and ownership of Securityholder Shares).
(c) First Refusal Rights. At least 40 days prior to any Transfer of
Securityholder Shares by any Securityholder which, together with its Affiliates
and Permitted Transferees, holds less than 10% of the Company's Common
Securityholders Shares as of immediately prior to such Transfer (other than
pursuant to (i) a Public Sale, (ii) a Transfer to the Company, or (iii) a
Transfer under Section 2(b), Section 2(d) or Section 3), the Securityholder
making such Transfer (the "Minority Transferor") shall deliver a written notice
(the "Transfer Notice") to the Company and each Significant Securityholder that
it desires to Transfer Securityholder Shares of such class, specifying in
reasonable detail the identity of the prospective transferee(s), the number to
be transferred and the terms and conditions of the Transfer, including the
proposed price per Securityholder Share of such class (which price shall be
payable solely in cash at the closing of the transaction or in installments over
time). The Company may elect to purchase all or any portion of the
Securityholder Shares to be transferred, upon the same terms and conditions as
those set forth in the Transfer Notice, by delivering a written notice of such
election to the Minority Transferor within 15 days after the Transfer Notice has
been given to the Company. If for any reason the Company does not elect to
purchase all of the Securityholder Shares to be transferred, the Significant
Securityholder(s) shall be entitled to purchase the Securityholder Shares which
the Company has not elected to purchase (the "Available Shares"), upon the same
terms and conditions as those set forth in the Transfer Notice, by giving
written notice of such election to the Minority Transferor within
- 4 -
<PAGE> 5
30 days after the Transfer Notice has been given to the Significant
Securityholder(s). If more than one Significant Securityholder elects to
purchase the Available Shares, the Available Shares will be allocated among such
electing securityholders pro rata according to the number of Common
Securityholder Shares owned by each such electing securityholder. The closing of
the purchase of any Securityholder Shares pursuant to this Section 2(c) shall
take place within 60 days after the date on which the parties to such purchase
have been finally determined pursuant to this Section 2(c) which, in any event,
shall be within 95 days after the Transfer Notice was delivered to the Company
and the Significant Securityholders. Notwithstanding the foregoing, if the
Company and the Significant Securityholder(s) do not elect to purchase,
collectively, all of the Securityholder Shares of a class specified in the
Transfer Notice, then the Minority Transferor may transfer all of the
Securityholder Shares of such class specified in the Transfer Notice to the
transferee(s) identified in the Transfer Notice for (i) a price no less than the
price specified in the Transfer Notice and (ii) other terms no more favorable to
the transferee(s) thereof than specified in the Transfer Notice, during the
90-day period immediately following the date on which the Transfer Notice has
been given to the Company and the Significant Securityholder(s). Any
Securityholder Shares not transferred within such 90-day period will be subject
to the provisions of this Section 2(c) upon subsequent transfer.
(d) Permitted Transfers. The restrictions contained in this Section 2
shall not apply with respect to any Transfer of Securityholder Shares by any
Securityholder:
(i) in the case of a Securityholder who is an individual,
pursuant to applicable laws of descent and distribution, or among such
individual's Family Group;
(ii) in the case of a Securityholder which is an entity, among
such entity's Affiliates; and
(iii) in the case of the Sponsors, up to ten percent of each
class of Securityholder Shares held by each of the Sponsors on the date
hereof, to employees of, consultants to and advisors to (or any entity
formed for their benefit) the Sponsors, the Company or any of its
Affiliates;
provided that the restrictions contained in this Section 2 shall continue to be
applicable to the Securityholder Shares after any of the foregoing Transfers;
and provided further that prior to or in connection with such Transfer, the
transferee of such Securityholder Shares shall have executed a Transfer Notice
in the form attached hereto as Exhibit A pursuant to which such transferee
agrees to be bound by the provisions of this Agreement and the Registration
Agreement affecting the Securityholder Shares so Transferred. Notwithstanding
the foregoing, no Party shall avoid the provisions of this Agreement by making
one or more Transfers to one or more Permitted Transferees and then disposing of
all or any portion of such Party's interest in any such Permitted Transferee,
or, in the case of an entity Securityholder, by permitting a Transfer of any
ownership interests in such entity Securityholder. All transferees permitted
under this Section 2(d) are collectively referred to herein as "Permitted
Transferees." Each Permitted Transferee shall be deemed a Securityholder for
purposes of this Agreement.
- 5 -
<PAGE> 6
(e) Other Agreements. Notwithstanding anything herein to the contrary,
the rights of any Securityholder to Transfer any Securityholder Shares pursuant
to the terms of this Agreement shall be subject to all such other limitations
and restrictions, if any, to which such Securityholder or such Securityholder
Shares are subject.
(f) Termination of Restrictions. The restrictions set forth in this
Section 2 shall continue with respect to each Securityholder Share until the
earlier of (i) the transfer of such Securityholder Share in a Public Sale, or
(ii) the consummation of a Sale of the Company or a Public Offering.
SECTION 3. SALE OF COMPANY; REORGANIZATION PRIOR TO PUBLIC OFFERING.
(a) Approved Sale. Subject to Section 3(c) below, if the Company's
Board of Managers recommends or approves and the holders of a majority of the
Common Securityholder Shares (the "Majority Holders") approve a Sale of the
Company (an "Approved Sale"), each Securityholder agrees to vote for, consent to
and raise no objections against the Approved Sale. If the Approved Sale is
structured as a (i) merger or consolidation, each Securityholder shall waive any
dissenters' rights, appraisal rights or similar rights in connection with such
merger or consolidation or (ii) sale of security, each Securityholder shall
agree to sell all of its Securityholder Shares on the terms and conditions
approved by the Majority Holders. Each Securityholder shall take all necessary
or desirable actions in connection with the consummation of the Approved Sale as
reasonably requested by the Majority Holders and/or the Company.
(b) Reorganization Prior to Public Offering.
(i) Subject to Section 3(c) below, if the Company's Board of
Managers recommends or approves and the Majority Holders approve a
reorganization of the Company in connection with a proposed initial
Public Offering by the Company or Team Health (the "Approved
Reorganization"), each Securityholder agrees to vote for, consent to
and raise no objections against the Approved Reorganization. If the
Approved Reorganization is structured as a (i) merger or consolidation,
each Securityholder shall waive any dissenters' rights, appraisal
rights or similar rights in connection with such merger or
consolidation or (ii) sale of securities, each Securityholder shall
agree to sell all of its Securityholders Shares on the terms and
conditions approved by the Majority Holders. Each Securityholder shall
take all necessary or desirable actions in connection with the
consummation of the Approved Reorganization as reasonably requested by
the Majority Holders and/or the Company.
(ii) As soon as practicable following the initial Public
Offering of Team Health, the Company will (i) distribute the Common
Stock of Team Health to the holders of Common Units, pro rata based on
Common Units held and (ii) distribute the Preferred Stock of Team
Health to the holders of Preferred Units, pro rata based on Preferred
Units held; provided that the Company shall not be required to make
such distribution if the Company reasonably believes that such
distribution could (A) adversely affect the accounting treatment of the
Team Health recapitalization or (B) have an adverse tax effect on the
Company or any of the Securityholders.
- 6 -
<PAGE> 7
(c) Obligations of Securityholders. In connection with an Approved Sale
or Approved Reorganization: (i) upon the consummation of the Approved Sale or
Approved Reorganization, all of the holders of each class of Securityholder
Shares shall receive the same form and amount of consideration per share of
Securityholder Shares as the other holders of such class, or if any holders of a
class of Securityholder Shares are given an option as to the form and amount of
consideration to be received, all holders of such class shall be given the same
option; and (ii) all holders of then currently exercisable rights to acquire
Securityholder Shares shall be given reasonable prior notice of such Approved
Sale or Approved Reorganization and a reasonable opportunity, at such holder's
election and except as otherwise provided for in any related stock option
agreement, to either (A) exercise such rights prior to the consummation of the
Approved Sale or Approved Reorganization and participate in such sale as holders
of Securityholder Shares or (B) upon the consummation of the Approved Sale or
Approved Reorganization, receive in exchange for such rights consideration equal
to the amount determined by multiplying (1) the same amount of consideration per
share of a class of Securityholder Shares received by holders of such class of
Securityholder Shares in connection with the Approved Sale less the exercise
price per share of such class of Securityholder Shares of such rights to acquire
such class of Securityholder Shares by (2) the number of securities of such
class of Securityholder Shares represented by such rights.
(d) Purchaser Representative. If any transaction undertaken pursuant to
this Section 3 involves entering into any negotiation or transaction for which
Rule 506 under the Securities Act (or any similar rule then in effect)
promulgated by the Securities and Exchange Commission may be available with
respect to such negotiation or transaction (including a merger, consolidation or
other reorganization), those Securityholders involved in such transaction who
are not "accredited investors" (as such term is defined in Rule 501 under the
Securities Act) (the "Unaccredited Securityholders") shall, at the request of
the Company or the Majority Holders, appoint one "purchaser representative" (as
such term is defined in Rule 501 under the Securities Act (or any similar rule
then in effect)) for all such Unaccredited Securityholders reasonably acceptable
to the Company. The Company shall first propose a purchaser representative to
the Unaccredited Securityholders. If holders of a majority of the Common
Securityholders Shares held by the Unaccredited Securityholders do not approve
the purchaser representative designated by the Company, such holders shall
appoint one purchaser representative to represent all Unaccredited
Securityholders, subject to the approval of the Company (which approval shall
not be unreasonably withheld). The Company shall be responsible for the fees of
the purchaser representative so appointed.
(e) Transaction Costs and Indemnity. Each Securityholder involved in
any transaction pursuant to this Section 3 shall be required to bear its pro
rata share (based upon the number of securities sold or the number of securities
to be acquired pursuant to options or other rights) of the expenses incurred by
the Securityholders in connection with such transaction to the extent such costs
are incurred for the benefit of all such Securityholders and are not otherwise
paid by the Company or the acquiring party and each Securityholder shall be
obligated to join on a pro rata basis (based on the number of securities sold or
the number of securities to be acquired pursuant to options or other rights) in
any representations, warranties, indemnification provisions or other obligations
(including without limitation any escrow arrangements) that the Majority Holders
agree
- 7 -
<PAGE> 8
to provide in connection with such transaction (other than any such obligations
that relate specifically to a particular Securityholder such as indemnification
with respect to representations and warranties given by a Securityholder
regarding such Securityholder's title to and ownership of Securityholder
Shares); provided that no Securityholder shall be obligated in connection with
such transaction to agree to indemnify or hold harmless the transferees with
respect to an amount in excess of the net after-tax consideration received by
such Securityholder in connection with such transaction. Costs incurred by any
such Securityholder on its own behalf shall not be considered costs of the
transaction hereunder.
SECTION 4. PREEMPTIVE RIGHTS.
(a) If the Company authorizes the issuance or sale of any equity
securities of the Company or any securities containing options or rights to
acquire any equity securities of the Company to any Sponsor (the "New
Securities"), the Company shall first offer to sell to each Securityholder who
at the time is a holder of Securityholder Shares, at the same price and on the
same terms, a portion of the total number of such New Securities equal to the
quotient of (i) the number of Common Securityholder Shares held by such Person
and its Permitted Transferees divided by (ii) the total number of Common
Securityholder Shares.
(b) In order to exercise its purchase rights pursuant to this Section,
a Securityholder must within ten business days after receipt of written notice
from the Company (the "Issuance Notice") describing in reasonable detail the New
Securities being offered, the purchase price thereof, the payment terms and such
Securityholder's percentage allotment, deliver a written notice to the Company
describing its election to purchase all or any portion of its pro rata share
determined pursuant to the immediately preceding paragraph.
(c) If a Securityholder purchases all or any portion of any New
Securities offered pursuant to this Section, such Securityholder shall be
required to concurrently purchase an equal proportion of each other class of
debt or equity securities of the Company or any of its Subsidiaries which are
issued contemporaneously in conjunction with such New Securities, if any, so
long as the Issuance Notice described all such classes of securities being
offered.
(d) During the 90 days after the expiration of the offering periods
described above, the Company shall be entitled to sell any New Securities which
the Securityholders have not elected to purchase, on terms and conditions no
more favorable to the Sponsors than those offered to the Securityholders. At the
Company's election, the Company may consummate the sale of any New Securities
(and related debt or other equity securities) contemplated hereunder to any
Securityholder pursuant to this Section 4 at any time after receipt of the
notices contemplated by paragraph (b) above, including concurrently with the
sale of such New Securities to parties other than the Securityholders. Any New
Securities offered or sold by the Company to the Sponsors after such 180-day
period must be reoffered to the Securityholders pursuant to the terms of this
paragraph.
- 8 -
<PAGE> 9
SECTION 5. ADDITIONAL RESTRICTIONS ON TRANSFER.
(a) Restricted Securities Legend. The Securityholder Shares have not
been registered under the Securities Act and, therefore, in addition to the
other restrictions on Transfer contained in this Agreement, cannot be sold
unless subsequently registered under the Securities Act or an exemption from
such registration is then available. In the event the Securityholders Shares are
in certificated form, each certificate evidencing Securityholder Shares and each
certificate issued in exchange for or upon the Transfer of any Securityholder
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON ___________, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER SPECIFIED IN THE SECURITYHOLDERS AGREEMENT, DATED AS OF MARCH
12, 1999 (THE "SECURITYHOLDERS AGREEMENT"), AS AMENDED AND MODIFIED
FROM TIME TO TIME, AMONG THE ISSUER (THE "COMPANY"), AND CERTAIN
INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT
TO ANY TRANSFER. A COPY OF THE SECURITYHOLDERS AGREEMENT SHALL BE
FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND
WITHOUT CHARGE."
In the event the Securityholder Shares are in certificated form, the Company
shall imprint such legend on certificates evidencing Securityholder Shares. The
legend set forth above shall be removed from the certificates evidencing any
securities of the Company which cease to be Securityholder Shares in accordance
with the definition thereof.
(b) Opinion of Counsel. No holder of Securityholder Shares may Transfer
any Securityholder Shares (except (i) pursuant to an effective registration
statement under the Securities Act, (ii) to a wholly-owned Affiliate or (iii) as
part of a Public Sale) without first delivering to the Company (unless waived by
the Board of Managers) an opinion of counsel (reasonably acceptable in form and
substance to the Board of Managers) that neither registration nor qualification
under the Securities Act and applicable state securities laws is required in
connection with such Transfer. The conditions to Transfer set forth in this
Section 5(b) are in addition to any other restrictions on Transfer contained in
this Agreement.
- 9 -
<PAGE> 10
(c) Actions By Transferee. Prior to Transferring any Securityholder
Shares (other than pursuant to a Public Sale), the Transferring holder of
Securityholder Shares shall cause the prospective transferee to be bound by this
Agreement and to execute and deliver to the Company and the other holders of
Securityholder Shares counterparts to this Agreement.
(d) Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Securityholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such Securityholder Shares as the
owner of such securities for any purpose.
SECTION 6. DEFINITIONS.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise, and if such Person is a partnership,
"Affiliate" shall also mean each general partner and limited partner of such
Person.
"Common Securityholder Shares" means Securityholder Shares which are
(i) Common Units (as defined in the LLC Agreement), (ii) warrants, options or
other rights to subscribe for or to acquire, directly or indirectly, Common
Units, whether or not then exercisable or convertible, and (iii) security or
other securities which are convertible into or exchangeable for, directly or
indirectly, Common Units, whether or not then convertible or exchangeable. As to
any particular Common Securityholder Shares, such securities shall cease to be
Common Securityholder Shares when they have been disposed of in a Public Sale or
repurchased by the Company or any Subsidiary. References in this Agreement to a
majority of, or a certain percentage of, the Common Securityholder Shares, shall
be deemed to be references to a majority of the Common Security represented by
the Common Securityholder Shares or a certain percentage of the Common Security
represented by the Common Securityholder Shares, calculated on a fully-diluted
basis, as applicable.
"Cornerstone" means Cornerstone Equity Investors IV, L.P. and each of
its Affiliates.
"Family Group" means a, with respect to any Securityholder, such
Securityholder's spouse, siblings, parents and descendants (whether natural or
adopted), any trust, corporation, partnership or limited liability company
solely for the benefit of such Securityholder and/or such Securityholder's
spouse, siblings, parents, and/or descendants (whether natural or adopted) (and
the beneficiaries of such trusts upon their dissolution), and such
Securityholder's heirs, devises or estate upon such Securityholder's death.
"HEP" means Healthcare Equity Partners, L.P., Healthcare Equity Q.P.
Partners, L.P. and each of their Affiliates.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 15% of the Common
Securityholder Shares (a "15% Owner"), who is not an Affiliate of any such 15%
Owner and who is not the spouse or
- 10 -
<PAGE> 11
descendent (by birth or adoption) of any such 15% Owner or a trust for the
benefit of any such 15% Owner and/or such other Persons.
"LLC Agreement" means that certain Amended and Restated Limited
Liability Company Agreement of the Company, dated as of the date hereof, by and
among the Company's members, as amended, modified and/or supplemented from time
to time.
"Management Investors" means any person who, at the time of his
acquisition of Securityholder Shares, was an employee of the Company or any of
its Subsidiaries or received such security in contemplation of becoming an
employee of the Company or any of its Subsidiaries.
"MDCP" means Madison Dearborn Capital Partners II, L.P. and each of its
Affiliates.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint security company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means the sale in an underwritten public offering
registered under the Securities Act of securities of any class of the Common
Security.
"Public Sale" means any sale of Securityholder Shares to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
under the Securities Act.
"Registration Agreement" means that certain Registration Agreement,
dated as of the date hereof, by and among the Company and its members, as
amended, modified and/or supplemented from time to time.
"Sale of the Company" means the sale of the Company to an Independent
Third Party or group of Independent Third Parties pursuant to which such party
or parties acquire (i) capital security of the Company possessing the voting
power under normal circumstances (e.g., without giving effect to the provisions
of Section 1 of this Agreement) to elect a majority of the Company's Board of
Managers (whether by merger, consolidation, sale or transfer of the Company's
capital security) or (ii) more than 50% of the Company's assets determined on a
consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Sponsors" means MDCP, Cornerstone and HEP.
"Securityholder Shares" means (i) any capital security of the Company
purchased or otherwise acquired by any Securityholder, (ii) any warrants,
options or other rights to subscribe for or to acquire, directly or indirectly,
any capital security of the Company, purchased or otherwise acquired by any
Securityholder, whether or not then exercisable or convertible, and (iii) any
security or other securities which are convertible into or exchangeable for,
directly or indirectly, any capital security of the Company, purchased or
otherwise acquired by any Securityholder, whether or not then
- 11 -
<PAGE> 12
convertible or exchangeable, (iv) any securities or rights issued or issuable
directly or indirectly with respect to the securities and rights referred to in
clauses (i), (ii) and (iii) above by way of security dividend or security split
or in connection with a combination of securities, recapitalization, merger,
consolidation or other reorganization. As to any particular Securityholder
Shares, such securities shall cease to be Securityholder Shares when they have
been disposed of in a Public Sale or repurchased by the Company or any
Subsidiary.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
security entitled (without regard to the occurrence of any contingency) to vote
in the election of managers, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing manager or general partner
of such limited liability company, partnership, association or other business
entity.
"Transfer" means any sale, transfer, assignment, pledge or other
disposition (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law).
SECTION 7. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to the Company's securities which is
inconsistent with or violates the rights granted to the holders of
Securityholder Shares in this Agreement.
(b) Additional Securityholders. In connection with the issuance of any
additional equity securities of the Company to any Person, the Company may
permit such Person to become a party to this Agreement and succeed to all of the
rights and obligations of a "Securityholder" under this Agreement by obtaining
the consent of the holders of a majority of the Common Securityholder Shares and
an executed counterpart signature page to this Agreement, and, upon such
execution, such Person shall for all purposes be a "Securityholder" party to
this Agreement.
(c) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment, or waiver of any provision of this Agreement will be
effective against the Company or the holders of Securityholder Shares, unless
such modification, amendment, or waiver is approved in writing by the Company
and the holders of at least a majority of the Common Securityholder Shares;
provided, however, that in the event that such amendment or waiver would
materially and adversely affect a holder or group of holders of Securityholder
Shares in a manner substantially different than any other holders of
Securityholder Shares, then such amendment or
- 12 -
<PAGE> 13
waiver will require the consent of such holder of Securityholder Shares or a
majority of the Securityholder Shares held by such group of holders materially
and adversely affected. Notwithstanding the foregoing, if an amendment or
modification of this Agreement serves merely to add a party hereto, then such
amendment or modification will be effective against the Company, and the holders
of Securityholder Shares if such amendment or modification is approved in
writing by the Company, the holders of at least a majority of the Common
Securityholder Shares, and such new party hereto. The failure of any party to
enforce any of the provisions of this Agreement will in no way be construed as a
waiver of such provisions and will not affect the right of such party thereafter
to enforce each and every provision of this Agreement in accordance with its
terms.
(d) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed, and enforced in such jurisdiction as if such invalid,
illegal, or unenforceable provision had never been contained herein.
(e) Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, those documents expressly referred to herein, and the other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
(f) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the holders of Securityholder Shares (or any portion thereof) as
such shall be for the benefit of, and enforceable by, any subsequent holder of
any Securityholder Shares (or of such portion thereof).
(g) Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
shall constitute one and the same agreement.
(h) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce their rights under this Agreement
specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Securityholder
may in its sole discretion apply to any court of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of this
Agreement.
- 13 -
<PAGE> 14
(i) Notices. All notices, demands, and other communications given or
delivered under this Agreement shall be in writing and shall be deemed to have
been given, (i) when received if given in person, (ii) on the date of electronic
confirmation of receipt if sent by telex, facsimile or other wire transmission,
(iii) three days after being deposited in the U.S. mail, certified or registered
mail, postage prepaid, or (iv) one day after being deposited with a reputable
overnight courier. Notices, demands, and communications shall, unless another
address is specified in writing, be sent to (i) the Company at the address or
telecopy number indicated below, (ii) the Securityholders at the address
specified on the attached Schedule A and (iii) any subsequent holder of
Securityholder Shares subject to this Agreement at such address as is indicated
in the Company's records:
<TABLE>
<CAPTION>
The Company: with a copy to:
<S> <C>
Team Health Holdings, L.L.C. Kirkland & Ellis
c/o Madison Dearborn Capital Partners II, L.P. 200 East Randolph
Three First National Plaza, Suite 3800 Chicago, Illinois 60601
Chicago, Illinois 60602 Attention: Sanford E. Perl, Esq.
Attention: Timothy Sullivan Fax No. (312) 861-2200
Fax No. (312) 895-1001
</TABLE>
(j) Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights and obligations
of the Company and its security holders. All other issues and questions
concerning the construction, validity, enforcement, and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
(k) No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
(l) Board Approval. Whenever this Agreement calls for or refers to the
consent or approval of any matter by any holder of Securityholder Shares, such
consent or approval shall be deemed given by such holder if each of such
holder's designees on the Company's board of managers (the "Board") has, in his
capacity as a manager of the Company, given his consent or approval with respect
to such matter at a duly convened meeting of the Board or pursuant to an
effective unanimous written consent of the Board, unless, with respect to any
given matter, such holder notifies the Company in writing that the consent or
approval at the Board level by such holder's designees on the Board does not
constitute the consent or approval by such holder itself.
- 14 -
<PAGE> 15
(m) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
(n) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
SECTION 8. TERMINATION. This Agreement shall continue in effect until
the consummation of a Sale of the Company, after which time this Agreement shall
terminate automatically and shall have no further force and effect; provided
that the restrictions set forth in Section 2 and Section 3(b) shall terminate
earlier upon the consummation of a Public Offering by the Company.
* * * *
- 15 -
<PAGE> 16
IN WITNESS WHEREOF, the Parties have executed this Securityholders
Agreement as of the date and year first above written.
TEAM HEALTH HOLDINGS, L.L.C.
By: ______________________________
Its: _____________________________
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P.
Its: General Partner
By: Madison Dearborn Partners, Inc.
Its: General Partner
By: ___________________________
Its: __________________________
CORNERSTONE EQUITY INVESTORS IV, L.P.
By: Cornerstone Equity Investors IV LLC
Its: General Partner
By: _______________________________
Its: ______________________________
HEALTHCARE EQUITY PARTNERS, L.P.
By: Beecken, Petty & Company, L.L.C.
Its: General Partner
By: _______________________________
Its: ______________________________
<PAGE> 17
[CONTINUATION OF SIGNATURE PAGES TO SECURITYHOLDERS AGREEMENT]
HEALTHCARE EQUITY Q.P. PARTNERS, L.P.
By: Beecken, Petty & Company, L.L.C.
Its: General Partner
By: _______________________________
Its: ______________________________
TEAM HEALTH, INC. EQUITY
DEFERRED COMPENSATION PLAN TRUST
By: The Trust Company of Knoxville, as Trustee
By: _______________________________
Its: ______________________________
<PAGE> 18
[CONTINUATION OF SIGNATURE PAGES TO SECURITYHOLDERS AGREEMENT]
/s/ H. Lynn Massingale
__________________________________________
H. LYNN MASSINGALE, M.D.
/s/ Michael L. Hatcher
__________________________________________
MICHAEL L. HATCHER
/s/ Jeffrey Bettinger
__________________________________________
JEFFREY BETTINGER, M.D.
/s/ David P. Jones
__________________________________________
DAVID P. JONES
/s/ Stephen D. Sherlin
__________________________________________
STEPHEN D. SHERLIN
/s/ Neil J. Principe
__________________________________________
NEIL J. PRINCIPE, M.D.
/s/ Richard Gillespie
__________________________________________
RICHARD GILLESPIE, M.D.
/s/ James E. George
__________________________________________
JAMES E. GEORGE, M.D.
/s/ Randal L. Dabbs
__________________________________________
RANDAL L. DABBS, M.D.
/s/ Monty C. Scott
__________________________________________
MONTY C. SCOTT
<PAGE> 19
[CONTINUATION OF SIGNATURE PAGES TO SECURITYHOLDERS AGREEMENT]
/s/ Randall S. Aguiar
__________________________________________
RANDALL S. AGUIAR
/s/ John Craig
__________________________________________
JOHN CRAIG
/s/ William R. Machuga
__________________________________________
WILLIAM R. MACHUGA
/s/ Mary Pastick
__________________________________________
MARY PASTICK
/s/ Michael J. Weiner
__________________________________________
MICHAEL J. WEINER
/s/ James V. Hillman
__________________________________________
JAMES V. HILLMAN, M.D.
/s/ Mark E. Jergens
__________________________________________
MARK E. JERGENS
/s/ Gerard LaSalle
__________________________________________
GERARD LASALLE, M.D.
/s/ James J. Rybak
__________________________________________
JAMES J. RYBAK, M.D.
/s/ John R. Staley
__________________________________________
JOHN R. STALEY, M.D.
<PAGE> 20
SCHEDULE A
NAME AND NOTICE ADDRESS
Madison Dearborn Capital Partners II, L.P.
Three First National Plaza, Suite 3800
Chicago, IL 60602
Attention: Timothy Sullivan
Cornerstone Equity Investors IV, L.P.
717 Fifth Avenue, Suite 1100
New York, NY 10022
Attention: Dana J. O'Brien
Healthcare Equity Partners, L.P.
901 Warrenville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
Healthcare Equity Q.P. Partners, L.P.
901 Warrenville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
Team Health, Inc. Equity
Deferred Compensation Plan Trust
c/o The Trust Company of Knoxville, as Trustee
One Centre Square
620 Market Street Suite 300
Knoxville, TN 31902
Attention: James Shelby
H. Lynn Massingale, M.D.
22000 Beals Chapel Road
Lenoir City, TN 37772
Michael L. Hatcher
1041 Hayslope Drive
Knoxville, TN 37919
Jeffrey Bettinger, M.D.
5925 SW 114 Terrace
Miami, FL 33156
David D. Jones
1291 Kensington Drive
Knoxville, TN 37922
Stephen D. Sherlin
8219 Glenrothes Blvd.
Knoxville, TN 37909
Neil J. Principe, M.D.
5 Isla Bahia Terrace
Ft. Lauderdale, FL 33316
<PAGE> 21
Richard Gillespie, M.D.
1855 Happy Valley Road
Santa Rosa, CA 95409
Randal L. Dabbs, M.D.
1871 Cherokee Bluff Drive
Knoxville, TN 37920
Monty C. Scott
1828 Scenic Valley Lane
Knoxville, TN 37922
Randall S. Aguiar
4911 NW 65th Avenue
Lauderhill, FL 33319
John Craig
12226 Brighton Court
Knoxville, TN 37922
William R. Machuga
12116 East Ashton Court
Knoxville, TN 37922
Mary Pastick
9077 Boca Gardens Cr S
Boca Raton, FL 33496
Michael J. Weiner
12922 NW 20th Street
Pembroke Pines, FL 33028
James V. Hillman, M.D.
34 Ladoga Avenue
Tampa, FL 33606
Mark E. Jergens
4122 University Boulevard
Houston, TX 77005
Gerard LaSalle, M.D.
PO Box 916
Vashon Island, WA 98070
James J. Rybak, M.D.
3878 N. Valley Road
Fairview Park, OH 44126
John R. Staley, M.D.
1865 Stonebrook Drive
Knoxville, TN 37923
THG Investment, L.L.C.
c/o James E. George, M.D.
532 Cooper Street
Woodbury, NJ 08096
<PAGE> 22
EXHIBIT A
FORM OF TRANSFER NOTICE AND JOINDER AGREEMENT
This notice is being delivered to Team Health Holdings, L.L.C., a
Delaware limited liability company (the "Company"), pursuant to Section 2(d) of
the Securityholders Agreement, dated as of March __, 1999 (as amended from time
to time, the "Securityholders Agreement"), among the Company, the
Securityholders and certain other securityholders of the Company who are from
time to time party thereto. Capitalized terms used herein and not defined shall
have the meanings assigned to such terms in the Securityholders Agreement.
The undersigned, being a Permitted Transferee under the Securityholders
Agreement, hereby notifies the Company that [name of Securityholder] has
transferred to the undersigned ______ Securityholder Shares (_____ Common Units
and _____ Preferred Units). In connection with such transfer, the undersigned
hereby becomes a party to the Securityholders Agreement and Registration
Agreement and agrees to be bound by the provisions of such Securityholders
Agreement and Registration Agreement affecting such Securityholder Shares.
Any notice provided for in the Securityholders Agreement or
Registration Agreement should be delivered to the undersigned at the address set
forth below:
______________________________
______________________________
Telephone: ___________________
Facsimile: ___________________
Date: _______________
_________________________
[Permitted Transferee]
<PAGE> 1
EXHIBIT 10.1
EXECUTION COPY
================================================================================
TEAM HEALTH, INC.
THE GUARANTORS NAMED
HEREIN
----------
$100,000,000
12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
OF TEAM HEALTH, INC.
----------
----------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 12, 1999
----------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
FLEET SECURITIES, INC.
================================================================================
<PAGE> 2
THIS REGISTRATION RIGHTS AGREEMENT (THIS "AGREEMENT") IS MADE AND
ENTERED INTO AS OF MARCH 12, 1999, BY AND BETWEEN TEAM HEALTH, INC., A TENNESSEE
CORPORATION (THE "COMPANY"), THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO
(EACH A "GUARANTOR" AND, COLLECTIVELY, THE "GUARANTORS") AND DONALDSON, LUFKIN &
JENRETTE SECURITIES CORPORATION, NATIONSBANC MONTGOMERY SECURITIES LLC AND FLEET
SECURITIES, INC. (EACH AN "INITIAL PURCHASER" AND, COLLECTIVELY, THE "INITIAL
PURCHASERS"), EACH OF WHOM HAS AGREED TO PURCHASE THE COMPANY'S 12% SERIES A
SENIOR SUBORDINATED NOTES DUE 2009 (THE "SERIES A NOTES"), PURSUANT TO THE
PURCHASE AGREEMENT (AS DEFINED BELOW).
THIS AGREEMENT IS MADE PURSUANT TO THE PURCHASE AGREEMENT, DATED MARCH
5, 1999, (THE "PURCHASE AGREEMENT"), BY AND AMONG THE COMPANY, THE GUARANTORS
AND THE INITIAL PURCHASERS. IN ORDER TO INDUCE THE INITIAL PURCHASERS TO
PURCHASE THE SERIES A NOTES, THE COMPANY HAS AGREED TO PROVIDE THE REGISTRATION
RIGHTS RELATING TO THE SERIES A NOTES SET FORTH IN THIS AGREEMENT. THE EXECUTION
AND DELIVERY OF THIS AGREEMENT IS A CONDITION TO THE OBLIGATIONS OF THE INITIAL
PURCHASERS SET FORTH IN SECTION 3 OF THE PURCHASE AGREEMENT. CAPITALIZED TERMS
USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANING ASSIGNED TO THEM IN
THE INDENTURE, DATED THE CLOSING DATE, BETWEEN THE COMPANY AND UNITED STATES
TRUST COMPANY OF NEW YORK, AS TRUSTEE, RELATING TO THE SERIES A NOTES AND THE
SERIES B NOTES, AS SUCH INDENTURE IS AMENDED OR SUPPLEMENTED FROM TIME TO TIME
(THE "INDENTURE").
THE PARTIES HEREBY AGREE AS FOLLOWS:
SECTION
1. DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING CAPITALIZED TERMS SHALL HAVE
THE FOLLOWING MEANINGS:
ACT: THE SECURITIES ACT OF 1933, AS AMENDED.
AFFILIATE: AS DEFINED IN RULE 144 OF THE ACT.
BROKER-DEALER: ANY BROKER OR DEALER REGISTERED UNDER THE EXCHANGE ACT.
BUSINESS DAY: ANY DAY OTHER THAN A SATURDAY, SUNDAY OR DAY ON WHICH
COMMERCIAL BANKS IN THE CITY OF NEW YORK ARE AUTHORIZED OR REQUIRED BY LAW,
REGULATION OR EXECUTIVE ORDER TO REMAIN CLOSED.
CERTIFICATED SECURITIES: DEFINITIVE NOTES, AS DEFINED IN THE INDENTURE.
CLOSING DATE: THE DATE HEREOF.
COMMISSION: THE SECURITIES AND EXCHANGE COMMISSION.
CONSUMMATE: AN EXCHANGE OFFER SHALL BE DEEMED "CONSUMMATED" FOR
PURPOSES OF THIS AGREEMENT UPON THE OCCURRENCE OF (a) THE FILING AND
EFFECTIVENESS UNDER THE ACT OF THE EXCHANGE OFFER REGISTRATION STATEMENT
RELATING TO THE SERIES B NOTES TO BE ISSUED IN THE EXCHANGE OFFER, (b) THE
MAINTENANCE OF SUCH EXCHANGE OFFER REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE
AND THE KEEPING OF THE EXCHANGE OFFER OPEN FOR A PERIOD NOT LESS THAN THE PERIOD
REQUIRED PURSUANT TO SECTION 3(b) HEREOF AND (c) THE DELIVERY BY THE COMPANY TO
THE REGISTRAR UNDER THE INDENTURE OF SERIES B NOTES IN
1
<PAGE> 3
THE SAME AGGREGATE PRINCIPAL AMOUNT AS THE AGGREGATE PRINCIPAL AMOUNT OF SERIES
A NOTES TENDERED BY HOLDERS THEREOF PURSUANT TO THE EXCHANGE OFFER.
CONSUMMATION DEADLINE: AS DEFINED IN SECTION 3(b) HEREOF.
EFFECTIVENESS DEADLINE: AS DEFINED IN SECTIONS 3(a) AND 4(a) HEREOF.
EXCHANGE ACT: THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXCHANGE OFFER: THE EXCHANGE AND ISSUANCE BY THE COMPANY OF A PRINCIPAL
AMOUNT OF SERIES B NOTES (WHICH SHALL BE REGISTERED PURSUANT TO THE EXCHANGE
OFFER REGISTRATION STATEMENT) EQUAL TO THE OUTSTANDING PRINCIPAL AMOUNT OF
SERIES A NOTES THAT ARE TENDERED BY SUCH HOLDERS IN CONNECTION WITH SUCH
EXCHANGE AND ISSUANCE.
EXCHANGE OFFER REGISTRATION STATEMENT: THE REGISTRATION STATEMENT
RELATING TO THE EXCHANGE OFFER, INCLUDING THE RELATED PROSPECTUS.
EXEMPT RESALES: THE TRANSACTIONS IN WHICH THE INITIAL PURCHASERS
PROPOSE TO SELL THE Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
NOTES: The Series A Notes and the Series B Notes.
PERSON: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization, or a government or agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company and
the Guarantors relating to (a) an offering of Series B Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
RULE 144: Rule 144 promulgated under the Act.
2
<PAGE> 4
SERIES B NOTES: The Company's 12% Series B Senior Subordinated Notes
due 2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or
(ii) as contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Series B Notes), or (iii) the date on which
such Series A Note is distributed to the public pursuant to Rule 144 under the
Act and each (B) Series B Note held by a Broker-Dealer until the date on which
such Series B Note is disposed of by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including the delivery of the Prospectus contained therein).
SECTION 1.0.1. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 1.0.2. REGISTERED EXCHANGE OFFER
A. Unless the Exchange Offer shall not be permitted by applicable
federal law or policy of the Commission (after the procedures set forth in
Section 6(a)(i) below have been complied with), the Company and the Guarantors
shall (i) cause the Exchange Offer Registration Statement to be filed with the
Commission as soon as practicable after the Closing Date, but in no event later
than 90 days after the Closing Date (such 90th day being the "FILING DEADLINE"),
(ii) use its best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 180
days after the Closing Date (such 180th day being the "EFFECTIVENESS DEADLINE"),
(iii) in connection with the foregoing, (A) file all pre-effective amendments to
such Exchange Offer Registration Statement as may be necessary in order to cause
it to become effective, (B) file, if applicable, a post-effective amendment to
such Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the registration
and qualification of the Series B Notes to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness of such Exchange Offer Registration
Statement, use its best efforts to commence and Consummate the Exchange Offer.
The Exchange Offer shall be on the appropriate form permitting (i) registration
of the Series B Notes to be offered in exchange for the Series A Notes that are
Transfer Restricted Securities and (ii) resales of Series B Notes by
Broker-Dealers that tendered into the
3
<PAGE> 5
Exchange Offer Series A Notes that such Broker-Dealer acquired for its own
account as a result of market making activities or other trading activities
(other than Series A Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
B. The Company and the Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 45
business days thereafter (such 45th day being the "CONSUMMATION DEADLINE").
C. The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act
and must, therefore, deliver a prospectus meeting the requirements of the Act in
connection with its initial sale of any Series B Notes received by such
Broker-Dealer in the Exchange Offer, and the Company shall permit the use of the
Prospectus contained in the Exchange Offer Registration Statement by such
Broker-Dealer to satisfy such prospectus delivery requirement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement. See the Shearman & Sterling no-action letter (available
July 2, 1993).
To the extent necessary to ensure that the prospectus contained in the
Exchange Offer Registration Statement is available for sales of Series B Notes
by Broker-Dealers, the Company and the Guarantors agree to use their respective
best efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Section 6(a) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of one year from
the Consummation Deadline or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement have been
sold pursuant thereto. The Company and the Guarantors shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers, promptly
upon request, and in no event later than one day after such request, at any time
during such period.
SECTION
1. SHELF REGISTRATION
4
<PAGE> 6
A. Shelf Registration. If (i) the Exchange Offer is not permitted by
applicable law or policy of the Commission (after the Company and the Guarantors
have complied with the procedures set forth in Section 6(a)(i) below) or (ii) if
any Holder of Transfer Restricted Securities shall notify the Company within 20
Business Days following the Consummation of the Exchange Offer that (A) such
Holder was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Series B Notes acquired by
it in the Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is a
Broker-Dealer and holds Series A Notes acquired directly from the Company or any
of its Affiliates, then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 45 days after the earlier of (i) the
date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above,
(such earlier date, the "FILING DEADLINE"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to
all Transfer Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 180 days after the
Filing Deadline (such 180th day the "EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law or
policy of the Commission (i.e., clause (a)(i) above), then the filing of the
Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the Company
shall remain obligated to meet the Effectiveness Deadline set forth in clause
(y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years (as extended
pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.
B. Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
5
<PAGE> 7
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION
1. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within 2 days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective within 5 days of filing such
post-effective amendment to such Registration Statement (each such event
referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the
Company and the Guarantors hereby jointly and severally agree to pay to each
Holder of Transfer Restricted Securities affected thereby liquidated damages in
an amount equal to $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities held by such Holder for each week or portion thereof that
the Registration Default continues for the first 90-day period immediately
following the occurrence of such Registration Default. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.25 per week per $1,000 in principal
amount of Transfer Restricted Securities; provided that the Company and the
Guarantors shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to such
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
SECTION 1.0.1. REGISTRATION PROCEDURES
6
<PAGE> 8
A. Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective best
efforts to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply with
all of the following provisions:
I. If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company and the Guarantors
hereby agree to seek a no-action letter or other favorable decision
from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Transfer Restricted Securities.
The Company and the Guarantors hereby agree to pursue the issuance of
such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Guarantors hereby agree to take all such
other actions as may be requested by the Commission or otherwise
required in connection with the issuance of such decision, including
without limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
II. As a condition to its participation in the Exchange
Offer, each Holder of Transfer Restricted Securities (including,
without limitation, any Holder who is a Broker-Dealer) shall furnish,
upon the request of the Company, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an Affiliate of the Company, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Series B Notes to be issued in the Exchange Offer and (C) it is
acquiring the Series B Notes in its ordinary course of business. As a
condition to its participation in the Exchange Offer each Holder using
the Exchange Offer to participate in a distribution of the Series B
Notes shall acknowledge and agree that, if the resales are of Series B
Notes obtained by such Holder in exchange for Series A Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Morgan Stanley and
Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above), and (2) must comply with
the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement
7
<PAGE> 9
containing the selling security holder information required by Item 507
or 508, as applicable, of Regulation S-K.
III.Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the
Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that neither the Company nor any Guarantor has entered
into any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the
best of the Company's and each Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B
Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Series B Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth
in any no-action letter obtained pursuant to clause (i) above, if
applicable.
A. Shelf Registration Statement.
In connection with the Shelf Registration Statement, the
Company and the Guarantors shall IV. comply with all the provisions of Section
6(c) below and use their respective best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof, and
V. issue, upon the request of any Holder or purchaser of
Series A Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Series B Notes having an aggregate principal amount equal to the
aggregate principal amount of Series A Notes sold pursuant to the Shelf
Registration Statement and surrendered to the Company for cancellation; the
Company shall register Series B Notes on the Shelf Registration Statement for
this purpose and issue the Series B Notes to the purchaser(s) of securities
subject to the Shelf Registration Statement in the names as such purchaser(s)
shall designate.
A. General Provisions. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company and the
Guarantors shall:
VI. use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of Transfer
8
<PAGE> 10
Restricted Securities during the period required by this Agreement, the
Company and the Guarantors shall file promptly an appropriate amendment
to such Registration Statement curing such defect, and, if Commission
review is required, use their respective best efforts to cause such
amendment to be declared effective as soon as practicable.
VII. prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
VIII. advise each selling Holder promptly and, if requested
by such Holder, confirm such advice in writing, (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any applicable Registration Statement or
any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the Guarantors
shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
IX. subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
9
<PAGE> 11
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
X. furnish to each selling Holder in connection with such
exchange or sale, if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Holders in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which such selling Holders of the Transfer Restricted Securities
covered by such Registration Statement in connection with such exchange
or sale, if any, shall reasonably object within five Business Days
after the receipt thereof. A Holder shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading
or fails to comply with the applicable requirements of the Act;
XI. promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each selling Holder in
connection with such exchange or sale, if any, make the Company's and
the Guarantors' representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such
selling Holders may reasonably request;
XII. make available, at reasonable times, for inspection by
each selling Holder and any attorney or accountant retained by such
selling Holders, all financial and other records, pertinent corporate
documents of the Company and the Guarantors and cause the Company's and
the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such selling Holder, attorney
or accountant in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness;
XIII. if requested by any selling Holders in connection with
such exchange or sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
XIV. furnish to each selling Holder in connection with such
exchange or sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
10
<PAGE> 12
XV. deliver to each selling Holder, without charge, as many
copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company and the Guarantors hereby consent to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each selling Holder in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus or
any amendment or supplement thereto;
XVI. upon the request of any selling Holder, make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder in connection with any sale or
resale pursuant to any applicable Registration Statement. In such
connection, the Company and the Guarantors shall, upon request of any
selling Holder, furnish (or in the case of paragraphs (2) and (3), use
its best efforts to cause to be furnished) to each selling Holder, upon
Consummation of the Exchange Offer or upon the effectiveness of the
Shelf Registration Statement, as the case may be, a certificate, dated
such date, signed on behalf of the Company and each Guarantor by (x)
the President or any Vice President and (y) a principal financial or
accounting officer of the Company and such Guarantor, confirming, as of
the date thereof, the matters set forth in Sections 6(z), 9(a) and 9(b)
of the Purchase Agreement and such other similar matters as such
Holders may reasonably request;
XVII. prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided, however, that neither
the Company nor any Guarantor shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
XVIII. in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders to facilitate
the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the selling Holders
may request at least two Business Days prior to such sale of Transfer
Restricted Securities;
XIX. use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
11
<PAGE> 13
XX. provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
XXI. otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
XXII. cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use its best efforts to
cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified
in a timely manner; and
XXIII. provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
A. Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION
1. REGISTRATION EXPENSES
12
<PAGE> 14
A. All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company, the Guarantors and the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing the Series B Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
B. In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Series A Notes into in the Exchange Offer and/or
selling or reselling Series A Notes or Series B Notes pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham & Watkins,
unless another firm shall be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared. Such Holders shall be responsible for any and all
other out-of-pocket expenses of the Holders incurred in connection with the
registration of the Notes.
SECTION
1. INDEMNIFICATION
A. The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities, judgments, (including without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment or supplement
thereto) provided by the Company to any Holder or any prospective purchaser of
Series B Notes, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or
13
<PAGE> 15
judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to any of the
Holders furnished in writing to the Company by any of the Holders.
B. Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors and
their respective directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act)
the Company or the Guarantors, to the same extent as the foregoing indemnity
from the Company and the Guarantors set forth in section (a) above, but only
with reference to information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
C. In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company and the Guarantors, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall
14
<PAGE> 16
have received a request from the indemnified party for reimbursement for the
fees and expenses of counsel (in any case where such fees and expenses are at
the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
D. To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Guarantor, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company, the Guarantors and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the
15
<PAGE> 17
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities plus (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
SECTION
1. RULE 144A and RULE 144
The Company and each Guarantor agrees with each Holder, for so long as
any Transfer Restricted Securities remain outstanding and during any period in
which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder, to such Holder
or beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 1.0.1. MISCELLANEOUS
A. Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and/or the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchasers or
any Holder may obtain such relief as may be required to specifically enforce the
Company's obligations under Sections 3 and 4 hereof. The Company and the
Guarantors further agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
B. No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
C. Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
16
<PAGE> 18
case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose Transfer Restricted Securities are being tendered pursuant to
the Exchange Offer, and that does not affect directly or indirectly the rights
of other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.
D. Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
E. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
I. if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
II. if to the Company or the Guarantors:
Team Health, Inc.
1900 Winston Road
Suite 300
Knoxville, TN 37919
Telecopier No.: (423) 539-8003
Attention: David Jones
With a copy to:
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Telecopier No.: (212) 446-4900
Attention: Frederick Tanne, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
17
<PAGE> 19
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
A. Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Indenture. If
any transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.
B. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
C. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
D. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
E. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
F. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
18
<PAGE> 20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEAM HEALTH, INC.
By: ____________________________________
Name:
Title:
Registration Rights Agreement Signature Page 1
<PAGE> 21
ALLIANCE CORPORATION
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT
INSTITUTE, INC.
KARL G. MANGOLD, INC.
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
EMERGENCY COVERAGE CORPORATION
EMERGICARE MANAGEMENT,
INCORPORATED
EMSA CONTRACTING SERVICE, INC.
EMSA LOUISIANA, INC.
HOSPITAL BASED PHYSICIAN SERVICES,
INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA,
INC.
MED ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF, MARGULIES, BORUSHOK &
SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL
CONSULTANTS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS,
INC.
SOUTHEASTERN EMERGENCY PHYSICIANS
OF MEMPHIS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
TEAM RADIOLOGY, INC.
THBS, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
DRS. SHEER, AHEARN & ASSOCIATES, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PROFESSIONAL SERVICES,
INC.
Registration Rights Agreement Signature Page 2
<PAGE> 22
THE EMERGENCY ASSOCIATES FOR
MEDICINE, INC.
EMERGENCY PHYSICIANS OF MANATEE,
INC.
EMERGENCY MANAGEMENT SPECIALISTS,
INC.
EMSA SOUTH BROWARD, INC.
NORTHWEST EMERGENCY PHYSICIANS,
INCORPORATED
EMSA JOLIET, INC.
By: __________________________________
Name:
Title:
FISCHER MANGOLD PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By: __________________________________
Name:
Title:
By: KARL G. MANGOLD, Inc., General Partner
By: _________________________________
Name:
Title:
MT. DIABLO EMERGENCY PHYSICIANS,
A CALIFORNIA GENERAL PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General Partner
By: _________________________________
Name:
Registration Rights Agreement Signature Page 3
<PAGE> 23
Title:
Registration Rights Agreement Signature Page 4
<PAGE> 24
By: KARL G. MANGOLD, Inc., General Partner
By: _________________________________
Name:
Title:
PARAGON HEALTHCARE LIMITED
PARTNERSHIP
By: INPHYNET HOSPITAL SERVICES, INC.,
General Partner
By: __________________________________
Name:
Title:
TEAM HEALTH SOUTHWEST, L.P.
By: Team Radiology, Inc., General Partner
By: __________________________________
Name:
Title:
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., General Partner
By: _________________________________
Name:
Title:
Registration Rights Agreement Signature Page 5
<PAGE> 25
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY
SECURITIES LLC
FLEET SECURITIES, INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: ______________________________
Name:
Title:
Registration Rights Agreement Signature Page 6
<PAGE> 1
Exhibit 10.2
EXECUTION COPY
TEAM HEALTH, INC.
THE GUARANTORS NAMED HEREIN
$100,000,000
12% Series A Senior Subordinated Notes due 2009
Purchase Agreement
March 5, 1999
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY
SECURITIES LLC
FLEET SECURITIES, INC.
<PAGE> 2
$100,000,000
12% SERIES A SENIOR SUBORDINATED NOTES DUE 2009
OF TEAM HEALTH, INC.
PURCHASE AGREEMENT
March 5, 1999
Donaldson, Lufkin & Jenrette Securities Corporation
NationsBanc Montgomery Securities LLC
Fleet Securities, Inc.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Team Health, Inc., a Tennessee corporation (the "COMPANY"), proposes to
issue and sell to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
NationsBanc Montgomery Securities LLC and Fleet Securities, Inc. (each, an
"INITIAL PURCHASER" and collectively, the "INITIAL PURCHASERS") an aggregate of
$100,000,000 in principal amount of its 12% Series A Senior Subordinated Notes
due 2009 (the "SERIES A NOTES"), subject to the terms and conditions set forth
herein. The Series A Notes are to be issued pursuant to the provisions of an
indenture (the "INDENTURE"), to be dated as of the Closing Date (as defined
below), among the Company, the Guarantors (as defined below) and United States
Trust Company of New York, as trustee (the "TRUSTEE"). The Series A Notes and
the Series B Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "NOTES." The Notes will be guaranteed
(the "SUBSIDIARY GUARANTEES") by each of the entities listed on Schedule A,
hereto (each, a "GUARANTOR" and collectively the "GUARANTORS"). Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Indenture.
0. 0. 1. OFFERING MEMORANDUM.
THE SERIES A NOTES WILL BE OFFERED AND SOLD TO THE INITIAL PURCHASERS
PURSUANT TO ONE OR MORE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE COMPANY AND THE GUARANTORS
HAVE PREPARED A PRELIMINARY OFFERING MEMORANDUM, DATED FEBRUARY 19, 1999
RELATING TO THE SERIES A NOTES AND THE SUBSIDIARY GUARANTEES (THE "PRELIMINARY
OFFERING MEMORANDUM") AND A FINAL OFFERING MEMORANDUM, DATED MARCH 5, 1999
RELATING TO THE SERIES A NOTES AND THE SUBSIDIARY GUARANTEES (THE "OFFERING
MEMORANDUM").
1
<PAGE> 3
UPON ORIGINAL ISSUANCE THEREOF, AND UNTIL SUCH TIME AS THE SAME IS NO
LONGER REQUIRED PURSUANT TO THE INDENTURE, THE SERIES A NOTES (AND ALL
SECURITIES ISSUED IN EXCHANGE THEREFOR, IN SUBSTITUTION THEREOF OR UPON
CONVERSION THEREOF) SHALL BEAR THE FOLLOWING LEGEND:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501 (A) (1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B)
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF
THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN
IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND
2
<PAGE> 4
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF
THE FOREGOING."
0. 0. 2. AGREEMENTS TO SELL AND PURCHASE.
ON THE BASIS OF THE REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED
IN THIS AGREEMENT, AND SUBJECT TO THE TERMS AND CONDITIONS CONTAINED HEREIN, THE
COMPANY AGREES TO ISSUE AND SELL TO THE INITIAL PURCHASERS, AND EACH INITIAL
PURCHASER AGREES, SEVERALLY AND NOT JOINTLY, TO PURCHASE FROM THE COMPANY, THE
PRINCIPAL AMOUNTS OF SERIES A NOTES SET FORTH OPPOSITE THE NAME OF SUCH INITIAL
PURCHASER ON SCHEDULE C HERETO AT A PURCHASE PRICE EQUAL TO 97% OF THE PRINCIPAL
AMOUNT THEREOF (THE "PURCHASE PRICE").
0. 0. 3. TERMS OF OFFERING.
THE INITIAL PURCHASERS HAVE ADVISED THE COMPANY THAT THE INITIAL
PURCHASERS WILL MAKE OFFERS (THE "EXEMPT RESALES") OF THE SERIES A NOTES
PURCHASED HEREUNDER ON THE TERMS SET FORTH IN THE OFFERING MEMORANDUM, AS
AMENDED OR SUPPLEMENTED, SOLELY TO PERSONS WHOM THE INITIAL PURCHASERS
REASONABLY BELIEVE TO BE "QUALIFIED INSTITUTIONAL BUYERS" AS DEFINED IN RULE
144A UNDER THE ACT ("QIBS"), SUCH PERSONS BEING REFERRED TO HEREIN AS THE
"ELIGIBLE PURCHASERS." THE INITIAL PURCHASERS WILL OFFER THE SERIES A NOTES TO
ELIGIBLE PURCHASERS INITIALLY AT A PRICE EQUAL TO 100.0% OF THE PRINCIPAL AMOUNT
THEREOF. SUCH PRICE MAY BE CHANGED AT ANY TIME WITHOUT NOTICE.
HOLDERS (INCLUDING SUBSEQUENT TRANSFEREES) OF THE SERIES A NOTES WILL
HAVE THE REGISTRATION RIGHTS SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT (THE
"REGISTRATION RIGHTS AGREEMENT"), TO BE DATED THE CLOSING DATE, IN SUBSTANTIALLY
THE FORM OF EXHIBIT A HERETO, FOR SO LONG AS SUCH SERIES A NOTES CONSTITUTE
"TRANSFER RESTRICTED SECURITIES" (AS DEFINED IN THE REGISTRATION RIGHTS
AGREEMENT). PURSUANT TO THE REGISTRATION RIGHTS AGREEMENT, THE COMPANY AND THE
GUARANTORS WILL AGREE TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") UNDER THE CIRCUMSTANCES SET FORTH THEREIN, (i) A REGISTRATION
STATEMENT UNDER THE ACT (THE "EXCHANGE OFFER REGISTRATION STATEMENT") RELATING
TO THE COMPANY'S 12% SERIES B SENIOR SUBORDINATED NOTES DUE 2009 (THE "SERIES B
NOTES") AND THE SUBSIDIARY GUARANTEES THEREOF, TO BE OFFERED IN EXCHANGE FOR THE
SERIES A NOTES (SUCH OFFER TO EXCHANGE BEING REFERRED TO AS THE "EXCHANGE
OFFER") AND THE SUBSIDIARY GUARANTEES THEREOF AND (ii) A SHELF REGISTRATION
STATEMENT PURSUANT TO RULE 415 UNDER THE ACT (THE "SHELF REGISTRATION STATEMENT"
AND, TOGETHER WITH THE EXCHANGE OFFER REGISTRATION STATEMENT, THE "REGISTRATION
STATEMENTS") RELATING TO THE RESALE BY CERTAIN HOLDERS OF THE SERIES A NOTES AND
SUBSIDIARY GUARANTEES THEREOF AND TO USE ITS BEST EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENTS TO BE
3
<PAGE> 5
DECLARED AND REMAIN EFFECTIVE AND USABLE FOR THE PERIODS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT AND TO CONSUMMATE THE EXCHANGE OFFER. THIS
AGREEMENT, THE INDENTURE, THE NOTES, THE SUBSIDIARY GUARANTEES AND THE
REGISTRATION RIGHTS AGREEMENT ARE HEREINAFTER SOMETIMES REFERRED TO COLLECTIVELY
AS THE "OPERATIVE DOCUMENTS."
0. 0. 4. DELIVERY AND PAYMENT.
a. DELIVERY OF, AND PAYMENT OF THE PURCHASE PRICE FOR, THE
SERIES A NOTES SHALL BE MADE AT THE OFFICES OF KIRKLAND & ELLIS, 153 EAST 53RD
STREET, NEW YORK, NEW YORK 10022 OR SUCH OTHER LOCATION AS MAY BE MUTUALLY
ACCEPTABLE. SUCH DELIVERY AND PAYMENT SHALL BE MADE AT 9:00 A.M. NEW YORK CITY
TIME, ON MARCH 12, 1999 OR AT SUCH OTHER TIME ON THE SAME DATE OR SUCH OTHER
DATE AS SHALL BE AGREED UPON BY THE INITIAL PURCHASERS AND THE COMPANY IN
WRITING. THE TIME AND DATE OF SUCH DELIVERY AND THE PAYMENT FOR THE SERIES A
NOTES ARE HEREIN CALLED THE "CLOSING DATE."
b. ONE OR MORE OF THE SERIES A NOTES IN DEFINITIVE GLOBAL
FORM, REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST
COMPANY ("DTC"), HAVING AN AGGREGATE PRINCIPAL AMOUNT CORRESPONDING TO THE
AGGREGATE PRINCIPAL AMOUNT OF THE SERIES A NOTES SOLD PURSUANT TO EXEMPT RESALES
(COLLECTIVELY, THE "GLOBAL NOTE"), SHALL BE DELIVERED BY THE COMPANY TO THE
INITIAL PURCHASERS (OR AS THE INITIAL PURCHASERS DIRECT) IN EACH CASE WITH ANY
TRANSFER TAXES THEREON DULY PAID BY THE COMPANY AGAINST PAYMENT BY THE INITIAL
PURCHASERS OF THE PURCHASE PRICE THEREOF BY WIRE TRANSFER IN SAME DAY FUNDS TO
THE ORDER OF THE COMPANY. THE GLOBAL NOTE SHALL BE MADE AVAILABLE TO THE INITIAL
PURCHASERS FOR INSPECTION NOT LATER THAN 9:30 A.M., NEW YORK CITY TIME, ON THE
BUSINESS DAY IMMEDIATELY PRECEDING THE CLOSING DATE.
0. 0. 1. AGREEMENTS OF THE COMPANY AND THE GUARANTORS.
EACH OF THE COMPANY AND THE GUARANTORS HEREBY AGREE WITH THE INITIAL
PURCHASERS AS FOLLOWS:
a. TO ADVISE THE INITIAL PURCHASERS PROMPTLY AND, IF REQUESTED
BY THE INITIAL PURCHASERS, CONFIRM SUCH ADVICE IN WRITING, (i) OF THE ISSUANCE
BY ANY STATE SECURITIES COMMISSION OF ANY STOP ORDER SUSPENDING THE
QUALIFICATION OR EXEMPTION FROM QUALIFICATION OF ANY SERIES A NOTES FOR OFFERING
OR SALE IN ANY JURISDICTION DESIGNATED BY THE INITIAL PURCHASERS PURSUANT TO
SECTION 5(e) HEREOF, OR THE INITIATION OF ANY PROCEEDING BY ANY STATE SECURITIES
COMMISSION OR ANY OTHER FEDERAL OR STATE REGULATORY AUTHORITY FOR SUCH PURPOSE
AND (ii) OF THE HAPPENING OF ANY EVENT DURING THE PERIOD REFERRED TO IN SECTION
5(c) BELOW THAT MAKES ANY STATEMENT OF A MATERIAL FACT MADE IN THE PRELIMINARY
OFFERING MEMORANDUM OR THE OFFERING MEMORANDUM UNTRUE OR THAT REQUIRES ANY
ADDITIONS TO OR CHANGES IN THE PRELIMINARY OFFERING MEMORANDUM OR THE OFFERING
MEMORANDUM IN ORDER TO MAKE THE STATEMENTS THEREIN NOT MISLEADING. THE COMPANY
AND THE GUARANTORS SHALL USE THEIR RESPECTIVE BEST EFFORTS TO PREVENT THE
ISSUANCE OF ANY STOP ORDER OR ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION OF
ANY SERIES A NOTES UNDER ANY STATE SECURITIES OR BLUE SKY LAWS AND, IF AT ANY
TIME ANY STATE SECURITIES COMMISSION OR OTHER FEDERAL OR STATE REGULATORY
AUTHORITY SHALL ISSUE AN ORDER SUSPENDING THE QUALIFICATION OR EXEMPTION OF ANY
SERIES A NOTES UNDER ANY STATE SECURITIES OR BLUE SKY LAWS, THE COMPANY AND THE
GUARANTORS SHALL USE THEIR
4
<PAGE> 6
RESPECTIVE BEST EFFORTS TO OBTAIN THE WITHDRAWAL OR LIFTING OF SUCH ORDER AT THE
EARLIEST POSSIBLE TIME.
b. TO FURNISH THE INITIAL PURCHASERS AND THOSE PERSONS
IDENTIFIED BY THE INITIAL PURCHASERS TO THE COMPANY AS MANY COPIES OF THE
PRELIMINARY OFFERING MEMORANDUM AND THE OFFERING MEMORANDUM, AND ANY AMENDMENTS
OR SUPPLEMENTS THERETO, AS THE INITIAL PURCHASERS MAY REASONABLY REQUEST FOR THE
TIME PERIOD SPECIFIED IN SECTION 5(c). SUBJECT TO THE INITIAL PURCHASERS'
COMPLIANCE WITH ITS REPRESENTATIONS AND WARRANTIES AND AGREEMENTS SET FORTH IN
SECTION 7 HEREOF, THE COMPANY CONSENTS TO THE USE OF THE PRELIMINARY OFFERING
MEMORANDUM AND THE OFFERING MEMORANDUM, AND ANY AMENDMENTS AND SUPPLEMENTS
THERETO REQUIRED PURSUANT HERETO, BY THE INITIAL PURCHASERS IN CONNECTION WITH
EXEMPT RESALES.
c. DURING SUCH PERIOD AS IN THE OPINION OF COUNSEL FOR THE
INITIAL PURCHASERS AN OFFERING MEMORANDUM IS REQUIRED BY LAW TO BE DELIVERED IN
CONNECTION WITH EXEMPT RESALES BY THE INITIAL PURCHASERS (i) NOT TO MAKE ANY
AMENDMENT OR SUPPLEMENT TO THE OFFERING MEMORANDUM OF WHICH THE INITIAL
PURCHASERS SHALL NOT PREVIOUSLY HAVE BEEN ADVISED OR TO WHICH THE INITIAL
PURCHASER SHALL REASONABLY OBJECT AFTER BEING SO ADVISED AND (ii) TO PREPARE
PROMPTLY UPON THE INITIAL PURCHASERS' REASONABLE REQUEST, ANY AMENDMENT OR
SUPPLEMENT TO THE OFFERING MEMORANDUM WHICH MAY BE NECESSARY OR ADVISABLE IN
CONNECTION WITH SUCH EXEMPT RESALES.
d. IF, DURING THE PERIOD REFERRED TO IN SECTION 5(c) ABOVE,
ANY EVENT SHALL OCCUR OR CONDITION SHALL EXIST AS A RESULT OF WHICH, IN THE
OPINION OF COUNSEL TO THE INITIAL PURCHASERS, IT BECOMES NECESSARY TO AMEND OR
SUPPLEMENT THE OFFERING MEMORANDUM IN ORDER TO MAKE THE STATEMENTS THEREIN, IN
THE LIGHT OF THE CIRCUMSTANCES WHEN SUCH OFFERING MEMORANDUM IS DELIVERED TO AN
ELIGIBLE PURCHASER, NOT MISLEADING, OR IF, IN THE OPINION OF COUNSEL TO THE
INITIAL PURCHASERS, IT IS NECESSARY TO AMEND OR SUPPLEMENT THE OFFERING
MEMORANDUM TO COMPLY WITH ANY APPLICABLE LAW, FORTHWITH TO PREPARE AN
APPROPRIATE AMENDMENT OR SUPPLEMENT TO SUCH OFFERING MEMORANDUM SO THAT THE
STATEMENTS THEREIN, AS SO AMENDED OR SUPPLEMENTED, WILL NOT, IN THE LIGHT OF THE
CIRCUMSTANCES WHEN IT IS SO DELIVERED, BE MISLEADING, OR SO THAT SUCH OFFERING
MEMORANDUM WILL COMPLY WITH APPLICABLE LAW, AND TO FURNISH TO THE INITIAL
PURCHASERS AND SUCH OTHER PERSONS AS THE INITIAL PURCHASERS MAY DESIGNATE SUCH
NUMBER OF COPIES THEREOF AS THE INITIAL PURCHASERS MAY REASONABLY REQUEST.
e. PRIOR TO THE SALE OF ALL SERIES A NOTES PURSUANT TO EXEMPT
RESALES AS CONTEMPLATED HEREBY, TO COOPERATE WITH THE INITIAL PURCHASERS AND
COUNSEL TO THE INITIAL PURCHASERS IN CONNECTION WITH THE REGISTRATION OR
QUALIFICATION OF THE SERIES A NOTES FOR OFFER AND SALE TO THE INITIAL PURCHASERS
AND PURSUANT TO EXEMPT RESALES UNDER THE SECURITIES OR BLUE SKY LAWS OF SUCH
JURISDICTIONS AS THE INITIAL PURCHASERS MAY REQUEST AND TO CONTINUE SUCH
REGISTRATION OR QUALIFICATION IN EFFECT SO LONG AS REQUIRED FOR EXEMPT RESALES
AND TO FILE SUCH CONSENTS TO SERVICE OF PROCESS OR OTHER DOCUMENTS AS MAY BE
NECESSARY IN ORDER TO EFFECT SUCH REGISTRATION OR QUALIFICATION; PROVIDED,
HOWEVER, THAT NEITHER THE COMPANY NOR ANY GUARANTOR
5
<PAGE> 7
SHALL BE REQUIRED IN CONNECTION THEREWITH TO QUALIFY AS A FOREIGN CORPORATION IN
ANY JURISDICTION IN WHICH IT IS NOT NOW SO QUALIFIED OR TO TAKE ANY ACTION THAT
WOULD SUBJECT IT TO GENERAL CONSENT TO SERVICE OF PROCESS OR TAXATION OTHER THAN
AS TO MATTERS AND TRANSACTIONS RELATING TO THE PRELIMINARY OFFERING MEMORANDUM,
THE OFFERING MEMORANDUM OR EXEMPT RESALES, IN ANY JURISDICTION IN WHICH IT IS
NOT NOW SO SUBJECT.
f. SO LONG AS ANY OF THE SERIES A NOTES REMAIN OUTSTANDING AND
DURING ANY PERIOD IN WHICH THE COMPANY AND THE GUARANTORS ARE NOT SUBJECT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"), TO MAKE AVAILABLE TO ANY HOLDER OF SERIES A NOTES IN CONNECTION
WITH ANY SALE THEREOF AND ANY PROSPECTIVE PURCHASER OF SUCH SERIES A NOTES FROM
SUCH HOLDER, THE INFORMATION ("RULE 144A INFORMATION") REQUIRED BY RULE
144A(d)(4) UNDER THE ACT.
g. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED IN THIS
AGREEMENT ARE CONSUMMATED OR THIS AGREEMENT IS TERMINATED, TO PAY OR CAUSE TO BE
PAID ALL EXPENSES INCIDENT TO THE PERFORMANCE OF THE OBLIGATIONS OF THE COMPANY
AND THE GUARANTORS UNDER THIS AGREEMENT, INCLUDING: (i) THE FEES, DISBURSEMENTS
AND EXPENSES OF COUNSEL TO THE COMPANY AND THE GUARANTORS AND ACCOUNTANTS OF THE
COMPANY AND THE GUARANTORS IN CONNECTION WITH THE SALE AND DELIVERY OF THE
SERIES A NOTES TO THE INITIAL PURCHASERS AND PURSUANT TO EXEMPT RESALES, AND ALL
OTHER FEES AND EXPENSES IN CONNECTION WITH THE PREPARATION, PRINTING, FILING AND
DISTRIBUTION OF THE PRELIMINARY OFFERING MEMORANDUM, THE OFFERING MEMORANDUM AND
ALL AMENDMENTS AND SUPPLEMENTS TO ANY OF THE FOREGOING (INCLUDING FINANCIAL
STATEMENTS), INCLUDING THE MAILING AND DELIVERING OF COPIES THEREOF TO THE
INITIAL PURCHASERS AND PERSONS DESIGNATED BY THEM IN THE QUANTITIES SPECIFIED
HEREIN, (ii) ALL COSTS AND EXPENSES RELATED TO THE TRANSFER AND DELIVERY OF THE
SERIES A NOTES TO THE INITIAL PURCHASERS AND PURSUANT TO EXEMPT RESALES,
INCLUDING ANY TRANSFER OR OTHER TAXES PAYABLE THEREON, (iii) ALL COSTS OF
PRINTING OR PRODUCING THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS AND ANY
OTHER AGREEMENTS OR DOCUMENTS IN CONNECTION WITH THE OFFERING, PURCHASE, SALE OR
DELIVERY OF THE SERIES A NOTES, (iv) ALL EXPENSES IN CONNECTION WITH THE
REGISTRATION OR QUALIFICATION OF THE SERIES A NOTES AND THE SUBSIDIARY
GUARANTEES FOR OFFER AND SALE UNDER THE SECURITIES OR BLUE SKY LAWS OF THE
SEVERAL STATES AND ALL COSTS OF PRINTING OR PRODUCING ANY PRELIMINARY AND
SUPPLEMENTAL BLUE SKY MEMORANDA IN CONNECTION THEREWITH (INCLUDING THE FILING
FEES AND FEES AND DISBURSEMENTS OF COUNSEL FOR THE INITIAL PURCHASERS IN
CONNECTION WITH SUCH REGISTRATION OR QUALIFICATION AND MEMORANDA RELATING
THERETO), (v) THE COST OF PRINTING CERTIFICATES REPRESENTING THE SERIES A NOTES
AND THE SUBSIDIARY GUARANTEES, (vi) ALL EXPENSES AND LISTING FEES IN CONNECTION
WITH THE APPLICATION FOR QUOTATION OF THE SERIES A NOTES IN THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD") AUTOMATED QUOTATION SYSTEM -
PORTAL ("PORTAL"), (vii) THE FEES AND EXPENSES OF THE TRUSTEE AND THE TRUSTEE'S
COUNSEL IN CONNECTION WITH THE INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES, (viii) THE COSTS AND CHARGES OF ANY TRANSFER AGENT, REGISTRAR AND/OR
DEPOSITARY (INCLUDING DTC), (ix) ANY FEES CHARGED BY RATING AGENCIES FOR THE
RATING OF THE NOTES, (x) ALL COSTS AND EXPENSES OF THE EXCHANGE OFFER AND ANY
REGISTRATION STATEMENT, AS SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT, AND
(xi) AND ALL OTHER COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF THE
OBLIGATIONS OF THE COMPANY AND THE GUARANTORS HEREUNDER FOR WHICH PROVISION IS
NOT OTHERWISE MADE IN THIS SECTION.
6
<PAGE> 8
h. TO USE ITS BEST EFFORTS TO EFFECT THE INCLUSION OF THE
SERIES A NOTES IN PORTAL AND TO MAINTAIN THE LISTING OF THE SERIES A NOTES ON
PORTAL FOR SO LONG AS THE SERIES A NOTES ARE OUTSTANDING.
i. TO OBTAIN THE APPROVAL OF DTC FOR "BOOK-ENTRY" TRANSFER OF
THE NOTES, AND TO COMPLY WITH ALL OF ITS AGREEMENTS SET FORTH IN THE
REPRESENTATION LETTERS OF THE COMPANY AND THE GUARANTORS TO DTC RELATING TO THE
APPROVAL OF THE NOTES BY DTC FOR "BOOK-ENTRY" TRANSFER.
j. DURING THE PERIOD BEGINNING ON THE DATE HEREOF AND
CONTINUING TO AND INCLUDING THE CLOSING DATE, NOT TO OFFER, SELL, CONTRACT TO
SELL OR OTHERWISE TRANSFER OR DISPOSE OF ANY DEBT SECURITIES OF THE COMPANY OR
ANY GUARANTOR OR ANY WARRANTS, RIGHTS OR OPTIONS TO PURCHASE OR OTHERWISE
ACQUIRE DEBT SECURITIES OF THE COMPANY OR ANY GUARANTOR SUBSTANTIALLY SIMILAR TO
THE NOTES AND THE SUBSIDIARY GUARANTEES (OTHER THAN (i) THE NOTES AND THE
SUBSIDIARY GUARANTEES AND (ii) COMMERCIAL PAPER ISSUED IN THE ORDINARY COURSE OF
BUSINESS), WITHOUT THE PRIOR WRITTEN CONSENT OF THE INITIAL PURCHASERS.
k. NOT TO SELL, OFFER FOR SALE OR SOLICIT OFFERS TO BUY OR
OTHERWISE NEGOTIATE IN RESPECT OF ANY SECURITY (AS DEFINED IN THE ACT) THAT
WOULD BE INTEGRATED WITH THE SALE OF THE SERIES A NOTES TO THE INITIAL
PURCHASERS OR PURSUANT TO EXEMPT RESALES IN A MANNER THAT WOULD REQUIRE THE
REGISTRATION OF ANY SUCH SALE OF THE SERIES A NOTES UNDER THE ACT.
l. NOT TO VOLUNTARILY CLAIM, AND TO ACTIVELY RESIST ANY
ATTEMPTS TO CLAIM, THE BENEFIT OF ANY USURY LAWS AGAINST THE HOLDERS OF ANY
NOTES AND THE RELATED SUBSIDIARY GUARANTEES.
m. TO COMPLY WITH ALL OF ITS AGREEMENTS SET FORTH IN THE
REGISTRATION RIGHTS AGREEMENT.
n. TO USE ITS BEST EFFORTS TO DO AND PERFORM ALL THINGS
REQUIRED OR NECESSARY TO BE DONE AND PERFORMED UNDER THIS AGREEMENT BY IT PRIOR
TO THE CLOSING DATE AND TO SATISFY ALL CONDITIONS PRECEDENT TO THE DELIVERY OF
THE SERIES A NOTES AND THE SUBSIDIARY GUARANTEES.
0. 0. 1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND
THE GUARANTORS.
AS OF THE DATE HEREOF, EACH OF THE COMPANY AND THE GUARANTORS
REPRESENTS AND WARRANTS TO, AND AGREES WITH, THE INITIAL PURCHASERS THAT:
a. THE PRELIMINARY OFFERING MEMORANDUM AND THE OFFERING
MEMORANDUM DO NOT, AND ANY SUPPLEMENT OR AMENDMENT TO THEM WILL NOT, CONTAIN ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED
TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN THE LIGHT
OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING, EXCEPT THAT THE
REPRESENTATIONS AND WARRANTIES
7
<PAGE> 9
CONTAINED IN THIS PARAGRAPH (a) SHALL NOT APPLY TO STATEMENTS IN OR OMISSIONS
FROM THE PRELIMINARY OFFERING MEMORANDUM OR THE OFFERING MEMORANDUM (OR ANY
SUPPLEMENT OR AMENDMENT THERETO) BASED UPON INFORMATION RELATING TO THE INITIAL
PURCHASERS FURNISHED TO THE COMPANY IN WRITING BY THE INITIAL PURCHASERS
EXPRESSLY FOR USE THEREIN. NO STOP ORDER PREVENTING THE USE OF THE PRELIMINARY
OFFERING MEMORANDUM OR THE OFFERING MEMORANDUM, OR ANY AMENDMENT OR SUPPLEMENT
THERETO, OR ANY ORDER ASSERTING THAT ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT ARE SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT, HAS BEEN
ISSUED.
b. EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS BEEN DULY
INCORPORATED, IS VALIDLY EXISTING AS A CORPORATION IN GOOD STANDING UNDER THE
LAWS OF ITS JURISDICTION OF INCORPORATION AND HAS THE CORPORATE POWER AND
AUTHORITY TO CARRY ON ITS BUSINESS AS DESCRIBED IN THE PRELIMINARY OFFERING
MEMORANDUM AND THE OFFERING MEMORANDUM AND TO OWN, LEASE AND OPERATE ITS
PROPERTIES, AND EACH IS DULY QUALIFIED AND IS IN GOOD STANDING AS A FOREIGN
CORPORATION AUTHORIZED TO DO BUSINESS IN EACH JURISDICTION IN WHICH THE NATURE
OF ITS BUSINESS OR ITS OWNERSHIP OR LEASING OF PROPERTY REQUIRES SUCH
QUALIFICATION, EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED WOULD NOT HAVE A
MATERIAL ADVERSE EFFECT ON THE BUSINESS, PROSPECTS, FINANCIAL CONDITION OR
RESULTS OF OPERATIONS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE (A
"MATERIAL ADVERSE EFFECT").
c. ALL OUTSTANDING SHARES OF CAPITAL STOCK OF THE COMPANY HAVE
BEEN DULY AUTHORIZED AND VALIDLY ISSUED AND ARE FULLY PAID, NON-ASSESSABLE AND
NOT SUBJECT TO ANY PREEMPTIVE OR SIMILAR RIGHTS.
d. THE ENTITIES LISTED ON SCHEDULE A HERETO ARE THE ONLY
SUBSIDIARIES, DIRECT OR INDIRECT, OF THE COMPANY. ALL OF THE OUTSTANDING SHARES
OF CAPITAL STOCK OF EACH OF THE COMPANY'S SUBSIDIARIES HAVE BEEN DULY AUTHORIZED
AND VALIDLY ISSUED AND ARE FULLY PAID AND NON-ASSESSABLE, AND ARE OWNED BY THE
COMPANY, DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE SUBSIDIARIES, FREE AND
CLEAR OF ANY SECURITY INTEREST, CLAIM, LIEN, ENCUMBRANCE OR ADVERSE INTEREST OF
ANY NATURE (EACH, A "LIEN").
e. THIS AGREEMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND
DELIVERED BY THE COMPANY AND EACH OF THE GUARANTORS.
f. THE INDENTURE HAS BEEN DULY AUTHORIZED BY THE COMPANY AND
EACH OF THE GUARANTORS AND, ON THE CLOSING DATE, WILL HAVE BEEN VALIDLY EXECUTED
AND DELIVERED BY THE COMPANY AND EACH OF THE GUARANTORS. WHEN THE INDENTURE HAS
BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY AND EACH OF THE GUARANTORS, THE
INDENTURE WILL BE A VALID AND BINDING AGREEMENT OF THE COMPANY AND EACH
GUARANTOR, ENFORCEABLE AGAINST THE COMPANY AND EACH GUARANTOR IN ACCORDANCE WITH
ITS TERMS EXCEPT AS (i) THE ENFORCEABILITY THEREOF MAY BE LIMITED BY BANKRUPTCY,
INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND (ii) RIGHTS
OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE REMEDIES MAY BE LIMITED BY
EQUITABLE PRINCIPLES OF GENERAL APPLICABILITY. ON THE CLOSING DATE, THE
INDENTURE WILL CONFORM IN ALL MATERIAL RESPECTS TO THE REQUIREMENTS OF THE TRUST
INDENTURE ACT OF 1939, AS AMENDED (THE "TIA" OR "TRUST INDENTURE ACT"), AND THE
RULES AND REGULATIONS OF THE COMMISSION APPLICABLE TO AN INDENTURE WHICH IS
QUALIFIED THEREUNDER.
8
<PAGE> 10
g. THE SERIES A NOTES HAVE BEEN DULY AUTHORIZED AND, ON THE
CLOSING DATE, WILL HAVE BEEN VALIDLY EXECUTED AND DELIVERED BY THE COMPANY. WHEN
THE SERIES A NOTES HAVE BEEN ISSUED, EXECUTED AND AUTHENTICATED IN ACCORDANCE
WITH THE PROVISIONS OF THE INDENTURE AND DELIVERED TO AND PAID FOR BY THE
INITIAL PURCHASERS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE SERIES A
NOTES WILL BE ENTITLED TO THE BENEFITS OF THE INDENTURE AND WILL BE VALID AND
BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS
EXCEPT AS (i) THE ENFORCEABILITY THEREOF MAY BE LIMITED BY BANKRUPTCY,
INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND (ii) RIGHTS
OF ACCELERATION AND THE AVAILABILITY OF EQUITABLE REMEDIES MAY BE LIMITED BY
EQUITABLE PRINCIPLES OF GENERAL APPLICABILITY. ON THE CLOSING DATE, THE SERIES A
NOTES WILL CONFORM AS TO LEGAL MATTERS TO THE DESCRIPTION THEREOF CONTAINED IN
THE OFFERING MEMORANDUM.
h. ON THE CLOSING DATE, THE SERIES B NOTES WILL HAVE BEEN DULY
AUTHORIZED BY THE COMPANY. WHEN THE SERIES B NOTES ARE ISSUED, EXECUTED AND
AUTHENTICATED IN ACCORDANCE WITH THE TERMS OF THE EXCHANGE OFFER AND THE
INDENTURE, THE SERIES B NOTES WILL BE ENTITLED TO THE BENEFITS OF THE INDENTURE
AND WILL BE THE VALID AND BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE
AGAINST THE COMPANY IN ACCORDANCE WITH THEIR TERMS, EXCEPT AS (i) THE
ENFORCEABILITY THEREOF MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS
AFFECTING CREDITORS' RIGHTS GENERALLY AND (ii) RIGHTS OF ACCELERATION AND THE
AVAILABILITY OF EQUITABLE REMEDIES MAY BE LIMITED BY EQUITABLE PRINCIPLES OF
GENERAL APPLICABILITY.
i. THE SUBSIDIARY GUARANTEE TO BE ENDORSED ON THE SERIES A
NOTES BY EACH GUARANTOR HAS BEEN DULY AUTHORIZED BY SUCH GUARANTOR AND, ON THE
CLOSING DATE, WILL HAVE BEEN DULY EXECUTED AND DELIVERED BY EACH SUCH GUARANTOR.
WHEN THE SERIES A NOTES HAVE BEEN ISSUED, EXECUTED AND AUTHENTICATED IN
ACCORDANCE WITH THE INDENTURE AND DELIVERED TO AND PAID FOR BY THE INITIAL
PURCHASERS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, THE SUBSIDIARY
GUARANTEE OF EACH GUARANTOR ENDORSED THEREON WILL BE ENTITLED TO THE BENEFITS OF
THE INDENTURE AND WILL BE THE VALID AND BINDING OBLIGATION OF SUCH GUARANTOR,
ENFORCEABLE AGAINST SUCH GUARANTOR IN ACCORDANCE WITH ITS TERMS, EXCEPT AS (i)
THE ENFORCEABILITY THEREOF MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR
LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND (ii) RIGHTS OF ACCELERATION AND
THE AVAILABILITY OF EQUITABLE REMEDIES MAY BE LIMITED BY EQUITABLE PRINCIPLES OF
GENERAL APPLICABILITY. ON THE CLOSING DATE, THE SUBSIDIARY GUARANTEES TO BE
ENDORSED ON THE SERIES A NOTES WILL CONFORM AS TO LEGAL MATTERS TO THE
DESCRIPTION THEREOF CONTAINED IN THE OFFERING MEMORANDUM.
j. THE SUBSIDIARY GUARANTEE TO BE ENDORSED ON THE SERIES B
NOTES BY EACH GUARANTOR HAS BEEN DULY AUTHORIZED BY EACH GUARANTOR AND, WHEN
ISSUED, WILL HAVE BEEN DULY EXECUTED AND DELIVERED BY EACH SUCH GUARANTOR. WHEN
THE SERIES B NOTES HAVE BEEN ISSUED, EXECUTED AND AUTHENTICATED IN ACCORDANCE
WITH THE TERMS OF THE EXCHANGE OFFER AND THE INDENTURE, THE SUBSIDIARY GUARANTEE
OF EACH GUARANTOR ENDORSED THEREON WILL BE ENTITLED TO THE BENEFITS OF THE
INDENTURE AND WILL BE THE VALID AND BINDING OBLIGATION OF SUCH GUARANTOR,
ENFORCEABLE AGAINST SUCH GUARANTOR IN ACCORDANCE WITH ITS TERMS, EXCEPT AS (i)
THE ENFORCEABILITY THEREOF MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR
LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND (ii) RIGHTS OF ACCELERATION AND
THE AVAILABILITY OF EQUITABLE
9
<PAGE> 11
REMEDIES MAY BE LIMITED BY EQUITABLE PRINCIPLES OF GENERAL APPLICABILITY. WHEN
THE SERIES B NOTES ARE ISSUED, AUTHENTICATED AND DELIVERED, THE SUBSIDIARY
GUARANTEES TO BE ENDORSED ON THE SERIES B NOTES WILL CONFORM AS TO LEGAL MATTERS
TO THE DESCRIPTION THEREOF IN THE OFFERING MEMORANDUM.
k. THE REGISTRATION RIGHTS AGREEMENT HAS BEEN DULY AUTHORIZED
BY THE COMPANY AND EACH OF THE GUARANTORS AND, ON THE CLOSING DATE, WILL HAVE
BEEN DULY EXECUTED AND DELIVERED BY THE COMPANY AND EACH OF THE GUARANTORS. WHEN
THE REGISTRATION RIGHTS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED, THE
REGISTRATION RIGHTS AGREEMENT WILL BE A VALID AND BINDING AGREEMENT OF THE
COMPANY AND EACH OF THE GUARANTORS, ENFORCEABLE AGAINST THE COMPANY AND EACH
GUARANTOR IN ACCORDANCE WITH ITS TERMS EXCEPT AS (i) THE ENFORCEABILITY THEREOF
MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS AFFECTING CREDITORS'
RIGHTS GENERALLY AND (ii) RIGHTS OF ACCELERATION AND THE AVAILABILITY OF
EQUITABLE REMEDIES MAY BE LIMITED BY EQUITABLE PRINCIPLES OF GENERAL
APPLICABILITY. ON THE CLOSING DATE, THE REGISTRATION RIGHTS AGREEMENT WILL
CONFORM AS TO LEGAL MATTERS TO THE DESCRIPTION THEREOF IN THE OFFERING
MEMORANDUM.
l. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES IS IN
VIOLATION OF ITS RESPECTIVE CHARTER OR BY-LAWS OR IN DEFAULT IN THE PERFORMANCE
OF ANY OBLIGATION, AGREEMENT, COVENANT OR CONDITION CONTAINED IN ANY INDENTURE,
LOAN AGREEMENT, MORTGAGE, LEASE OR OTHER AGREEMENT OR INSTRUMENT, TO WHICH THE
COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTY IS BOUND, EXCEPT FOR ANY DEFAULTS
UNDER SUCH INDENTURE, LOAN AGREEMENT, MORTGAGE, LEASE OR OTHER AGREEMENT OR
INSTRUMENT THAT COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.
m. THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT
AND THE OTHER OPERATIVE DOCUMENTS BY THE COMPANY AND EACH OF THE GUARANTORS,
COMPLIANCE BY THE COMPANY AND EACH OF THE GUARANTORS WITH ALL PROVISIONS HEREOF
AND THEREOF AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY WILL NOT (i) REQUIRE ANY CONSENT, APPROVAL, AUTHORIZATION OR OTHER ORDER
OF, OR QUALIFICATION WITH, ANY COURT OR GOVERNMENTAL BODY OR AGENCY (EXCEPT SUCH
AS MAY BE REQUIRED UNDER THE SECURITIES OR BLUE SKY LAWS OF THE VARIOUS STATES),
(ii) CONFLICT WITH OR CONSTITUTE A BREACH OF ANY OF THE TERMS OR PROVISIONS OF,
OR A DEFAULT UNDER, (a) THE CHARTER OR BY-LAWS OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES OR (b) ANY INDENTURE, LOAN AGREEMENT, MORTGAGE, LEASE OR OTHER
AGREEMENT OR INSTRUMENT THAT IS MATERIAL TO THE COMPANY AND ITS SUBSIDIARIES,
TAKEN AS A WHOLE, TO WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR
BY WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTY IS
BOUND, (iii) VIOLATE OR CONFLICT WITH ANY APPLICABLE LAW OR ANY RULE,
REGULATION, JUDGMENT, ORDER OR DECREE OF ANY COURT OR ANY GOVERNMENTAL BODY OR
AGENCY HAVING JURISDICTION OVER THE COMPANY, ANY OF ITS SUBSIDIARIES OR THEIR
RESPECTIVE PROPERTY, (iv) RESULT IN THE IMPOSITION OR CREATION OF (OR THE
OBLIGATION TO CREATE OR IMPOSE) A LIEN UNDER, ANY AGREEMENT OR INSTRUMENT TO
WHICH THE COMPANY OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY WHICH THE COMPANY
OR ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTY IS BOUND, OR (v) RESULT
IN THE TERMINATION, SUSPENSION OR REVOCATION OF ANY AUTHORIZATION (AS DEFINED
BELOW) OF THE COMPANY OR ANY OF ITS SUBSIDIARIES RESULT IN ANY OTHER IMPAIRMENT
OF THE
10
<PAGE> 12
RIGHTS OF THE HOLDER OF ANY SUCH AUTHORIZATION, EXCEPT IN THE CASE OF THE
FOREGOING CLAUSES (i), (ii)(B), (iii), (iv) AND (v) FOR SUCH VIOLATIONS OR
DEFAULTS WHICH, SINGLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT.
n. THERE ARE NO LEGAL OR GOVERNMENTAL PROCEEDINGS PENDING OR
TO THE COMPANY'S KNOWLEDGE THREATENED TO WHICH THE COMPANY OR ANY OF ITS
SUBSIDIARIES IS OR TO THE COMPANY'S KNOWLEDGE COULD BE A PARTY OR TO WHICH ANY
OF THEIR RESPECTIVE PROPERTY IS OR TO THE COMPANY'S KNOWLEDGE COULD BE SUBJECT,
WHICH MIGHT RESULT, SINGLY OR IN THE AGGREGATE, IN A MATERIAL ADVERSE EFFECT.
o. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES HAS
VIOLATED ANY FOREIGN, FEDERAL, STATE OR LOCAL LAW OR REGULATION RELATING TO THE
PROTECTION OF HUMAN HEALTH AND SAFETY, THE ENVIRONMENT OR HAZARDOUS OR TOXIC
SUBSTANCES OR WASTES, POLLUTANTS OR CONTAMINANTS ("ENVIRONMENTAL LAWS"), ANY
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR ANY PROVISIONS OF THE FOREIGN CORRUPT PRACTICES ACT OR THE RULES
AND REGULATIONS PROMULGATED THEREUNDER, EXCEPT FOR SUCH VIOLATIONS WHICH, SINGLY
OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.
p. EXCEPT AS SET FORTH IN THE OFFERING MEMORANDUM OR EXCEPT
FOR SUCH VIOLATIONS WHICH, SINGLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, TO THE COMPANY'S KNOWLEDGE,
NEITHER THE COMPANY NOR ANY OF THE GUARANTORS HAS VIOLATED ANY FEDERAL, STATE OR
LOCAL STATUTES, RULES OR REGULATIONS GOVERNING THE OWNERSHIP OR OPERATION OF
PHYSICIAN-STAFFING COMPANIES OR ANY OTHER HEALTH CARE RELATED STATUTES, RULES OR
REGULATIONS. EXCEPT FOR SUCH VIOLATIONS WHICH, SINGLY OR IN THE AGGREGATE, COULD
NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, TO THE
COMPANY'S KNOWLEDGE, NEITHER THE COMPANY NOR ANY OF THE GUARANTORS HAS ENGAGED
IN A PATTERN OR PRACTICE OF MAKING PAYMENTS INTENDED TO OBTAIN OR INDUCE PATIENT
REFERRALS FOR ANY OF THEIR OPERATIONS.
q. THERE ARE NO COSTS OR LIABILITIES ASSOCIATED WITH
ENVIRONMENTAL LAWS (INCLUDING, WITHOUT LIMITATION, ANY CAPITAL OR OPERATING
EXPENDITURES REQUIRED FOR CLEAN-UP, CLOSURE OF PROPERTIES OR COMPLIANCE WITH
ENVIRONMENTAL LAWS OR ANY AUTHORIZATION, ANY RELATED CONSTRAINTS ON OPERATING
ACTIVITIES AND ANY POTENTIAL LIABILITIES TO THIRD PARTIES) WHICH, SINGLY OR IN
THE AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
r. EACH OF THE COMPANY AND ITS SUBSIDIARIES HAS SUCH PERMITS,
LICENSES, CONSENTS, EXEMPTIONS, FRANCHISES, AUTHORIZATIONS AND OTHER APPROVALS
(EACH, AN "AUTHORIZATION") OF, AND HAS MADE ALL FILINGS WITH AND NOTICES TO, ALL
GOVERNMENTAL OR REGULATORY AUTHORITIES AND SELF-REGULATORY ORGANIZATIONS AND ALL
COURTS AND OTHER TRIBUNALS, INCLUDING WITHOUT LIMITATION, UNDER ANY APPLICABLE
ENVIRONMENTAL LAWS, AS ARE NECESSARY TO OWN, LEASE, LICENSE AND OPERATE ITS
RESPECTIVE PROPERTIES AND TO CONDUCT ITS BUSINESS, EXCEPT WHERE THE FAILURE TO
HAVE ANY SUCH AUTHORIZATION OR TO MAKE ANY SUCH FILING OR NOTICE COULD
11
<PAGE> 13
NOT REASONABLY BE EXPECTED TO, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT. EACH SUCH AUTHORIZATION IS VALID AND IN FULL FORCE AND EFFECT
AND EACH OF THE COMPANY AND ITS SUBSIDIARIES IS IN COMPLIANCE WITH ALL THE TERMS
AND CONDITIONS THEREOF AND WITH THE RULES AND REGULATIONS OF THE AUTHORITIES AND
GOVERNING BODIES HAVING JURISDICTION WITH RESPECT THERETO; AND NO EVENT HAS
OCCURRED (INCLUDING, WITHOUT LIMITATION, THE RECEIPT OF ANY NOTICE FROM ANY
AUTHORITY OR GOVERNING BODY) WHICH ALLOWS OR, AFTER NOTICE OR LAPSE OF TIME OR
BOTH, WOULD ALLOW, REVOCATION, SUSPENSION OR TERMINATION OF ANY SUCH
AUTHORIZATION OR RESULTS OR, AFTER NOTICE OR LAPSE OF TIME OR BOTH, WOULD RESULT
IN ANY OTHER IMPAIRMENT OF THE RIGHTS OF THE HOLDER OF ANY SUCH AUTHORIZATION;
EXCEPT WHERE SUCH FAILURE TO BE VALID AND IN FULL FORCE AND EFFECT OR TO BE IN
COMPLIANCE, THE OCCURRENCE OF ANY SUCH EVENT COULD NOT REASONABLY BE EXPECTED
TO, SINGLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.
s. THE ACCOUNTANTS, ERNST & YOUNG LLP, THAT HAVE CERTIFIED THE
FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED IN THE PRELIMINARY OFFERING
MEMORANDUM AND THE OFFERING MEMORANDUM ARE INDEPENDENT PUBLIC ACCOUNTANTS WITH
RESPECT TO THE COMPANY AND THE GUARANTORS, AS REQUIRED BY THE ACT AND THE
EXCHANGE ACT. THE HISTORICAL FINANCIAL STATEMENTS, TOGETHER WITH RELATED NOTES,
SET FORTH IN THE PRELIMINARY OFFERING MEMORANDUM AND THE OFFERING MEMORANDUM
COMPLY AS TO FORM IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS APPLICABLE TO
REGISTRATION STATEMENTS ON FORM S-1 UNDER THE ACT.
t. THE HISTORICAL FINANCIAL STATEMENTS, TOGETHER WITH RELATED
NOTES FORMING PART OF THE OFFERING MEMORANDUM (AND ANY AMENDMENT OR SUPPLEMENT
THERETO), PRESENT FAIRLY THE CONSOLIDATED FINANCIAL POSITION, RESULTS OF
OPERATIONS AND CHANGES IN FINANCIAL POSITION OF THE COMPANY AND ITS SUBSIDIARIES
ON THE BASIS STATED IN THE OFFERING MEMORANDUM AT THE RESPECTIVE DATES OR FOR
THE RESPECTIVE PERIODS TO WHICH THEY APPLY; SUCH STATEMENTS AND RELATED NOTES
HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
CONSISTENTLY APPLIED THROUGHOUT THE PERIODS INVOLVED, EXCEPT AS DISCLOSED
THEREIN; AND THE OTHER FINANCIAL AND STATISTICAL INFORMATION AND DATA SET FORTH
IN THE OFFERING MEMORANDUM (AND ANY AMENDMENT OR SUPPLEMENT THERETO) ARE, IN ALL
MATERIAL RESPECTS, ACCURATELY PRESENTED AND PREPARED ON A BASIS CONSISTENT WITH
SUCH FINANCIAL STATEMENTS AND THE BOOKS AND RECORDS OF THE COMPANY.
u. THE PRO FORMA FINANCIAL STATEMENTS AND THE RELATED NOTES
INCLUDED IN THE PRELIMINARY OFFERING MEMORANDUM AND THE OFFERING MEMORANDUM HAVE
BEEN PREPARED ON A BASIS CONSISTENT WITH THE HISTORICAL FINANCIAL STATEMENTS OF
THE COMPANY AND ITS SUBSIDIARIES AND GIVE EFFECT TO ASSUMPTIONS USED IN THE
PREPARATION THEREOF ON A REASONABLE BASIS AND IN GOOD FAITH AND PRESENT FAIRLY
THE PROPOSED TRANSACTIONS CONTEMPLATED BY THE PRELIMINARY OFFERING MEMORANDUM
AND THE OFFERING MEMORANDUM; AND SUCH PRO FORMA FINANCIAL STATEMENTS COMPLY AS
TO FORM IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS APPLICABLE TO PRO FORMA
FINANCIAL STATEMENTS INCLUDED IN REGISTRATION STATEMENTS ON FORM S-1 UNDER THE
ACT. THE OTHER PRO FORMA FINANCIAL AND STATISTICAL INFORMATION AND DATA INCLUDED
IN THE OFFERING MEMORANDUM ARE, IN ALL MATERIAL RESPECTS, ACCURATELY PRESENTED
AND PREPARED ON A BASIS CONSISTENT WITH THE PRO FORMA FINANCIAL STATEMENTS.
12
<PAGE> 14
v. THE COMPANY IS NOT AND, AFTER GIVING EFFECT TO THE OFFERING
AND SALE OF THE SERIES A NOTES AND THE APPLICATION OF THE NET PROCEEDS THEREOF
AS DESCRIBED IN THE OFFERING MEMORANDUM, WILL NOT BE, AN "INVESTMENT COMPANY,"
AS SUCH TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED.
w. EXCEPT AS SET FORTH IN THE OFFERING MEMORANDUM, THERE ARE
NO CONTRACTS, AGREEMENTS OR UNDERSTANDINGS BETWEEN THE COMPANY AND ANY PERSON
GRANTING SUCH PERSON THE RIGHT TO REQUIRE THE COMPANY TO FILE A REGISTRATION
STATEMENT UNDER THE ACT WITH RESPECT TO ANY SECURITIES OF THE COMPANY OR TO
REQUIRE THE COMPANY TO INCLUDE SUCH SECURITIES WITH THE NOTES AND SUBSIDIARY
GUARANTEES REGISTERED PURSUANT TO ANY REGISTRATION STATEMENT.
x. NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES NOR ANY
AGENT THEREOF ACTING ON THE BEHALF OF THEM HAS TAKEN, AND NONE OF THEM WILL
TAKE, ANY ACTION THAT MIGHT CAUSE THIS AGREEMENT OR THE ISSUANCE OR SALE OF THE
SERIES A NOTES TO VIOLATE REGULATION G (12 C.F.R. PART 207), REGULATION T (12
C.F.R. PART 220), REGULATION U (12 C.F.R. PART 221) OR REGULATION X (12 C.F.R.
PART 224) OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
y. NO "NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION"
AS SUCH TERM IS DEFINED FOR PURPOSES OF RULE 436(G)(2) UNDER THE ACT (i) HAS
IMPOSED (OR HAS INFORMED THE COMPANY OR ANY GUARANTOR THAT IT IS CONSIDERING
IMPOSING) ANY CONDITION (FINANCIAL OR OTHERWISE) ON THE COMPANY'S OR ANY
GUARANTOR'S RETAINING ANY RATING ASSIGNED TO THE COMPANY OR ANY GUARANTOR, ANY
SECURITIES OF THE COMPANY OR ANY GUARANTOR OR (ii) HAS INDICATED TO THE COMPANY
OR ANY GUARANTOR THAT IT IS CONSIDERING (a) THE DOWNGRADING, SUSPENSION, OR
WITHDRAWAL OF, OR ANY REVIEW FOR A POSSIBLE CHANGE THAT DOES NOT INDICATE THE
DIRECTION OF THE POSSIBLE CHANGE IN, ANY RATING SO ASSIGNED OR (b) ANY CHANGE IN
THE OUTLOOK FOR ANY RATING OF THE COMPANY OR ANY GUARANTOR OR ANY SECURITIES OF
THE COMPANY OR ANY GUARANTOR.
z. SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN
IN THE OFFERING MEMORANDUM OTHER THAN AS SET FORTH IN THE OFFERING MEMORANDUM
(EXCLUSIVE OF ANY AMENDMENTS OR SUPPLEMENTS THERETO SUBSEQUENT TO THE DATE OF
THIS AGREEMENT), (i) THERE HAS NOT OCCURRED ANY MATERIAL ADVERSE CHANGE OR ANY
DEVELOPMENT INVOLVING A PROSPECTIVE MATERIAL ADVERSE CHANGE IN THE CONDITION,
FINANCIAL OR OTHERWISE, OR THE EARNINGS, BUSINESS, MANAGEMENT OR OPERATIONS OF
THE COMPANY AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, (ii) THERE HAS NOT BEEN ANY
MATERIAL ADVERSE CHANGE OR ANY DEVELOPMENT INVOLVING A PROSPECTIVE MATERIAL
ADVERSE CHANGE IN THE CAPITAL STOCK OR IN THE LONG-TERM DEBT OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES AND (iii) NEITHER THE COMPANY NOR ANY OF ITS
SUBSIDIARIES HAS INCURRED ANY MATERIAL LIABILITY OR OBLIGATION, DIRECT OR
CONTINGENT.
aa. EACH OF THE PRELIMINARY OFFERING MEMORANDUM AND THE
OFFERING MEMORANDUM, AS OF ITS DATE, CONTAINS ALL THE INFORMATION SPECIFIED IN,
AND MEETING THE REQUIREMENTS OF, RULE 144A(d)(4) UNDER THE ACT.
13
<PAGE> 15
bb. WHEN THE SERIES A NOTES AND THE SUBSIDIARY GUARANTEES ARE
ISSUED AND DELIVERED PURSUANT TO THIS AGREEMENT, NEITHER THE SERIES A NOTES NOR
THE SUBSIDIARY GUARANTEES WILL BE OF THE SAME CLASS (WITHIN THE MEANING OF RULE
144A UNDER THE ACT) AS ANY SECURITY OF THE COMPANY OR THE GUARANTORS THAT IS
LISTED ON A NATIONAL SECURITIES EXCHANGE REGISTERED UNDER SECTION 6 OF THE
EXCHANGE ACT OR THAT IS QUOTED IN A UNITED STATES AUTOMATED INTER-DEALER
QUOTATION SYSTEM.
cc. NO FORM OF GENERAL SOLICITATION OR GENERAL ADVERTISING (AS
DEFINED IN REGULATION D UNDER THE ACT) WAS USED BY THE COMPANY, THE GUARANTORS
OR ANY OF THEIR RESPECTIVE REPRESENTATIVES (OTHER THAN THE INITIAL PURCHASERS,
AS TO WHOM THE COMPANY AND THE GUARANTORS MAKE NO REPRESENTATION) IN CONNECTION
WITH THE OFFER AND SALE OF THE SERIES A NOTES CONTEMPLATED HEREBY, INCLUDING,
BUT NOT LIMITED TO, ARTICLES, NOTICES OR OTHER COMMUNICATIONS PUBLISHED IN ANY
NEWSPAPER, MAGAZINE, OR SIMILAR MEDIUM OR BROADCAST OVER TELEVISION OR RADIO, OR
ANY SEMINAR OR MEETING WHOSE ATTENDEES HAVE BEEN INVITED BY ANY GENERAL
SOLICITATION OR GENERAL ADVERTISING. NO SECURITIES OF THE SAME CLASS AS THE
SERIES A NOTES HAVE BEEN ISSUED AND SOLD BY THE COMPANY WITHIN THE SIX-MONTH
PERIOD IMMEDIATELY PRIOR TO THE DATE HEREOF.
dd. PRIOR TO THE EFFECTIVENESS OF ANY REGISTRATION STATEMENT,
THE INDENTURE IS NOT REQUIRED TO BE QUALIFIED UNDER THE TIA.
ee. NO REGISTRATION UNDER THE ACT OF THE SERIES A NOTES OR THE
SUBSIDIARY GUARANTEES IS REQUIRED FOR THE SALE OF THE SERIES A NOTES AND THE
SUBSIDIARY GUARANTEES TO THE INITIAL PURCHASERS AS CONTEMPLATED HEREBY OR FOR
THE EXEMPT RESALES ASSUMING THE ACCURACY OF THE INITIAL PURCHASERS'
REPRESENTATIONS AND WARRANTIES AND AGREEMENTS SET FORTH IN SECTION 7 HEREOF.
ff. TO THE BEST OF THE COMPANY'S KNOWLEDGE NEITHER (A) THE
COMPANY, (B) ANY SUBSIDIARY OF THE COMPANY, NOR (C) ANY AFFILIATED ENTITY,
INCLUDING WITHOUT LIMITATION ANY PROFESSIONAL CORPORATION, PARTNERSHIP OR
ASSOCIATION, WITH WHICH THE COMPANY OR ANY SUBSIDIARY CONTRACTS AND THROUGH
WHICH SERVICES ARE PROVIDED (EACH A "GROUP MEMBER" OR COLLECTIVELY, THE "GROUP
MEMBERS") HAS RECEIVED ANY INDICATION OR NOTICE, WRITTEN OR ORAL, FROM
REPRESENTATIVES OF THE MEDICARE, MEDICAID OR CHAMPUS PROGRAMS (COLLECTIVELY, THE
"PROGRAMS") OR ANY OTHER FEDERAL OR STATE AGENCY THAT ANY OF THE GROUP MEMBERS'
AGREEMENTS OR ARRANGEMENTS ARE CONTRARY TO ANY FEDERAL OR STATE FRAUD AND ABUSE
LAWS OR REGULATIONS OR FEDERAL OR STATE SELF-REFERRAL LAWS OR REGULATIONS.
gg. ANY GROUP MEMBERS PROVIDING ITEMS AND SERVICES ARE
ELIGIBLE TO PARTICIPATE IN THE PROGRAMS.
hh. THE GROUP MEMBERS EMPLOY PERSONNEL FAMILIAR WITH THE
VARIOUS LAWS AND REGULATIONS GOVERNING REIMBURSEMENT UNDER THE PROGRAMS AND
CONDUCT PERIODIC AUDITS OF THE GROUP MEMBERS' BILLING AND COLLECTION PROCEDURES.
TO THE BEST OF THE COMPANY'S KNOWLEDGE, (i) EACH GROUP MEMBER IS IN SUBSTANTIAL
COMPLIANCE WITH THOSE LAWS AND REGULATIONS; AND (ii) EXCEPT AS OTHERWISE
INDICATED IN THE OFFERING MEMORANDUM, NO GROUP MEMBER HAS RECEIVED ANY
INDICATION OR NOTICE, WRITTEN OR ORAL, FROM REPRESENTATIVES OF
14
<PAGE> 16
THE PROGRAMS OR ANY OTHER FEDERAL OR STATE AGENCY THAT ANY OF THE GROUP MEMBERS'
BILLING PROCEDURES WILL BE AUDITED.
ii. TO THE BEST OF THE COMPANY'S KNOWLEDGE, THE GROUP MEMBERS
ARE IN COMPLIANCE WITH THE LAWS AND REGULATIONS PERTAINING TO (i) PHYSICIAN
LICENSURE AND (ii) PHYSICIAN FEE-SPLITTING IN ALL STATES IN WHICH THEY ARE
ORGANIZED AND OTHERWISE AUTHORIZED TO CONDUCT BUSINESS, AND ARE NOT ENGAGED,
EITHER DIRECTLY OR INDIRECTLY, IN EITHER THE UNAUTHORIZED OR UNLICENSED PRACTICE
OF MEDICINE OR IN PROHIBITED PHYSICIAN FEE-SPLITTING ARRANGEMENTS.
jj. TO THE BEST OF THE COMPANY'S KNOWLEDGE, THE GROUP MEMBERS
ARE IN SUBSTANTIAL COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE CORPORATE
COMPLIANCE PROGRAM OF MEDPARTNERS, INC. TO BE ASSUMED BY THE COMPANY, EXCEPT
WHERE SUCH FAILURE TO BE IN COMPLIANCE, SINGLY OR IN THE AGGREGATE, COULD NOT
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
kk. TO THE BEST OF THE COMPANY'S KNOWLEDGE, NO GROUP MEMBER,
OR ANY INDIVIDUAL OR BUSINESS ENTITY WITH WHICH A GROUP MEMBER CONTRACTS AND
THROUGH WHICH SERVICES ARE PROVIDED, HAS RECEIVED ANY INDICATION OR NOTICE,
WRITTEN OR ORAL, FROM REPRESENTATIVES OF THE UNITED STATES DEPARTMENT OF HEALTH
AND HUMAN SERVICES OR ANY OTHER FEDERAL OR STATE AGENCY OR ACCREDITING BODY
REGARDING ANY MATTERS, INCLUDING BUT NOT LIMITED TO THE REVOCATION, SUSPENSION,
TERMINATION OR MODIFICATION OF ANY APPLICABLE LICENSES, CERTIFICATIONS,
ACCREDITATIONS OR SUPPLIER NUMBERS, WHICH HAS HAD OR COULD HAVE WITH THE PASSAGE
OF TIME A MATERIAL ADVERSE EFFECT.
ll. FOR PURPOSES OF FINANCIAL REPORTING, THE COMPANY NEED NOT
MEET THE REQUIREMENTS OF FASB STATEMENT NO. 94 AND APB OPINION NO. 16, AS
INTERPRETED BY FASB EMERGING ISSUES TASK FORCE ISSUE NO. 97-2 ("EITF 97-2").
NOTWITHSTANDING THE FOREGOING, THE COMPANY MEETS THE REQUIREMENTS AS SET FORTH
IN EITF 97-2 WITH RESPECT TO ALL GROUP MEMBERS WHOSE FINANCIAL STATEMENTS ARE
CONSOLIDATED WITH THOSE OF THE COMPANY.
mm. THE AGREEMENTS LISTED ON SCHEDULE D HERETO REPRESENT ALL
OF THE MATERIAL AGREEMENTS OF THE COMPANY THAT WOULD BE REQUIRED TO BE FILED AS
EXHIBITS IF THE OFFERING WERE TO BE MADE PURSUANT TO A REGISTRATION STATEMENT ON
FORM S-1.
nn. EACH CERTIFICATE SIGNED BY ANY OFFICER OF THE COMPANY OR
ANY GUARANTOR AND DELIVERED TO THE INITIAL PURCHASERS OR COUNSEL FOR THE INITIAL
PURCHASERS SHALL BE DEEMED TO BE A REPRESENTATION AND WARRANTY BY THE COMPANY OR
SUCH GUARANTOR TO THE INITIAL PURCHASERS AS TO THE MATTERS COVERED THEREBY.
THE COMPANY ACKNOWLEDGES THAT THE INITIAL PURCHASERS AND, FOR PURPOSES
OF THE OPINIONS TO BE DELIVERED TO THE INITIAL PURCHASERS PURSUANT TO SECTION 9
HEREOF, COUNSEL TO THE COMPANY AND THE GUARANTORS AND COUNSEL TO THE INITIAL
PURCHASERS WILL RELY UPON THE ACCURACY AND TRUTH OF THE FOREGOING
REPRESENTATIONS AND HEREBY CONSENTS TO SUCH RELIANCE.
15
<PAGE> 17
0. 0. 1. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES.
EACH OF THE INITIAL PURCHASERS, SEVERALLY AND NOT JOINTLY, REPRESENTS
AND WARRANTS TO THE COMPANY AND THE GUARANTORS, AND AGREES THAT:
a. SUCH INITIAL PURCHASER IS EITHER A QIB OR AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a) (1), (2), (3) OR (7) UNDER THE ACT (AN
"ACCREDITED INSTITUTION"), IN EITHER CASE, WITH SUCH KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS AS IS NECESSARY IN ORDER TO EVALUATE THE MERITS
AND RISKS OF AN INVESTMENT IN THE SERIES A NOTES.
b. SUCH INITIAL PURCHASER (A) IS NOT ACQUIRING THE SERIES A
NOTES WITH A VIEW TO ANY DISTRIBUTION THEREOF OR WITH ANY PRESENT INTENTION OF
OFFERING OR SELLING ANY OF THE SERIES A NOTES IN A TRANSACTION THAT WOULD
VIOLATE THE ACT OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) WILL BE REOFFERING AND RESELLING THE
SERIES A NOTES ONLY TO QIBS IN RELIANCE ON THE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PROVIDED BY RULE 144A.
c. SUCH INITIAL PURCHASER AGREES THAT NO FORM OF GENERAL
SOLICITATION OR GENERAL ADVERTISING (WITHIN THE MEANING OF REGULATION D UNDER
THE ACT) HAS BEEN OR WILL BE USED BY SUCH INITIAL PURCHASER OR ANY OF ITS
REPRESENTATIVES IN CONNECTION WITH THE OFFER AND SALE OF THE SERIES A NOTES
PURSUANT HERETO, INCLUDING, BUT NOT LIMITED TO, ARTICLES, NOTICES OR OTHER
COMMUNICATIONS PUBLISHED IN ANY NEWSPAPER, MAGAZINE OR SIMILAR MEDIUM OR
BROADCAST OVER TELEVISION OR RADIO, OR ANY SEMINAR OR MEETING WHOSE ATTENDEES
HAVE BEEN INVITED BY ANY GENERAL SOLICITATION OR GENERAL ADVERTISING.
d. SUCH INITIAL PURCHASER AGREES THAT, IN CONNECTION WITH
EXEMPT RESALES, SUCH INITIAL PURCHASER WILL SOLICIT OFFERS TO BUY THE SERIES A
NOTES ONLY FROM, AND WILL OFFER TO SELL THE SERIES A NOTES ONLY TO, ELIGIBLE
PURCHASERS. EACH OF THE INITIAL PURCHASERS FURTHER AGREES THAT IT WILL OFFER TO
SELL THE SERIES A NOTES ONLY TO, AND WILL SOLICIT OFFERS TO BUY THE SERIES A
NOTES ONLY FROM ELIGIBLE PURCHASERS THAT THE INITIAL PURCHASERS REASONABLY
BELIEVE ARE QIBs THAT AGREE THAT (i) THE SERIES A NOTES PURCHASED BY THEM MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE TIME PERIOD REFERRED TO
UNDER RULE 144(K) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE
ACT, IF APPLICABLE) UNDER THE ACT, AS IN EFFECT ON THE DATE OF THE TRANSFER OF
SUCH SERIES A NOTES, ONLY (I) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A UNDER THE ACT, (III) IN AN OFFSHORE TRANSACTION (AS DEFINED IN RULE
902 UNDER THE ACT) MEETING THE REQUIREMENTS OF RULE 904 OF THE ACT, (IV) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE ACT, (V) TO AN
ACCREDITED INSTITUTION THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
REGISTRATION OF TRANSFER OF SUCH SERIES A NOTES (THE FORM OF WHICH IS
SUBSTANTIALLY THE SAME AS EXHIBIT A TO THE INDENTURE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SERIES A NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS
IN COMPLIANCE WITH THE ACT, (VI) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT (AND BASED
16
<PAGE> 18
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (VII) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (II) THEY WILL DELIVER TO EACH PERSON TO WHOM SUCH
SERIES A NOTES OR AN INTEREST THEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THE FOREGOING.
SUCH INITIAL PURCHASER ACKNOWLEDGES THAT THE COMPANY AND THE GUARANTORS
AND, FOR PURPOSES OF THE OPINIONS TO BE DELIVERED TO EACH INITIAL PURCHASER
PURSUANT TO SECTION 9 HEREOF, COUNSEL TO THE COMPANY AND THE GUARANTORS AND
COUNSEL TO THE INITIAL PURCHASERS WILL RELY UPON THE ACCURACY AND TRUTH OF THE
FOREGOING REPRESENTATIONS AND SUCH INITIAL PURCHASER HEREBY CONSENTS TO SUCH
RELIANCE.
0. 0. 1. INDEMNIFICATION.
a. THE COMPANY AND EACH OF THE GUARANTORS AGREE, JOINTLY AND
SEVERALLY, TO INDEMNIFY AND HOLD HARMLESS THE INITIAL PURCHASERS, THEIR
DIRECTORS, THEIR OFFICERS AND EACH PERSON, IF ANY, WHO CONTROLS SUCH INITIAL
PURCHASER WITHIN THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE
EXCHANGE ACT, FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES
AND JUDGMENTS (INCLUDING, WITHOUT LIMITATION, ANY LEGAL OR OTHER EXPENSES
INCURRED IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY MATTER, INCLUDING ANY
ACTION, THAT COULD GIVE RISE TO ANY SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
JUDGMENTS) CAUSED BY ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A
MATERIAL FACT CONTAINED IN THE OFFERING MEMORANDUM (OR ANY AMENDMENT OR
SUPPLEMENT THERETO), THE PRELIMINARY OFFERING MEMORANDUM OR ANY RULE 144A
INFORMATION PROVIDED BY THE COMPANY OR ANY GUARANTOR TO ANY HOLDER OR
PROSPECTIVE PURCHASER OF SERIES A NOTES PURSUANT TO SECTION 5(f) OR CAUSED BY
ANY OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT MISLEADING,
EXCEPT INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR JUDGMENTS ARE
CAUSED BY ANY SUCH UNTRUE STATEMENT OR OMISSION OR ALLEGED UNTRUE STATEMENT OR
OMISSION BASED UPON INFORMATION RELATING TO AN INITIAL PURCHASER FURNISHED IN
WRITING TO THE COMPANY BY SUCH INITIAL PURCHASER; PROVIDED, HOWEVER, THAT THE
FOREGOING INDEMNITY AGREEMENT WITH RESPECT TO ANY PRELIMINARY OFFERING
MEMORANDUM SHALL NOT INURE TO THE BENEFIT OF ANY INITIAL PURCHASER IF THEY
FAILED TO DELIVER A FINAL OFFERING MEMORANDUM, AS THEN AMENDED OR SUPPLEMENTED,
(SO LONG AS THE FINAL OFFERING MEMORANDUM AND ANY AMENDMENT OR SUPPLEMENT
THERETO WAS PROVIDED BY THE COMPANY TO THE SEVERAL INITIAL PURCHASERS IN THE
REQUISITE QUANTITY AND ON A TIMELY BASIS TO PERMIT PROPER DELIVERY ON OR PRIOR
TO THE CLOSING DATE) TO THE PERSON ASSERTING ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR JUDGMENTS CAUSED BY ANY UNTRUE STATEMENT OR ALLEGED UNTRUE
STATEMENT OF A MATERIAL FACT CONTAINED IN ANY PRELIMINARY OFFERING MEMORANDUM,
OR CAUSED BY ANY OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING, IF SUCH MATERIAL MISSTATEMENT OR OMISSION OR ALLEGED MATERIAL
MISSTATEMENT OR OMISSION WAS CURED IN THE FINAL OFFERING MEMORANDUM, AS SO
AMENDED OR SUPPLEMENTED.
17
<PAGE> 19
b. EACH OF THE INITIAL PURCHASERS, SEVERALLY AND NOT JOINTLY,
AGREES TO INDEMNIFY AND HOLD HARMLESS THE COMPANY AND THE GUARANTORS, AND THEIR
RESPECTIVE DIRECTORS AND OFFICERS AND EACH PERSON, IF ANY, WHO CONTROLS (WITHIN
THE MEANING OF SECTION 15 OF THE ACT OR SECTION 20 OF THE EXCHANGE ACT) THE
COMPANY OR THE GUARANTORS, TO THE SAME EXTENT AS THE FOREGOING INDEMNITY FROM
THE COMPANY AND THE GUARANTORS TO THE INITIAL PURCHASER BUT ONLY WITH REFERENCE
TO INFORMATION RELATING TO SUCH INITIAL PURCHASER FURNISHED IN WRITING TO THE
COMPANY BY SUCH INITIAL PURCHASER EXPRESSLY FOR USE IN THE PRELIMINARY OFFERING
MEMORANDUM OR THE OFFERING MEMORANDUM, AND NOT WITH RESPECT TO THE INFORMATION
PROVIDED BY ANY OTHER INITIAL PURCHASER.
c. IN CASE ANY ACTION SHALL BE COMMENCED INVOLVING ANY PERSON
IN RESPECT OF WHICH INDEMNITY MAY BE SOUGHT PURSUANT TO SECTION 8(a) OR 8(b)
(THE "INDEMNIFIED PARTY"), THE INDEMNIFIED PARTY SHALL PROMPTLY NOTIFY THE
PERSON AGAINST WHOM SUCH INDEMNITY MAY BE SOUGHT (THE "INDEMNIFYING PARTY") IN
WRITING AND THE INDEMNIFYING PARTY SHALL ASSUME THE DEFENSE OF SUCH ACTION,
INCLUDING THE EMPLOYMENT OF COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED
PARTY AND THE PAYMENT OF ALL FEES AND EXPENSES OF SUCH COUNSEL, AS INCURRED
(EXCEPT THAT IN THE CASE OF ANY ACTION IN RESPECT OF WHICH INDEMNITY MAY BE
SOUGHT PURSUANT TO BOTH SECTIONS 8(a) AND 8(b), THE INITIAL PURCHASERS SHALL NOT
BE REQUIRED TO ASSUME THE DEFENSE OF SUCH ACTION PURSUANT TO THIS SECTION 8(c),
BUT MAY EMPLOY SEPARATE COUNSEL AND PARTICIPATE IN THE DEFENSE THEREOF, BUT THE
FEES AND EXPENSES OF SUCH COUNSEL, EXCEPT AS PROVIDED BELOW, SHALL BE AT THE
EXPENSE OF THE INITIAL PURCHASERS). ANY INDEMNIFIED PARTY SHALL HAVE THE RIGHT
TO EMPLOY SEPARATE COUNSEL IN ANY SUCH ACTION AND PARTICIPATE IN THE DEFENSE
THEREOF, BUT THE FEES AND EXPENSES OF SUCH COUNSEL SHALL BE AT THE EXPENSE OF
THE INDEMNIFIED PARTY UNLESS (i) THE EMPLOYMENT OF SUCH COUNSEL SHALL HAVE BEEN
SPECIFICALLY AUTHORIZED IN WRITING BY THE INDEMNIFYING PARTY, (ii) THE
INDEMNIFYING PARTY SHALL HAVE FAILED TO ASSUME THE DEFENSE OF SUCH ACTION OR
EMPLOY COUNSEL REASONABLY SATISFACTORY TO THE INDEMNIFIED PARTY OR (iii) THE
NAMED PARTIES TO ANY SUCH ACTION (INCLUDING ANY IMPLEADED PARTIES) INCLUDE BOTH
THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY, AND THE INDEMNIFIED PARTY
SHALL HAVE BEEN ADVISED BY SUCH COUNSEL THAT THERE MAY BE ONE OR MORE LEGAL
DEFENSES AVAILABLE TO IT WHICH ARE DIFFERENT FROM OR ADDITIONAL TO THOSE
AVAILABLE TO THE INDEMNIFYING PARTY (IN WHICH CASE THE INDEMNIFYING PARTY SHALL
NOT HAVE THE RIGHT TO ASSUME THE DEFENSE OF SUCH ACTION ON BEHALF OF THE
INDEMNIFIED PARTY). IN ANY SUCH CASE, THE INDEMNIFYING PARTY SHALL NOT, IN
CONNECTION WITH ANY ONE ACTION OR SEPARATE BUT SUBSTANTIALLY SIMILAR OR RELATED
ACTIONS IN THE SAME JURISDICTION ARISING OUT OF THE SAME GENERAL ALLEGATIONS OR
CIRCUMSTANCES, BE LIABLE FOR THE FEES AND EXPENSES OF MORE THAN ONE SEPARATE
FIRM OF ATTORNEYS (IN ADDITION TO ANY LOCAL COUNSEL) FOR ALL INDEMNIFIED PARTIES
AND ALL SUCH FEES AND EXPENSES SHALL BE REIMBURSED AS THEY ARE INCURRED. SUCH
FIRM SHALL BE DESIGNATED IN WRITING BY DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION, IN THE CASE OF THE PARTIES INDEMNIFIED PURSUANT TO SECTION 8(a),
AND BY THE COMPANY, IN THE CASE OF PARTIES INDEMNIFIED PURSUANT TO SECTION 8(b).
THE INDEMNIFYING PARTY SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTY
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND JUDGMENTS
BY REASON OF ANY SETTLEMENT OF ANY ACTION (i) EFFECTED WITH ITS WRITTEN CONSENT
OR (ii) EFFECTED WITHOUT ITS WRITTEN CONSENT IF THE SETTLEMENT IS ENTERED INTO
MORE THAN TWENTY BUSINESS DAYS AFTER THE INDEMNIFYING PARTY SHALL HAVE RECEIVED
A REQUEST FROM THE INDEMNIFIED PARTY FOR REIMBURSEMENT FOR THE FEES AND EXPENSES
OF COUNSEL (IN ANY CASE WHERE SUCH FEES AND EXPENSES
18
<PAGE> 20
ARE AT THE EXPENSE OF THE INDEMNIFYING PARTY) AND, PRIOR TO THE DATE OF SUCH
SETTLEMENT, THE INDEMNIFYING PARTY SHALL HAVE FAILED TO COMPLY WITH SUCH
REIMBURSEMENT REQUEST. NO INDEMNIFYING PARTY SHALL, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE INDEMNIFIED PARTY, EFFECT ANY SETTLEMENT OR COMPROMISE OF, OR
CONSENT TO THE ENTRY OF JUDGMENT WITH RESPECT TO, ANY PENDING OR THREATENED
ACTION IN RESPECT OF WHICH THE INDEMNIFIED PARTY IS OR COULD HAVE BEEN A PARTY
AND INDEMNITY OR CONTRIBUTION MAY BE OR COULD HAVE BEEN SOUGHT HEREUNDER BY THE
INDEMNIFIED PARTY, UNLESS SUCH SETTLEMENT, COMPROMISE OR JUDGMENT (i) INCLUDES
AN UNCONDITIONAL RELEASE OF THE INDEMNIFIED PARTY FROM ALL LIABILITY ON CLAIMS
THAT ARE OR COULD HAVE BEEN THE SUBJECT MATTER OF SUCH ACTION AND (ii) DOES NOT
INCLUDE A STATEMENT AS TO OR AN ADMISSION OF FAULT, CULPABILITY OR A FAILURE TO
ACT, BY OR ON BEHALF OF THE INDEMNIFIED PARTY.
d. TO THE EXTENT THE INDEMNIFICATION PROVIDED FOR IN THIS
SECTION 8 IS UNAVAILABLE TO AN INDEMNIFIED PARTY OR INSUFFICIENT IN RESPECT OF
ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR JUDGMENTS REFERRED TO THEREIN, THEN
EACH INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH INDEMNIFIED PARTY, SHALL
CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNIFIED PARTY AS A RESULT
OF SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES AND JUDGMENTS (i) IN SUCH
PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE BENEFITS RECEIVED BY THE
COMPANY AND THE GUARANTORS, ON THE ONE HAND, AND THE INITIAL PURCHASERS ON THE
OTHER HAND FROM THE OFFERING OF THE SERIES A NOTES OR (ii) IF THE ALLOCATION
PROVIDED BY CLAUSE 8(d)(i) ABOVE IS NOT PERMITTED BY APPLICABLE LAW, IN SUCH
PROPORTION AS IS APPROPRIATE TO REFLECT NOT ONLY THE RELATIVE BENEFITS REFERRED
TO IN CLAUSE 8(d)(i) ABOVE BUT ALSO THE RELATIVE FAULT OF THE COMPANY AND THE
GUARANTORS, ON THE ONE HAND, AND THE INITIAL PURCHASERS, ON THE OTHER HAND, IN
CONNECTION WITH THE STATEMENTS OR OMISSIONS WHICH RESULTED IN SUCH LOSSES,
CLAIMS, DAMAGES, LIABILITIES OR JUDGMENTS, AS WELL AS ANY OTHER RELEVANT
EQUITABLE CONSIDERATIONS. THE RELATIVE BENEFITS RECEIVED BY THE COMPANY AND THE
GUARANTORS, ON THE ONE HAND AND THE INITIAL PURCHASERS, ON THE OTHER HAND, SHALL
BE DEEMED TO BE IN THE SAME PROPORTION AS THE TOTAL NET PROCEEDS FROM THE
OFFERING OF THE SERIES A NOTES (AFTER UNDERWRITING DISCOUNTS AND COMMISSIONS,
BUT BEFORE DEDUCTING EXPENSES) RECEIVED BY THE COMPANY, AND THE TOTAL DISCOUNTS
AND COMMISSIONS RECEIVED BY THE INITIAL PURCHASER BEAR TO THE TOTAL PRICE TO
INVESTORS OF THE SERIES A NOTES. THE RELATIVE FAULT OF THE COMPANY AND THE
GUARANTORS, ON THE ONE HAND, AND THE INITIAL PURCHASERS, ON THE OTHER HAND,
SHALL BE DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, WHETHER THE UNTRUE OR
ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT OR THE OMISSION OR ALLEGED OMISSION
TO STATE A MATERIAL FACT RELATES TO INFORMATION SUPPLIED BY THE COMPANY OR THE
GUARANTORS, ON THE ONE HAND, OR THE INITIAL PURCHASERS, ON THE OTHER HAND, AND
THE PARTIES' RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY
TO CORRECT OR PREVENT SUCH STATEMENT OR OMISSION.
THE COMPANY AND THE GUARANTORS AND THE INITIAL PURCHASERS AGREE THAT IT
WOULD NOT BE JUST AND EQUITABLE IF CONTRIBUTION PURSUANT TO THIS SECTION 8(d)
WERE DETERMINED BY PRO RATA ALLOCATION (EVEN IF THE INITIAL PURCHASERS WERE
TREATED AS ONE ENTITY FOR SUCH PURPOSE) OR BY ANY OTHER METHOD OF ALLOCATION
WHICH DOES NOT TAKE ACCOUNT OF THE EQUITABLE CONSIDERATIONS REFERRED TO IN THE
IMMEDIATELY PRECEDING PARAGRAPH. THE AMOUNT PAID OR PAYABLE BY AN INDEMNIFIED
PARTY AS A RESULT OF THE LOSSES, CLAIMS, DAMAGES, LIABILITIES OR
19
<PAGE> 21
JUDGMENTS REFERRED TO IN THE IMMEDIATELY PRECEDING PARAGRAPH SHALL BE DEEMED TO
INCLUDE, SUBJECT TO THE LIMITATIONS SET FORTH ABOVE, ANY REASONABLE LEGAL OR
OTHER REASONABLE EXPENSES INCURRED BY SUCH INDEMNIFIED PARTY IN CONNECTION WITH
INVESTIGATING OR DEFENDING ANY MATTER, INCLUDING ANY ACTION, THAT COULD HAVE
GIVEN RISE TO SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR JUDGMENTS.
NOTWITHSTANDING THE PROVISIONS OF THIS SECTION 8, THE INITIAL PURCHASERS SHALL
NOT BE REQUIRED TO CONTRIBUTE ANY AMOUNT IN EXCESS OF THE AMOUNT BY WHICH THE
TOTAL DISCOUNTS AND COMMISSIONS RECEIVED BY SUCH INITIAL PURCHASERS EXCEEDS THE
AMOUNT OF ANY DAMAGES WHICH THE INITIAL PURCHASERS HAVE OTHERWISE BEEN REQUIRED
TO PAY BY REASON OF SUCH UNTRUE OR ALLEGED UNTRUE STATEMENT OR OMISSION OR
ALLEGED OMISSION. NO PERSON GUILTY OF FRAUDULENT MISREPRESENTATION (WITHIN THE
MEANING OF SECTION 11(f) OF THE ACT) SHALL BE ENTITLED TO CONTRIBUTION FROM ANY
PERSON WHO WAS NOT GUILTY OF SUCH FRAUDULENT MISREPRESENTATION. THE INITIAL
PURCHASERS' OBLIGATIONS TO CONTRIBUTE PURSUANT TO THIS SECTION 8(d) ARE SEVERAL
IN PROPORTION TO THE RESPECTIVE PRINCIPAL AMOUNT OF SERIES A NOTES PURCHASED BY
EACH OF THE INITIAL PURCHASERS HEREUNDER AND NOT JOINT.
e. THE REMEDIES PROVIDED FOR IN THIS SECTION 8 ARE NOT
EXCLUSIVE AND SHALL NOT LIMIT ANY RIGHTS OR REMEDIES WHICH MAY OTHERWISE BE
AVAILABLE TO ANY INDEMNIFIED PARTY AT LAW OR IN EQUITY.
0. 0. 1. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS.
THE OBLIGATIONS OF THE INITIAL PURCHASERS TO PURCHASE THE SERIES A
NOTES UNDER THIS AGREEMENT ARE SUBJECT TO THE SATISFACTION OF EACH OF THE
FOLLOWING CONDITIONS:
a. ALL THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
THE GUARANTORS CONTAINED IN THIS AGREEMENT SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS, EXCEPT WHERE ALREADY QUALIFIED BY MATERIALITY, IN WHICH CASE
SUCH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE IN ALL RESPECTS ON THE CLOSING
DATE WITH THE SAME FORCE AND EFFECT AS IF MADE ON AND AS OF THE CLOSING DATE.
b. ON OR AFTER THE DATE HEREOF, (i) THERE SHALL NOT HAVE
OCCURRED ANY DOWNGRADING, SUSPENSION OR WITHDRAWAL OF, NOR SHALL ANY NOTICE HAVE
BEEN GIVEN OF ANY POTENTIAL OR INTENDED DOWNGRADING, SUSPENSION OR WITHDRAWAL
OF, OR OF ANY REVIEW (OR OF ANY POTENTIAL OR INTENDED REVIEW) FOR A POSSIBLE
CHANGE THAT DOES NOT INDICATE THE DIRECTION OF THE POSSIBLE CHANGE IN, ANY
RATING OF THE COMPANY OR ANY GUARANTOR OR ANY SECURITIES OF THE COMPANY OR ANY
GUARANTOR (INCLUDING, WITHOUT LIMITATION, THE PLACING OF ANY OF THE FOREGOING
RATINGS ON CREDIT WATCH WITH NEGATIVE OR DEVELOPING IMPLICATIONS OR UNDER REVIEW
WITH AN UNCERTAIN DIRECTION) BY ANY "NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATION" AS SUCH TERM IS DEFINED FOR PURPOSES OF RULE 436(g)(2) UNDER THE
ACT, (ii) THERE SHALL NOT HAVE OCCURRED ANY CHANGE, NOR SHALL ANY NOTICE HAVE
BEEN GIVEN OF ANY POTENTIAL OR INTENDED CHANGE, IN THE OUTLOOK FOR ANY RATING OF
THE COMPANY OR ANY GUARANTOR OR ANY SECURITIES OF THE COMPANY OR ANY GUARANTOR
BY ANY SUCH RATING ORGANIZATION AND (iii) NO SUCH RATING ORGANIZATION SHALL HAVE
GIVEN NOTICE THAT IT HAS ASSIGNED (OR IS CONSIDERING ASSIGNING) A LOWER RATING
TO THE NOTES THAN THAT ON WHICH THE NOTES WERE MARKETED.
c. SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN
IN THE OFFERING MEMORANDUM OTHER THAN AS SET FORTH IN THE OFFERING MEMORANDUM
(EXCLUSIVE OF ANY
20
<PAGE> 22
AMENDMENTS OR SUPPLEMENTS THERETO SUBSEQUENT TO THE DATE OF THIS AGREEMENT), (i)
THERE SHALL NOT HAVE OCCURRED ANY CHANGE OR ANY DEVELOPMENT IN THE CONDITION,
FINANCIAL OR OTHERWISE, OR THE EARNINGS, BUSINESS, PROSPECTS, MANAGEMENT OR
OPERATIONS OF THE COMPANY, AND ITS SUBSIDIARIES TAKEN AS A WHOLE, (ii) THERE
SHALL NOT HAVE BEEN ANY CHANGE OR ANY DEVELOPMENT INVOLVING A PROSPECTIVE CHANGE
IN THE CAPITAL STOCK OR IN THE LONG-TERM DEBT OF THE COMPANY OR ANY OF ITS
SUBSIDIARIES, EXCEPT AS DISCLOSED OR OTHERWISE CONTEMPLATED IN THE OFFERING
MEMORANDUM AND (iii) NEITHER THE COMPANY NOR ANY OF ITS SUBSIDIARIES SHALL HAVE
INCURRED ANY LIABILITY OR OBLIGATION, DIRECT OR CONTINGENT, THE EFFECT OF WHICH,
IN ANY SUCH CASE DESCRIBED IN CLAUSE 9(c)(i), 9(c)(ii) OR 9(c)(iii), IN YOUR
JUDGMENT, IS MATERIAL AND ADVERSE AND, IN YOUR JUDGMENT, MAKES IT IMPRACTICABLE
TO MARKET THE SERIES A NOTES ON THE TERMS AND IN THE MANNER CONTEMPLATED IN THE
OFFERING MEMORANDUM.
d. YOU SHALL HAVE RECEIVED ON THE CLOSING DATE A CERTIFICATE
DATED THE CLOSING DATE, SIGNED BY THE PRESIDENT AND THE CHIEF FINANCIAL OFFICER
OF THE COMPANY AND EACH OF THE GUARANTORS, CONFIRMING THE MATTERS SET FORTH IN
SECTIONS 9(a), 9(b) AND 9(c) AND STATING THAT EACH OF THE COMPANY AND THE
GUARANTORS HAS COMPLIED WITH ALL THE AGREEMENTS AND SATISFIED ALL OF THE
CONDITIONS HEREIN CONTAINED AND REQUIRED TO BE COMPLIED WITH OR SATISFIED ON OR
PRIOR TO THE CLOSING DATE.
e. YOU SHALL HAVE RECEIVED ON THE CLOSING DATE AN OPINION
(SATISFACTORY TO YOU AND COUNSEL FOR THE INITIAL PURCHASERS), DATED THE CLOSING
DATE, OF KIRKLAND & ELLIS, NEW YORK, NEW YORK, SPECIAL COUNSEL FOR THE COMPANY
AND THE GUARANTORS, TO THE EFFECT THAT:
A. ALL OF THE OUTSTANDING SHARES OF THE COMPANY'S
COMMON STOCK HAVE BEEN DULY AUTHORIZED, VALIDLY ISSUED AND ARE
FULLY PAID AND NON-ASSESSABLE. WE HAVE ASSUMED FOR PURPOSE OF
THIS OPINION THAT IN THE CASE OF EACH SHARE ISSUANCE AND
TRANSFER, THE SHARES WERE REPRESENTED BY A SHARE CERTIFICATE
WHICH COMPLIED WITH ALL APPLICABLE REQUIREMENTS IMPOSED BY
LAW, BY THE COMPANY'S CERTIFICATE OF INCORPORATION AND BYLAWS
AND BY ANY APPLICABLE RESOLUTIONS BY THE COMPANY'S BOARD OF
DIRECTORS AND THAT SUCH CERTIFICATE WAS PROPERLY SIGNED AND
AUTHENTICATED;
B. ASSUMING DUE AUTHORIZATION, EXECUTION AND DELIVERY
BY THE INITIAL PURCHASERS, THE COMPANY AND THE GUARANTORS, THE
REGISTRATION RIGHTS AGREEMENT CONSTITUTES A VALID AND LEGALLY
BINDING OBLIGATION OF THE COMPANY AND EACH GUARANTOR,
ENFORCEABLE IN ACCORDANCE WITH ITS TERMS, SUBJECT TO
APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM,
FRAUDULENT TRANSFER AND SIMILAR LAWS AFFECTING CREDITORS'
RIGHTS GENERALLY AND TO GENERAL PRINCIPLES OF EQUITY
(REGARDLESS OF WHETHER ENFORCEMENT IS SOUGHT IN A PROCEEDING
AT LAW OR IN EQUITY);
21
<PAGE> 23
C. ASSUMING DUE AUTHORIZATION, EXECUTION AND
DELIVERY, TO THE EXTENT APPLICABLE, BY THE TRUSTEE, THE
INDENTURE CONSTITUTES AND THE NOTES WHEN AUTHENTICATED IN
ACCORDANCE WITH THE TERMS OF THE INDENTURE AND DELIVERED TO
AND PAID FOR BY THE INITIAL PURCHASERS IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT, WILL CONSTITUTE VALID AND LEGALLY
BINDING OBLIGATIONS OF THE COMPANY, ENFORCEABLE IN ACCORDANCE
WITH THEIR TERMS, SUBJECT TO APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM, FRAUDULENT TRANSFER
AND SIMILAR LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND TO
GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER
ENFORCEMENT IS SOUGHT IN A PROCEEDING AT LAW OR IN EQUITY);
D. ASSUMING THE SUBSIDIARY GUARANTEES HAVE BEEN DULY
AUTHORIZED, EXECUTED AND DELIVERED AND, WHEN THE SERIES A
NOTES ARE EXECUTED AND AUTHENTICATED IN ACCORDANCE WITH THE
PROVISIONS OF THE INDENTURE AND DELIVERED TO AND PAID FOR BY
THE INITIAL PURCHASERS IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT, THE SUBSIDIARY GUARANTEES ENDORSED THEREON WILL BE
ENTITLED TO THE BENEFITS OF THE INDENTURE AND WILL BE VALID
AND BINDING OBLIGATIONS OF THE GUARANTORS, ENFORCEABLE IN
ACCORDANCE WITH THEIR TERMS, SUBJECT TO APPLICABLE BANKRUPTCY,
INSOLVENCY, REORGANIZATION, MORATORIUM, FRAUDULENT TRANSFER
AND SIMILAR LAWS AFFECTING CREDITORS' RIGHTS GENERALLY AND TO
GENERAL PRINCIPLES OF EQUITY (REGARDLESS OF WHETHER
ENFORCEMENT IS SOUGHT IN A PROCEEDING AT LAW OR IN EQUITY);
E. THE EXECUTION AND DELIVERY BY THE COMPANY AND THE
GUARANTORS OF THIS AGREEMENT, THE REGISTRATION RIGHTS
AGREEMENT AND THE INDENTURE AND THE PERFORMANCE OF THEIR
AGREEMENTS THEREIN AND THE CONSUMMATION OF THE SALE OF THE
NOTES TO YOU IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT DO
NOT (i) CONSTITUTE A VIOLATION BY THE COMPANY OF ANY
APPLICABLE PROVISION OF ANY LAW, STATUTE OR REGULATION (EXCEPT
THAT WE EXPRESS NO OPINION IN THIS PARAGRAPH AS TO COMPLIANCE
WITH ANY DISCLOSURE REQUIREMENT OR ANY PROHIBITION AGAINST
FRAUD OR MISREPRESENTATION OR AS TO WHETHER PERFORMANCE OF THE
INDEMNIFICATION AND CONTRIBUTION PROVISIONS IN THIS AGREEMENT
WOULD BE PERMITTED) OR (ii) BREACH OR RESULT IN A DEFAULT
UNDER, ANY EXISTING OBLIGATION OF THE COMPANY UNDER ANY
AGREEMENTS LISTED ON SCHEDULE D HEREOF (PROVIDED THAT WE
EXPRESS NO OPINION AS TO COMPLIANCE WITH ANY FINANCIAL TEST OR
CROSS DEFAULT PROVISION IN ANY SUCH AGREEMENT); THE EXECUTION
AND DELIVERY BY THE COMPANY AND THE GUARANTORS OF THIS
AGREEMENT, REGISTRATION RIGHTS AGREEMENT AND THE INDENTURE AND
THE PERFORMANCE OF ITS AGREEMENT THEREIN AND THE CONSUMMATION
OF THE SALE OF THE NOTES TO YOU IN ACCORDANCE WITH THIS
AGREEMENT DO NOT, BASED ON OUR REVIEW OF THE COMPANY'S
CERTIFICATE OF INCORPORATION AND BYLAWS, VIOLATE SUCH
CERTIFICATE OF INCORPORATION OR BYLAWS;
22
<PAGE> 24
F. TO SUCH COUNSEL'S KNOWLEDGE, THE COMPANY WAS NOT
REQUIRED TO OBTAIN ANY CONSENT, APPROVAL, AUTHORIZATION OR
ORDER OF ANY GOVERNMENTAL AGENCY FOR THE ISSUANCE, DELIVERY
AND SALE OF THE NOTES BEING ISSUED AND SOLD BY IT UNDER THIS
AGREEMENT AND THE INDENTURE EXCEPT FOR ANY SUCH CONSENT,
APPROVAL, AUTHORIZATION OR ORDER WHICH MAY BE REQUIRED UNDER
THE SO-CALLED "BLUE SKY" OR SECURITIES LAWS OF ANY STATES (AS
TO WHICH SUCH COUNSEL EXPRESSES NO OPINION OR ADVICE);
G. TO SUCH COUNSEL'S KNOWLEDGE, THE COMPANY WAS NOT
REQUIRED TO OBTAIN ANY CONSENT, APPROVAL, AUTHORIZATION OR
ORDER OF ANY GOVERNMENTAL AGENCY FOR THE ISSUANCE, DELIVERY
AND SALE OF THE SUBSIDIARY GUARANTEES BEING ISSUED AND SOLD BY
IT UNDER THIS AGREEMENT AND THE INDENTURE EXCEPT FOR ANY SUCH
CONSENT, APPROVAL, AUTHORIZATION OR ORDER WHICH MAY BE
REQUIRED UNDER THE SO-CALLED "BLUE SKY" OR SECURITIES LAWS OF
ANY STATES (AS TO WHICH SUCH COUNSEL EXPRESSES NO OPINION OR
ADVICE);
H. TO SUCH COUNSEL'S KNOWLEDGE, THERE IS NO ACTION,
SUIT, PROCEEDING OR INVESTIGATION BEFORE OR BY ANY COURT OR
GOVERNMENTAL AGENCY OR BODY, DOMESTIC OR FOREIGN, PENDING OR
THREATENED AGAINST, THE COMPANY OR ANY OF ITS SUBSIDIARIES
THAT (i) HAS CAUSED SUCH COUNSEL TO CONCLUDE THAT SUCH ACTION,
SUIT, PROCEEDING OR INVESTIGATION S REQUIRED TO BE DESCRIBED
IN THE OFFERING MEMORANDUM BUT IS NOT SO DESCRIBED OR (ii)
WOULD BE REASONABLY LIKELY TO ADVERSELY AFFECT THE
CONSUMMATION OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR THE INDENTURE, INCLUDING, WITHOUT LIMITATION THE
ISSUANCE OF THE NOTES;
I. THE COMPANY IS NOT AN "INVESTMENT COMPANY" AS
DEFINED IN THE INVESTMENT COMPANY ACT OF 1940;
J. IT IS NOT NECESSARY IN CONNECTION WITH (i) THE
OFFER, SALE AND DELIVERY OF THE NOTES TO THE INITIAL
PURCHASERS PURSUANT TO THIS AGREEMENT OR (ii) THE EXEMPT
RESALES BY THE INITIAL PURCHASERS IN THE MANNER CONTEMPLATED
IN THE OFFERING MEMORANDUM TO REGISTER THE NOTES UNDER THE ACT
OR TO QUALIFY AN INDENTURE IN RESPECT THEREOF UNDER THE TIA;
K. THE NOTES AND THE INDENTURE CONFORM IN ALL
MATERIAL RESPECTS TO THE DESCRIPTIONS THEREOF CONTAINED IN THE
OFFERING MEMORANDUM; AND
L. NO FACTS HAVE COME TO THE ATTENTION OF SUCH
COUNSEL THAT HAVE CAUSED SUCH COUNSEL TO BELIEVE THAT, AS OF
THE DATE OF THE OFFERING MEMORANDUM OR AS OF THE CLOSING DATE,
THE OFFERING MEMORANDUM, AS
23
<PAGE> 25
AMENDED OR SUPPLEMENTED, IF APPLICABLE (EXCEPT FOR THE
FINANCIAL STATEMENTS AND OTHER FINANCIAL DATA INCLUDED
THEREIN, AS TO WHICH SUCH COUNSEL NEED NOT EXPRESS ANY BELIEF)
CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO
STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE
STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER
WHICH THEY WERE MADE, NOT MISLEADING.
THE OPINION OF KIRKLAND & ELLIS DESCRIBED IN SECTION 9(e) ABOVE SHALL
BE RENDERED TO YOU AT THE REQUEST OF THE COMPANY AND THE GUARANTORS AND SHALL SO
STATE THEREIN.
a. YOU SHALL HAVE RECEIVED ON THE CLOSING DATE AN OPINION
(SATISFACTORY TO YOU AND COUNSEL FOR THE INITIAL PURCHASERS), DATED THE CLOSING
DATE, OF LONDON & AMBURN, P.C., LOCAL COUNSEL FOR THE COMPANY IN THE STATE OF
TENNESSEE, TO THE EFFECT THAT:
M. THE COMPANY IS A CORPORATION VALIDLY EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF ITS JURISDICTION OF
INCORPORATION;
N. EACH OF THE GUARANTORS ORGANIZED UNDER THE LAWS OF
THE STATE OF TENNESSEE (THE "TENNESSEE GUARANTORS") IS A
CORPORATION VALIDLY EXISTING AND IN GOOD STANDING UNDER THE
LAWS OF ITS JURISDICTION OF INCORPORATION;
O. EACH OF THIS AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY
THE COMPANY AND EACH OF THE TENNESSEE GUARANTORS;
P. THE INDENTURE HAS BEEN DULY AUTHORIZED, EXECUTED,
AUTHENTICATED, ISSUED AND DELIVERED BY THE COMPANY AND EACH OF
THE TENNESSEE GUARANTORS;
Q. THE NOTES HAVE BEEN DULY AUTHORIZED, EXECUTED,
AUTHENTICATED, ISSUED AND DELIVERED BY THE COMPANY;
R. THE SUBSIDIARY GUARANTEES HAVE BEEN DULY
AUTHORIZED BY EACH OF THE TENNESSEE GUARANTORS; AND
S. THE SERIES B NOTES HAVE BEEN DULY AUTHORIZED BY
THE COMPANY.
THE OPINION OF LONDON & AMBURN, P.C. DESCRIBED IN SECTION 9(F) ABOVE
SHALL BE RENDERED TO YOU AT THE REQUEST OF THE COMPANY AND EACH OF THE TENNESSEE
GUARANTORS AND SHALL SO STATE THEREIN.
a. YOU SHALL HAVE RECEIVED ON THE CLOSING DATE AN OPINION
(SATISFACTORY TO YOU AND COUNSEL FOR THE INITIAL PURCHASERS), DATED THE CLOSING
DATE, OF LOCAL
24
<PAGE> 26
COUNSEL FOR EACH OF THE GUARANTORS IN THE STATES OF OHIO, WEST VIRGINIA,
DELAWARE, VIRGINIA, NORTH CAROLINA, NEW JERSEY, WASHINGTON, ALABAMA,
PENNSYLVANIA, FLORIDA AND CALIFORNIA, TO THE EFFECT THAT:
T. EACH GUARANTOR IS A CORPORATION VALIDLY EXISTING
AND IN GOOD STANDING UNDER THE LAWS OF ITS RESPECTIVE
JURISDICTION OF INCORPORATION;
U. EACH OF THIS AGREEMENT AND THE REGISTRATION RIGHTS
AGREEMENT HAS BEEN DULY AUTHORIZED, EXECUTED AND DELIVERED BY
EACH OF THE GUARANTORS;
V. THE INDENTURE HAS BEEN DULY AUTHORIZED, EXECUTED,
AUTHENTICATED, ISSUED AND DELIVERED BY EACH OF THE GUARANTORS;
AND
W. THE SUBSIDIARY GUARANTEES HAVE BEEN DULY
AUTHORIZED BY EACH OF THE GUARANTORS.
THE OPINIONS DESCRIBED IN SECTION 9(g) ABOVE SHALL BE RENDERED TO YOU
AT THE REQUEST OF EACH OF THE GUARANTORS AND SHALL SO STATE THEREIN.
a. THE INITIAL PURCHASERS SHALL HAVE RECEIVED ON THE CLOSING
DATE AN OPINION, DATED THE CLOSING DATE, OF LATHAM & WATKINS, COUNSEL FOR THE
INITIAL PURCHASERS, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE INITIAL
PURCHASERS.
b. THE INITIAL PURCHASERS SHALL HAVE RECEIVED, AT THE TIME
THIS AGREEMENT IS EXECUTED AND AT THE CLOSING DATE, LETTERS DATED THE DATE
HEREOF OR THE CLOSING DATE, AS THE CASE MAY BE, IN FORM AND SUBSTANCE
SATISFACTORY TO THE INITIAL PURCHASERS FROM ERNST & YOUNG LLP, INDEPENDENT
PUBLIC ACCOUNTANTS, CONTAINING THE INFORMATION AND STATEMENTS OF THE TYPE
ORDINARILY INCLUDED IN ACCOUNTANTS' "COMFORT LETTERS" TO THE INITIAL PURCHASERS
WITH RESPECT TO THE FINANCIAL STATEMENTS AND CERTAIN FINANCIAL INFORMATION
CONTAINED IN THE OFFERING MEMORANDUM.
c. THE SERIES A NOTES SHALL HAVE BEEN APPROVED BY THE NASD FOR
TRADING AND DULY LISTED IN PORTAL.
d. THE INITIAL PURCHASERS SHALL HAVE RECEIVED A COUNTERPART,
CONFORMED AS EXECUTED, OF THE INDENTURE WHICH SHALL HAVE BEEN ENTERED INTO BY
THE COMPANY, THE GUARANTORS AND THE TRUSTEE.
e. THE COMPANY AND THE GUARANTORS SHALL HAVE EXECUTED THE
REGISTRATION RIGHTS AGREEMENT AND THE INITIAL PURCHASERS SHALL HAVE RECEIVED AN
ORIGINAL COPY THEREOF, DULY EXECUTED BY THE COMPANY AND THE GUARANTORS.
25
<PAGE> 27
f. THE SENIOR CREDIT FACILITIES (AS DEFINED IN THE INDENTURE)
SHALL HAVE BEEN EXECUTED BY THE PARTIES THERETO AND, ON THE CLOSING DATE, THE
CLOSING OF THE SENIOR CREDIT FACILITIES (INCLUDING, WITHOUT LIMITATION, THE
BORROWING OF ALL TERM LOANS THEREUNDER) SHALL HAVE BEEN CONSUMMATED.
g. ALL OF THE CONDITIONS PRECEDENT TO THE RECAPITALIZATION
AGREEMENT, DATED AS OF JANUARY 25, 1999 AMONG THE COMPANY, PACIFIC PHYSICIAN
SERVICES, INC., MEDPARTNERS, INC. AND TEAM HEALTH HOLDINGS, L.L.C. SHALL HAVE
BEEN SATISFIED OR WAIVED AND THE RECAPITALIZATION OF THE COMPANY CONTEMPLATED
THEREBY SHALL HAVE BEEN CONSUMMATED.
h. NEITHER THE COMPANY NOR THE GUARANTORS SHALL HAVE FAILED AT
OR PRIOR TO THE CLOSING DATE TO PERFORM OR COMPLY WITH ANY OF THE AGREEMENTS
HEREIN CONTAINED AND REQUIRED TO BE PERFORMED OR COMPLIED WITH BY THE COMPANY OR
THE GUARANTORS, AS THE CASE MAY BE, AT OR PRIOR TO THE CLOSING DATE.
0. 0. 1. EFFECTIVENESS OF AGREEMENT AND TERMINATION.
THIS AGREEMENT SHALL BECOME EFFECTIVE UPON THE EXECUTION AND DELIVERY
OF THIS AGREEMENT BY THE PARTIES HERETO.
THIS AGREEMENT MAY BE TERMINATED AT ANY TIME ON OR PRIOR TO THE CLOSING
DATE BY THE INITIAL PURCHASERS BY WRITTEN NOTICE TO THE COMPANY IF ANY OF THE
FOLLOWING HAS OCCURRED: (i) ANY OUTBREAK OR ESCALATION OF HOSTILITIES OR OTHER
NATIONAL OR INTERNATIONAL CALAMITY OR CRISIS OR CHANGE IN ECONOMIC CONDITIONS OR
IN THE FINANCIAL MARKETS OF THE UNITED STATES OR ELSEWHERE THAT, IN THE INITIAL
PURCHASERS' JUDGMENT, IS MATERIAL AND ADVERSE AND, IN THE INITIAL PURCHASERS'
JUDGMENT, MAKES IT IMPRACTICABLE TO MARKET THE SERIES A NOTES ON THE TERMS AND
IN THE MANNER CONTEMPLATED IN THE OFFERING MEMORANDUM, (ii) THE SUSPENSION OR
MATERIAL LIMITATION OF TRADING IN SECURITIES OR OTHER INSTRUMENTS ON THE NEW
YORK STOCK EXCHANGE, THE AMERICAN STOCK EXCHANGE, THE CHICAGO BOARD OF OPTIONS
EXCHANGE, THE CHICAGO MERCANTILE EXCHANGE, THE CHICAGO BOARD OF TRADE OR THE
NASDAQ NATIONAL MARKET OR LIMITATION ON PRICES FOR SECURITIES OR OTHER
INSTRUMENTS ON ANY SUCH EXCHANGE OR THE NASDAQ NATIONAL MARKET, (iii) THE
SUSPENSION OF TRADING OF ANY SECURITIES OF THE COMPANY OR ANY GUARANTOR ON ANY
EXCHANGE OR IN THE OVER-THE-COUNTER MARKET, (iv) THE ENACTMENT, PUBLICATION,
DECREE OR OTHER PROMULGATION OF ANY FEDERAL OR STATE STATUTE, REGULATION, RULE
OR ORDER OF ANY COURT OR OTHER GOVERNMENTAL AUTHORITY WHICH IN YOUR OPINION
MATERIALLY AND ADVERSELY AFFECTS, OR WILL MATERIALLY AND ADVERSELY AFFECT, THE
BUSINESS, PROSPECTS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS OF THE COMPANY
AND ITS SUBSIDIARIES, TAKEN AS A WHOLE, (v) THE DECLARATION OF A BANKING
MORATORIUM BY EITHER FEDERAL OR NEW YORK STATE AUTHORITIES OR (vi) THE TAKING OF
ANY ACTION BY ANY FEDERAL, STATE OR LOCAL GOVERNMENT OR AGENCY IN RESPECT OF ITS
MONETARY OR FISCAL AFFAIRS WHICH IN YOUR OPINION HAS A MATERIAL ADVERSE EFFECT
ON THE FINANCIAL MARKETS IN THE UNITED STATES.
IF ON THE CLOSING DATE ANY ONE OR MORE OF THE INITIAL PURCHASERS SHALL
FAIL OR REFUSE TO PURCHASE THE SERIES A NOTES WHICH IT OR THEY HAVE AGREED TO
PURCHASE HEREUNDER ON SUCH DATE AND THE AGGREGATE PRINCIPAL AMOUNT OF THE SERIES
A NOTES WHICH SUCH DEFAULTING INITIAL PURCHASER OR INITIAL PURCHASERS, AS THE
CASE MAY BE, AGREED BUT FAILED TO OR REFUSED TO PURCHASE IS NOT MORE THAN
ONE-TENTH OF THE AGGREGATE PRINCIPAL AMOUNT OF THE SERIES A NOTES
26
<PAGE> 28
TO BE PURCHASED ON SUCH DATE BY ALL INITIAL PURCHASERS, EACH NON-DEFAULTING
INITIAL PURCHASER SHALL BE OBLIGATED SEVERALLY, IN THE PROPORTION WHICH THE
PRINCIPAL AMOUNT OF THE SERIES A NOTES SET FORTH OPPOSITE ITS NAME IN SCHEDULE C
BEARS TO THE AGGREGATE PRINCIPAL AMOUNT OF THE SERIES A NOTES WHICH ALL THE
NON-DEFAULTING INITIAL PURCHASERS, AS THE CASE MAY BE, HAVE AGREED TO PURCHASE,
OR IN SUCH OTHER PROPORTION AS YOU MAY SPECIFY, TO PURCHASE THE SERIES A NOTES
WHICH SUCH DEFAULTING INITIAL PURCHASER OR INITIAL PURCHASERS, AS THE CASE MAY
BE, AGREED BUT FAILED OR REFUSED TO PURCHASE ON SUCH DATE; PROVIDED THAT IN NO
EVENT SHALL THE AGGREGATE PRINCIPAL AMOUNT OF THE SERIES A NOTES WHICH ANY
INITIAL PURCHASER HAS AGREED TO PURCHASE PURSUANT TO SECTION 2 HEREOF BE
INCREASED PURSUANT TO THIS SECTION 10 BY AN AMOUNT IN EXCESS OF ONE-NINTH OF
SUCH PRINCIPAL AMOUNT OF THE SERIES A NOTES WITHOUT THE WRITTEN CONSENT OF SUCH
INITIAL PURCHASER. IF ON THE CLOSING DATE ANY INITIAL PURCHASER OR INITIAL
PURCHASERS SHALL FAIL OR REFUSE TO PURCHASE THE SERIES A NOTES AND THE AGGREGATE
PRINCIPAL AMOUNT OF THE SERIES A NOTES WITH RESPECT TO WHICH SUCH DEFAULT OCCURS
IS MORE THAN ONE-TENTH OF THE AGGREGATE PRINCIPAL AMOUNT OF THE SERIES A NOTES
TO BE PURCHASED BY ALL INITIAL PURCHASERS AND ARRANGEMENTS SATISFACTORY TO THE
INITIAL PURCHASERS AND THE COMPANY FOR PURCHASE OF SUCH THE SERIES A NOTES ARE
NOT MADE WITHIN 48 HOURS AFTER SUCH DEFAULT, THIS AGREEMENT WILL TERMINATE
WITHOUT LIABILITY ON THE PART OF ANY NON-DEFAULTING INITIAL PURCHASER AND THE
COMPANY AND GUARANTORS. IN ANY SUCH CASE WHICH DOES NOT RESULT IN TERMINATION OF
THIS AGREEMENT, EITHER YOU OR THE COMPANY SHALL HAVE THE RIGHT TO POSTPONE THE
CLOSING DATE, BUT IN NO EVENT FOR LONGER THAN SEVEN DAYS, IN ORDER THAT THE
REQUIRED CHANGES, IF ANY, IN THE OFFERING MEMORANDUM OR ANY OTHER DOCUMENTS OR
ARRANGEMENTS MAY BE EFFECTED. ANY ACTION TAKEN UNDER THIS PARAGRAPH SHALL NOT
RELIEVE ANY DEFAULTING INITIAL PURCHASER FROM LIABILITY IN RESPECT OF ANY
DEFAULT OF ANY SUCH INITIAL PURCHASER UNDER THIS AGREEMENT.
0. 0. 2. INITIAL PURCHASERS' INFORMATION.
THE COMPANY, THE GUARANTORS AND THE INITIAL PURCHASERS SEVERALLY
ACKNOWLEDGE AND AGREE FOR ALL PURPOSES UNDER THIS AGREEMENT THAT THE STATEMENTS
WITH RESPECT TO THE OFFERING OF THE NOTES SET FORTH IN THE STABILIZATION
LANGUAGE ON THE INSIDE FRONT COVER AND THE THIRD PARAGRAPH, THE FOURTH SENTENCE
OF THE FOURTH PARAGRAPH, THE SIXTH PARAGRAPH AND THE SEVENTH PARAGRAPH UNDER THE
CAPTION "PLAN OF DISTRIBUTION" IN SUCH OFFERING MEMORANDUM CONSTITUTE THE ONLY
INFORMATION FURNISHED TO THE COMPANY IN WRITING BY THE INITIAL PURCHASERS
EXPRESSLY FOR USE IN THE OFFERING MEMORANDUM.
0. 0. 3. MISCELLANEOUS.
NOTICES GIVEN PURSUANT TO ANY PROVISION OF THIS AGREEMENT SHALL BE
ADDRESSED AS FOLLOWS: (i) IF TO THE COMPANY OR ANY GUARANTOR, TO, TEAM HEALTH,
INC., 1900 WINSTON ROAD, SUITE 300, KNOXVILLE, TN 37919 AND (ii) IF TO THE
INITIAL PURCHASERS, TO, DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, AS
REPRESENTATIVE FOR THE INITIAL PURCHASERS, 277 PARK AVENUE, NEW YORK, NEW YORK
10172, ATTENTION: SYNDICATE DEPARTMENT, OR IN ANY CASE TO SUCH OTHER ADDRESS AS
THE PERSON TO BE NOTIFIED MAY HAVE REQUESTED IN WRITING.
THE RESPECTIVE INDEMNITIES, CONTRIBUTION AGREEMENTS, REPRESENTATIONS,
WARRANTIES AND OTHER STATEMENTS OF THE COMPANY, THE GUARANTORS AND THE INITIAL
PURCHASERS
27
<PAGE> 29
SET FORTH IN OR MADE PURSUANT TO THIS AGREEMENT SHALL REMAIN OPERATIVE AND IN
FULL FORCE AND EFFECT, AND WILL SURVIVE DELIVERY OF AND PAYMENT FOR THE SERIES A
NOTES, REGARDLESS OF (i) ANY INVESTIGATION, OR STATEMENT AS TO THE RESULTS
THEREOF, MADE BY OR ON BEHALF OF THE INITIAL PURCHASERS, THEIR RESPECTIVE
OFFICERS OR DIRECTORS OF THE INITIAL PURCHASERS, ANY PERSON CONTROLLING THE
INITIAL PURCHASERS, THE COMPANY, ANY GUARANTOR, THE OFFICERS OR DIRECTORS OF THE
COMPANY OR ANY GUARANTORS, OR ANY PERSON CONTROLLING THE COMPANY OR ANY
GUARANTOR, (ii) ACCEPTANCE OF THE SERIES A NOTES AND PAYMENT FOR THEM HEREUNDER
AND (iii) TERMINATION OF THIS AGREEMENT.
IF FOR ANY REASON THE SERIES A NOTES ARE NOT DELIVERED BY OR ON BEHALF
OF THE COMPANY AS PROVIDED HEREIN (OTHER THAN AS A RESULT OF ANY TERMINATION OF
THIS AGREEMENT PURSUANT TO SECTION 10), THE COMPANY AND EACH GUARANTOR, JOINTLY
AND SEVERALLY, AGREE TO REIMBURSE THE INITIAL PURCHASERS FOR ALL OUT-OF-POCKET
EXPENSES (INCLUDING THE FEES AND DISBURSEMENTS OF COUNSEL) INCURRED BY THEM.
NOTWITHSTANDING ANY TERMINATION OF THIS AGREEMENT, THE COMPANY SHALL BE LIABLE
FOR ALL EXPENSES WHICH IT HAS AGREED TO PAY PURSUANT TO SECTION 5(g) HEREOF. THE
COMPANY AND EACH GUARANTOR ALSO AGREE, JOINTLY AND SEVERALLY, TO REIMBURSE THE
INITIAL PURCHASERS AND THEIR RESPECTIVE OFFICERS, DIRECTORS AND EACH PERSON, IF
ANY, WHO CONTROLS SUCH INITIAL PURCHASER WITHIN THE MEANING OF SECTION 15 OF THE
ACT OR SECTION 20 OF THE EXCHANGE ACT FOR ANY AND ALL FEES AND EXPENSES
(INCLUDING WITHOUT LIMITATION THE FEES AND EXPENSES OF COUNSEL) INCURRED BY THEM
IN CONNECTION WITH ENFORCING THEIR RIGHTS UNDER THIS AGREEMENT (INCLUDING
WITHOUT LIMITATION ITS RIGHTS UNDER SECTION 8).
EXCEPT AS OTHERWISE PROVIDED, THIS AGREEMENT HAS BEEN AND IS MADE
SOLELY FOR THE BENEFIT OF AND SHALL BE BINDING UPON THE COMPANY, THE INITIAL
PURCHASERS, THE GUARANTORS, THE INITIAL PURCHASERS' DIRECTORS AND OFFICERS, ANY
CONTROLLING PERSONS REFERRED TO HEREIN, THE DIRECTORS OF THE COMPANY AND THE
GUARANTORS AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, ALL AS AND TO THE EXTENT
PROVIDED IN THIS AGREEMENT, AND NO OTHER PERSON SHALL ACQUIRE OR HAVE ANY RIGHT
UNDER OR BY VIRTUE OF THIS AGREEMENT. THE TERM "SUCCESSORS AND ASSIGNS" SHALL
NOT INCLUDE A PURCHASER OF ANY OF THE SERIES A NOTES FROM THE INITIAL PURCHASERS
MERELY BECAUSE OF SUCH PURCHASE.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT MAY BE SIGNED IN VARIOUS COUNTERPARTS WHICH TOGETHER
SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.
28
<PAGE> 30
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
TEAM HEALTH, INC.
By: ____________________________
Name:
Title:
Purchase Agreement Signature Pages
<PAGE> 31
ALLIANCE CORPORATION
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT
INSTITUTE, INC.
KARL G. MANGOLD, INC.
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
EMERGENCY COVERAGE CORPORATION
EMERGICARE MANAGEMENT,
INCORPORATED
EMSA CONTRACTING SERVICE, INC.
EMSA LOUISIANA, INC.
HOSPITAL BASED PHYSICIAN SERVICES,
INC.
INPHYNET ANESTHESIA OF WEST
VIRGINIA, INC.
MED ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF, MARGULIES, BORUSHOK &
SCHOENBAUM RADIOLOGY
ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL
CONSULTANTS, INC.
SOUTHEASTERN EMERGENCY
PHYSICIANS, INC.
SOUTHEASTERN EMERGENCY
PHYSICIANS OF MEMPHIS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
TEAM RADIOLOGY, INC.
THBS, INC.
Purchase Agreement Signature Pages
<PAGE> 32
VIRGINIA EMERGENCY PHYSICIANS, INC.
DRS. SHEER, AHEARN & ASSOCIATES, INC.
EMERGENCY PHYSICIAN ASSOCIATES,
INC.
EMERGENCY PROFESSIONAL SERVICES,
INC.
THE EMERGENCY ASSOCIATES FOR
MEDICINE, INC.
EMERGENCY PHYSICIANS OF MANATEE,
INC.
EMERGENCY MANAGEMENT
SPECIALISTS, INC.
EMSA SOUTH BROWARD, INC.
NORTHWEST EMERGENCY PHYSICIANS,
INCORPORATED
EMSA JOLIET, INC.
By:___________________________________
Name:
Title:
FISCHER MANGOLD PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General
Partner
By:___________________________________
Name:
Title:
By: KARL G. MANGOLD, Inc., General
Partner
By:___________________________________
Name:
Title:
Purchase Agreement Signature Pages
<PAGE> 33
MT. DIABLO EMERGENCY PHYSICIANS,
A CALIFORNIA GENERAL PARTNERSHIP
By: HERSCHEL FISCHER, Inc., General
Partner
By:___________________________________
Name:
Title:
Purchase Agreement Signature Pages
<PAGE> 34
By: KARL G. MANGOLD, Inc., General
Partner
By:___________________________________
Name:
Title:
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By: INPHYNET HOSPITAL SERVICES, INC.,
General Partner
By:___________________________________
Name:
Title:
TEAM HEALTH SOUTHWEST, L.P.
By: Team Radiology, Inc., General Partner
By:___________________________________
Name:
Title:
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., General Partner
By:___________________________________
Name:
Title:
Purchase Agreement Signature Pages
<PAGE> 35
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
FLEET SECURITIES, INC.
By: Donaldson, Lufkin & Jenrette Securities Corporation
By:___________________________________
Name:
Title:
Purchase Agreement Signature Pages
<PAGE> 36
SCHEDULE A
GUARANTORS
1. ALLIANCE CORPORATION
2. EMERGENCY MANAGEMENT SPECIALISTS, INC.
3. EMSA SOUTH BROWARD, INC.
4. HERSCHEL FISCHER, INC.
5. IMBS, INC.
6. INPHYNET HOSPITAL SERVICES, INC.
7. INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
8. KARL G. MANGOLD, INC.
9. PARAGON HEALTHCARE LIMITED PARTNERSHIP
10. CHARLES L. SPRINGFIELD, INC.
11. CLINIC MANAGEMENT SERVICES, INC.
12. DANIEL & YEAGER, INC.
13. DRS. SHEER, AHEARN & ASSOCIATES, INC.
14. EMERGENCY COVERAGE CORPORATION
15. EMERGENCY PHYSICIAN ASSOCIATES, INC.
16. EMERGENCY PHYSICIANS OF MANATEE, INC.
17. EMERGENCY PROFESSIONAL SERVICES, INC.
18. EMERGICARE MANAGEMENT, INCORPORATED
19. EMSA CONTRACTING SERVICE, INC.
20. EMSA LOUISIANA, INC.
21. HOSPITAL BASED PHYSICIAN SERVICES, INC.
22. INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
23. MED ASSURE SYSTEMS, INC.
24. METROAMERICAN RADIOLOGY, INC.
25. NEO-MED, INC.
26. NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
27. PARAGON ANESTHESIA, INC.
Purchase Agreement Schedule A
<PAGE> 37
28. PARAGON CONTRACTING SERVICES, INC.
29. PARAGON IMAGING CONSULTANTS, INC.
30. QUANTUM PLUS, INC.
31. REICH, SEIDELMANN & JANICKI CO.
32. ROSENDORF, MARGULIES, BORUSHOK & SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, INC.
33. SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
34. SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
35. SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
36. TEAM HEALTH FINANCIAL SERVICES, INC.
37. TEAM RADIOLOGY, INC.
38. THBS, INC.
39. THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
40. VIRGINIA EMERGENCY PHYSICIANS, INC.
41. EMSA JOLIET, INC.
42. TEAM HEALTH SOUTHWEST, L.P.
43. TEAM HEALTH BILLING SERVICES, L.P.
44. FISCHER MANGOLD PARTNERSHIP
45. MT. DIABLO EMERGENCY PHYSICIANS, A CALIFORNIA GENERAL PARTNERSHIP
<PAGE> 38
SCHEDULE B
Subsidiaries
1. ALLIANCE CORPORATION
2. EMERGENCY MANAGEMENT SPECIALISTS, INC.
3. EMSA SOUTH BROWARD, INC.
4. HERSCHEL FISCHER, INC.
5. IMBS, INC.
6. INPHYNET HOSPITAL SERVICES, INC.
7. INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
8. KARL G. MANGOLD, INC.
9. PARAGON HEALTHCARE LIMITED PARTNERSHIP
10. CHARLES L. SPRINGFIELD, INC.
11. CLINIC MANAGEMENT SERVICES, INC.
12. DANIEL & YEAGER, INC.
13. DRS. SHEER, AHEARN & ASSOCIATES, INC.
14. EMERGENCY COVERAGE CORPORATION
15. EMERGENCY PHYSICIAN ASSOCIATES, INC.
16. EMERGENCY PHYSICIANS OF MANATEE, INC.
17. EMERGENCY PROFESSIONAL SERVICES, INC.
18. EMERGICARE MANAGEMENT, INCORPORATED
19. EMSA CONTRACTING SERVICE, INC.
20. EMSA LOUISIANA, INC.
21. HOSPITAL BASED PHYSICIAN SERVICES, INC.
22. INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
23. MED ASSURE SYSTEMS, INC.
24. METROAMERICAN RADIOLOGY, INC.
25. NEO-MED, INC.
26. NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
27. PARAGON ANESTHESIA, INC.
PURCHASE AGREEMENT SCHEDULE B
<PAGE> 39
28. PARAGON CONTRACTING SERVICES, INC.
29. PARAGON IMAGING CONSULTANTS, INC.
30. QUANTUM PLUS, INC.
31. REICH, SEIDELMANN & JANICKI CO.
32. ROSENDORF, MARGULIES, BORUSHOK & SCHOENBAUM RADIOLOGY ASSOCIATES OF
HOLLYWOOD, 3 INC.
33. SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
34. SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
35. SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
36. TEAM HEALTH FINANCIAL SERVICES, INC.
37. TEAM RADIOLOGY, INC.
38. THBS, INC.
39. THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
40. VIRGINIA EMERGENCY PHYSICIANS, INC.
41. EMSA JOLIET, INC.
42. TEAM HEALTH SOUTHWEST, L.P.
43. TEAM HEALTH BILLING SERVICES, L.P.
44. FISCHER MANGOLD PARTNERSHIP
45. MT. DIABLO EMERGENCY PHYSICIANS, A CALIFORNIA GENERAL PARTNERSHIP
<PAGE> 40
SCHEDULE C
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
INITIAL PURCHASERS OF NOTES
------------------ ----------------
<S> <C>
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION .................. $ 60,000,000
NATIONSBANC MONTGOMERY SECURITIES LLC ... $ 32,500,000
FLEET SECURITIES, INC. .................. $ 7,500,000
------------
TOTAL ................................... $100,000,000
============
</TABLE>
PURCHASE AGREEMENT SCHEDULE C
<PAGE> 41
SCHEDULE D
1. TO REPRESENT ALL MATERIAL CONTRACTS THAT WOULD BE REQUIRED
TO BE FILED AS EXHIBITS IF THE OFFERING WERE TO BE MADE PURSUANT TO A
REGISTRATION STATEMENT ON FORM S-1.
<PAGE> 42
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE> 43
DURABLE GENERAL POWER OF ATTORNEY
NEW YORK STATUTORY SHORT FORM
THE POWERS YOU GRANT BELOW CONTINUE TO BE EFFECTIVE SHOULD YOU
BECOME DISABLED OR INCOMPETENT
CAUTION: THIS IS AN IMPORTANT DOCUMENT. IT GIVES THE PERSON WHOM YOU
DESIGNATE (YOUR "AGENT") BROAD POWERS TO HANDLE YOUR PROPERTY DURING YOUR
LIFETIME, WHICH MAY INCLUDE POWERS TO MORTGAGE, SELL, OR OTHERWISE DISPOSE OF
ANY REAL OR PERSONAL PROPERTY WITHOUT ADVANCE NOTICE TO YOU OR APPROVAL BY YOU.
THESE POWERS WILL CONTINUE TO EXIST EVEN AFTER YOU BECOME DISABLED OR
INCOMPETENT. THESE POWERS ARE EXPLAINED MORE FULLY IN NEW YORK GENERAL
OBLIGATIONS LAW, ARTICLE 5, TITLE 15, SECTIONS 5-1502A THROUGH 5-1503, WHICH
EXPRESSLY PERMIT THE USE OF ANY OTHER OR DIFFERENT FORM OF POWER OF ATTORNEY.
THIS DOCUMENT DOES NOT AUTHORIZE ANYONE TO MAKE MEDICAL OR OTHER
HEALTH CARE DECISIONS. YOU MAY EXECUTE A HEALTH CARE PROXY TO DO THIS.
IF THERE IS ANYTHING ABOUT THIS FORM THAT YOU DO NOT UNDERSTAND, YOU
SHOULD ASK A LAWYER TO EXPLAIN IT TO YOU.
This is intended to constitute a DURABLE GENERAL POWER OF ATTORNEY
pursuant to Article 5, Title 15 of the New York General Obligation Law:
I, Philip Richard Mehler, of
51 West 72nd Street, #1510
New York, New York
do hereby appoint:
Carol Mehler
54 Birchall Drive
Scarsdale, New York
my attorney-in-fact TO ACT IN MY NAME, PLACE AND STEAD in any way which I
myself could do, if I were personally present, with respect to the following
matters as each of them is defined in Title 15 of Article 5 of the New York
General Obligations Law to the extent that I am permitted by law to act through
an agent:
-1-
<PAGE> 44
(DIRECTIONS: INITIAL IN THE BLANK SPACE TO THE LEFT OF YOUR CHOICE ANY ONE OR
MORE OF THE FOLLOWING LETTERED SUBDIVISIONS AS TO WHICH YOU WANT TO GIVE YOUR
AGENT AUTHORITY. IF THE BLANK SPACE TO THE LEFT OF ANY PARTICULAR LETTERED
SUBDIVISION IS NOT INITIALED, NO AUTHORITY WILL BE GRANTED FOR MATTERS THAT ARE
INCLUDED IN THAT SUBDIVISION. ALTERNATIVELY, THE LETTER CORRESPONDING TO EACH
POWER YOU WISH TO GRANT MAY BE WRITTEN OR TYPED ON THE BLANK LINE IN SUBDIVISION
"(Q)", AND YOU MAY THEN PUT YOUR INITIALS IN THE BLANK SPACE TO THE LEFT OF
SUBDIVISION "(Q)" IN ORDER TO GRANT EACH OF THE POWERS SO INDICATED.)
[ ] (A) real estate transactions;
[ ] (B) chattel and goods transactions;
[ ] (C) bond, share and commodity transactions;
[ ] (D) banking transactions;
[ ] (E) business operating transactions;
[ ] (F) insurance transactions;
[ ] (G) estate transactions;
[ ] (H) claims and litigation;
[ ] (I) personal relationships and affairs;
[ ] (J) benefits from military service;
[ ] (K) records, reports and statements;
[ ] (L) retirement benefit transactions;
[ ] (M) making gifts to my spouse, children and more remote
descendants, and parents, not to exceed in the aggregate
$10,000 to each of such persons in any year;
[ ] (N) tax matters;
[ ] (O) all other matters;
[ ] (P) full and unqualified authority to my attorney(s)-in-fact to
delegate any or all of the foregoing powers to any person or
persons whom my attorney(s)-in-fact shall select;
[ ] (Q) each of the above matters identified by the following
letters: A through P, inclusive.
This Durable Power of Attorney shall not be affected by my subsequent disability
or incompetence. I hereby revoke any prior Durable Power of Attorney given by
me to the extent it purports to confer the authority granted herein.
-2-
<PAGE> 45
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, I HEREBY AGREE THAT ANY THIRD PARTY
RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT
HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO
SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION
OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND I FOR MYSELF
AND FOR MY HEIRS, EXECUTORS, LEGAL REPRESENTATIVES AND ASSIGNS, HEREBY AGREE TO
INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL
CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY
HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
THIS DURABLE GENERAL POWER OF ATTORNEY MAY BE REVOKED BY ME AT ANY TIME.
IN WITNESS WHEREOF, I have hereunto signed my name this______ day of
_______________, 1999.
___________________________
Philip Richard Mehler
-3-
<PAGE> 46
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 1999, before me personally appeared Philip
Richard Mehler, to me known, and known to me to be the person described in and
who signed the foregoing instrument, and he acknowledged to me that he signed
the same.
_______________________
Notary Public
-4-
<PAGE> 1
EXHIBIT 10.3
DRAFT 3/5/99
TEAM HEALTH, INC.
EQUITY DEFERRED COMPENSATION PLAN
(Effective January 25, 1999)
<PAGE> 2
CERTIFICATE
I, _______________________, the_____________________ of Team Health,
Inc., do hereby certify that the attached is a true and correct copy of the Team
Health, Inc. Equity Deferred Compensation Plan as in effect on January 25, 1999.
By: ____________________________________
Title: ___________________________________
Dated this ____ day of February, 1999.
<PAGE> 3
TEAM HEALTH, INC.
EQUITY DEFERRED COMPENSATION PLAN
(Effective January 25, 1999)
Table of Contents
<TABLE>
<S> <C>
ARTICLE I - Introduction..........................................................................................1
1.1 Name............................................................................................1
1.2 Purpose.........................................................................................1
1.3 Administration of the Plan......................................................................1
ARTICLE II - Definitions..........................................................................................1
ARTICLE III - Plan Participation..................................................................................3
3.1 Eligibility.....................................................................................3
3.2 Participation...................................................................................3
ARTICLE IV - Deferral Contributions...............................................................................3
4.1 Deferral Contributions..........................................................................3
4.2 Deferral Contributions Account..................................................................3
ARTICLE V - Earnings on Account Balances..........................................................................3
5.1 Investments.....................................................................................3
5.2 Crediting of Deferrals..........................................................................4
ARTICLE VI - Establishment of Trust...............................................................................4
6.1 Establishment of Trust..........................................................................4
6.2 Status of Trust.................................................................................4
ARTICLE VII - Distribution of Account Balances....................................................................4
7.1 Vesting.........................................................................................4
7.2 Timing of Distributions.........................................................................4
7.3 Form of Distribution of Accounts................................................................5
7.4 Involuntary Distributions.......................................................................5
7.5 Designation of Beneficiaries....................................................................5
ARTICLE VIII - Amendment and Termination..........................................................................5
8.1 Amendment.......................................................................................5
8.2 Plan Termination................................................................................5
ARTICLE IX - General Provisions...................................................................................5
9.1 Non-Alienation of Benefits......................................................................6
9.2 Withholding for Taxes...........................................................................6
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
9.3 Immunity of Committee Members...................................................................6
9.4 Plan Not to Affect Employment Relationship......................................................6
9.5 Assumption of Company Liability.................................................................6
9.6 Subordination of Rights.........................................................................6
9.7 Notices.........................................................................................6
9.8 Gender and Number; Headings.....................................................................7
9.9 Controlling Law.................................................................................7
9.10 Successors......................................................................................7
9.11 Severability....................................................................................7
9.12 Action by Company...............................................................................7
9.13 Review of Benefit Determinations................................................................7
</TABLE>
ii
<PAGE> 5
TEAM HEALTH, INC.
EQUITY DEFERRED COMPENSATION PLAN
ARTICLE I
Introduction
1.1 Name. The name of this plan shall be the "Team Health, Inc. Equity
Deferred Compensation Plan." Unless otherwise expressly provided herein, the
capitalized terms used in this Plan shall have the meanings set forth in Article
II.
1.2 Purpose. This Plan shall constitute an unfunded nonqualified
deferred compensation arrangement established for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees (as defined for purposes of Title I of ERISA) of the Company.
1.3 Administration of the Plan. The Plan shall be administered by the
Committee. The duties and authority of the Committee under the Plan shall
include (i) the interpretation of the provisions of the Plan, (ii) the adoption
of any rules and regulations which may become necessary or advisable in the
operation of the Plan, (iii) the making of such determinations as may be
permitted or required pursuant to the Plan, and (iv) the taking of such other
actions as may be required for the proper administration of the Plan in
accordance with its terms. Any decision of the Committee with respect to any
matter within the authority of the Committee shall be final, binding and
conclusive upon the Company and each Participant, former Participant, designated
beneficiary, and each person claiming under or through any Participant or
designated beneficiary; and no additional authorization or ratification by the
Board of Directors or stockholders of the Company shall be required. Any action
taken by the Committee with respect to any one or more Participants shall not be
binding on the Committee as to any action to be taken with respect to any other
Participant. A member of the Committee may be a Participant, but no member of
the Committee may participate in any decision directly affecting his rights or
the computation of his benefits as an individual Participant under the Plan.
Each determination required or permitted under the Plan shall be made by the
Committee in the sole and absolute discretion of the Committee.
ARTICLE II
Definitions
2.1 "Account" means a bookkeeping account maintained by the Company for
a Participant under the Plan.
2.2 "Account Balance" means the value, as of a specified date, of any
of the Accounts of a Participant.
2.3 "Affiliate" of any Person means any other Person, directly or
indirectly controlling, controlled by or under common control with such Person.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE> 6
2.5 "Committee" means the persons who have been designated by the Board
of Directors of the Company to administer the Plan. If no persons have been
designated by the Board of Directors of the Company to administer the Plan, the
full Board of Directors of the Company shall constitute the Committee for
purposes of this Plan.
2.6 "Company" means Team Health, Inc., a Tennessee corporation, or its
successors or assigns under the Plan.
2.7 "Deferral Contributions" means the contributions made on behalf of
a Participant pursuant to Section 4.1 of this Plan.
2.8 "Deferral Contributions Account" means the account maintained on
behalf of each Participant which will represent the amount of the Deferral
Contributions made on behalf of such Participant pursuant to Section 4.1 of the
Plan.
2.9 "Effective Date" means January 25, 1999.
2.10 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
2.11 "Participant" means any eligible employee of the Company who is
participating under the Plan pursuant to Article III.
2.12 "Permitted Investment" means initially shares of Class A Preferred
Stock, par value $.01 per share, of the Company, and thereafter such funds,
investments or other assets of equal fair market value as may be approved by the
Committee from time to time for purposes of this Plan.
2.13 "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
2.14 "Plan" means this "Team Health, Inc. Equity Deferred Compensation
Plan," as amended from time to time.
2.15 "Plan Year" means the calendar year; provided, however, that the
initial Plan Year shall be the period from January 25, 1999 through December 31,
1999.
2.16 "Sale of the Company" means the sale of the Company to an
independent third party or group of independent third parties (as the term
"group" is used under the Securities Exchange Act of 1934, as amended) pursuant
to which such party or parties acquire (i) capital stock of the Company
possessing the voting power under normal circumstances to elect a majority of
the Company's Board of Directors (whether by merger, consolidation, sale or
transfer of the Company's capital stock) or (ii) more than 50% of the Company's
assets determined on a consolidated basis.
2
<PAGE> 7
ARTICLE III
Plan Participation
3.1 Eligibility. The Committee shall designate, in writing, each person
that is eligible to receive a benefit under this Plan (a "Participant"). The
initial Participants shall be the executives of the Company listed on Exhibit A
attached hereto. Only those employees who are in a select group of management or
are highly compensated (within the meaning of Title I of ERISA) may be
designated as eligible to participate under this Plan.
3.2 Participation. Each employee of the Company who has been designated
by the Committee as eligible to participate in this Plan for a Plan Year shall
become a Participant hereunder by timely executing a deferral election form with
the Committee in accordance with the requirements of Article IV.
ARTICLE IV
Deferral Contributions
4.1 Deferral Contributions. Each employee of the Company who is
eligible to participate in this Plan may elect to reduce his compensation by an
amount less than or equal to the amount of any bonus to be paid to such
Participant as a result of a Sale of the Company. Each Participant desiring to
defer compensation hereunder shall file an election with the Committee in such
form and at such time as the Committee may determine. The completion of such an
election shall evidence the Participant's authorization of the Company to reduce
his Compensation and shall thereafter be irrevocable.
4.2 Deferral Contributions Account. The Committee shall establish and
maintain an account (the "Deferral Contributions Account") with respect to each
Participant who has elected to make Deferral Contributions under this Article
IV. The Participant's Deferral Contributions Account shall be a bookkeeping
account maintained by the Company and shall reflect the amount of compensation
the Participant has elected to defer under the Plan. The amount of any deemed
investment earnings and losses on the amounts reflected in a Participant's
Deferral Contributions Account shall be credited or charged to his Deferral
Contributions Account in accordance with Article V.
ARTICLE V
Earnings on Account Balances
5.1 Investments.
(a) Permitted Investments. The Committee may designate from
time to time, that all or a portion of a Participant's Accounts be deemed to be
invested in one or more Permitted Investments. Such amounts shall be deemed to
be invested as of such dates as may be specified by the Committee.
3
<PAGE> 8
(b) Receipts. Each Account shall be deemed to receive all
interest, dividends, earnings and other property which would have been received
with respect to a Permitted Investment deemed to be held in such Account if such
Account was actually invested in such Permitted Investment. Cash deemed received
with respect to a Permitted Investment shall be credited to the Account as of
the date it would have been available for reinvestment if the Account was
actually invested in the Permitted Investment.
(c) Actual Investment Not Required. The Company need not
actually make any Permitted Investment. If the Company should from time to time
make any investment similar to a Permitted Investment, such investment shall be
solely for the Company's own account and the Participant shall have no right,
title or interest therein. Accordingly, each Participant is solely an unsecured
creditor of the Company with respect to any amount distributable to him under
the Plan.
5.2 Crediting of Deferrals. The Company shall credit all Deferral
Contributions to a Participant's Deferral Contributions Account within a
reasonable period following the date on which such deferred amounts would have
been paid to the Participant if the Participant had not made a deferral election
under Article IV.
ARTICLE VI
Establishment of Trust
6.1 Establishment of Trust. The Company may, in its sole discretion,
establish a grantor trust (as described in Section 671 of the Code) for the
purpose of accumulating assets to provide for the obligations hereunder. The
assets and income of such trust shall be subject to the claims of the general
creditors of the Company. The establishment of such a trust shall not affect the
Company's liability to pay benefits hereunder except that any such liability
shall be offset by any payments actually made to a Participant under such a
trust. In the event such a trust is established, the amount to be contributed
thereto shall be determined by the Company and the investment of such assets
shall be made in accordance with the trust document.
6.2 Status of Trust. Participants shall have no direct or secured claim
in any asset of the trust or in specific assets of the Company and will have the
status of general unsecured creditors of the Company for any amounts due under
this Plan. The assets and income of the trust will be subject to the claims of
the Company's creditors as provided in the trust document.
ARTICLE VII
Distribution of Account Balances
7.1 Vesting. A Participant's Account Balance shall be 100% vested and
nonforfeitable and shall be distributable to the Participant or, in the event of
the Participant's death, to his beneficiary, as provided in Section 7.2 below,
subject however, to the provisions of this Plan
4
<PAGE> 9
(including those provisions limiting a Participant's rights to those of an
unsecured creditor of the Company).
7.2 Timing of Distributions.
(a) General Rule. Each Participant's Account Balance shall be
distributable as soon as administratively practicable following the earliest of:
(i) December 31, 2009;
(ii) At the time provided in Section 7.4;
(iii) Such Participant's termination of employment
because of death or disability; provided that, in the event that the
Company has established a grantor trust under Section 6.1, the assets
of which consist entirely or in part of securities issued by the
Company (or an Affiliate of the Company), payment under this subsection
(iii) will not be made unless and until such time as the Company (or
such Affiliate) redeems a sufficient amount of such securities from the
grantor trust so that the redemption proceeds are equal to the
Participant's Account Balance, as long as the purpose of such
redemption is to provide cash proceeds to make such distribution to
such Participant. If the Company (or such Affiliate) redeems some
securities from the grantor trust pursuant to this subsection (iii),
but not a sufficient number to enable the trustee to distribute to the
Participant his entire Account Balance, and the purpose of such
redemption is to provide cash proceeds to make such distribution to
such Participant, then the Company will direct the trustee to make a
payment equal to such redemption proceeds, and payment of the balance
of the Participant's Account Balance will be deferred until otherwise
provided hereunder or until the Company (or such Affiliate) redeems an
additional amount of such securities from the grantor trust for the
purpose of providing cash proceeds to make such distribution to such
Participant. For purposes of this subsection (iii), a Participant's
termination of employment will be due to disability if, in the
determination of the Committee, the Participant was unable to perform
the principal duties of his or her position because of a physical or
mental disease, condition or impairment; or
(iv) In the event that the Company has established a
grantor trust under Section 6.1, the assets of which consist entirely
or in part of securities issued by the Company (or an Affiliate of the
Company), and if any of such securities are redeemed by the Company (or
such Affiliate) and the purpose of such redemption is not to provide
cash proceeds to make a distribution to any particular Participant
(whether pursuant to subsection (iii) or otherwise), a pro rata portion
of such redemption proceeds, up to the amount of his Account Balance,
will be paid to each Participant, with his share being the proportion
that his Account Balance hereunder bears to the aggregate Account
Balances of all Participants.
(b) Election to Defer. Notwithstanding subsection (a) above,
at any time before the first to occur of the events listed in subsection (i) to
(iv) of subsection (a), the Participant may elect to defer the time when his
Account Balance would be payable to him to a subsequent date
5
<PAGE> 10
(not later than the first business day of the calendar year following the
calendar year of his retirement or other termination of employment with the
Company). If such election becomes effective as provided in the next sentence,
then the Participant's Account Balance will be payable at time specified in such
election. The Participant's election under this subsection (b) will become
effective only if the Participant remains an Employee of the Company for at
least one year after making such election.
Notwithstanding subsections (a) and (b), as provided in Section 7.4, the
Committee in its discretion (which the Committee will not be obligated to
exercise in any instance or instances) may accelerate the distribution of the
Account Balance of any Participant who has terminated employment to such date as
the Committee determines; and such distribution will be made on or as soon as
administratively practicable following such date.
7.3 Form of Distribution of Accounts.
(a) Available Forms. Each Participant's Account Balance will
be distributed to him in cash (and not in kind) in one of the following forms,
as elected by the Participant:
(i) A lump sum payment; or
(ii) A series of annual installment payments of two
or more but not more than ten installments. If a Participant elects
installment payments, each installment will be a fraction of the
Participant's Account Balance as of immediately prior to such
installment payment, the numerator of which is one, and the denominator
of which is the total number of remaining installment payments
(including the installment payment then being made).
The lump sum payment or the first installment payment will be made on the date
provided in Section 7.2.
(b) Elections. A Participant's initial election of a form of
payment will be made at the time of his initial election to defer compensation
hereunder. Thereafter, a Participant may make one subsequent change of election
by filing with the Committee a written change in the form of payment of his
Account Balance. A Participant's change of election under this subsection (b)
will become effective only if the Participant remains an employee of the Company
for at least one year after making such change.
7.4 Involuntary Distributions. Notwithstanding the foregoing provisions
of this Article VII, the Committee may on its own initiative authorize and
direct the Company to distribute to any Participant (or to a designated
beneficiary in the event of the Participant's death) all or any portion of the
Participant's Account Balance. Such payment would be specifically authorized and
directed in the event that there is a change in tax law, a published ruling or
similar announcement issued by the Internal Revenue Service, a regulation issued
by the Secretary of the Treasury, a decision by a court of competent
jurisdiction involving a Participant or a beneficiary, or a closing agreement
made under Section 7121 of the Code that is approved by the Internal Revenue
Service
6
<PAGE> 11
and involves a Participant, and the Committee determines that a Participant has
or will recognize income for federal income tax purposes with respect to amounts
deferred under this Plan prior to the time such amounts otherwise would be paid
to the Participant.
7.5 Designation of Beneficiaries. Each Participant may name any person
(who may be named concurrently, contingently or successively) to whom the
Participant's Account Balance under the Plan is to be paid if the Participant
dies before such Account Balance is fully distributed. Each such beneficiary
designation will revoke all prior designations by the Participant, shall not
require the consent of any previously named beneficiary, shall be in a form
prescribed by or otherwise acceptable to the Committee and will be effective
only when filed with the Committee during the Participant's lifetime. If a
Participant fails to designate a beneficiary before his death, as provided
above, or if the beneficiary designated by a Participant dies before the date of
the Participant's death or before complete payment of the Participant's Account
Balance, the Committee, in its discretion, may pay the Participant's Account
Balance to either (i) one or more of the Participant's relatives by blood,
adoption or marriage and in such proportions as the Committee determines, or
(ii) the legal representative or representatives of the estate of the last to
die of the Participant and his designated beneficiary.
ARTICLE VIII
Amendment and Termination
8.1 Amendment. The Company, in its discretion, shall have the right to
amend the Plan from time to time, except that no such amendment shall, without
the consent of the Participant to whom deferred compensation has been credited
to any Account under this Plan, adversely affect the right of the Participant
(or his beneficiary) to receive payments of such deferred compensation under the
terms of this Plan.
8.2 Plan Termination. The Company may, in its discretion, terminate the
Plan at any time, however, no termination of this Plan shall alter the right of
a Participant (or his beneficiary) to payments of deferred compensation
previously credited to such Participant's Accounts under the Plan.
Notwithstanding the preceding sentence or Section 8.1, in connection with the
Plan's termination (or in any amendment adopted in connection with such
termination), as provided in Section 7.4, the Company may provide that each
Participant's Account Balance under the Plan will be distributed as soon as may
be practicable to the Participant (or, if applicable, beneficiary).
ARTICLE IX
General Provisions
9.1 Non-Alienation of Benefits. A Participant's rights to the amounts
credited to his Accounts under the Plan shall not be grantable, transferable,
pledgeable or otherwise assignable, in whole or in part, by the voluntary or
involuntary acts of any person, or by operation of law, and
7
<PAGE> 12
shall not be liable or taken for any obligation of such person. Any such
attempted grant, transfer, pledge or assignment shall be null and void and
without any legal effect.
9.2 Withholding for Taxes. Notwithstanding anything contained in this
Plan to the contrary, the Company shall withhold from any distribution made
under the Plan such amount or amounts as may be required for purposes of
complying with the tax withholding provisions of the Code or any State income
tax act for purposes of paying any income, estate, inheritance or other tax
attributable to any amounts distributable or creditable under the Plan.
9.3 Immunity of Committee Members. The members of the Committee may
rely upon any information, report or opinion supplied to them by any officer of
the Company or any legal counsel, independent public accountant or actuary, and
shall be fully protected in relying upon any such information, report or
opinion. No member of the Committee shall have any liability to the Company or
any Participant, former Participant, designated beneficiary, person claiming
under or through any Participant or designated beneficiary or other person
interested or concerned in connection with any decision made by such member of
the Committee pursuant to the Plan which was based upon any such information,
report or opinion if such member of the Committee relied thereon in good faith,
or for any other action or omission of the Committee member made in good faith
in connection with the operation of this Plan.
9.4 Plan Not to Affect Employment Relationship. Neither the adoption of
the Plan nor its operation shall in any way affect the right and power of the
Company to dismiss or otherwise terminate the employment or change the terms of
the employment or amount of compensation of any Participant at any time for any
reason or without cause. By accepting any payment under this Plan, each
Participant, former Participant, designated beneficiary and each person claiming
under or through such person, shall be conclusively bound by any action or
decision taken or made under the Plan by the Committee.
9.5 Assumption of Company Liability. The obligations of the Company
under the Plan may be assumed by any affiliate of the Company, in which case
such affiliate shall be obligated to satisfy all of the Company's obligations
under the Plan and the Company shall be released from any continuing obligation
under the Plan. At the Company's request, a Participant or designated
beneficiary shall sign such documents as the Company may require in order to
effectuate the purposes of this Section.
9.6 Subordination of Rights. At the Committee's request, each
Participant or designated beneficiary shall sign such documents as the Committee
may require in order to subordinate such Participant's or designated
beneficiary's rights under the Plan to the rights of such other creditors of the
Company as may be specified by the Committee.
9.7 Notices. Any notice required to be given by the Company or the
Committee hereunder shall be in writing and shall be delivered in person or by
registered or certified mail, return receipt requested. Any notice given by
registered mail shall be deemed to have been given upon the date of registration
or certification by the Post Office, correctly addressed to the last known
address
8
<PAGE> 13
(as appearing in the records of the Committee or the Company) of the person to
whom such notice is to be given.
9.8 Gender and Number; Headings. Wherever any words are used herein in
the masculine gender they shall be construed as though they were also used in
the feminine gender in all cases where they would so apply; and wherever any
words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so apply.
Headings of sections and subsections of the Plan are inserted for convenience of
reference and are not part of the Plan and are not to be considered in the
construction thereof.
9.9 Controlling Law. The Plan shall be construed in accordance with the
laws of the State of Delaware, to the extent not preempted by any applicable
federal law.
9.10 Successors. The Plan is binding on all persons entitled to
benefits hereunder and their respective heirs and legal representatives, on the
Committee and its successor and on any Employer and its successor, whether by
way of merger, consolidation, purchase or otherwise.
9.11 Severability. If any provision of the Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be enforced as if the
invalid provisions had never been set forth therein.
9.12 Action by Company. Any action required or permitted by the Company
under the Plan shall be by resolution of its Board of Directors or by a duly
authorized committee of its Board of Directors, or by a person or persons
authorized by resolution of its Board of Directors or such committee.
9.13 Review of Benefit Determinations. If a claim for benefits made by
a Participant or his or her beneficiary is denied, the Committee shall within 90
days (or 180 days if special circumstances require an extension of time) after
the claim is made furnish the person making the claim with a written notice
specifying the reasons for the denial. Such notice shall also refer to the
pertinent Plan provisions on which the denial is based, describe any additional
material or information necessary for properly completing the claim and explain
why such material or information is necessary, and explain the Plan's claim
review procedures. If requested in writing, the Committee shall afford each
claimant whose claim has been denied a full and fair review of the Committee's
decision and, within 60 days (120 days if special circumstances require
additional time) of the request for reconsideration of the denied claim, the
Committee shall notify the claimant in writing of the Committee's final
decision.
* * * * *
9
<PAGE> 14
EXHIBIT A
Initial Participants
Randall Aguiar
Jeffrey Bettinger, M.D.
John Craig
Randal Dabbs, M.D.
James George, M.D.
Richard Gillespie, M.D.
Michael Hatcher
James Hillman, M.D.
Mark Jergens
David Jones
Gerard LaSalle, M.D.
William R. Machuga
H. Lynn Massingale, M.D.
Mary Pastick
Neil Principe
James Rybak, M.D.
Monty Scott
Stephen Sherlin
John Staley
Michael Weiner
10
<PAGE> 1
EXHIBIT 10.4
TEAM HEALTH, INC.
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "Agreement"), dated as of
March 12, 1999, is by and among Team Health, Inc. (the "Company"), Madison
Dearborn Partners II, L.P. ("MDCP"), Beecken, Petty & Company, L.L.C.
("Beecken") and Cornerstone Equity Investors LLC ("Cornerstone", and together
with MDCP and Beecken, the "Advisors").
WHEREAS, the Company desires to retain the Advisors and the Advisors
desire to perform for the Company certain services.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. TERM. This Agreement shall be in effect for an initial term of three
(3) years commencing on the date hereof (the "Term"), and shall be automatically
extended thereafter on a year to year basis unless the Company or the Advisors
gives written notice of their desire to terminate this Agreement to the other
parties 90 days prior to the expiration of the Term or any extension thereof.
2. SERVICES. The Advisors shall perform or cause to be performed such
services for the Company and its direct and indirect subsidiaries as directed by
the Company's board of directors and agreed to by the Advisors, which may
include, without limitation, the following:
(a) general management services;
(b) identification, support, negotiation and analysis of acquisitions
and dispositions;
(c) support, negotiation and analysis of financing alternatives,
including, without limitation, in connection with acquisitions, capital
expenditures and refinancing of existing indebtedness;
(d) finance functions, including assistance in the preparation of
financial projections, and monitoring of compliance with financing agreements;
(e) strategic planning functions, including evaluating major strategic
alternatives; and
(f) other services for the Company and its subsidiaries upon which the
Company's board of directors and the Advisors agree.
<PAGE> 2
3. ADVISORY FEES AND TRANSACTION FEES.
(a) Payment to the Advisors for services rendered in connection with
this Agreement shall be in the aggregate amount of $500,000 per year or such
other amount as the parties hereto shall agree ("Advisory Fee") plus reasonable
out-of-pocket expenses of the Advisors. The Advisory Fee shall be divided among
the Advisors as follows: 45% of the Advisory Fee is payable to MDCP, 45% of the
Advisory Fee is payable to Cornerstone and 10% of the Advisor Fee is payable to
Beecken. Expenses shall be reimbursed to such Advisor as such expenses are
incurred. The Advisory Fee shall be payable quarterly in advance by the Company
in immediately available funds, the first such payment to be made promptly after
the date hereof.
(b) The Advisors shall be entitled to receive from the Company a
transaction fee in connection with the consummation by the Company or any of its
subsidiaries of the transactions contemplated by the Recapitalization Agreement,
dated as of January 25, 1999, by and among the Company, MedPartners, Inc.,
Pacific Physician Services, Inc. and Team Health Holdings, L.L.C., in an amount
equal to 1% of the aggregate value of such transaction (the "Transaction Fee").
The Transaction Fee payable to the Advisors shall be divided among the Advisors
as follows: 45% of the Transaction Fee is payable to MDCP, 45% of the
Transaction Fee is payable to Cornerstone and 10% of the Transaction Fee is
payable to Beecken. The Transaction Fee shall be payable upon consummation of
the related transaction.
4. SUBORDINATION. The Advisors covenant and agree that the payment to
the Advisors of any Advisory Fee and Transaction Fee as contemplated in this
Agreement shall be subordinate and junior in right to payment to the extent
provided herein to any indebtedness incurred by the Company related to (i) the
Credit Agreement, dated as of the date hereof, by and among the Company, the
lenders named therein, Fleet National Bank, NationsBank, N.A., NationsBanc
Montgomery Securities LLC and Donaldson, Lufkin & Jenrette Securities
Corporation, as amended from time to time (the "Credit Agreement") and (ii)
and/or arising from the issuance of the Company's 12% Senior Subordinated Notes
due 2009 (the "Senior Debt"). No payment shall be made by the Company hereunder,
whether with respect to any Advisory Fee or Transaction Fee, at any time when
there shall have occurred and be continuing (i) any default in the payment of
all or any part of the principal or premium, if any, on any of the Senior Debt
as and when the same shall become due and payable either at maturity, upon any
redemption, by declaration or otherwise or (ii) any default in the payment of
any installment of interest upon any of the Senior Debt or any fees payable
under the Senior Debt or any taxes payable thereunder as and when the same shall
become due and payable or (iii) any Event of Default under the Credit Agreement;
provided, however, that following the earlier of (a) the cure, waiver or other
resolution of such default or (ii) the payment in full in cash of all
obligations under the Senior Debt then outstanding, all amounts that have not
been paid to the Advisors due to the application of the provisions of this
Section 4 shall be promptly paid to the Advisors without requiring any demand,
notice to the Company or other action on the part of the Advisors.
5. PERSONNEL. The Advisors shall provide and devote to the performance
of this Agreement such employees, affiliates and agents of the Advisors as the
Advisors shall deem appropriate to the furnishing of the services required.
-2-
<PAGE> 3
6. LIABILITY. None of the Advisors or any of their affiliates, members,
partners, employees or agents shall be liable to the Company or any of its
subsidiaries or affiliates for any loss, liability, damage or expense arising
out of or in connection with the performance of services contemplated by this
Agreement, unless such loss, liability, damage or expense shall be proven to
result directly from gross negligence, willful misconduct or bad faith on the
part of any of the Advisors, their affiliates, members, partners, employees or
agents acting within the scope of their employment or authority.
7. INDEMNITY. The Company and its subsidiaries shall defend, indemnify
and hold harmless each of the Advisors, their affiliates, members, partners,
employees and agents from and against any and all loss, liability, damage, or
expenses arising from any claim (a "Claim") by any person with respect to, or in
any way related to, the performance of services contemplated by this Agreement
(including attorneys' fees) (collectively, "Claims") resulting from any act or
omission of any of the Advisors, their affiliates, members, partners, employees
or agents, other than for Claims which shall be proven to be the direct result
of gross negligence, bad faith or willful misconduct by any of the Advisors,
their affiliates, members, partners, employees or agents. The Company and its
subsidiaries shall defend at its own cost and expense any and all suits or
actions (just or unjust) which may be brought against any of the Advisors,
and/or any of their subsidiaries and any of the Advisors, their officers,
directors, affiliates, members, partners, employees or agents or in which any of
the Advisors, their affiliates, members, partners, employees or agents may be
impleaded with others upon any Claim or Claims, or upon any matter, directly or
indirectly, related to or arising out of this Agreement or the performance
hereof by the Advisors, their affiliates, members, partners, employees or
agents, except that if such damage shall be proven to be the direct result of
gross negligence, bad faith or willful misconduct by any of the Advisors, their
affiliates, members, partners, employees or agents, then the Advisors shall
reimburse the Company for the costs of defense and other costs incurred by the
Company.
8. NOTICES. All notices or other communications required or permitted
by this Agreement shall be effective upon receipt and shall be in writing and
delivered personally or by overnight courier, or sent by facsimile, as follows:
To the Company:
Team Health, Inc.
1900 Winston Road, Suite 300
Knoxville, TN 37919
Attention: President
Fax No.: (423) 539-8052
-3-
<PAGE> 4
To MDCP:
Madison Dearborn Partners II, L.P.
Three First National Plaza, Suite 3800
Chicago, IL 60602
Attention: Timothy Sullivan
Fax No: (312) 895-1001
To Cornerstone:
Cornerstone Equity Investors IV LLC
717 Fifth Avenue, Suite 1100
New York, NY 10022
Attention: Dana J. O'Brien
Fax No.: (212) 826-6798
To Beecken:
Beecken, Petty & Company, L.L.C.
901 Warrenville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
Fax No.: (630) 435-0370
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attn: Sanford E. Perl
Fax No.: (312) 861-2200
9. ASSIGNMENT. No party hereto may assign any obligations hereunder to
any other party without the prior written consent of the other party hereto,
which consent shall not be unreasonably withheld; provided, however, that,
notwithstanding the foregoing, the Advisors may assign their rights and
obligations under this Agreement to any of their affiliates without the consent
of the Company.
10. SUCCESSORS. This Agreement and all the obligations and benefits
hereunder shall inure to the successors and assigns of the parties hereto.
-4-
<PAGE> 5
11. COUNTERPARTS. This Agreement may be executed and delivered by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original and both of which taken together shall
constitute but one and the same agreement.
12. ENTIRE AGREEMENT; MODIFICATION; GOVERNING LAW. The terms and
conditions hereof constitute the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supercede all previous
communications, either oral or written, representations or warranties of any
kind whatsoever, except as expressly set forth herein. No modifications of this
Agreement nor waiver of the terms or conditions hereof shall be binding upon any
party hereto unless approved in writing by an authorized representative of such
party. All issues concerning this Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of New York.
* * * * *
-5-
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed this Management Services
Agreement as of the date first written above.
TEAM HEALTH, INC.
By: _______________________________________
Its: _____________________________________
MADISON DEARBORN PARTNERS II, L.P.
By: Madison Dearborn Partners, Inc.
Its: General Partner
By: ______________________________
Its: _____________________________
CORNERSTONE EQUITY INVESTORS LLC
By: ______________________________________
Its: _____________________________________
BEECKEN, PETTY & COMPANY, L.L.C.
By: ______________________________________
Its: _____________________________________
-6-
<PAGE> 1
EXHIBIT 10.5
TEAM HEALTH, INC.
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (this "Agreement") is made as of March 12,
1999, by and among Team Health, Inc., a Tennessee corporation (the "Company"),
Team Health Holdings, L.L.C., a Delaware limited liability company ("Holdings"),
Pacific Physician Services, Inc., a Delaware corporation ("PPSI") and certain
other stockholders of the Company who are from time to time a party hereto
(Holdings, PPSI and such other stockholders who are parties hereto from time to
time are collectively referred to as the "Stockholders" and individually as a
"Stockholder"). Otherwise undefined capitalized terms used herein are defined in
Section 9 hereof.
The execution and delivery of this Agreement by the Company, PPSI and
Holdings is a condition to closing under that certain Recapitalization
Agreement, dated as of January 25, 1999 (as amended from time to time, the
"Recapitalization Agreement"), by and among the Company, Holdings, PPSI and
MedPartners, Inc.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
SECTION 1. DEMAND REGISTRATIONS.
(a) Requests for Registration. At any time, the holders of at least a
majority of the Registrable Securities may request registration under the
Securities Act of all or part of their Registrable Securities on Form S-1 or any
similar long-form registration ("Long-Form Registrations") or, if available, on
Form S-2 or S-3 or any similar short-form registration ("Short-Form
Registrations"). All registrations requested pursuant to this Section 1(a) are
referred to herein as "Demand Registrations." Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range for such
offering. Within five business days after receipt of any such request, the
Issuer shall give written notice of such requested registration to all other
holders of Registrable Securities and, subject to Section 1(d) below, will
include in such registration all Registrable Securities with respect to which
the Issuer has received written requests for inclusion therein within five
business days after the receipt of the Issuer's notice.
(b) Long-Form Registrations. The holders of the Registrable Securities
shall be entitled to request three Long-Form Registrations ("Issuer-paid Long-
Form Registrations") in which the Issuer will pay all Registration Expenses (as
defined below in Section 5). A registration shall not count as one of the
permitted Issuer-paid Long-Form Registrations until it has become effective
(unless such Long-Form Registration has not become effective due solely to the
fault of the holders requesting such registration), and no Issuer-paid Long-Form
Registration shall count as one of the permitted Long-Form Registrations unless
the holders of Registrable Securities requesting such registration register and
sell at least 90% of the Registrable Securities requested to be included in such
registration; provided that in any event the Issuer shall pay all Registration
Expenses in connection with any registration initiated as an Issuer-paid
Long-Form Registration whether or not it has become effective and whether or not
such registration has counted as one of the permitted
<PAGE> 2
Issuer-paid Long-Form Registrations. All Long-Form Registrations shall be
underwritten registrations.
(c) Short-Form Registrations. In addition to the Issuer-paid Long-Form
Registrations provided pursuant to Section 1(b), the holders of the Registrable
Securities shall be entitled to request an unlimited number of Short-Form
Registrations in which the Issuer will pay all Registration Expenses. Demand
Registrations will be Short-Form Registrations whenever the Issuer is permitted
to use any applicable short form. After the Issuer has become subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, the
Issuer shall use its best efforts to make Short-Form Registrations on Form S-3
available for the sale of Registrable Securities. All Short-Form Registrations
shall be underwritten registrations, unless otherwise agreed to by the Issuer.
(d) Priority on Demand Registrations. The Issuer will not include in
any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Issuer in
writing that, in their opinion, the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities included
in such registration, the Issuer will include in such registration (i) first,
the number of Registrable Securities requested to be included in such
registration which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the number of Registrable Securities owned by
each such holder, and (ii) second, other securities requested to be included in
such Demand Registration, pro rata among the holders of such securities on the
basis of the number of such securities owned by each such holder. Any Persons
other than holders of Registrable Securities who participate in Demand
Registrations which are not at the Issuer's expense must pay their share of the
Registration Expenses as provided in Section 5 hereof.
(e) Restrictions on Demand Registrations. The Issuer will not be
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration or a previous registration in which the
holders of Registrable Securities were given piggyback rights pursuant to
Section 2 and were able to sell at least 90% of the Registrable Securities
requested to be included in such registration. The Issuer may postpone, for up
to 180 days (from the date of the request), the filing or the effectiveness of a
registration statement for a Demand Registration if the Issuer's board of
directors, or similar governing entity, believes that such Demand Registration
would reasonably be expected to have an adverse effect on any proposal or plan
by the Issuer or any Subsidiary thereof to engage in any material acquisition of
assets (other than in the ordinary course of business) or any material stock
purchase, merger, consolidation, tender offer, reorganization, or similar
transaction; provided, however, that in such event, the holders of Registrable
Securities initially requesting such Demand Registration will be entitled to
withdraw such request and, if such request is withdrawn, such Demand
Registration shall be treated as if it had never been made in the first
instance, and the Issuer will pay all Registration Expenses in connection
-2-
<PAGE> 3
with such registration. The Issuer may delay a Demand Registration hereunder
only once in any 12-month period.
(f) Selection of Underwriters. The holders of a majority of the
Registrable Securities initially requesting registration hereunder will have the
right to select the investment banker(s) and manager(s) to administer the
offering under such Demand Registration, subject to the Issuer's approval, which
will not be unreasonably withheld.
(g) Other Registration Rights. Except as provided in this Agreement,
the Issuer will not grant to any Persons the right to request that the Issuer
register any equity securities of the Issuer, or any securities convertible into
or exchangeable or exercisable for any such securities, without the prior
written consent of the holders of at least a majority of the Registrable
Securities.
SECTION 2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Issuer proposes to register any of
its equity securities under the Securities Act (other than pursuant to a Demand
Registration (which is addressed in Section 1 above rather than this Section 2)
or a registration on Form S-4 or S-8 or any successor or similar forms) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), whether or not for sale for its own
account, the Issuer will give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and,
subject to Sections 2(c) and 2(d) below, will include in such registration all
Registrable Securities with respect to which the Issuer has received written
requests for inclusion therein within 20 days after the receipt of the Issuer's
notice; provided that with respect to any Piggyback Registration, if the holders
of at least a majority of the Registrable Securities determine that it would be
in the best interests of the Issuer or the Issuer's stockholders that no
Registrable Securities be included in such Piggyback Registration, then such
holders may waive and forego, as against all holders of Registrable Securities,
the inclusion of any Registrable Securities in such Piggyback Registration.
(b) Piggyback Expenses. In all Piggyback Registrations, the
Registration Expenses of the holders of Registrable Securities will be paid by
the Issuer.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Issuer, and the managing
underwriters advise the Issuer in writing (with a copy to each party hereto
requesting registration of Registrable Securities) that, in their opinion, the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the Issuer, the Issuer will include in such registration (i)
first, the securities that the Issuer proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders thereof on the basis of the number of Registrable Securities
owned by each such holder, and (iii) third, other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the number of such other securities owned by each such holder.
-3-
<PAGE> 4
(d) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the Issuer's
securities (it being understood that secondary registrations on behalf of
holders of Registrable Securities are addressed in Section 1 above rather than
in this Section 2(d)), and the managing underwriters advise the Issuer in
writing (with a copy to each party hereto requesting registration of Registrable
Securities) that, in their opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in an orderly
manner in such offering within a price range acceptable to the Issuer, the
Issuer will include in such registration (i) first, the securities requested to
be included therein by the holders requesting such registration, (ii) second,
the Registrable Securities requested to be included in such registration, pro
rata among the holders of such Registrable Securities on the basis of the number
of Registrable Securities owned by each such requesting holder, and (iii) third,
other securities requested to be included in such registration pro rata among
the holders of such other securities on the basis of the number of such
securities owned by each such holder.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection of the investment banker(s) and manager(s)
for the offering must be approved by the holders of a majority of the
Registrable Securities included in such Piggyback Registration, which approval
shall not be unreasonably withheld.
(f) Withdrawal by Issuer. If, at any time after giving notice of its
intention to register any of its securities as set forth in Section 2(a) and
before the effective date of such registration statement filed in connection
with such registration, the Issuer shall determine, for any reason, not to
register such securities, the Issuer may, at its sole discretion, give written
notice of such determination to each holder of Registrable Securities and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith as provided herein).
(g) Other Registrations. If the Issuer has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Issuer will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible into or exchangeable or exercisable for its equity securities under
the Securities Act (except on Form S-4 or S-8 or any successor form), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least 180 days has elapsed from the effective date of such
previous registration.
SECTION 3. HOLDBACK AGREEMENTS.
(a) Each holder of Registrable Securities agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of equity
securities of the Issuer, or any securities, options, or rights convertible into
or exchangeable or exercisable for such securities, during the seven days before
and the 90-day period (but in the case of the Issuer's initial public offering,
the 180-day period) beginning on the effective date of any underwritten public
offering of the Issuer's equity securities (including Demand and Piggyback
Registrations) (except as part of such underwritten registration), unless the
underwriters managing the registered public offering require
-4-
<PAGE> 5
a longer period, not to exceed 180 days beginning on the effective date of such
underwritten public offering.
(b) The Issuer agrees (i) not to effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days before and during the
180-day period beginning on the effective date of any underwritten public
offering of the Issuer's equity securities (including Demand and Piggyback
Registrations) (except as part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, and (ii) to cause each
holder of its Common Stock, or any securities convertible into or exchangeable
or exercisable for Common Stock, purchased or otherwise acquired from the Issuer
at any time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during any such period
(except as part of such underwritten registration, if otherwise permitted),
unless the underwriters managing the registered public offering otherwise agree.
SECTION 4. REGISTRATION PROCEDURES. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Issuer will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Issuer will as
expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities which
registration statement shall comply as to form in all material respects with the
requirements of applicable form and include all financial statements required by
the Securities and Exchange Commission to be filed therewith, and thereafter use
its best efforts to cause such registration statement to become effective
(provided that, before filing a registration statement or prospectus or any
amendments or supplements thereto, the Issuer will furnish to the counsel
selected by the holders of a majority of the Registrable Securities covered by
such registration statement and to PPSI's counsel copies of all such documents
proposed to be filed, which documents will be subject to review of such
counsel);
(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of either (i) not less than 180 days (subject
to extension pursuant to Section 7(b)) or, if such registration statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer, or
(ii) such shorter period as will terminate when all of the securities covered by
such registration statement during such period have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but, in any event, not before
the expiration of any longer period required under the Securities Act), and to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until such time as all
of such
-5-
<PAGE> 6
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;
(c) respond as promptly as practicable to any comments received by the
Securities and Exchange Commission with respect to such registration statement;
(d) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(e) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Issuer will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection or (ii) subject itself to taxation in any such
jurisdiction);
(f) notify each seller of such Registrable Securities, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event as
a result of which, the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made, and, at the request of any such seller, the Issuer
will prepare, file and furnish to such seller a reasonable number of copies of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made;
(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Issuer are then
listed and, if not so listed, to be listed on a securities exchange or the
National Association of Securities Dealers ("NASD") automated quotation system
and, if listed on the NASD automated quotation system, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a "national market system security" of The Nasdaq
Stock Market within the meaning of Rule 11Aa2-1 of the Securities and Exchange
Commission or, failing that, to secure The Nasdaq Stock Market's authorization
for such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such Registrable Securities with the NASD;
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
-6-
<PAGE> 7
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split,
combination of shares, recapitalization or reorganization);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant, or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate and business documents and properties of the Issuer, and cause the
Issuer's officers, directors, employees, agents, representatives, and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent in connection with such
registration statement;
(k) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, beginning with the first day of the
Issuer's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(l) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Issuer to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Issuer in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(m) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Issuer will provide notice of such order to the holders of
Registrable Securities covered by such registration statement and will use its
reasonable best efforts promptly to obtain the withdrawal of such order;
(n) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities;
(o) obtain a cold comfort letter from the Issuer's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters, which letter shall be addressed to the
underwriters, and the Issuer shall use its reasonable best efforts to cause such
cold comfort letter to also be addressed to the holders of such Registrable
Securities;
-7-
<PAGE> 8
(p) obtain an opinion from the Issuer's outside counsel in customary
form and covering such matters of the type customarily covered by such opinions,
which opinion shall be addressed to the underwriters and the holders of such
Registrable Securities;
(q) at the request of any holder of Registrable Securities, notify such
holder promptly (i) when any such registration statement and any post-effective
amendments thereto have become effective and (ii) when any amendment or
supplement to a prospectus forming a part of any such registration statement has
been filed with the Securities and Exchange Commission; and
(r) cooperate with the holders of Registrable Securities to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend; and enable
certificates for such Registrable Securities to be issued for such numbers of
shares and registered in such names as such holders may reasonably request at
least two business days prior to any sale of Registrable Securities.
If any such registration or comparable statement refers to any holder by name or
otherwise as the holder of any securities of the Issuer and if such holder, in
its sole and exclusive judgment, is or might be deemed to be an underwriter or a
controlling person of the Issuer, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such holder and presented to the Issuer in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Issuer's
securities covered thereby, and that such holding does not imply that such
holder shall assist in meeting any future financial requirements of the Issuer,
or (ii) in the event that such reference to such holder by name or otherwise is
not required by the Securities Act or any similar federal or state statute then
in force, the deletion of the reference to such holder; provided that, with
respect to this clause (ii), such holder shall furnish to the Issuer an opinion
of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Issuer. The Issuer may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Issuer
with such information regarding such seller and the distribution of such
securities as the Issuer may from time to time reasonably request in writing.
SECTION 5. REGISTRATION EXPENSES.
(a) All expenses incident to the Issuer's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of custodians,
fees and disbursements of counsel for the Issuer, and all independent certified
public accountants, underwriters (excluding discounts and commissions), and
other Persons retained by the Issuer (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Issuer will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance, and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Issuer are then listed or, if none are so
listed, on a securities exchange or the NASD automated quotation system.
-8-
<PAGE> 9
(b) In connection with each Demand Registration and each Piggyback
Registration, the Issuer shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration.
(c) To the extent Registration Expenses are not required to be paid by
the Issuer, each holder of securities included in any registration hereunder
will pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
will be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of each seller's securities to be so
registered.
SECTION 6. INDEMNIFICATION.
(a) The Issuer agrees to indemnify and hold harmless, to the full
extent permitted by law, each holder of Registrable Securities, its officers,
directors, agents, and employees and each Person who controls such holder
(within the meaning of the Securities Act) against any and all losses, claims,
damages, liabilities, joint or several, together with reasonable costs and
expenses (including reasonable attorney's fees), to which such indemnified party
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of, are based upon, are
caused by, or result from (i) any untrue or alleged untrue statement of material
fact contained (A) in any registration statement, prospectus, or preliminary
prospectus or any amendment thereof or supplement thereto, or (B) in any
application or other document or communication (in this Section 6 collectively
called an "application") executed by or on behalf of the Issuer or based upon
written information furnished by or on behalf of the Issuer filed in any
jurisdiction in order to qualify any securities covered by such registration
statement under the "blue sky" or securities laws thereof, or (ii) any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Issuer will
reimburse such holder and each such director, officer, and controlling Person
for any legal or any other expenses incurred by them in connection with
investigating or defending any such loss, claim, liability, action, or
proceeding; provided, however, that the Issuer shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof), or expense arises out of, is based upon, is
caused by, or results from an untrue statement or alleged untrue statement, or
omission or alleged omission, made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon, and in conformity with, written
information prepared and furnished to the Issuer by such holder expressly for
use therein or solely by such holder's failure to deliver a copy of the
prospectus or any amendments or supplements thereto after the Issuer has
furnished such holder with a sufficient number of copies of the same. In
connection with any underwritten offering, the Issuer will indemnify such
underwriters, their officers and directors, and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Issuer in writing such information as
-9-
<PAGE> 10
the Issuer reasonably requests for use in connection with any such registration
statement or prospectus and, to the full extent permitted by law, will indemnify
and hold harmless the other holders of Registrable Securities and the Issuer,
and their respective directors, officers, agents, and employees and each other
Person who controls the Issuer (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities, joint or several, together
with reasonable costs and expenses (including reasonable attorney's fees), to
which such indemnified party may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out
of, are based upon, are caused by, or result from (i) any untrue or alleged
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or in any application, or (ii) any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
omission is made in such registration statement, any such prospectus or
preliminary prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
prepared and furnished to the Issuer by such holder expressly for use therein;
provided, however, that the obligation to indemnify will be individual to each
holder and will be limited to the net amount of proceeds received by such holder
from the sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party), and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnifying party shall not, except with the approval of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to each indemnified party of a release from all liability
in respect to such claim or litigation without any payment or consideration
provided by such indemnified party.
(e) If the indemnification provided for in this Section 6 is
unavailable to, or is insufficient to hold harmless, an indemnified party under
the provisions above in respect to any losses, claims, damages, or liabilities
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
-10-
<PAGE> 11
damages, or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuer on the one hand and the sellers of
Registrable Securities and any other sellers participating in the registration
statement on the other hand from the sale of Registrable Securities pursuant to
the registered offering of securities as to which indemnity is sought, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Issuer on the one hand and of the sellers of Registrable Securities and any
other sellers participating in the registration statement on the other hand in
connection with the registration statement on the other in connection with the
statement or omissions which resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer on the one hand and the sellers of
Registrable Securities and any other sellers participating in the registration
statement on the other hand shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) to the Issuer
bear to the total net proceeds from the offering (before deducting expenses) to
the sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Issuer on the one hand and of
the sellers of Registrable Securities and any other sellers participating in the
registration statement on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged omission to state a material
fact relates to information supplied by the Issuer or by the sellers of
Registrable Securities or other sellers participating in the registration
statement and the parties' relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission.
(f) The Issuer and the sellers of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the sellers of Registrable Securities
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no seller of Registrable Securities shall be required to contribute
any amount in excess of the net proceeds received by such seller from the sale
of Registrable Securities covered by the registration statement filed pursuant
hereto. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(g) The indemnification and contribution by any such party provided for
under this Agreement shall be in addition to any other rights to indemnification
or contribution which any indemnified party may have pursuant to law or contract
and will remain in full force and effect regardless of any investigation made or
omitted by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the transfer of
securities.
-11-
<PAGE> 12
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
(a) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s); provided that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Issuer to include in any
registration), and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents reasonably
required under the terms of such underwriting arrangements.
(b) Each Person that is participating in any registration hereunder
agrees that, upon receipt of any notice from the Issuer of the happening of any
event of the kind described in Section 4(e) above, such Person will forthwith
discontinue the disposition of its Registrable Securities pursuant to the
registration statement until such Person's receipt of the copies of a
supplemented or amended prospectus as contemplated by such Section 4(e). In the
event that the Issuer shall give any such notice, the applicable time period
mentioned in Section 4(b) during which a Registration Statement is to remain
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to this Section 7 to
and including the date when each seller of a Registrable Security covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 4(e).
SECTION 8. CURRENT PUBLIC INFORMATION. At all times after the Issuer
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Issuer will timely file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder, and
will take such further action as any holder or holders of Registrable Securities
may reasonably request, all to the extent required to enable such holders to
sell Registrable Securities pursuant to Rule 144 adopted by the Securities and
Exchange Commission under the Securities Act (as such rule may be amended from
time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission.
SECTION 9. DEFINITIONS.
"Common Stock" means the Common Stock of the Company, $0.01 par value,
and any capital stock of any class of the Company hereafter authorized which is
not limited to a fixed sum or percentage of par or stated value in respect to
the rights of the holders thereof to participate in dividends or in the
distribution of assets upon any liquidation, dissolution or winding up of the
Company.
-12-
<PAGE> 13
"Issuer" means the Company; provided that, from and after the time that
the Company or any of its successors becomes subject to the reporting
requirements of the Securities Exchange Act, the term "Issuer" shall mean the
entity that is subject to such reporting requirements.
"Registrable Securities" means (i) all Common Stock of the Company
originally issued, directly or indirectly, to any Stockholder, (ii) all shares
of Common Stock of the Company issued or issuable, directly or indirectly, with
respect to the securities referred to in clause (i) above upon exercise,
conversion, or exchange or by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation, or other reorganization, and (iii) all other shares of Common
Stock of the Company held by Persons holding securities described in clauses (i)
and (ii) above. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when they have been distributed to the
public pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer, or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a Person shall be deemed to be a holder of Registrable
Securities, and the Registrable Securities shall be deemed to be in existence,
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.
"Person" means an individual, a partnership, a joint venture, an
association, a joint stock company, a corporation, a limited liability company,
a trust, an unincorporated organization, and a governmental entity or any
department, agency, or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Subsidiary" or "Subsidiaries" means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof,
or (ii) if a limited liability company, partnership, association, or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of such Person or entity or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a
majority ownership interest in a limited liability company, partnership,
association, or other business entity if such Person or Persons shall be
-13-
<PAGE> 14
allocated a majority of limited liability company, partnership, association, or
other business entity gains or losses or shall be or control any managing
director or general partner of such limited liability company, partnership,
association, or other business entity.
SECTION 10. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to the Company's securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company will not
take any action, or permit any change to occur, with respect to the Company's
securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split, combination of shares,
or other recapitalization).
(c) Additional Stockholders. In connection with the issuance of any
additional equity securities of the Company to any Person, the Company may
permit such Person to become a party to this Agreement and succeed to all of the
rights and obligations of a "Stockholder" under this Agreement by obtaining the
consent of the holders of a majority of the Registrable Securities and an
executed counterpart signature page to this Agreement, and, upon such execution,
such Person shall for all purposes be a "Stockholder" party to this Agreement.
(d) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment, or waiver of any provision of this Agreement will be
effective against the Company or the holders of Registrable Securities, unless
such modification, amendment, or waiver is approved in writing by the Company
and the holders of at least a majority of the Registrable Securities; provided,
however, that in the event that such amendment or waiver would materially and
adversely affect a holder or group of holders of Registrable Securities in a
manner substantially different than any other holders of Registrable Securities,
then such amendment or waiver will require the consent of such holder of
Registrable Securities or a majority of the Registrable Securities held by such
group of holders materially and adversely affected. Notwithstanding the
foregoing, if an amendment or modification of this Agreement serves merely to
add a party hereto, then such amendment or modification will be effective
against the Company, and the holders of Registrable Securities if such amendment
or modification is approved in writing by the Company, the holders of at least a
majority of the Registrable Securities, and such new party hereto. The failure
of any party to enforce any of the provisions of this Agreement will in no way
be construed as a waiver of such provisions and will not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
(e) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other
-14-
<PAGE> 15
provision or any other jurisdiction, but this Agreement will be reformed,
construed, and enforced in such jurisdiction as if such invalid, illegal, or
unenforceable provision had never been contained herein.
(f) Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, those documents expressly referred to herein, and the other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the holders of Registrable Securities (or any portion thereof) as
such shall be for the benefit of, and enforceable by, any subsequent holder of
any Registrable Securities (or of such portion thereof).
(h) Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
shall constitute one and the same agreement.
(i) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce their rights under this Agreement
specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Stockholder may
in its sole discretion apply to any court of competent jurisdiction for specific
performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
(j) Notices. All notices, demands, and other communications given or
delivered under this Agreement shall be in writing and shall be deemed to have
been given, (i) when received if given in person, (ii) on the date of electronic
confirmation of receipt if sent by telex, facsimile or other wire transmission,
(iii) three days after being deposited in the U.S. mail, certified or registered
mail, postage prepaid, or (iv) one day after being deposited with a reputable
overnight courier. Notices, demands, and communications to the Parties shall,
unless another address is specified in writing, be sent to the address or
telecopy number indicated below for the initial parties to this Agreement and to
any subsequent holder of Registrable Securities subject to this Agreement at
such address as is indicated in the Company's records:
-15-
<PAGE> 16
The Company:
Team Health, Inc.
1900 Winston Road, Suite 300
Knoxville, Tennessee 37919
Attention: President
Fax No. (423) 539-8052
<TABLE>
<CAPTION>
Holdings: with a copy to:
<S> <C>
Team Health Holdings, L.L.C. Kirkland & Ellis
c/o Madison Dearborn Capital Partners II, L.P. 200 East Randolph
Three First National Plaza, Suite 3800 Chicago, Illinois 60601
Chicago, Illinois 60602 Attention: Sanford E. Perl, Esq.
Attention: Timothy Sullivan Fax No. (312) 861-2200
Fax No. (312) 895-1001
</TABLE>
PPSI:
c/o MedPartners, Inc.
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
Fax No. (205) 982-7709
Attention: Legal Services
(k) Governing Law. The corporate law of the State of Tennessee shall
govern all issues and questions concerning the relative rights and obligations
of the Company and its stockholders. All other issues and questions concerning
the construction, validity, enforcement, and interpretation of this Agreement
and the exhibits and schedules hereto shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
(l) No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
(m) Board Approval. Whenever this Agreement calls for or refers to the
consent or approval of any matter by any holder of Registrable Securities, such
consent or approval shall be deemed given by such holder if each of such
holder's designees on the Company's board of directors (the "Board") has, in his
capacity as a director of the Company, given his consent or approval with
respect to such matter at a duly convened meeting of the Board or pursuant to an
effective unanimous written consent of the Board, unless, with respect to any
given matter, such holder
-16-
<PAGE> 17
notifies the Company in writing that the consent or approval at the Board level
by such holder's designees on the Board does not constitute the consent or
approval by such holder itself.
(n) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
(o) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-17-
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Agreement on the day and year first above written.
TEAM HEALTH, INC.
By: _________________________________
Its: ________________________________
TEAM HEALTH HOLDINGS, L.L.C.
By: _________________________________
Its: ________________________________
PACIFIC PHYSICIAN SERVICES, INC.
By: _________________________________
Its: ________________________________
<PAGE> 1
EXHIBIT 10.6
TEAM HEALTH HOLDINGS, L.L.C.
REGISTRATION AGREEMENT
THIS REGISTRATION AGREEMENT (this "Agreement") is made as of March 12,
1999, by and among Team Health Holdings, L.L.C., a Delaware limited liability
company (the "Company"), each of the persons listed on Schedule A attached
hereto and certain other securityholders of the Company who are from time to
time a party hereto (collectively the "Securityholders" and individually a
"Securityholder"). Otherwise undefined capitalized terms used herein are defined
in Section 9 hereof.
The execution and delivery of this Agreement by the Company and the
Securityholders is a condition to closing under that certain Recapitalization
Agreement, dated as of January 25, 1999 (as amended from time to time, the
"Recapitalization Agreement"), by and among Team Health, Inc., the Company,
Pacific Physician Services, Inc. and MedPartners, Inc.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
SECTION 1. DEMAND REGISTRATIONS.
(a) Requests for Registration. At any time, the holders of at least a
majority of the Registrable Securities may request registration under the
Securities Act of all or part of their Registrable Securities on Form S-1 or any
similar long-form registration ("Long-Form Registrations") or, if available, on
Form S-2 or S-3 or any similar short-form registration ("Short-Form
Registrations"). All registrations requested pursuant to this Section 1(a) are
referred to herein as "Demand Registrations." Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered and the anticipated per share price range for such
offering. Within five business days after receipt of any such request, the
Issuer shall give written notice of such requested registration to all other
holders of Registrable Securities and, subject to Section 1(d) below, will
include in such registration all Registrable Securities with respect to which
the Issuer has received written requests for inclusion therein within five
business days after the receipt of the Issuer's notice.
(b) Long-Form Registrations. The holders of the Registrable Securities
shall be entitled to request three Long-Form Registrations ("Issuer-paid Long-
Form Registrations") in which the Issuer will pay all Registration Expenses (as
defined below in Section 5). A registration shall not count as one of the
permitted Issuer-paid Long-Form Registrations until it has become effective
(unless such Long-Form Registration has not become effective due solely to the
fault of the holders requesting such registration), and no Issuer-paid Long-Form
Registration shall count as one of the permitted Long-Form Registrations unless
the holders of Registrable Securities requesting such registration are able to
register and sell at least 90% of the Registrable Securities requested to be
included in such registration; provided that in any event the Issuer shall pay
all Registration Expenses in connection with any registration initiated as an
Issuer-paid Long-Form Registration whether or not it has become effective and
whether or not such registration has counted as one of
<PAGE> 2
the permitted Issuer-paid Long-Form Registrations. All Long-Form Registrations
shall be underwritten registrations.
(c) Short-Form Registrations. In addition to the Issuer-paid Long-Form
Registrations provided pursuant to Section 1(b), the holders of the Registrable
Securities shall be entitled to request an unlimited number of Short-Form
Registrations in which the Issuer will pay all Registration Expenses. Demand
Registrations will be Short-Form Registrations whenever the Issuer is permitted
to use any applicable short form. After the Issuer has become subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, the
Issuer shall use its best efforts to make Short-Form Registrations on Form S-3
available for the sale of Registrable Securities. All Short-Form Registrations
shall be underwritten registrations, unless otherwise agreed to by the Issuer.
(d) Priority on Demand Registrations. The Issuer will not include in
any Demand Registration any securities which are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities included in such registration. If a Demand Registration
is an underwritten offering and the managing underwriters advise the Issuer in
writing that, in their opinion, the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering,
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities included
in such registration, the Issuer will include in such registration (i) first,
the number of Registrable Securities requested to be included in such
registration which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the number of Registrable Securities owned by
each such holder, and (ii) second, other securities requested to be included in
such Demand Registration, pro rata among the holders of such securities on the
basis of the number of such securities owned by each such holder. Any Persons
other than holders of Registrable Securities who participate in Demand
Registrations which are not at the Issuer's expense must pay their share of the
Registration Expenses as provided in Section 5 hereof.
(e) Restrictions on Demand Registrations. The Issuer will not be
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration or a previous registration in which the
holders of Registrable Securities were given piggyback rights pursuant to
Section 2 and were able to sell at least 90% of the Registrable Securities
requested to be included in such registration. The Issuer may postpone, for up
to 180 days (from the date of the request), the filing or the effectiveness of a
registration statement for a Demand Registration if the Issuer's board of
managers, or similar governing entity, believes that such Demand Registration
would reasonably be expected to have an adverse effect on any proposal or plan
by the Issuer or any Subsidiary thereof to engage in any material acquisition of
assets (other than in the ordinary course of business) or any material stock
purchase, merger, consolidation, tender offer, reorganization, or similar
transaction; provided, however, that in such event, the holders of Registrable
Securities initially requesting such Demand Registration will be entitled to
withdraw such request and, if such request is withdrawn, such Demand
Registration shall be treated as if it had never been made in the first
instance, and the Issuer will pay all Registration Expenses in connection
2
<PAGE> 3
with such registration. The Issuer may delay a Demand Registration hereunder
only once in any 12-month period.
(f) Selection of Underwriters. The holders of a majority of the
Registrable Securities initially requesting registration hereunder will have the
right to select the investment banker(s) and manager(s) to administer the
offering under such Demand Registration, subject to the Issuer's approval, which
will not be unreasonably withheld.
(g) Other Registration Rights. Except as provided in this Agreement,
the Issuer will not grant to any Persons the right to request that the Issuer
register any equity securities of the Issuer, or any securities convertible into
or exchangeable or exercisable for any such securities, without the prior
written consent of the holders of at least a majority of the Registrable
Securities.
SECTION 2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Issuer proposes to register any of
its equity securities under the Securities Act (other than pursuant to a Demand
Registration (which is addressed in Section 1 above rather than this Section 2)
or a registration on Form S-4 or S-8 or any successor or similar forms) and the
registration form to be used may be used for the registration of Registrable
Securities (a "Piggyback Registration"), whether or not for sale for its own
account, the Issuer will give prompt written notice to all holders of
Registrable Securities of its intention to effect such a registration and,
subject to Sections 2(c) and 2(d) below, will include in such registration all
Registrable Securities with respect to which the Issuer has received written
requests for inclusion therein within 20 days after the receipt of the Issuer's
notice; provided that with respect to any Piggyback Registration, if the holders
of at least a majority of the Registrable Securities determine that it would be
in the best interests of the Issuer or the Issuer's securityholders that no
Registrable Securities be included in such Piggyback Registration, then such
holders may waive and forego, as against all holders of Registrable Securities,
the inclusion of any Registrable Securities in such Piggyback Registration.
(b) Piggyback Expenses. In all Piggyback Registrations, the
Registration Expenses of the holders of Registrable Securities will be paid by
the Issuer.
(c) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Issuer, and the managing
underwriters advise the Issuer in writing (with a copy to each party hereto
requesting registration of Registrable Securities) that, in their opinion, the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the Issuer, the Issuer will include in such registration (i)
first, the securities that the Issuer proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders thereof on the basis of the number of Registrable Securities
owned by each such holder, and (iii) third, other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the number of such other securities owned by each such holder.
3
<PAGE> 4
(d) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the Issuer's
securities (it being understood that secondary registrations on behalf of
holders of Registrable Securities are addressed in Section 1 above rather than
in this Section 2(d)), and the managing underwriters advise the Issuer in
writing (with a copy to each party hereto requesting registration of Registrable
Securities) that, in their opinion, the number of securities requested to be
included in such registration exceeds the number which can be sold in an orderly
manner in such offering within a price range acceptable to the Issuer, the
Issuer will include in such registration (i) first, the securities requested to
be included therein by the holders requesting such registration, (ii) second,
the Registrable Securities requested to be included in such registration, pro
rata among the holders of such Registrable Securities on the basis of the number
of Registrable Securities owned by each such requesting holder, and (iii) third,
other securities requested to be included in such registration pro rata among
the holders of such other securities on the basis of the number of such
securities owned by each such holder.
(e) Selection of Underwriters. If any Piggyback Registration is an
underwritten offering, the selection of the investment banker(s) and manager(s)
for the offering must be approved by the holders of a majority of the
Registrable Securities included in such Piggyback Registration, which approval
shall not be unreasonably withheld.
(f) Withdrawal by Issuer. If, at any time after giving notice of its
intention to register any of its securities as set forth in Section 2(a) and
before the effective date of such registration statement filed in connection
with such registration, the Issuer shall determine, for any reason, not to
register such securities, the Issuer may, at its sole discretion, give written
notice of such determination to each holder of Registrable Securities and
thereupon shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith as provided herein).
(g) Other Registrations. If the Issuer has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Issuer will not file or cause to be
effected any other registration of any of its equity securities or securities
convertible into or exchangeable or exercisable for its equity securities under
the Securities Act (except on Form S-4 or S-8 or any successor form), whether on
its own behalf or at the request of any holder or holders of such securities,
until a period of at least 180 days has elapsed from the effective date of such
previous registration.
SECTION 3. HOLDBACK AGREEMENTS.
(a) Each holder of Registrable Securities agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of equity
securities of the Issuer, or any securities, options, or rights convertible into
or exchangeable or exercisable for such securities, during the seven days before
and the 90-day period (but in the case of the Issuer's initial public offering,
the 180-day period) beginning on the effective date of any underwritten public
offering of the Issuer's equity securities (including Demand and Piggyback
Registrations) (except as part of such underwritten registration), unless the
underwriters managing the registered public offering require
4
<PAGE> 5
a longer period, not to exceed 180 days beginning on the effective date of such
underwritten public offering.
(b) The Issuer agrees (i) not to effect any public sale or distribution
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days before and during the
180-day period beginning on the effective date of any underwritten public
offering of the Issuer's equity securities (including Demand and Piggyback
Registrations) (except as part of such underwritten registration or pursuant to
registrations on Form S-4 or S-8 or any successor form), unless the underwriters
managing the registered public offering otherwise agree, and (ii) to cause each
holder of its equity securities, or any securities convertible into or
exchangeable or exercisable for equity securities, purchased or otherwise
acquired from the Issuer at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during any such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
SECTION 4. REGISTRATION PROCEDURES. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Issuer will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Issuer will as
expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities which
registration statement shall comply as to form in all material respects with the
requirements of applicable form and include all financial statements required by
the Securities and Exchange Commission to be filed therewith, and thereafter use
its best efforts to cause such registration statement to become effective
(provided that, before filing a registration statement or prospectus or any
amendments or supplements thereto, the Issuer will furnish to the counsel
selected by the holders of a majority of the Registrable Securities covered by
such registration statement copies of all such documents proposed to be filed,
which documents will be subject to review of such counsel);
(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of either (i) not less than 180 days (subject
to extension pursuant to Section 7(b)) or, if such registration statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriters a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer, or
(ii) such shorter period as will terminate when all of the securities covered by
such registration statement during such period have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but, in any event, not before
the expiration of any longer period required under the Securities Act), and to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement until such time as all
of such
5
<PAGE> 6
securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such registration
statement;
(c) respond as promptly as practicable to any comments received by the
Securities and Exchange Commission with respect to such registration statement;
(d) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(e) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Issuer will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection or (ii) subject itself to taxation in any such
jurisdiction;
(f) notify each seller of such Registrable Securities, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event as
a result of which, the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made, and, at the request of any such seller, the Issuer
will prepare, file and furnish to such seller a reasonable number of copies of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made;
(g) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Issuer are then
listed and, if not so listed, to be listed on a securities exchange or the
National Association of Securities Dealers ("NASD") automated quotation system
and, if listed on the NASD automated quotation system, use its best efforts to
secure designation of all such Registrable Securities covered by such
registration statement as a "national market system security" of The Nasdaq
Stock Market within the meaning of Rule 11Aa2-1 of the Securities and Exchange
Commission or, failing that, to secure The Nasdaq Stock Market's authorization
for such Registrable Securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such Registrable Securities with the NASD;
(h) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
6
<PAGE> 7
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a securities
split, combination of securities, recapitalization or reorganization);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant, or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate and business documents and properties of the Issuer, and cause the
Issuer's officers, directors, employees, agents, representatives, and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent in connection with such
registration statement;
(k) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, beginning with the first day of the
Issuer's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(l) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Issuer to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Issuer in writing, which in the reasonable judgment
of such holder and its counsel should be included;
(m) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in such registration statement for sale in any
jurisdiction, the Issuer will provide notice of such order to the holders of
Registrable Securities covered by such Registration Statement and use its
reasonable best efforts promptly to obtain the withdrawal of such order;
(n) use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities;
(o) obtain a cold comfort letter from the Issuer's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters, which letter shall be addressed to the
underwriters, and the Issuer shall use its reasonable best efforts to cause such
cold comfort letter to also be addressed to the holders of such Registrable
Securities;
7
<PAGE> 8
(p) obtain an opinion from the Issuer's outside counsel in customary
form and covering such matters of the type customarily covered by such opinions,
which opinion shall be addressed to the underwriters and the holders of such
Registrable Securities;
(q) at the request of any holder of Registrable Securities, notify such
holder promptly (i) when any such registration statement and any post-effective
amendments thereto have become effective and (ii) when any amendment or
supplement to a prospectus forming a part of any such registration statement has
been filed with the Securities and Exchange Commission; and
(r) cooperate with the holders of Registrable Securities to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any Securities Act legend; and enable
certificates for such Registrable Securities to be issued for such numbers of
shares and registered in such names as such holders may reasonably request at
least two business days prior to any sale of Registrable Securities.
If any such registration or comparable statement refers to any holder by name or
otherwise as the holder of any securities of the Issuer and if such holder, in
its sole and exclusive judgment, is or might be deemed to be an underwriter or a
controlling person of the Issuer, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory to
such holder and presented to the Issuer in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Issuer's
securities covered thereby, and that such holding does not imply that such
holder shall assist in meeting any future financial requirements of the Issuer,
or (ii) in the event that such reference to such holder by name or otherwise is
not required by the Securities Act or any similar federal or state statute then
in force, the deletion of the reference to such holder; provided that, with
respect to this clause (ii), such holder shall furnish to the Issuer an opinion
of counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to the Issuer. The Issuer may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Issuer
with such information regarding such seller and the distribution of such
securities as the Issuer may from time to time reasonably request in writing.
SECTION 5. REGISTRATION EXPENSES.
(a) All expenses incident to the Issuer's performance of or compliance
with this Agreement, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of custodians,
fees and disbursements of counsel for the Issuer, and all independent certified
public accountants, underwriters (excluding discounts and commissions), and
other Persons retained by the Issuer (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement, except
that the Issuer will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance, and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Issuer are then listed or, if none are so
listed, on a securities exchange or the NASD automated quotation system.
8
<PAGE> 9
(b) In connection with each Demand Registration and each Piggyback
Registration, the Issuer shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the holders of a majority of the Registrable Securities
included in such registration.
(c) To the extent Registration Expenses are not required to be paid by
the Issuer, each holder of securities included in any registration hereunder
will pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
will be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of each seller's securities to be so
registered.
SECTION 6. INDEMNIFICATION.
(a) The Issuer agrees to indemnify and hold harmless, to the full
extent permitted by law, each holder of Registrable Securities, its officers,
directors, agents, and employees and each Person who controls such holder
(within the meaning of the Securities Act) against any and all losses, claims,
damages, liabilities, joint or several, together with reasonable costs and
expenses (including reasonable attorney's fees), to which such indemnified party
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of, are based upon, are
caused by, or result from (i) any untrue or alleged untrue statement of material
fact contained (A) in any registration statement, prospectus, or preliminary
prospectus or any amendment thereof or supplement thereto, or (B) in any
application or other document or communication (in this Section 6 collectively
called an "application") executed by or on behalf of the Issuer or based upon
written information furnished by or on behalf of the Issuer filed in any
jurisdiction in order to qualify any securities covered by such registration
statement under the "blue sky" or securities laws thereof, or (ii) any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Issuer will
reimburse such holder and each such director, officer, and controlling Person
for any legal or any other expenses incurred by them in connection with
investigating or defending any such loss, claim, liability, action, or
proceeding; provided, however, that the Issuer shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof), or expense arises out of, is based upon, is
caused by, or results from an untrue statement or alleged untrue statement, or
omission or alleged omission, made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon, and in conformity with, written
information prepared and furnished to the Issuer by such holder expressly for
use therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Issuer has furnished such holder with a sufficient number of copies of the same.
In connection with any underwritten offering, the Issuer will indemnify such
underwriters, their officers and directors, and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the holders of Registrable
Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Issuer in writing such information and
9
<PAGE> 10
affidavits as the Issuer reasonably requests for use in connection with any such
registration statement or prospectus and, to the full extent permitted by law,
will indemnify and hold harmless the other holders of Registrable Securities and
the Issuer, and their respective directors, officers, agents, and employees and
each other Person who controls the Issuer (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities, joint or several,
together with reasonable costs and expenses (including reasonable attorney's
fees), to which such indemnified party may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of, are based upon, are caused by, or result from (i) any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or in any application, or (ii) any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only to the extent that such untrue
statement or omission is made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, or
in any application, in reliance upon and in conformity with written information
prepared and furnished to the Issuer by such holder expressly for use therein;
provided, however, that the obligation to indemnify will be individual to each
holder and will be limited to the net amount of proceeds received by such holder
from the sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party), and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party will not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnifying party shall not, except with the approval of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to each indemnified party of a release from all liability
in respect to such claim or litigation without any payment or consideration
provided by such indemnified party.
(e) If the indemnification provided for in this Section 6 is
unavailable to, or is insufficient to hold harmless, an indemnified party under
the provisions above in respect to any losses, claims, damages, or liabilities
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
10
<PAGE> 11
damages, or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Issuer on the one hand and the sellers of
Registrable Securities and any other sellers participating in the registration
statement on the other hand from the sale of Registrable Securities pursuant to
the registered offering of securities as to which indemnity is sought, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Issuer on the one hand and of the sellers of Registrable Securities and any
other sellers participating in the registration statement on the other hand in
connection with the registration statement on the other in connection with the
statement or omissions which resulted in such losses, claims, damages, or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer on the one hand and the sellers of
Registrable Securities and any other sellers participating in the registration
statement on the other hand shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) to the Issuer
bear to the total net proceeds from the offering (before deducting expenses) to
the sellers of Registrable Securities and any other sellers participating in the
registration statement. The relative fault of the Issuer on the one hand and of
the sellers of Registrable Securities and any other sellers participating in the
registration statement on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged omission to state a material
fact relates to information supplied by the Issuer or by the sellers of
Registrable Securities or other sellers participating in the registration
statement and the parties' relative intent, knowledge, access to information,
and opportunity to correct or prevent such statement or omission.
(f) The Issuer and the sellers of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the sellers of Registrable Securities
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no seller of Registrable Securities shall be required to contribute
any amount in excess of the net proceeds received by such seller from the sale
of Registrable Securities covered by the registration statement filed pursuant
hereto. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(g) The indemnification and contribution by any such party provided for
under this Agreement shall be in addition to any other rights to indemnification
or contribution which any indemnified party may have pursuant to law or contract
and will remain in full force and effect regardless of any investigation made or
omitted by or on behalf of the indemnified party or any officer, director, or
controlling Person of such indemnified party and will survive the transfer of
securities.
11
<PAGE> 12
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
(a) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements (including, without
limitation, pursuant to the terms of any over-allotment or "green shoe" option
requested by the managing underwriter(s); provided that no holder of Registrable
Securities will be required to sell more than the number of Registrable
Securities that such holder has requested the Issuer to include in any
registration), and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, and other documents reasonably
required under the terms of such underwriting arrangements.
(b) Each Person that is participating in any registration hereunder
agrees that, upon receipt of any notice from the Issuer of the happening of any
event of the kind described in Section 4(e) above, such Person will forthwith
discontinue the disposition of its Registrable Securities pursuant to the
registration statement until such Person's receipt of the copies of a
supplemented or amended prospectus as contemplated by such Section 4(e). In the
event that the Issuer shall give any such notice, the applicable time period
mentioned in Section 4(b) during which a Registration Statement is to remain
effective shall be extended by the number of days during the period from and
including the date of the giving of such notice pursuant to this Section 7 to
and including the date when each seller of a Registrable Security covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 4(e).
SECTION 8. CURRENT PUBLIC INFORMATION. At all times after the Issuer
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Issuer will timely file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder, and
will take such further action as any holder or holders of Registrable Securities
may reasonably request, all to the extent required to enable such holders to
sell Registrable Securities pursuant to Rule 144 adopted by the Securities and
Exchange Commission under the Securities Act (as such rule may be amended from
time to time) or any similar rule or regulation hereafter adopted by the
Securities and Exchange Commission.
SECTION 9. DEFINITIONS.
"Issuer" means the Company; provided that, from and after the time that
the Company or any of its successors becomes subject to the reporting
requirements of the Securities Exchange Act, the term "Issuer" shall mean the
entity that is subject to such reporting requirements.
"LLC Agreement" means that certain Amended and Restated Limited
Liability Company Agreement of the Company, dated as of the date hereof, by and
among the Company's members, as amended, modified or supplemented from time to
time.
12
<PAGE> 13
"Registrable Securities" means (i) all Common Units (as defined in the
LLC agreement) of the Company originally issued, directly or indirectly, to any
Securityholder, (ii) all Common Units of the Company issued or issuable,
directly or indirectly, with respect to the securities referred to in clause (i)
above upon exercise, conversion, or exchange or by way of dividend or split or
in connection with a combination of securities, recapitalization, merger,
consolidation, or other reorganization, and (iii) all other Common Units of the
Company held by Persons holding securities described in clauses (i) and (ii)
above. As to any particular Registrable Securities, such securities shall cease
to be Registrable Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act or sold to the
public through a broker, dealer, or market maker in compliance with Rule 144
under the Securities Act (or any similar rule then in force). For purposes of
this Agreement, a Person shall be deemed to be a holder of Registrable
Securities, and the Registrable Securities shall be deemed to be in existence,
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected, and such Person shall be entitled to exercise the
rights of a holder of Registrable Securities hereunder.
"Person" means an individual, a partnership, a joint venture, an
association, a joint stock company, a corporation, a limited liability company,
a trust, an unincorporated organization, and a governmental entity or any
department, agency, or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Subsidiary" or "Subsidiaries" means, with respect to any Person, any
corporation, limited liability company, partnership, association, or other
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof,
or (ii) if a limited liability company, partnership, association, or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of such Person or entity or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a
majority ownership interest in a limited liability company, partnership,
association, or other business entity if such Person or Persons shall be
allocated a majority of limited liability company, partnership, association, or
other business entity gains or losses or shall be or control any managing
director or general partner of such limited liability company, partnership,
association, or other business entity.
13
<PAGE> 14
SECTION 10. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to the Company's securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.
(b) Adjustments Affecting Registrable Securities. The Company will not
take any action, or permit any change to occur, with respect to the Company's
securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a securities split, combination of
securities, or other recapitalization).
(c) Additional Securityholders. In connection with the issuance of any
additional equity securities of the Company to any Person, the Company may
permit such Person to become a party to this Agreement and succeed to all of the
rights and obligations of a "Securityholder" under this Agreement by obtaining
the consent of the holders of a majority of the Registrable Securities and an
executed counterpart signature page to this Agreement, and, upon such execution,
such Person shall for all purposes be a "Securityholder" party to this
Agreement.
(d) Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment, or waiver of any provision of this Agreement will be
effective against the Company or the holders of Registrable Securities, unless
such modification, amendment, or waiver is approved in writing by the Company
and the holders of at least a majority of the Registrable Securities; provided,
however, that in the event that such amendment or waiver would materially and
adversely affect a holder or group of holders of Registrable Securities in a
manner substantially different than any other holders of Registrable Securities,
then such amendment or waiver will require the consent of such holder of
Registrable Securities or a majority of the Registrable Securities held by such
group of holders materially and adversely affected. Notwithstanding the
foregoing, if an amendment or modification of this Agreement serves merely to
add a party hereto, then such amendment or modification will be effective
against the Company, and the holders of Registrable Securities if such amendment
or modification is approved in writing by the Company, the holders of at least a
majority of the Registrable Securities, and such new party hereto. The failure
of any party to enforce any of the provisions of this Agreement will in no way
be construed as a waiver of such provisions and will not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
(e) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed, and enforced in such jurisdiction as if such invalid,
illegal, or unenforceable provision had never been contained herein.
14
<PAGE> 15
(f) Entire Agreement. Except as otherwise expressly set forth herein,
this Agreement, those documents expressly referred to herein, and the other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understandings,
agreements, or representations by or among the parties, written or oral, which
may have related to the subject matter hereof in any way.
(g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the holders of Registrable Securities (or any portion thereof) as
such shall be for the benefit of, and enforceable by, any subsequent holder of
any Registrable Securities (or of such portion thereof).
(h) Counterparts. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
shall constitute one and the same agreement.
(i) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce their rights under this Agreement
specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Securityholder
may in its sole discretion apply to any court of competent jurisdiction for
specific performance and/or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of
this Agreement.
(j) Notices. All notices, demands, and other communications given or
delivered under this Agreement shall be in writing and shall be deemed to have
been given, (i) when received if given in person, (ii) on the date of electronic
confirmation of receipt if sent by telex, facsimile or other wire transmission,
(iii) three days after being deposited in the U.S. mail, certified or registered
mail, postage prepaid, or (iv) one day after being deposited with a reputable
overnight courier. Notices, demands, and communications shall, unless another
address is specified in writing, be sent to (i) the Company at the address or
telecopy number indicated below, (ii) the Securityholders at the address
specified on the attached Schedule A and (iii) any subsequent holder of
Registrable Securities subject to this Agreement at such address as is indicated
in the Company's records:
<TABLE>
<CAPTION>
The Company: with a copy to:
<S> <C>
Team Health Holdings, L.L.C. Kirkland & Ellis
c/o Madison Dearborn Capital Partners II, L.P. 200 East Randolph
Three First National Plaza, Suite 3800 Chicago, Illinois 60601
Chicago, Illinois 60602 Attention: Sanford E. Perl, Esq.
Attention: Timothy Sullivan Fax No. (312) 861-2200
Fax No. (312) 895-1001
</TABLE>
15
<PAGE> 16
(k) Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights and obligations
of the Company and its securityholders. All other issues and questions
concerning the construction, validity, enforcement, and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
(l) No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.
(m) Board Approval. Whenever this Agreement calls for or refers to the
consent or approval of any matter by any holder of Registrable Securities, such
consent or approval shall be deemed given by such holder if each of such
holder's designees on the Company's board of managers (the "Board") has, in his
capacity as a manager of the Company, given his consent or approval with respect
to such matter at a duly convened meeting of the Board or pursuant to an
effective unanimous written consent of the Board, unless, with respect to any
given matter, such holder notifies the Company in writing that the consent or
approval at the Board level by such holder's designees on the Board does not
constitute the consent or approval by such holder itself.
(n) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is a Saturday, Sunday or legal holiday
in the state in which the Company chief-executive office is located, the time
period shall automatically be extended to the business day immediately following
such Saturday, Sunday or legal holiday.
(o) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
16
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Agreement on the day and year first above written.
TEAM HEALTH HOLDINGS, L.L.C.
By: ____________________________________
Its: ___________________________________
MADISON DEARBORN CAPITAL PARTNERS II, L.P.
By: Madison Dearborn Partners II, L.P.
Its: General Partner
By: Madison Dearborn Partners, Inc.
Its: General Partner
By: _________________________
Its: ________________________
CORNERSTONE EQUITY INVESTORS IV, L.P.
By: Cornerstone Equity Investors IV LLC
Its: General Partner
By: ________________________________
Its: _______________________________
HEALTHCARE EQUITY PARTNERS, L.P.
By: Beecken, Petty & Company, L.L.C.
Its: General Partner
By: ________________________________
Its: _______________________________
HEALTHCARE EQUITY Q.P. PARTNERS, L.P.
By: Beecken, Petty & Company, L.L.C.
Its: General Partner
By: ________________________________
Its: _______________________________
<PAGE> 18
[CONTINUATION OF SIGNATURE PAGES TO REGISTRATION AGREEMENT]
/s/ H. Lynn Massingale
________________________________________
H. LYNN MASSINGALE, M.D.
/s/ Michael L. Hatcher
________________________________________
MICHAEL L. HATCHER
/s/ Jeffrey Bettinger
________________________________________
JEFFREY BETTINGER, M.D.
/s/ David P. Jones
________________________________________
DAVID P. JONES
/s/ Stephen D. Sherlin
________________________________________
STEPHEN D. SHERLIN
/s/ Neil J. Principe
________________________________________
NEIL J. PRINCIPE, M.D.
/s/ Richard Gillespie
________________________________________
RICHARD GILLESPIE, M.D.
/s/ James E. George
________________________________________
JAMES E. GEORGE, M.D.
/s/ Randal L. Dabbs
________________________________________
RANDAL L. DABBS, M.D.
/s/ Monty C. Scott
________________________________________
MONTY C. SCOTT
<PAGE> 19
[CONTINUATION OF SIGNATURE PAGES TO REGISTRATION AGREEMENT]
/s/ Randall S. Aguiar
________________________________________
RANDALL S. AGUIAR
/s/ John Craig
________________________________________
JOHN CRAIG
/s/ William R. Machuga
________________________________________
WILLIAM R. MACHUGA
/s/ Mary Pastick
________________________________________
MARY PASTICK
/s/ Michael J. Weiner
________________________________________
MICHAEL J. WEINER
/s/ James V. Hillman
________________________________________
JAMES V. HILLMAN, M.D.
/s/ Mark E. Jergens
________________________________________
MARK E. JERGENS
/s/ Gerard LaSalle
________________________________________
GERARD LASALLE, M.D.
/s/ James J. Rybak
________________________________________
JAMES J. RYBAK, M.D.
/s/ John R. Staley
________________________________________
JOHN R. STALEY, M.D.
<PAGE> 20
SCHEDULE A
NAME AND NOTICE ADDRESS
Madison Dearborn Capital Partners II, L.P.
Three First National Plaza, Suite 3800
Chicago, IL 60602
Attention: Timothy Sullivan
Cornerstone Equity Investors IV, L.P.
717 Fifth Avenue, Suite 1100
New York, NY 10022
Attention: Dana J. O'Brien
Healthcare Equity Partners, L.P.
901 Warrenville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
Healthcare Equity Q.P. Partners, L.P.
901 Warrenville Road, Suite 205
Lisle, IL 60532
Attention: Kenneth O'Keefe
H. Lynn Massingale, M.D.
22000 Beals Chapel Road
Lenoir City, TN 37772
Michael L. Hatcher
1041 Hayslope Drive
Knoxville, TN 37919
Jeffrey Bettinger, M.D.
5925 SW 114 Terrace
Miami, FL 33156
David D. Jones
1291 Kensington Drive
Knoxville, TN 37922
Stephen D. Sherlin
8219 Glenrothes Blvd.
Knoxville, TN 37909
Neil J. Principe, M.D.
5 Isla Bahia Terrace
Ft. Lauderdale, FL 33316
Richard Gillespie, M.D.
1855 Happy Valley Road
Santa Rosa, CA 95409
Randal L. Dabbs, M.D.
1871 Cherokee Bluff Drive
Knoxville, TN 37920
<PAGE> 21
Monty C. Scott
1828 Scenic Valley Lane
Knoxville, TN 37922
<PAGE> 22
Randall S. Aguiar
4911 NW 65th Avenue
Lauderhill, FL 33319
John Craig
12226 Brighton Court
Knoxville, TN 37922
William R. Machuga
12116 East Ashton Court
Knoxville, TN 37922
Mary Pastick
9077 Boca Gardens Cr S
Boca Raton, FL 33496
Michael J. Weiner
12922 NW 20th Street
Pembroke Pines, FL 33028
James V. Hillman, M.D.
34 Ladoga Avenue
Tampa, FL 33606
Mark E. Jergens
4122 University Boulevard
Houston, TX 77005
Gerard LaSalle, M.D.
PO Box 916
Vashon Island, WA 98070
James J. Rybak, M.D.
3878 N. Valley Road
Fairview Park, OH 44126
John R. Staley, M.D.
1865 Stonebrook Drive
Knoxville, TN 37923
THG Investment, L.L.C.
c/o James E. George, M.D.
532 Cooper Street
Woodbury, NJ 08096
<PAGE> 1
EXHIBIT 10.7
TRUST AGREEMENT
This Agreement made this 25th day of January, 1999, by and between Team
Health, Inc., a Tennessee corporation (the "Company"), and The Trust Company of
Knoxville (the "Trustee");
WHEREAS, the Company has adopted the Team Health, Inc. Equity Deferred
Compensation Plan (the "Plan") attached hereto as Exhibit A, and the executives
of the Company listed in Exhibit B attached hereto are the initial Participants
in the Plan (the "Executives");
WHEREAS, the Company has incurred or expects to incur liability under
the terms of such Plan with respect to the Executives;
WHEREAS, the Company wishes to establish a trust (hereinafter called
the "Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's creditors in the event of the Company's
Insolvency, as herein defined, until paid to the Executives and their
beneficiaries in such manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in the meeting
of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Company hereby deposits with the Trustee in trust $8,580,250 or
such other amount as determined by the Company, which shall become the principal
of the Trust to be held, administered and disposed of by the Trustee as provided
in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
<PAGE> 2
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor, within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of the Executives and general creditors as herein set
forth. The Executives and their beneficiaries shall have no preferred claim on,
or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of the Executives and their beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Neither the Trustee nor any
Executive or any beneficiary shall have any right to compel such additional
deposits.
SECTION 2. PAYMENTS TO EXECUTIVES AND THEIR BENEFICIARIES.
(a) The Company shall deliver to the Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Executive (and
his or her beneficiaries), that provides a formula or other instructions
acceptable to the Trustee for determining the amounts so payable, the form in
which such amount is to be paid (as provided for or available under the Plan),
and the time of commencement for payment of such amounts. Except as otherwise
provided herein, the Trustee shall make payments to the Executives and their
beneficiaries in accordance with such Payment Schedule. The Trustee shall make
provision for the reporting and withholding of any federal, state or local taxes
that may be required to be withheld with respect to the payment of benefits
pursuant to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by the Company.
(b) The entitlement of an Executive or his or her beneficiaries to
benefits under the Plan shall be determined by the Company or such party as it
shall designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
(c) The Company may make payment of benefits directly to the Executives
or their beneficiaries as they become due under the terms of the Plan. The
Company shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to the Executives or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with the
terms of the Plan, the Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company where principal and earnings are
not sufficient.
2
<PAGE> 3
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN THE COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to the Executives and
their beneficiaries if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to the Trustee that the Company has become Insolvent, the
Trustee shall determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits to the
Executives or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person claiming to be a
creditor alleging that the Company is Insolvent, the Trustee shall have no duty
to inquire whether the Company is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to the Executives or their
beneficiaries and shall hold the assets of the Trust for the benefit of the
Company's general creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of the Executives or their beneficiaries to pursue their
rights as general creditors of the Company with respect to benefits due under
the Plan or otherwise.
(4) The Trustee shall resume making payments to the Executives
or their beneficiaries in accordance with Section 2 of this Trust Agreement only
after the Trustee has determined that the Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to the
Executives or their beneficiaries under the terms of the Plan for the period of
such discontinuance, less the aggregate amount of any payments made to the
Executives or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
3
<PAGE> 4
SECTION 4. PAYMENTS TO THE COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct the Trustee to
return to the Company or to divert to others any of the Trust assets before all
payments have been made to the Executives and their beneficiaries pursuant to
the terms of the Plan.
SECTION 5. INVESTMENT AUTHORITY.
The Trustee may invest in securities (including equity or rights to
acquire equity) or obligations issued by Team Health Holdings, LLC, a Delaware
limited liability company and majority stockholder of the Company. All rights
associated with assets of the Trust shall be exercised by the Trustee or the
person designated by the Trustee, and shall in no event be exercisable by or
rest with the Executives. The Company shall have the right at anytime, and from
time to time in its sole discretion, to substitute assets of equal fair market
value for any asset held by the Trust. This right is exercisable by the Company
in a nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY THE TRUSTEE.
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing between
the Company and the Trustee. Within 90 days following the close of each calendar
year and within 90 days after the removal or resignation of the Trustee, the
Trustee shall deliver to the Company a written account of its administration of
the Trust during such year or during the period from the close of the last
preceding year to the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions effected by it,
including a description of all securities and investments purchased and sold
with the cost or net proceeds of such purchases or sales (accrued interest paid
or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF THE TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that
4
<PAGE> 5
the Trustee shall incur no liability to any person for any action taken pursuant
to a direction, request or approval given by the Company which is contemplated
by, and in conformity with, the terms of the Plan or this Trust and is given in
writing by the Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the Trustee against
the Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the
Trust, the Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a successor Trustee, or to loan to any person
the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective 60 days after receipt of such notice unless
the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days notice or upon
shorter notice accepted by the Trustee.
5
<PAGE> 6
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 60 days after receipt of notice
of resignation, removal or transfer, unless the Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and
the Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on which the
Executives and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust any assets remaining in
the Trust shall be returned to the Company.
6
<PAGE> 7
SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to the Executives and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be January 25, 1999.
* * * * *
7
<PAGE> 8
EXECUTED by the undersigned to be effective as of the 25th day of
January, 1999.
TRUSTOR:
Team Health, Inc.
By:__________________________________
Its:__________________________________
TRUSTEE:
The Trust Company of Knoxville
By:____________________________________
Its:____________________________________
<PAGE> 9
EXHIBIT A
Team Health, Inc. Equity Deferred Compensation Plan
See Attached.
<PAGE> 10
EXHIBIT B
Initial Participants
<PAGE> 1
EXHIBIT 10.8
EXECUTION COPY
$200,000,000
CREDIT AGREEMENT
Dated as of March 12, 1999
among
TEAM HEALTH, INC.,
as Borrower,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
as Initial Lenders,
FLEET NATIONAL BANK,
as Issuing Bank,
as Swing Line Bank,
as Co-Arranger,
and
as Administrative Agent,
NATIONSBANK, N.A.,
as Issuing Bank,
and
as Co-Arranger,
NATIONSBANC MONTGOMERY SECURITIES LLC,
as Syndication Agent,
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION,
as Documentation Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS.............................................................. 2
SECTION 1.1 Certain Defined Terms.......................................................... 2
SECTION 1.2 Computation of Time Periods.................................................... 36
SECTION 1.3 Accounting Terms............................................................... 36
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT..................................................................... 37
SECTION 2.1 The Advances................................................................... 37
SECTION 2.2 Making the Advances............................................................ 39
SECTION 2.3 Issuance of and Drawings and Reimbursement
Under Letters of Credit.............................................. 42
SECTION 2.4 Repayment of Advances.......................................................... 44
SECTION 2.5 Termination or Reduction of the Commitments.................................... 46
SECTION 2.6 Prepayments.................................................................... 47
SECTION 2.7 Interest....................................................................... 50
SECTION 2.8 Fees........................................................................... 51
SECTION 2.9 Conversion of Advances......................................................... 52
SECTION 2.10 Increased Costs, Etc........................................................... 53
SECTION 2.11 Payments and Computations...................................................... 55
SECTION 2.12 Taxes.......................................................................... 56
SECTION 2.13 Sharing of Payments, Etc....................................................... 59
SECTION 2.14 Use of Proceeds................................................................ 60
SECTION 2.15 Defaulting Lenders............................................................. 60
SECTION 2.16 Removal of Lender.............................................................. 62
ARTICLE 3
CONDITIONS OF LENDING......................................................................... 63
SECTION 3.1 Conditions Precedent to Initial Extension of Credit............................ 63
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance............................ 71
SECTION 3.3 Determinations Under Section 3.1............................................... 72
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWER................................................ 73
</TABLE>
<PAGE> 3
ii
<TABLE>
<S> <C>
SECTION 4.1 Organization................................................................... 73
SECTION 4.2 Subsidiaries................................................................... 73
SECTION 4.3 Corporate Power, Authorization................................................. 73
SECTION 4.4 Governmental Authorizations, Approvals......................................... 74
SECTION 4.5 Due Execution, Validity, Enforceability........................................ 74
SECTION 4.6 Financial Statements........................................................... 75
SECTION 4.7 Pro Forma Financial Statements................................................. 75
SECTION 4.8 True and Complete Disclosure................................................... 75
SECTION 4.9 Litigation..................................................................... 76
SECTION 4.10 Regulation U................................................................... 76
SECTION 4.11 ERISA.......................................................................... 76
SECTION 4.12 Casualty....................................................................... 77
SECTION 4.13 Environmental Matters.......................................................... 77
SECTION 4.14 Collateral Documents........................................................... 78
SECTION 4.15 Taxes.......................................................................... 79
SECTION 4.16 Compliance with Securities Laws................................................ 79
SECTION 4.17 Solvency....................................................................... 80
SECTION 4.18 Debt........................................................................... 80
SECTION 4.19 No Defaults, Compliance with Laws.............................................. 80
SECTION 4.20 Owned Real Property............................................................ 80
SECTION 4.21 Leased Real Property........................................................... 81
SECTION 4.22 Material Contracts............................................................. 81
SECTION 4.23 Investments.................................................................... 81
SECTION 4.24 Intellectual Property.......................................................... 81
SECTION 4.25 Recapitalization Documents..................................................... 81
SECTION 4.26 Fees........................................................................... 82
SECTION 4.27 Government Consents for Conduct of Business.................................... 82
SECTION 4.28 Labor Disputes; Collective Bargaining Agreement;
Employee Grievances ................................................. 83
SECTION 4.29 Senior Debt.................................................................... 83
ARTICLE 5
AFFIRMATIVE COVENANTS......................................................................... 83
SECTION 5.1 Compliance with Law............................................................ 84
SECTION 5.2 Payment of Taxes, Etc.......................................................... 84
SECTION 5.3 Compliance with Environmental Laws............................................. 84
SECTION 5.4 Maintenance of Insurance....................................................... 84
SECTION 5.5 Preservation of Corporate Existence, Etc....................................... 85
SECTION 5.6 Visitation Rights.............................................................. 85
SECTION 5.7 Keeping of Books............................................................... 85
</TABLE>
<PAGE> 4
iii
<TABLE>
<S> <C>
SECTION 5.8 Maintenance of Properties, Etc................................................. 85
SECTION 5.9 Performance of Material Contracts.............................................. 85
SECTION 5.10 Transactions with Affiliates................................................... 86
SECTION 5.11 Agreement to Grant Additional Security......................................... 86
SECTION 5.12 Interest Rate Protection....................................................... 88
SECTION 5.13 Performance of Recapitalization Documents...................................... 89
SECTION 5.14 Year 2000 Compatibility........................................................ 89
SECTION 5.15 Assignment of Claims........................................................... 89
SECTION 5.16 Cash Concentration Account..................................................... 89
ARTICLE 6
NEGATIVE COVENANTS............................................................................ 90
SECTION 6.1 Liens, Etc..................................................................... 90
SECTION 6.2 Debt........................................................................... 91
SECTION 6.3 Fundamental Changes; Acquisitions.............................................. 93
SECTION 6.4 Sales, Etc. of Assets.......................................................... 94
SECTION 6.5 Investments.................................................................... 95
SECTION 6.6 Dividends, Etc................................................................. 97
SECTION 6.7 Change in Nature of Business................................................... 98
SECTION 6.8 Charter Amendments............................................................. 98
SECTION 6.9 Accounting Changes............................................................. 98
SECTION 6.10 Prepayments, Etc. of Debt...................................................... 98
SECTION 6.11 Amendment, Etc. of Recapitalization Documents.................................. 98
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries............................. 99
SECTION 6.13 Negative Pledge................................................................ 99
SECTION 6.14 Partnerships, New Subsidiaries................................................. 99
SECTION 6.15 Speculative Transactions....................................................... 100
SECTION 6.16 Capital Expenditures........................................................... 100
SECTION 6.17 Issuance of Stock.............................................................. 100
SECTION 6.18 Guaranteed Obligations......................................................... 101
SECTION 6.19 Management Fees................................................................ 102
ARTICLE 7
REPORTING REQUIREMENTS........................................................................ 102
SECTION 7.1 Default Notice................................................................. 102
SECTION 7.2 Monthly Financials............................................................. 102
SECTION 7.3 Quarterly Financials........................................................... 103
SECTION 7.4 Annual Financials.............................................................. 103
SECTION 7.5 Annual Forecasts............................................................... 104
</TABLE>
<PAGE> 5
iv
<TABLE>
<S> <C>
SECTION 7.6 ERISA Events and ERISA Reports................................................. 104
SECTION 7.7 Plan Terminations.............................................................. 105
SECTION 7.8 Actuarial Reports.............................................................. 105
SECTION 7.9 Plan Annual Reports............................................................ 105
SECTION 7.10 Multiemployer Plan Notices..................................................... 105
SECTION 7.11 Litigation..................................................................... 105
SECTION 7.12 Securities Reports............................................................. 105
SECTION 7.13 Creditor Reports............................................................... 106
SECTION 7.14 Agreement Notices.............................................................. 106
SECTION 7.15 Environmental Conditions....................................................... 106
SECTION 7.16 Real Property.................................................................. 106
SECTION 7.17 Insurance...................................................................... 106
SECTION 7.18 Management Letters............................................................. 106
SECTION 7.19 Other Information.............................................................. 107
ARTICLE 8
FINANCIAL COVENANTS........................................................................... 107
SECTION 8.1 Minimum EBITDA................................................................. 107
SECTION 8.2 Consolidated Funded Debt to EBITDA Ratio....................................... 108
SECTION 8.3 Interest Coverage Ratio........................................................ 108
SECTION 8.4 Fixed Charge Coverage Ratio.................................................... 109
ARTICLE 9
EVENTS OF DEFAULT............................................................................. 110
SECTION 9.1 Payment........................................................................ 110
SECTION 9.2 Representations and Warranties................................................. 110
SECTION 9.3 Certain Covenants.............................................................. 110
SECTION 9.4 Other Covenants................................................................ 110
SECTION 9.5 Other Defaults................................................................. 110
SECTION 9.6 Bankruptcy, Etc................................................................ 111
SECTION 9.7 Judgments...................................................................... 111
SECTION 9.8 Loan Documents................................................................. 111
SECTION 9.9 Liens.......................................................................... 111
SECTION 9.10 Change of Control.............................................................. 111
SECTION 9.11 ERISA Events................................................................... 112
SECTION 9.12 Subordination Provisions....................................................... 112
SECTION 9.13 Matters Relating to Regulatory Agencies........................................ 112
SECTION 9.14 Related Professional Corporation Termination................................... 113
</TABLE>
<PAGE> 6
v
<TABLE>
<S> <C>
ARTICLE 10
THE ADMINISTRATIVE AGENT...................................................................... 114
SECTION 10.1 Authorization and Action....................................................... 114
SECTION 10.2 Agent's Reliance, Etc.......................................................... 114
SECTION 10.3 Fleet and Affiliates........................................................... 115
SECTION 10.4 Lender Party Credit Decision................................................... 115
SECTION 10.5 Indemnification................................................................ 115
SECTION 10.6 Successor Administrative Agents................................................ 117
SECTION 10.7 Events of Default.............................................................. 118
ARTICLE 11
MISCELLANEOUS................................................................................. 118
SECTION 11.1 Amendments, Etc................................................................ 118
SECTION 11.2 Notices Etc.................................................................... 119
SECTION 11.3 No Waiver; Remedies............................................................ 121
SECTION 11.4 Costs and Expenses............................................................. 121
SECTION 11.5 Right of Set-off............................................................... 123
SECTION 11.6 Binding Effect................................................................. 124
SECTION 11.7 Assignments and Participations................................................. 124
SECTION 11.8 Execution in Counterparts...................................................... 127
SECTION 11.9 No Liability of the Issuing Banks.............................................. 127
SECTION 11.10 Confidentiality................................................................ 128
SECTION 11.11 Further Assurances............................................................. 128
SECTION 11.12 JURISDICTION, ETC.............................................................. 128
SECTION 11.13 GOVERNING LAW.................................................................. 129
SECTION 11.14 WAIVER OF JURY TRIAL........................................................... 129
</TABLE>
<PAGE> 7
vi
<TABLE>
<S> <C>
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Term A Note
Exhibit D - Form of Term B Note
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Security Agreement
Exhibit G - Form of Intellectual Property Security Agreement
Exhibit H - Form of Holdings Pledge Agreement
Exhibit I - Form of Holdings Guaranty
Exhibit J - Form of Subsidiary Guaranty
Exhibit K - Management Services Agreement
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule 1.3 Changes in Accounting Methods
Schedule 3.1(a)(xi) States in which Loan Parties are Qualified to do
Business
Schedule 4.2 Subsidiaries
Schedule 4.4 Required Authorizations and Approvals
Schedule 4.9 Disclosed Litigation
Schedule 4.11 Welfare Plans
Schedule 4.13 Environmental Matters
Schedule 4.18(a) Existing Debt
Schedule 4.18(b) Surviving Debt
Schedule 4.19 No Defaults
Schedule 4.20 Owned Real Estate
Schedule 4.21 Leased Real Estate
Schedule 4.22 Material Contracts
Schedule 4.23 Investments
Schedule 4.24 Intellectual Property
Schedule 4.28 Labor Disputes; Collective Bargaining Agreement;
Employee Grievances
Schedule 5.10 Transactions with Affiliates
Schedule 6.1(c) Liens
Schedule 6.2(c) Debt
Schedule 6.5(a) Investments in Subsidiaries
Schedule 6.5(g) Existing Investments
Schedule 6.17 Existing Issuances, Etc. of Stock
Schedule 6.18 Guaranteed Obligations
</TABLE>
<PAGE> 8
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 12, 1999 by and among TEAM HEALTH,
INC., a Tennessee corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders listed on the signature pages
hereof as the Initial Lenders (the "Initial Lenders"), FLEET NATIONAL BANK, as
an Issuing Bank (an "Issuing Bank"), as the Swing Line Bank (the "Swing Line
Bank"), as a co-arranger (in such capacity, a "Co-Arranger"), and as
administrative agent (together with any successor appointed pursuant to Article
10, the "Administrative Agent") for the Lender Parties (as hereinafter defined),
NATIONSBANK, N.A., as an Issuing Bank and as a Co-Arranger, NATIONSBANC
MONTGOMERY SECURITIES LLC, as syndication agent (the "Syndication Agent") and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION, as documentation agent (the
"Documentation Agent").
PRELIMINARY STATEMENT:
(1) Pursuant to a Recapitalization Agreement, dated as of January 25,
1999 (as amended, modified and supplemented from time to time, the
"Recapitalization Agreement"), by and among the Borrower, Pacific Physician
Services, Inc., a Delaware corporation ("Pacific"), MedPartners, Inc., a
Delaware corporation and the parent of the Borrower ("MedPartners") and Team
Health Holdings, L.L.C., a Delaware limited liability company ("Holdings"), (a)
MedPartners has agreed to take such actions as are necessary to cause all the
entities that collectively constitute what is commonly known as the "Team Health
business" (a list of which is attached as Exhibit A to the Recapitalization
Agreement), to become subsidiaries of the Borrower prior to the consummation of
the Recapitalization (as defined below), (b) Pacific has agreed to contribute to
the Borrower 100 shares of the Borrower's existing common stock, constituting
all of the outstanding common stock of the Borrower, in exchange for 100,000
shares of the Borrower's class A preferred stock, par value $.01 per share (the
"Preferred Stock") and a number of shares of the Borrower's common stock, no par
value (the "Common Stock") equal to (i)(A) the Estimated Closing Common Value
(as defined in the Recapitalization Agreement) minus (B) $100,000,000, divided
by (ii) $1.50, (c) Pacific has agreed to sell to Holdings, and Holdings has
agreed to purchase from Pacific, 94,299.091 shares of Preferred Stock for a
purchase price of $1,000 per share and 9,267,273 shares of Common Stock for a
purchase price of $1.50 per share and (d) the Borrower has agreed to redeem and
purchase from Pacific, and Pacific has agreed to sell to the Borrower, all
shares of Common Stock held by Pacific (after taking into account the above
described transactions) other than 732,727 shares of Common Stock (which will be
retained by Pacific), for a purchase price of $1.50 per share (the transactions
described in clauses (a), (b), (c) and (d) being hereinafter collectively called
the "Recapitalization");
(2) The Borrower has requested that the Lender Parties (as hereinafter
defined) make loans to the Borrower and issue letters of credit having an
aggregate principal and face amount at any one time outstanding of up to Two
Hundred Million Dollars ($200,000,000), to be used by the
<PAGE> 9
2
Borrower (i) to finance a portion of the Recapitalization, (ii) to pay fees and
expenses incurred in connection with the Recapitalization in an amount not to
exceed $20,000,000, (iii) to provide working capital, (iv) to finance general
corporate purposes of the Borrower and its Subsidiaries, and (v) to finance
Permitted Acquisitions (as hereinafter defined), and the Lender Parties have
agreed to make such loans and issue such letters of credit all on and subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired EBITDA" means as of any date of determination, an amount
equal to (i) EBITDA (calculated excluding clause (x) of the definition of
EBITDA) attributable to each Permitted Acquisition consummated by the Borrower
or any of its Subsidiaries during the one (1) year period preceding the date of
determination (but only for a number of full fiscal quarters immediately
preceding the consummation of the applicable Permitted Acquisition equal to four
(4) less the number of fiscal quarters following the consummation of the
applicable Permitted Acquisition for which financial statements of the Borrower
covering one (1) or more full fiscal quarters have been delivered to the
Administrative Agent pursuant to Section 7.3) plus (ii) the Pro Forma Cost
Reductions, if any, applicable to each such Permitted Acquisition (but
reductions shall be computed (notwithstanding the definition of Pro Forma Cost
Reduction) only in respect of the same number of fiscal quarters as described in
the parenthetical in clause (i) above).
"Additional Collateral Documents" has the meaning specified in Section
5.11(e).
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Fleet at its
office at Fleet National Bank, One Federal Street, Boston, Massachusetts 02110,
Attention: Loan Administration.
<PAGE> 10
3
"Advance" means a Term A Advance, a Term B Advance, a Revolving Credit
Advance, a Swing Line Advance or a Letter of Credit Advance.
"Affected Lender" has the meaning specified in Section 2.16.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agents" means the Administrative Agent, the Syndication Agent and the
Documentation Agent.
"Applicable Lending Office" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means at any time and from time to time a
percentage per annum determined pursuant to the last paragraph of this
definition by reference to the ratio of Consolidated Funded Debt to EBITDA at
such time, as set forth below:
Applicable Margin for Eurodollar Rate Advances
<TABLE>
<CAPTION>
Ratio of Consolidated Revolving Credit Advances
Funded Debt to EBITDA and Term A Advances Term B Advances
- --------------------- ------------------------- ---------------
<S> <C> <C>
Greater than 4.00:1 3.250% 3.750%
Greater than 3.50:1 3.000% 3.750%
less than or equal to 4.00:1
Greater than 3.00:1 2.750% 3.750%
less than or equal to 3.50:1
Greater than 2.50:1 2.500% 3.750%
less than or equal to 3.00:1
Less than or equal to 2.50:1 2.250% 3.750%
</TABLE>
<PAGE> 11
4
Applicable Margin for Prime Rate Advances
<TABLE>
<CAPTION>
Ratio of Consolidated Revolving Credit Advances
Funded Debt to EBITDA and Term A Advances Term B Advances
- --------------------- ------------------------- ---------------
<S> <C> <C>
Greater than 4.00:1 2.250% 2.750%
Greater than 3.50:1 2.000% 2.750%
less than or equal to 4.00
Greater than 3.00:1 1.750% 2.750%
less than or equal to 3.50:1
Greater than 2.50:1 1.500% 2.750%
less than or equal to 3.00:1
Less than or equal to 2.50:1 1.250% 2.750%
</TABLE>
Notwithstanding the above rates, prior to the date which is six (6)
months from the date hereof, the Applicable Margin for a Revolving Credit
Advance and a Term A Advance shall be 3.250% for a Eurodollar Rate Advance and
2.250% for a Prime Rate Advance.
The Applicable Margin for each Prime Rate Advance and each Eurodollar
Rate Advance shall be determined by reference to the ratio of Consolidated
Funded Debt to EBITDA which shall be determined and adjusted, if applicable,
three (3) Business Days after the date on which the Administrative Agent
receives financial statements pursuant to Section 7.3 or 7.4 and a certificate
of the Chief Financial Officer of the Borrower demonstrating the ratio of
Consolidated Funded Debt to EBITDA. If the Borrower has not submitted to the
Administrative Agent the information described above within ten (10) days
following the date required under Section 7.3 or 7.4, as the case may be, the
Applicable Margin shall result in an increase in the Applicable Margin to the
highest level set forth above, until the first day of the first month following
the delivery of such financial statements demonstrating that such an increase is
not required.
"Asset Disposition" shall mean the disposition (not involving an
Extraordinary Receipt) of any or all of the assets of the Borrower or any of its
Subsidiaries (including the capital stock of any of their Subsidiaries, but
excluding the sale by the Borrower of its own capital stock) whether by sale,
lease, transfer, or otherwise, including; provided, however, that for purposes
of Section 2.6(b)(ii), the term "Asset Disposition" shall not include any sale,
lease, transfer or other disposition (i) permitted pursuant to Section 6.4(a)
through (f) and (ii) of Equipment if the Net Proceeds therefrom are used to
reinvest in replacement Equipment within 180 days of such disposition;
<PAGE> 12
5
provided, that pending any purchase, any such Net Proceeds are used to repay
Revolving Credit Advances.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent and by the Borrower, in accordance with Section 11.7 and in
substantially the form of Exhibit A hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement required
or permitted under Section 5.12 that is entered into by and between the Borrower
and any Hedge Bank.
"Benefit Arrangements" means any deferred compensation, bonus, stock
option, stock purchase or incentive plan, or any other agreement or arrangement,
whether written or oral, other than Plans, Multiemployer Plans, Welfare Plans
and defined contribution plans, that authorizes benefits to employees of the
Borrower or any of its Subsidiaries.
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Fleet National Bank at its office at One Federal Street,
Boston, Massachusetts 02110.
"Borrowing" means a Term A Borrowing, a Term B Borrowing, a Revolving
Credit Borrowing or a Swing Line Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in Boston, Massachusetts, Charlotte, North
Carolina, Knoxville, Tennessee and New York, New York and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum of
all expenditures made by such Person or any of its Subsidiaries during such
period for Equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that should be, in
accordance with GAAP, reflected as additions to property, plant or Equipment on
a Consolidated balance sheet of such Person.
"Capitalized Leases" means all leases that should be, in accordance
with GAAP, recorded as capitalized leases.
<PAGE> 13
6
"Cash Equivalents" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries, free and clear of all Liens other than
Liens created under the Collateral Documents or as permitted under Section 6.1:
(a) marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States having a
maturity of not greater than 360 days from the date of issuance thereof, (b)
overnight bank deposits, bankers acceptances, certificates of deposit or time
deposits having a maturity of not greater than 360 days from the date of
issuance thereof with any commercial bank that is a Lender Party or a member of
the Federal Reserve System that issues (or the parent of which issues)
commercial paper rated as described in clause (c) and is organized under the
laws of the United States, any State thereof or the District of Columbia and has
combined capital and surplus of at least $500,000,000, (c) commercial paper
having a maturity of not greater than 180 days from the date of issuance thereof
in an aggregate amount of no more than $2,500,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group, (d) repurchase obligations and reverse
repurchase agreements of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
thirty (30) days with respect to marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or
instrumentality thereof, (e) securities with maturities of one (1) year or less
from the date of issuance thereof issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory, the securities of
which state, commonwealth, territory, political subdivision or taxing authority
(as the case may be) are rated at least AAA (or the equivalent thereof) by
Standard & Poor's Ratings Group or Aaa (or the equivalent thereof) by Moody's
Investors Service, Inc. or equivalent by another rating agency, (f) securities
with maturities of one (1) year or less from the date of issuance thereof backed
by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition, or (g) shares of
money market mutual or similar funds which invest only in assets satisfying the
requirements of clause (a) through (f) of this definition.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended from time
to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"Change of Control" means any of the following events: (a) prior to an
Initial Public Offering, (i) Holdings shall at any time cease to collectively
own a majority of the capital stock of the Borrower, (ii) the Sponsors or
Related Parties are no longer collectively the "beneficial owners" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, amended (the "Exchange
Act")) of at least fifty-one percent (51%) of the total voting power of all
Voting Stock of Holdings
<PAGE> 14
7
or (iii) the Sponsors or Related Parties no longer have the right to
collectively designate and cause to be elected a majority of the directors (or
their equivalent) of Holdings and thereby control the management of Holdings,
the Borrower and its Subsidiaries; (b) after an Initial Public Offering, (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than Holdings, the Sponsors or Related Parties, is or
becomes the beneficial owner, directly or indirectly, of more than the lesser of
(x) thirty-five percent (35%) of the total voting power of all Voting Stock of
the Borrower and (y) the percentage of the total voting power of all Voting
Stock of the Borrower owned by Holdings, the Sponsors and Related Parties (after
giving effect to the Initial Public Offering) or (ii) Continuing Directors shall
cease to constitute at least a majority of the directors constituting the board
of directors of Borrower; or (c) a Change of Control (as defined in the
Subordinated Notes Indenture) shall have occurred.
"Closing Date" means the date on which all of the conditions precedent
set forth in Section 3.1 to the Initial Extension of Credit shall have been
satisfied or waived.
"Co-Arranger" has the meaning specified in the recital of parties to
this Agreement.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, the Mortgages, the Holdings Pledge Agreement and
any other agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties, including the
Additional Collateral Documents delivered pursuant to Section 5.11.
"Commitment" means a Term A Commitment, a Term B Commitment, a
Revolving Credit Commitment or a Letter of Credit Commitment.
"Commitment Letter" means the letter dated January 21, 1999 among
NationsBank, Fleet, DLJ Capital Funding, Inc., each of the Agents and each of
Madison Dearborn Partners, Inc., Cornerstone Equity Investors LLC and Healthcare
Equity Partners, L.P.
"Common Stock" has the meaning specified in the Preliminary Statements.
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party in a writing
designated as confidential, but does not include any such information that is or
becomes generally available to the public (other than as a result of a breach by
the Administrative Agent or any Lender Party (or any party to which they
disclosed such information) of its obligations to keep such information
confidential under Section 11.10) or that is or becomes available to the
Administrative Agent or such Lender Party from a
<PAGE> 15
8
source other than the Borrower that is not, to the best of the Administrative
Agent's or such Lender Party's knowledge, acting in violation of a
confidentiality agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts, in accordance
with GAAP, of any Person and all of its Subsidiaries, and if not specified, the
Borrower and all of its Subsidiaries.
"Consolidated Funded Debt to EBITDA" means, for any fiscal quarter of
the Borrower, a ratio of (a) Funded Debt of the Borrower and its Subsidiaries as
at the end of such fiscal quarter to (b) EBITDA for the most recently completed
four fiscal quarters of the Borrower and its Subsidiaries.
"Consolidated Senior Debt to EBITDA" means, for any fiscal quarter of
the Borrower, a ratio of (a) Senior Debt of the Borrower and its Subsidiaries as
at the end of such fiscal quarter to (b) EBITDA for the most recently completed
four fiscal quarters of the Borrower and its Subsidiaries.
"Conversion," "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.9 or
2.10.
"Continuing Directors" means, as of any date of determination, any
member of the board of directors of the Borrower who (i) was a member of such
board of directors on the date of this Agreement, (ii) was nominated for
election or elected to such board of directors with the approval of a majority
of the Continuing Directors who were members of such board of directors at the
time of such nomination or election, or (iii) were nominated by the Sponsors
pursuant to the Stockholders Agreement.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets.
"Current Liabilities" of any Person means all indebtedness of such
Person that would, in accordance with GAAP, be classified as current
liabilities, but excluding the current portion of any Funded Debt (including
accrued but unpaid interest).
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables and
other accrued liabilities incurred in the ordinary course of business that are
not overdue by more than ninety (90) days unless being contested in good faith)
which would be shown as a liability on a balance sheet or are required to be set
forth in the footnotes to a year-end balance sheet, each prepared in accordance
with GAAP, (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or
<PAGE> 16
9
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Obligations of such Person as lessee under
Capitalized Leases to the extent classified as a liability on a balance sheet in
accordance with GAAP, (f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities, (g) all
Obligations of such Person in respect of Hedge Agreements, (h) all Debt of
others referred to in clauses (a) through (g) above or clause (i) below
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (I) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (II) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss,
(III) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (IV) otherwise to assure
a creditor against loss, (i) all Debt referred to in clauses (a) through (h)
above of another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts, contract rights or inventory) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt, (k) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product to which such Person is a party, where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP and (l) all Earnout
Obligations; provided, that notwithstanding the foregoing, Earnout Obligations
up to an aggregate amount of $20,000,000 outstanding at any time shall not be
deemed to be Debt.
"Debt Issuance" means any issuance or sale or other incurrence by the
Borrower or any of its Subsidiaries of any Funded Debt; provided, however, that
for purposes of determination of Net Cash Proceeds under Section 2.6(b)(iii),
the term "Debt Issuance" shall not include the incurrence of Debt permitted
under Section 6.2 (other than as provided in the proviso to Section
6.2(c)(iii)).
"Default" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.1 or 2.2 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.2(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.1 on the
same date as the Defaulted Advance so deemed made in part.
<PAGE> 17
10
"Defaulted Amount" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including, without
limitation, any amount required to be paid by such Lender Party to (a) the Swing
Line Bank pursuant to Section 2.2(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) any Issuing Bank pursuant to Section
2.3(c) to purchase a portion of a Letter of Credit Advance made by such Issuing
Bank, (c) the Administrative Agent pursuant to Section 2.2(e) to reimburse the
Administrative Agent for the amount of any Advance made by the Administrative
Agent for the account of such Lender Party, (d) any other Lender Party pursuant
to Section 2.13 to purchase any participation in Advances owing to such other
Lender Party and (e) the Administrative Agent or an Issuing Bank pursuant to
Section 10.5 to reimburse the Administrative Agent or such Issuing Bank for such
Lender Party's ratable share of any amount required to be paid by the Lender
Parties to the Administrative Agent or such Issuing Bank as provided therein. In
the event that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or under
any other Loan Document on the same date as the Defaulted Amount so deemed paid
in part.
"Defaulting Lender" means, at any time, any Lender Party that, at such
time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any
action or be the subject of any action or proceeding of a type described in
Section 9.6.
"Disclosed Litigation" has the meaning specified in Section 4.9.
"Disposal" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any federal, state, local or foreign law, into or on any land or
water so that such solid waste or hazardous waste or any hazardous constituents
thereof may enter the environment or be emitted into the air or discharged into
any waters, including ground waters.
"Documentation Agent" has the meaning specified in the recital of
parties to this Agreement.
"Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary organized under the laws of
the United States of America or any State thereof.
<PAGE> 18
11
"Earnout Obligations" means (i) Existing Earnout Obligations and (ii)
those payment obligations of the Borrower and its Subsidiaries to former owners
of businesses which were acquired by the Borrower or one of its Subsidiaries
pursuant to a Permitted Acquisition which are in the nature of deferred purchase
price. The amount of Earnout Obligations shall equal the amount required to be
set forth with respect to such payment obligations on a balance sheet prepared
in accordance with GAAP applied consistent with past practices.
"EBITDA" means, for any period the sum, determined on a Consolidated
basis and without duplication, of (i) Net Income (or Net Loss), (ii) Interest
Expense (without deduction for interest income), (iii) income (and franchise
taxes in the nature of income taxes) and foreign withholding tax expense, (iv)
depreciation expense, (v) extraordinary and nonrecurring non-cash expenses,
charges and losses to the extent that no reserve has been or is required to be
established therefor on a balance sheet prepared in accordance with GAAP, (vi)
amortization expense, (vii) other non-cash charges (including, without
limitation, non-cash charges in connection with the granting of options,
warrants or other equity interests) to the extent that no reserve has been or is
required to be established therefor on a balance sheet prepared in accordance
with GAAP, (viii) expenses of the Borrower related to the Transaction which are
paid, taken or otherwise accounted for within ninety (90) days of the
consummation of the Transaction not to exceed $20,000,000 in the aggregate, (ix)
up to $8,600,000 in bonuses or other compensation paid to employees on or about
the Closing Date, (x) Acquired EBITDA for such period, (xi) Management Fees paid
in cash during such period in accordance with this Agreement in an amount not to
exceed $500,000 in any Fiscal Year, (xii) non-cash losses from asset sales, and
(xiii) expenses incurred to the extent reimbursed (or reasonably expected to be
reimbursed within ninety (90) days of incurrence thereof) by MedPartners
pursuant to the indemnification provisions of the Recapitalization Agreement;
provided, that with respect to each of clauses (ii) through (xiii), such amounts
shall be added to Net Income pursuant to this definition only to the extent such
amounts are deducted in determining Net Income, minus (A) extraordinary and
nonrecurring gains (in each case determined in accordance with GAAP) and (B)
amounts added pursuant to clause (xiii) above during this Fiscal Year or any
previous Fiscal Year which were not so reimbursed within the time period set
forth in the parenthetical in clause (xiii) above; provided, that for Fiscal
Year 1998, EBITDA shall be deemed to be $11,800,000 with respect to the first
quarter of such Fiscal Year, $14,300,000 with respect to the second quarter of
such Fiscal Year, $14,500,000 with respect to the third quarter of such Fiscal
Year, and $13,700,000 with respect to the fourth quarter of such Fiscal Year;
provided, further, that for the first fiscal quarter of Fiscal Year 1999, EBITDA
shall be calculated for such fiscal quarter on a pro forma adjusted basis
consistent with the adjustments for Fiscal Year 1998 and reasonably acceptable
to the Administrative Agent. In addition, EBITDA shall be calculated without
giving effect to (w) any gains or losses (other than as expressly provided in
clause (xii) above) from sales of assets other than from sales of inventory sold
in the ordinary course of business, (x) purchase accounting adjustments required
or permitted by Account Principles Board Opinion Nos. 16 (including non-cash
write-ups and non-cash charges relating to inventory and fixed assets, in each
case arising in connection with any Permitted Acquisition) and 17 (including
non-cash charges relating to intangibles and goodwill arising in
<PAGE> 19
12
connection with any Permitted Acquisition), (y) any gain or loss recognized in
determining Consolidated Net Income (or Net Loss) for such period in respect of
post-retirement benefits as a result of the application of FASB 106 and (z) any
gain or loss recognized in determining Consolidated Net Income (or Net Loss) for
such period resulting from the payment of Earnout Obligations.
"Eligible Assignee" means with respect to any Facility (other than the
Letter of Credit Facility), (a) a Lender; (b) an Affiliate (or fund with the
same investment advisor or that has an Affiliate of such investment advisor as
its investment advisor) of a Lender; and (c) subject to the prior approval of
the Administrative Agent and the Borrower, such approval by the Borrower not to
be unreasonably withheld or delayed, (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $500,000,000; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $500,000,000; (iii) a commercial bank organized under
the laws of any other country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary Fund associated
with its General Arrangements to Borrow or of the Cayman Islands, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, so long as such bank is acting through a branch or agency located
in the United States; (iv) the central bank of any country that is a member of
the OECD; and (v) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust or other entity)
that is engaged in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having total assets in excess of
$500,000,000; and, with respect to the Letter of Credit Facility, a Person that
is an Eligible Assignee under subclause (i) or (iii) of clause (c) of this
definition and is approved by the Administrative Agent and the Borrower, such
approval by the Borrower not to be unreasonably withheld or delayed; provided,
however, that no Loan Party or Affiliate of a Loan Party shall qualify as an
Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (b) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any international or transnational law,
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidance having the force and effect of law, in each
case relating to pollution or protection of the environment or natural
resources, including, without
<PAGE> 20
13
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, threatened release, release or discharge of Hazardous
Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Equipment" has the meaning specified in Section 1(a) of the Security
Agreement.
"Equity Financing" means the purchase by Holdings and Pacific of (i)
Preferred Stock with a value on the date hereof of not less than $100,000,000
(including the retention by Pacific (a Wholly-Owned Subsidiary of MedPartners)
of Preferred Stock with a value on the date hereof of not more than $5,700,000)
and (ii) Common Stock with a value on the date hereof of not less than
$15,000,000 (including the retention by Pacific of Common Stock with a value on
the date hereof of not more than $1,100,000), all in accordance with the terms
of the Recapitalization Agreement.
"Equity Issuance" means any sale or issuance by the Borrower or any of
its Subsidiaries of any capital stock or other ownership or profit interest, any
securities convertible or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights or options to acquire capital stock or
other ownership or profit interest; provided, however, that for purposes of
determination of Net Cash Proceeds under Section 2.6(b)(iii), the term "Equity
Issuance" shall not include any issuance or sale of (a) capital stock of the
Borrower issued on or before the Closing Date in connection with the
Recapitalization; (b) capital stock of the Borrower to any Person as
consideration paid or otherwise issued in connection with a Permitted
Acquisition; (c) common stock of the Borrower issued to any director of the
Borrower required by applicable law in connection with such Person acting in
such capacity; (d) common stock of the Borrower to management and employees of
the Borrower whether pursuant to stock options or otherwise, (e) common stock
issued by any Subsidiary of the Borrower to the Borrower, (f) issuances of
capital stock of the Borrower to any shareholder of the Borrower (and their
respective Affiliates) on the Closing Date and (g) issuances of capital stock of
the Borrower to any Sponsor or Related Party after the date hereof so long as
the Net Cash Proceeds from any such issuance are used in accordance with Section
6.5(s).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Borrower, or under common
control with the Borrower, within the meaning of Section 414 of the Internal
Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (ii) the requirements of subsection (1) of Section
<PAGE> 21
14
4043(b) of ERISA (without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan under ERISA Section 4041(c),
pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect
to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of the Borrower or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year
for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an amendment
to a Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) as determined
on the basis of the offered rates for deposits in U.S. dollars, for a period of
time comparable to such Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m. (London time) two Business Days before the first day of such
Interest Period; provided, however, that if the rate described above does not
appear on the Telerate System on any applicable interest determination date, the
Eurodollar Rate shall be the rate (rounded upward as described above, if
necessary) for deposits in U.S. dollars for a period substantially equal to the
interest period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO page on that service for the purpose of displaying such rates), as of
11:00 a.m. (London time) two Business Days before the first day of such Interest
Period.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such Interest Period which
are offered to first class banks by four major banks in the
<PAGE> 22
15
London interbank market at approximately 11:00 a.m. (New York time) two Business
Days before the first day of such Interest Period as selected by the
Administrative Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its U.S. dollar deposit
offered rate. If at least two such quotations are provided, the rate for that
date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on the
basis of the rates quoted for loans in U.S. dollars to leading European banks
for a period of time comparable to such Interest Period offered by major banks
in New York City at approximately 11:00 a.m. (New York time) two Business Days
before the first day of such Interest Period. In the event that the
Administrative Agent is unable to obtain any such quotation as provided above,
it will be deemed that the Eurodollar Rate for such Interest Rate cannot be
determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Eurodollar Rate for an Interest Period shall be equal to the
amount determined above for such Interest Period divided by a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.7(a)(ii).
"Eurodollar Rate Reserve Percentage" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" has the meaning specified in Article 9.
"Excess Cash Flow" means for any period (without duplication) the sum
of (a) EBITDA of the Borrower and its Subsidiaries for such period plus (b) if
there was a net decrease in Working Capital during such period, the amount of
such net decrease less (c) if there was a net increase in Working Capital during
such period the amount of such net increase less (d) the aggregate amount of
mandatory and optional prepayments (other than optional prepayments of the Swing
Line Advances, Letter of Credit Advances or Revolving Credit Advances) or
repayments of principal made by the Borrower and its Subsidiaries on any Debt of
the Borrower and its Subsidiaries during such period less (e) Capital
Expenditures of the Borrower and its Subsidiaries paid in cash within
<PAGE> 23
16
such period or within 90 days of the end of such period (which, if so applied,
will not constitute a reduction in calculating Excess Cash Flow in the following
period) and not financed during such period less (f) the aggregate amount of all
federal, state, local and foreign taxes paid by the Borrower and its
Subsidiaries during such period less (g) the aggregate amount of interest paid
on any Debt of the Borrower and its Subsidiaries during such period less (h) the
aggregate amount of all non-cash credits included in arriving at such EBITDA
less (i) dividends or other distributions or redemptions paid by the Borrower to
the holders of its capital stock during such period to the extent that the
Borrower is expressly permitted to pay such dividends or other distributions or
redemptions under this Agreement less (j) extraordinary or nonrecurring cash
charges, expenses and losses during such period less (k) cash expenses paid
during such period in connection with the issuance pursuant to the Subordinated
Note Indenture of Subordinated Notes in exchange for such Subordinated Notes
plus (l) the increase during such period in reserves with respect to medical
malpractice insurance (except in the case of each of Fiscal Year 1999 and Fiscal
Year 2000, only that portion of the increase in such reserve during such Fiscal
Year in excess of $10,000,000) less (m) the decrease during such period in
reserves with respect to medical malpractice insurance less (n) the amount of
any payments in respect of Earnout Obligations and other payments made pursuant
to the Recapitalization Agreement less (o) up to $8,600,000 of bonuses and other
compensation paid to employees on or about the Closing Date less (p) the
unfinanced portion of cash purchase price for Permitted Acquisitions not to
exceed $3,000,000 in any Fiscal Year less (q) Acquired EBITDA less (r)
Management Fees paid in cash during such period in accordance with this
Agreement in an amount not to exceed $500,000 in any Fiscal Year less (s)
expenses of the Borrower related to the Transaction which are not financed and
which are paid, taken or otherwise accounted for within ninety (90) days of the
Transaction not to exceed $20,000,000 in the aggregate. With respect to each of
the deductions from EBITDA set forth above, each shall be made only to the
extent such amounts are not deducted in determining EBITDA.
"Existing Debt" has the meaning specified in Schedule 4.18(a).
"Existing Earnout Obligations" means those payment obligations of the
Borrower, its Subsidiaries and the Related Professional Corporations set forth
on Exhibit B to the Recapitalization Agreement to former owners of business
which were acquired by the Borrower, its Subsidiaries and the Related
Professional Corporations prior to the Closing Date which are in the nature of
deferred purchase prices for such businesses and are expressly contingent on the
financial or operating performance of such businesses for periods after the
Closing Date.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person from tax refunds (to the extent not included in EBITDA
for the period of receipt thereof), proceeds of insurance (other than proceeds
of business interruption insurance to the extent such proceeds constitute
compensation for lost earnings), condemnation awards (and payments in lieu
thereof) and indemnity payments; provided, however, that an Extraordinary
Receipt shall not include cash receipts received from proceeds of insurance,
condemnation awards (and payments in lieu
<PAGE> 24
17
thereof) or indemnity payments to the extent that such proceeds, awards or
payments (a) in respect of loss or damage to Equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the Equipment, fixed assets or real property in
respect of which such proceeds, awards or payments were received in accordance
with the terms of the Loan Documents, so long as such application is made within
one hundred eighty (180) days after such Person's receipt of such proceeds,
awards or payments; (b) are received by any Person in respect of any third party
claim against such Person and applied to pay (or to reimburse such Person for
its prior payment of) such claim and the costs and expenses of such Person with
respect thereto; or (c) in respect of indemnity payments have been or are
applied within twelve (12) months of receipt thereof to pay a reasonably
anticipated cost or expense of such Person not in excess of $10,000,000.
"Facility" means the Term A Facility, the Term B Facility, the
Revolving Credit Facility, the Letter of Credit Facility or the Swing Line
Facility.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the letter dated January 21, 1999 among NationsBank,
Fleet, DLJ Capital Funding, Inc., each of the Agents and each of Madison
Dearborn Partners, Inc., Cornerstone Equity Investors LLC and Healthcare Equity
Partners, L.P.
"Fiscal Year" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"Fleet" means Fleet National Bank in its capacity as a Lender, Issuing
Bank or Swing Line Bank.
"Foreign Subsidiary" means any Subsidiary organized under the laws of
any jurisdiction other than the United States of America or any State thereof.
"Funded Debt" means, with respect to the Borrower, the Advances, and
with respect to the Borrower and the other Loan Parties and any other Person,
all other Debt of such Person that by its terms matures more than one year after
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar agreement
that obligates the lender or
<PAGE> 25
18
lenders to extend credit during a period of more than one year after such date,
including the current portion of all such Debt.
"GAAP" has the meaning specified in Section 1.3.
"Guaranteed Obligations" means, as to any Person, any obligation of
such Person guaranteeing any indebtedness, rent or any other payment or
obligation of the lessee under a lease of real or personal property, dividend,
or other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) to indemnify the owner of such primary obligation against
loss in respect thereof; provided, that the term Guaranteed Obligations shall
not include endorsements of instruments for deposit or collection or standard
contractual indemnitees entered into in the ordinary course of business. The
amount of any Guaranteed Obligation at any time shall be deemed to be an amount
equal to the lesser at such time of (x) the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Obligation is made and
(y) the maximum amount for which such Person may be liable pursuant to the terms
of the instrument embodying such Guaranteed Obligation; or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"Guarantors" means (a) each Subsidiary Guarantor and (b) Holdings.
"Guaranty" means each of the Holdings Guaranty and the Subsidiary
Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"Hedge Bank" means any Lender Party or any of its Affiliates in its
capacity as a party to a Bank Hedge Agreement.
"Holdings" has the meaning specified in the Preliminary Statements.
<PAGE> 26
19
"Holdings Guaranty" has the meaning specified in Section 3.1(a).
"Holdings Pledge Agreement" has the meaning specified in Section
3.1(a).
"Immaterial Subsidiary" means each Subsidiary of the Borrower which (a)
for the most recent Fiscal Year of the Borrower had less than $100,000 of
revenues and (b) as of the end of such Fiscal Year was the owner of less than
$100,000 of assets, all as shown on the Consolidated financial statements of the
Borrower for such Fiscal Year.
"Indemnified Party" has the meaning specified in Section 11.4(b).
"Information Memorandum" means the information memorandum, dated
February 1999, delivered by the Syndication Agent and Fleet to the Lenders.
"Initial Extension of Credit" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit.
"Initial Lenders" has the meaning specified in the recital of parties
to this Agreement.
"Initial Public Offering" means the initial public offering of the
common stock of the Borrower.
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Intellectual Property Security Agreement" has the meaning specified in
Section 3.1(a).
"Interest Expense" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period net of interest
income for such period, whether paid or accrued, determined on a Consolidated
basis for such Person and its Subsidiaries and in accordance with GAAP, and
including, without limitation, (a) in the case of the Borrower, interest expense
in respect of Debt resulting from Advances, (b) the interest component of all
obligations under Capitalized Leases, (c) commissions, discounts and other fees
and charges payable in connection with letters of credit (including, without
limitation, Letters of Credit), (d) the net payment, if any, payable in
connection with Hedge Agreements less the net credit, if any, received in
connection with Hedge Agreements and (e) all fees paid by the Borrower pursuant
to Section 2.8(a). Interest Expense shall also include, regardless of treatment
of such amounts in accordance with GAAP, lease or other similar payments under
synthetic leases, tax retention operating leases, off-balance sheet loans or
similar off-balance sheet financing products to the extent that such payments
would be considered interest expense for tax purposes.
<PAGE> 27
20
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Prime Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:
(a) The Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends after
any principal repayment installment date for such Facility unless,
after giving effect to such selection, the aggregate principal amount
of Prime Rate Advances and of Eurodollar Rate Advances having Interest
Periods that end on or prior to such principal repayment installment
date for such Facility shall be at least equal to the aggregate
principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(c) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month, such Interest Period shall end on the last Business Day
of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Inventory" of any Person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
<PAGE> 28
21
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations or other securities of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clause (i) or (j) of the
definition of "Debt" in respect of such Person. The amount of any Investment by
any Person on any date of determination shall be the acquisition price of the
gross assets acquired (including any liability assumed by such Person to the
extent such liability would be reflected on a balance sheet prepared in
accordance with GAAP) plus all additional capital contributions or purchase
price paid in respect thereof, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment minus the amount of all cash returns of principal or capital thereon,
cash dividends thereon and other cash returns on investment thereon or
liabilities expressly assumed by another Person (other than Borrower or another
Subsidiary of Borrower) in connection with the sale of such Investment. Whenever
the term "outstanding" is used in this Agreement with reference to an
Investment, it shall take into account the matters referred to in the preceding
sentence.
"Issuing Bank" means each of Fleet and NationsBank and each Eligible
Assignee to which a Letter of Credit Commitment hereunder has been assigned
pursuant to Section 11.7.
"L/C Cash Collateral Account" has the meaning specified in the Security
Agreement.
"L/C Related Documents" has the meaning specified in Section
2.4(f)(ii)(A).
"Lender Party" means any Lender, any Issuing Bank or the Swing Line
Bank.
"Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 11.7.
"Letter of Credit" means any Letter of Credit issued hereunder (as
specified in Section 2.3(a)).
"Letter of Credit Advance" means an advance made by any Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.3(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.3(a).
"Letter of Credit Commitment" means, with respect to any Issuing Bank,
the amount set forth opposite such Issuing Bank's name on Schedule I hereto
under the caption "Letter of Credit Commitment" or, if such Issuing Bank has
entered into one or more Assignments and Acceptances, set forth for such Issuing
Bank in the Register maintained by the Administrative Agent pursuant to
<PAGE> 29
22
Section 11.7(d) as such Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section 2.5.
"Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Banks' Letter of Credit Commitments at such time, as such
amount may be reduced pursuant to Section 2.5.
"Lien" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"Loan Documents" means (a) this Agreement, (b) the Notes, (c) each
Guaranty, (d) the Collateral Documents, (e) each Letter of Credit Agreement, (f)
each Additional Collateral Document, and all other agreements, instruments and
documents executed in connection therewith, in each case as the same may at any
time be amended, supplemented, restated or otherwise modified and in effect.
"Loan Parties" means the Borrower and each Guarantor.
"Majority Lenders" of any Facility shall mean those Lenders (other than
Defaulting Lenders) which would constitute the Required Lenders under, and as
defined in, this Agreement if all outstanding Obligations of other Facilities
under this Agreement were repaid in full and all Commitments with respect
thereto were terminated.
"Management Fees" means for any period, all management fees, emoluments
or similar compensation paid to or incurred with respect to any Person (other
than any such fees, emoluments or similar compensation paid to or incurred and
payable to any Loan Party in respect of services rendered in connection with the
management or supervision of the management of any Loan Party), other than (a)
salaries, bonuses and other compensation paid to any full-time employee in
respect of such full-time employment and (b) fees, emoluments or similar
compensation paid or incurred in the ordinary course of business by any Loan
Party to any Person who is not an Affiliate thereof or to any Related
Professional Corporation in accordance with its contractual requirements.
"Management Services Agreement" means the Management Services Agreement
dated the date hereof between the Borrower and each of the Sponsors as in effect
on the date hereof, a copy of which is attached hereto as Exhibit K, as amended
to the extent permitted under this Agreement.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change (including
any event which, in the opinion of the Agents, is reasonably likely to result in
such a material adverse change) in (a)
<PAGE> 30
23
the business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or management of the Borrower and its Subsidiaries
(taken as a whole), (b) the ability of any Loan Party to perform its obligations
under the Loan Documents to which it is a party or (c) any material aspect of
the Transaction; provided, that the implementation or effectiveness of the final
rule entitled "Medicare Program: Revisions to Payment Policies and Adjustments
to the Relative Value Units under the Physician Fee Schedule for Calendar Year
1999" published at 63 Fed. Reg. 58814, et seq. (November 2, 1998) shall not be
deemed to cause a Material Adverse Change.
"Material Adverse Effect" has the meaning specified in Section 3.1(e).
"Material Contract" means, with respect to any Person, each contract or
group of similar contracts with the same or affiliated parties which account for
greater than 5% of the Consolidated revenue of the Borrower and its
Subsidiaries, each contract which is a replacement or a substitute for any
contract listed on such Schedule and each other contract to which such Person is
a party which is material to the business, condition (financial or otherwise),
operations, performance, properties or prospects of such Person.
"MedPartners" has the meaning specified in the Preliminary Statements.
"Mortgage" means each mortgage, deed of trust or other similar document
executed and delivered by the appropriate Loan Party, in form and substance
acceptable to the Administrative Agent and the Lenders in order (a) to provide
that such Loan Party is the mortgagor or grantor, (b) to comply with and/or
provide for specific laws of the jurisdictions in which the property to be
encumbered is located, and (c) to assure that the Administrative Agent for the
benefit of the Secured Parties has a perfected Lien on the Mortgaged Property.
"Mortgage Policies" has the meaning assigned to that term in Section
3.1(a)(iv)(B).
"Mortgaged Property" means any parcel (or adjoining parcels) of real
property acquired by the Borrower or any of is Subsidiaries after the Closing
Date which has a fair market value in excess of $1,000,000.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and at least one Person other than the Borrower
and the ERISA Affiliates or (b) was so maintained and in respect
<PAGE> 31
24
of which the Borrower or any ERISA Affiliate could have liability under Section
4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"NationsBank" means NationsBank, N.A. in its capacity as a Lender or an
Issuing Bank.
"Net Cash Proceeds" means, with respect to any Asset Disposition or any
Debt Issuance or Equity Issuance by any Person, or any Extraordinary Receipt
received by or paid to or for the account of any Person, the aggregate amount of
cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable commissions, underwriting fees and discounts, legal
fees, accountants' fees, investment banker's fees, finder's fees and other
out-of-pocket fees and expenses incurred in connection therewith, (b) the amount
of taxes payable in connection with or as a result of such transaction and (c)
with respect to any asset, the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid upon such
disposition, in the case of (a) or (c) above to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate of such Person or the
Borrower or any Affiliate of the Borrower and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" and "Net Loss" mean, respectively, with respect to any
period, the aggregate of the net income (loss) of the Person in question for
such period, determined in accordance with GAAP on a consolidated basis;
provided that (i) the net income (loss) of any Person which is not a
consolidated Subsidiary shall be included only to the extent of the amount of
cash dividends or distributions paid to the Person in question or to a
consolidated Subsidiary of such Person and (ii) the net income (loss) of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded.
"Note" means a Term A Note, a Term B Note or a Revolving Credit Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
"Notice of Issuance" has the meaning specified in Section 2.3(a).
"Notice of Renewal" has the meaning specified in Section 2.1(f).
"Notice of Swing Line Borrowing" has the meaning specified in Section
2.2(b).
"Notice of Termination" has the meaning specified in Section 2.1(f).
"NPL" means the National Priorities List under CERCLA.
<PAGE> 32
25
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 9.4. Without limiting the generality of the foregoing, the Obligations
of the Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by any
Loan Party under any Loan Document, (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender Party
may, after the occurrence and during the continuance of an Event of Default,
elect to pay or advance on behalf of such Loan Party in accordance with the
terms of this Agreement, and (c) any other obligations arising out of or under
the Loan Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"Open Year" has the meaning specified in Section 4.16.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Pacific" has the meaning specified in the Preliminary Statements.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Acquisitions" means any acquisition by the Borrower or any
of its Subsidiaries of all or substantially all of the assets or the capital
stock of any Person or a division or branch of any Person which either (a) has
been consented to in writing by the Agents and the Required Lenders, or (b)
complies with each of the following: (i) such Person is engaged in substantially
the same or similar line of business as one or more businesses of the Borrower
or any of its Subsidiaries, (ii) the aggregate consideration (including for
purposes hereof, any Debt (including for purposes of this definition, Earnout
Obligations) assumed by the Borrower or any of its Subsidiaries in connection
with such acquisition, but excluding for purposes hereof, (A) any common stock
of the Borrower or Preferred Stock and (B) Qualified Debt Securities which do
not require payment of interest in cash until after the Termination Date, in
each case issued in connection with such acquisition) payable in respect of any
individual acquisition shall not exceed $10,000,000; provided, that on the date
which is twelve (12) months following the date hereof and thereafter, so long as
no Default or Event of Default is then existing and continuing (without giving
effect to any waivers hereunder with respect to compliance with the provisions
of Article 8 or amendments of the provisions of Article 8 after the date
hereof), then the amount set forth in this clause (ii) shall be increased from
$10,000,000 to $15,000,000; (iii) the aggregate consideration (including for
purposes hereof, any Debt (including for purposes of this definition, Earnout
Obligations) assumed by the
<PAGE> 33
26
Borrower or any of its Subsidiaries in connection with such acquisition, but
excluding for purposes hereof, (A) any common stock of the Borrower or Preferred
Stock and (B) Qualified Debt Securities which do not require payment of interest
in cash until after the Termination Date, in each case issued in connection with
such acquisition) payable in respect of acquisitions contemplated by this
definition shall not exceed for all such acquisitions $20,000,000 in any twelve
(12) month period ending on the last day of the calendar month immediately
preceding the closing of the proposed acquisition; provided, that on the date
which is twelve (12) months following the date hereof and thereafter, so long as
no Default or Event of Default is then existing and continuing (without giving
effect to any waivers hereunder with respect to compliance with the provisions
of Article 8 or amendments of the provisions of Article 8 after the date
hereof), then the amount set forth in this clause (iii) shall be increased from
$20,000,000 to $30,000,000; (iv) after giving effect to the proposed acquisition
on a pro forma basis for the period (the "Pro Forma Period") of four fiscal
quarters of the Borrower ending with the fiscal quarter for which financial
statements have most recently been delivered (or were required to be delivered)
under Section 7.3 or 7.4, as applicable (on the basis that (A) any Debt incurred
or assumed in connection with such acquisition was incurred or assumed at the
beginning of the Pro Forma Period, (B) if such Debt bears a floating interest
rate, such interest shall be paid over the Pro Forma Period at the rate in
effect on the date of such acquisition and (C) all income and expense associated
with the assets or entity acquired in connection with such acquisition for the
most recently ended four fiscal quarter period for which such income and expense
amounts are available (with good faith estimates thereof being permitted if
financial statements indicating such amounts are not available) shall be treated
as being earned or incurred by the Borrower over the Pro Forma Period on a pro
forma basis), the Borrower is in compliance with the financial covenants set
forth in Sections 8.2 and 8.3 and the Borrower shall deliver a certificate
setting forth in reasonable detail the basis for calculation of such financial
covenants; provided, that the Borrower shall not be required to deliver such
certificate for any individual acquisition the aggregate consideration
(calculated as set forth above) for which is less than $2,000,000 unless and
until the aggregate amount of acquisitions in any Fiscal Year exceeds
$4,000,000, (v) after giving effect to the proposed acquisition, the Revolving
Credit Commitments of all Lenders minus the sum of Revolving Advances plus
Letter of Credit Advances plus Swing Line Advances plus the aggregate Available
Amount of all Letters of Credit then outstanding shall equal at least
$5,000,000, (vi) the Borrower shall give the Agents and the Lenders not less
than ten (10) Business Days prior written notice of its intention to make a
Permitted Acquisition, such notice to include the proposed amounts, date and
form of the proposed transaction, a reasonable description of the stock or
assets to be acquired and the location of all assets, a description and
calculation in reasonable detail of the pro forma effect of such acquisition on
the financial covenants contained in Sections 8.2 and 8.3, (vii) concurrently
with the making of a Permitted Acquisition consisting of assets, the Borrower
shall, as additional collateral security for the Obligations, grant to the
Administrative Agent for the ratable benefit of the Lenders, prior Liens
(subject to Liens permitted pursuant to Section 6.1) on and security interests
in any of the acquired assets by the execution and delivery to the
Administrative Agent of such agreements, instruments and documents as shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
(viii) the Borrower
<PAGE> 34
27
shall not make any acquisition at any time during which a Default or an Event of
Default shall exist and be continuing or would exist after giving effect to such
acquisition.
"Permitted Investment" has the meaning specified in Section 6.5.
"Permitted Liens" means the following (as to which any proceeding
commenced for the enforcement of any such Liens shall have been stayed or
suspended within thirty (30) days of the commencement thereof and only to the
extent that provisions for the payment of such Liens has been made on the books
of such Person to the extent required by GAAP): (a) Liens for taxes, assessments
and governmental charges or levies not yet due and payable or Liens for taxes,
assessments and governmental charges or levies which are being contested in good
faith or are overdue less than ninety (90) days; (b) Liens imposed by law, such
as lessor's, materialmen's, mechanics', carriers', workmen's, landlord's and
repairmen's Liens and other similar Liens arising in the ordinary course of
business which do not materially detract from the property or which are being
contested in good faith or securing obligations that are not overdue for a
period of more than 60 days; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation, to secure public or statutory
obligations or to secure the performance of tenders, bids, trade contracts,
leases, surety and appeal bonds, performance and return-of-money bonds and other
obligations of a like nature; and (d) Permitted Real Property Encumbrances.
"Permitted Real Property Encumbrances" means, with respect to any
particular Mortgaged Property, (i) those liens, encumbrances and other matters
affecting title to any Mortgaged Property listed in the Mortgage Policies in
respect thereof and as of the date of delivery of such Mortgage Policies to the
Administrative Agent in accordance with the terms hereof, reasonably acceptable
to the Lenders, (ii) such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which do not arise out of
the incurrence of any Debt and which do not materially impair the use of such
Mortgaged Property for the purpose for which it is held by the mortgagor
thereof, or the Lien granted to the Administrative Agent for the benefit of the
Secured Parties, and (iii) municipal and zoning ordinances; provided that no
violation exists thereunder that could materially impair the use of the existing
improvements and the present use made by the mortgagor thereof of the Premises
(as defined in the respective Mortgage).
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Post-Default Rate" means (a) in respect of any Advances a rate per
annum equal to: (i) if such Advances are Prime Rate Advances, 2% above the Prime
Rate as in effect from time to time plus the Applicable Margin for Prime Rate
Advances (but in no event less than the interest rate in
<PAGE> 35
28
effect on the due date), or (ii) if such Advances are Eurodollar Rate Advances,
2% above the rate of interest in effect thereon at the time of the Event of
Default that resulted in the Post-Default Rate being instituted until the end of
the then current Interest Period therefor and, thereafter, 2% above the Prime
Rate as in effect from time to time plus the Applicable Margin for Prime Rate
Advances (but in no event less than the interest rate in effect on the due
date); and (b) in respect of other amounts payable by the Borrower hereunder
(other than legal fees and other expenses) not paid when due (whether at stated
maturity, by acceleration or otherwise), a rate per annum during the period
commencing on the due date until such other amounts are paid in full equal to 2%
above the Prime Rate as in effect from time to time plus the Applicable Margin
for Prime Rate Advances (but in no event less than the interest rate in effect
on the due date).
"Pre-Commitment Information" means the information, taken as a whole,
provided by or on behalf of the Borrower or any of its Subsidiaries to the Agent
and the Initial Lenders prior to their commitment in respect of the Facilities.
"Preferred Stock" means class A preferred stock of Borrower, par value
$.01 per share.
"Prime Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in
Boston, Massachusetts, from time to time, as Fleet's prime rate, which
is not necessarily the lowest rate made available by Fleet; or
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Prime Rate Advance" means an Advance that bears interest as provided
in Section 2.7(a)(i).
"Pro Forma Cost Reduction" means with respect to any Permitted
Acquisition, if requested by the Borrower pursuant to the succeeding sentence,
the amount of factually supportable and identifiable pro forma cost savings
directly attributable to operational efficiencies expected to be created by the
Borrower with respect to such Permitted Acquisition which efficiencies can be
reasonably computed (based on the four (4) fiscal quarters immediately preceding
the date of such proposed acquisition) and are approved by the Administrative
Agent in its sole discretion acting in good faith; provided, that cost savings
in connection with a Permitted Acquisition (together with cost savings in
connection with other Permitted Acquisitions consummated during the prior twelve
(12) months) shall not exceed ten percent (10%) of EBITDA of the Borrower and
its Subsidiaries for the most recently ended four (4) fiscal quarters of the
Borrower (inclusive of Pro Forma Cost Reductions) without the consent of the
Required Lenders. If the Borrower desires to have, with respect to any Permitted
Acquisition, the amount of pro forma cost savings directly attributable to the
aforementioned operational efficiencies treated as part of the term Pro Forma
Cost Reduction,
<PAGE> 36
29
then the Borrower shall so notify the Administrative Agent and provide written
detail with respect thereto not less than five (5) Business Days prior to the
proposed date of consummation of such Permitted Acquisition.
"Pro Rata Share" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit Commitment at
such time and the denominator of which is the Revolving Credit Facility at such
time.
"Qualified Debt Securities" means unsecured notes issued by the
Borrower or any of its Subsidiaries in connection with a Permitted Acquisition
so long as the terms of any such note (i) do not provide any collateral
security, (ii) do not provide any guaranty or other support by the Borrower (if
such securities are issued by a Subsidiary of the Borrower) or any Subsidiaries
of the Borrower (if such securities are issued by the Borrower), (iii) do not
contain any mandatory put, redemption, sinking fund or other similar provision
occurring prior to the Termination Date, (iv) are no less favorable (including
the subordination provisions contained therein) to the Borrower or the Lenders
than the provisions of the Subordinated Notes and (v) do not provide for the
payment of principal prior to the date which is one (1) year following the
Termination Date.
"Recapitalization" has the meaning specified in the Preliminary
Statements.
"Recapitalization Agreement" has the meaning specified in the
Preliminary Statements.
"Recapitalization Date" means the date on which the Recapitalization
shall have been consummated in accordance with the Recapitalization Documents.
"Recapitalization Documents" means the Recapitalization Agreement and
all other agreements, instruments, certificates and other documents to be
entered into or delivered by any party to the Recapitalization Agreement in
connection with the consummation of the transactions contemplated by the
Recapitalization Agreement.
"Reduction Amount" has the meaning specified in Section 2.6(b)(vi).
"Register" has the meaning specified in Section 11.7(d).
"Registration Agreement" means the registration agreement dated the
date hereof among the Borrower, MedPartners, Holdings and Pacific.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
<PAGE> 37
30
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Agency" means any federal, state, local or other U.S. or
foreign governmental authority, bureau or agency.
"Related Parties" means, with respect to any Sponsor, (i) any
controlling stockholder or partner, eighty percent (80%) (or more) owned
Subsidiary, or spouse or immediate family member (in the case of an individual)
of such Sponsor, or (ii) any trust, corporation, partnership or other entity,
the beneficiaries, stockholders, partners, owners or Persons beneficially
holding a fifty-one percent (51%) or more controlling interest of which consist
of such Sponsor and/or such other Persons referred to in the immediately
preceding clause (i).
"Related Professional Corporation" means each professional corporation
which has entered into a management agreement with the Borrower, any of its
Subsidiaries or any other Related Professional Corporation, other than a
professional corporation with respect to which (i) the Borrower does not have
the right to designate or replace the sole shareholder (or a majority of the
shareholders, if applicable) pursuant to an agreement between such professional
corporation and the Borrower, any of its Subsidiaries or any Related
Professional Corporation and (ii) the Borrower does not have the right to
participate, directly or indirectly, in the profits or losses of such
professional corporation in accordance with the applicable management agreement,
provided, that in any event, it includes as of the date hereof the entities
listed as a "Related Professional Corporation" on the Organization Schedule
included in the disclosure letter to the Recapitalization Agreement.
"Release" means any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"Remedial" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(24) and/or any other applicable Environmental Laws.
"Removal" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(23) and/or any other applicable Environmental Laws.
"Required Lenders" means at any time Lenders (other than Defaulting
Lenders) the sum of whose outstanding Term A Advances, Term B Advances and
Revolving Credit Commitments (or,
<PAGE> 38
31
if after the Revolving Credit Facility has been terminated, outstanding
Revolving Credit Advances) constitute greater than 50% of the sum of (a) the
aggregate principal amount of the Term A Advances and Term B Advances (in each
case owing to Lenders which are not Defaulting Lenders) outstanding at such time
and (b) the Revolving Credit Facility less the aggregate Revolving Credit
Commitments of Defaulting Lenders (or, if after the Revolving Credit Facility
has been terminated, outstanding Revolving Credit Advances of Revolving Credit
Lenders (other than Defaulting Lenders)). For purposes of this definition, the
aggregate principal amount of Swing Line Advances owing to the Swing Line Bank,
Letter of Credit Advances owing to the Issuing Banks and the Available Amount of
each Letter of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments.
"Response" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.
"Responsible Officer" means, with respect to any Loan Party, the Chief
Executive Officer, the President, the Chief Financial Officer, the Chief
Operating Officer, any Executive Vice President, any Vice President, the
Controller or the Treasurer of such Loan Party.
"Revolving Credit Advance" has the meaning specified in Section 2.1(c).
"Revolving Credit Borrowing" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or, if such
Lender has entered into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 11.7(d) as such Lender's "Revolving Credit Commitment," as such amount
may be reduced at or prior to such time pursuant to this Agreement.
"Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Revolving Credit Lender, in substantially the form of
Exhibit B hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Revolving Credit Advances made by such Lender.
<PAGE> 39
32
"Revolving Credit Termination Date" means the earlier of (a) the fifth
anniversary of the Closing Date, and (b) the Termination Date.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Administrative Agent, the Lender Parties,
and the Hedge Banks and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the Collateral
Documents.
"Security Agreement" has the meaning specified in Section 3.1(a).
"Senior Debt" means, as at any date of determination thereof, the
aggregate outstanding principal balance of (a) all Term A Advances, Term B
Advances, Revolving Credit Advances, Swing Line Advances, Letter of Credit
Advances and the aggregate Available Amount of all Letters of Credit and (b) all
Debt for borrowed money and all Capitalized Leases, unless such Debt or
Capitalized Lease is expressly subordinate to the obligations of the Borrower
and its Subsidiaries to the Agents and the Lenders under the Loan Documents.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any ERISA Affiliate and no Person other than the Loan Parties and
the ERISA Affiliates or (b) was so maintained and in respect of which the
Borrower or any ERISA Affiliate could have liability under Section 4069 of ERISA
in the event such plan has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay such debts and liabilities as they mature and (d) such Person is
not engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small capital as then presently conducted. The amount of contingent
liabilities at any time shall be computed as the amount that, in the light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"Sponsor" or "Sponsors" means any or all (as the context may require)
of Madison Dearborn Capital Partners II, LP, Cornerstone Equity Investors IV,
L.P., Healthcare Equity Partners, LP and each of their respective Related
Parties.
<PAGE> 40
33
"Standby Letter of Credit" means any Letter of Credit other than a
Trade Letter of Credit.
"Stockholders Agreement" means the stockholders agreement dated the
date hereof among the Borrower, MedPartners, Holdings and Pacific and other
parties thereto from time to time, as amended, modified and supplemented from
time to time to the extent permitted under this Agreement.
"Subordinated Debt" means (i) any Debt of the Borrower that is
subordinated to the Obligations of the Borrower under the Loan Documents on, and
that otherwise contains, terms and conditions satisfactory to the Administrative
Agent and Required Lenders and (ii) the Subordinated Notes.
"Subordinated Debt Financing" means Subordinated Debt of the Borrower
in an amount of not less than $100,000,000 evidenced by the Subordinated Notes.
"Subordinated Notes" means (i) the subordinated notes, if any, issued
by the Borrower pursuant to the Subordinated Notes Indenture and (ii) the
subordinated notes, if any, issued in exchange for such subordinated notes in an
exchange offer pursuant to the Subordinated Notes Indenture and on terms and
conditions reasonably satisfactory to the Administrative Agent.
"Subordinated Notes Indenture" means the Indenture dated as of the date
hereof between the Borrower and United States Trust Company of New York, as
trustee.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate, is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries. Unless otherwise specified
herein, the term Subsidiary shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary (other than
Immaterial Subsidiaries) of the Borrower and each Person who shall have executed
and delivered or become party to a Subsidiary Guaranty.
"Subsidiary Guaranty" has the meaning specified Section 3.1(a).
"Surviving Debt" shall have the meaning specified in Section 4.19(b).
<PAGE> 41
34
"Swing Line Advance" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.1(e) or (b) any Revolving Credit Lender pursuant to
Section 2.2(b).
"Swing Line Bank" has the meaning specified in the recital of parties
to this Agreement.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" has the meaning specified in Section 2.1(e).
"Syndication Agent" has the meaning specified in the recital of parties
to this Agreement.
"Taxes" has the meaning specified in Section 2.12(a).
"Term A Advance" has the meaning specified in Section 2.1(a).
"Term A Borrowing" means a borrowing consisting of simultaneous Term A
Advances of the same Type made by the Term A Lenders.
"Term A Commitment" means, with respect to any Term A Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term A Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 11.7(d) as such
Lender's "Term A Commitment," as such amount may be reduced at or prior to such
time pursuant to Section 2.5.
"Term A Facility" means, at any time, the aggregate amount of the Term
A Lenders' Term A Commitments at such time.
"Term A Lender" means any Lender that has a Term A Commitment.
"Term A Note" means a promissory note of the Borrower payable to the
order of any Term A Lender, in substantially the form of Exhibit C hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term A Advance made by such Lender.
"Term B Advance" has the meaning specified in Section 2.1(b).
"Term B Borrowing" means a borrowing consisting of simultaneous Term B
Advances of the same Type made by the Term B Lenders.
<PAGE> 42
35
"Term B Commitment" means, with respect to any Term B Lender at any
time, the amount set forth opposite such Lender's name on Schedule I hereto
under the caption "Term B Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section 11.7 as such Lender's
"Term B Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.5.
"Term B Facility" means, at any time, the aggregate amount of the Term
B Lenders' Term B Commitments at such time.
"Term B Lender" means any Lender that has a Term B Commitment.
"Term B Note" means a promissory note of the Borrower payable to the
order of any Term B Lender, in substantially the form of Exhibit D hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from the
Term B Advance made by such Lender.
"Term Facilities" means the Term A Facility and the Term B Facility.
"Termination Date" means the date of termination in whole of the
Commitments pursuant to Section 2.5 or Article 9.
"Trade Letter of Credit" means any Letter of Credit that is issued for
the benefit of a supplier of Inventory or Equipment to the Borrower or any of
its Subsidiaries to effect payment for such Inventory or Equipment, the
conditions to drawing under which include the presentation to the applicable
Issuing Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of such Issuing Bank, to create a valid and
perfected Lien on or security interest in such Inventory, bills of lading,
invoices and related documents in favor of such Issuing Bank.
"Transaction" means the transactions contemplated by the
Recapitalization Documents and the Loan Documents.
"Type" refers to the distinction between Advances bearing interest at
the Prime Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Revolving Credit Availability" means, as of any date, the
amount by which the Revolving Credit Facility exceeds the sum of the aggregate
principal amount of all Revolving Credit Advances plus Swing Line Advances plus
Letter of Credit Advances plus the aggregate Available Amount of all Letters of
Credit, in each case outstanding at such time.
"Unused Revolving Credit Commitment" means, with respect to any
Revolving Credit Lender, at any time, (a) such Lender's Revolving Credit
Commitment at such time minus (without
<PAGE> 43
36
duplication) (b) the sum of (i) the aggregate principal amount of all Revolving
Credit Advances and Letter of Credit Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time, plus (ii) such Lender's Pro
Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time and (B) the aggregate principal amount of all Letter of
Credit Advances made by the Issuing Banks pursuant to Section 2.3(c) and
outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of the Borrower or in respect of which
any Loan Party could have liability.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person of which securities (except for directors' or other qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power or 100% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held by such Person
or one or more wholly owned Subsidiaries of such Person or by such Person and
one or more wholly owned Subsidiaries of such Person.
"Working Capital" means, for any period, Consolidated Current Assets
(excluding cash and Cash Equivalents) of the Borrower and its Subsidiaries
during such period minus Consolidated Current Liabilities of the Borrower and
its Subsidiaries (other than Consolidated Current Liabilities arising out of
Debt permitted pursuant to Section 6.2).
"Withdrawal Liabilities" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.2 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.6 or changes thereto described on
Schedule 1.3 ("GAAP"). Except as otherwise expressly provided herein, all
computations and determinations for purposes of determining compliance with the
financial requirements of this Agreement shall be made in accordance with GAAP
in effect in the United States of America on a basis consistent with the
presentation of the financial statements delivered pursuant to Section 4.6. It
being understood that all financial statements delivered pursuant to
<PAGE> 44
37
Section 7 shall be prepared in accordance with GAAP as in effect on the date of
their respective preparation. In the event that any "Accounting Change" (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.1 The Advances.
(a) The Term A Advances. Each Term A Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term A
Advance") to the Borrower on the Closing Date in an amount not to exceed such
Lender's Term A Commitment at such time. The Term A Borrowing shall consist of
Term A Advances made simultaneously by the Term A Lenders ratably according to
their Term A Commitments. Amounts borrowed under this Section 2.1(a) and repaid
or prepaid may not be reborrowed.
(b) The Term B Advances. Each Term B Lender severally agrees, on the
terms and conditions hereinafter set forth, to make a single advance (a "Term B
Advance") to the Borrower on the Closing Date in an amount not to exceed such
Lender's Term B Commitment at such time. The Term B Borrowing shall consist of
Term B Advances made simultaneously by the Term B Lenders ratably according to
their Term B Commitments. Amounts borrowed under this Section 2.1(b) and repaid
or prepaid may not be reborrowed.
(c) The Revolving Credit Advances. Each Revolving Credit Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the date
<PAGE> 45
38
hereof (other than on the Closing Date) until the Revolving Credit Termination
Date in an amount for each such Advance not to exceed such Lender's Unused
Revolving Credit Commitment at such time; provided, however, that no Revolving
Credit Lender shall have any obligation to make a Revolving Credit Advance under
this Section 2.1(c) to the extent such Revolving Credit Advance would (combined
with all other Revolving Credit Advances and after giving effect to any
immediate application of the proceeds thereof) exceed the Unused Revolving
Credit Availability at such time. Each Revolving Credit Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $100,000 (other than,
in each case, a Borrowing the proceeds of which shall be used solely to repay or
prepay in full outstanding Swing Line Advances, outstanding Letter of Credit
Advances or Advances requested by the Administrative Agent to cover fees or
other amounts due under this Agreement) and shall consist of Revolving Credit
Advances made simultaneously by the Revolving Credit Lenders ratably according
to their Revolving Credit Commitments. Within the limits of each Revolving
Credit Lender's Unused Revolving Credit Commitment in effect from time to time,
the Borrower may borrow, repay and reborrow Revolving Credit Advances. No
Revolving Credit Advances shall be made to the Borrower on the Closing Date.
(d) The Swing Line Advances. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank agrees to make, on the terms and
conditions hereinafter set forth, Swing Line Advances to the Borrower from time
to time on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date (i) in an aggregate amount not to exceed at
any time outstanding $5,000,000 (the "Swing Line Facility") and (ii) in an
amount for each such Swing Line Borrowing not to exceed (after giving effect to
any immediate application of the proceeds thereof) the Unused Revolving Credit
Availability at such time. No Swing Line Advance shall be used for the purpose
of funding the payment of principal of any other Swing Line Advance. Each Swing
Line Borrowing shall be made as a Prime Rate Advance. Within the limits of the
Swing Line Facility and within the limits referred to in clause (ii) above, the
Borrower may borrow and reborrow under this Section 2.1(d) and may repay or
prepay the Swing Line Advances at such times prior to the Termination Date, and
in such integral multiples, as the Borrower may elect.
(e) Letters of Credit. Each Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit for the account of
the Borrower from time to time on any Business Day during the period from the
Closing Date until thirty (30) days before the Revolving Credit Termination Date
(i) in an aggregate Available Amount for all Letters of Credit not to exceed at
any time the Issuing Banks' Letter of Credit Commitments at such time and (ii)
in an Available Amount for each such Letter of Credit not to exceed (after
giving effect to any immediate application of the proceeds thereof) the Unused
Revolving Credit Availability at such time. No Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary to
require renewal) later than the earlier of (A) thirty (30) days before the
Revolving Credit Termination Date, (B) in the case of a Standby Letter of
Credit, 365 days after the date of issuance thereof and (C) in the case of a
Trade Letter of Credit, 365 days after the date of issuance thereof. The
foregoing notwithstanding, any Standby Letter of Credit may, by its terms, be
renewable annually upon notice (a "Notice of
<PAGE> 46
39
Renewal") given to the applicable Issuing Bank and the Administrative Agent on
or prior to any date for notice of renewal set forth in such Letter of Credit
(but in any event at least five (5) Business Days prior to the date of the
proposed renewal of such Standby Letter of Credit) and upon fulfillment of the
applicable conditions set forth in Article 3 unless such Issuing Bank shall have
notified the Borrower (with a copy to the Administrative Agent) on or prior to
the date for notice of termination set forth in such Letter of Credit (but in
any event at least thirty (30) Business Days prior to the date of automatic
renewal) of its election not to renew such Standby Letter of Credit (a "Notice
of Termination"); provided that the terms of each Standby Letter of Credit that
is automatically renewable annually shall not permit the expiration date (after
giving effect to any renewal) of such Standby Letter of Credit in any event to
be extended to a date later than thirty (30) days before the Revolving Credit
Termination Date. If either a Notice of Renewal is not given by the Borrower or
a Notice of Termination is given by the applicable Issuing Bank pursuant to the
immediately preceding sentence, such Standby Letter of Credit shall expire on
the date on which it otherwise would have been automatically renewed; provided,
however, that even in the absence of receipt of a Notice of Renewal, the
applicable Issuing Bank may, in its discretion unless instructed to the contrary
by the Administrative Agent or the Borrower, deem that a Notice of Renewal had
been timely delivered and, in such case, a Notice of Renewal shall be deemed to
have been so delivered for all purposes under this Agreement. Within the limits
of the Letter of Credit Facility, and subject to the limits referred to above,
the Borrower may request the issuance of Letters of Credit under this Section
2.1(e), repay any Letter of Credit Advances resulting from drawings under
Letters of Credit pursuant to Section 2.3(c) and request the issuance of
additional Letters of Credit under this Section 2.1(e).
SECTION 2.2 Making the Advances. (a) Except as otherwise provided in
Section 2.3 or, with respect to Swing Line Advances, in Section 2.2(b), each
Borrowing shall be made on notice, given not later than 2:00 P.M. (New York
time) on the third Business Day prior to the date of the proposed Borrowing in
the case of Eurodollar Rate Advances and on the first Business Day prior to the
date of the proposed Borrowing in the case of Prime Rate Advances by the
Borrower to the Administrative Agent, which shall give to each appropriate
Lender prompt notice thereof by telex or telecopier. Each such notice of a
Borrowing (a "Notice of Borrowing") may be by telephone, confirmed promptly in
writing, or telex or telecopier in substantially the form of Exhibit E hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Facility under
which such Borrowing is to be made, (iii) Type of Advances comprising such
Borrowing, (iv) aggregate amount of such Borrowing and (v) in the case of a
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Advance. Each appropriate Lender shall, before 1:00 P.M. (New York
time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing in accordance with the respective Commitments under the applicable
Facility of such Lender and the other appropriate Lenders. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article 3, the Administrative Agent will make
such funds available to the Borrower by crediting the
<PAGE> 47
40
Borrower's Account; provided, however, that in the case of any Revolving Credit
Borrowing, the Administrative Agent shall first make a portion of such funds
equal to the aggregate principal amount of Letter of Credit Advances made by the
applicable Issuing Bank and by any other Revolving Credit Lender and outstanding
on the date of such Revolving Credit Borrowing, plus interest accrued and unpaid
thereon to and as of such date, available to the applicable Issuing Bank and
such other Revolving Credit Lenders for repayment of Letter of Credit Advances.
(b) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 2:00 P.M. (New York time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent
or (y) pursuant to other arrangements, including, by way of example and not of
limitation, arrangements for daily repayments and borrowings on each Business
Day, which are satisfactory in form and substance to the Swing Line Bank, the
Administrative Agent and the Borrower. Each notice of a Swing Line Borrowing
pursuant to clause (x) in the immediately preceding sentence (a "Notice of Swing
Line Borrowing") may be by telephone, confirmed promptly in writing, or telex or
telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such Borrowing (which maturity
shall be no later than the seventh day after the requested date of such
Borrowing). The Swing Line Bank will make the amount of a requested Swing Line
Advance available to the Administrative Agent at the Administrative Agent's
Account, in same day funds. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article 3,
the Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account. Upon written demand by the Swing Line Bank,
with a copy of such demand to the Administrative Agent, each other Revolving
Credit Lender shall purchase from the Swing Line Bank, and the Swing Line Bank
shall sell and assign to each such other Revolving Credit Lender, such other
Lender's Pro Rata Share of all outstanding Swing Line Advances as of the date of
such demand, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
Swing Line Advances to be purchased by such Lender. The Borrower hereby agrees
to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of outstanding Swing Line Advances on (i) the
Business Day on which demand therefor is made by the Swing Line Bank; provided
that notice of such demand is given not later than 3:00 P.M. (New York time) on
such Business Day, or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Swing Line Bank to any other Revolving Credit Lender of a portion of a Swing
Line Advance, the Swing Line Bank represents and warrants to such other Lender
that the Swing Line Bank is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Revolving Credit Lender shall not
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent, for the account of the Swing Line Bank, forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Swing Line Bank until the date such
<PAGE> 48
41
amount is paid to the Administrative Agent, at the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such amount for the account of the
Swing Line Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Swing Line Advance made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Swing Line Advance made by the Swing Line Bank shall be reduced by such amount
on such Business Day.
(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.9 or Section 2.10, and (ii) the Eurodollar Rate Advances
made on any date may not be outstanding as part of more than twelve (12)
separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall
be irrevocable and binding on the Borrower. In the case of any Borrowing that
the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each appropriate Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article 3, including, without limitation, any
loss (including, without limitation, a return on such liquidation or deployment
that would result in such Lender receiving less than it would have received had
such Advances remained outstanding until the last day of the Interest Period),
cost or expense incurred by reason of the liquidation or redeployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.2 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.7 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
<PAGE> 49
42
(f) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.3 Issuance of and Drawings and Reimbursement Under Letters of
Credit.
(a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 3:00 P.M. (New York time) on the fifth Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to an Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "Notice of Issuance") may be by
telephone, confirmed promptly in writing, or telex or telecopier, specifying
therein the requested (i) date of such issuance (which shall be a Business Day),
(ii) Available Amount of such Letter of Credit, (iii) expiration date of such
Letter of Credit, (iv) name and address of the beneficiary of such Letter of
Credit and (v) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit as such Issuing Bank may specify
to the Borrower for use in connection with such requested Letter of Credit (a
"Letter of Credit Agreement"). If the requested form of such Letter of Credit is
acceptable to such Issuing Bank, in its sole discretion, such Issuing Bank will,
upon fulfillment of the applicable conditions set forth in Article 3, make such
Letter of Credit available to the Borrower at its office referred to in Section
11.2 or as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any such Letter of Credit
Agreement shall conflict with this Agreement or any other Loan Document, the
provisions of this Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to
the Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrower and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrower and each Revolving Credit Lender on the first
Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit.
(c) Drawing and Reimbursement. The payment by an Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by such Issuing Bank of a Letter of Credit Advance which
shall be a Prime Rate Advance in the amount of such draft. Each of the Borrower,
the Administrative Agent and each Revolving Credit Lender hereby acknowledges
and agrees that Letter of Credit Advances may be made, or deemed made, by any
Issuing Bank in respect of any Letter of Credit and to participate in all Letter
of Credit Advances
<PAGE> 50
43
made hereunder as provided herein. The Borrower shall reimburse the applicable
Issuing Bank for each Letter of Credit Advance, using its own funds or the
proceeds of a Revolving Credit Borrowing or Swing Line Borrowing on the same
Business Day on which such Letter of Credit is drawn. To the extent the Borrower
does not so reimburse the applicable Issuing Bank, upon written demand by such
Issuing Bank, with a copy of such demand to the Administrative Agent, each
Revolving Credit Lender shall purchase from such Issuing Bank, and such Issuing
Bank shall sell and assign to each such Revolving Credit Lender, such Lender's
Pro Rata Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available (for the account of its Applicable Lending
Office) to the Administrative Agent (for the account of such Issuing Bank), by
deposit to the Administrative Agent's Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Letter of
Credit Advance to be purchased by such Lender. Promptly after receipt thereof,
the Administrative Agent shall transfer such funds to the applicable Issuing
Bank. The Borrower hereby agrees to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the applicable Issuing Bank; provided that notice of such demand is
given not later than 11:00 A.M. (New York time) on such Business Day or (ii) the
first Business Day next succeeding such demand if notice of such demand is given
after such time. Upon any such assignment by the applicable Issuing Bank to any
other Revolving Credit Lender of a portion of a Letter of Credit Advance, such
Issuing Bank represents and warrants to such other Lender that such Issuing Bank
is the legal and beneficial owner of such interest being assigned by it, free
and clear of any Liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Revolving Credit
Lender shall not have so made the amount of such Letter of Credit Advance
available to the Administrative Agent, such Revolving Credit Lender agrees to
pay to the Administrative Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by the applicable Issuing
Bank until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate for its account or the account of such Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the applicable Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any
Lender to make any Letter of Credit Advance to be made by it on the date
specified in Section 2.3(c) shall not relieve any other Lender of its obligation
hereunder to make its Letter of Credit Advance on such date, but no Lender shall
be responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
<PAGE> 51
44
SECTION 2.4 Repayment of Advances.
(a) Term A Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term A Lenders the aggregate outstanding
principal amount of the Term A Advances on the following dates in the amounts
indicated (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.6):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $2,400,000
December 31, 1999 $2,400,000
March 31, 2000 $2,400,000
June 30, 2000 $2,400,000
September 30, 2000 $2,400,000
December 31, 2000 $2,400,000
March 31, 2001 $2,400,000
June 30, 2001 $3,000,000
September 30, 2001 $3,000,000
December 31, 2001 $3,000,000
March 31, 2002 $3,000,000
June 30, 2002 $3,900,000
September 30, 2002 $3,900,000
December 31, 2002 $3,900,000
March 31, 2003 $3,900,000
June 30, 2003 $3,900,000
September 30, 2003 $3,900,000
December 31, 2003 $3,900,000
March 12, 2004 $3,900,000
</TABLE>
provided, however, that the final principal installment shall be in an amount
equal to the aggregate principal amount of the Term A Advances outstanding on
such date.
(b) Term B Advances. The Borrower shall repay to the Administrative
Agent for the ratable account of the Term B Lenders the aggregate outstanding
principal amount of the Term B Advances on the following dates in the amounts
indicated (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.6):
<PAGE> 52
45
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
December 31, 1999 $ 900,000
December 31, 2000 $ 900,000
December 31, 2001 $ 900,000
December 31, 2002 $ 900,000
December 31, 2003 $ 900,000
June 30, 2004 $21,375,000
September 30, 2004 $21,375,000
December 31, 2004 $21,375,000
March 12, 2005 $21,375,000
</TABLE>
provided, however, that the final principal installment shall be equal to the
aggregate principal amount of the Term B Advances outstanding on such date.
(c) Revolving Credit Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Revolving Credit Termination Date the aggregate principal amount of the
Revolving Credit Advances then outstanding.
(d) Swing Line Advances. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
for such Swing Line Advance (which maturity date shall be no later than the
seventh day after the requested date of such Swing Line Advance) and the
Revolving Credit Termination Date.
(e) Letter of Credit Advances. (i) The Borrower shall repay to the
Administrative Agent for the account of the applicable Issuing Bank and each
other Revolving Credit Lender that has made a Letter of Credit Advance on the
earlier of demand and the Revolving Credit Termination Date the outstanding
principal amount of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any
Loan Document, any Letter of Credit Agreement, any Letter of Credit or
any other agreement or instrument relating to any of the foregoing (all
of the foregoing being, collectively, the "L/C Related Documents");
<PAGE> 53
46
(B) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations of
the Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any of
the L/C Related Documents;
(C) the existence of any claim, set-off, defense
(other than payment) or other right that the Borrower may have at any
time against any beneficiary or any transferee of a Letter of Credit
(or any Persons for whom any such beneficiary or any such transferee
may be acting), any Issuing Bank, or any other Person, whether in
connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or
(E) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver
of or consent to departure from any Guaranty or any other guarantee,
for all or any of the Obligations of the Borrower in respect of the L/C
Related Documents;
provided, however, that the Borrower (or any other Loan Party) or any other
Lender Party shall not be obligated to reimburse any Issuing Bank or other
Lender Party for any wrongful payment or indemnify any Issuing Bank or other
Lender Party for any wrongful dishonor or any other matter to the extent
resulting from acts or omissions constituting gross negligence, bad faith or
willful misconduct or an intentional violation of law by such Issuing Bank or
any other Lender Party.
SECTION 2.5 Termination or Reduction of the Commitments.
(a) Optional. The Borrower may, upon at least three Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portion of the Unused Revolving Credit Commitments; provided, however,
that each partial reduction of such Facility (i) shall be in an aggregate amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (ii)
shall be made ratably among the appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) Mandatory. (i) The Term A Commitments of the Term A Lenders shall
automatically and permanently terminate and shall be of no further force and
effect on the Closing Date after the Term A Borrowing has been made by the Term
A Lenders.
<PAGE> 54
47
(ii) The Term B Commitments of the Term B Lenders shall
automatically and permanently terminate and shall be of no further force and
effect on the Closing Date after the Term B Borrowing has been made by the Term
B Lenders.
(iii) On and after the date that all Term A Advances and Term
B Advances shall have been repaid in full, the Revolving Credit Facility shall
be automatically and permanently reduced on each date on which prepayment
thereof is required to be made pursuant to Section 2.6(b)(i), (ii), (iii) or
(iv) in an amount equal to the applicable Reduction Amount, provided that each
such reduction of the Revolving Credit Facility shall be made ratably among the
Revolving Credit Lenders in accordance with their Revolving Credit Commitments.
(iv) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Revolving Credit Facility after giving effect to such
reduction of the Revolving Credit Facility.
(v) In the event the Closing Date shall not have occurred by
the close of business on March 16, 1999 then all of the Commitments shall be
automatically terminated and this Agreement shall be of no further force or
effect.
SECTION 2.6 Prepayments.
(a) Optional. The Borrower may, without premium or penalty, upon at
least one (1) Business Day's notice in the case of Prime Rate Advances and three
(3) Business Days' notice in the case of Eurodollar Rate Advances, in each case
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given, the Borrower shall,
prepay the outstanding aggregate principal amount of the Advances, in whole or
ratably in part, together, in the case of Term A Advances and Term B Advances,
with accrued interest to the date of such prepayment on the aggregate principal
amount prepaid; provided, however, that (i) each partial prepayment shall be in
an aggregate principal amount of $1,000,000 or an integral multiple of $100,000
in excess thereof and (ii) no such prepayment of a Eurodollar Rate Advance shall
be made other than on the last day of an Interest Period therefor without
payment by the Borrower of the amounts provided for in Section 11.4(c). Each
prepayment made pursuant to this Section 2.6(a) shall be applied to repay those
Facilities designated by the Borrower and unless otherwise designated by the
Borrower with respect to such Facilities, such prepayment shall be applied first
to the payment of Prime Rate Advances and second to the payment of Eurodollar
Rate Advances; provided, that if the Borrower designates that any prepayment
made pursuant to this Section 2.6(a) is to be applied to the Term Facilities,
such prepayment shall be applied ratably to the Term A Facility and the Term B
Facility, and ratably to each unpaid installment of principal of each of the
Term Facilities. Upon the drawing of any Letter of Credit for which funds are on
deposit in the L/C Cash
<PAGE> 55
48
Collateral Account, such funds shall be applied to reimburse the applicable
Issuing Bank or the Revolving Credit Lenders, as applicable.
(b) Mandatory. (i) Within one hundred twenty (120) days following the
end of each Fiscal Year in which the ratio of Consolidated Senior Debt to EBITDA
at the end of such Fiscal Year equals or is greater than 1.75:1, the Borrower
shall execute and deliver to the Administrative Agent a certificate of the
Borrower's Chief Executive Officer or Chief Financial Officer demonstrating its
calculation of Excess Cash Flow for such Fiscal Year (except that in the case of
Fiscal Year 1999, such calculation shall be made for the period from April 1,
1999 through the end of such Fiscal Year) along with a prepayment of the then
outstanding Advances equal to seventy-five percent (75%) of the annual Excess
Cash Flow; provided, however, that if the ratio of Consolidated Senior Debt to
EBITDA, measured at the end of such Fiscal Year of the Borrower, for such Fiscal
Year of the Borrower, is (x) less than 1.75:1 and greater than or equal to
1:00:1, then the required prepayment of the then outstanding Advances shall be
in the amount of fifty percent (50%) of the annual Excess Cash Flow and (y) less
than 1.00:1, then the required prepayment of the then outstanding Advances shall
be in the amount of zero (0%) of the annual Excess Cash Flow.
(ii) Within five (5) days after receipt by the Borrower or any
of its Subsidiaries of Net Cash Proceeds from Asset Dispositions, unless such
proceeds may be reinvested in accordance with the definition of "Asset
Disposition," the Borrower shall prepay the then outstanding Advances in an
amount equal to one-hundred percent (100%) of such Net Cash Proceeds in excess
of $2,000,000 in any Fiscal Year.
(iii) Within five (5) days after receipt by the Borrower or
any of its Subsidiaries of Net Cash Proceeds from any Debt Issuance or Equity
Issuance, the Borrower shall prepay the then outstanding Advances in an amount
equal to, with respect to any (x) Debt Issuance, one hundred percent (100%), and
(y) Equity Issuance, fifty percent (50%), of such Net Cash Proceeds.
(iv) Within five (5) days after receipt of Net Cash Proceeds
by the Borrower or any of its Subsidiaries from any Extraordinary Receipt
received by or paid to or for the account of the Borrower or any of its
Subsidiaries and not otherwise included in clause (i), (ii) or (iii) above,
unless the Borrower or such Subsidiary intends in good faith to reinvest such
proceeds in accordance with the definition of "Extraordinary Receipt," the
Borrower shall prepay the then outstanding Advances in an amount equal to one
hundred percent (100%) of such Net Cash Proceeds in excess of $1,000,000 in any
Fiscal Year.
(v) Each prepayment made pursuant to clause (i), (ii), (iii)
or (iv) shall be subject to the provisions of Section 11.4(c) and shall be
applied to prepay the Facilities in the following manner: first, ratably to the
Term A Facility and the Term B Facility, and ratably to each unpaid installment
of principal of each of the Term Facilities until such installments are paid in
full; second, to prepay Swing Line Advances then outstanding until such Advances
are paid in full; third, to
<PAGE> 56
49
prepay Revolving Credit Advances and Letter of Credit Advances then outstanding
(whereupon the Revolving Credit Facility shall be permanently reduced as set
forth in Section 2.5(b)(iv) in the amount of such prepayment) until such
Revolving Credit Advances are paid in full; and fourth, deposited in the L/C
Cash Collateral Account to cash collateralize 100% of the Available Amount of
the Letters of Credit then outstanding and within any of the foregoing
Facilities, unless otherwise designated by the Borrower, such prepayments shall
be applied first to the payment of Prime Rate Advances and second to the payment
of Eurodollar Rate Advances. Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the applicable Issuing Bank or the Revolving Credit
Lenders, as applicable. The amount remaining (if any) after the required
prepayment of the Advances then outstanding and the 100% cash collateralization
of the aggregate Available Amount of Letters of Credit then outstanding (the sum
of such prepayment amounts, cash collateralization amounts and remaining amount
being referred to herein as the "Reduction Amount") may be retained by the
Borrower. Upon the termination of all of the Commitments and the final payment
in full of all Obligations, including, without limitation, termination or
expiration of all Letters of Credit and the final payment in full of all
Obligations in respect of all Letters of Credit, then all amounts remaining on
deposit in the L/C Cash Collateral Account shall be returned to the Borrower.
(vi) The Borrower shall, within fifteen (15) days following
the end of each month in each Fiscal Year, pay to the Administrative Agent for
deposit in the L/C Cash Collateral Account an amount sufficient to cause the
aggregate amount on deposit in such Account to equal the amount by which the
aggregate Available Amount of all Letters of Credit then outstanding exceeds the
Letter of Credit Facility on such Business Day.
(vii) At any time that the aggregate amount of Revolving
Credit Advances, Letter of Credit Advances, Swing Line Advances and the
aggregate Available Amount of all Letters of Credit, in each case outstanding,
exceeds the Revolving Credit Facility, the Borrower shall immediately repay
Revolving Credit Advances to the extent necessary to reduce the principal
balance of Revolving Credit Borrowings to an amount equal to or less than the
Revolving Credit Facility.
(viii) The foregoing notwithstanding, the provisions of this
Section 2.6(b) shall not be construed to permit any Equity Issuance, Debt
Issuance or Asset Disposition otherwise prohibited under the terms of this
Agreement.
(c) Application of Prepayments to the Term A Facility and the Term B
Facility. Upon receipt of any amounts to be applied to the prepayment in respect
of the Term A Facility and the Term B Facility pursuant to this Section 2.6, the
Administrative Agent shall apply such amounts to the prepayment of the Term A
Advances and Term B Advances ratably; provided, however, that the Borrower may,
by providing prompt notice to the Administrative Agent, offer the Term B Lenders
the option to decline to accept any prepayments made pursuant to Section 2.6(b),
and, if within five
<PAGE> 57
50
(5) Business Days of receiving a copy of such notice from the Administrative
Agent, any Term B Lender notifies the Administrative Agent that it elects to
refuse to accept the prepayment of its Term B Advances, the Administrative Agent
shall apply the portion of such prepayment that would have been allocated to the
repayment of such Lender's Term B Advances, to the prepayment of the Advances of
the Lenders under the Term A Facility (to the extent that there are Term A
Advances then outstanding) and of the Advances of the Term B Lenders which have
not so refused ratably to each unpaid installment of principal of each such
Facility (and, if all Lenders under the Term B Facility elect to refuse their
ratable share of such prepayment, only to the Advances of the Lenders under the
Term A Facility, to the extent that there are Term A Advances then outstanding).
If any Term B Lender shall not give notice to the Administrative Agent within
such five (5) Business Day period, the Administrative Agent shall assume that
such Lender shall have accepted such prepayment.
SECTION 2.7 Interest.
(a) Scheduled Interest. The Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) Prime Rate Advances. During such periods as such Advance
is a Prime Rate Advance, a rate per annum equal at all times to the sum of (x)
the Prime Rate in effect from time to time plus (y) the Applicable Margin for
such Advance in effect from time to time, payable in arrears quarterly on the
last day of each fiscal quarter during such periods.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Advance plus (y) the Applicable Margin for such
Advance in effect on the first day of such Interest Period, payable in arrears
on the last day of such Interest Period and, if such Interest Period has a
duration of more than three months, on each day that occurs during such Interest
Period every three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Notwithstanding the foregoing, the Borrower shall
pay interest on any Advance and all other amounts then due and payable
outstanding under the Facilities at the applicable Post-Default Rate (to the
extent permitted by law) whenever an Event of Default has occurred and is
continuing (i) under Section 9.1 for the period commencing on the occurrence of
such Event of Default until such Event of Default has been cured or waived as
acknowledged in writing by the Administrative Agent and (ii) under any Section
contained in Article 9 (other than Section 9.1) for the period commencing on the
sixty-first day after the occurrence of such Event of
<PAGE> 58
51
Default (if not then cured or waived) until such Event of Default has been cured
or waived as acknowledged in writing by the Administrative Agent.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.2(a), the Administrative Agent shall give notice
to the Borrower and each appropriate Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (ii).
SECTION 2.8 Fees.
(a) Commitment Fees. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders (other than Defaulting Lenders),
commitment fees, from the Closing Date in the case of each Initial Lender and
from the effective date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender, until the Revolving
Credit Termination Date payable in arrears quarterly on the last Business Day of
each March, June, September and December, commencing June 30, 1999, and on the
Revolving Credit Termination Date at a rate per annum equal to 0.500% per annum
on the average daily Unused Revolving Credit Commitment of such Lender;
provided, however, that the commitment fee shall be decreased to 0.375% per
annum during any periods when the ratio of Consolidated Funded Debt to EBITDA is
less than or equal to 3.0:1 determined in the same manner as is the Applicable
Margin for the Term A Facility and the Revolving Credit Facility three (3)
Business Days after the date on which the Administrative Agent receives
financial statements pursuant to Section 7.3 or 7.4 and a certificate of the
Chief Financial Officer of the Borrower demonstrating the ratio of Consolidated
Funded Debt to EBITDA. For purposes of this subsection (a), Swing Line Advances
shall not constitute utilization of the Revolving Credit Commitments of the
Revolving Credit Lenders (other than the Lender Parties which have made the
Swing Line Advances). Notwithstanding the foregoing, prior to the date which is
six months from the date hereof, the rate per annum on the average daily Unused
Revolving Credit Commitment of such Lender shall be equal to 0.500%.
(b) Letter of Credit Fees. (i) The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last Business Day of each March,
June, September and December, commencing June 30, 1999 and on the earliest to
occur of the full drawing, expiration, termination or cancellation of any such
Letter of Credit and on the Revolving Credit Termination Date, on such Lender's
Pro Rata Share of the average daily aggregate Available Amount during such
quarter of all Letters of Credit outstanding from time to time at the rate per
annum equal to (x) the Applicable Margin then in effect for Eurodollar Advances
under the Revolving Credit Facility with respect to Standby Letters of Credit
and (y) 50% of the Applicable Margin then in effect for Eurodollar Advances
under the Revolving Credit Facility with respect to Trade Letters of Credit.
<PAGE> 59
52
(ii) In addition to the foregoing fees described in (i) above,
the Borrower shall pay to the applicable Issuing Bank, for its own account, (x)
on the Available Amount of each Letter of Credit, a fronting fee, for the period
from the date of issuance of such Letter of Credit to and including the
termination thereof, computed at a rate to be agreed upon between the Borrower
and the applicable Issuing Bank, which amount shall be payable in arrears
quarterly on the last Business Day of each March, June, September and December
of each year and on the date of termination thereof and (y) transfer fees and
other customary fees and charges in connection with the issuance or
administration of each Letter of Credit as the Borrower and the applicable
Issuing Bank shall agree.
(c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent, including pursuant to
the Fee Letter.
SECTION 2.9 Conversion of Advances.
(a) Optional. The Borrower may on any Business Day, upon notice given
to the Administrative Agent not later than 2:00 P.M. (New York time) on the
third Business Day prior to the date of a proposed Conversion of Advances into
Eurodollar Rate Advances and on the Business Day prior to the date of a proposed
conversion of Eurodollar Rate Advances into Prime Rate Advances, and subject to
the provisions of Sections 2.7 and 2.10, Convert all or any portion of the
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Prime Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances unless the Borrower pays the amounts, if any,
provided for in Section 11.4(c), any Conversion of Prime Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.1(c), no Conversion of any Advances shall result in more
separate Borrowings than permitted under Section 2.2(c) and each Conversion of
Advances comprising part of the same Borrowing under any Facility shall be made
ratably among the appropriate Lenders in accordance with their Commitments under
such Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $500,000, such Advances shall
automatically Convert into Prime Rate Advances.
<PAGE> 60
53
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.1, the
Administrative Agent will forthwith so notify the Borrower and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default and the acceleration of the Notes, interest thereon and other
amounts payable by the Borrower under this Agreement and the other Loan
Documents pursuant to Article 9, (x) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Prime Rate Advance and (y) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10 Increased Costs, Etc.
(a) If, due to either (i) the introduction of or any change in reserve
requirements included in the Eurodollar Rate Reserve Percentage, or in the
interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender Party of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances (excluding for purposes of this Section
2.10 any such increased costs resulting from (x) Taxes or Other Taxes (as to
which Section 2.12 shall govern) and (y) changes in the basis of taxation of
overall net income or profit or overall gross income by the United States or by
the foreign jurisdiction or state under the laws of which such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then, subject to Section 11.4(f), the Borrower shall from time to
time, within five (5) days after demand by such Lender Party (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost (except to the extent already
reflected in the definition of Eurodollar Rate); provided, however, that a
Lender Party claiming additional amounts under this Section 2.10(a) agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party. A certificate as to the amount of such increased cost setting
forth in reasonable detail the basis for calculation of such increased cost,
submitted to the Borrower by such Lender Party, shall be conclusive and binding
for all purposes, absent manifest error.
(b) If, due to the introduction of or any change in or in the
interpretation of any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law), there shall be any increase in the amount of capital required
<PAGE> 61
54
or reasonably expected to be maintained by any Lender Party or any corporation
controlling such Lender Party as a result of or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or the
issuance or maintenance of the Letters of Credit (or similar contingent
obligations), then, within five (5) days after demand by such Lender Party (with
a copy of such demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender Party, from time to time
as specified by such Lender Party, additional amounts sufficient to compensate
such Lender Party in the light of such circumstances, to the extent that such
Lender Party reasonably determines such increase in capital to be allocable to
the existence of such Lender Party's commitment to lend or to issue Letters of
Credit hereunder or to the issuance or maintenance of any Letters of Credit. A
certificate as to such amounts setting forth in reasonable detail the basis for
calculation of such amounts submitted to the Borrower by such Lender Party shall
be conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed greater than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, at the end
of such applicable Interest Periods (or sooner if required by law), Convert into
a Prime Rate Advance and (ii) the obligation of the appropriate Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower that such Lender has
determined that the circumstances causing such suspension no longer exist;
provided, however, that before making any such demand, such Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to
continue to find or maintain Eurodollar Rate Advances and would
<PAGE> 62
55
not, in the judgment of such Lender, result in an economic, legal or regulatory
disadvantage to such Lender.
SECTION 2.11 Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 12:00 P.M. (New York time) on the day
when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the account of their respective Applicable
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lender Parties and (ii) if such payment by the
Borrower is in respect of any Obligation then payable hereunder to one Lender
Party, to such Lender Party for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 11.7(d), from and after
the effective date of such Assignment and Acceptance, the Administrative Agent
shall make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent shall distribute
such funds to each Lender Party ratably in accordance with such Lender Party's
proportionate share of the principal amount of all outstanding Advances and the
Available Amount of all Letters of Credit then outstanding in repayment or
prepayment of such of the outstanding Advances or other Obligations owed to such
Lender Party, and for application to such principal installments, as the
Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder (after
giving effect to applicable grace periods, if any) or, in the case of a Lender,
under the Note held by such Lender, to charge from time to time against any or
all of the Borrower's accounts with such Lender Party any amount so due.
(d) Interest, fees and Letter of Credit commissions shall be computed
by the Administrative Agent on the basis of the actual number of days (including
the first day but excluding the last day) elapsed over a year of 360 days;
provided, that interest on all Prime Rate Advances shall be computed on the
basis of the actual number of days (including the first day but excluding the
last
<PAGE> 63
56
day) elapsed over a year of 365 or 366 days, as the case may be. Each
determination by the Administrative Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12 Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and the Administrative Agent, net income taxes
that are imposed by the United States and net income taxes (or franchise taxes
imposed in lieu thereof) that are imposed on such Lender Party or the
Administrative Agent by the state or foreign jurisdiction under the laws of
which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the state or foreign jurisdiction of such Lender
Party's Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender Party or the Administrative Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender
<PAGE> 64
57
Party or the Administrative Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.12, imposed on or paid by such Lender Party or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto, except
with respect to any Lender Party or the Administrative Agent, as the case may
be, for such a liability arising from such Lender Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date such Lender
Party or the Administrative Agent, as the case may be, makes written demand
specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment by the
Borrower of Taxes, the Borrower shall furnish to the Administrative Agent, at
its address referred to in Section 11.2, the original receipt of payment thereof
or a certified copy of such receipt. For purposes of this subsection (d) and
subsection (e), the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party that is not a United States Person shall, on or
prior to the date of its execution and delivery of this Agreement in the case of
each Initial Lender or Issuing Bank, as the case may be, and on the date of the
Assignment and Acceptance pursuant to which it became a Lender Party in the case
of each other Lender Party, and from time to time thereafter as requested in
writing by the Borrower or the Administrative Agent (but only so long thereafter
as such Lender Party remains lawfully able to do so), provide each of the
Administrative Agent and the Borrower with two (2) original Internal Revenue
Service forms 1001 or 4224, as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, the Internal Revenue Code or the
Treasury Regulations thereunder, certifying that such Lender is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or the Notes. In addition, each Lender Party shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Lender Party. Each Lender Party shall promptly notify the
Borrower at any time it determines that it is no longer in a position to provide
any previously delivered certificates to the Borrower (or any other form of
certification adopted by the United States taxing
<PAGE> 65
58
authorities for such purpose). If the forms provided by a Lender Party at the
time such Lender Party first becomes a party to this Agreement indicates a
United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from Taxes unless and until such
Lender Party provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form; provided, however, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender Party
becomes a party to this Agreement, the Lender Party assignor was entitled to
payments under subsection (a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee on such date.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give notice thereof to the Borrower and
shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Lender Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable pursuant
to this Section 2.12 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Eurodollar Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
(h) Each Lender Party shall, to the extent it is legally entitled to do
so, deliver to the Borrower or the Administrative Agent (as the case may be)
such other forms or similar documentation as may be required from time to time
by any applicable law, treaty, rule or regulation in order to establish such
Lender Party's complete exemption from withholding on all payments under this
Agreement or the Notes.
SECTION 2.13 Sharing of Payments, Etc. If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise)
<PAGE> 66
59
(i) on account of Obligations due and payable to such Lender Party hereunder or
under the Notes at such time in excess of its ratable share (according to the
proportion of (x) the amount of such Obligations due and payable to such Lender
Party at such time to (y) the aggregate amount of the Obligations due and
payable to all Lender Parties hereunder and under the Notes at such time) of
payments on account of the Obligations due and payable to all Lender Parties
hereunder or under the Notes at such time obtained by all the Lender Parties at
such time or (ii) on account of Obligations owing (but not due and payable) to
such Lender Party hereunder and under the Notes at such time in excess of its
ratable share (according to the proportion of (x) the amount of such Obligations
owing to such Lender Party at such time to (y) the aggregate amount of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time) of payments on account of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time obtained by all of the Lender Parties at such time, such Lender Party
shall forthwith purchase from the other Lender Parties such participations in
the Obligations due and payable or owing to them, as the case may be, as shall
be necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender Party, such
purchase from each other Lender Party shall be rescinded and each such other
Lender Party shall repay to the purchasing Lender Party the purchase price to
the extent of such Lender Party's ratable share (according to the proportion of
(x) the purchase price paid to such Lender Party to (y) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (x) the
amount of such other Lender Party's required repayment to (y) the total amount
of such required repayments to the purchasing Lender Party) of any interest or
other amount paid or payable by the purchasing Lender Party in respect of the
total amount so recovered.
The Borrower agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such participation.
SECTION 2.14 Use of Proceeds. The proceeds of the Advances and
issuances of Letters of Credit shall be available, and the Borrower shall use
such proceeds and Letters of Credit solely (a) with respect to the Term
Advances, to (i) finance in part the Recapitalization and (ii) pay fees and
expenses incurred in connection with the Recapitalization in an amount not to
exceed $20,000,000, and (b) with respect to the Revolving Credit Advances, to
finance (i) working capital, (ii) general corporate purposes of the Borrower and
its Subsidiaries and (iii) Permitted Acquisitions.
SECTION 2.15 Defaulting Lenders. (a) In the event that, at any one
time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting
Lender shall owe a Defaulted Advance to the Borrower and (iii) the Borrower
shall be required to make any payment hereunder or under any other Loan Document
to or for the account of such Defaulting Lender, then the Borrower may, so
<PAGE> 67
60
long as no Default shall occur or be continuing at such time and to the fullest
extent permitted by applicable law, set off and otherwise apply the obligation
of the Borrower to make such payment to or for the account of such Defaulting
Lender against the obligation of such Defaulting Lender to make such Defaulted
Advance. In the event that, on any date, the Borrower shall so set off and
otherwise apply its obligation to make any such payment against the obligation
of such Defaulting Lender to make any such Defaulted Advance on or prior to such
date, the amount so set off and otherwise applied by the Borrower shall
constitute for all purposes of this Agreement and the other Loan Documents an
Advance by such Defaulting Lender made on the date under the Facility pursuant
to which such Defaulted Advance was originally required to have been made
pursuant to Section 2.1. Such Advance shall be a Prime Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.1, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this subsection (a). The Borrower shall
notify the Administrative Agent at any time the Borrower exercises its right of
set-off pursuant to this subsection (a) and shall set forth in such notice (i)
the name of the Defaulting Lender and the Defaulted Advance required to be made
by such Defaulting Lender and (ii) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any portion
of such payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after giving
effect to the amount set off and otherwise applied by the Borrower pursuant to
this subsection (a), shall be applied by the Administrative Agent as specified
in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents, payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
<PAGE> 68
61
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent; and
(ii) second, to the Lender Parties for any Defaulted Amounts
then owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Fleet, in the name and under the control of the Administrative Agent, but
subject to the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Fleet's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
<PAGE> 69
62
(iii) third, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16 Removal of Lender. In the event that any Lender Party (an
"Affected Lender") (a) demands payment of costs or additional amounts pursuant
to Section 2.10 or Section 2.12 or (b) asserts, pursuant to Section 2.10(d) that
it is unlawful for such Affected Lender to make Eurodollar Rate Advances, then
(subject to such Affected Lender's right to rescind such demand or assertion
within 10 days after the notice from the Borrower referred to below and so long
as no Event of Default exists) the Borrower may, upon 20 days' prior written
notice to such Affected Lender and the Administrative Agent, with the reasonable
assistance of the Administrative Agent, elect to cause such Affected Lender to
assign all of its rights and obligations under the Agreement (including, without
limitation, all of its Commitment or Commitments, the Advances owing to it and
the Note or Notes held by it) to an Eligible Assignee selected by the Borrower
which is reasonably satisfactory to the Administrative Agent, so long as such
Affected Lender receives payment in full in cash of the outstanding principal
amount of all Advances made by it and all accrued and unpaid interest thereon
and all other amounts due and payable to such Affected Lender as of the
effective date of such assignment (including, without limitation, amounts owing
to such Affected Lender pursuant to Section 2.3, 2.4, 2.7, 2.8, 2.10 or 2.12)
and in such case such Affected Lender agrees to make such assignment, and such
assignee shall agree to accept such assignment and assume all the obligations of
such Affected Lender hereunder, in accordance with Section 11.7. Until the
consummation of an assignment in accordance with the foregoing provisions of
this Section 2.16, the Borrower shall continue to pay to the Affected Lender any
Obligations as they become due and payable.
<PAGE> 70
63
ARTICLE 3
CONDITIONS OF LENDING
SECTION 3.1 Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or of each Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction or waiver of each of the following conditions
precedent before or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent and the Lenders, and in sufficient copies (except for the Notes), for each
Lender Party:
(i) The Notes payable to the order of the Lenders duly
executed by the Borrower.
(ii) A security agreement in substantially the form of Exhibit
F granting to the Administrative Agent, for the ratable benefit of the Lenders,
a first priority security interest (subject only to Liens permitted under
Section 6.1) in the Collateral described therein (together with each other
security agreement delivered pursuant to Section 5.11, in each case as amended,
supplemented or otherwise modified from time to time in accordance with its
terms, each a "Security Agreement"), duly executed by the Borrower and each
Subsidiary Guarantor, together with:
(A) proper, duly executed financing statements under
the Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the first priority Liens and security interests
created under the Security Agreement (subject only to Liens permitted
under Section 6.1), covering the Collateral described in the Security
Agreement;
(B) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing all
effective financing statements filed that name the Borrower or any
Subsidiary Guarantor as debtor, together with copies of such financing
statements;
(C) evidence of the completion of (or provision for)
all other recordings and filings of or with respect to the Security
Agreement that the Administrative Agent may deem necessary or desirable
in order to perfect and protect the Liens created thereby;
(D) evidence of the insurance required by the terms
of the Security Agreement;
<PAGE> 71
64
(E) certificates representing the Pledged Shares
referred to in the Security Agreement, accompanied by undated stock
powers executed in blank and irrevocable proxies;
(F) in the case of the Borrower's Foreign
Subsidiaries, all action necessary to allow the Administrative Agent to
obtain a valid and enforceable, first priority, perfected security
interest in (x) 65% (or such greater percentage which would not result
in material adverse tax consequences) of the Voting Stock and (y) 100%
of the non-voting stock of each Foreign Subsidiary; and
(G) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the first priority Liens and security interests
(subject to Liens permitted pursuant to Section 6.1) created under the
Security Agreement has been taken.
(iii) (A) Mortgages duly executed by the Borrower or
applicable Subsidiary Guarantor for each parcel of real property listed on
Schedule 4.20, together with evidence that counterparts of the Mortgages have
been delivered to a title insurance company (reasonably acceptable to the
Agents) insuring the Lien of the Mortgages for recording in all places to the
extent necessary or desirable, in the reasonable judgment of the Agents, to
create a valid and enforceable first priority Lien on each parcel of real
property listed on Schedule 4.20 (subject only to Permitted Liens) in favor of
the Administrative Agent (or a trustee acting on behalf of the Administrative
Agent required or desired under local law) for the benefit of the Secured
Parties;
(B) Mortgagee title insurance policies (or binding
commitments to issue such title insurance policies) which shall (1) be
issued to the Administrative Agent for the benefit of the Secured
Parties by title insurance companies reasonably satisfactory to the
Administrative Agent (the "Mortgage Policies") in amounts reasonably
satisfactory to the Administrative Agent insuring that the Mortgages
are valid and enforceable first priority mortgage Liens on the
respective parcels of real property, free and clear of all defects,
encumbrances and other Liens except Permitted Liens, (2) be in form and
substance reasonably satisfactory to the Administrative Agent, (3)
include, as appropriate, and to the extent reasonably available, an
endorsement for future advances under this Agreement, the Notes and the
Mortgages and such other endorsements that the Administrative Agent in
its discretion may reasonably request, and (4) to the extent reasonably
available, provide for affirmative insurance and such reinsurance
(including direct access agreements) as the Administrative Agent in its
discretion may reasonably request; and
(C) Surveys, in form and substance satisfactory to
the Administrative Agent, of each parcel of real property listed on
Schedule 4.20, dated a recent date reasonably
<PAGE> 72
65
acceptable to the Administrative Agent, certified by a licensed
professional surveyor in a manner satisfactory to the Administrative
Agent for the benefit of the Lenders.
(iv) An intellectual property security agreement in
substantially the form of Exhibit G hereto granting to the Administrative Agent
for the ratable benefit of the Lenders a first priority security interest
(subject to Liens permitted pursuant to Section 6.1) in all of the Borrower's
and each Subsidiary Guarantor's intellectual property (together with each other
intellectual property security agreement delivered pursuant to Section 5.11, in
each case as amended, supplemented or otherwise modified from time to time in
accordance with its terms, each an "Intellectual Property Security Agreement"),
duly executed by the Borrower and each Subsidiary Guarantor, together with
evidence that all action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority Liens (subject to
Liens permitted pursuant to Section 6.1) and security interests created under
the Intellectual Property Security Agreement has been taken.
(v) A pledge agreement substantially in the form of Exhibit H
hereto (as hereafter amended, supplemented or otherwise modified from time to
time in accordance with its terms, the "Holdings Pledge Agreement") pursuant to
which all of the issued and outstanding capital stock of the Borrower held by
Holdings shall be pledged to the Administrative Agent as security for the
Obligations, together with the certificates representing all shares pledged
thereunder, undated stock powers executed in blank and proxies with respect
thereto.
(vi) A guaranty in substantially the form of Exhibit I hereto
(as hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Holdings Guaranty"), duly executed by Holdings.
(vii) A guaranty in substantially the form of Exhibit J hereto
(as hereafter amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor.
(viii) Certified copies of resolutions of the Board of
Directors of each Loan Party approving the Recapitalization, this Agreement, the
Notes, and each other Loan Document and Recapitalization Document to which it is
or is to be a party, and of all documents evidencing other necessary corporate
action and governmental, shareholder and other third party approvals and
consents, if any, with respect to the Recapitalization, this Agreement, the
Notes, and each other Loan Document and Recapitalization Document.
(ix) A copy of the charter (or equivalent document) of each
Loan Party and each amendment thereto, certified (as of a date reasonably near
the date of the Initial Extension of Credit) by the Secretary of State of the
jurisdiction of its incorporation or organization as being a true and correct
copy thereof.
<PAGE> 73
66
(x) A copy of a certificate of the Secretary of State of the
jurisdiction of its incorporation or organization, dated within ten (10)
Business Days of the date of the Initial Extension of Credit, listing the
charter (or equivalent document) of each Loan Party and each amendment thereto
on file in its office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter (or equivalent document) on file in its
office, (B) such Loan Party has paid all franchise taxes to the date of such
certificate and (C) such Loan Party is duly incorporated or organized and in
good standing under the laws of the State of the jurisdiction of its
incorporation or organization.
(xi) A copy of a certificate of the Secretary of State of each
State listed on Schedule 3.1(a)(xi), dated reasonably near the date of the
Initial Extension of Credit, stating that the Borrower and each of its
Subsidiaries is duly qualified and in good standing as a foreign corporation or
limited liability company, as applicable, in such State and has filed all annual
reports required to be filed to the date of such certificate.
(xii) A certificate of each Loan Party signed on behalf of
such Loan Party by a Responsible Officer and the Secretary or an Assistant
Secretary of such Loan Party, dated the date of the Initial Extension of Credit
(the statements made in such certificate shall be true on and as of the date of
the Initial Extension of Credit), certifying as to (A) the absence of any
amendments to the charter (or equivalent document) of such Loan Party since the
date of the Secretary of State's certificate referred to in Section 3.1(a)(xii),
(B) a true and correct copy of the bylaws (or equivalent document) of such Loan
Party as in effect on the date of the Initial Extension of Credit, (C) the truth
in all material respects of the representations and warranties made by such Loan
Party contained in the Loan Documents as though made on and as of the date of
the Initial Extension of Credit and (D) the absence of any event occurring and
continuing, or resulting from the Initial Extension of Credit, that constitutes
a Default.
(xiii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign this Agreement, the Notes, each
other Loan Document to which they are or are to be parties and the other
documents to be delivered hereunder and thereunder.
(xiv) Such financial, business and other information regarding
Holdings, the Borrower and each Subsidiary Guarantor and each such Person's
Subsidiaries as any of the Lenders shall have reasonably requested, including,
audited financial statements of the Borrower for its most recent three (3)
Fiscal Years, unaudited financial statements dated the end of the most recent
fiscal quarter, if any, for which financial statements are available, an
unaudited pro forma balance sheet of the Borrower and its Subsidiaries which
gives effect to the Transaction as if it had occurred on the last day of the
most recently completed fiscal quarter of the Borrower, an unaudited pro forma
income statement of the Borrower (including a calculation of EBITDA) which gives
effect to the Transaction for the trailing twelve (12) months of operations
ending on the most recently completed
<PAGE> 74
67
fiscal quarter of the Borrower and forecasts prepared by management of the
Borrower, all in form and substance reasonably satisfactory to the Lenders. All
pro forma financial statements shall be prepared in accordance in all material
respects with the requirements of Regulation S-X under the Securities Act of
1933, as amended, applicable to a Registration Statement under such Act on Form
S-1.
(xv) Notices of Borrowing with respect to each of the Term
Facilities pursuant to which the Borrower shall request an Initial Extension of
Credit in an aggregate amount of not more than $150,000,000.
(b) The Agents shall be satisfied with (i) the corporate, ownership and
legal structure and capitalization of the Borrower, each of its Subsidiaries and
each Related Professional Corporation after the Recapitalization, including,
without limitation, the terms and conditions of the charter, by-laws (or
equivalent documents), stockholder agreements and each class of capital stock or
membership interests of the Borrower, each such Subsidiary and each Related
Professional Corporation and of each agreement or instrument relating to such
structure or capitalization and (ii) the management of the Borrower, each of its
Subsidiaries and each Related Professional Corporation (after giving effect to
the Recapitalization).
(c) The Agents shall be satisfied that all Existing Debt has been (or,
upon consummation of the Recapitalization will be) prepaid, redeemed or defeased
in full or otherwise satisfied and extinguished concurrently with the funding of
the Initial Extension of Credit and that all Surviving Debt shall be on terms
and conditions satisfactory to the Agents.
(d) There shall have occurred no Material Adverse Change (including any
event which, in the opinion of the Agents, is reasonably likely to result in a
Material Adverse Change) in the business, assets, liabilities (actual and
contingent), operations, condition (financial or otherwise), management or
prospects of the Borrower and its Subsidiaries, taken as a whole, since the date
of the most recent audited financial statements of the Borrower delivered to the
Administrative Agent; provided, that the implementation or effectiveness of the
final rule entitled "Medicare Program: Revisions to Payment Policies and
Adjustments to the Relative Value Units under the Physician Fee Schedule for
Calendar Year 1999" published at 63 Fed. Reg. 58814, et seq. (November 2, 1998)
shall not be deemed to cause a Material Adverse Change; and no material
inaccuracy in such financial statements shall exist.
(e) There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or Regulatory Agency or authority that (i) could reasonably be
expected to (A) have a material adverse effect on the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise) or management of the Borrower and its Subsidiaries, taken as a whole,
(B) materially and adversely affect the ability of the Borrower or any
Subsidiary Guarantor to perform its obligations under the Loan Documents to
<PAGE> 75
68
which it is a party or (C) materially and adversely affect the rights and
remedies of the Administrative Agent and the Lender Parties under the Loan
Documents or (ii) purports to materially and adversely affect any aspect of the
Transaction or the Facilities (collectively, a "Material Adverse Effect");
provided, that the implementation or effectiveness of the final rule entitled
"Medicare Program: Revisions to Payment Policies and Adjustments to the Relative
Value Units under the Physician Fee Schedule for Calendar Year 1999" published
at 63 Fed. Reg. 58814, et seq. (November 2, 1998) shall not be deemed to cause a
Material Adverse Effect; and there shall have been no Material Adverse Change in
the status, or financial effect on the Borrower or any of its Subsidiaries, of
the Disclosed Litigation from that described on Schedule 4.9.
(f) All governmental, shareholder and other third party consents
(except for third party consents with respect to contracts entered into in the
ordinary course of business which are not material) and approvals (including
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended)
necessary or desirable in connection with each aspect of the Transaction and the
other transactions contemplated hereby shall have been obtained (without the
imposition of any conditions that are not acceptable to the Agents) and shall
remain in full force and effect; all applicable waiting periods shall have
expired without any action being taken by any authority; and no law or
regulation shall be applicable in the reasonable judgment of the Agents that
could restrain, prevent or impose any materially adverse conditions upon any
aspect of the Transaction or such other transactions or that could seek or
threaten any of the foregoing.
(g) There shall not exist any order, decree, judgment, ruling or
injunction which restrains the consummation of the Transaction in the manner
contemplated by the Recapitalization Documents.
(h) The Agents and their counsel shall have completed their business,
legal, environmental, tax, pension, regulatory and accounting due diligence
investigation of the Borrower's, the other Loan Parties' and their respective
Subsidiaries' business, assets, liabilities (actual and contingent), operations,
condition (financial or otherwise), management and prospects and shall be
satisfied with the results thereof. This condition shall be deemed satisfied
unless any additional information is disclosed to or discovered by the Agents
which the Agents deem materially adverse in respect of the condition (financial
or otherwise), business, assets, liabilities, properties, results of operations
or prospects of the Borrower and its Subsidiaries. The Borrower and each of the
Guarantors shall have given the Administrative Agent such access to their
respective books and records as the Administrative Agent may have requested upon
reasonable notice in order to carry out its investigations, appraisals and
analyses and the Administrative Agent shall have received all additional
financial, business and other information regarding the Borrower and its
Subsidiaries and properties as they shall have reasonably requested.
(i) The Borrower shall have delivered either (i) a certificate, in form
and substance satisfactory to the Agents, attesting to the financial condition
and Solvency of the Borrower and the
<PAGE> 76
69
Subsidiary Guarantors, together with their Subsidiaries, taken as a whole,
immediately before and immediately after giving effect to the Transaction, from
its Chief Financial Officer or (ii) in the event that the Borrower receives a
third party Solvency opinion from an independent expert in connection with the
Transaction, such opinion shall (A) be addressed to the Agents and (B) provide
that the Agents shall be entitled to rely thereon.
(j) The Lenders shall be satisfied that (i) the Borrower and its
Subsidiaries will be able to meet in all material respects their respective
obligations under all employee and retiree welfare plans, (ii) the employee
benefit plans of the Borrower and its Subsidiaries are, in all material
respects, funded in accordance with the minimum statutory requirements, (iii) no
material "reportable event" (as defined in ERISA, but excluding events for
which reporting has been waived) has occurred as to any such employee benefit
plan and (iv) no termination of, or withdrawal from, any such employee benefit
plan has occurred or is contemplated that could reasonably be expected to result
in a material liability.
(k) The Administrative Agent shall be reasonably satisfied with the
amount, types and terms and conditions of all insurance maintained by the
Borrower and its Subsidiaries, and the Administrative Agent shall have received
endorsements naming the Administrative Agent, on behalf of the Lenders, as loss
payee or an additional insured, as applicable, under all insurance policies to
be maintained with respect to the properties of the Borrower and its
Subsidiaries forming any part of the Lenders' Collateral under the Security
Agreement and the other Loan Documents and Collateral Documents.
(l) The Administrative Agent shall have received (i) satisfactory
opinions of counsel to the Borrower and the Guarantors (which shall cover, among
other things, authority, legality, validity, binding effect and enforceability
of the Loan Documents) and local and special counsel to the extent requested by
the Administrative Agent, as to the Transaction and (ii) reliance letters
permitting the Agent and Lenders to rely on each of the opinions of counsel
delivered in connection with the Recapitalization, including the opinions of
counsel delivered to MedPartners.
(m) There shall exist no Default or Event of Default under any of the
Loan Documents, and all legal matters incident to the Initial Extension of
Credit shall be reasonably satisfactory to counsel for the Agents.
(n) All fees and expenses due and payable to the Agents, and Initial
Lenders and/or their affiliates pursuant to the Commitment Letter, Fee Letter or
otherwise (including the reasonable fees and expenses of counsel for the Agents
and local counsel for the Agents) shall have been paid in full as contemplated
therein and the Borrower and the Sponsors shall have complied with all of their
obligations under the Commitment Letter and the Fee Letter.
<PAGE> 77
70
(o) The Recapitalization shall have been consummated (contemporaneously
with the Initial Extension of Credit) pursuant to the terms and conditions of
the Recapitalization Agreement (and none of the material terms or conditions of
the Recapitalization Agreement or any other material Recapitalization Documents
(including, but not limited to, MedPartners' obligations with respect to the
indemnification of post-closing claims by the Borrower under the
Recapitalization Agreement including Medical Malpractice Claims (as defined in
the Recapitalization Agreement)) shall have been waived or modified except with
the prior approval of the Agents) and in compliance with all applicable laws and
with all necessary consents and approvals. The final terms and conditions of the
Recapitalization Documents shall be satisfactory in all respects to the Agents,
and the Administrative Agent shall have received certified copies of each of the
Recapitalization Documents, each of which shall be satisfactory to the Agents
and in full force and effect. Management or employment agreements with each of
Lynn Massingale, MD, Jeffrey Bettinger, David Jones and Michael Hatcher shall
have been entered into on terms and conditions satisfactory to the
Administrative Agent and the Lenders and the Borrower shall have delivered to
the Administrative Agent certified copies of each such agreement.
(p) The Administrative Agent shall be satisfied that there are no state
takeover laws and no supermajority charter provisions applicable to the
Recapitalization, or that any conditions to avoiding such restrictions have been
satisfied.
(q) The Equity Financing and the Subordinated Debt Financing shall have
been consummated on terms reasonably satisfactory to the Agents pursuant to
definitive documentation in form and substance reasonably satisfactory to the
Agents and all conditions precedent to the consummation of the Equity Financing
and the Subordinated Debt Financing shall have been satisfied or, with the prior
approval of the Agents, waived. The Agents shall be satisfied that (i) funds
from the Equity Financing, the Subordinated Debt Financing and the Facilities
are sufficient to consummate the Transaction, and (ii) there shall be no
drawdown under the Revolving Credit Facility on the Closing Date. The Agents
shall be satisfied that the Borrower shall have received funds from the Equity
Financing and the Subordinated Debt Financing.
(r) All Advances made under this Agreement shall be in full compliance
with all applicable requirements of law, including, without limitation, Federal
Reserve Regulations T, U, and X.
(s) The Administrative Agent shall also have received such bank consent
agreements, third party consents, intercreditor agreements or other agreements,
as deemed necessary or desirable in the Administrative Agent's sole discretion,
to preserve or otherwise in respect of the Administrative Agent's rights in the
Collateral.
(t) The Agents and the Lenders shall be satisfied that (i) the Borrower
is taking all necessary and appropriate steps to ascertain the extent of, and to
quantify and successfully address,
<PAGE> 78
71
business and financial risks facing the Borrower as a result of what is commonly
referred to as the "Year 2000 Problem" (i.e., the inability of certain computer
applications to recognize correctly and perform date-sensitive functions
involving certain dates prior to and after December 31, 1999), including risks
resulting from the failure of key vendors and customers of the Borrower to
successfully address the Year 2000 Problem, and (ii) the Borrower's material
computer applications will, on a timely basis, adequately address the Year 2000
Problem in all material respects.
(v) The Agents shall have received evidence satisfactory to them that
the Borrower's Ratio of Consolidated Funded Debt to EBITDA (calculated on a
basis satisfactory to the Agents) shall not exceed 4.8:1.0 on the Closing Date.
(w) The Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request, and all legal matters incident to such Borrowing shall be
satisfactory to counsel for the Administrative Agent.
SECTION 3.2 Conditions Precedent to Each Borrowing and Issuance. The
obligation of each appropriate Lender to make an Advance (other than a Letter of
Credit Advance made by an Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.3(c) and a Swing Line Advance made by a Revolving Credit Lender
pursuant to Section 2.2(b)), and the obligation of an Issuing Bank to issue a
Letter of Credit (including the initial issuance thereof) or renew a Letter of
Credit and the right of the Borrower to request the issuance or renewal of a
Letter of Credit, shall each be subject to the further conditions precedent that
on the date of each such Borrowing or issuance or renewal:
(a) Each of the conditions precedent listed in Section 3.1 shall have
been previously or concurrently satisfied or waived in accordance with this
Agreement.
(b) The following statements shall be true (and each of the giving of
the applicable Notice of Borrowing, Notice of Swing Line Borrowing, or Notice of
Issuance or Notice of Renewal and the acceptance by the Borrower of the proceeds
of a Borrowing or of a Letter of Credit or the renewal of a Letter of Credit
shall constitute a representation and warranty by the Borrower that both on the
date of such notice and on the date of such Borrowing or issuance or renewal
such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date, before and
after giving effect to such Borrowing or issuance or renewal and to the
application of the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their terms, refer to
a specific date other than the date of such Borrowing, issuance or renewal, in
which case, as of such specific date;
<PAGE> 79
72
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default or Event of Default; and
(iii) for each Revolving Credit Advance, Swing Line Advance
made by the Swing Line Bank or issuance or renewal of any Letter of Credit, the
Revolving Credit Facility equals or exceeds the aggregate principal amount of
the Revolving Credit Advances plus Swing Line Advances plus Letter of Credit
Advances plus the aggregate Available Amount of all Letters of Credit then
outstanding after giving effect to such Advances or issuance or renewal,
respectively; and
(c) The Administrative Agent shall have received from the Borrower a
duly executed Notice of Borrowing, Notice of Swing Line Borrowing, Notice of
Issuance or Notice of Renewal as applicable.
SECTION 3.3 Determinations Under Section 3.1. For purposes of
determining compliance with the conditions specified in Section 3.1, each
Initial Lender shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Initial Lenders
unless an officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received written notice from such
Initial Lender prior to the Initial Extension of Credit specifying its objection
thereto and, if the Initial Extension of Credit consists of a Borrowing, such
Initial Lender shall not have made available to the Administrative Agent such
Initial Lender's ratable portion of such Borrowing.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
The Borrower represents and warrants as follows:
SECTION 4.1 Organization. The Borrower and each of the Subsidiary
Guarantors (a) is a corporation, partnership or limited liability company, as
applicable, duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, (b) is duly qualified
and in good standing as a foreign corporation, partnership or limited liability
company, as applicable, in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
reasonably be expected to have a Material Adverse Effect and (c) has all
requisite corporate or other power and authority (including, without limitation,
all
<PAGE> 80
73
governmental licenses, permits and other approvals) to own or lease and operate
its properties and to carry on its business as now conducted and as proposed to
be conducted, except where the failure to have such authority could not
reasonably be expected to result in a Material Adverse Effect. As of the date
hereof, Holdings and Pacific collectively beneficially own and control, directly
or indirectly, one hundred percent (100%) of the issued and outstanding shares
of each class of the capital stock of the Borrower.
SECTION 4.2 Subsidiaries. As of the date hereof, set forth on Schedule
4.2 hereto is a complete and accurate list of all Subsidiaries of the Borrower
and each Related Professional Corporation, showing as of the date hereof (as to
each such Subsidiary) the jurisdiction of its incorporation or organization, the
number of shares or membership interests of each class of capital stock
authorized, and the number outstanding, on the date hereof and the percentage of
the outstanding shares or membership interests of each such class owned
(directly or indirectly) by the Borrower or one of its Subsidiaries at the date
hereof. All of the outstanding capital stock or membership interests of all of
such Subsidiaries has been validly issued, is fully paid and non-assessable and
is owned by the Borrower or one or more of its Subsidiaries free and clear of
all Liens, except those created under the Collateral Documents or Liens
permitted under Section 6.1.
SECTION 4.3 Corporate Power, Authorization. The execution, delivery and
performance by the Borrower and each Subsidiary Guarantor of this Agreement, the
Notes and each other Loan Document to which it is or is to be a party, and the
consummation of the Transaction, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not (a)
contravene such Loan Party's charter or bylaws (or equivalent documents), (b)
violate any law (including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act
of 1970), rule, regulation (including, without limitation, Regulation T, U or X
of the Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award in each case binding on such Loan
Party, (c) conflict with or result in the breach of, or constitute a default
under, any loan agreement, indenture, mortgage, deed of trust, lease or other
material contract, instrument or agreement binding on or affecting any Loan
Party, any of its Subsidiaries or any of their respective properties, except
where such conflict, breach or default could not reasonably be expected to
result in a Material Adverse Effect or (d) except for the Liens created under
the Collateral Documents, result in or require the creation or imposition of any
Lien upon or with respect to any of the properties of any Loan Party or any of
its Subsidiaries.
SECTION 4.4 Governmental Authorizations, Approvals. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is or was required for (a)
the due execution, delivery, recordation, filing or performance by the Borrower
or any Subsidiary Guarantor of this Agreement, the Notes, any other Loan
Document or any Recapitalization Document to which it is or is to be a party, or
for the
<PAGE> 81
74
consummation of the Transaction, (b) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (c) the perfection or
maintenance of the Liens created by the Collateral Documents or (d) the exercise
by the Administrative Agent or any Lender Party of its rights under the Loan
Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals (other than
immaterial third party consents), actions, notices and filings obtained on or
prior to the date hereof listed on Schedule 4.4, all of which have been duly
obtained, taken, given or made (or provision has been provided for in a manner
satisfactory to the Administrative Agent) and are in full force and effect and
except for filings required to be made in connection with the perfection of the
security interests created under the Collateral Documents and compliance with
securities laws and other laws regarding dispositions of collateral. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
SECTION 4.5 Due Execution, Validity, Enforceability. This Agreement has
been, and each of the Notes and each other Loan Document has been or when
delivered hereunder will have been, duly executed and delivered by each of the
Borrower and each Subsidiary Guarantor party thereto. This Agreement is, and
each of the Notes and each other Loan Document has been or when delivered
hereunder will be, the legal, valid and binding obligation of each of the
Borrower and each Subsidiary Guarantor party thereto, enforceable against the
Borrower or such Subsidiary Guarantor in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
SECTION 4.6 Financial Statements. The consolidated balance sheets of
the Borrower and its Subsidiaries as at December 31, 1998 and the related
consolidated statements of income and consolidated statements of cash flows of
the Borrower and its Subsidiaries for the Fiscal Year then ended, accompanied by
(in the case of such Consolidated financial statements) an opinion of Ernst &
Young LLP, independent public accountants, and the Consolidated balance sheet of
the Borrower and its Subsidiaries as at January 31, 1999 and the related
Consolidated statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the month then ended, duly certified by the
Chief Financial Officer of the Borrower, copies of which have been furnished to
each Lender Party, fairly present in all material respects, subject, in the case
of said balance sheet as at January 31, 1999 and said statements of income and
cash flows for the month then ended, to normal year-end audit adjustments, the
Consolidated financial condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such date, all in accordance with GAAP
applied on a consistent basis, and, except for the incurrence of Debt in
connection with the Recapitalization and other
<PAGE> 82
75
transactions in connection therewith, since December 31, 1998, there has been no
Material Adverse Change.
SECTION 4.7 Pro Forma Financial Statements. The Consolidated pro forma
balance sheet of the Borrower and its Subsidiaries as at December 31, 1998, and
the related Consolidated pro forma statement of income and cash flows of the
Borrower and its Subsidiaries for the period then ended, certified by the Chief
Financial Officer of the Borrower, copies of which have been furnished to each
Initial Lender, (a) fairly present in all material respects the Consolidated pro
forma financial condition of the Borrower and its Subsidiaries as at such date
and the Consolidated pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case after giving effect
to the Transaction, (and the financial statements utilized in preparing such pro
forma statements were prepared in accordance with GAAP) and (b) have been
prepared in accordance in all material respects with the requirements of
Regulation S-X under the Securities Act of 1933, as amended, applicable to a
Registration Statement under such Act on Form S-1.
SECTION 4.8 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
Borrower or any of its Subsidiaries in writing to any Lender (other than
projections) for purposes of or in connection with this Agreement or any
transaction contemplated herein or the syndication of the Facilities
contemplated hereby is, (and, solely with respect to any such information
furnished on behalf of Borrower or any Subsidiary by a third party, to the best
of Borrower's knowledge after due inquiry are and will be) true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
SECTION 4.9 Litigation. Other than the litigation disclosed on Schedule
4.9 (the "Disclosed Litigation"), there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its Subsidiaries, any
Related Professional Corporation or any professional officer, director, employee
or contractor of any of the foregoing (in so far as related to services provided
in respect of the Borrower, any of its Subsidiaries or any Related Professional
Corporation), including, without limitation, any Environmental Action, pending
or, to the Borrower's knowledge, threatened before any court, governmental
agency or arbitrator that could reasonably be expected to have a Material
Adverse Effect, and there has been no Material Adverse Change in the status, or
financial effect on the Borrower or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 4.9.
SECTION 4.10 Regulation U. No part of the proceeds of any Advance will
be used to purchase or carry any Margin Stock, directly or indirectly, or to
extend credit for the purpose of purchasing or carrying any such Margin Stock
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other
<PAGE> 83
76
purpose which might cause any of the loans or extensions of credit under this
Agreement to be considered a "purpose credit" within the meaning of Regulation
T, U or X of the Board.
SECTION 4.11 ERISA.
(a) As of the Closing Date, except as set forth on Schedule 4.11
hereto, neither the Borrower nor any of its ERISA Affiliates maintains or has
maintained any Plans or Multiemployer Plans.
(b) As of the Closing Date, set forth on Schedule 4.11 is a complete
and accurate list of all Welfare Plans and all defined contribution plans to
which the Borrower or any of its Subsidiaries is a party, whether written or
oral. Each Welfare Plan, defined contribution plan and Benefit Arrangement
materially complies with, and has been operating in all material respects, in
accordance with, all applicable laws, including, without limitation, the
provisions of ERISA.
(c) Each defined contribution plan that is intended to be qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code") has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code, and nothing has occurred or is reasonably expected
to occur that would adversely affect the qualified status of any of the defined
contribution plans or any related trust subsequent to the issuance of such
determination letter.
(d) No event has occurred in connection with any Welfare Plan, defined
contribution plan or Benefit Arrangement which has, or could reasonably be
expected to result in any fine, penalty, assessment or other similar liability
in excess of $5,000,000 for which the Borrower or any of its Subsidiaries may be
responsible, whether by reason of operation of law or contract.
(e) Except as set forth in the financial statements referred to in this
Section 4.6 and in Article 7, neither the Borrower nor any of its Subsidiaries
has any material liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial Accounting Standards
No. 106.
SECTION 4.12 Casualty. Neither the business nor the properties of the
Borrower or any of its Subsidiaries are affected by any fire, explosion,
accident, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.13 Environmental Matters.
(a) The operations and properties of the Borrower and each of its
Subsidiaries comply in all known material respects with all applicable
Environmental Laws and Environmental Permits, all known past non-compliance with
such Environmental Laws and Environmental Permits has been
<PAGE> 84
77
resolved without ongoing obligations or costs, except to the extent that the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect, and no circumstances exist that could reasonably be expected to (i) form
the basis of an Environmental Action against the Borrower or any of its
Subsidiaries or any of their properties that could reasonably be expected to
have a Material Adverse Effect or (ii) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
Environmental Law which could reasonably be expected to have a Material Adverse
Effect.
(b) Except as disclosed on Schedule 4.13 hereto, (i) none of the
properties owned or operated as of the date hereof or formerly owned or operated
by the Borrower or any of its Subsidiaries is listed or, to the knowledge of the
Borrower, proposed for listing on the NPL or on the CERCLIS or any analogous
foreign, state or local list or is adjacent to any such property; (ii) to the
best of its knowledge, as of the date hereof, there are no and never have been
any underground or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or, to the
best of its knowledge, have been treated, stored or disposed on any property
currently owned or operated by the Borrower or any of its Subsidiaries or on any
property formerly owned or operated by the Borrower or any of its Subsidiaries;
(iii) to the best of its knowledge, there is no material asbestos or
asbestos-containing material on any property owned or operated on the date
hereof by the Borrower or any of its Subsidiaries; and (iv) Hazardous Materials
have not been released, discharged or disposed of in violation in any material
respect of any Environmental Law on any property currently owned or operated by
the Borrower or any of its Subsidiaries, or any property formerly owned or
operated by the Borrower or any of its Subsidiaries.
(c) As of the date hereof, except as disclosed on Schedule 4.13 hereto,
(i) neither the Borrower nor any of its Subsidiaries is undertaking or has not
completed, either individually or together with other potentially responsible
parties, any investigation or assessment or Remedial, Response or Removal action
relating to any actual or threatened release, discharge or disposal of Hazardous
Materials at any site, location or operation, either voluntarily or pursuant to
the order of any governmental or regulatory authority or the requirements of any
Environmental Law; and (ii) all Hazardous Materials generated, used, treated,
handled or stored at, or transported to or from, any property currently owned or
operated by the Borrower or any of its Subsidiaries or any property formerly
owned or operated by the Borrower or any of its Subsidiaries have been disposed
of in a manner which complies in all material respects with Environmental Laws
or in a manner that could not be reasonably be expected to result in a Material
Adverse Effect.
SECTION 4.14 Collateral Documents.
(a) The provisions of the Collateral Documents are effective
to create in favor of the Administrative Agent for the ratable benefit of the
Lender Parties pursuant to the Security Agreement, a legal, valid and
enforceable security interest in the Collateral owned by such Loan Party, and
the Security Agreement, together with the filings of Form UCC-1 and assignment
of
<PAGE> 85
78
certain of such Form UCC-1's or Form UCC-3 in all relevant jurisdictions creates
a first Lien on, and security interest in all of the Collateral described
therein, subject to no other Liens other than Liens permitted under Section 6.1.
Except for titled vehicles, vessels and other collateral which may not be
perfected through the filing of financing statements under the Uniform
Commercial Code and which have an aggregate fair market value of less than
$1,000,000, all such Liens have been or, upon the filing of the financing
statements delivered on the Closing Date, will be fully perfected Liens except
for Liens permitted under Section 6.1. The Intellectual Property Security
Agreement creates (assuming all necessary filings with the United States Patent
and Trademark Office and the United States Copyright Office have been
appropriately and duly made), as security for the Obligations purported to be
secured thereby, a valid and enforceable, and upon the recordation in the United
States Patent and Trademark Office and in the United States Copyright Office of
assignments for security made pursuant to the Intellectual Property Security
Agreement, perfected security interest in and Lien on the trademarks, patents
and copyrights covered by the Intellectual Property Security Agreement in favor
of the Administrative Agent for the ratable benefit of the Secured Parties,
superior to and prior to the rights of all third Persons. The Borrower and its
Subsidiaries have good and marketable title to all Collateral, free and clear of
all Liens except Liens permitted under Section 6.1.
(b) The security interests created in favor of Administrative
Agent, as pledgee for the benefit of the Lenders under the Security Agreement
and the Holdings Pledge Agreement together with the delivery of the certificates
pursuant thereto and delivery of appropriate endorsements executed in blank,
constitute first perfected security interests in the Pledged Shares and Pledged
Debt (as such terms are defined in the Security Agreement and the Holdings
Pledge Agreement) pledged under such agreements, subject to no security
interests of any other Person other than Permitted Liens and unperfected Liens
permitted under Section 6.1(g). Except as set forth in the Security Agreement
and the Holdings Pledge Agreement, no filings, registrations or recordings which
have not been made or will not have been made (or submitted for recordation)
within ten (10) Business Days after the Closing Date are required in order to
perfect the security interests created in the Pledged Shares or Pledged Debt
under the Security Agreement or Holdings Pledge Agreement.
(c) Assuming the Mortgages are appropriately and duly filed
and recorded, the Mortgages create, as security for the obligations purported to
be secured thereby, a valid and enforceable perfected security interest in and
Lien on all of the real property listed on Schedule 4.20 subject to a Mortgage
and the Mortgaged Property (including, without limitation, all fixtures and
improvements relating to such Mortgaged Property and affixed or added thereto on
or after the Closing Date) in favor of the Administrative Agent (or such other
trustees that may be named therein) for the ratable benefit of the Lender
Parties, superior to and prior to the rights of all third Persons (except that
the security interest created in such real property and the Mortgaged Property
may be subject to the Permitted Liens related thereto) and subject to no other
Liens (other than Liens permitted under Section 6.1).
<PAGE> 86
79
SECTION 4.15 Taxes.
(a) The Borrower and each of its Subsidiaries has filed, has caused to
be filed or has been included in all material tax returns (Federal, state, local
and foreign) required to be filed and has paid (prior to the date on which
penalties attach thereto) all taxes shown thereon to be due, together with
applicable interest and penalties (other than de minimus taxes which are not
overdue more than thirty (30) days and any taxes the amount or validity of which
are being contested in good faith and with respect to which the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP).
(b) There is no unpaid amount of adjustments to the state, local and
foreign tax liability of the Borrower and each of its Subsidiaries proposed by
any state, local or foreign taxing authorities which could reasonably be
expected to result in a Material Adverse Effect (other than amounts arising from
adjustments to Federal income tax returns and other than adjustments the amount
or validity of which are being contested in good faith and with respect to which
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP).
SECTION 4.16 Compliance with Securities Laws. Neither the Borrower nor
any of its Subsidiaries is an "investment company," or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.
Neither the making of any Advances, nor the issuance of any Letters of Credit,
nor the application of the proceeds or repayment thereof by the Borrower, nor
the consummation of the Transaction, will violate any provision of such Act or
any rule, regulation or order of the Securities and Exchange Commission
thereunder or any takeover, disclosure or other federal, state or foreign
securities law or Regulations T, U or X of the Federal Reserve Board. The
Borrower is not subject to regulation under any federal, state or foreign
statute or regulation which limits its ability to incur Debt.
SECTION 4.17 Solvency. Each Loan Party is, individually and together
with its Subsidiaries, Solvent.
SECTION 4.18 Debt.
(a) Set forth on Schedule 4.18(a) is a complete and accurate list of
all Debt which will be repaid by the Borrower on or prior to the Closing Date
(the "Existing Debt"), the principal amount of which is greater than $250,000,
showing as of the date hereof the principal amount outstanding thereunder and
the maturity date thereof.
(b) Set forth on Schedule 4.18(b) is a complete and accurate list of
all Debt which will not be repaid by the Borrower on or prior to the Closing
Date (the "Surviving Debt"), the principal
<PAGE> 87
80
amount of which is greater than $100,000, showing as of the date hereof the
principal amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.
SECTION 4.19 No Defaults, Compliance with Laws.
(a) Except as set forth on Schedule 4.19 hereto, neither the Borrower
nor any of its Subsidiaries is in default under any agreement, ordinance,
resolution, decree, bond, note, indenture, order or judgment to which it is a
party or by which it is bound, or any other agreement or other instrument by
which any of the properties or assets owned by it or used in the conduct of its
business is affected, which default could reasonably be expected to have a
Material Adverse Effect.
(b) The Borrower, each of its Subsidiaries, each Related Professional
Corporation and each professional officer, director, employee or contractor of
any of the foregoing (in so far as related to services provided in respect of
the Borrower or any Subsidiary by any such officer, director, employee or
contractor) has complied and is in compliance in all respects with all
applicable laws, ordinances, regulations, resolutions, decrees and other similar
documents and instruments of all courts and governmental authorities, bureaus
and agencies, domestic and foreign and all applicable Environmental Laws and
Regulations, non-compliance with which could reasonably be expected to have a
Material Adverse Effect.
SECTION 4.20 Owned Real Property. As of the date hereof, set forth on
Schedule 4.20 is a complete and accurate list of all real property owned by any
Loan Party or any of its Subsidiaries, showing as of the date hereof the street
address, county or other relevant jurisdiction, state and record owner thereof.
Such Loan Party or such Subsidiary has good, marketable and insurable fee simple
title to such real property, free and clear of all Liens, other than Permitted
Liens.
SECTION 4.21 Leased Real Property. As of the date hereof, set forth on
Schedule 4.21 is a complete and accurate list of all leases of real property
with an annual rent in excess of $250,000 under which the Borrower or any of its
Subsidiaries is the lessee, showing as of the date hereof the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration date
and annual rental cost thereof.
SECTION 4.22 Material Contracts. Set forth on Schedule 4.22 is a
complete and accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject matter and term
thereof. Except as could not reasonably be expected to have a Material Adverse
Effect, each such Material Contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect and, to the best knowledge of the Borrower with respect
to all parties other than the Loan Parties, is binding upon and enforceable
against all parties thereto in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and by equitable
<PAGE> 88
81
principles (regardless of whether enforcement is sought in equity or at law).
There exists no material default under any Material Contract by the Borrower or
any of its Subsidiaries party thereto. To the best knowledge of each Loan Party,
there exists no default under any Material Contract by any other party thereto
which could reasonably be expected to result in a Material Adverse Effect.
SECTION 4.23 Investments. As of the date hereof, set forth on Schedule
4.23 is a complete and accurate list of all Investments in excess of $250,000
held by the Borrower or any of its Subsidiaries, showing as of the date hereof
the amount, obligor or issuer and maturity, if any, thereof.
SECTION 4.24 Intellectual Property. As of the date hereof, set forth on
Schedule 4.24 is a complete and accurate list of all patents, registered
trademarks, service marks and copyrights, and all applications therefor, all
material unregistered trademarks, service marks, trade names and copyrights, and
all licenses of any of the foregoing (except for licenses of commercially
available software), of the Borrower or any of its Subsidiaries. The Borrower
and each of its Subsidiaries owns or has rights to use all patents, trademarks,
trade names, service marks, copyrights and other intellectual property material
to the conduct of its business as now or heretofore conducted by it except to
the extent the failure to so own or have such rights could not reasonably be
expected to result in a Material Adverse Effect. The Borrower and each of its
Subsidiaries conducts its business and affairs without infringement of or
interference with any patent, trademark, trade name, service mark, copyright or
other intellectual property of any other Person except to the extent that could
not reasonably be expected to result in a Material Adverse Effect.
SECTION 4.25 Recapitalization Documents. Each Recapitalization Document
to which the Borrower or any of its respective Subsidiaries is a party has been
duly executed and delivered by such Loan Party or such Subsidiary, as the case
may be, and, to the best knowledge of the Borrower, each Recapitalization
Document has been duly executed and delivered by the parties thereto other than
the Borrower and its Subsidiaries, and is in full force and effect. All
representations and warranties made in the Recapitalization Documents were true
and correct in all material respects at the time as of which such
representations and warranties were made; provided, however, that any
representation made relating to any party other than any Loan Party is made to
the best knowledge of the Borrower.
SECTION 4.26 Fees. No broker's or finder's fees or commissions or any
similar fees or commissions will be payable by the Borrower or any of its
Subsidiaries with respect to the incurrence and maintenance of the Obligations,
any other transaction contemplated by the Loan Documents or any services
rendered in connection with any such transactions. The Borrower hereby covenants
and agrees to indemnify the Administrative Agent and each Lender Party against
and hold the Administrative Agent and each Lender Party harmless from any claim,
demand or liability for broker's or finder's fees or similar fees or
commissions.
<PAGE> 89
82
SECTION 4.27 Government Consents for Conduct of Business.
(a) The Borrower and each Subsidiary Guarantor has, and is in good
standing with respect to, all approvals, permits, licenses, consents,
authorizations, franchises, certificates, and inspections of all Regulatory
Agencies and are otherwise necessary for such Loan Party to continue to conduct
business and own, use, operate, and maintain its property and assets as
heretofore conducted, owned, used, operated, and maintained which, if not
obtained (whether directly or by lawful and effective assignment) or not
maintained in good standing, would have a Material Adverse Effect. No such
approval, permit, license, consent, authorization, franchise, or certificate is
conditioned or limited (in any material respect) any more so than as is
generally the case with respect to Persons engaged in the same or similar lines
of business. Each such approval, permit, license, consent, authorization,
franchise, or certificate was duly and validly granted or issued, is in full
force and effect, and neither has been suspended, rescinded, revoked, forfeited,
or assigned to a party other than the Borrower or any of its Subsidiaries.
Further, no conditions exist or events have occurred that, with the giving of
notice or lapse of time or both, could result in the amendment, modification,
suspension, rescission, revocation, forfeiture, or non-renewal of any such
approval, permit, license, consent, authorization, franchise, or certificate.
(b) Each Related Professional Corporation and each of the Borrower's,
each of its Subsidiaries' and the Related Professional Corporations' employees,
officers, directors, and contractors providing professional medical services to
patients is, and has at all times been, while serving in such capacity (i) duly
licensed and certified (as and where required) by each regulatory body having
jurisdiction over services rendered by such Person, and (ii) eligible (as and
where required) to participate in Medicare, Medicaid, and other federal and
state funded health care reimbursement programs, where such failure to be
licensed, certified or eligible, as the case may be, could reasonably be
expected to have a Material Adverse Effect either individually or in the
aggregate.
SECTION 4.28 Labor Disputes; Collective Bargaining Agreement; Employee
Grievances. Except as set forth on Schedule 4.28 hereto: (a) as of the date
hereof, there are no collective bargaining agreements or other labor contracts
covering the Borrower or any other Loan Party; (b) as of the date hereof, no
such collective bargaining agreement or other labor contract will expire during
the term of this Agreement; (c) as of the date hereof, to the Borrower's
knowledge no union or other labor organization is seeking to organize, or to be
recognized as bargaining representative for, a bargaining unit of employees of
the Borrower or any other Loan Party; (d) to the Borrower's knowledge there is
no pending or threatened strike, work stoppage, material unfair labor practice
claim or charge, arbitration or other material labor dispute against or
affecting the Borrower or any of its Subsidiaries or their respective employees
which could reasonably be expected to have a Material Adverse Effect; (e) there
has not been, during the three (3) year period prior to the date hereof, a
strike, work stoppage, material unfair labor practice claim or charge,
arbitration or other material labor dispute against or affecting the Borrower or
any of its Subsidiaries or any of their
<PAGE> 90
83
respective employees, and (f) there are no actions, suits, charges, demands,
claims, counterclaims or proceedings pending or, to the Borrower's knowledge,
threatened against the Borrower or any of its Subsidiaries, by or on behalf of,
or with, its employees, other than employee grievances which could not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.29 Senior Debt. All of the Obligations of the Borrower and
the Guarantors to the Agents and the Lenders under this Agreement and the other
Loan Documents constitute "Designated Senior Debt" as defined in the
Subordinated Notes Indenture and are permitted thereunder and there exists no
other "Designated Senior Debt."
The Borrower may, in addition to the reporting requirements set forth
in Section 7.18, at any time and from time to time, supplement or amend any one
or more of the other Schedules referred to in this Agreement (other than
Schedule I), and any representation or warranty contained herein which refers to
any such Schedule shall from and after the date of any such amendment refer to
such Schedule as so supplemented or amended; provided, however, that in no event
shall any such supplemented or amended disclosure cure any existing Default or
Event of Default.
ARTICLE 5
AFFIRMATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
SECTION 5.1 Compliance with Law. Comply, cause each of its Subsidiaries
to comply and use its best efforts to cause the Related Professional
Corporations to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA.
SECTION 5.2 Payment of Taxes, Etc. Timely pay and discharge, and cause
each of its Subsidiaries to timely pay and discharge, (a) all taxes, assessments
and governmental charges or levies imposed upon it or upon its property and (b)
all lawful claims that, if unpaid, might by law become a Lien upon its property
(other than a Permitted Lien); provided, however, that the Borrower and its
Subsidiaries shall not be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien (other than a Permitted Lien) resulting therefrom attaches to its property
and becomes enforceable against the Borrower or any of its Subsidiaries.
<PAGE> 91
84
SECTION 5.3 Compliance with Environmental Laws. Comply, and cause each
of its Subsidiaries to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause each of
its Subsidiaries to obtain and renew all material Environmental Permits
reasonably necessary for its operations and properties; and conduct, and cause
each of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any Removal, Remedial or other Response action necessary
to remove and clean up all Hazardous Materials from any of its properties, in
accordance with the requirements of all Environmental Laws; provided, however,
that the Borrower and its Subsidiaries shall not be required to undertake any
such cleanup, Removal, Remedial or Response action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and adequate reserves as determined by the Administrative Agent are being
maintained with respect to such circumstances.
SECTION 5.4 Maintenance of Insurance.
(a) Maintain, and cause each of its Subsidiaries to maintain, insurance
with responsible and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
(b) In addition to, and without limiting the foregoing, the Borrower
and its Subsidiaries shall maintain or require the maintenance of medical
malpractice insurance with a responsible insurance company for or by and
covering each Related Professional Corporation and each of such Loan Party's or
Related Professional Corporation's respective employees, officers, directors or
contractors who provides professional medical services to patients, and naming
the relevant Loan Party as an additional insured. Such insurance shall cover
such casualties, risks and contingencies, shall be of the type and in amounts,
and may be subject to deductibles as are customarily maintained by Persons
employed or serving in the same or a similar capacity.
SECTION 5.5 Preservation of Corporate Existence, Etc. Except as
otherwise permitted hereunder, preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its existence, legal structure, legal
name, material rights (charter and statutory), material permits, material
licenses, material approvals, material privileges and material franchises.
SECTION 5.6 Visitation Rights.
(a) At any reasonable time and from time to time during normal business
hours, upon reasonable notice, permit the Administrative Agent, or, during the
continuance of an Event of Default, the Lender Parties, or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of and visit the properties of the Borrower and its
Subsidiaries (and to the extent lawful, the Related Professional Corporations),
and to discuss
<PAGE> 92
85
the affairs, finances and accounts of the Borrower and any such Subsidiaries
with any of their officers or directors.
(b) Permit the Administrative Agent and the Lender Parties to conduct
such commercial finance examinations and/or Collateral audits of the Borrower
and its Subsidiaries during each calendar year as the Administrative Agent may
reasonably request; provided, that in the absence of the occurrence and
continuance of an Event of Default, the Administrative Agent and the Lender
Parties may conduct one (1) finance examination and one (1) collateral audit per
annum.
SECTION 5.7 Keeping of Books. Keep, and cause each of its Subsidiaries
and each of the Related Professional Corporations to keep, proper books of
record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Borrower, each
Subsidiary and each Related Professional Corporation in accordance with GAAP.
SECTION 5.8 Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
that are reasonably necessary in the conduct of its business in good working
order and condition, ordinary wear and tear and damage by casualty excepted and
except where the failure to so maintain and preserve could not be reasonably
expected to result in a Material Adverse Effect.
SECTION 5.9 Performance of Material Contracts. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Material Contract to be performed or observed by it except
where the failure to so perform or observe could not be reasonably expected to
result in a Material Adverse Effect.
SECTION 5.10 Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates (other than the Borrower or any of its
Wholly-Owned Subsidiaries) on terms that are fair and reasonable and no less
favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arms-length transaction with a Person not an Affiliate; provided,
that in any event the following shall be permitted: (i) the transactions
(including the payment of fees and expenses in connection therewith)
contemplated by the Recapitalization Documents, the Loan Documents and the
documents related to the Subordinated Debt, including without limitation the
payment of up to $8,600,000 of bonuses or other compensation to employees on or
about the Closing Date; (ii) the payment on the Closing Date, pursuant to a
management agreement in form and substance reasonably satisfactory to the
Agents, of one time consulting fees to the Sponsors and/or any of their
respective Affiliates in an amount not to exceed $3,700,000 in the aggregate
(plus out-of-pocket expenses incurred by the Sponsors and/or any of their
respective Affiliates in providing services to the Borrower); (iii) the payment
of Management Fees and expenses pursuant to and in accordance with the
Management Services Agreement; (iv) payments under any tax sharing agreement in
form and substance reasonably satisfactory to the Agents or arrangements
reasonably satisfactory to the
<PAGE> 93
86
Agents among the Borrower and other members of the affiliated group of
corporations of which the Borrower is the common parent; (v) reasonable and
customary directors' fees, indemnification of officers and directors and similar
arrangements and payments thereunder; (vi) dividends permitted to be paid
pursuant to and in accordance with Section 6.6; (vii) transactions pursuant to
management contracts with affiliated physicians entered into in the ordinary
course of business consistent with past practice; (viii) transactions pursuant
to any contract or agreement in effect on the date hereof and set forth on
Schedule 5.10, as amended modified or replaced so long as such amendment,
modification or replacement is not materially less favorable to the Borrower and
its Subsidiaries than the contract or agreement in effect on the date hereof.
SECTION 5.11 Agreement to Grant Additional Security.
(a) Promptly, and in any event within thirty (30) days after the
acquisition by the Borrower or any Subsidiary Guarantor of (i) assets of the
type that would have constituted Collateral at the date hereof and investments
of the type that would have constituted Collateral on the date hereof (other
than assets with a fair market value of less than $100,000), including the
capital stock of any direct or indirect Subsidiary of the Borrower or (ii) any
Mortgaged Property, notify the Administrative Agent of the acquisition of such
assets or investments or Mortgaged Property and, to the extent not already
Collateral in which the Administrative Agent has a perfected security interest
pursuant to the Collateral Documents, such assets and investments and Mortgaged
Property will become additional Collateral hereunder to the extent the
Administrative Agent deems the pledge of such assets or mortgage of such
Mortgaged Property practicable (the "Additional Collateral"), and the Borrower
will, and will cause each Subsidiary Guarantor to, take all necessary action,
including the filing of appropriate financing statements under the provisions of
the UCC, applicable foreign, domestic or local laws, rules or regulations in
each of the offices where such filing is necessary or appropriate to grant the
Administrative Agent a perfected Lien in such Collateral (or comparable interest
under foreign law in the case of foreign Collateral) or perfected mortgage on
such Mortgaged Property pursuant to and to the full extent required by the
Collateral Documents and this Agreement.
(b) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each of the Borrower's direct and indirect
Domestic Subsidiaries (other than Immaterial Subsidiaries) as the Administrative
Agent shall request to become party to, or to execute and deliver a Subsidiary
Guaranty, guarantying to the Administrative Agent and the Lenders the prompt
payment, when and as due, of all Obligations of the Borrower and its
Subsidiaries under the Loan Documents, including all obligations under any Bank
Hedge Agreements.
(c) Promptly, and in any event no later than thirty (30) days after a
request with respect thereto, cause each Subsidiary Guarantor created or
established after the date hereof to grant to the Administrative Agent, for the
ratable benefit of the Lenders, a first priority Lien (subject to Liens
permitted pursuant to Section 6.1) on all property (tangible and intangible) of
such Subsidiary Guarantor, including, without limitation, all of the capital
stock of any of its Domestic Subsidiaries
<PAGE> 94
87
and (x) 65% (or such greater percentage which would not result in material
adverse tax consequences) of the Voting Stock and (y) 100% of the non-voting
stock of each Foreign Subsidiary, upon terms similar to those set forth in the
Collateral Documents and otherwise reasonably satisfactory in form and substance
to the Administrative Agent. The Borrower shall cause each Subsidiary Guarantor,
at its own expense, to become a party to a Security Agreement, an Intellectual
Property Security Agreement, a Mortgage (to the extent provided in clause (a)
above) and any other Collateral Document and to execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record in any appropriate governmental office, any document or
instrument reasonably deemed by the Administrative Agent to be necessary or
desirable for the creation and perfection of the foregoing Liens (including
legal opinion, title insurance, consents, corporate documents and any additional
or substitute security agreements or mortgages or deeds of trust). The Borrower
will cause each such Subsidiary Guarantor to take all reasonable actions
requested by the Administrative Agent (including, without limitation, the filing
of UCC-1's) in connection with the granting of such security interests.
(d) Promptly, and in any event not later than thirty (30) days after a
request with respect thereto, (i) deliver to the Administrative Agent the
original of all instruments, documents and chattel paper, and all other
Collateral of which the Administrative Agent determines it should have physical
possession in order to perfect and protect its security interest therein, duly
pledged, endorsed or assigned to the Administrative Agent without restriction;
(ii) use reasonable efforts obtain landlord waivers, in form and substance
satisfactory to the Administrative Agent, with respect to any material Inventory
or other Collateral located at a location that is not owned by the Borrower or a
Subsidiary; (iii) deliver to the Administrative Agent warehouse receipts
covering any portion of the Inventory or other Collateral located in warehouses
and for which warehouse receipts are issued; (iv) when an Event of Default
exists, transfer Inventory to locations designated by the Administrative Agent;
(v) if any Collateral is at any time in the possession or control of any
warehousemen, bailee or the Borrower's agents or processors, notify the
Administrative Agent thereof and notify such person of the Administrative
Agent's security interest in such Collateral and to the extent requested by the
Administrative Agent and to the extent the value of such Collateral exceeds
$1,000,000 and use reasonable efforts to obtain a landlord waiver or bailee
letter, in form and substance satisfactory to the Administrative Agent, from
such person and instruct such person to hold all such Collateral for the
Administrative Agent's account subject to the Administrative Agent's
instructions; (vi) if at any time any Inventory or other Collateral with a value
individually in excess of $250,000 (or $1,000,000 in the aggregate with respect
to all such property) is located on any real property of the Borrower which is
subject to a mortgage or other Lien and to the extent requested by the
Administrative Agent, use reasonable efforts to obtain a mortgagee waiver, in
form and substance satisfactory to the Administrative Agent, from the holder of
each mortgage or other Lien on such real property; and (vii) to the extent not
inconsistent with the terms of this Agreement, take all such other actions and
obtain all such other agreements as the Administrative Agent may reasonably deem
necessary or desirable in respect of any Collateral.
<PAGE> 95
88
(e) The security interests required to be granted pursuant to this
Section shall be granted pursuant to the Collateral Documents or, in the
Administrative Agent's discretion, such other security documentation (which
shall be substantially similar to the Collateral Documents already executed and
delivered by the Borrower and the Guarantors) as is satisfactory in form and
substance to the Administrative Agent (the "Additional Collateral Documents")
and shall constitute valid and enforceable perfected security interests prior to
the rights of all third Persons and subject to no other Liens except Liens
permitted under Section 6.1. The Additional Collateral Documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places and at such times as are required by law to establish, perfect,
preserve and protect the Liens, in favor of the Administrative Agent, for the
benefit of the Lender Parties, granted pursuant to the Additional Collateral
Documents and, all taxes, fees and other charges payable in connection therewith
shall be paid in full by the Borrower. At the time of the execution and delivery
of Additional Collateral Documents, the Borrower shall cause to be delivered to
the Administrative Agent such agreements, opinions of counsel, and other related
documents as may be reasonably requested by the Administrative Agent or the
Required Lenders to assure themselves that this Section has been complied with.
SECTION 5.12 Interest Rate Protection. In the event that the Borrower
has less than $150,000,000 of fixed rate Debt outstanding on the Closing Date,
then within ninety (90) days following the Closing Date, the Borrower shall
obtain and thereafter keep in effect one or more interest rate Hedge Agreements
(the terms and other provisions of all such Hedge Agreements to be subject to
the prior written consent of the Administrative Agent) covering an amount equal
to the difference between (a) $150,000,000 and (b) the amount of such fixed rate
Debt outstanding, for an aggregate period of not less than three (3) years
commencing on the Closing Date.
SECTION 5.13 Performance of Recapitalization Documents. Perform and
observe, or cause the relevant Subsidiary to perform and observe, all of the
terms and provisions of each Recapitalization Document to be performed or
observed by it or such Subsidiary, maintain each such Recapitalization Document
in full force and effect, enforce each such Recapitalization Document in
accordance with its terms, take all such action to such end as may be from time
to time requested by the Administrative Agent and, upon request of the
Administrative Agent, make such demands and requests for action or for
information and reports as the Borrower or any Subsidiary is entitled to make
under any Recapitalization Document.
SECTION 5.14 Year 2000 Compatibility. Take all commercially reasonable
action necessary to assure that its computer based systems, hardware and
software used in the Borrower's and its Subsidiaries' and the Related
Professional Corporations' business and operations will be able to operate and
effectively receive, transmit, process, store, retrieve or retransmit data
including dates on and after January 1, 2000, and, at the request of the
Administrative Agent, the Loan Parties shall provide evidence to the
satisfaction of the Administrative Agent of such year 2000 compatibility.
<PAGE> 96
89
SECTION 5.15 Assignment of Claims. If required by the Administrative
Agent, the Borrower shall, within a reasonable period of time as specified by
the Agent, deliver or cause to be delivered all documents necessary or desirable
in order to comply with all applicable federal and state assignment of claims
acts, statutes or regulations.
SECTION 5.16 Cash Concentration Account. Promptly, and in any event not
later than ninety (90) days after the Closing Date, the Borrower, at its own
expense, shall cause the institution or institutions (which shall be reasonably
acceptable to the Administrative Agent) (collectively, the "Lockbox Banks") with
which the Borrower and its Subsidiaries maintain lockbox arrangements and
accounts with respect to Receivables (collectively, the "Lockbox Accounts") to
enter into arrangements reasonably acceptable to the Administrative Agent
pursuant to which such Lockbox Banks shall transfer all funds from such Lockbox
Accounts as are agreed to between the Borrower and the Administrative Agent on a
basis reasonably acceptable to the Administrative Agent into a concentration
account or accounts(collectively, the "Cash Concentration Account") in the sole
control and dominion of the Administrative Agent, such Cash Concentration
Account to be governed by the terms of agreements in form and substance
satisfactory to the Administrative Agent. Prior to the occurrence of a Default
or Event of Default, amounts deposited in the Cash Concentration Account shall
be either made available to, or actually disbursed by the Administrative Agent
to, the Borrower on a daily basis into an account or accounts designated by the
Borrower or as otherwise directed by the Borrower. Following the Closing Date,
neither the Borrower nor any of its Subsidiaries shall establish any deposit
account relating to the accounts described in this Section 5.16 other than in
accordance with this Section 5.16.
ARTICLE 6
NEGATIVE COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time, without the prior consent of the Required
Lenders:
SECTION 6.1 Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character (including,
without limitation, Accounts, Inventory and other Collateral) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial
Code or any other statute of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file any such financing
statement,
<PAGE> 97
90
or assign, or permit any of its Subsidiaries to assign, any accounts or other
right to receive income, excluding, however, from the operation of the foregoing
restrictions the following:
(a) Liens created under the Loan Documents;
(b) Permitted Liens;
(c) Liens existing on the date hereof and described on Schedule 6.1(c);
(d) Purchase money Liens securing Debt permitted under Section
6.2(c)(i) upon real property or Equipment acquired or held by the Borrower or
any of its Subsidiaries in the ordinary course of business to secure the
purchase price of such real property or Equipment or to secure Debt incurred
solely for the purpose of financing the acquisition, construction or improvement
of any such real property or Equipment to be subject to such Liens, or Liens
existing on any such real property or Equipment at the time of acquisition
(whether in a stock or asset transaction) (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount; provided, however, that no such Lien shall extend to or cover any
property other than the real property or Equipment being acquired, constructed
or improved, and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being extended, renewed
or replaced;
(e) Liens arising in connection with Capitalized Leases permitted under
Section 6.2(c)(i); provided, that no such Lien shall extend to or cover any
Collateral or any assets other than the assets subject to such Capitalized
Leases;
(f) Liens securing Debt permitted under Section 6.2(c)(i) on property
or assets acquired pursuant to a Permitted Acquisition, or on property or assets
of a Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to a Permitted Acquisition, provided that such Liens are not
incurred in connection with or in anticipation of such Permitted Acquisition and
do not attach to any other asset of the Borrower or any of its Subsidiaries
(g) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.7;
(h) Licenses, leases or subleases granted to third Persons in the
ordinary course of business not interfering in any material respect with the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements regarding
operating leases not constituting Debt or consignments;
<PAGE> 98
91
(j) Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;
(k) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or operation
of law, incurred in the ordinary course of business so long as such deposits are
not intended to be collateral for any obligation;
(l) Liens incurred in the ordinary course of business of the Borrower
or any Subsidiary of the Borrower with respect to obligations (other than for
Debt for borrowed money) that do not exceed $5,000,000 at any one time
outstanding
(m) The replacement, extension or renewal of any Lien permitted by
clauses (b) through (l) above upon or in the same property theretofore subject
thereto in connection with the replacement, extension or renewal (without
increase in the amount or any change in any direct or contingent obligor) of the
Debt secured thereby.
SECTION 6.2 Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than:
(a) Debt incurred pursuant to the Loan Documents;
(b) In the case of any of the Subsidiaries of the Borrower, Debt owed
to the Borrower or to a Subsidiary of the Borrower; provided, that if such Debt
is owed by a Subsidiary of the Borrower which is not a Guarantor such Debt shall
be evidenced by a promissory note, such promissory note shall be pledged to the
Administrative Agent pursuant to the terms of the Security Agreement and there
shall be no restrictions whatsoever on the ability of such Subsidiary to repay
such Debt;
(c) In the case of the Borrower and any of its Subsidiaries:
(i) Debt (A) secured by Liens permitted by Section 6.1(d), (B)
Capitalized Leases and (C) of the Borrower or any Subsidiary acquired
pursuant to a Permitted Acquisition or permitted Investment (or Debt
assumed at the time of a Permitted Acquisition or permitted Investment
of any asset securing such Debt), provided that such Debt was not
incurred in connection with, or in anticipation or contemplation of,
such Permitted Acquisition or permitted Investment, collectively not to
exceed in the aggregate $5,000,000 at any time outstanding;
(ii) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
<PAGE> 99
92
(iii) Subordinated Debt incurred pursuant to the Subordinated
Debt Financing; provided, that the Net Cash Proceeds of any such Subordinated
Debt issued after the Closing Date shall be used to prepay the Advances then
outstanding in accordance with Section 2.6(b)(iii), except that up to
$25,000,000 of such Net Cash Proceeds may be used to pay the purchase price of a
Permitted Acquisition;
(iv) Debt existing on the date hereof and described on
Schedule 6.2(c);
(v) Debt in respect of Hedge Agreements entered into in the
ordinary course of business to protect the Borrower or any of its
Subsidiaries against fluctuations in interest rates or currency values;
(vi) unsecured Debt consisting of promissory notes issued by
the Borrower to officers, directors and employees of the Borrower or
any Subsidiary of the Borrower issued to purchase or redeem capital
stock of the Borrower to the extent that payment of cash on such
promissory notes is permitted hereunder and so long as such promissory
notes are expressly subordinate to the Obligations of the Borrower and
the Subsidiary Guarantors under the Loan Documents on terms reasonably
acceptable to the Administrative Agent;
(vii) Debt consisting of Qualified Debt Securities of the
Borrower or any of its Subsidiaries incurred by it in connection with
Permitted Acquisitions plus the amount of interest on such Qualified
Debt Securities paid in kind or through accretion or capitalization to
the extent that incurrence thereof would not result in an Event of
Default under any of the financial covenants set forth in Article 8;
(viii) Debt incurred in connection with the financing of
insurance premiums (excluding tail medical malpractice insurance) in an
amount not to exceed lesser of $20,000,000 and the premiums with
respect to the applicable insurance policies;
(ix) Debt constituting Guaranteed Obligations permitted under
Section 6.18;
(x) Debt in respect of any of the Recapitalization Documents
as in effect on the date hereof, including, without limitation, the
Earnout Obligations;
(xi) Obligations in respect of the Preferred Stock;
(xii) refinancings of any Debt originally incurred as
permitted by this Section 6.2(c)(i), (iv), (vi), (vii) and (x);
provided, that the terms of any such refinancing of such Debt, and of
any agreement entered into and of any instrument issued in connection
therewith, shall be on substantially the same terms as the agreements
and instruments in existence on the date hereof and otherwise permitted
by this Agreement and the other Loan
<PAGE> 100
93
Documents; and, provided, further, that the principal amount of such
Debt shall not be increased above the principal amount thereof
outstanding on the date hereof and the direct and indirect obligors
therefor shall not be changed, as a result of or in connection with
such refinancing and any Debt which is subordinate to the Obligations
shall remain subordinate on substantially the same terms or on such
other terms as may be approved by the Administrative Agent;
(xiii) other Debt not expressly permitted above in an
aggregate amount together with the amount of Guaranteed Obligations
incurred pursuant to Section 6.18(k) not to exceed $15,000,000 at any
time outstanding.
SECTION 6.3 Fundamental Changes; Acquisitions.
(a) Merge into or consolidate with any Person or permit any Person to
merge into it, or permit any of its Subsidiaries to do so, except that so long
as no Default or Event of Default shall have occurred and be continuing and so
long as no Default or Event of Default would result therefrom, any Subsidiary of
the Borrower may merge into or consolidate with any other Subsidiary of the
Borrower or the Borrower, as the case may be, provided that in the case of any
such merger or consolidation, the Person resulting from such merger or
consolidation shall be the Borrower or a Wholly Owned Subsidiary of the
Borrower, as the case may be;
(b) Liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), convey, sell, assign, lease, transfer or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or substantially all of
its property, business or assets, or permit any of its Subsidiaries to do any of
the foregoing, except that so long as no Default or Event of Default shall have
occurred and be continuing and so long as no Default or Event of Default would
result therefrom, any Subsidiary of the Borrower may liquidate itself into any
other Subsidiary of the Borrower or the Borrower, as the case may be;
(c) Acquire or permit any Subsidiary to acquire all or substantially
all of the assets or any division or line of business of any other Person
(including capital stock), except that the Borrower and Subsidiary Guarantors
may consummate (i) Permitted Acquisitions and (ii) the transfers contemplated by
Sections 6.4(e) and (f).
SECTION 6.4 Sales, Etc. of Assets. Sell, lease (as lessor), transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease (as
lessor), transfer or otherwise dispose of, any assets or grant any option or
other right to purchase, lease or otherwise acquire any assets, except:
(a) Sales of Inventory and Cash Equivalents in the ordinary course of
business;
<PAGE> 101
94
(b) Sales of obsolete or worn-out Equipment and Intellectual Property
in the ordinary course of business;
(c) Sales or discounts of overdue accounts receivable in the ordinary
course of business on customary terms and conditions;
(d) Leases or subleases of real property or licenses or sublicenses of
Intellectual Property in each case in the ordinary course of business;
(e) The Borrower may transfer assets to any Subsidiary Guarantor and
may make Investment in other Subsidiaries to the extent permitted by Section
6.5(a);
(f) Any Subsidiary of the Borrower may transfer assets to the Borrower
or to any Subsidiary Guarantor or make an Investment in other Subsidiaries to
the extent permitted under Section 6.5(a);
(g) The sale of any asset by the Borrower or any of its Subsidiaries
(other than an asset included in Section 6.4(a) through (f)) so long as (i) the
purchase price paid to the Borrower or such Subsidiary for such asset shall be
no less than the fair market value of such asset at the time of such sale, (ii)
the purchase price for such asset shall be paid to the Borrower or such
Subsidiary at least seventy-five percent (75%) in cash and (iii) the aggregate
Net Proceeds received by the Borrower and all of its Subsidiaries for such asset
and all other assets sold by the Borrower and its Subsidiaries (other than an
asset included in Section 6.4(a) through (f)) in any Fiscal Year pursuant to
this clause (g) shall not exceed $7,500,000; provided, that the Borrower and its
Subsidiaries may sell or exchange specific items of Equipment, so long as the
purpose of each sale or exchange is to acquire (and results within 180 days of
such sale or exchange in the acquisition of) replacement items of Equipment
which are, in the reasonable business judgment of the Borrower and its
Subsidiaries, the functional equivalent of the item of Equipment so sold or
exchanged;
provided that (i) in the case of sales of assets pursuant to Section 6.4(g), the
Borrower shall apply the Net Cash Proceeds from such sale in accordance with
Section 2.6(b)(ii) and (ii) to the extent the Required Lenders waive the
provisions of this Section with respect to the sale or other disposition of any
Collateral, or any Collateral is sold or disposed of as permitted by this
Section, such Collateral in each case shall be sold or otherwise disposed of
free and clear of the Liens created by the Loan Documents and the Administrative
Agent shall take such actions as are appropriate in connection therewith.
SECTION 6.5 Investments. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than (each of
the following, a "Permitted Investment"):
<PAGE> 102
95
(a) Investments by the Borrower and its Subsidiaries in their
Subsidiaries outstanding on the date hereof and described on Schedule 6.5(a),
and additional investments in new or existing Wholly Owned Subsidiaries of the
Borrower; provided, however, that no more than an aggregate amount equal to
$2,000,000 shall be invested from the date hereof in Foreign Subsidiaries; and,
provided, further, that with respect to Investments in any newly acquired (to
the extent such acquisition is permitted hereunder) or created Wholly Owned
Subsidiary (other than a Foreign Subsidiary or an Immaterial Subsidiary), any
such Subsidiary shall become a Guarantor pursuant to the terms of the Subsidiary
Guaranty and an additional grantor pursuant to the terms of the Security
Agreement and Intellectual Property Security Agreement and otherwise comply with
Section 5.11;
(b) Loans and advances to officers, other employees and independent
contractor physicians in the ordinary course of the business of the Borrower and
its Subsidiaries in an aggregate principal amount not to exceed $2,000,000 at
any time outstanding;
(c) Advances of salary to independent contractor physicians in the
ordinary course of business of the Borrower and its Subsidiaries;
(d) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(e) Investments by the Borrower and its Subsidiaries in Hedge
Agreements permitted under Section 5.12 and Section 6.2;
(f) Investments consisting of intercompany Debt permitted under Section
6.2(b) or 6.18(i) and (j);
(g) Investments existing on the date hereof and described on Schedule
6.5(g) hereto;
(h) Investments by the Borrower and its Subsidiaries in deposit
accounts opened and maintained in the ordinary course of business;
(i) Investments consisting of accounts receivable in the ordinary
course of business;
(j) Investments in the form of Permitted Acquisitions;
(k) Investments required to be made pursuant to the Recapitalization
Documents as in effect on the date hereof;
(l) The Borrower and its Subsidiaries may receive and own Investments
acquired as non-cash consideration received in connection with an Asset
Disposition permitted by Section 6.4(g);
<PAGE> 103
96
(m) The Borrower and its Subsidiaries may make pledges and deposits
permitted under Section 6.1;
(n) The Borrower and its Subsidiaries may acquire and own Investments
(including Debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in good faith settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business and past due accounts;
(o) The Borrower and its Subsidiaries may hold Investments to the
extent such Investments reflect an increase in the value of Investments and
would otherwise exceed the limitations of this Section 6.5;
(p) Transfers of assets to Related Professional Corporations to the
extent required under the express contractual terms of applicable management
contracts in the ordinary course of business;
(q) Investments consisting of notes payable from employees for the
purchase price of stock in connection with the issuance of such stock;
(r) Investments in the form of loans by the Borrower or any of its
Subsidiaries to Related Professional Corporations in the ordinary course of
business; provided, that such loans shall be evidenced by promissory notes and
such promissory notes shall be pledged to the Administrative Agent pursuant to
the terms of the Security Agreement;
(s) Investments made by the Borrower or any of its Subsidiaries solely
with the proceeds from issuances of capital stock of the Borrower to any Sponsor
or a Related Party after the date hereof; provided, that the capital
contribution made by such Sponsor or such Related Party in connection with such
issuance was made solely for the purpose of permitting the Borrower making of
such Investment; and
(t) Other Investments not expressly permitted above in an aggregate
amount outstanding at any time not in excess of $5,000,000.
SECTION 6.6 Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital stock
or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such, make any
distribution of assets, capital stock, warrants, rights, options, obligations or
securities to its stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit any of its
Subsidiaries to do any of the foregoing or permit any of its Subsidiaries to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of the Borrower or any warrants, rights or options to acquire such capital
stock or to issue or sell any such capital stock or any warrants, rights or
options to acquire such capital stock, except:
<PAGE> 104
97
(a) The Borrower may declare and pay dividends and distributions
payable solely in common stock of the Borrower;
(b) A Subsidiary of the Borrower may declare and pay dividends and
distributions to its stockholders ratably in accordance with their interests;
(c) The Borrower may consummate the Recapitalization;
(d) For issuances of stock expressly permitted by Section 6.17;
(e) the repurchase, redemption or other acquisition or retirement for
value of any capital stock of the Borrower held by any members or former member
of the Borrower's (or any of its Subsidiaries') management; provided, however,
that the aggregate price paid shall not exceed (x) $2,000,000 in any Fiscal Year
and $5,000,000 in the aggregate during the term of this Agreement, plus (y) the
aggregate cash proceeds received by the Borrower from any issuance or reissuance
of capital stock by the Borrower to members of management of the Borrower and
its Subsidiaries and the net proceeds to the Borrower of any "key-man" life
insurance policies;
(f) The declaration or payment of dividends to satisfy any required
purchase price adjustment payment arising out of the Recapitalization;
(g) Repurchases of capital stock deemed to occur upon the exercise of
stock options to the extent the value of such capital stock represents all or a
portion of the exercise price thereof;
(h) The Borrower and its Subsidiaries may pay regularly scheduled
dividends on the Preferred Stock pursuant to the terms thereof solely through
the issuance of additional interests of such Preferred Stock, or by an increase
in the liquidation preference thereof; and
(i) The Borrower and its Subsidiaries may issue its common stock to
holders of Preferred Stock upon the conversion thereof in accordance with the
terms thereof.
SECTION 6.7 Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business (and
businesses reasonably related thereto) as carried on at the date hereof.
SECTION 6.8 Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate or articles of incorporation or bylaws if
such amendment would adversely affect (i) The Borrower's or such Subsidiary's
capacity to perform its obligations under the Loan Documents to which it is a
party or (ii) the interests or rights of the Administrative Agent or any Lender
Party under the Loan Documents.
<PAGE> 105
98
SECTION 6.9 Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (a) accounting policies or
reporting practices, except as mandated by GAAP, or (b) its Fiscal Year.
SECTION 6.10 Prepayments, Etc. of Debt. (a) Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Subordinated Debt or Qualified Debt Securities, other than the exchange of
Subordinated Notes with Subordinated Notes in accordance with the Subordinated
Note Indenture or (b) amend, modify or change in any manner any term or
condition of any Subordinated Debt or Qualified Debt Securities.
SECTION 6.11 Amendment, Etc. of Recapitalization Documents. Cancel or
terminate (other than in accordance with its terms) any Recapitalization
Document or consent to or accept any cancellation or termination thereof (other
than in accordance with its terms), amend, modify or change in any materially
adverse manner any term or condition of any Recapitalization Document or the
Management Services Agreement or give any consent, waiver or approval
thereunder, waive any default under or any breach of any term or condition of
any Recapitalization Document or take any other action in connection with any
Recapitalization Document or the Management Services Agreement that would, in
any such case, materially impair the value of the interests or rights of the
Borrower thereunder, or would materially impair the interests or rights of the
Administrative Agent or any Lender Party, or permit any of its Subsidiaries to
do any of the foregoing; provided, that in no event shall the Borrower or any of
its Subsidiaries amend, modify or change the Management Services Agreement so as
to increase the Management Fees payable thereunder.
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries. Create
or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends
or make any other distributions on its capital stock or pay any Debt or other
Obligations owed to the Borrower or any of its other Subsidiaries, (ii) make any
loans or advances to the Borrower or any of its other Subsidiaries or (iii)
transfer any of its property or assets to the Borrower or any of its other
Subsidiaries, except:
(a) those contained in the Loan Documents or the documents
related to the Subordinated Debt;
(b) any such encumbrance or restriction consisting of
customary non-assignment provisions in contractual obligations and are entered
into in the ordinary course of business to the extent such provisions restrict
the transfer of the lease or license or assignment of such agreement; and
<PAGE> 106
99
(c) in the case of clause (iii) above, Permitted Liens or
other restrictions contained in security agreements securing Debt permitted by
Section 6.2(c)(i) to the extent such restrictions restrict the transfer of such
asset;
SECTION 6.13 Negative Pledge. Enter into or suffer to exist, or permit
any of the Subsidiaries of the Borrower to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of any Lien
upon any of its properties or assets, other than as provided in the Loan
Documents, the documents related to the Subordinated Debt and other than
restrictions contained in security agreements securing Debt permitted by Section
6.2(c)(i) to the extent such restrictions restrict the transfer of such asset.
SECTION 6.14 Partnerships, New Subsidiaries.
(a) Become a general partner in any general or limited partnership or
joint venture (other than as expressly permitted pursuant to Section 6.5(a) and
(q)), or permit any of its Subsidiaries to do so, or
(b) Create any new Subsidiary, unless the Borrower and such Subsidiary
comply with Section 5.11, including, without limitation, by causing such newly
created Domestic Subsidiary (other than Immaterial Subsidiaries) to become a
Guarantor pursuant to the terms of the Subsidiary Guaranty and an additional
grantor pursuant to the terms of the Security Agreement and Intellectual
Property Security Agreement and the shares of the capital stock of such
Subsidiary to be pledged to the Administrative Agent pursuant to the Security
Agreement to the extent required thereunder.
SECTION 6.15 Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or derivatives or any similar speculative transactions, except
for Hedge Agreements expressly permitted under Section 5.12 or Section
6.2(c)(v).
SECTION 6.16 Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures that would cause the aggregate of
all such Capital Expenditures made by the Borrower and its Subsidiaries in any
period set forth below to exceed the amount set forth below for such period.
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
Fiscal Year 1999 $17,000,000
Fiscal Year 2000 $12,000,000
Fiscal Year 2001 $12,000,000
Fiscal Year 2002 $13,000,000
Fiscal Year 2003 $13,000,000
</TABLE>
<PAGE> 107
100
<TABLE>
<S> <C>
Fiscal Year 2004 $14,000,000
Fiscal Year 2005 $15,000,000
</TABLE>
; provided, however, that amounts permitted to be expended in a Fiscal Year that
are not expended in such fiscal year, but not in excess of one hundred (100%)
percent of such prior year's unused amount (not including any amount permitted
to be carried forward from a prior year) shall be permitted to be expended in
(but only in) the subsequent fiscal year. For purposes of this Section 6.16,
Capital Expenditures shall not include (i) expenditures constituting the
purchase price for any Permitted Acquisition, (ii) expenditures from proceeds of
insurance settlements, condemnation awards and other settlements in respect of
lost, destroyed, damaged or condemned assets or property to the extent such
proceeds are used within 180 days of receipt to replace assets or property so
lost, destroyed, damages or condemned and (iii) expenditures to the extent that
such expenditures constitute a reinvestment of Net Cash Proceeds from any Asset
Disposition permitted under this Agreement, which reinvestment is made within
180 days after receipt of such Net Cash Proceeds.
SECTION 6.17 Issuance of Stock. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, issue, sell, assign,
pledge or otherwise encumber or dispose of any shares of capital stock of the
Borrower or any Subsidiary of the Borrower, except (a) to the Borrower, (b) to
qualify directors if required by applicable law, (c) as set forth in Schedule
6.17, (d) pursuant to the Recapitalization in accordance with the
Recapitalization Documents, (e) issuances of common stock of the Borrower to
management and employees of the Borrower, pursuant to a stock option or grant
plan or the exercise of options issued pursuant thereto and (f) other issuances
of common stock or Preferred Stock of the Borrower (i) in connection with a
Permitted Acquisition, (ii) to any other Person so long as such common stock is
pledged to the Administrative Agent for the ratable benefit of the Lender
Parties to secure the Obligations of the Borrower and the Subsidiary Guarantors
under the Loan Documents, provided, however, that common stock issued in
connection with an Initial Public Offering shall not be required to be so
pledged, or (iii) to MedPartners pursuant to its preemptive rights existing on
the date hereof.
SECTION 6.18 Guaranteed Obligations. Create, incur, assume or permit to
exist, or permit any of its Subsidiaries to create, incur, assume or permit to
exist, any Guaranteed Obligations except
(a) by endorsement of instruments or items of payment for deposit to
the general account of any Loan Party;
(b) for Guaranteed Obligations existing on the date hereof and set
forth on Schedule 6.18;
(c) guarantees by the Borrower or its Subsidiaries of Debt expressly
permitted under Section 6.2; provided, that guarantees of Subordinated Debt
shall be subordinated on substantially similar terms;
<PAGE> 108
101
(d) the Borrower and its Subsidiaries may become and remain liable with
respect to contingent obligations in the form of customary indemnifications for
agents, employees, consultants, officers and directors of such Loan Party;
(e) the Borrower and the Subsidiaries may become and remain liable with
respect to contingent obligations in the form of customary and reasonable
indemnification provisions or customary purchase price adjustments (based on
post-closing audit adjustments) incurred in connection with acquisitions or
sales or assets permitted hereunder to be made by the Borrower or any
Subsidiary;
(f) the Borrower and its Subsidiaries may become and remain liable with
respect to guarantees in favor of the Lenders and the Agent executed and
delivered pursuant hereto;
(g) for performance, surety, bid, appeal and other similar bonds as
expressly permitted under Section 6.1 or the definition of Permitted Liens;
(h) The Borrower and Subsidiaries may incur Guaranteed Obligations in
respect of employment arrangements and other compensation arrangements entered
into in connection with Permitted Acquisitions or otherwise in the ordinary
course of business;
(i) The Borrower may incur Guaranteed Obligations in respect of
obligations of Subsidiary Guarantors arising in the ordinary course of business;
(j) Subsidiary Guarantors may incur Guaranteed Obligations in respect
of obligations of the Borrower or other Subsidiary Guarantors arising in the
ordinary course of business;
(k) the Borrower and its Subsidiaries may incur Guaranteed Obligations
in an aggregate amount together with the Debt incurred pursuant to Section
6.2(c)(xiii) not to exceed $15,000,000 at any one time outstanding.
SECTION 6.19 Management Fees. Pay, or be or become obligated to pay,
any Management Fees to any Person, or any interest on any deferred obligation
therefor, including, without limitation, to any shareholder, director, officer
or employee of the Borrower or any Loan Party; provided, however, that so long
as no Event of Default has occurred and is continuing or would occur after
giving effect thereto, the Borrower and its Subsidiaries may make payments
pursuant to and in accordance with the Management Services Agreement; provided,
further, that notwithstanding the preceding proviso, the Borrower may pay the
out-of-pocket costs of the Sponsors incurred pursuant to and in accordance with
the Management Services Agreement during the existence and continuance of an
Event of Default.
<PAGE> 109
102
ARTICLE 7
REPORTING REQUIREMENTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will furnish to the Administrative Agent and Lender Parties (for
purposes of this Article 7 and each of the defined terms used herein, references
to "Subsidiaries" and "Loan Parties" shall be deemed to include the Related
Professional Corporations):
SECTION 7.1 Default Notice. As soon as possible and in any event within
two (2) Business Days after a Responsible Officer of the Borrower obtains
knowledge of the occurrence of any Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect, a statement of
the Chief Financial Officer of the Borrower setting forth details of such
Default or event, development or occurrence and the action that the Borrower has
taken and proposes to take with respect thereto.
SECTION 7.2 Monthly Financials. As soon as available and in any event
within thirty (30) days after the end of each month which is not a fiscal
quarter end, a Consolidated balance sheet of the Borrower and its Subsidiaries,
as of the end of such month and a Consolidated statement of income and a
Consolidated statement of cash flows of the Borrower and its Subsidiaries, for
the period commencing at the end of the previous month and ending with the end
of such month and Consolidated statement of income and a Consolidated statement
of cash flows of the Borrower and its Subsidiaries, for the period commencing at
the end of the previous Fiscal Year and ending with the end of such month,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the prior Fiscal Year, all in reasonable detail and duly
certified by the chief financial officer of the Borrower.
SECTION 7.3 Quarterly Financials. As soon as available and in any event
within forty-five (45) days after the end of each fiscal quarter of each Fiscal
Year, a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of the Borrower and its Subsidiaries, as of the end
of such quarter and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries, and consolidating
statements of income and consolidating statements of cash flows of the Borrower
and its Subsidiaries, for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and a Consolidated
statement of income and a Consolidated statement of cash flows of the Borrower
and its Subsidiaries and consolidating statements of income and consolidating
statements of cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such fiscal quarter, setting forth in each case in comparative
<PAGE> 110
103
form the corresponding figures for the corresponding period of the preceding
Fiscal Year (provided that with respect to the first four (4) quarters following
the Closing Date, such comparative financial statements shall be prepared on a
pro forma basis after giving effect to the Transaction) and the corresponding
figures from the budgets for such period and for the Fiscal Year which includes
such period, all in reasonable detail and duly certified by the Chief Financial
Officer of the Borrower as having been prepared (except for the pro forma
comparative financial statements) in accordance with GAAP (subject to normal
year-end audit adjustments and the absence of footnotes), together with (i) a
certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto and (ii) a schedule in form and detail satisfactory to
the Administrative Agent of the computations used by the Borrower in determining
compliance with the financial covenants contained in Article 8, provided, that
in the event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Article 8, a statement of reconciliation conforming such
financial statements to GAAP.
SECTION 7.4 Annual Financials. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries, including
therein a Consolidated balance sheet of the Borrower and its Subsidiaries, and
consolidating balance sheets of Borrower and its Subsidiaries, as of the end of
such Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries, and consolidating
statements of income and consolidating statements of cash flows of the Borrower
and its Subsidiaries, for such Fiscal Year, in each case setting forth in
comparative form the corresponding figures for the prior Fiscal Year (provided
that respect to the first Fiscal Year following the Closing Date, such
comparative financial statements shall be prepared on a pro forma basis after
giving effect to the Transaction) and the corresponding figures from the budget
for such Fiscal Year and in each case accompanied (in the case of such
Consolidated financial statements) by an opinion of Ernst & Young LLP or other
independent certified public accountants of recognized national standing
acceptable to the Administrative Agent, (which opinion shall contain no
qualification with respect to the continuance of the Borrower and its
Subsidiaries as going concerns and shall state that such financial statements
fairly present in all material respects the financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated, in each case in conformity
with GAAP), together with (a) a letter of such accounting firm to the
Administrative Agent and Lender Parties stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof; provided, that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Article 8, a statement of
reconciliation conforming such
<PAGE> 111
104
financial statements to GAAP, (b) a certificate of the Chief Financial Officer
of the Borrower stating that no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with respect thereto
and (c) a schedule in form and detail satisfactory to the Administrative Agent
of the computations used by the Borrower in determining compliance with the
financial covenants contained in Article 8, provided, that in the event of any
change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of compliance
with Article 8, a statement of reconciliation conforming such financial
statements to GAAP.
SECTION 7.5 Annual Forecasts. As soon as available and in any event no
later than sixty (60) days after the end of each Fiscal Year, (i) forecasts
prepared by management of the Borrower, including balance sheets, income
statements and cash flow statements on a quarterly basis, and (ii) to the extent
prepared, a business plan, in each case for the Fiscal Year following such
Fiscal Year then ended and in form reasonably satisfactory to the Administrative
Agent.
SECTION 7.6 ERISA Events and ERISA Reports. (i) Promptly and in any
event within twenty (20) days after the Borrower or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the Chief
Financial Officer of the Borrower describing such ERISA Event and the action, if
any, that the Borrower or such ERISA Affiliate has taken and proposes to take
with respect thereto and (ii) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information.
SECTION 7.7 Plan Terminations. Promptly and in any event within five
(5) Business Days after receipt thereof by the Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan or correspondence from the
PBGC indicating it is considering termination of any Plan.
SECTION 7.8 Actuarial Reports. Promptly upon receipt thereof by the
Borrower or any ERISA Affiliate, a copy of the annual actuarial valuation report
for each Plan the funded current liability percentage (as defined in Section
302(d)(8)(B) of ERISA) of which is less than 90% or the unfunded current
liability (as defined in Section 302(d)(8)(A) of ERISA) of which exceeds
$500,000 or the present value of benefit liabilities as of the latest actuarial
valuation date for such Plan (but not prior to 12 months prior to the date
hereof), determined on the basis of a shut down of the company in accordance
with actuarial assumptions used by the PBGC in single-employer plan
terminations, exceeds the market value of assets exclusive of any contributions
due to the Plan by $500,000.
SECTION 7.9 Plan Annual Reports. Upon the request, from time to time,
of the Administrative Agent, promptly and in any event within thirty (30) days
after request, copies of each
<PAGE> 112
105
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan.
SECTION 7.10 Multiemployer Plan Notices. Promptly and in any event
within five (5) Business Days after receipt thereof by the Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, copies of each notice
concerning, or other correspondence with respect to, (i) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (ii) the reorganization or
termination, within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (iii) the amount of liability incurred, or that may be incurred, by the
Borrower or any ERISA Affiliate in connection with any event described in clause
(i) or (ii) if in excess of $2,500,000.
SECTION 7.11 Litigation. Promptly after the commencement thereof,
notice of all material actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, Federal, state, local or foreign, affecting
the Borrower or any of its Subsidiaries and, promptly after the occurrence
thereof, notice of any Material Adverse Change in the status or the financial
effect on the Borrower or any of its Subsidiaries of the Disclosed Litigation
from that described on Schedule 4.9.
SECTION 7.12 Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
the Borrower or any of its Subsidiaries sends to its stockholders generally, and
copies of all regular, periodic and special reports, and all registration
statements, that the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or with any national securities exchange.
SECTION 7.13 Creditor Reports. Promptly after the furnishing thereof,
copies of any statement, report or notice furnished to all holders of the
Subordinated Debt of the Borrower or of any of its Subsidiaries pursuant to the
terms of any agreement, instrument or other document related to the Subordinated
Debt and not otherwise required to be furnished to the Lender Parties pursuant
to any other clause of this Article 7.
SECTION 7.14 Agreement Notices. Promptly upon the sending or receipt
thereof, copies of all notices, requests and other documents sent or received by
the Borrower or any of its Subsidiaries under or pursuant to any indenture, loan
or credit agreement or similar agreement or instrument, in each case evidencing
indebtedness in excess of $5,000,000, regarding or related to any breach or
default by any party thereto or any event that could materially impair the value
of the interests or the rights of any Loan Party or any of its Subsidiaries or
otherwise have a Material Adverse Effect and, from time to time upon request by
the Administrative Agent, such information and reports regarding the foregoing
as the Administrative Agent may reasonably request.
SECTION 7.15 Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by the Borrower or
<PAGE> 113
106
any of its Subsidiaries with any Environmental Law or Environmental Permit that
could reasonably be expected to have a Material Adverse Effect.
SECTION 7.16 Real Property. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within sixty (60) days after any
such request, a report supplementing Schedules 4.20 and 4.21 hereto, including
an identification of all real and leased property disposed of by the Borrower or
any of its Subsidiaries during such Fiscal Year, a list and description
(including the street address, county or other relevant jurisdiction, state,
record owner and, in the case of leases of property, lessor, lessee, expiration
date and annual rental cost thereof) of all real property acquired or leased
during such Fiscal Year and a description of such other changes in the
information included in such Schedules as may be necessary for such Schedules to
remain accurate and complete in all material respects.
SECTION 7.17 Insurance. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within forty-five (45) days
after any such request, a report summarizing the insurance coverage (specifying
type, amount and carrier) in effect for the Borrower and its Subsidiaries and
containing such additional information as the Administrative Agent may
reasonably request.
SECTION 7.18 Management Letters. As soon as available and in any event
within five (5) Business Days after the receipt thereof, copies of any
"management letter" or similar letter received by the Borrower or its Board of
Directors (or any Committee thereof) from its independent public accountants.
SECTION 7.19 Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or any of its Subsidiaries or the
Collateral as the Administrative Agent or any Lender Party (through the
Administrative Agent) may from time to time reasonably request.
ARTICLE 8
FINANCIAL COVENANTS
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will (for purposes of this Article 8 and each of the defined terms used
herein, references to "Subsidiaries" and "Loan Parties" shall be deemed to
include the Related Professional Corporations):
<PAGE> 114
107
SECTION 8.1 Minimum EBITDA. Maintain for each period set forth below
EBITDA at not less than the respective amounts set forth below:
<TABLE>
<CAPTION>
Four Fiscal Quarters ending on or about: Minimum EBITDA
---------------------------------------- --------------
<S> <C>
June 30, 1999 $47,000,000
September 30, 1999 $47,000,000
December 31, 1999 $47,000,000
March 31, 2000 $48,000,000
June 30, 2000 $48,000,000
September 30, 2000 $48,000,000
December 31, 2000 $48,000,000
March 31, 2001 $48,000,000
June 30, 2001 $48,000,000
September 30, 2001 $48,000,000
December 31, 2001 $48,000,000
March 31, 2002 $50,000,000
June 30, 2002 $50,000,000
September 30, 2002 $50,000,000
December 31, 2002 $50,000,000
March 31, 2003 $52,000,000
June 30, 2003 $52,000,000
September 30, 2003 $52,000,000
December 31, 2003 $52,000,000
March 31, 2004 $54,000,000
June 30, 2004 $54,000,000
September 30, 2004 $54,000,000
December 31, 2004 $54,000,000
March 31, 2005 $56,000,000
</TABLE>
SECTION 8.2 Consolidated Funded Debt to EBITDA Ratio. Maintain as of
the end of each fiscal quarter of the Borrower a ratio of Consolidated Funded
Debt to EBITDA for the most recently completed four fiscal quarters of the
Borrower of not more than the ratio set forth below:
<TABLE>
<CAPTION>
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
<S> <C>
June 30, 1999 5.25:1
September 30, 1999 5.25:1
December 31, 1999 5.10:1
March 31, 2000 5.00:1
June 30, 2000 5.00:1
</TABLE>
<PAGE> 115
108
<TABLE>
<S> <C>
September 30, 2000 5.00:1
December 31, 2000 4.90:1
March 31, 2001 4.90:1
June 30, 2001 4.75:1
September 30, 2001 4.75:1
December 31, 2001 4.75:1
March 31, 2002 4.50:1
June 30, 2002 4.50:1
September 30, 2002 4.50:1
December 31, 2002 4.50:1
March 31, 2003 4.00:1
June 30, 2003 4.00:1
September 30, 2003 4.00:1
December 31, 2003 4.00:1
March 31, 2004 and thereafter 3.75:1
</TABLE>
SECTION 8.3 Interest Coverage Ratio. Maintain as of each date set forth
below, a ratio of (i) EBITDA for the most recently completed four fiscal
quarters of the Borrower to (ii) Consolidated cash Interest Expense for such
period (except that in respect of the first two (2) testing periods referred to
below, actual amounts expended for cash Interest Expense, in each case since
January 1, 1999, shall be computed on an annualized basis) of not less than the
ratio set forth below for such period:
<TABLE>
<CAPTION>
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
<S> <C>
June 30, 1999 1.65:1
September 30, 1999 1.65:1
December 31, 1999 1.65:1
March 31, 2000 1.75:1
June 30, 2000 1.75:1
September 30, 2000 1.75:1
December 31, 2000 1.85:1
March 31, 2001 1.85:1
June 30, 2001 1.85:1
September 30, 2001 1.85:1
December 31, 2001 1.85:1
March 31, 2002 2.00:1
June 30, 2002 2.00:1
September 30, 2002 2.00:1
December 31, 2002 2.00:1
March 31, 2003 2.25:1
</TABLE>
<PAGE> 116
109
<TABLE>
<S> <C>
June 30, 2003 2.25:1
September 30, 2003 2.25:1
December 31, 2003 2.25:1
March 31, 2004 2.75:1
June 30, 2004 2.75:1
September 30, 2004 2.75:1
December 31, 2004 2.75:1
March 31, 2005 and thereafter 3.00:1
</TABLE>
SECTION 8.4 Fixed Charge Coverage Ratio. Maintain as of the end of each
fiscal quarter of the Borrower a ratio of (i) EBITDA for the most recently
completed four fiscal quarters of the Borrower, less Capital Expenditures (other
than Capital Expenditures financed with Debt permitted hereunder) made by the
Borrower and its Subsidiaries during such period, less the aggregate amount of
federal, state, local and foreign taxes paid by the Borrower and its
Subsidiaries in cash during such period, less cash dividends paid by the
Borrower to the holders of its common stock during such period, to the (ii) sum
of (x) cash interest payable by the Borrower and its Subsidiaries on all Debt
during such period (except that in respect of the first two (2) testing periods
referred to below, such interest amounts payable, in each case since January 1,
1999, shall be computed on an annualized basis), plus (y) scheduled principal
amounts of all Debt payable by the Borrower and its Subsidiaries during such
period, of not less than the ratio set forth below for such period:
<TABLE>
<CAPTION>
Four Fiscal Quarters ending on or about: Ratio
---------------------------------------- -----
<S> <C>
June 30, 1999 1.05:1
September 30, 1999 1.05:1
December 31, 1999 1.05:1
March 31, 2000 1.05:1
June 30, 2000 1.05:1
September 30, 2000 1.05:1
December 31, 2000 1.10:1
March 31, 2001 1.10:1
June 30, 2001 1.10:1
September 30, 2001 1.10:1
December 31, 2001 and thereafter 1.20:1
</TABLE>
<PAGE> 117
110
ARTICLE 9
EVENTS OF DEFAULT
If any of the following ("Events of Default") shall occur and be
continuing:
SECTION 9.1 Payment. (a) The Borrower shall fail to pay any principal
of any Advance when the same shall become due and payable or (b) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall fail to
make any other payment under any Loan Document, in each case under this clause
(b) within five (5) Business Days after the same becomes due and payable; or
SECTION 9.2 Representations and Warranties. Any representation or
warranty made by any Loan Party (or any of its officers) under or in connection
with any Loan Document shall prove to have been incorrect in any material
respect when made or confirmed; or
SECTION 9.3 Certain Covenants. The Borrower shall fail to perform or
observe any term, covenant or agreement contained in Section 2.14, 5.6, or 5.11,
Article 6 or Article 8; or
SECTION 9.4 Other Covenants. Any Loan Party shall fail to perform any
other term, covenant or agreement contained in any Loan Document on its part to
be performed or observed if such failure shall remain unremedied for thirty (30)
days after the date on which written notice thereof shall have been given to the
Borrower by the Administrative Agent; or
SECTION 9.5 Other Defaults. The Borrower or any of its Subsidiaries
shall fail to pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or notional
amount of at least $5,000,000 either individually or in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Debt, in each case if the effect of such event or condition
is to accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
<PAGE> 118
111
SECTION 9.6 Bankruptcy, Etc. The Borrower or any of its Subsidiaries
(other than Immaterial Subsidiaries) shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or any of its
Subsidiaries (other than Immaterial Subsidiaries) seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of forty-five (45) days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur, or the
Borrower or any of its Subsidiaries (other than Immaterial Subsidiaries) shall
take any corporate action to authorize any of the actions set forth above in
this Section 9.6; or
SECTION 9.7 Judgments. Any judgment or order for the payment of money
in excess of $5,000,000 (other than such a judgment or order which is fully
covered by insurance for which the appropriate insurer has acknowledged
responsibility in writing) shall be rendered against the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) such judgments or orders shall
not have been vacated, discharged, satisfied or bonded pending appeal within
thirty (30) days of entry thereof; or
SECTION 9.8 Loan Documents. Any material provision of any Loan Document
after delivery thereof shall for any reason cease to be valid and binding on or
enforceable against any Loan Party which is party to it, or any such Loan Party
shall so state in writing; or
SECTION 9.9 Liens. Any Collateral Document after delivery thereof shall
for any reason cease (except in accordance with their terms) to or otherwise not
create a valid and perfected first priority Lien (subject to the Liens permitted
under Section 6.1) on and security interest in a material portion of the
Collateral purported to be covered thereby to the extent previously perfected;
or
SECTION 9.10 Change of Control. Any Change of Control shall occur; or
SECTION 9.11 ERISA Events.
(a) Any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of the last such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred
<PAGE> 119
112
and then exist (or the liability of the Borrower and the ERISA Affiliates
related to such ERISA Events) exceeds $5,000,000; or
(b) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower and the ERISA
Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $5,000,000; or
(c) The Borrower or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $5,000,000; or
SECTION 9.12 Subordination Provisions. The subordination provisions
contained in any instrument pursuant to which the Subordinated Debt permitted
under Section 6.2(c)(iii) was created or in any instrument evidencing such
Subordinated Debt shall cease, for any reason, to be in full force and effect or
enforceable in accordance with their terms (other than as the result of payment
or prepayment in accordance with the terms hereof); or
SECTION 9.13 Matters Relating to Regulatory Agencies.
(a) Any Regulatory Agency shall commence a hearing on the renewal of
any material license, consent, authorization, permit, certificate, franchise
held by any the Borrower, any of its Subsidiaries, Related Professional
Corporation, or professional employee, officer, director or contractor of any
the Borrower, any of its Subsidiaries or Related Professional Corporation if
there is a significant probability that result thereof will be the termination,
revocation, suspension or material adverse amendment of any such license,
consent, authorization, permit, certificate, franchise that would have a
Material Adverse Effect; or
(b) Any Regulatory Agency shall commence an action or proceeding
seeking the termination, suspension, revocation or material adverse amendment of
any license, consent, authorization, permit, certificate, franchise held by the
Borrower, any of its Subsidiaries, Related Professional Corporation, or
professional employee, officer, director or contractor of the Borrower, any
Subsidiary of the Borrower or Related Professional Corporation if the result
thereof is likely to be the termination, suspension, revocation or material
adverse amendment of any license, consent, authorization, permit, certificate,
franchise that would have a Material Adverse Effect; or
<PAGE> 120
113
SECTION 9.14 Related Professional Corporation Termination. The
Borrower's or any of its Subsidiaries' contractual arrangements with a material
portion of the Related Professional Corporations shall be terminated and not
replaced by other similar contractual arrangements unless the Borrower shall
have elected to terminate (or permit to expire) those of the Related
Professional Corporation contracts as being unnecessary to the future conduct of
its business.
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each appropriate Lender (other than the Commitment in
respect of Letter of Credit Advances by an Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.3(c) and Swing Line Advances by a Revolving Credit
Lender pursuant to Section 2.2(b)) and of each Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrower, declare the Notes, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Notes, all such interest and all such
other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower or any of its
Subsidiaries under the Federal Bankruptcy Code, (x) the obligation of each
Lender to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Revolving Credit Lender pursuant to Section 2.3(c) and Swing Line Advances
by a Revolving Credit Lender pursuant to Section 2.2(b)) and of each Issuing
Bank to issue Letters of Credit shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Article 9
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the Administrative Agent on behalf of the Lender
Parties in same day funds at the Administrative Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount equal to
the aggregate Available Amount of all Letters of Credit then outstanding. If at
any time the Administrative Agent determines that any funds held in the L/C Cash
Collateral Account are subject to any right or claim of any Person other than
the Administrative Agent and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available
<PAGE> 121
114
Amount over (b) the total amount of funds, if any, then held in the L/C Cash
Collateral Account that the Administrative Agent determines to be free and clear
of any such right and claim.
ARTICLE 10
THE ADMINISTRATIVE AGENT
SECTION 10.1 Authorization and Action. Each Lender Party (in its
capacities as a Lender, each Issuing Bank, the Swing Line Bank and any Hedge
Bank) hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
and discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement, any other Loan Document or applicable law. The
Administrative Agent agrees to give to each Lender Party prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement. The
Administrative Agent shall not be a trustee or fiduciary for any Lender.
SECTION 10.2 Agent's Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 11.7; (b) may consult
with legal counsel (including counsel for any Loan Party), independent public
accountants and other experts reasonably selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (c) makes no warranty
or representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including
<PAGE> 122
115
the books and records) of any Loan Party; (e) shall not be responsible to any
Lender Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any Lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto; and (f) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, telecopy or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 10.3 Fleet and Affiliates. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Fleet shall have the same rights
and powers under the Loan Documents as any other Lender Party and may exercise
the same as though it were not the Administrative Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
Fleet in its individual capacity. Fleet and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Fleet were
not the Administrative Agent and without any duty to account therefor to the
Lender Parties.
SECTION 10.4 Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender Party and based on the financial
statements referred to in Section 4.6 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender Party also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 10.5 Indemnification.
(a) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Administrative Agent under any of the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any costs and expenses
<PAGE> 123
116
(including, without limitation, fees and expenses of counsel) payable by the
Borrower under Section 11.4, to the extent that the Administrative Agent is not
promptly reimbursed for such costs and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify each Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by such Issuing Bank under any of the Loan Documents; provided, however,
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Issuing Bank promptly upon demand for its ratable share
of any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 11.4, to the extent that such
Issuing Bank is not promptly reimbursed for such costs and expenses by the
Borrower.
(c) For purposes of Sections 10.5(a) and 10.5(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (iii) the aggregate unused portions of their
respective Term A Commitments and Term B Commitments at such time, and (iv)
their respective Unused Revolving Credit Commitments at such time; provided,
that the aggregate principal amount of Swing Line Advances owing to the Swing
Line Bank and Letter of Credit Advances owing to the Issuing Banks shall be
considered to be owed to the Revolving Credit Lenders ratably in accordance with
their respective Revolving Credit Commitments. In the event that any Defaulted
Advance shall be owing by any Defaulting Lender at any time, such Lender Party's
Commitment with respect to the Facility under which such Defaulted Advance was
required to have been made shall be considered to be unused for purposes of this
Section 10.5 to the extent of the amount of such Defaulted Advance. The failure
of any Lender Party to reimburse the Administrative Agent or any Issuing Bank,
as the case may be, promptly upon demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent or such
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse the Administrative Agent
or such Issuing Bank, as the case may be, for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Administrative Agent or such Issuing Bank, as the case
may be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
10.5 shall survive the
<PAGE> 124
117
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.
SECTION 10.6 Successor Administrative Agents. The Administrative Agent
may resign as to any or all of the Facilities at any time by giving thirty (30)
days prior written notice thereof to the Lender Parties and the Borrower and may
be removed as to all of the Facilities at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent as to such of
the Facilities as to which the Administrative Agent has resigned or been removed
which shall be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a Lender which shall be reasonably acceptable to the
Borrower and which is a commercial bank organized or licensed under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to all of
the Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations under this Agreement and
the other Loan Documents. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent as to less
than all of the Facilities and upon the execution and filing or recording of
such financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Administrative Agent
shall succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent as to such
Facilities, other than with respect to funds transfers and other similar aspects
of the administration of Borrowings under such Facilities, issuances of Letters
of Credit (notwithstanding any resignation as Administrative Agent with respect
to the Letter of Credit Facility) and payments by the Borrower in respect of
such Facilities which functions shall continue to be performed by the
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement as to such Facilities,
other than as aforesaid. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent as to all of the Facilities, the
provisions of this Article 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent as to any
Facilities under this Agreement.
<PAGE> 125
118
SECTION 10.7 Events of Default. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Administrative
Agent has received notice from a Lender or the Borrower specifying such Default
and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the
Administrative Agent shall give notice thereof to the Lenders (and shall give
each Lender notice of each such non-payment). The Administrative Agent shall
(subject to Section 10.1(b) hereof) take such action with respect to such
Default as shall be directed by the Required Lenders.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Amendments, Etc. No amendment, modification, supplement,
termination or waiver of or to any provision of this Agreement, nor consent to
any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless the same shall be in writing and signed by or on behalf of the
Required Lenders and the Borrower; provided, however, that no such amendment,
modification, supplement, termination, waiver or consent, as the case may be,
shall, (i) reduce the rate of interest or extend the final scheduled maturity of
any Advance or Note, or the stated maturity of any Letter of Credit beyond the
Revolving Credit Termination Date, or the date for payment of any fees or
interest on any Advance, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Advance, or reduce the
principal amount thereof, without the prior written consent of each Lender
affected thereby, (ii) release all or substantially all of the Collateral
(except as expressly provided in the Collateral Documents) under the Collateral
Documents, without the prior written consent of each Lender, (iii) amend, modify
or waive any provision of this Section 11.1, without the prior written consent
of each Lender, (iv) reduce the percentage specified in the definition of
Required Lenders, without the prior written consent of each Lender, (v) consent
to the assignment or transfer by Borrower of any of its rights and obligations
under this Agreement, or (vi) release all or substantially all of the Guarantors
from their respective Guaranty, without the prior written consent of each
Lender; provided, further, that no such amendment, modification, supplement,
termination, waiver or consent shall (1) increase the Commitments of any Lender
over the amount thereof then in effect without the consent of such Lender (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default shall not constitute an increase of the
Commitment of any Lender, and that an increase in the available portion of any
Commitment of any Lender shall not constitute an increase in the Commitment of
such Lender), (2) amend, modify or waive any provision of this Agreement or any
other Loan Document which affects the rights or obligations of the Swing Line
Bank or the Issuing Banks, as the case may be, without the consent of the Swing
Line Bank or the Issuing Banks, as the case may be, (3) amend, modify or waive
any provision of Article 10 as same
<PAGE> 126
119
applies to the Administrative Agent or any other provisions as same relates to
the rights or obligations of the Administrative Agent, without the consent of
the Administrative Agent, (4) amend, modify or waive any provisions relating to
the rights or obligations of the Administrative Agent under the other Loan
Documents, without the consent of the Administrative Agent, (5) alter the
required application of any prepayments or repayments (or commitment reduction),
as between the various Facilities pursuant to Section 2.6(b) (although the
Required Lenders may waive in whole or in part, any such prepayment, repayment
or commitment reduction so long as the application, as amongst the various
Facilities, of any such prepayment, repayment or commitment reduction which is
still required to be made is not altered), without the consent of the Majority
Lenders of each Facility which is being allocated a lesser prepayment, repayment
or commitment reduction, (6) amend the definition of Majority Lenders, without
the consent of the Majority Lenders of each Facility, (7) amend the definition
of Pro Rata Share, without the consent of the Majority Lenders of the Revolving
Facility; (8) amend Section 2.4(a), without the consent of the Majority Lenders
of the Term A Facility or (9) amend Section 2.4(b), without the consent of the
Majority Lenders of the Term B Facility.
SECTION 11.2 Notices Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered,
(a) if to the Borrower:
Team Health, Inc.
1900 Winston Road
Knoxville, Tennessee 37919
Attention: President
Telephone No.: (423) 693-1000
Facsimile No.: (423) 539-8003
with a copy to:
Cornerstone Equity Investors
717 Fifth Avenue
Suite 1100
New York, New York 10022
Attention: Tyler Wolfram
Telephone No.: (212) 207-2383
Facsimile No.: (212) 826-6798
Madison Dearborn Partners
Three First National Plaza
<PAGE> 127
120
Suite 3800
Chicago, Illinois 60602
Attention: Nick Alexos
Telephone No.: (312) 895-1260
Facsimile No.: (312) 895-1256
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Christopher Butler, Esq.
Telephone No.: (312) 861-2298
Facsimile No.: (312) 861-2200
(b) if to the Administrative Agent:
Fleet National Bank
One Federal Street
Boston, Massachusetts 02110
Attention: Ginger Stolzenthaler
Telephone No.: (617) 346-4618
Facsimile No.: (617) 346-4699
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601-9703
Attention: Charles B. Boehrer, Esq.
Telephone No.: (312) 558-5989
Facsimile No.: (312) 558-5700
(c) if to any Initial Lender or any Issuing Bank, at its
Domestic Lending Office specified opposite its name on Schedule I
attached hereto.
(d) if to any other Lender Party, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Lender Party;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative
<PAGE> 128
121
Agent. All such notices and communications shall, when mailed by certified mail,
return receipt requested, telegraphed, telecopied or telexed, be effective three
(3) Business Days after mailing, upon delivery to the telegraph company, upon
transmission by telecopier or upon confirmation by telex answerback,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article 2, 3 or 10 shall not be effective until received by the
Administrative Agent. Delivery by telecopier of an executed counterpart of this
Agreement, the Notes or any other Loan Document or of any Exhibit hereto or
thereto or of any amendment or waiver of any provision thereof shall be as
effective as delivery of a manually executed counterpart thereof.
SECTION 11.3 No Waiver; Remedies. No failure on the part of any Lender
Party or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Note or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or in equity.
SECTION 11.4 Costs and Expenses.
(a) The Borrower agrees to pay on demand (i) all reasonable
out-of-pocket costs and expenses of the Agents in connection with the
preparation, execution and delivery of the Loan Documents, and of the
Administrative Agent in connection with modification and amendment of the Loan
Documents (including, without limitation, (A) all reasonable due diligence,
collateral review, syndication (including printing, distribution and bank
meetings), transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, and (B) the
reasonable fees and out-of-pocket expenses of counsel for the Agents with
respect thereto, with respect to advising the Agents as to their rights and
responsibilities, or the perfection, protection or preservation of rights or
interests under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
reasonable out-of-pocket costs and expenses of the Agents and the Lender Parties
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the Agents and each
Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent, each
Lender Party and each of their respective Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of counsel
and
<PAGE> 129
122
settlement costs) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) the Transaction, (ii) any acquisition or proposed
acquisition or similar business combination or proposed business combination by
the Borrower or any of its Subsidiaries of all or any portion of the shares of
capital stock or substantially all of the property and assets of any other
Person, (iii) the Facilities, the actual or proposed use of the proceeds of the
Advances or the Letters of Credit by the Borrower or any of its Subsidiaries and
any of the other transactions contemplated by the Loan Documents, or (iv) the
actual or alleged presence of Hazardous Materials on any property of the
Borrower or any of its Subsidiaries or any Environmental Action relating in any
way to the Borrower or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, officers, employees, stockholders or creditors or an Indemnified
Party or any Indemnified Party is otherwise a party thereto and whether or not
the Transaction is consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence,
bad faith or willful misconduct. The Borrower also agrees not to assert any
claim against the Administrative Agent, any Lender Party or any of their
respective Affiliates, or any of their respective officers, directors,
employees, attorneys and agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Facilities, the actual or proposed use of the proceeds of the Advances or
the Letters of Credit, the Loan Documents or any of the Transaction, other than
claims for direct, as opposed to consequential, damages.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.9(b)(i) or 2.10(d) or a
prepayment pursuant to Section 2.6(a) or (b), acceleration of the maturity of
the Notes pursuant to Article 9 or for any other reason, the Borrower shall,
upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including, without
limitation, a return on such liquidation or deployment that would result in such
Lender receiving less than it would have received had such Advances remained
outstanding until the last day of the Interest Period), cost or expense incurred
by reason of the liquidation or re-employment of deposits or other funds
required by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, in its sole
discretion.
<PAGE> 130
123
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
11.4 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
(f) Notwithstanding anything to the contrary contained in this
Agreement, unless a Lender gives notice to the Borrower that it is obligated to
pay an amount under Section 2.10, 2.12 or 11.4(c) within 180 days after the date
the Lender Party incurs the respective increased costs, taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital, then such Lender Party shall only be entitled to be compensated for
such amount by the Borrower or any other Loan Party pursuant to said Section
2.10, 2.12 or 11.4(c) to the extent the costs, taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital are incurred or suffered on or after the date which occurs 180 days
prior to such Lender giving notice to the Borrower that it is obligated to pay
the respective amounts pursuant to said Section 2.10, 2.12 or 11.4(c). Each
Lender, in determining additional amounts owing under Section 2.10, 2.12 or
11.4(c), will act reasonably and in good faith and to the extent the increased
costs or reductions in amounts receivable or reduction in return on capital
relate to such Lender Party's loans, commitments or letters of credit in general
and not specifically attributable to the Advances or Letters of Credit
hereunder, use averaging and attribution methods which are reasonable and which
cover all advances and letters of credit similar to the Advances and Letters of
Credit made, issued or participated in by such Lender Party whether or not the
documentation for such other advances or letters of credit permit such Lender
Party to receive amounts of the type described in such Section 2.10, 2.12 and
11.4(c).
SECTION 11.5 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Article 9 to authorize the Administrative
Agent to declare the Notes due and payable pursuant to the provisions of Article
9, each Lender Party and each of its respective Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower or any of its Subsidiaries against any and all of the
Obligations of the Borrower now or hereafter existing under this Agreement and
the Note or Notes (if any) held by such Lender Party, irrespective of whether
such Lender Party shall have made any demand under this Agreement or such Note
or Notes and although such obligations may be unmatured. Each Lender Party
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender Party and its respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender Party and its respective Affiliates may have
at law, in equity or otherwise.
<PAGE> 131
124
SECTION 11.6 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and each Issuing Bank that each such Initial Lender and each such Issuing Bank
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender Party and their
respective successors and assigns, except that the Borrower shall not have the
right to assign any of its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 11.7 Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that (i)
except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000 (or $2,500,000 in the case of an assignment by
a Lender to an Affiliate of such Lender), (ii) no such assignments shall be
permitted without the prior consent of the Administrative Agent (which may be
withheld for any reason) until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed,
but in any event not later than 90 days following the Closing Date, (iii) no
such assignment shall be permitted if, immediately after giving effect thereto,
the Borrower would be required to make payments to or on behalf of the assignee
Lender Party pursuant to Section 2.10(a) or (b) or 2.12 and the assignor Lender
Party was not, at the time of such assignment, entitled to receive any payment
pursuant to Section 2.10(a) or (b) or 2.12, and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500 (other that with respect to an assignment to a
Lender's Affiliate, in which event such fee shall be $1,500).
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto).
<PAGE> 132
125
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.6 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 11.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment and the appropriate processing and reconciliation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit A hereto, (i) accept
<PAGE> 133
126
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower. In the case
of any assignment by a Lender, within ten (10) Business Days after its receipt
of such notice and the return of the old Notes (or a customary indemnity with
respect to any lost Notes), the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the surrendered Note or
Notes a new Note to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it under a Facility pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder
under such Facility, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit B, C or D hereto, as the case may be.
(f) Each Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes, if any, held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment, waiver or other modification of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Loan Party therefrom, except to the extent that such amendment, waiver,
modification or consent would reduce the rate of interest or extend the final
scheduled maturity of any Advance or Note, or the date for payment of any fees
or other interest on any Advance, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Advance, or reduce the
principal amount thereof, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral (except as
expressly provided in the Collateral Documents) under all of the Collateral
Documents.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
11.7, disclose to the assignee or
<PAGE> 134
127
participant or proposed assignee or participant, any information relating to the
Borrower furnished to such Lender Party by or on behalf of the Borrower;
provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender
Party in accordance with the terms set forth in Section 11.10.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System without notice to, or the consent of, the Borrower or the
Administrative Agent and, with the consent of the Borrower and the
Administrative Agent, any Lender which is a fund may pledge all or any portion
of Advances owing to it or the Note or Notes held by it to its trustee in
support of its obligations to its trustee. No such pledge, assignment or
creation of security interest shall release the transferor Lender from its
obligations under this Agreement.
SECTION 11.8 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 11.9 No Liability of the Issuing Banks. The Borrower assumes
all risks of the acts or omissions of any beneficiary or transferee of any
Letter of Credit with respect to its use of such Letter of Credit. No Issuing
Bank nor any of its officers, directors, employees or agents shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by any Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against any Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence or (ii)
such Issuing Bank's willful failure to make lawful payment under a Letter of
Credit after the presentation to it of a draft and certificates strictly
complying with the terms and conditions of the Letter of Credit. In furtherance
and not in limitation of the foregoing, each Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
<PAGE> 135
128
SECTION 11.10 Confidentiality. Neither the Administrative Agent nor any
Lender Party shall disclose any Confidential Information to any Person without
the consent of the Borrower, other than (a) to the Administrative Agent's or
such Lender Party's Affiliates and their officers, directors, employees, agents,
auditors and advisors and to actual or prospective Eligible Assignees and
participants, and then only on a confidential basis and subject to such Person's
agreement to be bound by the confidentiality provisions of this Agreement, (b)
as required by any law, rule or regulation or judicial process, (c) as required
by any state, federal or foreign authority or examiner regulating banks or
banking and (d) in any court action between any Loan Party and the
Administrative Agent or any Lender Party arising out of the transactions
contemplated by this Agreement.
SECTION 11.11 Further Assurances. (a) At any time and from time to
time, upon the request of the Administrative Agent, each Loan Party shall
execute, deliver and acknowledge or cause to be executed, delivered or
acknowledged, such further documents and instruments and do such further acts as
the Administrative Agent may reasonably request in order to fully affect the
purposes of this Agreement, the other Loan Documents and any other agreements,
instruments and documents delivered pursuant hereto or in connection with the
Facilities.
(b) Upon receipt of an affidavit of an officer of the
Administrative Agent or any Lender as to the loss, theft, destruction or
mutilation of any Note or Collateral Document which is not of public record and,
in the case of any such mutilation, upon the surrender and cancellation of such
Note or Collateral Document, the Borrower will issue, in lieu thereof, a
replacement Note or Collateral Document in the same principal amount thereof (in
the case of any Note) and otherwise of like tenor.
SECTION 11.12 JURISDICTION, ETC.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED
<PAGE> 136
129
BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY LENDER PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
SECTION 11.13 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS (OTHER THAN THE MORTGAGES WHICH SHALL BE GOVERNED BY THE LAW OF
THE JURISDICTION WHERE THE PROPERTY COVERED THEREBY IS LOCATED) SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO CONFLICTS OF LAWS
OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401.
SECTION 11.14 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE LOAN
PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
<PAGE> 137
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
TEAM HEALTH, INC.
By____________________________________
Title: President
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 138
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT,
AS ISSUING BANK
AS SWING LINE BANK AND
AS CO-ARRANGER
By:___________________________________
Title: Senior Vice President
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 139
NATIONSBANK, N.A.,
AS ISSUING BANK AND
AS CO-ARRANGER
By:___________________________________
Title: Senior Vice President
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 140
NATIONSBANC MONTGOMERY SECURITIES LLC,
AS SYNDICATION AGENT
By:___________________________________
Title: Managing Director
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 141
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION,
AS DOCUMENTATION AGENT
By:___________________________________
Title:________________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 142
INITIAL LENDERS
FLEET NATIONAL BANK
By:_________________________________
Title: Senior Vice President
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 143
NATIONSBANK, N.A.
By:_________________________________
Title: Senior Vice President
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 144
ANTARES CAPITAL CORP.
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 145
PARIBAS
By:_________________________________
Title:______________________________
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 146
BHF-BANK AKTIENGESELLSCHAFT
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 147
DRESDNER BANK AG (NEW YORK BRANCH AND
GRAND CAYMAN BRANCH)
By:__________________________________
Title:_______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 148
FINOVA CAPITAL CORPORATION
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 149
FIRST AMERICAN NATIONAL BANK
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 150
THE FIRST NATIONAL BANK OF CHICAGO
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 151
HELLER FINANCIAL, INC.
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 152
LASALLE NATIONAL BANK
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 153
MERCANTILE BANK NATIONAL ASSOCIATION
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 154
SRF TRADING, INC.
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 155
SCOTIABANC, INC.
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 156
U.S. BANK NATIONAL ASSOCIATION
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 157
UNION BANK OF CALIFORNIA, N.A.
By:_________________________________
Title:______________________________
[SIGNATURE PAGE TO TEAM HEALTH, INC. CREDIT AGREEMENT]
<PAGE> 158
EXHIBIT A TO THE
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of March 12, 1999
(as amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) among Team Health, Inc., a Tennessee corporation (the "Borrower"), the
banks, financial institutions and other institutional lenders named therein,
Fleet National Bank, as Issuing Bank, as Swing Line Bank, as Co-Arranger and as
Administrative Agent for the Lender Parties (the "Administrative Agent"),
NationsBank, N.A., as Issuing Bank and as Co-Arranger, NationsBanc Montgomery
Securities LLC, as Syndication Agent and Donaldson, Lufkin & Jenrette Securities
Corporation, as Documentation Agent.
[Name of Assignor] ("the "Assignor") and [Name of Assignee] (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule I hereto of all
outstanding rights and obligations under the Credit Agreement Facility or
Facilities as specified on Schedule I hereto. After giving effect to such sale
and assignment, the Assignee's _______________/1/ Commitments and the amount of
the _______________/2/ Advances owing to the Assignee will be as set forth on
Schedule I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, the Loan
Documents or any other instrument, agreement or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument, agreement or
______________________
/1/ Specify Term A Commitments, Term B Commitments or Revolving Credit
Commitments here.
/2/ Specify Term A Advances, Term B Advances or Revolving Credit Advances here.
<PAGE> 159
document furnished pursuant thereto; and (iv) attaches the _______________/3/
Note or Notes held by the Assignor and requests that the Administrative Agent
exchange such Note or Notes for a new _______________/3/ Note or Notes payable
to the order of the Assignee in an amount equal to the _______________/1/
Commitments assumed by the Assignee pursuant hereto or new _______________/3/
Note or Notes payable to the order of the Assignee in an amount equal to the
_______________/1/ Commitments assumed by the Assignee pursuant hereto and to
the order of the Assignor in an amount equal to the _______________/1/
Commitments retained by the Assignor under the Credit Agreement, respectively,
as specified on Schedule I hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to therein,
including, without limitation, those referred to in Section 4.6 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent, the Assignor or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement and the other Loan Documents are required to be performed by it
as a Lender Party; and (vi) attaches any U.S. Internal Revenue Service forms or
other forms required under Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent, together with the processing and
recordation fee specified in the Credit Agreement, for acceptance and recording
by the Administrative Agent. The effective date for this Assignment and
Acceptance (the "Effective Date") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule I hereto.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender Party thereunder and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the _______________/3/ Notes in respect of the
interest assigned hereby (including,
- ------------
/3/ Specify Term A Note or Notes, Term B Note or Notes or Revolving Credit Note
or Notes here.
-2-
<PAGE> 160
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the
_______________/3/ Notes for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York (without giving effect to
its conflicts of law principles).
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by telecopier shall
be as effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
-3-
<PAGE> 161
IN WITNESS WHEREOF, the Assignor and the Assignee have executed this
Assignment and Acceptance by their officers thereunto duly authorized as of the
date specified below.
[NAME OF ASSIGNOR], as Assignor
By:______________________________
Title:___________________________
Dated:_______________, __________
[NAME OF ASSIGNEE], as Assignee
By:______________________________
Title:___________________________
Dated:_____________ ___, ________
Domestic Lending Office:
__________________________________________
__________________________________________
__________________________________________
Eurodollar Lending Office:
__________________________________________
__________________________________________
__________________________________________
Accepted this day of _____________, ________
FLEET NATIONAL BANK, as Administrative Agent
By:_________________________________________
Title:______________________________________
Consented to this ____ day of _________, ___
TEAM HEALTH, INC.
By:_________________________________________
-2-
<PAGE> 162
Title:______________________________________
-3-
<PAGE> 163
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
As to the _______________/1/ Facility in respect of which an interest is being
assigned:
<TABLE>
<S> <C>
Percentage interest assigned: __________%
Assignee's _______________/2/ Commitment: $__________
Aggregate outstanding principal amount
of _______________/3/ Advances assigned: $__________
Principal amount of _______________/4/
Note payable to Assignee: $__________
Principal amount of _______________/4/
Note payable to Assignor: $__________
Effective Date (if other than date of
acceptance by Administrative Agent): _____, ___
</TABLE>
- --------------
/1/ Specify Term A Commitments, Term B Commitments or Revolving Credit
Commitments here.
/2/ Specify Term A Advances, Term B Advances or Revolving Credit Advances here.
/3/ Specify Term A Advances, Term B Advances or Revolving Credit Advances here.
/4/ Specify Term A Note or Notes, Term B Note or Notes or Revolving Credit Note
or Notes here.
<PAGE> 164
EXHIBIT B TO THE
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT PROMISSORY NOTE
$_________________ Dated: ________, ____
FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Tennessee
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Revolving Credit Advances (as defined below)
owing to the Lender by the Borrower pursuant to the Credit Agreement, dated as
of March __, 1999 (as amended, supplemented, restated or otherwise modified, the
"Credit Agreement"; terms defined therein being used herein as therein defined),
among the Borrower, the Lender and certain other banks, financial institutions
and other institutional lenders named therein, Fleet National Bank, as Issuing
Bank, as Swing Line Bank, as Co-Arranger and as Administrative Agent for the
Lender Parties (the "Administrative Agent"), NationsBank, N.A., as Issuing Bank
and as Co-Arranger, NationsBanc Montgomery Securities LLC, as Syndication Agent
and Donaldson, Lufkin & Jenrette Securities Corporation, as Documentation Agent,
on the Revolving Credit Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Fleet National Bank, as Administrative Agent for the Lender
Parties, at One Federal Street, Boston, MA 02110, Attention: Loan
Administration, in same day funds. Each Revolving Credit Advance owing to the
Lender by the Borrower and the maturity thereof, and all payments made on
account of principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on the grid attached hereto or any continuation
thereof, which is part of this Promissory Note; provided, however, that the
failure of such Lender to so record any such information or any error in so
recording any such information shall not, however, limit or otherwise affect the
obligations of the Borrower hereunder or under any other Loan Document.
This Promissory Note is one of the Revolving Credit Notes referred to
in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i)
<PAGE> 165
provides for the making of Revolving Credit Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Revolving Credit Advance being evidenced
by this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the Borrower under
this Promissory Note, and the obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the Collateral
Documents.
This Promissory Note shall be governed by and construed in accordance
with the laws of the State of New York.
TEAM HEALTH, INC.
By:_________________________________
Name: ______________________________
Title: _______________________________
2
<PAGE> 166
REVOLVING CREDIT ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
AMOUNT OF AMOUNT OF UNPAID PRINCIPAL NOTATION MADE
DATE REVOLVING CREDIT PRINCIPAL PAID OR BALANCE BY
ADVANCE PREPAID
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 167
EXHIBIT C TO THE
CREDIT AGREEMENT
FORM OF TERM A PROMISSORY NOTE
$_______________ Dated: ________, ____
FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Tennessee
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Term A Advances owing to the Lender by the Borrower
pursuant to the Credit Agreement, dated as of March __, 1999 (as amended,
supplemented, restated or otherwise modified, the "Credit Agreement"; terms
defined therein being used herein as therein defined), among the Borrower, the
Lender and certain other banks, financial institutions and other institutional
lenders named therein, Fleet National Bank, as Issuing Bank, as Swing Line Bank,
as Co-Arranger and as Administrative Agent for the Lender Parties (the
"Administrative Agent"), NationsBank, N.A., as Issuing Bank and as Co-Arranger,
NationsBanc Montgomery Securities LLC, as Syndication Agent and Donaldson,
Lufkin & Jenrette Securities Corporation, as Documentation Agent, on the dates
and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
the Term A Advance from the date of such Term A Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Fleet National Bank, as Administrative Agent for the Lender
Parties, at One Federal Street, Boston, MA 02110, Attention: Loan
Administration, in same day funds.
This Promissory Note is one of the Term A Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of a Term A Advance by the Lender to
the Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Term A Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for
<PAGE> 168
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the Borrower under
this Promissory Note, and the obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the Loan Documents.
This Promissory Note shall be governed by and construed in accordance
with the laws of the State of New York.
TEAM HEALTH, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
2
<PAGE> 169
EXHIBIT D TO THE
CREDIT AGREEMENT
FORM OF TERM B PROMISSORY NOTE
$_______________ Dated: ________, ____
FOR VALUE RECEIVED, the undersigned, TEAM HEALTH, INC., a Tennessee
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Term B Advances owing to the Lender by the Borrower
pursuant to the Credit Agreement, dated as of March __, 1999 (as amended,
supplemented, restated or otherwise modified, the "Credit Agreement"; terms
defined therein being used herein as therein defined), among the Borrower, the
Lender and certain other banks, financial institutions and other institutional
lenders named therein, Fleet National Bank, as Issuing Bank, as Swing Line Bank,
as Co-Arranger and as Administrative Agent for the Lender Parties (the
"Administrative Agent"), NationsBank, N.A., as Issuing Bank and as Co-Arranger,
NationsBanc Montgomery Securities LLC, as Syndication Agent and Donaldson,
Lufkin & Jenrette Securities Corporation, as Documentation Agent, on the dates
and in the amounts specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
the Term B Advance from the date of such Term B Advance until such principal
amount is paid in full, at such interest rates, and payable at such times, as
are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Fleet National Bank, as Administrative Agent for the Lender
Parties, at One Federal Street, Boston, MA 02110, Attention: Loan
Administration, in same day funds.
This Promissory Note is one of the Term B Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of a Term B Advance by the Lender to
the Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Term B Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for
<PAGE> 170
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the Borrower under
this Promissory Note, and the obligations of the other Loan Parties under the
Loan Documents, are secured by the Collateral as provided in the Loan Documents.
This Promissory Note shall be governed by and construed in accordance
with the laws of the State of New York.
TEAM HEALTH, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
2
<PAGE> 171
EXHIBIT E TO THE
CREDIT AGREEMENT
FORM OF NOTICE OF BORROWING
[Date]
Fleet National Bank, as Administrative
Agent under the Credit Agreement
referred to below
One Federal Street
Boston, Massachusetts 02110
Attention: Loan Administration
Ladies and Gentlemen:
The undersigned, on behalf of Team Health, Inc. (the "Borrower"),
refers to the Credit Agreement, dated as of March __, 1999 (as amended,
supplemented, restated or otherwise modified, the "Credit Agreement"; the terms
defined therein being used herein as therein defined), among the Borrower, the
banks, financial institutions and other institutional lenders named therein,
Fleet National Bank, as Issuing Bank, as Swing Line Bank, as Co-Arranger and as
Administrative Agent for the Lender Parties (the "Administrative Agent"),
NationsBank, N.A., as Issuing Bank and as Co-Arranger, NationsBanc Montgomery
Securities LLC, as Syndication Agent and Donaldson, Lufkin & Jenrette Securities
Corporation, as Documentation Agent, and hereby gives the Administrative Agent
notice, irrevocably, pursuant to Section 2.2 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.2 of the Credit Agreement:
(1) The Business Day of the Proposed Borrowing is _____________,
_____.
(2) The Facility under which the Proposed Borrowing is to be made
is the _______________ Facility.
(3) The Type of Advances comprising the Proposed Borrowing is
[Prime Rate Advances][Eurodollar Rate Advances].
<PAGE> 172
(4) The aggregate amount of the Proposed Borrowing is $_________.
[(5) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _______ month[s].]
The undersigned hereby certifies on behalf of the Borrower
that the following statements are true and correct on the date hereof, and will
be true on the borrowing date:
(a) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of the
date of the Proposed Borrowing, both before and after giving
effect to the Proposed Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of
the Proposed Borrowing, in which case, as of such specific
date;
(b) no event has occurred and is continuing, or would result from
the Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default or Event of Default;
(c) for each Revolving Credit Advance, the Revolving Credit
Facility equals or exceeds the aggregate principal amount of
the Revolving Credit Advances plus Swing Line Advances plus
Letter of Credit Advances plus the aggregate Available Amount
of all Letters of Credit then outstanding after giving effect
to the Proposed Borrowing.
Very truly yours,
TEAM HEALTH, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
-2-
<PAGE> 173
EXHIBIT F TO THE
CREDIT AGREEMENT
SECURITY AGREEMENT
Dated March 12, 1999
From
TEAM HEALTH, INC., and
THE SUBSIDIARY GUARANTORS NAMED HEREIN
as Grantors
to
FLEET NATIONAL BANK,
as Administrative Agent
<PAGE> 174
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECURITY AGREEMENT.............................................................................................. 1
PRELIMINARY STATEMENTS.......................................................................................... 1
Section 1. Grant of Security........................................................................ 2
Section 2. Security for Obligations................................................................. 5
Section 3. Grantors Remain Liable................................................................... 5
Section 4. Delivery of Security Collateral and Account Collateral................................... 5
Section 5. Maintaining the L/C Cash Collateral Account.............................................. 6
Section 6. Investing of Amounts in the L/C Cash Collateral Account.................................. 6
Section 7. Release of Amounts....................................................................... 6
Section 8. Representations and Warranties........................................................... 7
Section 9. Further Assurances....................................................................... 8
Section 10. As to Equipment and Inventory............................................................ 10
Section 11. Insurance................................................................................ 10
Section 12. Place of Perfection; Record; Collection of Receivables................................... 11
Section 13. Voting Rights; Dividends; Etc............................................................ 12
Section 14. Intentionally Omitted.................................................................... 14
Section 15. Intentionally Omitted.................................................................... 14
Section 16. Transfers and Other Liens; Additional Shares............................................. 14
Section 17. Administrative Agent Appointed Attorney-in-Fact.......................................... 14
Section 18. Administrative Agent May Perform......................................................... 15
Section 19. Administrative Agent's Duties............................................................ 15
Section 20. Remedies................................................................................. 15
Section 21. Registration Rights; Private Sale........................................................ 17
Section 22. Indemnity and Expenses................................................................... 18
Section 23. Security Interest Absolute............................................................... 18
Section 24. Amendments; Waivers; Etc................................................................. 19
Section 25. Addresses for Notices.................................................................... 20
Section 26. Continuing Security Interest; Assignments under the Credit Agreement..................... 20
Section 27. Release and Termination.................................................................. 20
Section 28. Governing Law; Terms..................................................................... 21
Section 29. Counterparts............................................................................. 21
</TABLE>
i
<PAGE> 175
SCHEDULES
Schedule I Pledged Shares and Pledged Debt
Schedule II Assigned Agreements
Schedule III Locations of Equipment and Inventory
Schedule IV Trade Names
Schedule V Principal Places of Business
EXHIBITS
Exhibit A Form of Lockbox Letter
Exhibit B Form of Consent and Agreement
Exhibit C Form of Security Agreement Supplement
ii
<PAGE> 176
SECURITY AGREEMENT
SECURITY AGREEMENT (this "Agreement"), dated March 12, 1999, by and
among Team Health, Inc., a Tennessee corporation having an office at the address
set forth on the signature page hereof (the "Borrower"), the Subsidiary
Guarantors listed on the signature pages hereof, each having an office at the
address set forth on the signature page hereof (the "Subsidiary Guarantors"),
the Additional Grantors (as defined in Section 24(c) hereof) (the Additional
Grantors, together with the Borrower and the Subsidiary Guarantors, the
"Grantors") and Fleet National Bank ("Fleet"), as administrative agent (in such
capacity, together with its successors in such capacity, the "Administrative
Agent") for the Secured Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY STATEMENTS
(1) The Borrower has entered into a Credit Agreement, dated as of even
date herewith (said Agreement, as it may hereafter be amended, restated,
supplemented, extended or otherwise modified from time to time, the "Credit
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined),with the banks, financial institutions and other
institutional lenders named therein, Fleet National Bank, as Issuing Bank, as
Swing Line Bank, as Co-Arranger and as Administrative Agent, NationsBank, N.A.,
as Issuing Bank and as Co-Arranger, NationsBanc Montgomery Securities LLC, as
Syndication Agent and Donaldson, Lufkin & Jenrette Securities Corporation, as
Documentation Agent.
(2) Each Grantor is the owner of the shares, partnership interests and
limited liability company interests (such shares being the "Pledged Shares") set
forth opposite such Grantor's name in Part I of Schedule I hereto and issued by
the corporations, partnerships and limited liability companies named therein and
of the indebtedness (the "Pledged Debt") set forth opposite such Grantor's name
in Part II of Schedule I and issued by the obligors named therein.
(3) The Administrative Agent will open a non-interest bearing cash
collateral account (the "L/C Cash Collateral Account") with Fleet at its office
at Fleet National Bank, One Federal Street, Boston, Massachusetts 02110, in the
name of the Borrower but under the sole control and dominion of the
Administrative Agent and subject to the terms of this Agreement.
(4) It is a condition precedent to the Lenders' making of Advances, the
Issuing Banks' issuing of Letters of Credit under the Credit Agreement and the
Hedge Banks' entering into Bank Hedge Agreements with the Borrower from time to
time that the Grantors shall have granted the assignment and security interest
and made the pledge and assignment contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, the Issuing Banks to
issue Letters of Credit
<PAGE> 177
under the Credit Agreement and the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, each of the Grantors hereby
agrees with the Administrative Agent, for the benefit of the Administrative
Agent and the ratable benefit of the Secured Parties, as follows:
Section 1. Grant of Security. Each of the Grantors hereby assigns and
pledges to the Administrative Agent, for the benefit of the Administrative Agent
and the ratable benefit of the Secured Parties, and hereby grants to the
Administrative Agent, for the benefit of the Administrative Agent and the
ratable benefit of the Secured Parties, a security interest in the following
(collectively, the "Collateral"):
(a) all of such Grantor's machinery and equipment in all of its forms,
whether now owned or hereafter acquired, wherever located, now or hereafter
existing, all fixtures and all parts thereof and all accessions thereto (any and
all such equipment, fixtures, parts and accessions, the "Equipment");
(b) all of such Grantor's inventory in all of its forms, whether now
owned or hereafter acquired, wherever located, now or hereafter existing
(including, without limitation, (i) raw materials and work in process, (ii)
finished goods, (iii) materials used or consumed in the manufacture or
production thereof, (iv) goods in which such Grantor has an interest in mass or
a joint or other interest or right of any kind (including, without limitation,
goods in which such Grantor has an interest or right as consignee) and (v) goods
that are returned to or repossessed by such Grantor), and all accessions
thereto, products thereof and documents therefor (any and all such inventory,
accessions, products and documents, the "Inventory");
(c) all of such Grantor's accounts, contract rights, chattel paper,
instruments, deposit accounts, lockbox accounts and other claims of any kind,
whether now owned or hereafter acquired, now or hereafter existing, whether or
not arising out of or in connection with the sale or lease of goods or the
rendering of services, and all rights now or hereafter existing in and to all
security agreements, leases and other contracts securing or otherwise relating
to any such accounts, contract rights, chattel paper, instruments, deposit
accounts, lockbox accounts or claims (any and all such accounts, contract
rights, chattel paper, instruments, deposit accounts and claims, to the extent
not referred to in clause (d), (e) or (f) below, being the "Receivables", and
any and all such leases, security agreements and other contracts being the
"Related Contracts"); provided, however, that the Collateral shall not include
(i) those rights to payment under agreements with Medicare, Medicaid or CHAMPUS
to the extent, if any, that (and only for so long as) the grant of a lien or
security interest in, or an assignment thereof would cause an immediate, actual
forfeiture of such Grantor's rights thereunder or is prohibited by law and (ii)
contracts (but not excluding accounts receivable arising therefrom or related
thereto, except to the extent expressly consented to in writing by the
Administrative Agent) entered into by such Grantor to the extent, if any, that
(and only for so long as) the grant of a lien or a security interest in, or
assignment thereof would cause an immediate, actual forfeiture of any of such
Grantor's rights thereunder or an immediate default thereunder or is prohibited
by law;
2
<PAGE> 178
(d) all of the following (the "Security Collateral"), without
duplication:
(i) the Pledged Shares and the certificates representing the
Pledged Shares, including without limitation, the shares of capital
stock, partnership interests and limited liability company interests of
all of such Grantor's Subsidiaries, and the certificates representing
the Pledged Shares, provided, however, that only 65% (or such greater
percentage which would not result in material adverse tax consequences)
of the Voting Stock of such Grantor's Foreign Subsidiaries shall be
pledged, and all dividends, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Pledged Shares;
(ii) the Pledged Debt and the instruments evidencing the
Pledged Debt, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Debt;
(iii) all additional shares of stock of any issuer of the
Pledged Shares from time to time acquired by such Grantor in any
manner, provided, however, that only 65% (or such greater percentage
which would not result in material adverse tax consequences) of the
Voting Stock of such of such Grantor's Foreign Subsidiaries shall be
pledged pursuant to this Agreement, and the certificates representing
such additional shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares;
(iv) all additional indebtedness from time to time owed to
such Grantor by any obligor of the Pledged Debt and the instruments
evidencing such indebtedness, and all interest, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness;
(v) all additional "investment property" (as defined in the
UCC) now owned or hereafter acquired by such Grantor including, without
limitation, (A) all securities, whether certificated or uncertificated,
including, without limitation, stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of
deposit, and mutual fund shares; (B) all security entitlements of such
Grantor including, without limitation, the rights of such Grantor to
any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or
other money owing by any securities intermediary with respect to that
account; (C) all securities accounts held by such Grantor;
3
<PAGE> 179
(D) all commodity contracts held by such Grantor; and (E) all commodity
accounts held by such Grantor.
(e) each of the agreements listed on Schedule II to which such Grantor
is now or may hereafter become a party, and each Hedge Agreement to which such
Grantor is now or may hereafter become a party, in each case as such agreements
may be amended, restated or otherwise modified from time to time (collectively,
the "Assigned Agreements"), including, without limitation, (i) all rights of
such Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) claims of such Grantor for damages arising out of or for
breach of or default under the Assigned Agreements, and (iv) the right of such
Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the "Agreement Collateral");
(f) all of the following (collectively, the "Account Collateral"):
(i) the L/C Cash Collateral Account, all funds held therein
and all certificates and instruments, if any, from time to time
representing or evidencing the L/C Cash Collateral Account;
(ii) all deposit accounts, including, without limitation, the
Cash Concentration Account, and lockbox accounts of such Grantor, all
funds held therein and all certificates and instruments, if any, from
time to time representing or evidencing such deposit accounts or
lockbox accounts;
(iii) all Collateral Investments (as hereinafter defined) from
time to time and all certificates and instruments, if any, from time to
time representing or evidencing the Collateral Investments;
(iv) all notes, certificates of deposit, deposit accounts,
lockbox accounts, checks and other instruments from time to time
hereafter delivered to or otherwise possessed by the Administrative
Agent for or on behalf of such Grantor in substitution for or in
addition to any or all of the then existing Account Collateral; and
(v) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Account Collateral;
(g) all of such Grantor's corporate and business records, customer
lists, credit files, computer program printouts and other computer materials and
records;
4
<PAGE> 180
(h) without limitation of any of the foregoing, all of such Grantor's
general intangibles, including, without limitation, choses in action, claims and
causes of action or rights of recovery or set-off of every kind and character,
and the business of such Grantor as a going concern; and
(i) all proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds that constitute property of the types described in
clauses (a) - (h) of this Section 1) and, to the extent not otherwise included,
all (i) payments under insurance other than liability and medical malpractice
insurance (whether or not the Administrative Agent is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by reason of loss or damage to
or otherwise with respect to any of the foregoing Collateral and (ii) cash.
Section 2. Security for Obligations. This Agreement secures the payment
of all Obligations of each Grantor now or hereafter existing under the Loan
Documents and the Bank Hedge Agreements, whether for principal, interest, fees,
expenses or otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by such Grantor to the Administrative Agent or the Secured Parties under
the Loan Documents and the Bank Hedge Agreements but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Grantor.
Section 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to which it is a party to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent of any of the rights hereunder shall not release any
Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral to which it is a party and (c) neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Administrative Agent or any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
under such contracts and agreements included in the Collateral to which it is a
party or to take any action to collect or enforce any claim for payment assigned
hereunder.
Section 4. Delivery of Security Collateral and Account Collateral. All
certificates or instruments representing or evidencing Security Collateral or
Account Collateral shall be delivered to and held by or on behalf of the
Administrative Agent pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the
Administrative Agent. The Administrative Agent shall have the right, upon the
occurrence and during the continuation of an Event of Default and on five (5)
days' notice to the Borrower, to transfer to or to register in the name of the
Administrative Agent or any of its nominees any or all of the Security
Collateral and the Account Collateral, subject only to the revocable rights
specified in Section 13(a). In addition, the
5
<PAGE> 181
Administrative Agent shall have the right at any time to exchange certificates
or instruments representing or evidencing Security Collateral or Account
Collateral for certificates or instruments of smaller or larger denominations.
Section 5. Maintaining the L/C Cash Collateral Account. So long as any
Advance shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment under the Credit Agreement or any Hedge Bank or
any Loan Party shall have any obligations under any Hedge Agreement:
(a) The Borrower will maintain the L/C Cash Collateral Account with
Fleet.
(b) It shall be a term and condition of the L/C Cash Collateral
Account, notwithstanding any term or condition to the contrary in any other
agreement relating to the L/C Cash Collateral Account and, except as otherwise
provided by the provisions of Section 7 and Section 20, that no amount
(including interest on Collateral Investments) shall be paid or released to or
for the account of, or withdrawn by or for the account of, any Grantor or any
other Person from the L/C Cash Collateral Account.
The L/C Cash Collateral Account shall be subject to such applicable laws, and
such applicable regulations, of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.
Section 6. Investing of Amounts in the L/C Cash Collateral Account. If
requested by the Borrower, the Administrative Agent will, subject to the
provisions of Section 7 and Section 20, from time to time invest (a) amounts on
deposit in the L/C Cash Collateral Account in such Cash Equivalents as the
Borrower may select and the Administrative Agent may approve, in each case which
investments shall be made in the name of the Administrative Agent on behalf of
the Borrower, and (b) interest paid on the Cash Equivalents referred to in
clause (a) above, and reinvest other proceeds of any such Cash Equivalents that
may mature or be sold, in each case in such Cash Equivalents as the Borrower may
select and the Administrative Agent may approve in its reasonable discretion, in
each case which investments shall be made in the name of the Administrative
Agent on behalf of the Borrower (the Cash Equivalents referred to in clauses (a)
and (b) above being collectively "Collateral Investments"). Interest and
proceeds that are not invested or reinvested in Collateral Investments as
provided above shall be deposited and held in the L/C Cash Collateral Account.
Section 7. Release of Amounts. Upon the drawing of any Letter of Credit
for which funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the Issuing Bank or the Revolving Credit Lenders,
as applicable.
6
<PAGE> 182
Section 8. Representations and Warranties. Each Grantor represents and
warrants as follows:
(a) All of such Grantor's Equipment and Inventory, other than Equipment
and Inventory which is in transit, are located at the places specified for such
Grantor on Schedule III hereto. The chief place of business and chief executive
office of such Grantor and the office where such Grantor keeps its records
concerning the Receivables, and the original copies of each Assigned Agreement
and all originals of all chattel paper that evidence Receivables, are located at
the address or addresses specified for such Grantor on Schedule V hereto. None
of the Receivables or Agreement Collateral is evidenced by a promissory note or
other instrument.
(b) Such Grantor is the legal and beneficial owner of the Collateral
pledged by such Grantor hereunder free and clear of any Lien, except for
security interests created or permitted under the Loan Documents (including,
without limitation, any Liens disclosed on Schedule 6.1(c) to the Credit
Agreement). No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed: (i) in favor of the Administrative
Agent relating to this Agreement or (ii) with respect to Permitted Liens.
(c) Set forth below each Grantor's name on Schedule IV hereto is a
complete and accurate list of (i) all names under which such Grantor is or has
been doing business within the last five years (including, without limitation,
all trade names, division names and fictitious names), (ii) all trade names that
such Grantor owns or is licensed to use (including the expiration date of such
license) and (iii) all trade names that such Grantor has established the right
to use (collectively, the "Trade Names"). Such Grantor has not changed within
the past six months its name or identity, by reorganization or otherwise, or its
address set forth below the name of such Grantor on the signature pages hereof
or the Security Agreement Supplement executed and delivered by it, as the case
may be, except as set forth on Schedule IV hereto.
(d) Such Grantor has possession and control of the Equipment and
Inventory pledged by such Grantor hereunder.
(e) The Pledged Shares owned by such Grantor have been duly authorized
and validly issued and are fully paid and non-assessable. The Pledged Debt owed
to such Grantor has been duly authorized, authenticated or issued and delivered
and, to the best knowledge of such Grantor, is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(f) The Pledged Shares constitute the percentage of the issued and
outstanding shares of stock of the issuers thereof indicated on Schedule I. The
Pledged Debt is outstanding in the principal amount indicated on Schedule I.
(g) The Assigned Agreements to which such Grantor is a party, true and
complete copies of which have been furnished to each Secured Party, have been
duly authorized, executed and
7
<PAGE> 183
delivered by such Grantor, have not been amended, restated or otherwise
modified, are in full force and effect and are binding upon and enforceable
against such Grantor and, to such Grantor's knowledge, all other parties thereto
in accordance with their terms. There exists no default by such Grantor or, to
such Grantor's knowledge, by any other parties thereto under any Assigned
Agreement to which such Grantor is a party. Each party to the Assigned
Agreements to which such Grantor is a party, other than such Grantor, has
executed and delivered to such Grantor a consent, in substantially the form of
Exhibit B hereto, to the assignment of the Agreement and Collateral to the
Administrative Agent pursuant to this Agreement unless the assignment
contemplated herein is permitted by the terms of such Assigned Agreement.
(h) Upon either the filing by the Administrative Agent or its
representatives of the proper financing statements referred to in Section
3.1(a)(ii) of the Credit Agreement or the taking of possession thereof, as
applicable, this Agreement, the pledge of the Security Collateral pursuant
hereto and the pledge and assignment of the Account Collateral pursuant hereto
create a valid and perfected first and only priority security interest, subject
to Liens permitted under the Credit Agreement, in the Collateral of such
Grantor, securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable to perfect and protect such security
interest shall have been duly taken.
(i) Other than as disclosed on Schedule 4.4 to the Credit Agreement, no
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
or other third party is required either (i) for the grant by such Grantor of the
assignment and security interest granted hereby, for the pledge by such Grantor
of the Security Collateral pursuant hereto or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first and only priority nature of such pledge, assignment or
security interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements are in
proper form and are duly executed, or (iii) for the exercise by the
Administrative Agent of its voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the offering and sale of
securities generally.
(j) The Inventory has been produced by such Grantor in compliance with
all requirements of the Fair Labor Standards Act.
Section 9. Further Assurances.
(a) Each of the Grantors agrees that from time to time, at the expense
of the Borrower, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Administrative Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Administrative Agent to exercise
and enforce its
8
<PAGE> 184
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, such Grantor will, upon any such request of the
Administrative Agent: (i) mark conspicuously each document included in the
Inventory pledged by such Grantor hereunder, each chattel paper included in the
Receivables pledged by such Grantor hereunder, each Related Contract pledged by
such Grantor hereunder, each Assigned Agreement pledged by such Grantor
hereunder and each of its records pertaining to the Collateral with a legend, in
form and substance satisfactory to the Administrative Agent, indicating that
such document, chattel paper, Related Contract, Assigned Agreement or Collateral
is subject to the security interest granted hereby; (ii) if any Collateral
pledged by such Grantor hereunder in excess of $25,000 shall be evidenced by a
promissory note or other instrument (other than checks received in the ordinary
course of business) or chattel paper, deliver and pledge to the Administrative
Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to the Administrative Agent; and (iii)
execute such financing or continuation statements, or amendments thereto, and
such other instruments or notices as may be reasonably requested by the
Administrative Agent in order to perfect and preserve the pledge, assignment and
security interest granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Administrative Agent to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral pledged by such Grantor hereunder, without
the signature of such Grantor where permitted by law. A copy of each such
statement and amendment will be timely provided to such Grantor. A photocopy or
other reproduction of this Agreement or any financing statement covering its
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the Collateral
and such reports in connection with its Collateral as the Administrative Agent
may reasonably request, all in reasonable detail.
(d) Each Grantor hereby agrees, upon the request of the Administrative
Agent at any time following the occurrence and during the continuance of an
Event of Default, and at the expense of the Borrower, (i) within twenty-one (21)
days after such request deliver to the Administrative Agent a letter agreement,
in substantially the form of Exhibit A hereto, in respect of each lockbox and
blocked deposit account of such Grantor, (ii) within thirty (30) days after such
request, take whatever action (including, without limitation, the filing of
Uniform Commercial Code financing statements) as may be necessary or reasonably
advisable in the sole discretion of the Administrative Agent to vest in the
Administrative Agent (or in any representative of the Administrative Agent
designated by it), for the benefit of the Administrative Agent and the ratable
benefit of the Secured Parties, valid and subsisting Liens on the main cash
concentration accounts of the Borrower and each other Grantor and the lockboxes
and blocked deposit accounts of the Grantors, (iii) within forty-five (45) days
after such request, deliver to the Administrative Agent a signed copy of a
favorable opinion, addressed to the Administrative Agent, of counsel for the
Loan
9
<PAGE> 185
Parties acceptable to the Administrative Agent as to the matters contained in
clauses (i) and (ii) above and as to all such other matters as the
Administrative Agent may request, and (iv) at any time and from time to time,
promptly execute and deliver any and all further instruments and documents and
take all such other action as the Administrative Agent may deem desirable in
obtaining the full benefits of the Liens on, or in preserving the Liens in, such
main concentration accounts, lockboxes and blocked deposit accounts.
Section 10. As to Equipment and Inventory. (a) Each Grantor shall keep
the Equipment and Inventory (other than Inventory sold in the ordinary course of
business and Equipment the disposition of which is permitted under the Credit
Agreement) pledged by such Grantor hereunder at the places therefor specified in
Section 8(a) or, upon thirty (30) days' prior written notice to the
Administrative Agent, at such other places in a jurisdiction where all action
required by this Agreement to maintain the security interest of the
Administrative Agent in such Equipment and Inventory granted hereby shall have
been taken with respect to such Equipment and Inventory.
(b) Each Grantor shall cause the Equipment pledged by such Grantor
hereunder to be maintained and preserved in working condition, ordinary wear and
tear excepted, and shall forthwith, or in the case of any loss or damage to any
of such Equipment, as quickly as practicable after the occurrence thereof, make
or cause to be made all repairs, replacements and other improvements in
connection therewith that are necessary or desirable to such end, except to the
extent that such Grantor determines in its reasonable business judgment that
such Equipment is no longer necessary or useful in the conduct of its business.
Each Grantor shall promptly furnish to the Administrative Agent a statement
respecting any loss or damage to any of the Equipment pledged by such Grantor
hereunder.
(c) Each Grantor shall timely pay when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Equipment and Inventory pledged by such Grantor hereunder; provided, however,
that such Grantor shall not be required to pay any such tax, assessment, charge
or claim that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable against the
Borrower or any of its Subsidiaries. In producing the Inventory pledged by such
Grantor hereunder, each Grantor shall comply with all requirements of the Fair
Labor Standards Act.
Section 11. Insurance.
(a) Each Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory pledged by such Grantor hereunder in such
amounts, against such risks, in such form and with such insurers, as shall be
reasonably satisfactory to the Administrative Agent from time to time. Each
policy for liability insurance shall provide for all losses to be paid on behalf
of the Administrative Agent and each Grantor as their interests may appear and
each policy for
10
<PAGE> 186
property damage insurance shall provide for all losses (except so long as the
payor shall not have received notice from the Administrative Agent to the effect
that an Event of Default shall have occurred and is continuing for losses of
less than $500,000 per occurrence) to be paid directly to the Administrative
Agent. Each such policy shall in addition (i) name such Grantor and the
Administrative Agent as insured parties thereunder (without any representation
or warranty by or obligation upon the Administrative Agent) as their interests
may appear, (ii) contain the agreement by the insurer that any loss thereunder
shall be payable to the Administrative Agent notwithstanding any action,
inaction or breach of representation or warranty by such Grantor, (iii) provide
that there shall be no recourse against the Administrative Agent for payment of
premiums or other amounts with respect thereto and (iv) provide that the insurer
shall endeavor to provide at least thirty (30) days' prior written notice of
cancellation or of lapse to the Administrative Agent. Each Grantor shall, if so
requested by the Administrative Agent, deliver to the Administrative Agent
original or duplicate policies of such insurance and, as often as the
Administrative Agent may request, a report of a reputable insurance broker with
respect to such insurance. Further, each Grantor shall, at the request of the
Administrative Agent, duly exercise and deliver instruments of assignment of its
insurance policies to comply with the requirements of Section 9 and cause the
insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by any
Grantor pursuant to this Section 11 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 11 is not
applicable, the Grantor that owns such Equipment or Inventory shall make or
cause to be made the necessary repairs to or replacements of such Equipment or
Inventory out of available proceeds of insurance maintained by such Grantor
pursuant to this Section 11.
(c) Subject to the provisions of the Credit Agreement, upon the
occurrence and during the continuance of any Event of Default or the loss (equal
to or in excess of $500,000 per occurrence) of any Equipment or Inventory, all
insurance payments in respect of such Equipment or Inventory shall be paid to
and applied by the Administrative Agent as specified in Section 20(b).
Section 12. Place of Perfection; Record; Collection of Receivables.
(a) Each of the Grantors shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Collateral, and the original copies of the Assigned Agreements and all originals
of all chattel paper that evidence Receivables, at the location therefor
specified in Section 8(a) or, upon thirty (30) days' prior written notice to the
Administrative Agent, at such other locations in a jurisdiction where all
actions required by this Agreement to maintain the security interest of the
Administrative Agent in such Collateral granted hereby shall have been taken
with respect to the Collateral. Each of the Grantors shall hold and preserve
such records, Assigned Agreements and chattel paper and shall permit
representatives of the Administrative Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.
11
<PAGE> 187
(b) Except as otherwise provided in this subsection (b), each of the
Grantors shall continue to collect, at its own expense, all amounts due or to
become due such Grantor under the Receivables pledged by such Grantor hereunder.
In connection with such collections, each Grantor may take (and, at the
Administrative Agent's direction, shall take) such action as such Grantor or the
Administrative Agent may deem necessary or advisable to enforce collection of
the Receivables pledged by such Grantor hereunder; provided, however, that the
Administrative Agent shall have the right at any time, upon the occurrence and
during the continuance of an Event of Default and upon five (5) days' written
notice to the Borrower of its intention to do so, to notify the obligors under
any Receivables of the assignment of such Receivables to the Administrative
Agent and to direct such Obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Administrative Agent and,
upon such notification and at the expense of such Grantor, to enforce collection
of any such Receivables, and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Grantor might
have done. After receipt by any Grantor of the notice from the Administrative
Agent referred to in the proviso of the preceding sentence, (i) all amounts and
proceeds (including instruments) received by such Grantor in respect of the
Receivables pledged by such Grantor hereunder shall be received in trust for the
benefit of the Administrative Agent hereunder, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Administrative
Agent in the same form as so received (with any necessary endorsement) to be
applied as provided by Section 20(b) and (ii) without the prior consent of the
Administrative Agent, such Grantor shall not adjust, settle or compromise the
amount or payment of any of its Receivables, release wholly or partly any
Obligor thereof, or allow any credit or discount thereon.
Section 13. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) The Grantors shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Security
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the other Loan Documents; provided,
however, that the Grantors shall not exercise or refrain from
exercising any such right if, in the Administrative Agent's judgment,
such action would have a material adverse effect on the value of the
Security Collateral or any part thereof.
(ii) The Grantors shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Security
Collateral; provided, however, that any and all
(A) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Security Collateral,
12
<PAGE> 188
(B) dividends and other distributions paid or payable
in cash in respect of any Security Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange
for, any Security Collateral
shall be, and shall be forthwith, delivered to the Administrative Agent
to hold as Security Collateral and shall, if received by any of the
Grantors, be received in trust for the benefit of the Administrative
Agent, be segregated from the other property or funds of such Grantor
and be forthwith delivered to the Administrative Agent as Security
Collateral in the same form as so received (with any necessary
endorsement).
(iii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to each of the Grantors all such
proxies and other instruments as such Grantor may request for the
purpose of enabling such Grantor to exercise, after the occurrence and
during the continuance of an Event of Default, the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends or interest payments that it is authorized
to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an Event of
Default:
(i) All rights of each of the Grantors (x) to exercise or
refrain from exercising the voting and other consensual rights that it
would otherwise be entitled to exercise pursuant to Section 13(a)(i)
shall cease upon notice from the Administrative Agent and (y) to
receive the dividends and interest payments that it would otherwise be
authorized to receive and retain pursuant to Section 13(a)(ii) shall
automatically cease, and all such rights shall thereupon be vested
solely in the Administrative Agent, which shall thereupon have the sole
right to exercise or refrain from exercising such voting and other
consensual rights and to receive and hold as Security Collateral such
dividends and interest payments.
(ii) All dividends and interest payments that are received by
any of the Grantors contrary to the provisions of paragraph (i) of this
Section 13(b) shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Administrative Agent as
Security Collateral in the same form as so received (with any necessary
endorsement).
13
<PAGE> 189
Section 14. Intentionally Omitted.
Section 15. Intentionally Omitted.
Section 16. Transfers and Other Liens; Additional Shares.
(a) Each of the Grantors agrees that it shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except sales of Inventory in the ordinary
course of business or sales or other dispositions of other assets permitted by
the Credit Agreement, or (ii) create or suffer to exist any Lien upon or with
respect to any of the Collateral except for (A) the pledge, assignment and
security interest created by this Agreement and (B) any other Liens expressly
permitted under Section 6.1 of the Credit Agreement.
(b) Each of the Grantors agrees that it shall (i) cause each issuer of
the Pledged Shares which it controls not to issue any stock, partnership
interests, membership interests or other securities in addition to or in
substitution for the Pledged Shares issued by such issuer, except to such
Grantor, and (ii) pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional shares of stock, partnership
interests, membership interests or other securities owned by such Grantor of
each issuer of the Pledged Shares; provided, however, that in no event shall
more than 65% (or such greater percentage which would not result in material
adverse tax consequences) of the Voting Stock of any Foreign Subsidiary of a
Grantor be pledged pursuant to this Agreement.
Section 17. Administrative Agent Appointed Attorney-in-Fact. Each of
the Grantors hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of the Borrower and
in the name of the Borrower or otherwise, upon the occurrence and during the
continuance of an Event of Default, to take any action and to execute any
instrument that the Administrative Agent may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Administrative Agent pursuant to Section 11,
(b) to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of its Collateral,
(c) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and
(d) to file any claims or take any action or institute any proceedings
that the Administrative Agent may deem necessary or desirable for the collection
of any of its Collateral or
14
<PAGE> 190
otherwise to enforce compliance with the terms and conditions of any Assigned
Agreement or the rights of the Administrative Agent with respect to any of its
Collateral.
Section 18. Administrative Agent May Perform. If any of the Grantors
fails to perform any agreement contained herein, the Administrative Agent may
itself, upon reasonable prior notice to such Grantor, perform, or cause
performance of, such agreement, and the reasonable and actual expenses of the
Administrative Agent incurred in connection therewith shall be payable by such
Grantor under Section 22(b).
Section 19. Administrative Agent's Duties. The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Security Collateral, whether or not the
Administrative Agent or any Secured Party has or is deemed to have knowledge of
such matters, or as to the taking of any necessary steps to preserve rights
against any parties or any other rights pertaining to any Collateral. The
Administrative Agent shall exercise reasonable care in the custody and
preservation of any Collateral in its possession and shall accord such
Collateral treatment equal to that which Fleet accords other similar property in
its possession.
Section 20. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party upon default
under the Uniform Commercial Code in effect in the State of New York at such
time (the "N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform
Commercial Code applies to the affected Collateral) and also may (i) require any
or all of the Grantors to, and each Grantor hereby agrees that it will at its
expense and upon request of the Administrative Agent forthwith, assemble all or
part of the Collateral as directed by the Administrative Agent and make it
available to the Administrative Agent at a place to be designated by the
Administrative Agent that is reasonably convenient to both parties and (ii)
without notice except as specified below and as required by law, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Administrative Agent's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Administrative Agent
may deem commercially reasonable. Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten (10) days' notice to such Grantor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Collateral regardless of notice
of sale having been given. The Administrative Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice except as required by law,
be made at the time and place to which it was so adjourned.
15
<PAGE> 191
(b) Any cash held by or on behalf of the Administrative Agent as
Collateral and all cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Administrative Agent, be held by
the Administrative Agent as Collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Administrative
Agent pursuant to Section 22) in whole or in part by the Administrative Agent
for the ratable benefit of the Secured Parties against, all or any part of the
Secured Obligations in such order as is specified by the Credit Agreement and,
if the Credit Agreement does not so specify an order of application against the
Obligations, in such order as the Administrative Agent shall elect. Any surplus
of such cash or cash proceeds held by the Administrative Agent and remaining
after payment in full of all the Secured Obligations shall be paid over to the
applicable Grantors or to whomsoever may be lawfully entitled to receive such
surplus.
(c) The Administrative Agent may exercise any and all rights and
remedies of any of the Grantors under or in connection with the Assigned
Agreements or otherwise in respect of the Collateral, including, without
limitation, any and all rights of any Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, any Assigned
Agreement.
(d) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Administrative Agent in the same form as so received (with any necessary
endorsement or assignment).
(e) The Administrative Agent may, with reasonable notice to any of the
Grantors and at any time or from time to time, charge, set-off or otherwise
apply all or any part of the Secured Obligations against the L/C Cash Collateral
Account or any part thereof; provided, however, that the failure to give notice
shall not affect the validity of such charge, set-off or application.
(f) Each Grantor will furnish to the Administrative Agent correct and
complete customer lists and updates thereof as the Administrative Agent may
reasonably request, all in reasonable detail.
Section 21. Registration Rights; Private Sale. (a) If the
Administrative Agent shall determine to exercise its right to sell all or any of
the Security Collateral pursuant to Section 20 pursuant to a public offering (it
being understood by each of the Grantors that the Administrative Agent shall be
under no obligation to do so and may, in its sole discretion, dispose of the
Security Collateral in any manner permitted by law that the Administrative Agent
may select), each Grantor agrees that, upon request of the Administrative Agent,
such Grantor will, at its own expense:
(i) execute and deliver, and cause each issuer of the Security
Collateral contemplated to be sold and the directors and officers thereof to
execute and deliver all such instruments and documents, and do or cause to be
done all such other acts and things as may be
16
<PAGE> 192
necessary or, in the reasonable discretion of the Administrative Agent,
desirable to register its Security Collateral under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), to cause a
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related prospectus
that, in the reasonable discretion of the Administrative Agent, are necessary or
desirable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto;
(ii) use its best efforts to qualify its Security Collateral
under the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Security Collateral, as requested by
the Administrative Agent in its sole discretion;
(iii) cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 10(a) of the Securities Act;
(iv) provide the Administrative Agent with such other
information and projections as may be necessary or, in the reasonable discretion
of the Administrative Agent, desirable to enable the Administrative Agent to
effect the sale of its Security Collateral; and
(v) do or cause to be done all such other acts and things as
may be necessary to make such sale of its Security Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Administrative Agent is authorized, in connection with any sale of the
Security Collateral pursuant to Section 20, to deliver or otherwise disclose to
any prospective purchaser of the Security Collateral (A) any registration
statement or prospectus, and all supplements and amendments thereto, prepared
pursuant to clause (i) above, (B) any information and projections provided to it
pursuant to clause (iv) above and (C) any other information in its possession
relating to the Security Collateral.
(b) The Grantors recognize that the Administrative Agent may be unable
to effect a public sale of all or a part of the Security Collateral, and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the
distribution or resale thereof. The Grantors acknowledge that any such private
sales may be at places and on terms less favorable to the sellers than if sold
at public sales and agrees that such private sales shall be deemed to have been
made in a commercially reasonable manner, and that the Administrative Agent has
no obligation to delay the sale of any such securities for the period of time
necessary to permit any such securities to be registered for public sale.
17
<PAGE> 193
Section 22. Indemnity and Expenses.
(a) Each of the Grantors hereby agrees, jointly and severally, to
indemnify the Administrative Agent from and against any and all claims, losses
and liabilities arising out of or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except claims, losses or
liabilities resulting from the Administrative Agent's gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction.
(b) The Borrower will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Administrative Agent or the Secured
Parties hereunder or (iv) the failure by the Borrower or any other Grantor to
perform or observe any of the provisions hereof.
Section 23. Security Interest Absolute. The obligations of each Grantor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be brought and prosecuted against each Grantor to enforce
this Agreement, irrespective of whether any action is brought against the
Borrower or any other Grantor or whether the Borrower or any other Grantor is
joined in any such action or actions. All rights of the Administrative Agent and
the pledge, assignment and security interest hereunder, and all obligations of
each Grantor hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other amendment or
waiver of or any consent to any departure from any Loan Document, including,
without limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Borrower or any Guarantor or any of their
subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or any
other assets of the Borrower or any Guarantor or any of their subsidiaries;
18
<PAGE> 194
(e) any change, restructuring or termination of the corporate structure
or existence of the Borrower or any Guarantor or any of their subsidiaries; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or a third party grantor of a
security interest.
Section 24. Amendments; Waivers; Etc.
(a) No amendment or waiver of any provision of this Agreement, and no
consent to any departure by any Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Administrative
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No failure on the part of the Administrative Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(c) Upon the execution and delivery by any Person of a supplement to
this Agreement, in each case in substantially the form of Exhibit C hereto (each
a "Security Agreement Supplement"), (i) such Person shall be referred to as an
"Additional Grantor" and shall be and become a Grantor, and each reference in
this Agreement to an "Additional Grantor" or a "Grantor" shall also mean and be
a reference to such Additional Grantor and each reference in any other Loan
Document to a "Grantor" or a "Loan Party" shall also mean and be a reference to
such Additional Grantor, and (ii) the supplements attached to each Security
Agreement Supplement shall be incorporated into and become a part of and
supplement the Schedules to this Agreement, as appropriate, and the
Administrative Agent may attach such supplements to such Schedules, and each
reference to such Schedules shall mean and be a reference to such Schedules, as
supplemented pursuant hereto.
Section 25. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
if to any Grantor addressed to it at the address set forth below its name on the
signature pages hereof; if to any Additional Grantor, addressed to it at the
address set forth below its name on the signature pages to the Security
Agreement Supplement executed and delivered by such Additional Grantor; if to
the Administrative Agent, addressed to it at its address set forth in Section
11.2 of the Credit Agreement or, as to each other party, at such other address
as shall be designated by such party in a written notice to the Grantors and the
Administrative Agent. All such notices and communications shall, when mailed by
certified mail, return receipt requested, telegraphed, telecopied or telexed, be
effective three (3) days after mailing, upon transmission to the telegraph
company, upon delivery by telecopier or upon confirmation by telex answerback,
respectively, addressed as aforesaid. Any party hereto may change the Person,
address or telecopier number to whom or which notices are to be given
19
<PAGE> 195
hereunder, by notice duly given hereunder; provided, however, that any such
notice shall be deemed to have been given hereunder only when actually received
by the party to which it is addressed.
Section 26. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the the
indefeasible payment in full in cash of the Secured Obligations, (b) be binding
upon each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the Lender Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 11.7 of the
Credit Agreement. Notwithstanding the foregoing, no Grantor may assign any of
its rights or obligations under this Agreement without the prior written consent
of the Administrative Agent, which consent may be withheld for any reason.
Section 27. Release and Termination.
(a) Upon any sale, lease, transfer or other disposition of any item of
Collateral in accordance with the express terms of the Loan Documents, the
Administrative Agent will, at the Grantors' expense, execute and deliver to each
Grantor such documents as such Grantor shall reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted hereby; provided, however, that (i) at the time of such request and such
release no Default shall have occurred and be continuing, (ii) such Grantor
shall have delivered to the Administrative Agent, at least thirty (30) days
prior to the date of the proposed release, a written request for release
describing the item of Collateral and the terms of the sale, lease, transfer or
other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a form of release for execution
by the Administrative Agent and a certification by such Grantor to the effect
that the transaction is in compliance with the Loan Documents and as to such
other matters as the Administrative Agent may request, (iii) the proceeds of any
such sale, lease, transfer or other disposition required to be applied in
accordance with Section 2.6 or any other provision of the Credit Agreement shall
be paid to, or in accordance with the instructions of, the Administrative Agent
at the closing for application by the Administrative Agent as required by the
terms of the Credit Agreement and, if not so required to be applied, for
application in such manner as the Administrative Agent may determine, and (iv)
the Administrative Agent shall have approved (such approval not to be
unreasonably withheld) such sale, lease, transfer or other disposition in
writing.
(b) Upon the latest of (i) the indefeasible payment in full in cash of
the Secured Obligations, (ii) the expiration, termination or cancellation of all
of the Letters of Credit and (iii) the Termination Date, the pledge, assignment
and security interest granted by each of the Grantors hereby shall terminate and
all rights to the Collateral shall revert to the appropriate Grantor. Upon
20
<PAGE> 196
any such termination, the Administrative Agent will, at the Grantors' expense,
execute and deliver to the appropriate Grantor such documents as such Grantor
shall reasonably request to evidence such termination.
Section 28. Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Credit Agreement, terms used in Article 9 of the N.Y.
Uniform Commercial Code are used herein as therein defined.
Section 29. Counterparts. This Agreement may be executed in any number
of several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
21
<PAGE> 197
IN WITNESS WHEREOF, each of the Grantors has caused this Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
TEAM HEALTH, INC.
By:_______________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
CLINIC MANAGEMENT SERVICES, INC.
EMERGICARE MANAGEMENT, INCORPORATED
HOSPITAL BASED PHYSICIAN SERVICES, INC.
TEAM RADIOLOGY, INC.
By:________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
ALLIANCE CORPORATION
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
EMERGENCY COVERAGE CORPORATION
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
INPHYNET CONTRACTING SERVICES, INC.
INPHYNET JOLIET, INC.
INPHYNET LOUISIANA, INC.
INPHYNET SOUTH BROWARD, INC.
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
[SIGNATURE PAGE TO SECURITY AGREEMENT]
<PAGE> 198
KARL G. MANGOLD, INC.
MED: ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
NORTHWEST EMERGENCY PHYSICIANS INCORPORATED
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF MARGULIES BORUSHOK SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS,
INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
THBS, INC.
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
By:_________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
FISCHER MANGOLD PARTNERSHIP
By: Herschel Fischer, Inc., its general partner
Karl G. Mangold, Inc., its general partner
By:___________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
MT. DIABLO EMERGENCY PHYSICIANS, a California
General Partnership
By: Herschel Fischer, Inc., its general partner
[SIGNATURE PAGE TO SECURITY AGREEMENT]
<PAGE> 199
Karl G. Mangold, Inc., its general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By: InPhyNet Hospital Services, Inc.,
its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH SOUTHWEST L.P.
By: Team Radiology, Inc., its sole general
partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
ACCEPTED:
[SIGNATURE PAGE TO SECURITY AGREEMENT]
<PAGE> 200
FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT
By: _____________________________________
Name: Ginger Stolzenthaler
Title: Senior Vice President
[SIGNATURE PAGE TO SECURITY AGREEMENT]
<PAGE> 201
EXHIBIT A TO
SECURITY AGREEMENT
FORM OF LOCKBOX LETTER
___________________, ______
[Name and address
of Lockbox Bank]
[Name of the Grantor]
Ladies and Gentlemen:
Reference is made to Lockbox no. __________ into which certain monies,
instruments and other properties are deposited from time to time and deposit
account no. _________ (collectively, the "Lockbox Account") maintained with you
by ______________ (the "Grantor"). Pursuant to a Security Agreement, dated March
__, 1999 (the "Security Agreement"), the Grantor has granted to Fleet National
Bank, as administrative agent (the "Administrative Agent") for the Lender
Parties referred to in the Credit Agreement, dated as of March __, 1999 (the
"Credit Agreement") with Team Health, Inc., as Borrower, a security interest in
certain property of the Grantor, including, among other things, the following
(the "Account Collateral"): the Lockbox Account, all funds held therein and all
certificates and instruments, if any, from time to time representing or
evidencing the Lockbox Account, all interest, dividends, cash instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Account
Collateral and all proceeds of any and all of the foregoing Account Collateral
and, to the extent not otherwise included, all (i) payments under insurance
(whether or not the Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Account Collateral and (ii) cash.
It is a condition to the continued maintenance of the Lockbox Account with you
that you agree to this letter agreement.
By signing this letter agreement, you acknowledge notice of, and
consent to the terms and provisions of, the Security Agreement and confirm to
the Administrative Agent that you have received no notice of any other pledge or
assignment of the Lockbox Account. Further, you hereby agree with the
Administrative Agent that:
a. Notwithstanding anything to the contrary in any other
agreement relating to the Lockbox Account, the Lockbox Account is and
will be subject to the terms and conditions of the Security Agreement,
will be maintained solely for the benefit of the Administrative Agent,
will be entitled "Fleet Bank, as Administrative Agent, Re: [name
<PAGE> 202
of the Grantor]" and will be subject to written instructions only from
an officer of the Administrative Agent.
b. You will collect mail from the Lockbox Account on each of
your business days at times that coincide with the delivery of mail
thereto.
c. You will follow your usual operating procedures for the
handling of any remittance received in the Lockbox Account that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
d. You will endorse and process all eligible checks and other
remittance items not covered by paragraph (c) and deposit such checks
and remittance items in the Lockbox Account.
e. You will maintain a record of all checks and other
remittance items received in the Lockbox Account and, in addition to
providing the Grantor with photostats, vouchers, enclosures, etc. of
such checks and remittance items on a daily basis, furnish to the
Administrative Agent (i) a monthly statement of the Lockbox Account and
(ii) a daily collection and check float report to be transmitted by
facsimile to the Administrative Agent at: Fleet National Bank, One
Federal Street, Boston, MA 02110, Attention: Loan Administration,
Facsimile No. , Telephone No. .
f. You will transfer, in same day funds, on each of your
business days, all amounts collected from the Lockbox Account on such
day to the following account (the "Cash Collateral Account"):
[Name of Borrower]
Account No.
Fleet National Bank
One Federal Street
Boston, Massachusetts 02110
Attention: Loan Administration
Each such transfer of funds shall neither comprise only part of a
remittance nor reflect the rounding off of any funds so transferred.
g. All transfers referred to in paragraph (vi) above shall be
made by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and
the undersigned will not seek to recover from the Administrative Agent
or any other Lender Party for any reason any such payment once made.
h. All service charges and fees with respect to the Lockbox
Account shall be payable by the Grantor, and deposited checks returned
for any reason shall not be charged
<PAGE> 203
to the Lockbox Account, but may be charged to another account
maintained by the Grantor with you.
i. The Administrative Agent shall be entitled to exercise any
and all rights of the Grantor in respect of the Lockbox Account, and
the undersigned shall comply in all respects with such exercise.
This letter agreement shall be binding upon you and your
successors and assigns and shall inure to the benefit of the Administrative
Agent, the Lender Parties and their respective successors, transferees and
assigns. You may terminate this letter agreement only upon thirty (30) days
prior written notice to the Grantor and the Administrative Agent. Upon such a
termination you shall close the Lockbox Account and transfer all funds in the
Lockbox Account to the Cash Collateral Account. After any such termination, you
shall nonetheless remain obligated promptly to transfer to the Cash Collateral
Account all funds and other property received in respect of the Lockbox Account.
This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
[NAME OF GRANTOR]
By:_____________________________________
Title:
FLEET NATIONAL BANK, as
Administrative Agent
By:_____________________________________
Title:
Acknowledges and agreed to as of the date first above written:
[NAME OF LOCKBOX BANK]
By:_____________________________________
Title:
<PAGE> 204
EXHIBIT B TO
SECURITY AGREEMENT
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to
the terms and provisions of, the Security Agreement, dated March __, 1999 (the
"Security Agreement"; the terms defined therein being used herein as therein
defined), from _____________, (the "Grantor") to Fleet National Bank, as
administrative agent (the "Administrative Agent") for the Secured Parties
referred to therein, and hereby agrees with the Administrative Agent that:
(a) The undersigned will make all payments to be made by it
under or in connection with the ________ Agreement, dated _________,
19__ (the "Assigned Agreement"), between the undersigned and Grantor in
accordance with the instructions of the Administrative Agent.
(b) All payments referred to in paragraph (a) above shall be
made by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and
the undersigned will not seek to recover from the Administrative Agent
or any Lender Party for any reason any such payment once made.
(c) The Administrative Agent shall be entitled to exercise any
and all rights and remedies of the Grantor under the Assigned Agreement
and the undersigned shall comply in all respects with any such
exercise.
(d) The undersigned shall not, without the prior written
consent of the Administrative Agent, (i) cancel or terminate the
Assigned Agreement or consent to or accept any cancellation or
termination thereof, (ii) amend, restate or otherwise modify the
Assigned Agreement or (iii) except as expressly provided therein, make
any prepayment of amounts to become due under or in connection with the
Assigned Agreement.
This Consent and Agreement shall be binding upon the
undersigned and its successors and assigns, and shall inure, together with the
rights and remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the Lender Parties and their respective successors,
transferees and assigns. THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS).
<PAGE> 205
IN WITNESS WHEREOF, the undersigned has duly executed this
Consent and Agreement as of the date set forth below.
Dated: ________, 1998 [NAME OF OBLIGOR]
By:_____________________________________
Title:__________________________________
<PAGE> 206
EXHIBIT C TO
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
____________, ____
Fleet Bank, as Administrative Agent
One Federal Street
Boston, MA 02110
Attention: Corporate Banking Group
Security Agreement, dated as of March __, 1999,
made by Team Health, Inc.,
and the other Grantors party thereto, to Fleet National Bank,
as Administrative Agent for the Secured Parties
Ladies and Gentlemen:
Reference is made to the above-captioned Security Agreement (such
Security Agreement, as in effect on the date hereof and as it may hereafter be
amended, supplemented, restated, or otherwise modified from time to time, the
"Security Agreement"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Security Agreement.
The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to "Grantor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Administrative Agent,
for the benefit of the Administrative Agent and the ratable benefit of the
Lenders, the Swing Line Bank and the Issuing Bank, and hereby grants to the
Administrative Agent, for the benefit of the Administrative Agent and the
ratable benefit of the Secured Parties, as security for the Secured Obligations,
a lien on, and security interest in, all of the right, title and interest of the
undersigned, whether now owned or hereafter acquired, in and to the Collateral
owned by the undersigned, including, but not limited to, the property listed on
the attached supplements to Schedules I through IV to the Security Agreement.
The undersigned hereby certifies that such
<PAGE> 207
supplements have been prepared by the undersigned in substantially the form of
such Schedules and are true, accurate and complete as of the date hereof.
The undersigned hereby makes each representation and warranty set forth
in Section 8 of the Security Agreement (as modified by the attached supplements
to the Schedules to the Security Agreement) to the same extent as each other
Grantor and hereby agrees to be bound as a Grantor by all of the terms and
provisions of the Security Agreement to the same extent as each other Grantor.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS
PROVISIONS).
THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THE LOAN DOCUMENTS (AS DEFINED IN THE CREDIT
AGREEMENT), THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING BANK IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GRANTOR]
[Address of chief executive office]
[Address of chief executive office]
By: ____________________________________
Title:__________________________________
<PAGE> 208
EXHIBIT G TO THE
CREDIT AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT
March 12, 1999
from
TEAM HEALTH, INC., and
THE SUBSIDIARY GUARANTORS NAMED HEREIN
as Grantors,
to
FLEET NATIONAL BANK,
as Administrative Agent
<PAGE> 209
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTELLECTUAL PROPERTY SECURITY AGREEMENT................................................................. 1
PRELIMINARY STATEMENTS................................................................................... 1
SECTION 1. Grant of Security...................................................................... 1
SECTION 2. Security for Obligations............................................................... 3
SECTION 3. Grantors Remain Liable................................................................. 3
SECTION 4. Representations and Warranties......................................................... 3
SECTION 5. Further Assurances..................................................................... 5
SECTION 6. Transfers and Other Liens.............................................................. 7
SECTION 7. Administrative Agent Appointed Attorney-in-Fact........................................ 7
SECTION 8. Administrative Agent May Perform....................................................... 8
SECTION 9. The Administrative Agent's Duties...................................................... 8
SECTION 10. Remedies............................................................................... 8
SECTION 11. Indemnity and Expenses................................................................. 10
SECTION 12. Security Interest Absolute............................................................. 10
SECTION 13. Amendments; Waivers; Supplements; Etc.................................................. 11
SECTION 14. Addresses for Notices.................................................................. 11
SECTION 15. Continuing Security Interest, Assignments.............................................. 12
SECTION 16. Release and Termination................................................................ 12
SECTION 17. Execution in Counterparts.............................................................. 12
SECTION 18. Governing Law; Terms................................................................... 13
</TABLE>
<PAGE> 210
SCHEDULES
Schedule I - Patents and Patent Applications
Schedule II - Trademark Registrations and Applications
Schedule III - Copyright Registrations and Applications
Schedule IV - Licenses
EXHIBIT
Exhibit A - Form of Intellectual Property Security Agreement
Supplement
<PAGE> 211
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT dated March 12, 1999, made by
Team Health, Inc., a Tennessee corporation having an office at the address set
forth on the signature page hereof (the "Borrower"), the Subsidiary Guarantors
listed on the signature pages hereof, each having an office at the address set
forth on the signature page hereof (the "Subsidiary Guarantors"), the Additional
Grantors (as defined in Section 13(c)) (the Additional Grantors, together with
the Borrower, the "Grantors") to FLEET NATIONAL BANK as administrative agent
(the "Administrative Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
PRELIMINARY STATEMENTS:
(1) The Borrower has entered into a Credit Agreement, dated as of the
date hereof (said Agreement, as it may hereafter be amended, restated or
otherwise modified from time to time, being the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the banks, financial institutions and other institutional lenders
named therein, Fleet National Bank, as Issuing Bank, as Swing Line Bank, as
Co-Arranger and as Administrative Agent, NationsBank, N.A., as Issuing Bank and
as Co-Arranger, NationsBanc Montgomery Securities LLC, as Syndication Agent and
Donaldson, Lufkin & Jenrette Securities Corporation, as Documentation Agent.
(2) It is a condition precedent to the making of Advances by the
Lenders, the issuance of Letters of Credit by the Issuing Banks under the Credit
Agreement and the Hedge Banks entering into the Bank Hedge Agreements with the
Borrower from time to time that the Borrower shall have granted the security
interest and made the pledge and grant of the security interest contemplated by
this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, the Issuing Banks to
issue Letters of Credit under the Credit Agreement, and the Hedge Banks to enter
into Bank Hedge Agreements with the Borrower from time to time, each of the
Grantors hereby agrees with the Administrative Agent for its benefit and the
ratable benefit of the Secured Parties as follows:
SECTION 1. Grant of Security. Each of the Grantors hereby grants to the
Administrative Agent for its benefit and the ratable benefit of the Secured
Parties a security interest in the following, in each case, as to each type of
property described below, whether now owned or hereafter acquired by such
Grantor, and whether now or hereafter existing (collectively, the "Intellectual
Property Collateral"):
(a) all patents, patent applications and patentable inventions,
including, without limitation, each patent identified in Schedule I attached
hereto and made a part hereof and each patent application identified in such
Schedule I, and including, without limitation, (i) all inventions
<PAGE> 212
and improvements described and claimed therein and the right to make, use or
sell the same, (ii) the right to sue or otherwise recover for any
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto (including,
without limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past and future infringements thereof),
and (iv) all rights corresponding thereto throughout the world and all reissues,
divisions, continuations, continuations-in-part, substitutes, renewals and
extensions thereof, all improvements thereon and all other rights of any kind
whatsoever of each Grantor accruing thereunder or pertaining thereto (the
"Patents");
(b) all trademarks, service marks, trade names, trade dress or other
indicia of trade origin, trademark and service mark registrations, and
applications for trademark or service mark registrations and any renewals
thereof, including, without limitation, each registration and application
identified in Schedule II attached hereto and made a part hereof, and including,
without limitation, (i) the right to sue or otherwise recover for any and all
past, present and future infringements and misappropriations thereof, (ii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for past
or future infringements thereof), and (iii) all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of the Grantor
accruing thereunder or pertaining thereto, together in each case with the
goodwill of the business connected with the use of, and symbolized by, each such
trademark, service mark, trade name, trade dress or other indicia of trade
origin (the "Trademarks");
(c) all copyrights, whether statutory or common law, and whether or not
the underlying works of authorship have been published, and all works of
authorship and other intellectual property rights therein, all copyrights of
works based on, incorporated in, derived from or relating to works covered by
such copyrights, all right, title and interest to make and exploit all
derivative works based on or adopted from works covered by such copyrights, and
all copyright registrations and copyright applications, and any renewals or
extensions thereof, including, without limitation, each copyright registration
and copyright application identified in Schedule III attached hereto and made a
part hereof, and including, without limitation, (i) the right to reproduce,
prepare derivative works, distribute copies, perform or display any of the
foregoing, (ii) the right to sue or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments for past
or future infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of the Grantor
accruing thereunder or pertaining thereto (the "Copyrights");
(d) all license agreements with any other Person in connection with any
of the Patents, Trademarks or Copyrights, or such other Person's patents, trade
names, trademarks,
2
<PAGE> 213
service marks, copyrights or works of authorship, or other intellectual
property, whether such Grantor is a licensor or licensee under any such license
agreement, including, without limitation, the license agreements listed on
Schedule IV attached hereto and made a part hereof (the "Licenses"); and
(e) all proceeds of any of the foregoing Patents, Trademarks,
Copyrights and Licenses, including, without limitation, any claims by such
Guarantor against third parties for infringement of the Patents, Trademarks,
Copyrights or Licenses.
SECTION 2. Security for Obligations. This Agreement secures the payment
of all Obligations of each Grantor now or hereafter existing under the Loan
Documents, whether for principal, interest, fees, expenses or otherwise (all
such Obligations secured being the "Secured Obligations").
SECTION 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in the Intellectual Property Collateral to which it is a
party to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Administrative Agent of any of the rights or
remedies hereunder shall not release any Grantor from any of its duties or
obligations under any of the contracts and agreements included in the
Intellectual Property Collateral, and (c) neither the Administrative Agent nor
any Secured Party shall have any obligation or liability under any of the
contracts and agreements included in the Intellectual Property Collateral by
reason of this Agreement, nor shall the Administrative Agent or any Secured
Party be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties. The Grantors jointly and
severally represent and warrant as follows:
(a) Each Grantor is the legal and beneficial owner of the Patents,
Trademarks and Copyrights pledged by such Grantor free and clear of any Lien,
claim, option or right of others, except for the liens and security interests
created under this Agreement or permitted under the Loan Documents (including,
without limitation, any Liens disclosed on Schedule 6.1(c) to the Credit
Agreement). No effective financing statement or other instrument similar in
effect covering all of any part of the Intellectual Property Collateral or
listing any Grantor or any of its Subsidiaries or any trade name of any Grantor
or any of its Subsidiaries as debtor is on file in any recording office
(including, without limitation, the United States Patent and Trademark Office
and the United States Copyright Office), except such as may have been filed in
favor of the Administrative Agent relating to this Agreement or one of the other
Loan Documents.
(b) Set forth in Schedule I is a complete and accurate list of all
patents owned by each Grantor. Set forth in Schedule II is a complete and
accurate list of all trademark and
3
<PAGE> 214
service mark registrations and all trademark and service mark applications owned
by each Grantor. Set forth in Schedule III is a complete and accurate list of
all copyright registrations and copyright applications owned by each Grantor.
Set forth in Schedule IV is a complete and accurate list of all Licenses that
are material to the conduct of each Grantor's business in which such Grantor is
(i) a licensor with respect to any of the Patents, Trademarks, or Copyrights or
(ii) a licensee of any other Person's patents, trade names, trademarks, service
marks, copyrights or works of authorship (other than licenses of commercially
available off-the-shelf computer software). Such Grantor has made all necessary
filings and recordations to protect and maintain its interest in the patents,
patent applications, trademark and service mark registrations, trademark and
service mark applications, copyright registrations and copyright applications
and Licenses set forth in Schedules I, II, III and IV hereto.
(c) Each patent, patent application, trademark or service mark
registration, trademark or service mark application, copyright registration, and
copyright application of each Grantor set forth in Schedule I, II or III hereto
is subsisting and has not been adjudged invalid, unregisterable or
unenforceable, in whole or in part, and, to such Grantor's knowledge, is valid,
registrable and enforceable. Each License of each Grantor identified in Schedule
IV is subsisting and has not been adjudged invalid or unenforceable, in whole or
in part, and, to such Grantor's knowledge, is valid and enforceable. No Grantor
is aware of any uses of any item of Intellectual Property Collateral which would
be expected to lead to such item becoming invalid or unenforceable, including
unauthorized uses by third parties and uses which were not supported by the
goodwill of the business connected with such Intellectual Property Collateral.
(d) No Grantor has made any previous assignment, transfer or agreement
constituting a present or future assignment, transfer or encumbrance of any of
the Intellectual Property Collateral. No Grantor has granted any license (other
than those listed on Schedule IV hereto), release, covenant not to sue, or
non-assertion assurance to any Person with respect to any part of the
Intellectual Property Collateral.
(e) Each Grantor has used proper statutory notice in connection with
its use of each patent, registered trademark and service mark and copyright
contained in Schedule I, II or III.
(f) Upon the filing by the Administrative Agent or its representatives
of the proper financing statements referred to in Section 3.1(a)(ii) of the
Credit Agreement and the filing and recording of this Agreement in the United
States Patent and Trademark Office against each patent, patent application,
trademark or service mark registration, trademark or service mark application,
and in the U.S. Copyright Office against each copyright registration, and
copyright application of each Grantor set forth in Schedule I, II or III hereto,
this Agreement creates in favor of the Administrative Agent, on behalf of itself
and the Lender Parties, a valid and perfected first and only priority security
interest, subject to Liens permitted under the Credit Agreement, in the
Intellectual Property Collateral of each Grantor, securing the payment of the
Secured Obligations.
4
<PAGE> 215
(g) Other than as disclosed on Schedule 4.4 to the Credit Agreement, no
consent of any Person and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or other
Person is required (i) for the grant by any Grantor of the security interest
granted hereby, for the pledge by any Grantor of the Intellectual Property
Collateral pursuant hereto, or for the execution, delivery or performance of
this Agreement by each Grantor, (ii) for the perfection or maintenance of the
pledge and security interest created hereby (including the first and only
priority nature of such pledge and security interest), except for the filing of
financing and continuation statements under the Uniform Commercial Code, which
financing statements are in proper form and are duly executed, and the filing
and recording of this Agreement in the United States Patent and Trademark Office
against each patent, patent application, trademark or service mark registration,
trademark or service mark application, and in the U.S. Copyright Office against
each copyright registration, and copyright application of each Grantor set forth
in Schedule I, II or III hereto, or (iii) for the exercise by the Administrative
Agent of its rights provided for in this Agreement or the remedies in respect of
the Patents, Trademarks and Copyrights pursuant to this Agreement.
(h) There are no claims by any third party relating to any item of
Intellectual Property Collateral.
(i) No claim has been made and is continuing or threatened that any
item of Intellectual Property Collateral is invalid or unenforceable or that the
use by any Grantor of any Intellectual Property Collateral does or may violate
the rights of any Person. To the best of each Grantor's knowledge, there is
currently no infringement or unauthorized use of any item of Intellectual
Property Collateral.
(j) Each Grantor has taken all reasonably necessary steps to use
consistent standards of quality in the provision of all services provided under
or in connection with any of the Patents, Trademarks and Copyrights and has
taken all necessary steps to ensure that all licensed users of any of the
Patents, Trademarks and Copyrights use such consistent standards of quality.
SECTION 5. Further Assurances. (a) Each of the Grantors jointly and
severally agrees that from time to time, at the expense of the Borrower, such
Grantor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the Administrative Agent believes
may be reasonably necessary or reasonably desirable, or that the Administrative
Agent may reasonably request, in order to perfect and protect any pledge or
security interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any part of the Intellectual Property Collateral. Without
limiting the generality of the foregoing, each Grantor will, upon the reasonable
request of the Administrative Agent, with respect to the Intellectual Property
Collateral owned by such Grantor, execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be reasonably
5
<PAGE> 216
necessary or desirable, or as the Administrative Agent may reasonably request,
in order to perfect and preserve the pledge and security interest granted or
purported to be granted hereby.
(b) Each Grantor hereby authorizes the Administrative Agent to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of the Intellectual Property Collateral without the signature
of such Grantor where permitted by law. A photocopy or other reproduction of
this Agreement or any financing statement covering the Intellectual Property
Collateral or any part thereof will be sufficient as a financing statement where
permitted by law.
(c) Each Grantor will furnish to the Administrative Agent from time to
time statements and schedules further identifying and describing the
Intellectual Property Collateral and such other reports in connection with the
Intellectual Property Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(d) Each Grantor agrees that, should it obtain an ownership interest in
any patent, patent application, patentable invention, trademark, service mark,
trade name, trade dress, other indicia of trade origin, trademark or service
mark registration, trademark or service mark application, copyright, copyright
registration, copyright application or work of authorship or become party to any
License, which is not now a part of the Intellectual Property Collateral, (i)
the provisions of Section 1 will automatically apply thereto, and (ii) any such
patent, patent application, patentable invention, trademark, service mark, trade
name, trade dress, indicia of trade origin, trademark or service mark
registration, trademark or service mark application (together with the goodwill
of the business connected with the use of same and symbolized by same),
copyright, copyright registration, copyright application, work of authorship or
License will automatically become part of the Intellectual Property Collateral.
Each Grantor further agrees that it shall deliver to the Administrative Agent a
written report, in reasonable detail, on a semi-annual basis (starting, for this
year, on June 30, 1999, and thereafter on December 31 and June 30 of each
succeeding year), setting forth each new patent, patent application, trademark
or service mark registration, trademark or service mark application, copyright
registration, copyright application or license that such Grantor has filed,
acquired or otherwise obtained in the preceding six month reporting period. Such
Grantor authorizes the Administrative Agent to modify this Agreement by amending
Schedules I, II, III and IV hereto (and shall cooperate with the Administrative
Agent in effecting any such amendment) to include any patent, patent
application, trademark or service mark registration, trademark or service mark
application, copyright registration, copyright application or License which
becomes part of the Intellectual Property Collateral.
(e) With respect to each patent, patent application, trademark or
service mark registration, trademark or service mark application, copyright
registration and copyright application set forth in Schedule I, II or III
hereto, each Grantor agrees to take all necessary or desirable steps in such
Grantor's reasonable business judgment, including, without limitation, in the
United States Patent and Trademark Office and the United States Copyright Office
or in any
6
<PAGE> 217
court, to (i) maintain each such patent, trademark or service mark registration,
and copyright registration, and (ii) pursue each such patent application,
trademark or service mark application and copyright application now or hereafter
included in the Intellectual Property Collateral, including, without limitation,
the filing of responses to office actions issued by the United States Patent and
Trademark Office, the filing of affidavits under Sections 8 and 15 of the United
States Trademark Act, the filing of divisional, continuation,
continuation-in-part and substitute applications, the filing of applications for
re-issue, renewal or extensions, the payment of maintenance fees, and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. Each Grantor agrees to take
corresponding steps with respect to each new or acquired patent, patent
application, trademark or service mark registration, trademark or service mark
application, copyright registration, or copyright application to which it is now
or later becomes entitled. Any and all expenses incurred in connection with such
activities will be borne by such Grantor. No Grantor shall discontinue use of or
otherwise abandon any patent, patent application, trademark or service mark,
trademark or service mark registration, trademark or service mark application,
copyright registration, or copyright application now or hereafter included in
the Intellectual Property Collateral, unless the relevant Grantor shall have
first determined in its reasonable business judgment that such use or pursuit or
maintenance of same is no longer desirable in the conduct of such Grantor's
business, in which case, such Grantor shall give written notice of any such
abandonment or discontinuance to the Administrative Agent pursuant to the
semi-annual reporting requirement contained in Section 5(d) above.
(f) Each Grantor agrees to notify the Administrative Agent promptly and
in writing if it learns (i) that any item of the Intellectual Property
Collateral has been determined to have become abandoned or dedicated to the
public or (ii) of the institution of any proceeding (including, without
limitation, the institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any item of the Intellectual Property
Collateral.
(g) In the event that a Grantor makes a determination in its reasonable
business judgment that any item of the Intellectual Property Collateral is
infringed or misappropriated by a third party, such Grantor shall promptly
notify the Administrative Agent and will take such actions as such Grantor or
the Administrative Agent deems appropriate under the circumstances to protect
such Intellectual Property Collateral, including, without limitation, suing for
infringement or misappropriation and for an injunction against such infringement
or misappropriation. Any expense in connection with such activities will be
borne by such Grantor.
(h) Each Grantor shall continue to use proper statutory notice in
connection with its use of each of its patents, registered trademarks and
service marks, and copyrights contained in Schedule I, II or III.
(i) Each Grantor shall take all steps which it or the Administrative
Agent deems appropriate in its reasonable business judgment under the
circumstances to preserve and protect its Intellectual Property Collateral,
including, without limitation, maintaining the quality of any
7
<PAGE> 218
and all services provided in connection with any of the Patents, Trademarks and
Copyrights, consistent with the quality of the products and services as of the
date hereof, and taking all steps necessary to ensure that all licensed users of
any of the Patents, Trademarks and Copyrights use such consistent standards of
quality.
SECTION 6. Transfers and Other Liens. Each of the Grantors agrees that
it shall not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of (except as provided in Section 5(e)) or grant any option with respect
to, any of the Intellectual Property Collateral, or (ii) create or suffer to
exist any Lien upon or with respect to any of the Intellectual Property
Collateral except for the pledge and security interest created by this Agreement
and Permitted Liens.
SECTION 7. Administrative Agent Appointed Attorney-in-Fact. Each of the
Grantors hereby irrevocably appoints the Administrative Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, upon the occurrence and during the
continuance of an Event of Default and upon notice to such Grantor to take any
action and to execute any instrument that the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:
(a) to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Intellectual Property Collateral;
(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and
(c) to file any claims or take any action or institute any proceedings
that the Administrative Agent may deem necessary or desirable to enforce the
rights of the Administrative Agent with respect to any of the Intellectual
Property Collateral.
SECTION 8. Administrative Agent May Perform. If any of the Grantors
fails to perform any agreement contained herein, the Administrative Agent may
itself, upon fifteen (15) days' notice to such Grantor, perform, or cause
performance of, such agreement, and the reasonable expenses of the
Administrative Agent incurred in connection therewith shall be borne by such
Grantor.
SECTION 9. The Administrative Agent's Duties. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest in the
Intellectual Property Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Intellectual
Property Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Administrative Agent shall have no duty as to any
Intellectual Property Collateral, whether or not the Administrative Agent or any
other Secured
8
<PAGE> 219
Party has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against any parties or any other rights
pertaining to any Intellectual Property Collateral. The Administrative Agent
shall exercise reasonable care in the custody and preservation of any
Intellectual Property Collateral in its possession and shall accord such
Intellectual Property Collateral treatment equal to that which the
Administrative Agent accords its own property.
SECTION 10. Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the
Intellectual Property Collateral, in addition to other rights and remedies
provided for herein or in any other Loan Document or otherwise available to it,
all the rights and remedies of a secured party upon default under the New York
Uniform Commercial Code in effect in the State of New York at such time (the
"N.Y. Uniform Commercial Code") (whether or not the N.Y. Uniform Commercial Code
applies to the affected Intellectual Property Collateral) and also may (i)
require any and all of the Grantors to, and each Grantor hereby agrees that it
will at its expense and upon request of the Administrative Agent forthwith,
assemble all or part of the documents and things embodying any part of the
Intellectual Property Collateral as directed by the Administrative Agent and
make them available to the Administrative Agent at a place and time to be
designated by the Administrative Agent; (ii) without notice except as specified
below and as required by law, sell the Intellectual Property Collateral or any
part thereof in one or more parcels at public or private sale, at any of the
Administrative Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable; and (iii) occupy any premises owned or leased by any
Grantor where documents and things embodying the Intellectual Property
Collateral or any part thereof are assembled or located for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation. In the event of any
sale, assignment, or other disposition of any of the Intellectual Property
Collateral, the goodwill of the business connected with and symbolized by any of
the Intellectual Property Collateral subject to such disposition will be
included, and such Grantor will supply to the Administrative Agent or its
designee such Grantor's know-how and expertise, and documents and things
embodying the same, relating to the manufacture, distribution, advertising and
sale of products or the provision of services relating to any Intellectual
Property Collateral subject to such disposition and, including, but not limited
to, such Grantor's customer lists and other records and documents relating to
such Intellectual Property Collateral and to the manufacture, distribution,
advertising and sale of such products and services. Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days'
notice to such Grantor of the time and place of any public sale or the time
after which any private sale is to be made will constitute reasonable
notification. The Administrative Agent shall not be obligated to make any sale
of Intellectual Property Collateral regardless of notice of sale having been
given. The Administrative Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed
9
<PAGE> 220
therefor, and such sale may, without further notice except as required by law,
be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon, all or any part of
the Intellectual Property Collateral may, in the discretion of the
Administrative Agent, be held by the Administrative Agent as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts
payable to the Administrative Agent pursuant to Section 11(b)), in whole or in
part, by the Administrative Agent, for the ratable benefit of the Secured
Parties against all or any part of the Secured Obligations in such order as the
Credit Agreement may require and otherwise as the Administrative Agent may
elect. Any surplus of such cash or cash proceeds held by the Administrative
Agent and remaining after payment in full of all of the Secured Obligations
shall be paid over to the applicable Grantors or to whomever may be lawfully
entitled to receive such surplus.
(c) The Administrative Agent may exercise any and all rights and
remedies of any of the Grantors in respect of the Intellectual Property
Collateral.
(d) All payments received by any Grantor in respect of the Intellectual
Property Collateral shall be received in trust for the benefit of the
Administrative Agent, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Administrative Agent in the same form as so
received (with any necessary or desirable endorsement or assignment).
SECTION 11. Indemnity and Expenses. (a) Each of the Grantors hereby
jointly or severally agrees to indemnify the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or resulting
from this Agreement (including, without limitation, enforcement of this
Agreement), except claims, losses or liabilities resulting from the
Administrative Agent's gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction.
(b) The Borrower will, upon demand, pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that the Administrative
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use, or operation of, or the sale of, collection
from or other realization upon, any of the Intellectual Property Collateral,
(iii) the exercise or enforcement of any of the rights of the Administrative
Agent or the Lender Parties hereunder or (iv) the failure by any Grantor to
perform or observe any of the provisions hereof.
SECTION 12. Security Interest Absolute. The obligations of each Grantor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be brought and prosecuted against any or all Grantors to
enforce this Agreement, irrespective of whether any action is brought against
the Borrower or whether the Borrower is joined in any such
10
<PAGE> 221
action or actions. All rights of the Administrative Agent and the pledge and
security interest created hereunder, and all obligations of each Grantor
hereunder, shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement, instrument or document relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations or any other amendment,
restatement or other modification or waiver of or any consent to any departure
from any Loan Document, including, without limitation, any increase in the
Secured Obligations resulting from the extension of additional credit to the
Borrower or any Guarantor or any of their Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment, restatement, other modification
or waiver of or consent to any departure from any guaranty, for all or any of
the Secured Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or any
other assets of the Borrower, any Guarantor or any of their Subsidiaries;
(e) any change, restructuring or termination of the corporate structure
or existence of the Borrower or any Guarantor or any of their Subsidiaries; or
(f) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or a third party grantor of a
security interest.
SECTION 13. Amendments; Waivers; Supplements; Etc. (a) No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
any Grantor herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Administrative Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No failure on the part of the Administrative Agent to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right.
(c) Upon the execution and delivery by any Person of an intellectual
property security agreement supplement, in each case in substantially the form
of Exhibit A hereto (each an "Intellectual Property Security Agreement
Supplement"), (i) such Person shall be referred to as an "Additional Grantor"
and shall be and become a Grantor, and each reference in this
11
<PAGE> 222
Agreement to "Grantor" shall also mean and be a reference to such Additional
Grantor and each reference in any other Loan Document to a "Grantor" or a "Loan
Party" shall also mean and be a reference to such Additional Grantor, and (ii)
the annexes attached to each Intellectual Property Security Agreement Supplement
shall be incorporated into and become a part of and supplement Schedules I, II,
III and IV, as appropriate, hereto and the Administrative Agent may attach such
annexes as supplements to such Schedules, and each reference to such Schedules
shall mean and be a reference to such Schedules, as so supplemented.
SECTION 14. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to any Grantor, addressed to it at the address set forth below its name on
the signature pages hereof; if to any Additional Grantor, addressed to it at the
address set forth below its name on the signature page to the Intellectual
Property Security Agreement Supplement executed and delivered by such Additional
Grantor; if to the Administrative Agent, addressed to it at its address set
forth in Section 11.2 of the Credit Agreement; or, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Grantors and the Administrative Agent. All such notices and communications
shall, when mailed by certified mail, return receipt requested, telegraphed,
telecopied or telexed, be effective three (3) days after mailing, upon delivery
to the telegraph company, upon transmission by telecopier or upon confirmation
by telex answerback, respectively, addressed as aforesaid. Any party hereto may
change the Person, address or telecopier number to whom or which notices are to
be given hereunder, by notice duly given hereunder; provided, however, that any
such notice shall be deemed to have been given hereunder only when actually
received by the party to which it is addressed.
SECTION 15. Continuing Security Interest, Assignments. This Agreement
shall create a continuing security interest in the Intellectual Property
Collateral and shall (a) remain in full force and effect until the latest of (i)
the indefeasible payment in full in cash of all of the Secured Obligations, (ii)
the expiration, termination or cancellation of all of the Letters of Credit and
(iii) the date of termination in whole of all Commitments under the Credit
Agreement, (b) be binding upon each Grantor, its successors and assigns and (c)
inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of the Lender Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 11.7 of the
Credit Agreement.
SECTION 16. Release and Termination. (a) Upon any sale, lease, transfer
or other disposition of any item of Intellectual Property Collateral in
accordance with the terms of the Loan Documents, the Administrative Agent will,
at the Grantors' expense, execute and deliver
12
<PAGE> 223
to such Grantor such documents as such Grantor shall reasonably request to
evidence the release of such item of Intellectual Property Collateral from the
security interest granted hereby; provided, however, that (i) at the time of
such request and such release, no Default shall have occurred and be continuing,
(ii) such Grantor shall have delivered to the Administrative Agent, at least
thirty (30) Business Days prior to the date of the proposed release, a written
request for release describing the item of Intellectual Property Collateral and
the terms of the sale, lease, transfer or other disposition in reasonable
detail, including the price thereof and any expenses in connection therewith,
together with a form of release for execution by the Administrative Agent and a
certification by such Grantor to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters as the
Administrative Agent may request and (iii) the proceeds of any such sale, lease,
transfer or other disposition required to be applied in accordance with Section
2.6 of the Credit Agreement shall be paid to, or in accordance with the
instructions of, the Administrative Agent at the closing and (v) the
Administrative Agent shall have approved such sale, lease, transfer or other
disposition in writing.
(b) Upon the latest of (i) the indefeasible payment in full in cash of
the Secured Obligations, (ii) the expiration, termination or cancellation of all
of the Letters of Credit and (iii) the date of termination in whole of all
Commitments under the Credit Agreement, the pledge and security interest granted
by each of the Grantors hereby shall terminate and all rights to the
Intellectual Property Collateral shall revert to the appropriate Grantor. Upon
any such termination, the Administrative Agent will, upon receipt of a written
request and at the Grantors' expense, execute and deliver to the appropriate
Grantor such documents as such Grantor shall reasonably request to evidence such
termination.
SECTION 17. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 18. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York (without
giving effect to its conflicts of law principles), except to the extent that the
validity or perfection of the security interest hereunder, or remedies
hereunder, in respect of the Intellectual Property Collateral are governed by
the laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein or in the Credit Agreement, terms used in Article 9 of the N.Y.
Uniform Commercial Code are used herein as therein defined.
[SIGNATURE PAGE FOLLOWS]
13
<PAGE> 224
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer, thereunto duly authorized, as of the date
first above written.
TEAM HEALTH, INC.
By:_________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
CLINIC MANAGEMENT SERVICES, INC.
EMERGICARE MANAGEMENT, INCORPORATED
HOSPITAL BASED PHYSICIAN SERVICES, INC.
TEAM RADIOLOGY, INC.
By:________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
ALLIANCE CORPORATION
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
EMERGENCY COVERAGE CORPORATION
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
INPHYNET CONTRACTING SERVICES, INC.
INPHYNET JOLIET, INC.
INPHYNET LOUISIANA, INC.
INPHYNET SOUTH BROWARD, INC.
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
INPHYNET HOSPITAL SERVICES, INC.
[SIGNATURE PAGE TO INTELLECTUAL PROPERTY SECURITY AGREEMENT]
<PAGE> 225
INPHYNET MEDICAL MANAGEMENT INSTITUTE, INC.
KARL G. MANGOLD, INC.
MED: ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
NORTHWEST EMERGENCY PHYSICIANS
INCORPORATED
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF MARGULIES BORUSHOK SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
THBS, INC.
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
By:_________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
FISCHER MANGOLD PARTNERSHIP
By: Herschel Fischer, Inc., its general partner
Karl G. Mangold, Inc., its general partner
By:___________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
[SIGNATURE PAGE TO INTELLECTUAL PROPERTY SECURITY AGREEMENT]
<PAGE> 226
MT. DIABLO EMERGENCY PHYSICIANS, a California
General Partnership
By: Herschel Fischer, Inc., its general partner
Karl G. Mangold, Inc., its general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By:InPhyNet Hospital Services, Inc.,
its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc., its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH SOUTHWEST L.P.
By: Team Radiology, Inc., its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
[SIGNATURE PAGE TO INTELLECTUAL PROPERTY SECURITY AGREEMENT]
<PAGE> 227
ACCEPTED:
FLEET NATIONAL BANK, AS ADMINISTRATIVE AGENT
By: _____________________________________
Name: Ginger Stolzenthaler
Title: Senior Vice President
[SIGNATURE PAGE TO INTELLECTUAL PROPERTY SECURITY AGREEMENT]
<PAGE> 228
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the ____ day of March in the year 1999, before me, the undersigned, a Notary
Public in and for said state, personally appeared H. Lynn Massingale personally
known to me or proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his capacity, and that by his signature on the
instrument, the entities upon behalf of which he acted, executed the instrument.
________________________________
Notary Public
<PAGE> 229
EXHIBIT A
to
Intellectual Property Security Agreement
FORM OF INTELLECTUAL PROPERTY
SECURITY AGREEMENT SUPPLEMENT
_______________, ____
Fleet National Bank, as Administrative Agent
under the Credit Agreement
referred to below
One Federal Street
Boston, Massachusetts 02110
Attention: Corporate Banking Group
Intellectual Property Security Agreement,
dated as of March __, 1999,
made by Team Health, Inc.,
and the other Grantors to
Fleet National Bank, as Administrative Agent
Ladies and Gentlemen:
Reference is made to the above-captioned Intellectual Property
Security Agreement (such Intellectual Property Security Agreement, as in effect
on the date hereof and as it may hereafter be amended, supplemented, restated or
otherwise modified from time to time, being the "Intellectual Property Security
Agreement"). The terms defined in the Intellectual Property Security Agreement
(or in the Credit Agreement referred to therein) and not otherwise defined
herein are used herein as therein defined.
The undersigned hereby agrees, as of the date first above
written, to become a Grantor under the Intellectual Property Security Agreement
as if it were an original party thereto and agrees that each reference in the
Intellectual Property Security Agreement to "Grantor" shall also mean and be a
reference to the undersigned.
The undersigned hereby pledges to the Administrative Agent,
for the ratable benefit of the Secured Parties, and hereby grants to the
Administrative Agent, for the ratable benefit of
<PAGE> 230
the Secured Parties, as security for the Secured Obligations a lien on and
security interest in, all of the right, title and interest of the undersigned,
whether now owned or hereafter acquired, in and to Intellectual Property
Collateral owned by the undersigned, including, but not limited to, the property
listed on Annex I, II, III and IV hereto. Schedules I, II, III and IV to the
Intellectual Property Security Agreement are hereby supplemented by Annexes I,
II, III and IV hereto, respectively. The undersigned hereby certifies on behalf
of such Grantor that such Annexes have been prepared by the undersigned in
substantially the form of Schedules I, II, III and IV to the Intellectual
Property Security Agreement and are true, accurate and complete in all material
respects as of the date hereof.
The undersigned on behalf of such Grantor hereby makes each
representation and warranty set forth in Section 4 of the Intellectual Property
Security Agreement (as supplemented by the attached Annexes) to the same extent
as each other Grantor and hereby agrees to be bound as a Grantor by all of the
terms and provisions of the Intellectual Property Security Agreement to the same
extent as each other Grantor.
This Intellectual Property Security Agreement Supplement shall
be governed by and construed in accordance with the laws of the State of New
York.
Very truly yours,
[NAME OF ADDITIONAL INTELLECTUAL
PROPERTY GRANTOR]
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address:________________________________
________________________________________
<PAGE> 231
EXHIBIT H TO THE
CREDIT AGREEMENT
HOLDINGS PLEDGE AGREEMENT
March 12, 1999
between
TEAM HEALTH HOLDINGS, L.L.C.,
as Pledgor,
and
FLEET NATIONAL BANK,
as Administrative Agent
<PAGE> 232
HOLDINGS PLEDGE AGREEMENT
HOLDINGS PLEDGE AGREEMENT ("Pledge Agreement") dated March 12, 1999 by
and between TEAM HEALTH HOLDINGS, L.L.C., a Delaware limited liability company,
having an office at the address set forth on the signature page hereof (the
"Pledgor") and FLEET NATIONAL BANK ("Fleet"), a national banking association,
having an office at the address set forth on the signature page hereof, as
administrative agent (in such capacity, together with its successors in such
capacity, the "Administrative Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
PRELIMINARY STATEMENTS:
(1) Team Health, Inc., a Tennessee corporation, having an office at
[Address] (the "Borrower") has entered into a Credit Agreement, dated as of even
date herewith (said Agreement, as it may hereafter be amended, restated,
supplemented, extended or otherwise modified from time to time, the "Credit
Agreement"; the terms defined therein and not otherwise defined herein being
used herein as therein defined), with the banks, financial institutions and
other institutional lenders named therein, Fleet National Bank, as Issuing Bank,
as Swing Line Bank, as Co-Arranger and as Administrative Agent, NationsBank,
N.A., as Issuing Bank and as Co-Arranger, NationsBanc Montgomery Securities LLC,
as Syndication Agent and Donaldson, Lufkin & Jenrette Securities Corporation, as
Documentation Agent.
(2) As of the date hereof, the Pledgor is the owner of 9,267,273 shares
of the Borrower's Common Stock, no par value (the "Common Stock"), and
94,299.091 shares of the Borrower's class A Preferred Stock, $.01 par value (the
"Preferred Stock" and together with the Common Stock, the "Pledged Stock"),
which are 92.7% and 94.3%, respectively, of the issued and outstanding shares of
Common Stock and Preferred Stock of the Borrower.
(3) The Pledgor has guaranteed, on a limited basis, to the Lenders and
the Administrative Agent the full payment and performance by the Borrower of all
of the Borrower's Obligations under the Credit Agreement and the other Loan
Documents by the execution and delivery to the Administrative Agent of a
guaranty of even date herewith (hereinafter, as it may from time to time be
amended, modified or supplemented, the "Holdings Guaranty").
(4) It is a condition precedent to the Lenders' making of Advances, the
Issuing Banks' issuing of Letters of Credit under the Credit Agreement and the
Hedge Banks' entering into Bank Hedge Agreements with the Borrower from time to
time that the Pledgor shall have executed and delivered this Pledge Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, the Issuing Banks to
issue Letters of
<PAGE> 233
Credit under the Credit Agreement and the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, the Pledgor hereby agrees with
the Administrative Agent, for the benefit of the Administrative Agent and the
ratable benefit of the Secured Parties, as follows:
1. The term "Pledged Stock" as used herein shall mean and include the
shares of Common Stock of the Borrower referred to in Preliminary Statement (2)
above, and, also, any shares, stock certificates, options or rights issued by
the Borrower as an addition to, in substitution of, or in exchange for any such
shares, and any and all proceeds thereof, now or hereafter owned or acquired by
the Pledgor.
2. (a) As collateral security for the due payment and performance
of all indebtedness and other liabilities and obligations of the Pledgor to the
Administrative Agent and the Secured Parties, whether now existing or hereafter
arising, under or out of the Holdings Guaranty and this Pledge Agreement (all of
the foregoing indebtedness, liabilities and obligations are hereinafter referred
to collectively as the "Obligations"), the Pledgor hereby pledges, assigns,
hypothecates, delivers and sets over to the Administrative Agent, as collateral
security, all the Pledged Stock, and hereby grants to the Administrative Agent a
first security interest in all the Pledged Stock and in any and all proceeds
thereof and substitutions therefor.
(b) If the Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital), option or rights, whether
as an addition to, in substitution of, or in exchange for any shares of the
Pledged Stock, or otherwise, the Pledgor shall accept any such instruments as
the agent for the Administrative Agent, shall hold them in trust for the
Administrative Agent, and shall deliver them forthwith to the Administrative
Agent in the exact form received, with the Pledgor's endorsement when necessary
and/or appropriate stock powers duly executed in blank, to be held by the
Administrative Agent, subject to the terms hereof, as further collateral
security for the Obligations.
(c) Any or all shares of the Pledged Stock held by the
Administrative Agent hereunder may, at the option of the Administrative Agent or
its nominee be registered in the name of the Administrative Agent or its
nominee. The Administrative Agent or its nominee may, upon prior written notice
to the Pledgor, after the occurrence and during the continuation of any Event of
Default, exercise all voting and corporate rights at any meeting of the
shareholders of the Borrower including, without limitation, the right to amend
the by-laws, to remove the directors, with or without cause, and to nominate and
elect successor directors, and exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any shares of the Pledged Stock as if it were the absolute owner thereof,
including, without limitation, the right to receive dividends payable thereon,
and the right to exchange, at its discretion, any and all of the Pledged Stock
upon the merger, consolidation, reorganization, recapitalization or other
readjustment of any corporation issuing any of such shares or upon the
2
<PAGE> 234
exercise by any such issuer of any right, privilege or option pertaining to any
shares of the Pledged Stock, and in connection therewith, to deposit and deliver
any and all of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine, all without liability except to account for property actually
received by it, but the Administrative Agent shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.
(d) Upon prior written notice to the Pledgor, in the event of
the occurrence and continuation of any Event of Default, the Administrative
Agent shall have the right to require that all cash dividends payable with
respect to any part of the Pledged Stock be paid to the Administrative Agent to
be held by the Administrative Agent as additional security hereunder until
applied to the Obligations.
(e) In the event of the occurrence and continuation of any
Event of Default, the Administrative Agent without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified
below of time and place of public or private sale) to or upon the Pledgor or any
other Person (all and each of which demands, advertisements and/or notices are,
to the extent permitted by law, hereby expressly waived), may forthwith collect,
receive, appropriate and realize upon the Pledged Stock, or any part thereof,
and/or may forthwith sell, assign, give an option or options to purchase,
contract to sell or otherwise dispose of and deliver the Pledged Stock, or any
part thereof, in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of the Administrative Agent's offices or
elsewhere at such prices and on such terms (including, without limitation, a
requirement that any purchaser of all or any part of the Pledged Stock shall be
required to purchase the shares constituting the Pledged Stock for investment
and without any intention to make a distribution thereof) as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk, with the right to the Administrative Agent or any purchaser upon any such
sale or sales, whether public or private, to purchase the whole or any part of
the Pledged Stock so sold, free of any right or equity of redemption in the
Pledgor, which right or equity is hereby expressly waived and released.
(f) The proceeds of any collection, recovery, receipt,
appropriation, realization or sale as aforesaid, shall be applied as follows:
(i) First, to the costs and expenses of every kind
incurred in connection therewith or incidental to the care, safekeeping or
otherwise of any and all of the Pledged Stock or in any way relating to the
rights of the Administrative Agent hereunder, including reasonable attorneys'
fees and legal expenses;
(ii) Second, to the satisfaction of the Obligations;
3
<PAGE> 235
(iii) Third, to the payment of any other amounts
required by applicable law (including, without limitation, Section 9-504(1)(c)
of the Uniform Commercial Code); and
(iv) Fourth, to the Pledgor to the extent of the
surplus proceeds, if any.
(g) The Administrative Agent need not give more than five (5)
Business Days' notice to the Pledgor of the time and place of any public sale or
of the time after which a private sale may take place and such notice shall be
deemed to be reasonable notification of such matters.
(h) The Pledgor hereby grants to the Administrative Agent full
power, without notice to the Pledgor, and without in any way affecting the
obligations of the Pledgor hereunder, to deal in any manner with the Borrower or
the Obligations or the collateral (other than the Pledged Stock, as to which the
other provisions of this Agreement shall govern) securing any of the Obligations
(hereinafter called the "Collateral") and the Pledgor hereby irrevocably waives
to the fullest extent permitted by applicable law any defenses it may now or
hereafter have in any way relating to, any or all of the following: (i) any lack
of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto; (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations or any other
obligations of any other Loan Party under the Loan Documents, or any amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Obligations resulting from the extension
of additional credit to the Borrower or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Obligations; (iv) any manner of application of
Collateral, or proceeds thereof, to all or any of the Obligations, or any manner
of sale or other disposition of any Collateral for all or any of the Obligations
or any other obligations of any other Loan Party under the Loan Documents or any
other assets of the Borrower or any of its Subsidiaries; (v) any change,
restructuring or termination of the corporate structure or existence of the
Borrower or any of its Subsidiaries; (vi) any failure of any Secured Party to
disclose to the Borrower or the Pledgor any information relating to the
financial condition, operations, properties or prospects of any other Loan Party
now or in the future known to any Secured Party (the Pledgor waiving any duty on
the part of the Secured Parties to disclose such information); or (vii) any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Administrative
Agent or any other Secured Party that might otherwise constitute a defense
available to, or a discharge of, the Borrower, the Pledgor or any other
guarantor or surety (other than payment). The Pledgor hereby waives presentment,
demand for payment, protest and notice of dishonor or nonpayment of or with
respect to the Obligations. The obligations of the Pledgor under this Pledge
Agreement are independent of the Obligations of the Borrower or of any other
obligations of any Loan Party or pledgor under the Loan Documents, and a
separate action or actions may be brought and prosecuted against the Pledgor to
enforce this Pledge Agreement, without joining the Borrower, any Loan Party or
any other pledgor under the Loan Documents. The Administrative Agent may enforce
its rights and remedies under this Pledge Agreement without being obligated to
resort first to the Borrower or the Collateral or to
4
<PAGE> 236
any other security or to any other remedy or remedies and may pursue all or any
of its remedies at one or at different times.
(i) In the event that the proceeds of any collection,
recovery, receipt, appropriation, realization, or sale as aforesaid are
insufficient to pay all amounts to which the Administrative Agent is legally
entitled, the Pledgor will not be liable for any deficiency.
3. The Pledgor represents and warrants that:
(a) The Pledged Stock is owned directly and beneficially and
of record by the Pledgor, has been duly authorized and validly issued and is
fully paid and non-assessable;
(b) All of the shares of the Pledged Stock are owned by the
Pledgor free and clear of any pledge, mortgage, hypothecation, lien, charge,
encumbrance or any security interest in such shares or the proceeds thereof,
except for the security interest granted to the Administrative Agent hereunder,
Permitted Liens and unperfected Liens under Section 6.1(g) of the Credit
Agreement; and
(c) Upon delivery of the Pledged Stock to the Administrative
Agent for the benefit of the Secured Parties, this Pledge Agreement creates and
grants a valid first lien on and perfected security interest in the shares of
the Pledged Stock and the proceeds thereof, subject to no prior security
interest, lien, charge or encumbrance or to any agreement purporting to grant to
any third party a security interest in the property or assets of the Pledgor
that would include the Pledged Stock.
4. (a) Except as expressly permitted by the Credit Agreement, the
Pledgor hereby covenants that so long as this Agreement shall be in effect, in
whole or in part, the Pledgor will not:
(i) sell, convey or otherwise dispose of any shares
of the Pledged Stock or any interest therein, nor will the Pledgor create, incur
or permit to exist any pledge, mortgage, lien, charge, encumbrance or any
security interest whatsoever with respect to any of the Pledged Stock or the
proceeds thereof other than that created hereby, except for the security
interest granted to the Administrative Agent hereunder, Permitted Liens and
unperfected Liens under Section 6.1(g) of the Credit Agreement unless any such
sale, conveyance or disposition is subject to this Agreement; or
(ii) consent to or approve the issuance of any
additional shares of any class of the issuer of the Pledged Stock.
(b) The Pledgor warrants and will defend the Administrative
Agent's right, title, special property and security interest in and to the
Pledged Stock against the claims of any Person, firm, corporation or other
entity.
5
<PAGE> 237
5. The Pledgor recognizes that the Administrative Agent may be unable
to effect a public sale of all or a part of the Pledged Stock, and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges that any such private
sales may be at places and on terms less favorable to the seller than if sold at
public sales and agrees that such private sales shall be deemed to have been
made in a commercially reasonable manner, and that the Administrative Agent has
no obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such securities
for public sale under the Securities Act.
6. The Pledgor shall at any time and from time to time upon the written
request of the Administrative Agent execute and deliver such further documents
and do such further acts and things as the Administrative Agent may reasonably
request in order to effect the purposes of this Pledge Agreement, including,
without limitation, delivering to the Administrative Agent on the date hereof or
at any time hereafter irrevocable proxies in respect of the Pledged Stock in the
form of Exhibit A hereto.
7. (a) Beyond the exercise of reasonable care to assure the safe
custody of the Pledged Stock while held hereunder, the Administrative Agent
shall have no duty or liability to preserve rights pertaining thereto, and shall
be relieved of all responsibility for the Pledged Stock upon surrendering it to
the Pledgor or in accordance with the Pledgor's instructions.
(b) No course of dealing between the Pledgor and the
Administrative Agent, nor any failure to exercise, nor any delay in exercising,
on the part of the Administrative Agent, any right, power or privilege hereunder
or under any of the Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
(c) The rights and remedies herein provided are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided by law
including, without limitation, the rights and remedies of a secured party under
the Uniform Commercial Code.
(d) The provisions of this Pledge Agreement are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision in this Pledge Agreement in any jurisdiction.
8. All notices and other communications pursuant to this Pledge
Agreement shall be in writing, either by letter (delivered by hand or commercial
messenger service or sent by
6
<PAGE> 238
registered or certified mail, return receipt requested) or telegram or telecopy,
addressed as follows:
(a) If to the Pledgor:
Team Health Holdings, L.L.C.
c/o Madison Dearborn Partners
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Attention: Nick Alexos
Telephone No.: (312) 895-1260
Facsimile No.: (312) 895-1256
with a copy to:
Cornerstone Equity Investors
717 Fifth Avenue
Suite 1100
New York, New York 10022
Attention: Tyler Wolfram
Telephone No.: (212) 207-2383
Facsimile No.: (212) 826-6798
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Christopher Butler, Esq.
Telephone No.: (312) 861-2298
Facsimile No.: (312) 861-2200
(b) if to the Administrative Agent:
Fleet National Bank
One Federal Street
Boston, Massachusetts 02110
Attention: Ginger Stolzenthaler
Telephone No.: (617) 346-4618
Facsimile No.: (617) 346-4699
7
<PAGE> 239
with a copy to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601-9703
Attention: Charles B. Boehrer, Esq.
Telephone No.: (312) 558-5989
Facsimile No.: (312) 558-5700
Any notice or other communication hereunder shall be deemed to have been given
on the day on which it is telecopied to such party at its telecopier number
specified above or delivered by hand or such commercial messenger service to
such party at its address specified above, or, if sent by mail, on the third
Business Day after the day deposited in the mail, postage prepaid, or in the
case of telegraphic notice, when delivered to the telegraph company, addressed
as aforesaid. Any party hereto may change the Person, address or telecopier
number to whom or which notices are to be given hereunder, by notice duly given
hereunder; provided, however, that any such notice shall be deemed to have been
given hereunder only when actually received by the party to which it is
addressed.
10. This Pledge Agreement shall be binding upon the Pledgor and its
successors and assigns and shall inure to the benefit of the Administrative
Agent and its successors for the benefit of the Administrative Agent and the
ratable benefit of the Secured Parties, and their respective successors and
assigns.
11. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS RULES PERTAINING TO CONFLICTS OF LAWS (OTHER THAN GENERAL OBLIGATIONS LAW
SECTION 5-1401).
12. The Pledgor's obligations under this Pledge Agreement are limited
to the Pledgor's interest in the Pledged Stock, and notwithstanding any other
provision herein contained, the Administrative Agent shall have no remedy
against the Pledgor other than to realize upon the security interest in, pledge
of and assignment of the Pledged Stock provided for herein.
13. Upon the latest of (i) the indefeasible payment in full in cash of
the Secured Obligations, (ii) the expiration, termination or cancellation of all
of the Letters of Credit and (iii) the Termination Date, the pledge by the
Pledgor hereby shall terminate and all rights to the Pledged Stock shall revert
to the Pledgor. Upon any such termination, the Administrative Agent will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
[SIGNATURE PAGE FOLLOWS]
8
<PAGE> 240
IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to be
duly executed and delivered the day and year first above written.
TEAM HEALTH HOLDINGS, L.L.C.
By: ______________________________
Name: H. Lynn Massingale
Title: President and Chief Executive Officer
Address: c/o Madison Dearborn Partners
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
FLEET NATIONAL BANK, as Administrative Agent
By: ______________________________
Name: Ginger Stolzenthaler
Title: Senior Vice President
Address: One Federal Street
Boston, MA 02110
[SIGNATURE PAGE TO HOLDINGS PLEDGE AGREEMENT]
<PAGE> 241
EXHIBIT A
TO
PLEDGE AGREEMENT
IRREVOCABLE PROXY
KNOW ALL MEN BY THESE PRESENTS that, the undersigned does hereby make,
constitute and appoint FLEET NATIONAL BANK, as Administrative Agent (the
"Administrative Agent"), and each of the Administrative Agent's officers and
employees, its true and lawful attorneys, for it and in its name, place and
stead, to act as its proxy in respect of the shares of capital stock (including
Common Stock and Preferred Stock) of TEAM HEALTH, INC., a Tennessee corporation
(hereinafter referred to as the "Corporation"), that the undersigned now or
hereafter may own or hold, including, without limitation, the right, on its
behalf to demand the call by any proper officer of the Corporation pursuant to
the provisions of its Certificate of Incorporation or By-Laws and as permitted
by law of a meeting of its shareholders and at any such meeting of shareholders,
annual, general or special, to vote for the transaction of any and all business
that may come before such meeting, or at any adjournment thereof, including,
without limitation, the right to vote for the sale of all or any part of the
assets of the Corporation and/or the liquidation and dissolution of the
Corporation; giving and granting to its said attorneys full power and authority
to do and perform each and every act and thing whether necessary or desirable to
be done in and about the premises, as fully as it might or could do if
personally present with full power of substitution, appointment and revocation,
hereby ratifying and confirming all that its said attorneys shall do or cause to
be done by virtue hereof.
This Proxy is given to the Administrative Agent and to its officers and
employees in consideration of the credit to be extended to the Corporation by
the Lenders described in a certain Pledge Agreement of even date herewith
between the undersigned and the Administrative Agent (pursuant to which the
undersigned pledged the shares of stock referred to above to the Administrative
Agent as pledgee) and in order to carry out the covenant of the undersigned
contained in such Pledge Agreement, and this Proxy shall not be revocable or
revoked by the undersigned, shall be binding upon the undersigned and its
successors and assigns until the payment in full of all of the Obligations (as
defined in the aforesaid Pledge Agreement) and may be exercised only after the
occurrence and during the continuation of an Event of Default under the Credit
Agreement (as such terms are defined in the aforesaid Pledge Agreement).
IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Proxy
this ___ day of __________.
TEAM HEALTH HOLDINGS, L.L.C.
By: _______________________________
Name:______________________________
Title:_____________________________
<PAGE> 242
EXHIBIT I TO THE
CREDIT AGREEMENT
HOLDINGS GUARANTY
Dated March 12, 1999
From
TEAM HEALTH HOLDINGS, L.L.C.,
as Guarantor,
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
<PAGE> 243
HOLDINGS GUARANTY
HOLDINGS GUARANTY (this "Guaranty"), dated March 12, 1999,
made by TEAM HEALTH HOLDINGS, L.L.C. (the "Guarantor") in favor of the Secured
Parties (as defined in the Credit Agreement referred to below) and Fleet
National Bank, as administrative agent (the "Administrative Agent").
PRELIMINARY STATEMENT. Team Health, Inc., a Tennessee
corporation (the "Borrower"), has entered into a Credit Agreement, dated as of
March 12, 1999 (said Credit Agreement, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used and not otherwise defined herein have
the meanings ascribed to them in the Credit Agreement), with the banks,
financial institutions and other institutional lenders named therein, Fleet
National Bank, as Issuing Bank, as Swing Line Bank, as Co-Arranger and as
Administrative Agent for the Lender Parties (the "Administrative Agent"),
NationsBank, N.A., as Issuing Bank and as Co-Arranger, NationsBanc Montgomery
Securities LLC, as Syndication Agent and Donaldson, Lufkin & Jenrette Securities
Corporation, as Documentation Agent. It is a condition precedent to the making
of Advances by the Lender Parties and the issuance of Letters of Credit by the
Issuing Bank under the Credit Agreement, and to the entry by the Hedge Banks
into Bank Hedge Agreements with the Borrower, from time to time, that the
Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lender Parties to make Advances and Issuing Banks to issue Letters
of Credit under the Credit Agreement, and the Hedge Banks to enter into Bank
Hedge Agreements with the Borrower, from time to time, the Guarantor hereby
agrees as follows:
Section 1. Guaranty; Limitation of Liability.
(a) The Guarantor hereby unconditionally and irrevocably
guarantees the punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of the Borrower or any other Loan
Party now or hereafter existing under the Loan Documents or the Bank Hedge
Agreements, whether for principal, interest, fees, expenses or otherwise (such
Obligations being the "Guaranteed Obligations"), and agrees to pay any and all
reasonable expenses (including counsel fees and expenses) incurred by the
Administrative Agent or any other Secured Party in enforcing any rights under
this Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by the Borrower or any other Loan Party to the
Administrative Agent or any other Secured Party under the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower.
(b) The Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such parties that this Guaranty not constitute a fraudulent
transfer or conveyance for purposes of any Bankruptcy
<PAGE> 244
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal, state or foreign law which may be applicable to this
Guaranty. To effectuate the foregoing intention, the Administrative Agent, the
other Secured Parties and the Guarantor hereby irrevocably agree that the
Obligations of the Guarantor under this Guaranty shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of the Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other guarantor in
respect of the Obligations of such other guarantor under this Guaranty, result
in the Obligations of such guarantor under this Guaranty not constituting a
fraudulent transfer or conveyance. For purposes hereof, "Bankruptcy Law" means
Title 11, U.S. Code, or any similar federal or state law for the relief of
debtors.
(c) Notwithstanding any other provision in this Guaranty to
the contrary, the Administrative Agent, the other Secured Parties and the
Guarantor hereby agree that the obligations of the Guarantor under this Guaranty
shall be limited to the proceeds of any collection, recovery, receipt,
appropriation, realization, or sale of the capital stock of the Borrower pledged
to the Administrative Agent pursuant to the Holdings Pledge Agreement, dated as
of the date hereof, by and between the Guarantor and the Administrative Agent.
In the event that the proceeds of such collection, recovery, receipt,
appropriation, realization, or sale as aforesaid are insufficient to pay all of
the obligations to which the Administrative Agent is legally entitled under this
Guaranty, the Guarantor will not be liable for any deficiency.
Section 2. Guaranty Absolute. The Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any other Secured Party with respect thereto. The
Obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations or any other Obligations of any other Loan Party under
the Loan Documents, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or any other Loan Party or
whether the Borrower or any other Loan Party is joined in any such action or
actions. The liability of the Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional, irrespective of, and the Guarantor
hereby irrevocably waives any defenses (other than payment) it may now or
hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any amendment
or waiver of or any consent to departure from any Loan
2
<PAGE> 245
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the Borrower or
any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan Documents or any
other assets of the Borrower or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to the
Borrower or the Guarantor any information relating to the financial condition,
operations, properties or prospects of any other Loan Party now or in the future
known to any Secured Party (the Guarantor waiving any duty on the part of the
Secured Parties to disclose such information); or
(g) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Administrative Agent or any other Secured Party that might otherwise
constitute a defense available to, or a discharge of, the Borrower, the
Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be refused by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments.
(a) The Guarantor hereby waives promptness, diligence, notice
of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative Agent
or any other Secured Party protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against the
Borrower, the Guarantor or any other Person or any Collateral.
(b) The Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
3
<PAGE> 246
(c) The Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in this
Section 3 are knowingly made in contemplation of such benefits.
Section 4. Subrogation. The Guarantor will not exercise any
rights that it may now or hereafter acquire against the Borrower or any other
guarantor that arise from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Administrative Agent or any other Secured Party against
the Borrower or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Borrower or any other guarantor, directly or indirectly, in cash or other
property or by setoff or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Guaranteed Obligations
and all other amounts payable under this Guaranty and the other Loan Documents
shall have been independently paid in full in cash, all Letters of Credit have
expired or have been terminated or canceled, all Bank Hedge Agreements shall
have expired or terminated and the Commitments shall have expired or terminated.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence at any time prior to the later of (i) the indefeasible payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (ii) the later of (x) the Termination Date, (y) the expiration,
termination or cancellation or all Letters of Credit, and (z) the expiration or
termination of all Bank Hedge Agreements, such amount shall be held in trust for
the benefit of the Administrative Agent and the other Secured Parties and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) the Guarantor
shall make payment to the Administrative Agent or any other Secured Party of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be
indefeasibly paid in full in cash and (iii) the Termination Date shall have
occurred, all Letters of Credit have expired or have been terminated or canceled
and all Bank Hedge Agreements shall have expired or terminated, the
Administrative Agent and the other Secured Parties will promptly, at the
Guarantor's request and expense, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc.
(a) Any and all payments by the Guarantor hereunder shall be
made, in accordance with Section 2.11 of the Credit Agreement, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all
4
<PAGE> 247
liabilities with respect thereto, excluding, in the case of each Secured Party
and the Administrative Agent, net income taxes that are imposed by the United
States and net income taxes (or franchise taxes imposed in lieu thereof) that
are imposed on such Secured Party or the Administrative Agent by the state or
foreign jurisdiction under the laws of which such Secured Party or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Secured Party, net income taxes (or
franchise taxes imposed in lieu thereof) that are imposed on such Secured Party
by the state or foreign jurisdiction of such Secured Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder being hereinafter referred to as "Taxes"). If the Guarantor
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Secured Party or the Administrative Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5) such Secured Party or the Administrative Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Guarantor shall make such deductions and (iii)
the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Guarantor shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or from the execution, delivery or registration
of, performing under, or otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").
(c) The Guarantor shall indemnify each Secured Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 5, imposed on or paid by such Secured Party or the Administrative Agent
(as the case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto, except with
respect to any Secured Party or the Administrative Agent, as the case may be,
for such a liability arising from such Secured Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date on which
such Secured Party or the Administrative Agent, as the case may be, makes
written demand specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes by
or on behalf of the Guarantor, the Guarantor shall furnish to the Administrative
Agent, at its address referred to in Section 11.2 of the Credit Agreement, the
original receipt of payment thereof or a certified copy of such receipt. For
purposes of this subsection (d) and subsection (e), the terms "United States"
and "United States person" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.
5
<PAGE> 248
(e) Each Secured Party that is not a United States Person shall, on or
prior to the date of its execution and delivery of the Credit Agreement in the
case of each Initial Lender or Initial Issuing Bank, as the case may be, and on
the date of the Assignment and Acceptance or other agreement pursuant to which
it became a Secured Party in the case of each other Secured Party, and from time
to time thereafter as requested in writing by the Guarantor or the
Administrative Agent (but only so long thereafter as such Secured Party remains
lawfully able to do so), provide each of the Administrative Agent and the
Guarantor with two (2) original Internal Revenue Service forms 1001 or 4224, as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, the Internal Revenue Code or the Treasury Regulations thereunder,
certifying that such Secured Party is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement. In
addition, each Secured Party shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Secured
Party. Each Secured Party shall promptly notify the Guarantor at any time it
determines that it is no longer in a position to provide any previously
delivered certificates to the Guarantor (or any other form of certification
adopted by the United States taxing authorities for such purpose). If the forms
provided by a Secured Party at the time such Secured Party first becomes a party
to the Credit Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Secured Party provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Secured Party becomes a party to the Credit Agreement, the
Secured Party assignor was entitled to payments under subsection (a) in respect
of United States withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include (in addition to withholding
taxes that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Secured Party assignee on such date. If any form or document referred to in this
subsection (e) and requested by the Guarantor pursuant to this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or 4224, that the Secured Party reasonably considers
to be confidential, the Secured Party shall give notice thereof to the Guarantor
and shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Secured Party has failed to
provide the Guarantor, following the Guarantor's request therefor pursuant to
subsection (e) above, with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Secured Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Secured Party become subject to Taxes because of its failure to deliver a form
required hereunder, the Guarantor shall take such steps as such Secured Party
shall reasonably request to assist such Secured Party to recover such Taxes.
6
<PAGE> 249
(g) Any Secured Party claiming any additional amounts payable pursuant
to this Section 5 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the judgment of such Secured Party, be otherwise
disadvantageous to such Secured Party.
(h) Each Secured Party shall, to the extent it is legally entitled to
do so, deliver to the Guarantor or the Administrative Agent (as the case may be)
such other forms or similar documentation as may be required from time to time
by any applicable law, treaty, rule or regulation in order to establish such
Secured Party's complete exemption from withholding on all payments under this
Agreement.
(i) Without prejudice to the survival of any other agreement of the
Guarantor hereunder or under any other Loan Document, the agreements and
obligations of the Guarantor contained in this Section 5 shall survive the
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the other Loan Documents.
Section 6. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of
this Guaranty that have not been satisfied or waived.
(b) The Guarantor has, independently and without reliance upon
the Administrative Agent or any other Secured Party and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guaranty, and the Guarantor has established adequate
means of obtaining from any other Loan Parties on a continuing basis information
pertaining to (and is now, and on a continuing basis will be, completely
familiar with) the financial condition, operations, properties and prospects of
the Borrower and the other Loan Parties.
Section 7. Covenants. The Guarantor hereby covenants and
agrees that, so long as any part of the Guaranteed Obligations shall remain
unpaid, any Letter of Credit shall be outstanding, any Bank Hedge Agreement
shall not have expired or terminated or any Lender Party shall have any
Commitment, the Guarantor will, unless the Administrative Agent and Required
Lenders shall otherwise consent in writing, perform or observe all of the terms,
covenants and agreements that this Guaranty and the other Loan Documents state
that the Guarantor shall perform or observe.
Section 8. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, and no consent to any departure by the Guarantor
therefrom, shall in any event be
7
<PAGE> 250
effective unless the same shall be in writing and signed by the Administrative
Agent and Required Lenders, and then such waiver or consent shall be effective
only in the specific instance, and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by all of the Lenders (other than any Lender Party which is, at such
time, a Defaulting Lender), (a) further limit the liability of the Guarantor
hereunder or (b) postpone any date fixed for payment hereunder.
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to the Guarantor, addressed to it at the address listed for the
Guarantor on the signature pages hereof, if to the Administrative Agent or any
Lender Party, at its address specified in Section 11.2 of the Credit Agreement,
if to any Hedge Bank, at its address specified in the Bank Hedge Agreement to
which it is a party, or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
notices and other communications shall, when mailed by certified mail, return
receipt requested, telegraphed, telecopied or telexed, be effective three (3)
Business Days after mailing, upon delivery to the telegraph company, upon
transmission by telecopier or upon confirmation by telex answerback,
respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11. Intentionally Omitted
Section 12. Indemnification. Without limitation on any other
Obligations of any Guarantor or the remedies of the Secured Parties under this
Guaranty, the Guarantor shall indemnify, defend and save and hold harmless each
Secured Party from and against, and shall pay on demand, any and all losses,
liabilities, damages, reasonable costs, expenses and charges (including the
reasonable fees and disbursements of such Secured Party's legal counsel)
suffered or incurred by such Secured Party as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Borrower or any other guarantor enforceable against the Borrower or such other
guarantor (as the case may be) in accordance with their terms.
Section 13. Continuing Guaranty; Assignments Under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the indefeasible payment in full in cash of all amounts
payable under this Guaranty, (b) be binding upon the Guarantor, its successors
and assigns and (c) inure to the benefit of and be enforceable by the
Administrative Agent and the other Secured Parties and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Secured Party may assign
8
<PAGE> 251
or otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party by this Guaranty or
otherwise, in each case to the maximum extent provided in Section 11.7 of the
Credit Agreement.
Section 14. Governing Law; Jurisdiction; Waiver of July Trial,
Etc.
(A) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW PRINCIPLES OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401).
(B) THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS OR IS TO BE A PARTY, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH NEW YORK STATE COURT OR IN SUCH FEDERAL COURT LOCATED
WITHIN THE STATE OF NEW YORK. THE GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS GUARANTY SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR
ANY OTHER SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN THE COURTS OF ANY JURISDICTION.
(C) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF, OR RELATING TO, THIS GUARANTY OR ANY OF THE OTHER
LOAN DOCUMENTS TO WHICH IT IS OR IS TO BE A PARTY, IN ANY NEW YORK STATE OR
FEDERAL COURT. THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
9
<PAGE> 252
(D) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE, IN EQUITY OR AT LAW) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
10
<PAGE> 253
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
TEAM HEALTH HOLDINGS, L.L.C.
By:____________________________________
Title: President and Chief Executive Officer
Address: c/o Madison Dearborn Partners
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
[SIGNATURE PAGE TO HOLDINGS GUARANTY]
<PAGE> 254
EXHIBIT J TO THE
CREDIT AGREEMENT
SUBSIDIARY GUARANTY
Dated March 12, 1999
From
THE SUBSIDIARY GUARANTORS NAMED HEREIN
as Guarantors,
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
<PAGE> 255
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY (this "Guaranty"), dated March 12, 1999,
made by each of the Persons listed on the signature pages hereof, and the
Additional Guarantors (as defined in Section 8(b)) (such Persons so listed and
the Additional Guarantors being, each, a "Guarantor", and collectively, the
"Guarantors") in favor of the Secured Parties (as defined in the Credit
Agreement referred to below) and Fleet National Bank, as administrative agent
(the "Administrative Agent").
PRELIMINARY STATEMENT. Team Health, Inc., a Tennessee
corporation (the "Borrower"), has entered into a Credit Agreement, dated as of
March 12, 1999 (said Credit Agreement, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used and not otherwise defined herein have
the meanings ascribed to them in the Credit Agreement), with the banks,
financial institutions and other institutional lenders named therein, Fleet
National Bank, as Issuing Bank, as Swing Line Bank, as Co-Arranger and as
Administrative Agent for the Lender Parties (the "Administrative Agent"),
NationsBank, N.A., as Issuing Bank and as Co-Arranger, NationsBanc Montgomery
Securities LLC, as Syndication Agent and Donaldson, Lufkin & Jenrette Securities
Corporation, as Documentation Agent. It is a condition precedent to the making
of Advances by the Lender Parties and the issuance of Letters of Credit by the
Issuing Bank under the Credit Agreement, and to the entry by the Hedge Banks
into Bank Hedge Agreements with the Borrower, from time to time, that the
Guarantors shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lender Parties to make Advances and Issuing Banks to issue Letters
of Credit under the Credit Agreement, and the Hedge Banks to enter into Bank
Hedge Agreements with the Borrower, from time to time, each Guarantor hereby
agrees as follows:
Section 1. Guaranty; Limitation of Liability.
(a) Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrower or any other Loan Party now or hereafter existing under the Loan
Documents or the Bank Hedge Agreements, whether for principal, interest, fees,
expenses or otherwise (such Obligations being the "Guaranteed Obligations"), and
agrees to pay any and all reasonable expenses (including counsel fees and
expenses) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty. Without limiting the generality of the
foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by the Borrower
or any other Loan Party to the Administrative Agent or any other Secured Party
under the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
1
<PAGE> 256
(b) Each Guarantor, and by its acceptance of this Guaranty,
the Administrative Agent and each other Secured Party, hereby confirms that it
is the intention of all such parties that this Guaranty not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal, state or foreign law which may be applicable to this Guaranty.
To effectuate the foregoing intention, the Administrative Agent, the other
Secured Parties and the Guarantors hereby irrevocably agree that the Obligations
of each Guarantor under this Guaranty shall be limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under this Guaranty, result in the
Obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance. For purposes hereof, "Bankruptcy Law" means Title 11,
U.S. Code, or any similar federal or state law for the relief of debtors.
Section 2. Guaranty Absolute. Each Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any other Secured Party with respect thereto. The
Obligations of each Guarantor under this Guaranty are independent of the
Guaranteed Obligations or any other Obligations of any other Loan Party under
the Loan Documents, and a separate action or actions may be brought and
prosecuted against any Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or any other Loan Party or
whether the Borrower or any other Loan Party is joined in any such action or
actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional, irrespective of, and each Guarantor
hereby irrevocably waives any defenses (other than payment) it may now or
hereafter have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to the Borrower or any of its Subsidiaries or
otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral for all or
2
<PAGE> 257
any of the Guaranteed Obligations or any other Obligations of any other Loan
Party under the Loan Documents or any other assets of the Borrower or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to the
Borrower or any Guarantor any information relating to the financial condition,
operations, properties or prospects of any other Loan Party now or in the future
known to any Secured Party (each Guarantor waiving any duty on the part of the
Secured Parties to disclose such information); or
(g) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Administrative Agent or any other Secured Party that might otherwise
constitute a defense available to, or a discharge of, the Borrower, such
Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be refused by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments.
(a) Each Guarantor hereby waives promptness, diligence, notice
of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative Agent
or any other Secured Party protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against the
Borrower, any Guarantor or any other Person or any Collateral.
(b) Each Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
(c) Each Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in this
Section 3 are knowingly made in contemplation of such benefits.
Section 4. Subrogation. Each Guarantor will not exercise any
rights that it may now or hereafter acquire against the Borrower or any other
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's obligations under this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Administrative Agent or any other Secured Party against
the Borrower or any other guarantor
3
<PAGE> 258
or any Collateral, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Borrower or any other guarantor, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been independently paid in full in cash, all Letters of
Credit have expired or have been terminated or canceled, all Bank Hedge
Agreements shall have expired or terminated and the Commitments shall have
expired or terminated. If any amount shall be paid to a Guarantor in violation
of the preceding sentence at any time prior to the later of (i) the indefeasible
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty and (ii) the later of (x) the Termination Date, (y)
the expiration, termination or cancellation or all Letters of Credit, and (z)
the expiration or termination of all Bank Hedge Agreements, such amount shall be
held in trust for the benefit of the Administrative Agent and the other Secured
Parties and shall forthwith be paid to the Administrative Agent to be credited
and applied to the Guaranteed Obligations and all other amounts payable under
this Guaranty, whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Guaranty thereafter arising. If (i) a Guarantor
shall make payment to the Administrative Agent or any other Secured Party of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be
indefeasibly paid in full in cash and (iii) the Termination Date shall have
occurred, all Letters of Credit have expired or have been terminated or canceled
and all Bank Hedge Agreements shall have expired or terminated, the
Administrative Agent and the other Secured Parties will promptly, at such
Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.
Section 5. Payments Free and Clear of Taxes, Etc.
(a) Any and all payments by any Guarantor hereunder shall be
made, in accordance with Section 2.11 of the Credit Agreement, free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Secured Party and the Administrative Agent, net
income taxes that are imposed by the United States and net income taxes (or
franchise taxes imposed in lieu thereof) that are imposed on such Secured Party
or the Administrative Agent by the state or foreign jurisdiction under the laws
of which such Secured Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Secured
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Secured Party by the state or foreign jurisdiction of such
Secured Party's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder being hereinafter referred to
as "Taxes"). If any Guarantor shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Secured Party or the
Administrative Agent, (i) the sum payable shall
4
<PAGE> 259
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
5) such Secured Party or the Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) such Guarantor shall make such deductions and (iii) such Guarantor
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, each Guarantor shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or from the execution, delivery or registration
of, performing under, or otherwise with respect to, this Agreement (hereinafter
referred to as "Other Taxes").
(c) Each Guarantor shall indemnify each Secured Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 5, imposed on or paid by such Secured Party or the Administrative Agent
(as the case may be) and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto, except with
respect to any Secured Party or the Administrative Agent, as the case may be,
for such a liability arising from such Secured Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date on which
such Secured Party or the Administrative Agent, as the case may be, makes
written demand specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes by
or on behalf of any Guarantor, such Guarantor shall furnish to the
Administrative Agent, at its address referred to in Section 11.2 of the Credit
Agreement, the original receipt of payment thereof or a certified copy of such
receipt. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Secured Party that is not a United States Person shall, on or
prior to the date of its execution and delivery of the Credit Agreement in the
case of each Initial Lender or Initial Issuing Bank, as the case may be, and on
the date of the Assignment and Acceptance pursuant to which it became a Secured
Party in the case of each other Secured Party, and from time to time thereafter
as requested in writing by any Guarantor or the Administrative Agent (but only
so long thereafter as such Secured Party remains lawfully able to do so),
provide each of the Administrative Agent and Guarantors with two (2) original
Internal Revenue Service forms 1001 or 4224, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, the Internal Revenue Code
or the Treasury Regulations thereunder, certifying that such Secured Party is
exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement. In addition, each Secured Party shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Secured Party. Each Secured Party shall promptly
notify the Guarantors at any time it determines that it is no longer in a
position to provide any previously
5
<PAGE> 260
delivered certificates to the Guarantors (or any other form of certification
adopted by the United States taxing authorities for such purpose). If the forms
provided by a Secured Party at the time such Secured Party first becomes a party
to the Credit Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Secured Party provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Secured Party becomes a party to the Credit Agreement, the
Secured Party assignor was entitled to payments under subsection (a) in respect
of United States withholding tax with respect to interest paid at such date,
then, to such extent, the term Taxes shall include (in addition to withholding
taxes that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Secured Party assignee on such date. If any form or document referred to in this
subsection (e) and requested by a Guarantor pursuant to this subsection (e)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or 4224, that the Secured Party reasonably considers
to be confidential, the Secured Party shall give notice thereof to such
Guarantor and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Secured Party has failed to
provide any Guarantor, following such Guarantor's request therefor pursuant to
subsection (e) above, with the appropriate form described in subsection (e)
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e)), such Secured Party shall not be entitled
to indemnification under subsection (a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should a
Secured Party become subject to Taxes because of its failure to deliver a form
required hereunder, such Guarantor shall take such steps as such Secured Party
shall reasonably request to assist such Secured Party to recover such Taxes.
(g) Any Secured Party claiming any additional amounts payable pursuant
to this Section 5 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Eurodollar Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the judgment of such Secured Party, be otherwise
disadvantageous to such Secured Party.
(h) Each Secured Party shall, to the extent it is legally entitled to
do so, deliver to the Guarantors or the Administrative Agent (as the case may
be) such other forms or similar documentation as may be required from time to
time by any applicable law, treaty, rule or regulation in order to establish
such Secured Party's complete exemption from withholding on all payments under
this Agreement.
6
<PAGE> 261
(i) Without prejudice to the survival of any other agreement of each
Guarantor hereunder or under any other Loan Document, the agreements and
obligations of each Guarantor contained in this Section 5 shall survive the
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guaranty and the other Loan Documents.
Section 6. Representations and Warranties. The Guarantors
hereby jointly and severally represent and warrant as follows:
(a) There are no conditions precedent to the effectiveness of
this Guaranty that have not been satisfied or waived.
(b) Each Guarantor has, independently and without reliance
upon the Administrative Agent or any other Secured Party and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty, and each Guarantor has
established adequate means of obtaining from any other Loan Parties on a
continuing basis information pertaining to (and is now, and on a continuing
basis will be, completely familiar with) the financial condition, operations,
properties and prospects of the Borrower and the other Loan Parties.
Section 7. Covenants. Each Guarantor hereby covenants and
agrees that, so long as any part of the Guaranteed Obligations shall remain
unpaid, any Letter of Credit shall be outstanding, any Bank Hedge Agreement
shall not have expired or terminated or any Lender Party shall have any
Commitment, such Guarantor will, unless the Administrative Agent and Required
Lenders shall otherwise consent in writing, perform or observe all of the terms,
covenants and agreements that this Guaranty and the other Loan Documents state
that such Guarantor shall perform or observe.
Section 8. Amendments, Etc. (a) No amendment or waiver of any
provision of this Guaranty, and no consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent and Required Lenders, and then such
waiver or consent shall be effective only in the specific instance, and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party which is, at such time, a Defaulting Lender), (a) limit the
liability of any Guarantor hereunder or (b) postpone any date fixed for payment
hereunder.
(b) Upon the execution and delivery by any Person of a
supplemental guaranty in substantially the form of Exhibit A hereto (each a
"Guaranty Supplement"), such Person shall be referred to as an "Additional
Guarantor" and shall be and become a Guarantor for all purposes hereunder and
each reference in this Guaranty to a "Guarantor" shall also mean and be a
reference to such Additional Guarantor and each reference in any other Loan
Document to a "Guarantor" or "Subsidiary Guarantor" shall also mean and be a
reference to such Additional Guarantor.
7
<PAGE> 262
Section 9. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to it, if to a Guarantor, addressed to it at the address listed for such
Guarantor on the signature pages hereof (or in the applicable Guaranty
Supplement), if to the Administrative Agent or any Lender Party, at its address
specified in Section 11.2 of the Credit Agreement, if to any Hedge Bank, at its
address specified in the Bank Hedge Agreement to which it is a party, or, as to
any party, at such other address as shall be designated by such party in a
written notice to each other party. All such notices and other communications
shall, when mailed by certified mail, return receipt requested, telegraphed,
telecopied or telexed, be effective three (3) Business Days after mailing, upon
delivery to the telegraph company, upon transmission by telecopier or upon
confirmation by telex answerback, respectively.
Section 10. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any other Secured Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 11. Right of Setoff. Upon the occurrence and during
the continuance of any Event of Default, each Lender Party and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender Party or such Affiliate to
or for the credit or the account of any Guarantor against any and all of the
Obligations of such Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender Party shall have made any demand under this Guaranty
and although such Obligations may be unmatured. Each Lender Party agrees
promptly to notify such Guarantor after any such setoff and application;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender Party and its
Affiliates under this Section are in addition to the other rights and remedies
(including, without limitation, other rights of setoff) that such Lender Party
and its respective Affiliates has.
Section 12. Indemnification. Without limitation on any other
Obligations of any Guarantor or the remedies of the Secured Parties under this
Guaranty, each Guarantor shall indemnify, defend and save and hold harmless each
Secured Party from and against, and shall pay on demand, any and all losses,
liabilities, damages, reasonable costs, expenses and charges (including the
reasonable fees and disbursements of such Secured Party's legal counsel)
suffered or incurred by such Secured Party as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Borrower or any other Guarantor enforceable against the Borrower or such other
Guarantor (as the case may be) in accordance with their terms.
Section 13. Continuing Guaranty; Assignments Under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the indefeasible payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this
8
<PAGE> 263
Guaranty, (b) be binding upon each Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Administrative Agent and the
other Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Secured Party
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and the Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party by
this Guaranty or otherwise, in each case to the maximum extent provided in
Section 11.7 of the Credit Agreement.
Section 14. Governing Law; Jurisdiction; Waiver of July Trial,
Etc.
(A) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW PRINCIPLES OTHER THAN GENERAL OBLIGATIONS LAW SECTION 5-1401).
(B) EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS OR IS TO BE A PARTY, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR IN SUCH FEDERAL COURT LOCATED
WITHIN THE STATE OF NEW YORK. EACH GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS GUARANTY SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR
ANY OTHER SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS OR
IS TO BE A PARTY IN THE COURTS OF ANY JURISDICTION.
(C) EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF, OR RELATING TO, THIS GUARANTY OR ANY OF THE OTHER
LOAN DOCUMENTS TO WHICH IT IS OR IS TO BE A PARTY, IN ANY NEW YORK STATE OR
FEDERAL COURT. EACH GUARANTOR
9
<PAGE> 264
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT.
(D) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE, IN EQUITY OR AT LAW) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS
OF THE ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
10
<PAGE> 265
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
CLINIC MANAGEMENT SERVICES, INC.
EMERGICARE MANAGEMENT, INCORPORATED
HOSPITAL BASED PHYSICIAN SERVICES, INC.
TEAM RADIOLOGY, INC.
By:________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
ALLIANCE CORPORATION
CHARLES L. SPRINGFIELD, INC.
CLINIC MANAGEMENT SERVICES, INC.
DANIEL & YEAGER, INC.
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
EMERGENCY COVERAGE CORPORATION
EMERGENCY MANAGEMENT SPECIALISTS, INC.
EMERGENCY PHYSICIAN ASSOCIATES, INC.
EMERGENCY PHYSICIANS OF MANATEE, INC.
EMERGENCY PROFESSIONAL SERVICES, INC.
INPHYNET CONTRACTING SERVICES, INC.
INPHYNET JOLIET, INC.
INPHYNET LOUISIANA, INC.
INPHYNET SOUTH BROWARD, INC.
HERSCHEL FISCHER, INC.
IMBS, INC.
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
INPHYNET HOSPITAL SERVICES, INC.
INPHYNET MEDICAL MANAGEMENT INSTITUTE,
INC.
KARL G. MANGOLD, INC.
MED: ASSURE SYSTEMS, INC.
METROAMERICAN RADIOLOGY, INC.
NEO-MED, INC.
NORTHWEST EMERGENCY PHYSICIANS
INCORPORATED
PARAGON ANESTHESIA, INC.
PARAGON CONTRACTING SERVICES, INC.
PARAGON IMAGING CONSULTANTS, INC.
QUANTUM PLUS, INC.
[SIGNATURE PAGE TO SUBSIDIARY GUARANTY]
<PAGE> 266
REICH, SEIDELMANN & JANICKI CO.
ROSENDORF MARGULIES BORUSHOK SCHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
SARASOTA EMERGENCY MEDICAL CONSULTANTS,
INC.
SOUTHEASTERN EMERGENCY PHYSICIANS OF
MEMPHIS, INC.
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
TEAM HEALTH FINANCIAL SERVICES, INC.
THBS, INC.
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
VIRGINIA EMERGENCY PHYSICIANS, INC.
By:_________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
FISCHER MANGOLD PARTNERSHIP
By: Herschel Fischer, Inc., its general partner
Karl G. Mangold, Inc., its general partner
By:___________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
MT. DIABLO EMERGENCY PHYSICIANS, a California
General Partnership
By: Herschel Fischer, Inc., its general partner
Karl G. Mangold, Inc., its general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
PARAGON HEALTHCARE LIMITED PARTNERSHIP
By: InPhyNet Hospital Services, Inc.,
its sole general partner
[SIGNATURE PAGE TO SUBSIDIARY GUARANTY]
<PAGE> 267
By:____________________________________________
Name: H. Lynn Massingale
Title: Vice President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH BILLING SERVICES, L.P.
By: Team Health, Inc.,
its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
TEAM HEALTH SOUTHWEST L.P.
By: Team Radiology, Inc.,
its sole general partner
By:____________________________________________
Name: H. Lynn Massingale
Title: President
Address: 1900 Winston Road
Knoxville, TN 37919
[SIGNATURE PAGE TO SUBSIDIARY GUARANTY]
<PAGE> 268
EXHIBIT A
FORM OF GUARANTY SUPPLEMENT
__________, _____
Fleet National Bank, as Administrative Agent
One Federal Street
Boston, Massachusetts 02110
Attention: Corporate Banking Group
Re: Credit Agreement, dated as of March __, 1999, among Team
Health Inc., a Tennessee corporation (the "Borrower"), the
banks, financial institutions and other institutional lenders
named therein, Fleet National Bank, as Issuing Bank, as Swing
Line Bank, as Co-Arranger and as Administrative Agent for the
Lender Parties (the "Administrative Agent"), Nationsbank,
N.A., as Issuing Bank and as Co-Arranger, Nationsbanc
Montgomery Securities LLC, as Syndication Agent and Donaldson,
Lufkin & Jenrette Securities Corporation, as Documentation
Agent (the "Credit Agreement").
Ladies and Gentlemen:
Reference is made to the above-defined Credit Agreement and to
the Guaranty referred to therein (such Guaranty, as in effect on the date hereof
and as it may hereafter be amended, modified, restated or supplemented from time
to time, (the "Guaranty"). Capitalized terms used and not otherwise defined
herein have the meanings ascribed to them in the Guaranty.
The undersigned hereby, jointly and severally, unconditionally
and irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all of the Guaranteed Obligations and
agrees to pay any and all reasonable expenses (including reasonable counsel fees
and expenses) incurred by the Administrative Agent or any other Secured Party on
the terms set forth in the Guaranty as if it were an original party thereto. On
and after the date hereof, each reference in the Guaranty to "Guarantor" shall
also mean and be a reference to the undersigned.
The undersigned hereby agrees to be bound as a Guarantor by
all of the terms and provisions of the Guaranty to the same extent as each other
Guarantor.
<PAGE> 269
THIS GUARANTY SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
ITS CONFLICT OF LAWS PRINCIPLES).
THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE, IN EQUITY OR AT LAW) ARISING OUT OF THE LOAN DOCUMENTS, THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL
GUARANTOR]
By:_________________________________
Title: _____________________________
Address: ___________________________
___________________________
<PAGE> 1
Exhibit 10.9
SHEER, AHEARN AND ASSOCIATES, INC.
PLAN PROVISION
NONQUALIFIED EXCESS DEFERRAL PLAN
EFFECTIVE: SEPTEMBER 1, 1998
ARTICLE I - PURPOSE OF PLAN
1.1. PURPOSE OF PLAN. The Company intends and desires by the adoption of
this Plan to recognize the value to the Company of the past and present
services of Eligible Employees covered by the Plan and to encourage and
assure their continued service with the Company by making additional
provisions for their future retirement security.
This Plan is adopted to provide certain key management or highly
compensated employees of Sheer, Ahearn and Associates, Inc. the
opportunity to accumulate deferred compensation in addition to amounts
accumulated in qualified plans.
ARTICLE II - DEFINITIONS
2.1. ACCOUNTS means the accounts maintained under this Plan on the books of
the Company to measure the benefit of an Eligible Employee.
2.1. BOARD means the Board of Directors of the Sheer, Ahearn and Associates,
Inc.
2.2. CODE means the Internal Revenue Code of 1986, as amended.
2.3. COMMITTEE means the Compensation Committee appointed by the Board.
2.4. COMPANY means Sheer, Ahearn and Associates, Inc. or any company that is
a successor as a result of merger, consolidation, liquidation, transfer
of assets or other reorganization.
2.5. ELIGIBLE EMPLOYEE means, for any Plan year, an employee of the Company
who is a member of a select group of management or highly compensated
employees as determined by the Company.
2.6. PLAN means the Sheer, Ahearn and Associates, Inc. Nonqualified Excess
Deferral Plan.
2.7. PLAN YEAR means the twelve (12) month period ending each December 31
during which the Plan is in effect.
2.8. NONQUALIFIED EXCESS DEFERRAL ACCOUNT means the account on the
books of the Company to which an Eligible Employee's salary deferrals
under Section 3.1, plus earnings, are credited.
<PAGE> 2
ARTICLE III - SALARY REDUCTION CONTRIBUTIONS
3.1. An Eligible Employee may, for any Plan Year in which he or she is an
Eligible Employee, elect to defer base salary or bonuses from the
Company equal to a whole percentage or specified dollar amount of his
or her base salary or bonus per payroll period. The minimum deferral
that may be made during a Plan Year is $5,000; the maximum deferral
that may be made during any Plan Year is $200,000. Eligible Employee
does so by completing the Enrollment Form and Beneficiary Election
Form. Salary reduction elections for existing employees under this Plan
must be made before the beginning of the Plan Year to which they apply.
New employees to the company are eligible to participate the first
quarter subsequent to their hire date. Once a Plan Year begins, salary
reduction elections for that year under this Plan may not be amended or
revoked, nor may salary reductions be suspended. The company will
credit to each Eligible Employee's Nonqualified Excess Deferral Account
the amount of that Eligible Employee's salary reduction under this
section.
3.2. Contribution amounts may be changed prior to the beginning of the next
Plan Year but the salary reduction may not be less than the minimum
amount as described in Section 3.1.
ARTICLE IV - VESTING
4.1. SALARY DEFERRALS. An Eligible Employee shall always be one hundred
percent (100%) vested in amounts credited to his or her Nonqualified
Excess Deferral Account.
ARTICLE V - ACCOUNTS
5.1. ACCOUNTS. The Company will maintain on its books an Account for each
Eligible Employee, to which shall be credited, as appropriate, salary
reduction contributions under Section 3.1 and earnings as provided in
Section 6.5.
ARTICLE VI - PAYMENT OF BENEFITS
6.1. PAYMENT OF BENEFITS. The benefit payable under this Plan on account of
an Eligible Employee's termination of employment, retirement,
disability, or death shall be paid out based upon his or her payout
schedule, as elected on the Enrollment Form prior to starting
deferrals. Upon the earlier of such termination of employment,
retirement, disability or death, payments shall start within sixty (60)
days after the triggering event. All payments provided for in this Plan
shall be made in conformity with the regular payroll procedures in use
by the Company at the time of payment. Any death benefit payable under
this Plan shall be payable to the beneficiary or beneficiaries listed
on the Beneficiary Election Form.
-2-
<PAGE> 3
6.2. DEFERRAL OF PAYMENTS. The Employee may elect to defer receipt of
retirement benefits by making an election before the first day of the
Plan year before the year he/she would receive benefits.
6.3. HARDSHIP WITHDRAWAL. A participant may at anytime after completion of
twelve months participation in the Plan apply in writing to the
Committee for a single-sum distribution of that portion of such
Employee's Accrued Balance necessary to relieve an immediate financial
need resulting from an Unforeseeable Emergency. Whether, and the extent
to which, the Employee has incurred an Unforeseeable Emergency shall be
determined by the Committee in its sole discretion. The minimum
hardship withdrawal shall be $5,000, and the maximum shall be the
amount necessary to relieve the immediate financial need resulting from
the unforeseeable emergency. An Employee who receives a Hardship
Withdrawal shall not be eligible to make deferrals under the Plan until
the beginning of the next Plan year, or if the beginning of the next
Plan year is less than six months from the effective date of the
withdrawal, until the expiration of such six-month period.
6.4. DISABILITY BENEFITS. The Employee shall be deemed to have become
disabled for purposes of this Plan if the Committee shall find, on the
basis of medical evidence satisfactory to it, that the Employee is so
totally mentally or physically disabled as to be unable to engage in
further employment, and that such disability shall be permanent and
continuous during the remainder of his or her life. No disability
payments under this Plan will be paid until benefits from all other
sources of Employer Sponsored and Employee- owned Disability Income
Insurance are accessed and in the process of paying benefits as
described by each applicable contract.
6.5. EARNINGS BASED ON DEEMED INVESTMENT. At the end of each calendar
quarter, each Account will be adjusted, with either an increase or a
decrease, to reflect earnings on the Account during the quarter. The
Account will be adjusted to reflect the investment return under the
Eligible Employee's election for deemed investment (noted an the
Enrollment Form). Interest for a quarter will be credited or debited
only on Accounts which are on the books of the Company at the end of
the quarter, and accounts which are distributed in full during a
quarter will not be credited with earnings for that quarter. The return
credited or debited to the account is only a measuring device and does
not reflect that the Employee has any right to any assets owned by the
Company.
ARTICLE VII - ADMINISTRATION
7.1. COMMITTEE. The Committee shall administer, construe, and interpret this
Plan and shall determine, subject to the provisions of this Plan, the
Eligible Employees who shall participate in the Plan from time to time
and the amount, if any, due an Eligible Employee (or his at her
beneficiary) under this Plan. No member of the Committee shall be
liable for any act done or determination made in good faith. No member
of the Committee who is a participant in this Plan may vote on matters
affecting his or her personal benefit under this Plan, but any such
member shall otherwise be fully entitled to
-3-
<PAGE> 4
act in matters arising out of or affecting this Plan notwithstanding
his or her participation herein. In carrying out its duties herein, the
Committee shall have discretionary authority to exercise all powers and
to make all determinations, consistent with the terms of the Plan, in
all matters entrusted to it, and its determinations shall be given
deference and shall be final and binding on all interested parties.
7.2. CLAIMS PROCEDURE. The following claims procedure shall apply to the
Plan:
a. FILING OF A CLAIM FOR BENEFITS. The Employee or the
beneficiaries of the Plan shall make a claim for the benefits
provided under the Plan in the manner provided in the Plan.
b. CLAIM APPROVAL OR DENIAL WITH RESPECT TO PLAN BENEFITS. With
respect to a claim for benefits, the Plan Administrator shall
review and make decisions on claims for benefits. The Plan
Administrator shall have complete and sole discretionary
authority to determine eligibility for benefits and to
construe the terms of the Plan.
c. NOTIFICATION TO CLAIMANT OF DECISION. If a claim is wholly or
partially denied, notice of the decision, meeting the
requirements of paragraph d. following, shall be furnished to
the claimant within a reasonable period of time after the
claim has been filed.
d. CONTENT OF NOTICE. The Plan Administrator shall provide to any
claimant whose claim for benefits is denied in whole or in
part a written notice setting forth, in a manner calculated to
be understood by the claimant, the following:
(1) the specific reason or reasons for the denial or
partial denial;
(2) specific reference to pertinent Plan provisions on
which the denial is based;
(3) a description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and,
(4) an explanation of the Plan's claim review procedure,
as set forth in paragraphs e. and f. following.
e. REVIEW PROCEDURE. The purpose of the review procedure set
forth in this paragraph and in paragraph f. following is to
provide a procedure by which a claimant under the Plan may
have a reasonable opportunity to appeal a denial or partial
denial of a claim and request a full and fair review. To
accomplish that purpose, the claimant or a duly authorized
representative:
-4-
<PAGE> 5
(1) may request a review by written application to the
Plan Administrator;
(2) may review pertinent Plan documents or agreements;
and,
(3) may submit issues and comments in writing.
A claimant (or duly authorized representative) shall request a
review at any time within sixty (60) days by filing a written
application after receipt by the claimant of written notice of
the denial of his or her claim.
f. DECISION ON REVIEW. A decision on review of a denial of a
claim shall be made in the following manner.
(1) The decision on review shall be made by the Plan
Administrator, which may in his or her discretion
hold a hearing on the denied claim. The Plan
Administrator shall make his or her decision
promptly, unless special circumstances (such as the
need to hold a hearing) require an extension of time
for processing, in which case a decision shall be
rendered as soon as possible, but no later than one
hundred twenty (120) days after receipt of the
request for review.
(2) The decision on review shall be in writing, and shall
include specific reasons for the decision, written in
a manner calculated to be understood by the claimant,
and specific references to the pertinent Policy or
Plan provisions on which the decision is based.
g. IMPLEMENTATION. For purposes of implementing this claims
procedure, the Committee is hereby designated as Plan
Administrator of this Plan and Agreement.
ARTICLE VIII - MISCELLANEOUS PROVISIONS
8.1. LIMITATION OF RIGHTS. Nothing contained in this Plan shall be construed
to:
(a) Limit in any way the right of the Company to terminate an
Eligible Employee's employment at any time; or
(b) Be evidence of any agreement or understanding, express or
implied, that the Company will employ an Eligible Employee in
any particular position or at any particular rate of
remuneration.
8.2. NONALIENATION OF BENEFITS; NO WITHDRAWALS. No amounts payable
hereunder may be assigned, pledged, mortgaged, or hypothecated, and, to
the extent permitted by law, no such amounts shall be subject to legal
process or attachment of the payment of any claims against any person
entitled to receive the same. No amounts
-5-
<PAGE> 6
credited to an Eligible Employee's account[s] may be withdrawn or paid
to the Eligible Employee prior to his or her termination of employment.
8.3. AMENDMENT OR TERMINATION OF PLAN. Although it is expected that this
Plan shall continue indefinitely, the Board may amend this Plan from
time to time in any respect, and may at any time terminate the Plan in
its entirety; provided, however, that an Eligible Employee's account[s]
as of the date of any such amendment or termination may not be reduced
nor may any such amendment or termination adversely affect an Eligible
Employee's entitlement to his or her account[s] as of such date.
8.4. ACCELERATION OF BENEFITS BASED ON COMPANY'S FINANCIAL
HARDSHIP. If the Executive Management Committee or some other committee
duly appointed by the Board of Directors of the Corporation to
supervise the Plan deems that MedPartners, Inc. or any other owner of
the company is financially insecure, illiquid or in any way unable to
pay its debts and in particular its obligations under this Plan, then
the Employee's Deferred Compensation Account will immediately vest and
be made payable as an immediate payment at the discretion of the
participant, in the Employee and the Company shall credit 100% to the
deferred book reserve.
8.5. CONSTRUCTION OF PLAN. This Plan is unfunded. The obligations of the
Company with respect to the amounts payable hereunder shall be paid out
of the Company's general assets and shall not be secured by any form of
trust, escrow, or otherwise. This provision shall not require the
Company to set aside any funds, but the Company may set aside such
funds if it chooses to do so. This Plan shall be so construed that it
will be "unfunded" and maintained "primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employees," as those terms are used in the Employee
Retirement Income Security Act of 1974.
8.6. INCAPACITY OF BENEFICIARY. If the Company shall find that any person to
whom any payment is payable under this Plan is unable to care for his
or her affairs because of illness or accident or is a minor, any
payment due (unless a prior claim thereof shall have been made by a
duly appointed guardian, committee, or other legal representative) may
be paid to the spouse, child, parent, or brother or sister, or to any
person deemed by the Company to have incurred expense for such person
otherwise entitled to payment, in accordance with the applicable
provision of this Plan. Any such payment shall be a complete discharge
of the Company's liabilities under this Plan.
8.7. SEVERABILITY. If the Internal Revenue Service shall at any time
interpret this Plan to be ineffective with regard to deferral of the
Employee's income, and that interpretation becomes final and is not
appealed, then only those amounts in the account[s] which would be
treated as currently taxable income by the Service at the time of such
final interpretation shall be paid over to the Employee. All other
assets shall be distributed to the Employee according to the Enrollment
and Beneficiary Election Form.
-6-
<PAGE> 7
8.8. NOTICE. Any notice to be delivered under this Plan shall be given in
writing and delivered, personally or by certified mail, postage
prepaid, addressed to the Company at its last known address.
8.9. NONWAIVER. No delay or failure by either party to exercise any right
under this Plan, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right.
8.10. GENDER AND NUMBER. Wherever used in this Plan, the masculine shall be
deemed to include the feminine and the singular shall be deemed to
include the plural, unless the context clearly indicates otherwise.
8.11. LAW GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Florida to the extent such laws
are not preempted by federal law.
8.12. BINDING EFFECT. This Plan shall be binding upon the parties hereto,
their heirs, assigns, successors, executors, and administrators. In the
event the Company becomes a party to any merger, sale, consolidation,
or reorganization, this Plan shall remain in full force and continue to
be offered as a benefit for the class of employees for which it is
intended. The continuation of this Plan shall remain as an obligation
of the Company or its successors in interest.
ATTEST/WITNESS Sheer, Ahearn and Associates, Inc.
Witness: /s/ Christopher P. Davis By: /s/ H. Kirby Blankenship
Title: President
Print Name: Christopher P. Davis Print Name: H. Kirby Blankenship
Date: February 25, 1999
-7-
<PAGE> 1
EXHIBIT 10.10
AMENDMENT AND RESTATEMENT OF
EMERGENCY PROFESSIONAL SERVICES, INC.
DEFERRED COMPENSATION PLAN
Effective as of January 31, 1996
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
CONDITION PRECEDENT AND PURPOSE................................1
ARTICLE II
DEFINITIONS....................................................1
ARTICLE III
PAYMENT OF BENEFITS............................................4
ARTICLE IV
FORFEITURES....................................................6
ARTICLE V
ADMINISTRATION.................................................7
ARTICLE VI
AMENDMENT AND TERMINATION......................................7
ARTICLE VII
MISCELLANEOUS..................................................7
EXHIBIT A.................................................................10
-i-
<PAGE> 3
ARTICLE I
CONDITION PRECEDENT AND PURPOSE
1.1 This Amendment and Restatement of the Emergency Professional
Services, Inc. Deferred Compensation Plan shall be effective as of January 31,
1996, but only upon approval of the shareholder of Emergency Professional
Services, Inc.
1.2 This Deferred Compensation Plan is adopted and amended and
restated by Emergency Professional Services, Inc., in the form of an unfunded
deferred compensation arrangement for a select closed group of key individuals,
to fulfill certain incentive commitments made to said individuals to continue in
employment or contract arrangements with or for the benefit of the Company and
as a means of compensating those persons of outstanding abilities who were
instrumental in developing new ideas and in ensuring the growth of the Company
and upon whom the future success of the Company's business largely depended.
ARTICLE II
DEFINITIONS
Unless the context otherwise indicates, the following terms shall
have the meanings set forth below whenever used in this document:
2.1 The words "Account Balance" shall mean, for any Participant at
any point in time, up to and including the Participant's Determination Date, an
amount (expressed in United States dollars) which shall be the sum of (a) plus
(b), where:
(a) equals the Participant's January 31, 1996 Account
Balance; and
(b) equals any forfeitures allocated to the Participant
pursuant to Section 4.2.
2.2 The words "Active Participant" shall mean, with respect to any
Service Year, a Participant who both completes a Year of Service with respect to
such Service Year and is a Covered Physician on the last day of the Service
Year.
2.3 The word "Affiliate" shall mean:
(a) for periods prior to the Closing Date, any person that,
directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with the Company, including any
corporation or unincorporated trade or business which is
a member of an affiliated service group (within the
meaning of 26 U.S.C. Section 414(m)) which includes the
Company; and
(b) with respect to periods on and after the Closing Date,
any person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is
under common control with MedPartners/Mullikin including
any corporation which is a
-1-
<PAGE> 4
member of a controlled group of corporations (within the
meaning of 26 U.S.C. Section 1563(a)) which includes
MedPartners/Mullikin.
2.4 The word "Age" shall mean for any Participant his or her actual
attained age in full years.
2.5 The word "Beneficiary" shall mean any person who is designated
to receive payment of any benefit under the terms of the Plan following a
Participant's death.
2.6 The words "Benefit Amount" shall mean for any Participant an
amount, determined as of the Participant's Determination Date, which shall be
equal to the product of (a) multiplied by (b), where:
(a) equals the Participant's Account Balance; and
(b) equals the Participant's Vested Percentage.
2.7 The words "Closing Date" shall mean the date of the Merger.
2.8 The word "Company" shall mean Emergency Professional Services,
Inc. (f/k/a Emergency Professional Services of Ohio, Inc.), an Ohio corporation,
or any successor to the Company's business and/or obligations hereunder.
2.9 The words "Covered Physician" shall mean a Participant who is a
licensed physician who, pursuant to a contractual arrangement (whether as an
employee or an independent contractor), provides medical services in connection
with the business of the Company or an Affiliate, whether personally or through
the medium of a professional corporation or other controlled entity. A person
shall cease to be a Covered Physician at such time as he or she ceases to
perform medical services in connection with the business of the Company or an
Affiliate pursuant to such a contractual arrangement.
2.10 The words "Determination Date" shall mean for any Participant
the first to occur of either (a) the date the Participant ceases to be a Covered
Physician or (b) the date the Participant receives the first payment of his or
her Benefit Amount pursuant to Section 3.3.
2.11 The word "Hour" shall mean for any Covered Physician an hour
during which the Covered Physician either was on active duty in a hospital
emergency room in Participant's capacity as a Covered Physician or performed
executive and/or administrative functions on behalf of the Company or an
Affiliate, and for which Participant was directly or indirectly-paid or entitled
to payment by the Company or an Affiliate.
2.12 The words "January 31, 1996 Account Balance" shall mean, for
any Participant, the amount set forth opposite Participant's name on Exhibit 1,
attached to the Emergency Professional Services, Inc. Board Resolution approving
this Plan amendment and restatement.
-2-
<PAGE> 5
2.13 The words "MedPartners/Mullikin" shall mean
MedPartners/Mullikin, Inc., a Delaware corporation, which owns, directly or
indirectly, all of the issued and outstanding stock of the Company.
2.14 The word "Merger" shall mean a transaction pursuant to which
MedPartners/Mullikin became the beneficial owner, directly or indirectly, of all
of the issued and outstanding stock of the Company.
2.15 The word "Participant" shall mean any person whose name is set
forth on Exhibit A, attached hereto and no one else.
2.16 The word "Plan" shall mean this document, as originally
executed and as it may be later amended, and/or the arrangement created by this
document. The word "Plan" shall also mean, as the context may require, the
Emergency Professional Services, Inc. Deferred Compensation Plan as it existed
prior to the Closing Date.
2.17 The words "Service Year" shall mean either:
(a) in respect of periods ending on or before January 31, 1996, the
twelve (12) month period ending on January 31 in any calendar
year; or
(b) the eleven (11) month period beginning on February 1, 1996 and
ending on December 31, 1996; or
(c) in respect of periods commencing after December 31, 1996, the
calendar year, commencing with 1997.
2.18 The words "Total and Permanent Disability" shall mean any
physical or mental ailment which continuously disables and wholly prevents a
Participant from performing Participant's duties as a Covered Physician and
which is expected to be of a permanent duration; except that no Participant
shall be deemed to be totally and permanently disabled if such disability was
(a) contracted, suffered or incurred while the Participant was engaged in, or
resulted from Participant having engaged in, a criminal act or enterprise, or
(b) resulted from Participant's habitual drunkenness or addiction to narcotics,
or (c) resulted from an intentionally self-inflicted injury. The Company shall
determine in good faith whether a Participant is Totally and Permanently
Disabled and, to assist it in making such determination, may require any
Participant to submit to appropriate medical examination and tests at the
Company's expense.
2.19 The words "Vested Percentage" shall mean for any Participant a
percentage determined on the basis of Participant's number of Years of Service
in accordance with the following table:
-3-
<PAGE> 6
<TABLE>
<CAPTION>
YEARS OF SERVICE VESTED PERCENTAGE
---------------- -----------------
<S> <C>
Less than 6 0%
6 but less than 7 10%
7 but less than 8 20%
8 but less than 9 30%
9 but less than 10 40%
10 but less than 11 50%
11 but less than 12 60%
12 but less than 13 70%
13 but less than 14 80%
14 but less than 15 90%
15 or more 100%
</TABLE>
Notwithstanding the foregoing provisions of this Section 2.19:
(a) any Participant who has at least six (6) Years of Service and
the sum of whose Age and Years of Service (in full years), at
the time the Participant ceases to be a Covered Physician, is
at least seventy (70) will have a Vested Percentage of 100%
(b) any Participant who dies while he is a Covered Physician will
have a Vested Percentage of 100%; and
(c) any Participant who ceases to be a Covered Physician because of
Total and Permanent Disability will have a Vested Percentage of
100%.
2.20 The words "Year of Service" shall mean for any Participant a
Service Year during which the Participant was credited with at least One
Thousand Four Hundred Forty (1,440) Hours. Notwithstanding the preceding
sentence, if any Service Year is less than twelve (12) months in length, the
number of Hours with which a Participant must be credited in order to complete a
Year of Service shall be determined by multiplying One Thousand Four Hundred
Forty (1,440) by a fraction, the numerator of which is the number of full months
in such Service Year, and the denominator of which is twelve (12).
ARTICLE III
PAYMENT OF BENEFITS
3.1 Upon the occurrence of a Participant's Determination Date, the
Participant's Benefit Amount shall be determined. Such a Participant's Benefit
Amount shall be paid to Participant or Participant's Beneficiary at such time
and in such manner as set forth below in this Article III, but only upon the
execution and delivery to the Company by the Participant or Beneficiary of a
Distribution Election and Acknowledgment in such form as may be prescribed by
Company from time to time.
3.2 A Participant's Benefit Amount shall be paid in sixty (60) equal
monthly payments. Each payment shall be equal to the quotient of (a) divided by
(b), where:
-4-
<PAGE> 7
(a) equals the Participant's Benefit Amount; and
(b) equals sixty (60).
3.3 A Participant who is a Covered Physician may, by giving at least
ten (10) days advance notice to the Company, elect to have payment of the
Benefit Amount commence on the first day of any month following the month in
which the sum of the Participant's Age and Years of Service (in full years)
equals sixty-five (65).
3.4 In the event that a Participant shall cease to be a Covered
Physician for any reason other than death or Total and Permanent Disability and
payment of the Participant's Benefit Amount had not commenced pursuant to
Section 3.3, payment of the Participant's Benefit Amount shall commence on the
later of: (a) the first day of the month next following the month in which the
sum of the Participant's Age and Years of Service (in full years) equals sixty
five (65); or (b) the first day of the month coinciding with or next following
the date the Participant ceases to be a Covered Physician.
3.5 In the event that a Participant shall cease to be a Covered
Physician because of his Total and Permanent Disability and payment of the
Participant's Benefit Amount had not commenced pursuant to Section 3.3, payment
of the Participant's Benefit Amount shall commence as soon as practicable
following the later of (a) the date the Participant ceases to be a Covered
Physician; or (b) the date the Company determines that the Participant ceased to
be a Covered Physician because of his Total and Permanent Disability.
3.6 If a Participant shall die while a Covered Physician and payment
of the Participant's Benefit Amount had not commenced pursuant to Section 3.3,
payment of the Participant's Benefit Amount shall commence to be made to the
Participant's Beneficiary as soon as practicable following the Participant's
death.
3.7 In the event that a Participant shall cease to be a Covered
Physician and shall die prior to the date payment of the Participant's Benefit
Amount has commenced, payment of the Participant's Benefit Amount shall commence
to be made to the Participant's Beneficiary as soon as practicable following the
Participant's death.
3.8 In the event that a Participant shall die after the date payment
of the Participant's Benefit Amount commenced, the monthly payments specified in
Section 3.2 shall continue to be made to the deceased Participant's Beneficiary
until the total number of monthly payments made to the Participant and the
Participant's Beneficiary combined equal sixty (60).
3.9 The Company, in its sole and absolute discretion, may accelerate
the time of any payment hereunder to any Participant or Beneficiary in such
amounts as it may deem necessary in order to alleviate financial hardship being
suffered or which may be suffered by the Participant or the Beneficiary.
-5-
<PAGE> 8
3.10 Notwithstanding any other provision of this Article III except
as set forth in Section 3.3, no amounts shall be paid hereunder to any
Participant while he is a Covered Physician.
3.11 A Participant may designate in writing, delivered to the
Company prior to Participant's death, the Beneficiary and/or contingent
Beneficiary to receive, in the event of his death, the remaining payments of his
Benefit Amount A Participant may change his designation of Beneficiary at any
time. In the event that upon the death of a Participant, the Beneficiary
designation on file with the Company does not dispose of all of the remaining
payments of his Benefit Amount, or in the event no Beneficiary designation shall
be on file with the Company at the time of the Participant's death, then, to
such extent the remaining payments of his Benefit Amount shall be made to the
Participant's spouse if the Participant's spouse survives the Participant or, if
the spouse does not survive, to the personal representative of the Participant
for distribution as a part of the Participant's estate.
3.12 Notwithstanding any other provision of this Plan, in the event
a Participant directly or indirectly violates any noncompetition provision
contained in any agreement which either the Participant or any professional
corporation which is in whole or in part owned by the Participant has with the
Company or an Affiliate, the Participant and the Participant's Beneficiary shall
forfeit any right either may have to receive any payments pursuant to this Plan.
ARTICLE IV
FORFEITURES
4.1 Upon the occurrence, on or after the Closing Date, of the
Determination Date of a Participant whose Vested Percentage is less than 100%,
an amount shall be forfeited equal to the difference of (a) minus (b), where:
(a) equals the Participant's Account Balance; and
(b) equals the Participant's Benefit Amount.
4.2 The total of all amounts forfeited during a Service Year
pursuant to Section 4.1 shall, as of the last day of the Service Year in which
the forfeiture occurs, be allocated among those Participants who:
(a) were Active Participants in respect of such Service Year; and
(b) had not, as of the last day of such Service Year, commenced to
receive payment of their respective Benefit Amounts.
4.3 Forfeitures shall be allocated among the Active Participants
determined in accordance with Section 4.2, pro rata on the basis of the relative
Account Balances of such Active Participants determined as of the last day of
such Service Year and prior to the allocation of forfeitures in respect of such
Service Year.
-6-
<PAGE> 9
4.4 In the last Service Year of the Plan's existence, forfeitures,
if any, shall be allocated pro rata among those Participant's and Beneficiaries
who receive benefit payments during the last Service Year, based on the amounts
paid in that Service Year.
ARTICLE V
ADMINISTRATION
5.1 The Company, through its officers, shall administer and
interpret this Plan. All decisions of the Company concerning the Plan shall be
made in good faith. Neither any member of the Board of Directors of the Company
nor any officer of the Company nor the shareholder of the Company shall be
liable for any action taken by the Company or determination made by the Company
with respect to the Plan.
ARTICLE VI
AMENDMENT AND TERMINATION
6.1 This Plan was originally effective as of January 31, 1987. It is
amended and restated, effective as of January 31, 1996. The Plan may be further
amended at any time by the Company, through its duly authorized officers.
6.2 This Plan may be terminated at any time by the Company, through
its duly authorized officers.
6.3 Notwithstanding the provisions of Sections 6.1 and 6.2, no such
amendment or termination shall in reduce either: (a) the Account Balance of any
Participant whose Determination Date has occurred; or (b) the Vested Percentage
of any Participant.
ARTICLE VII
MISCELLANEOUS
7.1 No interest shall accrue on any Participant's Account. No
interest shall accrue for delays in payments of benefits in the reasonable, good
faith administration of the Plan, nor in any event for any delays in payments
during the period from January 1, 1996, through May 31, 1997.
7.2 No person other than a Participant or a Participant's
Beneficiary shall be entitled to receive any amounts pursuant to the Plan.
7.3 The undertakings of the Company herein constitute merely the
unsecured promise of the Company to make the payments as provided for herein. No
property of the Company or any Affiliate is or shall be, by reason of this Plan,
held in trust for any Participant, any Beneficiary or any other person, and
neither a Participant nor any Beneficiary nor any other person shall have, by
reason of this Plan, any rights, title or interest of any kind in or to any
property of the Company or any Affiliate. Company's and Plan's liability for
benefits under this Plan shall not exceed a total of $4,568,127, the sum of the
Participant Account Balances as of January 31, 1996.
-7-
<PAGE> 10
7.4 The provisions of this Plan shall be binding upon and inure to
the benefit of any successor of the Company and any Participant and Beneficiary
(including, without limitation, the Participant's estate).
7.5 Except as set forth herein, no rights of any kind under this
Plan shall, without the written consent of the Company, be transferable or
assignable by a Participant, any Beneficiary or any other person, or be subject
to alienation, encumbrance, garnishment, attachment, execution or levy of any
kind, voluntary or involuntary.
7.6 In the event that any provision of the Plan is determined by any
judicial, quasi-judicial or administrative body to be void or unenforceable for
any reason, all other provisions of the Plan shall remain in full force and
effect as if such void or unenforceable provision had never been a part of the
Plan.
7.7 The singular herein shall include the plural, or vice versa,
wherever the context so requires.
7.8 A pronoun in the masculine, feminine, or neuter gender shall be
deemed, where appropriate, to include also the masculine, feminine or neuter
gender.
7.9 If the Company shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, any payment due (unless a prior claim therefor shall
have been made by a duly appointed guardian, committee or other legal
representative) may be paid to such person's spouse, child, parent, or brother
or sister, or to any person deemed by the Company to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Company may determine.
7.10 The Plan shall be construed in accordance with, and governed
by, the laws of the State of Ohio, determined without regard to conflict of laws
rules.
7.11 Nothing herein shall affect the benefit amount due under the
Plan to any person who, prior to the Closing Date, terminated as an "Employee"
(as such term was defined in the prior Plan document). A comprehensive list of
such persons and the amount payable to each such person in accordance with Plan
as it existed prior to the Closing Date is part of Exhibit 1 to the Company
Board resolution approving this amendment and restatement of the Plan. The
amounts due such persons are include in the total stated liability of the
Company under Section 7.3.
-8-
<PAGE> 11
IN WITNESS WHEREOF, Emergency Professional Services, Inc., by its
officers duly authorized, has executed this document as of the 31st day of
January, 1996, effective for all purposes, assuming satisfaction of the
condition precedent set forth in Article I, as of the Closing Date.
EMERGENCY PROFESSIONAL SERVICES,
INC.
By:
-----------------------------
Its:
-----------------------------
MedPartners/Mullikin, Inc., the owner of the Company, hereby consents to the
foregoing amendment and restatement of the Plan, this day of ,
1997.
MEDPARTNERS/MULLIKIN, INC.
By:
-----------------------------
Its:
-----------------------------
-9-
<PAGE> 12
EMERGENCY PROFESSIONAL SERVICES, INC. (CORPORATION)
CERTIFIED COPY OF BOARD OF DIRECTORS' RESOLUTIONS
AMENDING AND RESTATING THE DEFERRED COMPENSATION PLAN
By action of the Board of Directors of the Corporation taken ____________, 1997,
the following resolutions were duly adopted:
WHEREAS, Emergency Professional Services, Inc. ("Corporation") wants
to restate the Corporation's Deferred Compensation Plan ("Plan") to fulfill its
obligations under that certain merger agreement among Corporation and
MedPartners/Mullikin, Inc., which required Corporation to freeze benefit
accruals under the Plan effective as of January 31, 1996; and
WHEREAS, the Plan provides for its amendment upon the action of the
Corporation board of directors, subject to shareholder approval of any such
amendment; and
WHEREAS, the only Participants in the Plan and their Account
Balances and Vested Percentages as of January 3 1, 1996, and the only prior Plan
Participants due benefits under the Plan as of January 31, 1996, and the amount
and beginning date for payment, are shown on Exhibit 1.
RESOLVED, that the Board of Directors hereby adopts and approves the
amended and restated Plan, substantially in the form presented to this Board and
as attached as Exhibit 2, effective as January 31, 1996;
RESOLVED FURTHER, that full power and authority are hereby conferred
upon the President or his designee to execute the Plan within the general intent
and purpose of this resolution and the purchase agreement;
RESOLVED FURTHER, that the President or his designee is hereby
appointed to act for the Corporation as the Plan Administrator of such Plan and
is delegated have such powers and duties as are set forth in the Plan for all
purposes of interpreting, construing, and implementing the terms and conditions
of the Plan and shall have discretion in making decisions and determinations
concerning the general operation of the Plan, and to amend and terminate the
Plan on behalf of the Corporation.
CERTIFICATE
I hereby certify that the foregoing is a true and exact copy of resolutions
adopted by the Board of Directors of this Corporation and that such resolutions
have not been amended, modified or revoked and are still in full force and
effect.
IN WITNESS THEREOF, I have signed this Certificate as of this _________ day of
__________, 1997.
<PAGE> 13
-----------------------------------------
Secretary,
Emergency Professional Services, Inc.
<PAGE> 14
DISTRIBUTION ELECTION AND ACKNOWLEDGMENT
To: The Administrator of the Emergency Professional Services, Inc.
("Company") Deferred Compensation Plan ("Plan").
From: _____________________________________, Participant or Beneficiary.
1. Application for Benefit Distribution. I hereby apply for a benefit under
the Plan, as follows:
(a) My proposed first Distribution Date begins the first day of
____________, 199___, and continues on the first of each month
thereafter for a total of 60 equal monthly payments,
computed as follows:
(b) My January 31, 1996 Account Balance: $__________.
(c) Annual Forfeitures Allocated to Account from
January 31, 1996, through proposed first Distribution Date: $__________.
(d) Account Balance [(a) plus (b)]: $__________.
(e) Vested percentage _________%.
(f) Benefit Amount [(d) times (e)]: $__________.
(g) Monthly benefit payment [(f) divided by 60]: $__________.
2. Basis for Eligibility for Benefit. I am entitled to begin receiving
benefit payments from the Plan on the following basis:
/ / (a) My age and service total 65 or more and I elect to begin benefit
payments immediately.
/ / (b) I am Totally and Permanently Disabled and no longer a Covered
Physician as defined in the Plan. I elect to begin benefit payments
immediately.
/ / (c) I am the Beneficiary of a deceased Participant and I am entitled to
begin or continue benefit payments from the Participant's Account.
3. Beneficiary Designation. I understand that I am entitled to name a
designated beneficiary to receive any amount due me under the Plan, in the event
I die before all amounts due me are paid. A beneficiary designation form is
available from the Company and must be received by the Company before my death
to be effective.
4. Tax Withholding. I understand that the Company may withhold as required
by applicable Federal, State, or local income, employment or other tax law on
all amounts paid me under the Plan.
<PAGE> 15
I understand that since this benefit payment is not from a qualified retirement
plan or IRA, the amounts paid are not subject to rollover or transfer to another
qualified plan, IRA, or tax sheltered annuity (403(b) or 457) plan.
5. Cessation of Vesting and of Allocation of Forfeitures. I acknowledge
that:
(a) Even if I am still a Covered Physician under the Plan, when I elect
to start benefit payments under the Plan, I will not continue to accrue
service credit for vesting purposes; and
(b) If I am not fully vested when I start benefit payments, I will not in
the future ever be entitled under the Plan to earn further vesting, even
if I am otherwise a Covered Physician under the Plan; and
(c) Under the Plan I will not be entitled to allocation of future
forfeitures once I begin benefit payments; and
(d) The monthly amount shown in Section I above to be paid in 60 month
installments (or the balance of 60 monthly installments, if I am the
beneficiary of a deceased participant) is the sole benefit to which I am
entitled under the Plan; and
(e) No interest or earnings accrue on amounts paid under the Plan.
6. Irrevocable Election. My benefit elections under this Participant
Distribution Election and Acknowledgment are irrevocable. I understand that once
I return this form to the Company, I will not be able to change my election to
start payments as of the proposed first Distribution Date stated in Section
1(a). However, I will be able to change my Beneficiary Designation at any time
so long as I am entitled to further benefit payments.
7. Further Information. Before you sign this form, if you have any question
regarding the information provided or about your Plan distribution, please
contact the Company or the Vice President of Human Resources, Team Health,
Knoxville.
8. Execution. Dated this ____ day of ____________ 19___.
____________________________________
Participant's Signature
____________________________________
Participant's Social Security Number
_______________________________________________________________________________
RECEIVED by Emergency Professional Services, Inc. on ____________, 199__.
By: _____________________________________
<PAGE> 16
DESIGNATION OF BENEFICIARY
To: The Administrator of the Emergency Professional Services, Inc., Deferred
Compensation Plan ("Plan")
From: _______________________________, Participant
Pursuant to the provisions of the Plan permitting the designation of a
beneficiary or beneficiaries by a participant, I hereby designate the following
person or persons as primary and secondary beneficiaries of my Account Balance
under the Plan payable by reason of my death:
PRIMARY BENEFICIARY(IES) [INCLUDE ADDRESS AND RELATIONSHIP]:
SECONDARY BENEFICIARY(IES) [INCLUDE ADDRESS AND RELATIONSHIP]:
I RESERVE THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY DESIGNATION. I HEREBY
REVOKE ALL PRIOR DESIGNATIONS (IF ANY) OF PRIMARY BENEFICIARIES AND CONTINGENT
BENEFICIARIES.
The Plan will pay all sums payable under the Plan by reason of my death to the
primary beneficiary, if he or she survives me, and if no primary beneficiary
survives me, then to the secondary beneficiary. If no named beneficiary survives
me, then the Plan will pay all amounts in accordance with the Plan.
I understand this Beneficiary Designation is not effective until delivered to
the Administrator for the Plan.
_______________________________ __________________________________
Date of this Designation Signature of Participant
_______________________________________________________________________________
RECEIVED by Emergency Professional Services, Inc. on ___________, 199__.
By: ______________________________
<PAGE> 17
EMERGENCY PROFESSIONAL SERVICES, INC.
DEFERRED COMPENSATION PLAN
EXHIBIT A
Exclusive List of Plan Participants
DC196
EMERGENCY PROFESSIONAL SERVICES, INC.
DEFERRED COMPENSATION
JANUARY 31, 1996
1 STOUT
2 HOPE
3 RYBAK
4 THOMAS
5 KLATZKO
6 WEEKS
7 JONES
8 STAUTER
9 SPIRTOS
10 DEEHRING
11 GRABER
12 COSBY
13 COSTARELL
14 KONGMUANG
15 MIRASOL
16 PEARCE
17 NIEMI
18 BONNIE
19 FAIRLEY
20 AMSTERDAM
21 MCNAMARA
22 ACHAREKAR
23 SUDIMACK
24 OLSON
25 TAFURI
26 GREER
27 BLAU
28 FRANK
29 GALAN
30 BUISER
31 MCELREE
32 MEYER
33 SILVA
34 TISHMAN
35 ZIEMAK
36 HASTINGS
37 MASARYK
38 SOLTIS
TERMINATIONS
1 JACOBS
2 GINSBERG
3 OGAN
4 KILE
<PAGE> 18
EMERGENCY PROFESSIONAL SERVICES, INC.
DEFERRED COMPENSATION
JANUARY 31, 1996
<TABLE>
<CAPTION>
4,327,715.99 VESTING VESTED YRS AGE @
UNITS A/R % $ SERVICE 01-31-96 TOTAL
-------- ----------- ------- -------- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1 STOUT 203.10 315,170.15 100.00% 315,170 17 47 64
2 HOPE 189.60 294,220.88 100.00% 294,221 17 48 65
3 RYBAK 278.99 432,936.09 100.00% 432,936 16 52 68
4 THOMAS 197.41 306,340.42 100.00% 306,340 16 45 61
5 KLATZKO 162.12 251,577.47 100.00% 251,577 16 53 69
6 WEEKS 182.46 283,141.04 100.00% 283,141 15 48 63
7 JONES 150.75 233,933.53 90.00% 210,540 14 47 61
8 STAUTER 151.45 235,019.79 90.00% 211,518 14 43 57
9 SPIRTOS 186.31 289,115.46 90.00% 260,204 14 41 55
10 DEEHRING 122.08 189,443.48 80.00% 151,555 13 49 62
11 GRABER 118.52 183,919.08 70.00% 128,743 12 47 59
12 COSBY 58.22 90,345.67 60.00% 54,207 11 47 58
13 COSTARELL 70.05 108,703.44 60.00% 65,222 11 46 57
14 KONGMUANG 67.79 105,196.38 60.00% 63,118 11 49 60
15 MIRASOL 75.88 117,750.42 60.00% 70,650 11 54 65
16 PEARCE 66.58 103,318.70 60.00% 61,991 11 47 58
17 NIEMI 51.00 79,141.69 40.00% 31,657 9 40 49
18 BONNIE 49.84 77,341.61 40.00% 30,937 9 43 52
19 FAIRLEY 44.92 69,706.76 40.00% 27,883 9 41 50
20 AMSTERDAM 59.74 92,704.41 40.00% 37,082 9 43 52
21 MCNAMARA 40.52 62,878.85 30.00% 18,864 8 52 60
22 ACHAREKAR 32.53 50,479.98 30.00% 15,144 8 53 61
23 SUDIMACK 33.70 52,295.59 30.00% 15,689 8 40 48
24 OLSON 19.30 29,949.70 20.00% 5,990 7 45 52
25 TAFURI 18.73 29,065.17 20.00% 5,813 7 35 42
26 GREER 23.58 36,591.39 20.00% 7,318 7 42 49
27 BLAU 12.72 19,738.87 10.00% 1,974 6 44 50
28 FRANK 12.71 19,723.35 10.00% 1,972 6 37 43
29 GALAN 15.11 23,447.67 10.00% 2,345 6 43 49
30 BUISER 10.93 16,961.15 10.00% 1,696 6 55 61
31 MCELREE 15.67 24,316.67 10.00% 2,432 6 70 76
32 MEYER 10.47 16,247.32 10.00% 1,625 6 44 50
33 SILVA 11.08 17,193.92 10.00% 1,719 6 60 66
34 TISHMAN 14.47 22,454.52 10.00% 2,245 6 39 45
35 ZIEMAK 10.72 16,635.27 10.00% 1,664 6 39 45
36 HASTINGS 6.95 10,785.00 0.00% 0 5 40 45
37 MASARYK 6.73 10,443.60 0.00% 0 5 38 43
38 SOLTIS 6.11 9,481.49 0.00% 0 5 36 41
-------- ------------ ---------
2,788.84 4,327,715.99 3,375,182
TERMINATIONS
1 JACOBS 12,208 12,208 6 53 59
2 GINSBERG 3,276 3,276 6 51 57
3 OGAN 218,401 218,401 15 48 63
4 KILE 6.526 6,526 7 47 54
------------ ---------
4,568,127 3,615,593
========= =========
</TABLE>
<PAGE> 19
EMERGENCY PROFESSIONAL SERVICES, INC.
ACTION OF SHAREHOLDER
BY WRITTEN CONSENT
, 1997
------------
The undersigned person, being the sole shareholder of the Corporation, consents
to the following action taken without a meeting, this instrument to have the
same force and effect as if the action had been taken by unanimous vote at a
specially called meeting of the Shareholder.
Consent to Amendment and Restatement to Deferred Compensation Plan. The
Shareholder hereby adopts the following resolution:
WHEREAS, Emergency Professional Services, Inc. ("Corporation") wants
to restate the Corporation's Deferred Compensation Plan ("Plan") to fulfill its
obligations under that certain purchase agreement among Corporation and
MedPartners/Mullikin, Inc., which required the Corporation to freeze benefit
accruals under the Plan effective as of January 31, 1996; and
WHEREAS, the Plan provides for its amendment upon the action of the
Corporation board of directors, subject to shareholder consent to any such
amendment;
RESOLVED, that the shareholder hereby consents to the amended and
restated Plan, substantially in the form presented to the Shareholder, effective
as January 31, 1996, including delegation to the President or his designee to
further amend or terminate the Plan without further shareholder approval.
IN WITNESS WHEREOF, the shareholder has executed this instrument by a duly
authorized representative as of the date first above written and it shall be
filed with the minutes of the proceedings of the shareholder.
MedPartners/Mullikin, Inc.
By:
-------------------------------------
Its:
-------------------------------------
Shareholder
<PAGE> 1
EXHIBIT 10.11
INDEX TO WINSTON ROAD PROPERTIES LEASE
TENANT: MED:ASSURE
Page 1
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C>
1. PREMISES AND TERM........................................................................................ 1
2. RENTAL................................................................................................... 2
3. POSSESSION............................................................................................... 2
4. USE...................................................................................................... 2
5. ACCEPTANCE OF PREMISES................................................................................... 2
6. TENANT'S CARE............................................................................................ 2
7. SERVICES................................................................................................. 3
8. DESTRUCTION OR DAMAGE TO PREMISES........................................................................ 6
9. DEFAULT BY TENANT - LANDLORD'S REMEDIES.................................................................. 6
10. ASSIGNMENT AND SUBLETTING................................................................................ 8
11. CONDEMNATION............................................................................................. 8
12. INSPECTIONS.............................................................................................. 8
13. SUBORDINATION............................................................................................ 8
14. INDEMNITY AND HOLD HARMLESS.............................................................................. 8
15. TENANT'S INSURANCE AND WAIVER OF SUBROGATION............................................................. 9
16. RIGHTS OF LANDLORD....................................................................................... 9
17. HOLDING OVER............................................................................................. 9
18. ENTIRE AGREEMENT - NO WAIVER............................................................................. 9
</TABLE>
<PAGE> 2
INDEX TO WINSTON ROAD PROPERTIES LEASE
TENANT: MED:ASSURE
Page 12
<TABLE>
<CAPTION>
Article
- -------
<S> <C>
19. HEADINGS................................................................................................. 9
20. NOTICES.................................................................................................. 9
21. HEIRS AND ASSIGNS - PARTIES.............................................................................. 10
22. ATTORNEY FEES............................................................................................ 10
23. NO ESTATE IN LAND........................................................................................ 10
24. TIME OF ESSENCE.......................................................................................... 11
25. PARKING.................................................................................................. 11
26. RULES AND REGULATIONS.................................................................................... 11
27. SPECIAL STIPULATIONS..................................................................................... 12
</TABLE>
<PAGE> 3
LEASE AGREEMENT
FOR
OFFICE FACILITIES
THIS LEASE is made this 27th day of August 1992, between William M.
Thomas and Robert C. Eldridge, Jr., and Park Med Properties, d/b/a Winston Road
Properties of Knoxville, Tennessee, herein called "Landlord," whose address is:
1900 Winston Road
Suite 100
Knoxville, Tennessee 37919
and Med:Assure Systems of Knoxville, Tennessee, herein called "Tenant" whose
address is:
1900 Winston Road
Suite 403
Knoxville, Tennessee 37919
1. PREMISES AND TERM
Landlord hereby leases to Tenant and Tenant hereby rents and
leases from Landlord the following described space, herein called "Premises":
Square Feet: 4,806
Floor: 4th
located at the herein called "Building":
Building: Winston Road Properties
Address: 1900 Winston Road
Knoxville, Tennessee
District: 6th
County: Knox
State: Tennessee
The Premises being more particularly shown and outlined on the floor plan
attached hereto as Exhibit "A" and made a part hereof, for a term to commence on
the 1st day of October, 1992, and end at midnight on the 30th day of September
2002, such period being herein called "Term".
-1-
<PAGE> 4
Unless either party gives written notice of intent not to renew to other not
less than ninety (90) days prior to the expiration of the term, this lease will
automatically renew for successive terms of one (1) year each.
2. RENTAL
(a) Tenant shall pay to Winston Road Properties or at
other such place as Landlord may designate in writing, without demand, deduction
or off-set, annual rental at the rate of $31,239.00 (herein, called "Base
Rental"), payable in equal monthly installments of $2,603.25 in advance on the
first day of each calendar month during the first twelve months of the lease
term. Beginning the thirteenth month, the unadjusted (prior to annual percentage
increase) annual Base Rent shall be $50,463.00, payable in equal monthly
installments of $4,205.25 in advance on the first day of each calendar month
during the balance of the lease term.
(b) Base Rent Adjustment. The monthly Base Rent shall be
increased from time-to-time as mutually agreed upon by both tenant and landlord.
3. POSSESSION
Tenant will occupy Premises at the beginning of the term.
4. USE
Tenant shall use and occupy Premises as offices only. Tenant's
use of Premises shall not violate any ordinance, law, or regulation of any
governmental body or the "Rules and Regulations" of Landlord herein provided
for. Tenant agrees to conduct its business in the manner and according to the
generally accepted business principles of the business or profession in which
Tenant is engaged.
5. ACCEPTANCE OF PREMISES
The taking of possession of Premises by Tenant at commencement
of Term shall be conclusive evidence as against Tenant that Tenant accepts the
sane "as is" and that said Premises and the building were in good and
satisfactory condition for the use intended at the time such possession was
taken.
6. TENANT'S CARE
(a) Tenant will, at Tenant's expense, take good care of
Premises and the fixtures and appurtenances therein, and will suffer no active
or permissive waste or injury thereof; and Tenant shall, at Tenant's expense,
but under the direction of Landlord, promptly repair any injury or damage to
Premises or Building caused by the misuse or neglect thereof by Tenant, or by
persons permitted on Premises by Tenant, or Tenant moving in or out of
Premises.
-2-
<PAGE> 5
(b) Tenant will not, without Landlord's written consent,
make alterations, additions or improvements in or about Premises and will not do
anything to or on the Premises which will increase the rate of fire insurance on
the Building. All alterations, additions or improvements of a permanent nature
made or installed by Tenant to the Premises shall become the property of
Landlord at the expiration of this lease, but Landlord reserves the right to
require Tenant to remove any improvements or additions made to the Premises by
Tenant, and repair and restore Premises to their condition prior to such
alteration, addition or improvement. Tenant further agrees to do so prior to the
expiration of Term.
(c) No later than the last day of Term, Tenant will
remove all Tenant's personal property and repair all injury done by or in
connection with installation or removal of said property and surrender Premises
(together with all keys to Premises) in as good a condition as they were at the
beginning of Term, reasonable wear and damage by fire, the elements or casualty
excepted. All property of Tenant remaining on Premises after expiration of Term
shall be deemed conclusively abandoned and may be removed by Landlord and Tenant
shall reimburse Landlord for the cost of removing the same, subject however, to
Landlord's right to require Tenant to remove any improvements or additions made
to Premises by Tenant pursuant to the preceding sub-paragraph (b).
(d) In doing any work related to the installation of
Tenant's furnishings, fixtures, or equipment in the Premises, Tenant will use
only contractors or workmen approved by Landlord. Tenant shall promptly remove
any lien for material or labor claimed against Premises, by such contractors or
workmen if such claim should arise and hereby indemnifies and holds Landlord
harmless from and against any and all costs, expenses or liabilities incurred by
Landlord as a result of such liens.
(e) Tenant shall not place nor maintain any food or drink
coin-operated or vending machine within Premises or Building without the written
consent of Landlord; such consent shall not preclude Landlord from charging
Tenant for utility costs therefor under Paragraph 7(b).
(f) Tenant agrees that all personal property brought into
the Premises by Tenant, its employees, licensees and invitees shall be at the
sole risk of Tenant and Landlord shall not be liable for theft thereof or of
money deposited therein or for any damages thereto; such theft or damage being
the sole responsibility of Tenant.
7. SERVICES
(a) Landlord shall furnish the following services at his
expense:
(i) Elevator service for passenger and delivery
needs.
(ii) HVAC.
-3-
<PAGE> 6
(iii) Public rest rooms, including the furnishing
of soap, paper towels, toilet tissue and
sanitary napkin machines.
(iv) Janitorial service, including sanitizing,
dusting, cleaning, mopping, vacuuming, and
trash removal, each Monday through Friday
plus floor waxing and polishing, window
washing, smudge removal, and vent and blind
cleaning as needed.
(v) Electric power, for small desk top types of
machines, or handheld devices, such as
typewriters, adding machines and recording
machines.
(vi) Electric lighting, at a level of at least 75
foot candles at desk height except in
corridor or storage areas, and including the
replacement of lamps and ballasts as needed.
(vii) Repairs and maintenance for maintaining in
good order at all times, the exterior walls,
windows, doors, and roof of the building,
public corridors, stairs, elevators, storage
rooms, and rest rooms, the air conditioning,
electrical, and plumbing systems of the
Building, and the walks, paving and
landscaping surrounding the Building. Tenant
shall be responsible for damage, wear and
tear to the premises when caused by his
usage and occupancy of the Premises.
(viii) Grounds care, including the sweeping of
walks and parking areas and the maintenance
of landscaping in an attractive manner.
(ix) Property taxes, as may be assessed against
real estate by the state, country or city.
(x) Fire and extended coverage insurance to
protect the Landlord's interest in the
property.
(xi) General management, including supervision,
inspections, record keeping, accounting,
leasing, and related management functions.
(b) The services provided for in Paragraph 7(a) herein,
and the amount of the rental prescribed in Paragraphs 2(a) and 2(b) herein, are
predicated on and are in anticipation of certain usage of the Premises by Tenant
as follows:
-4-
<PAGE> 7
(i) Services shall be provided for, and the
normal business hours of the Building shall
be from 8:00 a.m. to 6:00 p.m. on Mondays
through Fridays, except for national
holidays.
(ii) Air conditioning design is based on
sustained outside temperatures being no
higher than 95 degrees Fahrenheit and no
lower than 10 degrees Fahrenheit with
sustained occupancy of the Premises by no
more than one person per 75 square feet of
floor area and heat generated by electrical
lighting and fixtures not to exceed 3.7
watts per square feet.
(iii) For hours other than normal business hours,
heating of the Building shall be held to a
minimum temperature of approximately 60
degrees Fahrenheit and cooling of the
Building shall be held to a maximum
temperature of approximately 85 degrees
Fahrenheit.
(iv) Electric power usage and consumption is
based on lighting of the Premises during
normal business hours on an average level
not to exceed 75 foot candles at desk
height, and power from small desk top type
machines and handheld devices using 110 volt
20-amp circuits. Such heavier use items as
electric heaters, bookkeeping machines, data
processing and duplicating equipment,
stoves, refrigerators, vending machines, and
the like shall not be used or installed,
unless specified elsewhere herein, or by
separate written consent of Landlord.
(v) If Tenant uses services in an amount, or for
a period in excess of that provided for
herein, then Landlord reserves the right to
charge Tenant, as additional rent, a
reasonable sum as reimbursement for the
direct cost of such added services. In the
event of disagreement as to the
reasonableness of such charge, the opinion
of the appropriate local utility company or
an independent professional engineering firm
shall prevail.
(c) Landlord shall not be liable for any damages directly
or indirectly resulting from the installation, use or interruption of use of any
equipment in connection with the furnishings of services by any cause beyond the
immediate control of the Landlord, but Landlord shall exercise due care in
furnishing adequate and uninterrupted services.
-5-
<PAGE> 8
8. DESTRUCTION OR DAMAGE TO PREMISES
If the Premises are totally destroyed (or so substantially
damaged as to be untenantable) by storm, fire, earthquake, or other casualty,
rent shall abate from the date of such damage or destruction and Landlord shall
have 60 days to commence the restoration of the Premises to a tenantable
condition. In the event the Landlord fails to complete such restoration within
120 days of such damage or destruction, this lease may be terminated as of the
date of such damage or destruction upon written notice from either party to the
other given not more than 10 days following the expiration of said 120 days
period. In the event such notice is not given, then this lease shall remain in
force and effect and rent shall commence upon delivery of the Premises to Tenant
in a tenantable condition. In the event such damage or destruction occurs within
one year from the expiration of the term of this lease, Tenant may, at its
option or written notice to Landlord within thirty days of such destruction or
damage, terminate this lease as of the date of such destruction or damage.
(a) If Premises are damaged but not rendered wholly
untenantable by any of the events set forth in the paragraph above, rental shall
abate in such proportion as Premises have been damaged and Landlord shall
restore Premises as speedily as practicable whereupon full rent shall commence.
(b) In no event shall rent abate if the damage or
destruction of the Premises whether total or partial, is the result of the
negligence of Tenant, its agents, or employees.
9. DEFAULT BY TENANT - LANDLORD'S REMEDIES
(a) If Tenant defaults for 30 days after written notice,
therein paying any and all rentals or additional rentals reserved herein; or if
Tenant defaults for 30 days after written notice thereof in performing any other
of his obligations hereunder; or if tenant is adjudicated a bankrupt, or if a
permanent receiver is appointed for Tenant's property, including Tenant's
interest in Premises, and such receiver is not removed within 60 days after
written notice from Landlord to Tenant to obtain such removal, or if, whether
voluntarily or involuntarily, Tenant takes advantage of any debtor relief
proceedings under any present or future law, whereby the rent or any part
thereof deferred, or if Tenant makes an assignment for benefits of Creditors; or
if Premises or Tenant's effects or interest therein should be levied upon or
attached under process against Tenant, not satisfied or dissolved within 30 days
after written notice from Landlord to Tenant to obtain satisfaction thereof, or
if Premises shall be abandoned by tenant or become vacant during the term
hereof, then and in any of said events, Landlord at its option may at once, or
within 6 months thereafter (but only during continuance of such default or
condition) terminate this lease by written notice to Tenant, whereupon this
lease shall end. After authorized assignment or subletting, the occurring of any
of the foregoing defaults or events shall affect this lease only if caused by or
happened to the assignee or sublessee. Upon such termination by Landlord, Tenant
must at once surrender possession of Premises to Landlord and remove all of
Tenant's effects therefrom, and Landlord may forthwith re-enter the Premises and
-6-
<PAGE> 9
repossess itself thereof, and remove all persons and effects therefrom, using
such force as may be necessary without being guilty or trespass, forcible entry
or detainer or other tort.
(b) Any installment of rent, additional rent, or other
sums herein required to be paid by Tenant which is not paid when due, shall bear
interest at the maximum legal rate permissible in the State of Tennessee from
the due date until paid, as a late charge for the purpose of reimbursing
Landlord for expenses incurred by reason of such failure by Tenant and not as
penalty therefor.
(c) Landlord, as Tenant's agent, without termination of
this lease, upon Tenant's default or breach of this Agreement, as set forth in
subparagraph (a) above, may at Landlord's option, evidenced by written notice to
Tenant, terminate Tenant's right to possession and enter upon and rent Premises
at the best price obtainable by reasonable effort, without advertisement, and by
private negotiations and for any term Landlord deems proper. Tenant shall, upon
receipt of such notice, surrender possession of Premises to Landlord and remove
all of Tenant's effects therefrom, and Landlord may forthwith re-enter the
Premises and repossess itself thereof, and remove all persons and effects
therefrom, using such force as may be necessary without being guilty of
trespass, forcible entry or detainer or other tort. Tenant shall be liable to
Landlord for the deficiency, if any, between the amount of all rent and
additional rent reserved in this lease and the net rent, if any, collected by
Landlord in reletting Premises, which deficiency shall be due and payable by
Tenant on the several days n which rent and additional rent reserved in the
lease would have been due and payable. Net rent shall be computed by deducting
from gross rents collected all expenses or costs of whatsoever nature incurred
by Landlord in reletting including, but not limited to attorneys' fees, brokers'
commissions and the cost of renovating or remodeling Premises.
(d) No termination of this lease prior to the normal
ending thereof by lapse of time or otherwise shall affect Tenant's obligation to
pay and Landlords right to collect the entire rent and additional rent reserved
in this lease.
(e) In the event Landlord elects to terminate this lease
as hereinabove provided, Landlord may, in addition to any other remedies it may
have, recover from Tenant all damages Landlord may incur by reason of such
default, including the cost of recovering Premises, reasonable attorneys' fees
and including the worth at the time of such termination of the excess, if any,
of the amount of rent and additional rent reserved in this lease for the
remainder of the Term over the then reasonable rental value of the Premises for
the remainder of the Term, all of which amounts shall be immediately due and
payable from Tenant to Landlord.
(f) Pursuit of any of the foregoing remedies shall not
preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law.
(g) The term "reserved" as applied to rent or additional
rent herein, shall mean any and all payments to which Landlord is entitled
hereunder during the entire term of this lease.
-7-
<PAGE> 10
10. ASSIGNMENT AND SUBLETTING
Tenant may assign this lease or sublet all or any part of the
premises with the prior written consent of Landlord, subject to the terms and
conditions herein set forth, which consent shall not be unreasonably withheld.
Without limiting the generality of the foregoing provision, the withholding of
such consent by Landlord shall not be deemed unreasonable and the lease may not
be assigned or sublet under any circumstances if said assignment or subletting
results in a second assignment or subletting within the term of the lease, it
being specifically understood that the Landlord shall not be obligated or
required under any circumstances to allow more than one assignment or subletting
throughout the term. Tenant may, at anytime, without the consent of Landlord,
assign this lease or sublease the entire Premises to a wholly owned corporation
or controlled subsidiary of Tenant, provided, however, that such assignment or
sublease shall not relieve Tenant of liability under this lease.
11. CONDEMNATION
If all, or any part of Premises are taken by virtue of eminent
domain or conveyed or leased in lieu of such taking, this lease shall expire on
the date when title shall vest, or the term of such lease shall commence, and
any rent paid for any period beyond said date shall be repaid to Tenant. Tenant
shall not be entitled to any part of the award or any payment in lieu thereof.
12. INSPECTIONS
Landlord may enter Premises at reasonable hours to exhibit
same to prospective purchasers or tenants, to inspect Premises, to see that
Tenant is complying with all its obligations hereunder; and to make repairs
required of Landlord under the terms hereof or repairs to any adjoining space.
13. SUBORDINATION
This lease shall be subject and subordinate to any underlying
land leases and/or security deeds which may now or hereafter affect this lease
or the real property of which Premises form a part, and also to all renewals,
modifications, extensions, consolidations, and replacements of such underlying
land leases and such security deeds. In confirmation of the subordination set
forth in this Paragraph 13, Tenant shall, at Landlord's request, execute and
deliver such further instruments as may be desired by any holder of a security
deed or by any lessor under any such underlying land leases.
14. INDEMNIFY AND HOLD HARMLESS
Notwithstanding that joint or concurrent liability may be
imposed upon Landlord by law, Tenant shall indemnify, defend and hold harmless
the Landlord and Premises, at Tenant's expense, against: (i) any default by
Tenant or sub-tenant hereunder; or (ii) any act of
-8-
<PAGE> 11
negligence of Tenant or its agents, contractors, employees, invitees, or
licensees; or (iii) all claims for damages to persons or property by reason of
the use or occupancy of Premises.
15. TENANT'S INSURANCE AND WAIVER OF SUBROGATION
Tenant shall carry fire and extended coverage insurance
insuring its interest in Tenant's improvements in Premises and its interest in
its office furniture, equipment, supplies, and other personal property, and
Tenant hereby waives any rights of action against Landlord for loss or damage to
its improvements, fixtures and personal property in Premises.
16. RIGHTS OF LANDLORD
The rights given to Landlord herein are in addition to any
rights that may be given to Landlord by any statute or under law.
17. HOLDING OVER
If Tenant remains in possession after expiration of Term
hereof, with Landlord's acquiescence and without any distinct agreement between
the parties, Tenant shall be a tenant at will and such tenancy shall be subject
to all the provisions hereof, except that the monthly portion of the Base Rental
shall be as negotiated for the entire holdover period and there shall be no
renewal of this lease by operation of law. Nothing in this Paragraph shall be
construed as a consent by Landlord to the possession of Premises by Tenant after
the expiration of the Term.
18. ENTIRE AGREEMENT - NO WAIVER
This lease contains the entire agreement of the parties hereto
and no representations, inducements, promises or agreements, oral or otherwise,
between the parties not embodied herein, shall be of any force or effect. The
failure of either party to insist in any instance on strict performance of any
covenant or condition hereof, or to exercise any option herein contained, shall
not be construed as a waiver of such covenant, condition or option in any other
instance. This lease cannot be changed or terminated orally.
19. HEADINGS
The headings in this lease are included for convenience only
and shall not be taken into consideration in any construction or interpretation
of this lease or any of its provisions.
20. NOTICES
(a) Any notice by either party to the other shall be valid
only if in writing and shall be deemed to be duly given only if delivered
personally or sent by registered or certified mail addressed (i) if to Tenant,
at Premises and (ii) if to Landlord, at Landlord's address set forth above, or
at such other address for either party as that party may designate by notice to
-9-
<PAGE> 12
the other, notice shall be deemed given, if delivered personally, upon delivery
thereof, and if mailed, upon the mailing thereof.
(b) Tenant hereby appoints as its agent to receive
service of all dispossessory or distraint proceedings, the person in charge of
Premises at the time of occupying Premises, and if there is no person occupying
same, then such service may be made by attachment thereof on the main entrance
of Premises.
21. HEIRS AND ASSIGNS - PARTIES
(a) The provisions of this lease shall bind and insure to
the benefit of the Landlord and Tenant, and their respective successors, heirs,
legal representatives and assigns, it being understood that the term "Landlord"
as used in this lease, means only the owner of the lessee for the time being of
the land and Building of which Premises are a part, so that in the event of any
sale or sales of said property or of any lease thereof, the Landlord named
herein shall be and hereby is entirely freed and relieved of all covenants and
obligations of Landlord hereunder accruing thereafter, and it shall be deemed
without further agreement that the purchaser, or the lessee, as the case may be,
has assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder during the period such party has possession of the land and
Building. Should the land and the entire Building be severed as to ownership by
sale and/or lease, then the owner of the entire Building or lessee of the entire
Building that has the right to lease space in the Building to tenants shall be
deemed the "Landlord." Tenant shall be bound to any such succeeding party
landlord for performance by tenant of all the terms, covenants, and conditions
of this lease and agrees to execute any attornment agreement not in conflict
with the terms and provisions of this lease at the request of any such
succeeding Landlord.
(b) The parties "Landlord," "Tenant," and "Agent" and
pronouns relating thereto, as used herein, shall include male, female, singular
and plural, corporation, partnership or individual, as may fit the particular
parties.
22. ATTORNEY FEES
If any rent owing under this lease is collected by through an
attorney at law, Tenant shall pay as additional rent fifteen percent (15%)
thereof as attorney's fees. Tenant shall also pay all attorney fees incurred by
Landlord as a result of any breach or default by Tenant under this lease.
23. NO ESTATE IN LAND
Tenant has only a usufruct under this agreement, not subject
to levy or sale, no estate shall pass out of Landlord.
24. TIME OF ESSENCE
-10-
<PAGE> 13
Time is of the essence of this agreement.
25. PARKING
Lessee is hereby granted the non-exclusive privilege to use
the parking spaces in the Winston Road Properties parking lot for use by itself
and its agents. Lessee shall abide by all rules and regulations as concerns the
use of the aforementioned parking area as may now exist or as may hereinafter be
promulgated by the Lessor, and a violation of this clause and/or the rules
referred to above shall constitute, upon reasonable notice to Lessee, at the
option of Lessor, a default by the Lessee in the terms, conditions and covenants
of this lease or Lessor shall have the right to revoke Lessee's parking
privileges provided by this paragraph and such revocation shall not affect any
other rights, duties or obligations as provided for in this Lease. These parking
spaces may be charged to the Lessee on a monthly basis according to the monthly
rate then in effect and parking spaces may be designated by the Lessor for the
exclusive use of Lessee subject to change by Lessor. Lessee agrees that any
parking cards, stickers or related materials supplied by Lessor to Lessee shall
remain the property of Lessor and, upon termination of this Lease or revocation
of Lessee's parking privileges, whichever shall first occur, Lessee shall
promptly return such cards, stickers and related materials to Lessor.
26. RULES AND REGULATIONS
(a) The sidewalks, entry passages, corridors, hal1s,
elevators, and stairways shall not be obstructed by Tenant or used by it for
other than those of ingress and egress. The floors, skylights, and windows that
reflect or admit light into any place in said Building shall not be covered or
obstructed by Tenant. The water closets and other water apparatus shall not be
used for any other purpose than those for which they were constructed, and no
sweeping, rubbish, or other obstructing substances shall he thrown therein.
(b) No advertisement, sign or other notice shall be
inscribed, painted or affixed on any part of the outside or inside of Building,
except upon the interior doors as permitted by Landlord, which signs, etc. shall
be of such order, size and style, and at such places as shall be designated by
Landlord. Window shades, blinds or curtains of a uniform color and pattern only
shall be used throughout the Building to give uniform color exposure through
exterior windows. Signs on Tenant's entrance doors will be provided by Tenant by
Landlord, the cost of the signs to be charged to and paid for by Tenant. No
painting shall be done, nor shall any alterations be made to any part of the
Building by putting up or changing any partition, doors or windows, nor shall
there be any nailing, boring or screwing into the woodwork or plastering, nor
shall any connection be made to the electric wires or electric fixtures without
the consent in writing on each occasion of Landlord or its Agents. All glass,
locks and trimmings in or upon the doors and windows of the Building shall be
kept whole and, when any part thereof shall be broken, the same shall be
immediately replaced or repaired and put in order under the direction and to the
satisfaction of the Landlord or its Agents, and shall be left whole and in good
repair. Tenant shall not injure, or overload or deface the Building, the
woodwork or the walls of the Premises, nor carry on upon the Premises any
noxious, noisy or offensive business. Tenant shall not (without Landlord's
written consent), install or operate any computer, duplicating or other
-11-
<PAGE> 14
large business machine, equipment, or any other machinery, upon the Premises, or
carry on any mechanical business thereon. If Tenant requires any interior
wiring, such as for a business machine, intercom, printing equipment or copying
equipment, such wiring shall be done by the electrician of the Building only,
and no outside wiring men shall be allowed to do work of this kind unless by the
written permission of Landlord or its representatives. If telegraphic or
telephonic service is desired, the wiring for same shall be done as directed by
the electrician of the Building or by some other employee of Landlord who may be
instructed by the superintendent of the Building to supervise same, and no
boring or cutting for wiring shall be done unless approved by Landlord or its
representatives, as stated.
(c) Landlord, in all cases, retains the right to approve
the weight per square foot and position of heavy articles including, but not
limited to, iron safes, printing equipment, computer and duplicating equipment
or air compressors. Tenants must make arrangements with the superintendent of
Building when the elevator is required for the purpose of carrying any kind of
freight.
27. SPECIAL STIPULATIONS
The following special stipulations shall control if in
conflict with any of the foregoing provisions of this lease:
-12-
<PAGE> 15
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, in
quadruplicate, the day and year first above written.
Signed, sealed and delivered *Tenant: Med:Assure Systems
in the presence of:**
- -------------------------------- By: /s/ Michael L. Hatcher
Witness ------------------------------
/s/ Kathy Whitten Its: President
- -------------------------------- -----------------------------
Notary Public
My Commission Expires: 8/28/89 Date: 12/31/93
----------------------------
Signed, sealed and delivered Landlord: Winston Road
Properties
/s/ Robert C. Eldridge, Jr.
- -------------------------------- --------------------------------
Witness Robert C. Eldridge
Managing Partner
/s/ Kathy Whitten /s/ Michael L. Hatcher
- -------------------------------- --------------------------------
Notary Public Michael L. Hatcher
Managing Partner
My Commission Expires:
8/28/96 Date:12/31/93
- -------------------------------- -----------------------------
Following execution, the original and two copies hereof shall be returned to
Landlord.
NOTE: *If Tenant is a corporation, two authorized corporate
officers muse execute this lease in their appropriate
capacity for Tenant, affixing the corporate seal.
**Two witnesses are required, one of whom must be a Notary
Public, who must affix his/her Notarial seal and stamp
bearing the expiration date of his/her commission.
-13-
<PAGE> 16
Amendment to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of August 1994, the following article is amended in said
lease agreement:
1. PREMISES AND TERM.
The Premises being more particularly shown and outlined on the floor
plan attached hereto as Exhibit "A" and made a part hereof, for a term
to commence on the 1st day of October, 1992, and end at midnight on the
31st day of March, 2010, such period being herein called "Term."
Except as provided herein, all the terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord
Med:Assure Systems Winston Road Properties
By:/s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
-------------------------------- --------------------------------
Its: Vice President Its: Partner
------------------------------ -------------------------------
Date: 8/1/94 Date: 8/1/94
----------------------------- ------------------------------
By:
--------------------------------
Its:
-------------------------------
Date:
------------------------------
<PAGE> 17
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of August 1994, the following article is added in said
lease agreement:
Tenant shall lease the following additional space:
Suite 400 with 333 square feet.
Tenant shall pay the following base rental rate for this space:
August 1, 1994 through July 31, 1995
<TABLE>
<S> <C>
Annual rent = $2,664.00
Monthly rent = $ 222.00
Rate per square foot = $ 8.00
</TABLE>
Beginning August 1. 1995, the unadjusted (Prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $3,996.00
Monthly rent = $ 333.00
Rate per square foot = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March, 2010.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By:/s/ Michael Hatcher By:/s/ Robert C. Eldridge, Jr.
-------------------------------- --------------------------------
Its: President Its: Partner
-------------------------------- ------------------------------
Date: 8/1/94 Date: 8/1/94
-------------------------------- -----------------------------
<PAGE> 18
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of August 1994, the following article is added in said
lease agreement:
Tenant shall lease the following additional space:
Suite 401 with 1,022 square feet.
Tenant shall pay the following base rental rate for this space:
September 1, 1994 through August 31, 1995
<TABLE>
<S> <C>
Annual rent = $8,176.00
Monthly rent = $ 681.33
Rate per square foot = $ 8.00
</TABLE>
Beginning September 1, 1995, the unadjusted (Prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $12,264.00
Monthly rent = $ 1,022.00
Rate per square foot = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March, 2010.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By:/s/ Michael Hatcher By:/s/ Robert C. Eldridge, Jr.
-------------------------------- --------------------------------
Its: President Its: Partner
-------------------------------- ------------------------------
<PAGE> 19
Date: 8/1/94 Date: 8/1/94
-------------------------------- -----------------------------
By:
-------------------------------
Its:
------------------------------
Date:
-----------------------------
<PAGE> 20
Amendment to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of January, 1994, the following article is amended in said
lease agreement:
2. Rental
(a) (1) Suite 403 with 4,806 square feet.
Tenant shall pay the following base rental rate for this
space:
Beginning January 1, 1994, the base rent shall be
<TABLE>
<S> <C>
Annual rent = $57,672.00
Monthly rent = $ 4,806.00
Rate per square feet = $ 12.00
</TABLE>
(2) Suite 403B with 1,414 square feet.
Tenant shall pay the following base rental rate for this
space:
January 1, 1994 through April 30,1994
<TABLE>
<S> <C>
Annual rent = $11,312.00
Monthly rent = $ 942.67
Rate per square feet = $ 8.00
</TABLE>
Beginning May 1, 1994, the base rent shall be:
<TABLE>
<S> <C>
Annual rent = $16,968.00
Monthly rent = $ 1,414.00
Rate per square feet = $ 12.00
</TABLE>
<PAGE> 21
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
Its: President Its: Managing Partner
------------------------------- ------------------------------
Date: 12/31/93 Date: 12/31/93
------------------------------ -----------------------------
By: /s/ Michael Hatcher
-------------------------------
Its: Managing Partner
------------------------------
Date: 12/31/93
-----------------------------
<PAGE> 22
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st Day of May 1993, the following article is added in said lease
agreement:
Tenant shall lease the following additional space:
Suite 403B with 1,414 square feet.
Tenant shall pay the following base rental rate for this space:
May 1, 1993 through April 30, 1994
<TABLE>
<S> <C>
Annual rent = $9,191.00
Monthly rent = $ 765.92
Rate per square feet = $ 6.50
</TABLE>
Beginning May 1, 1994, the unadjusted (prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $14,847.00
Monthly rent = $ 1,237.25
Rate per square feet = $ 10.50
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 30th day of September 2002.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this a additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
Its: President Its: Managing Partner
------------------------------- ------------------------------
<PAGE> 23
Date: 12/31/93 Date: 12/31/93
------------------------------ -----------------------------
By: /s/ Michael Hatcher
-------------------------------
Its: Managing Partner
------------------------------
Date: 12/31/93
-----------------------------
<PAGE> 24
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of February 1994, the following article is added in said
lease agreement:
Tenant shall lease the following additional space:
Suite 403C with 990 square feet.
Tenant shall pay the following base rental rate for this space:
February 1, 1994, through January 1, 1995
<TABLE>
<S> <C>
Annual rent = $ 7,920.00
Monthly rent = $ 660.00
Rate per square feet = $ 8.00
</TABLE>
Beginning February 1, 1995, the unadjusted (Prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $11,880.00
Monthly rent = $ 990.00
Rate per square feet = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 30th day of September 2002.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
Its: President Its: Managing Partner
------------------------------- ------------------------------
<PAGE> 25
Date: 12/31/93 Date: 12/31/93
------------------------------ -----------------------------
By: /s/ Michael Hatcher
-------------------------------
Its: Managing Partner
------------------------------
Date: 12/31/93
-----------------------------
<PAGE> 26
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of August 1994, the following article is added in said
lease agreement:
Tenant shall lease the following additional space:
Suite 408 with 579 square feet.
Tenant shall pay the following base rental rate for this space:
October 1, 1994 through September 30, 1995
<TABLE>
<S> <C>
Annual rent = $4,632.00
Monthly rent = $ 386.00
Rate per square foot = $ 8.00
</TABLE>
Beginning October 1, 1995, the unadjusted (Prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $6,948.00
Monthly rent = $ 579.00
Rate per square foot = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
<PAGE> 27
Its: Vice President Its: Partner
------------------------------- ------------------------------
Date: Date: 8/1/94
------------------------------ -----------------------------
By:
-------------------------------
Its:
------------------------------
Date:
-----------------------------
<PAGE> 28
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of April 1995, the following article is added said lease
agreement:
Tenant shall lease the following additional space:
Suite 506 with 2,149 square feet.
Tenant shall pay the following base rental rate for this space:
<TABLE>
<S> <C>
Annual rent = $ 28,788.00
Monthly rent = $ 2,149.00
Rate per square foot = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By: /s/ John Misickey By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
Its: President Its: Partner
------------------------------- ------------------------------
Date: 3/8/95 Date: 3/14/95
------------------------------ -----------------------------
By: /s/ Michael Hatcher
-------------------------------
Its: Partner
------------------------------
Date: 3/6/95
-----------------------------
<PAGE> 29
Addendum to Lease Agreement
Between
Winston Road Properties
and
Med:Assure Systems
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Med:Assure Systems dated
the 27th day of August 1992, is amended as follows:
Effective the 1st day of May 1995, the following article is added in said lease
agreement:
Tenant shall lease the following additional space:
Suite 603B with 1,500 square feet.
Tenant shall pay the following base rental rate for this space:
May 1, 1995 through April 30, 1996
<TABLE>
<S> <C>
Annual rent = $12,000.00
Monthly rent = $ 1,000.00
Rate per square foot = $ 8.00
</TABLE>
Beginning May 1, 1996, the unadjusted (Prior to annual percentage
increase) base rent shall be:
<TABLE>
<S> <C>
Annual rent = $18,000.00
Monthly rent = $ 1,500.00
Rate per square foot = $ 12.00
</TABLE>
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
All terms of the original lease agreement dated the 27th day of August 1992,
shall apply to this additional space. All the terms of the original lease
agreement shall remain in full force and effect.
Tenant: Landlord:
Med:Assure Systems Winston Road Properties
By: /s/ John Misickey By: /s/ Robert C. Eldridge, Jr.
-------------------------------- -------------------------------
<PAGE> 30
Its: President Its: Partner
------------------------------- ------------------------------
Date: 3/8/95 Date: 3/14/95
------------------------------ -----------------------------
By: /s/ Michael Hatcher for
-------------------------------
Park Med Properties
Its: Partner
------------------------------
Date: 3/6/95
-----------------------------
<PAGE> 1
Exhibit 10.12
INDEX TO WINSTON ROAD PROPERTIES LEASE
TENANT: AMERICARE MEDICAL SERVICES, INC.
Article Page
- ------- ----
1. Premises and Term 1
2. Rental 2
3. Possession 2
4. Use 2
5. Acceptance of Premises 2
6. Tenant's Care 2
7. Services 3
8. Destruction or Damage to Premises 6
9. Default by Tenant - Landlord's Remedies 6
10. Assignment and Subletting 8
11. Condemnation 8
12. Inspections 8
13. Subordination 8
14. Indemnity and Hold Harmless 8
15. Tenant's Insurance and Waiver of Subrogation 9
16. Rights of Landlord 9
17. Holding over 9
18. Entire Agreement - No Waiver 9
19. Headings 9
<PAGE> 2
INDEX TO WINSTON ROAD PROPERTIES LEASE
TENANT: AMERICARE MEDICAL SERVICES, INC.
Article Page 2 Page
- ------- ----
20. Notices 9
21. Heirs and Assigns - Parties 10
22. Attorney Fees 10
23. No Estate in Land 10
24. Time of Essence 11
25. Parking 11
26. Rules and Regulations 11
27. Special Stipulations 12
<PAGE> 3
LEASE AGREEMENT
FOR
OFFICE FACILITIES
THIS LEASE is made this 27th day of August 1992, between William M.
Thomas and Robert C. Eldridge, Jr., and Park Med Properties, d/b/a Winston Road
Properties of Knoxville, Tennessee, herein called "Landlord," whose address is:
1900 Winston Road
Suite 100
Knoxville, Tennessee 37919
and Americare Medical Services, Inc. of Knoxville, Tennessee, herein called
"Tenant" whose address is:
1900 Winston Road
Suite 300
Knoxville, Tennessee 37919
1. PREMISES AND TERM
Landlord hereby leases to Tenant and Tenant hereby rents and leases
from Landlord the following described space, herein called "Premises":
Square Feet: 9,744
Floor: 3rd
at the herein called "Building":
Building: Winston Road Properties
Address: 1900 Winston Road
Knoxville, Tennessee
District: 6th
County: Knox
State: Tennessee
The Premises being more particularly shown and outlined on the floor plan
attached hereto as Exhibit "A" and made a part hereof, for a term to commence
on the 1st day of December 1992,
Page 1
<PAGE> 4
and end at midnight on the 30th day of November 2002, such period being herein
called "Term". Unless either party gives written notice of intent not to renew
to the other not less than ninety (90) days prior to the expiration of the term,
this lease will automatically renew for successive terms of one (1) year each
2. RENTAL
(a) Tenant shall pay to Winston Road Properties or at
such other place as Landlord may designate in writing, without demand, deduction
or off-set, annual rental at the rate of $63,336.00 (herein called "Base
Rental"), payable in equal monthly installments of $5,278.00 in advance on the
first day of each calendar month during the first twelve months of the lease
term. Beginning the thirteenth month, the unadjusted (prior to annual percentage
increase) annual Base Rent shall be $102,312.00, payable in equal monthly
installments of $8,526.00 in advance on the first day of each calendar month
during the balance of the lease term.
(b) Base Rent Adjustment. The monthly Base Rent shall
be increased from tine-to-time as mutually agreed upon by both tenant and
landlord.
3. POSSESSION
Tenant will occupy Premises at the beginning of the
term.
4. USE
Tenant shall use and occupy Premises as offices only.
Tenant's use of Premises shall not violate any ordinance, law, or regulation of
any governmental body or the "Rules and Regulations" of Landlord herein provided
for. Tenant agrees to conduct its business in the manner and according to the
generally accepted business principles of the business or profession in which
Tenant is engaged.
5. ACCEPTANCE OF PREMISES
The taking of possession of Premises by Tenant at
commencement of Term shall be conclusive evidence as against Tenant that Tenant
accepts the same "as is" and that said Premises and the building were in good
and satisfactory condition for the use intended at the time such possession was
taken.
6. TENANT'S CARE
(a) Tenant will, at Tenant's expense, take good care
of Premises and the fixtures and appurtenances therein, and will suffer no
active or permissive waste or injury thereof; and Tenant shall, at Tenant's
expense, but under the direction of Landlord, promptly repair any injury or
damage to Premises or Building caused the misuse or neglect thereof by Tenant,
or by persons permitted on Premises by Tenant, or Tenant moving in or out of
Premises.
Page 2
<PAGE> 5
(b) Tenant will not, without Landlord's written
consent, make alterations, additions or improvements in or about Premises and
will not do anything to or on the Premises which will increase the rate of fire
insurance on the Building. All alterations, additions or improvements of a
permanent nature made or installed by Tenant to the Premises shall become the
property of Landlord at the expiration of this lease, but Landlord reserves the
right to require Tenant to remove any improvements or additions made to the
Premises by Tenant, and repair and restore Premises to their condition prior to
such alteration, addition or improvement. Tenant further agrees to do so prior
to the expiration of Term.
(c) No later than the last day of Term, Tenant will
remove all Tenant's personal property and repair all injury done by or in
connection with installation or removal of said property and surrender Premises
(together with all keys to Premises) in as good a condition as they were at the
beginning of Term, reasonable wear and damage by fire, the elements or casualty
excepted. All property of Tenant. remaining on Premises after expiration of Term
shall be deemed conclusively abandoned and may be removed by Landlord and Tenant
shall reimburse Landlord for the cost of removing the same, subject however, to
Landlord's right to require Tenant to remove any improvements or additions made
to Premises by Tenant pursuant to the preceding sub-paragraph (b).
(d) In doing any work related to the installation of
Tenant's furnishings, fixtures, or equipment in the Premises, Tenant will use
only contractors or workmen approved by Landlord. Tenant shall promptly remove
any lien for material or labor claimed against Premises, by such contractors or
workmen if such claim should arise and hereby indemnifies and holds Landlord
harmless from and against any and all costs, expenses or liabilities incurred by
Landlord as a result of such liens.
(e) Tenant shall not place nor maintain any food or
drink coin- operated or vending machine within Premises or Building without the
written consent of Landlord; such consent shall not preclude Landlord from
charging Tenant for utility costs therefor under Paragraph 7(b).
(f) Tenant agrees that all personal property brought
into the Premises by Tenant, its employees, licensees and invitees shall be at
the sole risk of Tenant and Landlord shall not be liable for theft thereof or of
money deposited therein or for any damages thereto; such theft or damage being
the sole responsibility of Tenant.
7. SERVICES
(a) Landlord shall furnish the following services at
his expense:
(i) Elevator service for passenger and
delivery needs.
(ii) HVAC.
Page 3
<PAGE> 6
(iii) Public rest rooms, including the
furnishing of soap, paper towels,
toilet tissue and sanitary napkin
machines.
(iv) Janitorial service, including
sanitizing, dusting, cleaning,
mopping, vacuuming, and trash
removal, each Monday through Friday
plus floor waxing and polishing,
window washing, smudge removal, and
vent and blind cleaning as needed.
(v) Electric power, for small desk top
types of machines, or handheld
devices, such a typewriters, adding
machines and recording machines.
(vi) Electric lighting, at a level of at
least 75 foot candles at desk
height except in corridor or
storage areas, and including the
replacement of lamps and ballasts
as needed.
(vii) Repairs and maintenance for
maintaining in good order at all
times, the exterior walls, windows,
doors, and roof of the building,
public corridors, stairs,
elevators, storage rooms, and rest
rooms, the air conditioning,
electrical, and plumbing systems of
the Building, and the walks, paving
and landscaping surrounding the
Building. Tenant shall be
responsible for damage, wear and
tear to the premises when caused by
his usage and occupancy of the
Premises.
(viii) Grounds care, including the
sweeping of walks and parking areas
and the maintenance of landscaping
in an attractive manner.
(ix) Property taxes, as may be assessed
against real estate by the state or
city.
(x) Fire and extended coverage
insurance to protect the Landlord's
interest in the property.
(xi) General management, including
supervision, inspections, record
keeping, accounting, leasing, and
related management functions.
(b) The services provided for in Paragraph 7(a)
herein, and the amount of the rental prescribed in Paragraph 2(a) and 2(b)
herein, are predicated on and are in anticipation of certain usage of the
Premises by Tenant as follows:
Page 4
<PAGE> 7
(i) Services shall be provided for, and
the normal business hours of the
Building shall be from 8:00 a.m. to
6:00 p.m. on Mondays through
Fridays, except for national
holidays.
(ii) Air conditioning design is based on
sustained outside temperatures
being no higher than 95 degrees
Fahrenheit and no lower than 10
degrees Fahrenheit with sustained
occupancy of the Premises by no
more than one person per 75 square
feet of floor area and heat
generated by electrical lighting
and fixtures not to exceed 3.7
watts per square feet.
(iii) For hours other than normal
business hours, heating of the
Building shall be held to a minimum
temperature of approximately 60
degrees Fahrenheit and cooling of
the Building shall be held to a
maximum temperature of
approximately 85 degrees
Fahrenheit.
(iv) Electric power usage and
consumption is based on lighting of
the Premises during normal business
hours on an average level not to
exceed 75 foot candles at desk
height, and power from small desk
top type machines and handheld
devices using 110 volt 20-amp
circuits. Such heavier use items as
electric heaters, bookkeeping
machines, data processing and
duplicating equipment, stoves,
refrigerators, vending machines,
and the like shall not be used or
installed, unless specified
elsewhere herein, or by separate
written consent of Landlord.
(v) If Tenant uses services in an
amount, or for a period in excess
of that provided for herein, then
Landlord reserves the right to
charge Tenant, as additional rent,
a reasonable sum as reimbursement
for the direct cost of such added
services. In the event of
disagreement as to the
reasonableness of such charge, the
opinion of the appropriate local
utility company or an independent
professional engineering firm shall
prevail.
(c) Landlord shall not be liable for any damages
directly or indirectly resulting from the installation, use or interruption of
use of any equipment in connection with the furnishings of services by any cause
beyond the immediate control of the Landlord, but Landlord shall exercise due
care in furnishing adequate and uninterrupted services.
Page 5
<PAGE> 8
8. DESTRUCTION OR DAMAGE TO PREMISES
If the Premises are totally destroyed (or so
substantially damaged as to be untenantable) by storm, fire, earthquake, or
other casualty, rent shall abate from the date of such damage or destruction and
Landlord shall have 60 days to commence the restoration of the Premises to a
tenantable condition. In the event the Landlord fails to complete such
restoration within 120 days of such damage or destruction, this lease may be
terminated as of the date of such damage or destruction upon written notice from
either party to the other given not more than 10 days following the expiration
of said 120 days period. In the event such notice is not given, then this lease
shall remain in force and effect and rent shall commence upon delivery of the
Premises to Tenant in a tenantable condition. In the event such damage or
destruction occurs within one year from the expiration of the term of this
lease, Tenant may, at its option or written notice to Landlord within thirty
days of such destruction or damage, terminate this lease as of the date of such
destruction or damage.
(a) If Premises are damaged but not rendered wholly
untenantable by any of the events set forth in the paragraph above, rental shall
abate in such proportion as Premises have ben damaged and Landlord shall restore
Premises as speedily as practicable whereupon full rent shall commence.
(b) In no event shall rent abate if the damage or
destruction of the Premises whether total or partial, is the result of the
negligence of Tenant, its agents, or employees.
9. DEFAULT BY TENENT - LANDLORD'S REMEDIES
(a) If Tenant defaults for 30 days after written
notice, therein paying any and all rentals or additional rentals reserved
herein; or if Tenant defaults for 30 days after written notice thereof in
performing any other of his obligations hereunder; or if tenant is adjudicated a
bankrupt, or if a permanent receiver is appointed for Tenant's property,
including Tenant's interest in Premises, and such receiver is not removed within
60 days after written notice from Landlord to Tenant to obtain such removal, or
if, whether voluntarily or involuntarily, Tenant takes advantage of any debtor
relief proceedings under any present or future law, whereby the rent or any part
thereof deferred, or if Tenant makes an assignment for benefits of Creditors; or
if Premises or Tenant's effects or interest therein should be levied upon or
attached under process against Tenant, not satisfied or dissolved within 30 days
after written notice from Landlord to Tenant to obtain satisfaction thereof, or
if Premises shall be abandoned by tenant or become vacant during the term
hereof, then and in any of said Events, Landlord at its option may at once, or
within 6 months thereafter (but only during continuance of such default or
condition terminate this lease by written notice to Tenant, whereupon this lease
shall end. After authorized assignment or subletting, the occurring of any of
the foregoing defaults or events shall affect this lease only if caused by or
happened to the assignee or sublessee. Upon such termination by Landlord, Tenant
must at once surrender possession of Premises to Landlord and remove all of
Tenant's effects therefrom, and Landlord may forthwith re-enter the Premises
Page 6
<PAGE> 9
and repossess itself thereof, and remove all persons and effective therefrom,
using such force as may be necessary without being guilty or trespass, forcible
entry or detainer or other tort.
(b) Any installment of rent, additional rent, or
other sums herein required to be paid by Tenant which is not paid when due,
shall bear interest at the maximum legal rate permissible in the State of
Tennessee from the due date until paid, as a late charge for the purpose of
reimbursing Landlord for expenses incurred by reason of such failure by Tenant
and not as penalty therefor.
(c) Landlord, as Tenant's agent, without termination
of this lease, upon Tenant's default or breach of this Agreement, as set forth
in subparagraph (a) above, may at Landlord's option, evidenced by written notice
to Tenant, terminate Tenant's right to possession and enter upon and rent
Premises at the best price obtainable by reasonable effort, without
advertisement, and by private negotiations and for any term Landlord deems
proper. Tenant shall, upon receipt of such notice, surrender possession of
Premises to Landlord and remove all of Tenant's effects therefrom, and Landlord
may forthwith re-enter the Premises and repossess itself thereof, and remove all
persons and effects therefrom, using such force as may be necessary without
being guilty of trespass, forcible entry or detainer or other tort. Tenant shall
be liable to Landlord for the deficiency, if any, between the amount of all rent
and additional rent reserved in this lease and the net rent, if any, collected
by Landlord in reletting Premises, which deficiency shall be due and payable by
Tenant on the several days n which rent and additional rent reserved in the
lease would have been due and payable. Net rent shall be computed by deducting
from gross rents collected all expenses or costs of whatsoever nature incurred
by Landlord in reletting including, but not limited to attorneys' fees brokers'
commissions and the cost of renovating or remodeling Premises.
(d) No termination of this lease prior to the normal
ending thereof by lapse of time or otherwise shall affect Tenant's obligation to
pay and Landlord's right to collect the entire rent and additional rent reserved
in this lease.
(e) In the event Landlord elects to terminate this
lease as hereinabove provided, Landlord may, in addition to any other remedies
it may have, recover from Tenant all damages Landlord may incur by reason of
such default, including the cost of recovering Premises, reasonable attorneys'
fees and including the worth at the time of such termination of the excess, if
any, of the amount of rent and additional rent reserved in this lease for the
remainder of the Term over the then reasonable rental value of the Premises for
the remainder of the Term, all of which amounts shall be immediately due and
payable from Tenant to Landlord.
(f) Pursuit of any of the foregoing remedies shall
not preclude pursuit of any of the other remedies herein provided or any other
remedies provided by law.
(g) The term "reserved" as applied to rent or
additional rent herein, shall mean any and all payments to which Landlord is
entitled hereunder during the entire term of this lease.
Page 7
<PAGE> 10
10. ASSIGNMENT AND SUBLETTING
Tenant may assign this lease or sublet all or any
part of the premises with the prior written consent of Landlord, subject to the
terms and conditions herein set forth, which consent shall not be unreasonably
withheld. Without limiting the generality of the foregoing provision, the
withholding of such consent by Landlord shall not be deemed unreasonable and the
lease may not be assigned or sublet under any circumstances if said assignment
or subletting results in a second assignment or subletting within the term of
the lease, it being specifically understood that the Landlord shall not be
obligated or required under any circumstances to allow more than one assignment
or subletting throughout the term. Tenant may, at anytime, without the consent
of Landlord, assign this lease or sublease the entire premises to a wholly owned
corporation or controlled subsidiary of Tenant, provided, however, that such
assignment or sublease shall not relieve Tenant of liability under this lease.
11. CONDEMNATION
If all or any part of Premises are taken by virtue of
eminent domain or conveyed or leased in lieu of such taking, this lease shall
expire on the date when title shall vest, or the term of such lease shall
commence, and any rent paid for any period beyond said date shall be repaid to
Tenant. Tenant shall not be entitled to any part of the award or any payment in
lieu thereof.
12. INSPECTIONS
Landlord may enter Premises at reasonable hours to
exhibit same to prospective purchasers or tenants, to inspect Premises, to see
that Tenant is complying with all its obligations hereunder; and to make repairs
required of Landlord under the terms hereof or repairs to any adjoining space.
13. SUBORDINATION
This lease shall be subject and subordinate to any
underlying land leases and/or security deeds which may now or hereafter affect
this lease or the real property of which Premises form a part, and also to all
renewals, modifications, extensions, consolidations, and replacements of such
underlying land leases and such security deeds. In confirmation of the
subordination set forth in this Paragraph 13, Tenant shall, at Landlord's
request, execute and deliver such further instruments as may be desired by any
holder of a security deed or by any lessor under any such underlying land
leases.
14. INDEMNITY AND HOLD HARMLESS
Notwithstanding that joint or concurrent liability
may be imposed upon Landlord by law, Tenant shall indemnify, defend and hold
harmless the Landlord and Premises, at Tenant's expense, against: (i) any
default by Tenant or sub-tenant hereunder; or (ii) any act of
Page 8
<PAGE> 11
negligence of Tenant or its agents, contractors, employees, invitees, or
licensees; or (iii) all claims for damages to persons or property by reason of
the use or occupancy of Premises.
15. TENANT'S INSURANCE AND WAIVER OF SUBROGATION
Tenant shall carry fire and extended coverage
insurance insuring its interest in Tenant's improvements in Premises and its
interest in its office furniture, equipment, supplies, and other personal
property, and Tenant hereby waives any rights of action against Landlord for
loss or damage to its improvements, fixtures and personal property in Premises.
16. RIGHTS OF LANDLORD
The rights given to Landlord herein are in addition
to any rights that may be given to Landlord by any statute or under law.
17. HOLDING OVER
If Tenant remains in possession after expiration of
Term hereof, with Landlord's acquiescence and without any distinct agreement
between the parties, Tenant shall be a tenant at will and such tenancy shall be
subject to all the provisions hereof, except that the monthly portion of the
Base Rental shall be as negotiated for the entire holdover period and there
shall be no renewal of this lease by operation of law. Nothing in this Paragraph
shall be construed as a consent by Landlord to the possession of Premises by
Tenant after the expiration of the Term.
18. ENTIRE AGREEMENT - NO WAIVER
This lease contains the entire agreement of the
parties hereto and no representations, inducements, promises or agreements, oral
or otherwise, between the parties not embodied herein, shall be of any force or
effect. The failure of either party to insist in any instance on strict
performance of any covenant or condition hereof, or to exercise any option
herein contained, shall not be construed as a waiver of such covenant, condition
or option in any other instance. This lease cannot be changed or terminated
orally.
19. HEADINGS
The headings in this lease are included for
convenience only and shall not be taken into consideration in any construction
or interpretation of this lease or any of its provisions.
20. NOTICES
(a) Any notice by either party to the other shall be
valid only if in writing and shall be deemed to be duly given only if delivered
personally or sent by registered or certified mail addressed (i) if to Tenant,
at Premises and (ii) if to Landlord, at Landlord's address
Page 9
<PAGE> 12
set forth above, or at such other address for either party as that party may
designate by notice to the other, notice shall be deemed given, if delivered
personally, upon delivery thereof, and if mailed, upon the mailing thereof.
(b) Tenant hereby appoints as its agent to receive
service of all dispossessory or distraint proceedings, the person in charge of
Premises at the time of occupying Premises, and if there is no person occupying
same, then such service nay be made by attachment thereof on the main entrance
of Premises.
21. HEIRS AND ASSIGNS - PARTIES
(a) The provisions of this lease shall bind and
insure to the benefit of the Landlord and Tenant, and their respective
successors, heirs, legal representatives and assigns, it being understood that
the term "Landlord" as used in this lease, means only the owner of the lessee
for the time being of the land and Building of which Premises are a part, so
that in the event of any sale or sales of said property or of any lease thereof,
the Landlord named herein shall be and hereby is entirely freed and relieved of
all covenants and obligations of Landlord hereunder accruing thereafter, and it
shall be deemed without further agreement that the purchaser, or the lessee, as
the case may be, has assumed and agreed to carry out any and all covenants and
obligations of Landlord hereunder during the period such party has possession of
the land and Building. Should the land and the entire Building be severed as to
ownership by sale and/or lease, then the owner of the entire Building or lessee
of the entire Building that has the right to lease space in the Building to
tenants shall be deemed the "Landlord." Tenant shall be bound to any such
succeeding party landlord for performance by tenant of all the terms, covenants,
and conditions of this lease and agrees to execute any attornment agreement not
in conflict with the terms and provisions of this lease at the request of any
such succeeding Landlord.
(b) The parties "Landlord," "Tenant," and "Agent" and
pronouns relating thereto, as used herein, shall include male, female, singular
and plural, corporation, partnership or individual, as may fit the particular
parties.
22. ATTORNEY FEES
If any rent owing under this lease is collected by or
through an attorney at law, Tenant shall pay as additional rent fifteen percent
(15%) thereof as attorney's fees. Tenant shall also pay all attorney fees
incurred by Landlord as a result of any breach or default by Tenant under this
lease.
23. NO ESTATE IN LAND
Tenant has only a usufruct under this agreement, not
subject to levy or sale, no estate shall pass out of Landlord.
Page 10
<PAGE> 13
24. TIME OF ESSENCE
Time is of the essence of this agreement.
25. PARKING
Lessee is hereby granted the non-exclusive privilege
to use the parking spaces in the Winston Road Properties parking lot for use by
itself and its agents. Lessee shall abide by all rules and regulations as
concerns the use of the aforementioned parking area as may now exist or as may
hereinafter be promulgated by the Lessor, and a violation of this clause and/or
the rules referred to above shall constitute, upon reasonable notice to Lessee,
at the option of Lessor, a default by the Lessee in the terms, conditions and
covenants of this lease or Lessor shall have the right to revoke Lessee's
parking privileges provided by this paragraph and such revocation shall not
affect any other rights, duties or obligations as provided for in this Lease.
These parking spaces may be charged to the Lessee on a monthly basis according
to the monthly rate then in effect and parking spaces may be designated by the
Lessor for the exclusive use of Lessee subject to change by Lessor. Lessee
agrees that any parking cards, stickers or related materials supplied by Lessor
to Lessee shall remain the property of Lessor and, upon termination of this
Lease or revocation of Lessee's parking privileges, whichever shall first occur,
Lessee shall promptly return such cards, stickers and related materials to
Lessor.
26. RULES AND REGULATIONS
(a) The sidewalks, entry passages, corridors, halls,
elevators, and stairways shall not be obstructed by Tenant or used by it for
other than those of ingress and egress. The floors, skylights, and windows that
reflect or admit light into any place in said Building shall not be covered or
obstructed by Tenant. The water closets and other water apparatus shall not be
used for any other purpose than those for which they were constructed, and no
sweeping, rubbish, or other obstructing substances shall be thrown therein.
(b) No advertisement, sign or other notice shall be
inscribed, painted or affixed on any part of the outside or inside of Building,
except upon the interior doors as permitted by Landlord, which signs, etc. shall
be of such order, size and style, and at such places as shall be designated by
Landlord. Window shades, blinds or curtains of a uniform color and pattern only
shall be used throughout the Building to give uniform color exposure through
exterior windows. Signs on Tenant's entrance doors will be provided by Tenant by
Landlord, the cost of the signs to be charged to and paid for by Tenant. No
painting shall be done, nor shall any alterations be made to any part of the
Building by putting up or changing any partition, doors or windows, nor shall
there be any nailing, boring or screwing into the woodwork or plastering, nor
shall any connection be made to the electric wires or electric fixtures without
the consent in writing on each occasion of Landlord or its Agents. All glass,
locks and trimmings in or upon the doors and windows of the Building shall be
kept whole and, when any part thereof shall be broken, the same shall be
immediately replaced or repaired and put in order under the direction and to the
satisfaction of the Landlord or its Agents, and shall be left whole and in good
repair. Tenant shall not injure, or overload or deface the Building, the
woodwork or the walls of the
Page 11
<PAGE> 14
Premises, nor carry on upon the Premises any noxious, noisy or offensive
business. Tenant shall not (without Landlord's written consent) install or
operate any computer, duplicating or other large business machine, equipment, or
any other machinery, upon the premises, or carry on any mechanical business
thereon. If Tenant requires any interior wiring, such as for a business machine,
intercom, printing equipment or copying equipment, such wiring shall be done by
the electrician of the Building only, and no outside wiring men shall be allowed
to do work of this kind unless by the written permission of Landlord or its
representatives. If telegraphic or telephonic service is desired, the wiring for
same shall be done as directed b the electrician of the Building or by some
other employee of Landlord who may be instructed by the superintendent of the
Building to supervise same, and no boring or cutting for wiring shall be done
unless approved by Landlord or its representatives, as stated.
(c) Landlord, in all cases, retains the right to
approve the weight per square foot and position of heavy articles including, but
not limited to, iron safes, printing equipment, computer and duplicating
equipment or air compressors. Tenants must make arrangements with the
superintendent of Building when the elevator is required for the purpose of
carrying any kind of freight.
27. SPECIAL STIPULATIONS
The following special stipulations shall control if
in conflict with any of the foregoing provisions of this lease:
Page 12
<PAGE> 15
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals, in
quadruplicate, the day and year first above written.
Signed, sealed and delivered in the *Tenant: Americare Medical.
presence of:** Services, Inc.
By: /s/ Michael Hatcher
- ---------------------------------- --------------------------------
Witness
/s/ Kathy Whitten Its: President
- ---------------------------------- --------------------------------
Notary Public
My Commission Expires: Date: 12/31/93
--------------------------------
8/28/96
- ----------------------------------
Signed, sealed and delivered Landlord: Winston Road Properties
/s/ Robert C. Eldridge
- ---------------------------------- --------------------------------
Witness Robert C. Eldridge
Managing Partner
/s/ Kathy Whitten /s/ Michael Hatcher
- ---------------------------------- --------------------------------
Notary Public Michael L. Hatcher
Managing Partner
My Commission Expires:
8/28/96 Date: 12/31/93
- ---------------------------------- --------------------------------
Following execution, the original and two copies hereof shall be returned to
Landlord.
NOTE: * If Tenant is a corporation, two authorized corporate officers muse
execute this lease in their appropriate capacity for Tenant, affixing
the corporate seal.
** Two witnesses are required, one of whom must be a Notary Public, who
must affix his/her Notarial seal and stamp bearing the expiration date
of his/her commission.
Page 13
<PAGE> 16
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services, Inc. dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of August 1994, the following article is amended to add in
said lease agreement:
1. PREMISES AND TERM
The Premises being more particularly shown and
outlined on the floor plan attached hereto as Exhibit "A" and
made a part hereof, for a term to commence on the 1st day of
December 1992, and end at midnight on the 31st day of March
2010, such period being herein called "Term."
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Partner
------------------------------- --------------------------------
Date: 8/1/94 Date: 8/1/94
------------------------------- --------------------------------
By:
--------------------------------
Its:
--------------------------------
Date:
--------------------------------
<PAGE> 17
Amendment to Lease Agreement
Between Winton Road Properties
and Americare Medical Services Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services. Inc. dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of June 1995, the following article is amended to add in
said lease agreement:
2. Rental
(a) Suite 201 with 360 square feet.
Tenant shall pay the following base rental rate for this
space:
February 1, 1995 through January 31, 1996
Annual rent = $4,320.00
Monthly rent = $ 360.00
Rate per square foot = $ 12.00
Base rent, if held over, shall be adjusted simultaneously and in the same
percentage as the space in the original lease. The term of this additional
leased space shall end at midnight on the 31st day of January 1996.
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Partner
------------------------------- --------------------------------
Date: 3/6/95 Date: 3/6/95
------------------------------- --------------------------------
By: /s/ Michael Hatcher for
--------------------------------
Park Med Properties
Its: Partner
--------------------------------
Date: 3/6/95
--------------------------------
<PAGE> 18
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of January 1994, the following article is amended in said
lease agreement:
2. Rental
(a) Suite 300 with 9,744 square feet.
Tenant shall pay the following base rental rate for this
space:
January 1, 1994 through November 30, 2005
Annual rent = $116,928.00
Monthly rent = $ 9,744.00
Rate per square feet = $ 12.00
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Managing Partner
------------------------------- --------------------------------
Date: 12/31/93 Date: 12/31/93
------------------------------- --------------------------------
By: /s/ Michael Hatcher
--------------------------------
Its: Managing Partner
--------------------------------
Date: 12/31/93
--------------------------------
<PAGE> 19
Amendment to Lease Agreement
Between
Winston Road Properties. LLC
and Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services, Inc. dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of August, 1998, the following article is amended to add
in said lease agreement:
2. Rental
Suite 500 with 2,096 square feet.
Tenant shall pay the following base rental rate for this
space.
Annual rent = $27,646.24
Monthly rent = $ 2,303.71
Rate per square foot = $ 13.19
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
Except as provided herein, ail terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties, LLC
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: V.P. Its: Partner
------------------------------- --------------------------------
B&B Partnership
Date: 6/2/98 Date: 6/2/98
------------------------------- --------------------------------
By: /s/ Michael Hatcher
--------------------------------
Its: Member
--------------------------------
Park Med Properties, LLC
Date: 6/2/98
--------------------------------
<PAGE> 20
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services. Inc. dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of May, 1997, the following article is amended to add in
said lease agreement:
2. Rental
Suite 504 with 1,231 square feet.
Tenant shall pay the following base rental rate for this
space.
Annual rent = $15,682.94
Monthly rent = $ 1,306.91
Rate per square foot = $ 12.74
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ David P. Jones By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: CFO/VP Its: Managing Partner
------------------------------- --------------------------------
B&B Partnership
Date: 6/23/97 Date: 6/9/97
------------------------------- --------------------------------
By: /s/ Michael Hatcher
--------------------------------
Its: Managing Partner
--------------------------------
Park Med Properties, LLC
Date: 6/6/97
--------------------------------
<PAGE> 21
Amendment to Lease Agreement
Between Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services, Inc. dated the 27th day of August, is now amended as follows:
Effective the 1st day of April 1994, the following article is amended to add in
said lease agreement:
2. Rental
(a) Suite, 508 with 194 square feet.
Tenant shall pay the following base rental rate for this
space:
April 1, 1994 through November 30, 2005
Annual rent = $2,075.80
Monthly rent = $ 172.98
Rate per square foot = $ 10.70
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Partner
------------------------------- --------------------------------
Date: 4/1/94 Date:
------------------------------- --------------------------------
By: /s/ Michael Hatcher for
--------------------------------
Park Med Properties
Its: Partner
--------------------------------
Date: 4/1/94
--------------------------------
<PAGE> 22
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services, Inc. dated the 27th day of August 1992. is now amended as follows:
Effective the 1st day of February, 1998, the following article is amended to add
in said lease agreement:
2. Rental
Suites 600 and 601 with 3,479 square feet.
Tenant shall pay the following base rental rate for this
space.
Annual rent = $45,888.01
Monthly rent = $ 3,823.76
Rate per square foot = $ 13.19
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties, LLC
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: V.P. Its: Partner
------------------------------- --------------------------------
B&B Partnership
Date: 6/2/98 Date: 6/2/98
------------------------------- --------------------------------
By: /s/ Michael Hatcher
--------------------------------
Its: Member
--------------------------------
Park Med Properties, LLC
Date: 6/2/98
--------------------------------
<PAGE> 23
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
This lease agreement between Winston Road Properties and Americare Medical Inc.
dated the 27th day of August, 1992, is now amended as follows:
Effective the 1st day of June 1994, the following article is amended to add in
said lease agreement:
2. Rental
(a) Suite 602 with 2,504 square feet.
Tenant shall pay the following, base rental rate for this
space:
June 1, 1994 through November 30, 2005
Annual rent = $30,048.00
Monthly rent = $ 2,504.00
Rate per square foot = $ 12.00
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Partner
------------------------------- --------------------------------
Date: 6/1/94 Date:
------------------------------- --------------------------------
By: /s/ Michael Hatcher for
--------------------------------
Park Med Properties
Its: Partner
--------------------------------
Date: 6/1/94
--------------------------------
<PAGE> 24
Amendment to Lease Agreement
Between
Winston Road Properties
and
Americare Medical Services, Inc.
Dated: August 27, 1992
The lease agreement between Winston Road Properties and Americare Medical
Services. Inc. dated the 27th day of August 1992, is now amended as follows:
Effective the 1st day of June 1995, the following article is amended to add in
said lease agreement:
2. Rental
(a) Suite 603A with 1,800 square feet.
Tenant shall pay the following base rental rate for this
space:
June 1, 1995 through May 31, 1996
Annual rent = $ 14,400.00
Monthly rent = $ 1,200.00
Rate per square foot = $ 8.00
(b) Beginning June 1, 1996, the unadjusted (prior to annual
percentage increase) base rent shall be:
Annual rent = $21,600.00
Monthly rent = $ 1,800.00
Rate per square foot = $ 12.00
Base rent shall be adjusted simultaneously and in the same percentage as the
space in the original lease. The term of this additional leased space shall end
at midnight on the 31st day of March 2010.
<PAGE> 25
Americare Medical Services, Inc.
Addendum to Lease dated August 27, 1992
Page 2 of 2
Except as provided herein, all terms of the original lease agreement shall
remain in full force and effect.
Tenant: Landlord:
Americare Medical Services, Inc. Winston Road Properties
By: /s/ Michael Hatcher By: /s/ Robert C. Eldridge, Jr.
------------------------------- --------------------------------
Its: President Its: Partner
------------------------------- --------------------------------
Date: 3/6/95 Date: 3/6/95
------------------------------- --------------------------------
By: /s/ Michael Hatcher for
--------------------------------
Park Med Properties
Its: Partner
--------------------------------
Date: 3/6/95
--------------------------------
<PAGE> 26
[FLOOR PLAN]
<PAGE> 1
Exhibit 12.1
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Year Ended Three Months
December 31, Ended
(in 000's)
1994 1995 1996 1997 1998 3/31/98 3/31/99
------- ------- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed Charges
Interest Expense $ 1,394 $ 1,900 $ 1,400 $ 600 $ 400 $ 590 $ 1,631
Rent Expense 2,500 2,500 4,500 5,800 5,700 1,400 1,100
*1/3 833 833 1,500 1,933 1,900 467 367
Debt Issuance Cost -- -- -- -- -- -- 125
Total Fixed Charges 2,227 2,733 2,900 2,533 2,300 1,057 2,123
Earnings
Income before income taxes 19,926 34,358 28,807 7,160 37,216 9,517 (11,821)
Add: fixed charges 2,227 2,733 2,900 2,533 2,300 1,057 2,123
Total 22,153 37,091 31,707 9,693 39,516 10,574 (9,698)
Ratio 9.95 13.57 10.93 3.83 17.18 10.01 (4.57)
</TABLE>
<PAGE> 1
EXHIBIT 21.1 -- SUBSIDIARIES OF THE REGISTRANT
Acute Care Specialists Co.
Alliance Corporation
Charles L. Springfield, Inc.
Clinic Management Services, Inc.
Daniel & Yeager Inc.
Drs. Sheer, Ahearn and Associates, Inc.
Emergency Coverage Corporation
Emergency Management Specialists, Inc.
Emergency Physician Associates, Inc.
Emergency Physicians of Manatee, Inc.
Emergency Professional Services, Inc.
Emergicare Management, Incorporated
Fischer Mangold Partnership
Herschel Fisher, Inc.
Hospital Based Physician Services, Inc.
IMBS, Inc.
InPhyNet Anesthesia of West Virginia, Inc.
InPhyNet Contracting Services, Inc.
InPhyNet Hospital Services, Inc.
InPhyNet Joliet, Inc.
InPhyNet Louisiana Inc.
InPhyNet Medical Management Institute, Inc.
InPhyNet South Broward, Inc.
Karl G. Mangold, Inc.
Med Assure Systems, Inc.
MetroAmerican Radiology, Inc.
Mt. Diablo Emergency Physicians, a California General Partnership
Neo:Med, Inc.
Northwest Emergency Physicians, Incorporated
Paragon Anesthesia, Inc.
Paragon Contracting Services, Inc.
Paragon Healthcare Limited Partnership
Paragon Imaging Consultants, Inc.
Quantum Plus, Inc.
Reich, Seidelman & Janicki Co.
Rosendorf, Margulies, Borushok & Schoenbaum Radiology Associates of
Hollywood, Inc.
Sarasota Emergency Medical Consultants, Inc.
Southeastern Emergency Physicians of Memphis, Inc.
Southeastern Emergency Physicians, Inc.
Team Health Billing Services, L.P.
Team Health Financial Services, Inc.
Team Health Southwest, L.P.
Team Radiology, Inc.
THBS, Inc.
The Emergency Associates for Medicine, Inc.
Virginia Emergency Physicians, Inc.
<PAGE> 2
TEAM HEALTH RELATED PROFESSIONAL CORPORATIONS
ACS Primary Care Center Physicians Midwest, S.C.
ACS Primary Care Center Physicians -- New England, P.C.
ACS Primary Care Center Physicians -- Northeast, P.C.
ACS Primary Care Center Physicians -- Southeast, P.C.
ACS Primary Care Center Physicians -- Southwest, P.A.
Acute Care Specialists, Inc.
Atlantic Emergency Physician Associates, P.C.
Atlantic Physician Services of Maryland, P.C.
Central Susquehanna OBGYN, P.C.
Chase Dennis Emergency Medical Group, Inc.
Emergency Medicine of Florida, Inc.
Emergency Physician Associates of Delaware, P.C.
Emergency Physician Associates of North Carolina, P.C.
Emergency Physician Associates of North Jersey, P.C.
Emergency Physician Associates of Pennsylvania, P.C.
Emergency Physician Associates of South Jersey, P.C.
Emergency Physician Services of New York, P.C.
Emergency Professionals of Ohio, Inc.
InPhyNet Primary Care Physicians -- Medical Corporation West
InPhyNet Primary Care Physicians -- Midwest, S.C.
InPhyNet Primary Care Physicians -- New England, P.C.
InPhyNet Primary Care Physicians -- Northeast, P.C.
InPhyNet Primary Care Physicians -- South Dakota, P.C.
InPhyNet Primary Care Physicians -- Southeast, P.C.
InPhyNet Primary Care Physicians -- Southwest, P.A.
Illinois Emergency Physicians, S.C.
MetroAmerican Radiology Consultants, P.A.
Montvale Radiology, P.A.
North Jersey Emergency Physicians, P.A.
Northwest Emergency Physicians, a California Partnership
Occucare, Inc.
Park Med, P.C.
Provident Physicians, Ltd
Radiology Group, P.A.
South Carolina Emergency Physicians, Inc.
Southeastern Medical Group, P.C.
Team Physicians of Arizona, P.C.
Team Physicians of California Medical Group, Inc.
Team Physicians of Florida, P.A.
Team Physicians of Texas, P.A.
Team Physicians of West Virginia, Inc.
Team Physicians of Ohio, Inc.
Team Physicians, P.C.
TR Physicians, P.C.
William C. Heymann, P.A.
TEAM HEALTH JOINT VENTURES
Mid-Ohio Emergency Services, L.L.C.
St. Vincent's Emergency Physicians, Ltd.
InPhyNet Gulf Coast, Inc.
InPhyNet Wichita, Inc.
EMZA, Inc.
Louisiana Emergency Medical Consultants, Inc.
Park Med Ambulatory Care, P.C.
Health Alliance, L.L.C.
Methodist Medical Center of Oak Ridge Joint Venture
<PAGE> 1
Exhibit 23.1
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated January 29, 1999 and our report included in the
following paragraph, in the Registration Statement (Form S-4 No. ) and related
Prospectus of Team Health, Inc. for the registration of Team Health, Inc. 12%
Senior Subordinated Notes due 2009.
Our audits also included the financial statement schedule of Team Health, Inc.,
listed in Item 21(b). This schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
/s/ Ernst & Young LLP
Birmingham, Alabama
June 9, 1999
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
--------------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
New York 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of principal
executive offices)
</TABLE>
--------------------------
TEAM HEALTH, INC.
(Exact name of OBLIGOR as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1562558
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
1900 Winston Road 37919
Knoxville, Tennessee (Zip code)
(Address of principal executive offices)
</TABLE>
--------------------------
ALLIANCE CORPORATION
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
West Virginia 55-0739050
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 2
-2-
--------------------------
CHARLES L. SPRINGFIELD, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 94-2713012
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
CLINIC MANAGEMENT SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1453392
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
DANIEL & YEAGER, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Alabama 63-1009913
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
DRS. SHEER, AHEARN AND ASSOCIATES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 59-1237521
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
EMERGENCY COVERAGE CORPORATION
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1130266
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
EMERGENCY MANAGEMENT SPECIALISTS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
West Virginia 55-0632298
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 3
- 3 -
--------------------------
EMERGENCY PHYSICIAN ASSOCIATES, INC..
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
New Jersey 22-2213199
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
EMERGENCY PHYSICIANS OF MANATEE, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0051890
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
EMERGENCY PROFESSIONAL SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Ohio 94-2460636
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
EMERGICARE MANAGEMENT, INCORPORATED
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-0881710
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
FISCHER MANGOLD PARTNERSHIP
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 94-1731121
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
HERSCHEL FISCHER, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 94-3262291
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 4
- 4 -
--------------------------
HOSPITAL BASED PHYSICIAN SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1535401
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
IMBS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0622847
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET ANESTHESIA OF WEST VIRGINIA, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
West Virginia 65-0746470
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET CONTRACTING SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0622862
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET HOSPITAL SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0622855
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET JOLIET, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0086608
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 5
- 5 -
--------------------------
INPHYNET LOUISIANA, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0125286
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET MEDICAL MANAGEMENT INSTITUTE
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0652251
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
INPHYNET SOUTH BROWARD, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0726225
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
KARL G. MANGOLD, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 91-1775707
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
MED ASSURE SYSTEMS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1304911
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
METROAMERICAN RADIOLOGY, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
North Carolina 56-1657199
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 6
- 6 -
--------------------------
MT. DIABLO EMERGENCY PHYSICIANS
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 68-0049611
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
NEO:MED, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0456767
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
NORTHWEST EMERGENCY PHYSICIANS, INCORPORATED
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Washington 91-1753075
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
PARAGON ANESTHESIA, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 59-2092416
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
PARAGON CONTRACTING SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0622859
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
PARAGON HEALTHCARE LIMITED PARTNERSHIP
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0426893
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 7
- 7 -
--------------------------
PARAGON IMAGING CONSULTANTS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0410357
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
QUANTUM PLUS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
California 94-3259635
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
REICH, SEIDELMAN, & JANICKI CO.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Ohio 34-1245634
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
ROSENDORF, MARGULIES, BORUSHOK & SHOENBAUM
RADIOLOGY ASSOCIATES OF HOLLYWOOD, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 59-1226776
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
SARASOTA EMERGENCY MEDICAL CONSULTANTS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 65-0195332
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
SOUTHEASTERN EMERGENCY PHYSICIANS OF MEMPHIS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1453389
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 8
- 8 -
--------------------------
SOUTHEASTERN EMERGENCY PHYSICIANS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1266047
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
TEAM HEALTH BILLING SERVICES, L.P.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1727916
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
TEAM HEALTH FINANCIAL SERVICES, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Tennessee 62-1727919
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
TEAM HEALTH SOUTHWEST, L.P.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Delaware 63-1201377
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
TEAM RADIOLOGY, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
North Carolina 56-1844186
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
THBS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Delaware 62-1727916
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
<PAGE> 9
- 9 -
--------------------------
THE EMERGENCY ASSOCIATES FOR MEDICINE, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Florida 59-2862461
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
VIRGINIA EMERGENCY PHYSICIANS, INC.
(Exact name of REGISTRANT as specified in its charter)
<TABLE>
<S> <C>
Virginia 54-1629761
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
</TABLE>
--------------------------
12% Senior Subordinated Notes due 2009
(Title of the indenture securities)
<PAGE> 10
- 10 -
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Reserve Bank of New York (2nd District), New York,
New York (Board of Governors of the Federal Reserve
System).
Federal Deposit Insurance Corporation, Washington, D. C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3,4,5,6,7,8,9,10,11,12,13,14 and 15.
Team Health, Inc., Alliance Corporation, Charles L. Springfield, Inc.,
Clinic Management Services, Inc., Daniel & Yeager, Inc., Drs. Sheer,
Ahearn and Associates, Inc., Emergency Coverage Corporation, Emergency
Management Specialist, Inc., Emergency Physician Associates, Inc.,
Emergency Physicians of Manatee, Inc., Emergency Professional Services,
Inc., Emergicare Management, Incorporated, Fischer Mangold Partnership,
Herschel Fischer, Inc., Hospital Based Physician Services, Inc., IMBS,
Inc., Inphynet Anesthesia of West Virginia, Inc., Inphynet Contracting
Services, Inc., Inphynet Hospital Services, Inc., Inphynet Joliet,
Inc., Inphynet Louisiana, Inc., Inphynet Medical Management Institute,
Inphynet South Broward, Inc., Karl G. Mangold, Inc., Med Assure
Systems, Inc., Metroamerican Radiology, Inc., Mt. Diablo Emergency
Physicians, NEO:MED, Inc., Northwest Emergency Physicians,
Incorporated, Paragon Anesthesia, Inc., Paragon Contracting Services,
Inc., Paragon Healthcare Limited Partnership, Paragon Imaging
Consultants, Inc., Quantum Plus, Inc., Reich, Seidelman, & Janicki Co.,
Rosendorf, Margulies, Borushok & Shoenbaum Radiology Associates of
Hollywood, Inc., Sarasota Emergency Medical Consultants, Inc.,
Southeastern Emergency Physicians of Memphis, Inc.,
<PAGE> 11
- 11 -
Southeastern Emergency Physicians, Inc., Team Health Billing Services,
L.P., Team Health Financial Services, Inc., Team Health Southwest,
L.P., Team Radiology, Inc., THBS, Inc., The Emergency Associates for
Medicine, Inc., Virginia Emergency Physicians, Inc. are currently not
in default under any of its outstanding securities for which United
States Trust Company of New York is Trustee. Accordingly, responses to
Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are
not required under General Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the
State of New York Banking Department to transact
business as a Trust Company, is incorporated by
reference to Exhibit T-1.1 to Form T-1 filed on
September 15, 1995 with the Commission pursuant to
the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990 (Registration No.
33-97056).
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
T-1.4 -- The By-Laws of United States Trust Company of New
York, as amended, is incorporated by reference to
Exhibit T-1.4 to Form T-1 filed on September 15, 1995
with the Commission pursuant to the Trust Indenture
Act of 1939, as amended by the Trust Indenture Reform
Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b)
of the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the
trustee pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 12
- 12 -
NOTE
As of June 3, 1999, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U. S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United
States Trust Company of New York and its parent company, U. S. Trust
Corporation.
In answering Item 2 in this statement of eligibility, as to matters
peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and
will rely on information to be furnished by the obligor and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
---------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, United States Trust Company of New York, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in the City of New
York, and State of New York, on the 3rd day of June, 1999.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: _______________________________________
Patricia Gallagher
Assistant Vice President
RFL/pg
<PAGE> 13
EXHIBIT T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission 450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /S/Gerard F. Ganey
---------------------------
Senior Vice President
<PAGE> 14
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
MARCH 31, 1999
($ IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
Cash and Due from Banks $ 139,755
Short-Term Investments 85,326
Securities, Available for Sale 528,160
Loans 2,081,103
Less: Allowance for Credit Losses 17,114
----------
Net Loans 2,063,989
Premises and Equipment 57,765
Other Assets 125,780
----------
TOTAL ASSETS $3,000,775
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 623,046
Interest Bearing 1,875,364
----------
Total Deposits 2,498,410
Short-Term Credit Facilities 184,281
Accounts Payable and Accrued Liabilities 126,652
----------
TOTAL LIABILITIES $2,809,343
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 53,041
Retained Earnings 121,759
Unrealized Gains on Securities
Available for Sale (Net of Taxes) 1,637
----------
TOTAL STOCKHOLDER'S EQUITY 191,432
----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $3,000,775
==========
</TABLE>
I, Richard E. Brinkmann, Managing Director & Comptroller of the named bank do
hereby declare that this Statement of Condition has been prepared in conformance
with the instructions issued by the appropriate regulatory authority and is true
to the best of my knowledge and belief.
Richard E. Brinkmann, Managing Director & Controller
May 18, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001086795
<NAME> TEAM HEALTH INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR 3-MOS YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1998 DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1999 JAN-01-1998 JAN-01-1998 JAN-01-1997 JAN-01-1996
<PERIOD-END> MAR-31-1999 DEC-31-1998 MAR-31-1998 DEC-31-1997 DEC-31-1996
<CASH> 20,327 3,894 13,697 5,468 5,550
<SECURITIES> 0 0 478 242 334
<RECEIVABLES> 357,276 512,747 138,582 414,835 377,790
<ALLOWANCES> 205,774 364,300 0 284,058 (267,478)
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 175,486 155,019 163,945 150,843 129,187
<PP&E> 43,466 42,549 14,612 41,458 37,170
<DEPRECIATION> 28,377 27,663 0 26,595 20,766
<TOTAL-ASSETS> 370,671 229,956 228,095 199,534 161,364
<CURRENT-LIABILITIES> 72,609 58,151 61,469 58,856 42,484
<BONDS> 247,508 0 0 0 0
0 0 0 0 0
100,521 0 0 0 0
<COMMON> 1,505 0 0 0 0
<OTHER-SE> (64,879) 99,953 136,629 97,893 101,378
<TOTAL-LIABILITY-AND-EQUITY> 370,671 229,956 228,095 199,534 161,364
<SALES> 0 0 0 0 0
<TOTAL-REVENUES> 137,877 547,785 133,026 511,236 463,380
<CGS> 0 0 0 0 0
<TOTAL-COSTS> 108,388 430,362 104,886 398,738 353,593
<OTHER-EXPENSES> 39,738 74,906 18,118 104,452 80,445
<LOSS-PROVISION> 0 0 0 0 0
<INTEREST-EXPENSE> 1,572 5,301 505 886 535
<INCOME-PRETAX> (11,821) 37,216 9,517 7,160 28,807
<INCOME-TAX> (4,361) 15,778 3,983 4,894 9,852
<INCOME-CONTINUING> (7,460) 21,438 5,534 2,266 18,955
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 912 0 0 0
<NET-INCOME> 0 20,526 5,534 2,266 18,955
<EPS-BASIC> 0 0 0 0 0
<EPS-DILUTED> 0 0 0 0 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
12% SENIOR SUBORDINATED NOTES DUE 2009
OF
TEAM HEALTH, INC.
PURSUANT TO THE PROSPECTUS DATED , 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1999 UNLESS EXTENDED
(THE "EXPIRATION DATE").
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to the Exchange Agent:
<TABLE>
<S> <C> <C>
By Overnight Courier By Hand before 4:30 pm: By Registered or Certified Mail:
and By Hand after 4:30 pm United States Trust Company United States Trust Company
on the Expiration Date: of New York of New York
United States Trust Company 111 Broadway P.O. Box 844
of New York Lower Level Cooper Station
770 Broadway, 13th Floor New York, New York 10006 New York, New York 10276-0844
New York, New York 10003 Attn: Corporate Trust Services Attn: Corporate Trust Services
Attn: Corporate Trust Services
</TABLE>
By Facsimile:
212-780-0592
Attn: Corporate Trust Services
confirm by phone
(800) 540-6565
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS LETTER OF TRANSMITTAL OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
800-548-6565 OR BY FACSIMILE AT 212-780-0592.
The undersigned hereby acknowledges receipt of the Prospectus dated
(the "Prospectus") of Team Health, Inc., a Tennessee
corporation (the "Issuer"), and this Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Issuer's offer (the "Exchange
Offer") to exchange $1,000 in principal amount of its 12% Senior Subordinated
Notes due 2009 (the "Exchange Notes"), which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement, for each $1,000 in principal amount of its outstanding
12% Senior Subordinated Notes due 2009 (the "Notes"), of which $100,000,000
aggregate principal amount is outstanding. Capitalized terms used but not
defined herein have the meanings ascribed to them in the Prospectus.
The undersigned hereby tenders the Notes described in Box 1 below (the
"Tendered Notes") pursuant to the terms and conditions described in the
Prospectus and this Letter of Transmittal. The undersigned is the registered
owner of all the Tendered Notes and the undersigned represents that it has
received from each beneficial owner of the Tendered Notes ("Beneficial Owners")
a duly completed and executed form of "Instruction to Registered Holder and/or
Book-Entry Transfer Facility Participant from Beneficial Owner" accompanying
this Letter of Transmittal, instructing the undersigned to take the action
described in this Letter of Transmittal.
<PAGE> 2
Subject to, and effective upon, the acceptance for exchange of the Tendered
Notes, the undersigned hereby exchanges, assigns, and transfers to, or upon the
order of, the Issuer, all right, title, and interest in, to, and under the
Tendered Notes.
Please issue the Exchange Notes exchanged for Tendered Notes in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions" below (Box 3), please send or cause to be sent the
certificates for the Exchange Notes (and accompanying documents, as appropriate)
to the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the true and lawful agent and attorney in fact of the undersigned with
respect to the Tendered Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(i) deliver the Tendered Notes to the Issuer or cause ownership of the Tendered
Notes to be transferred to, or upon the order of, the Issuer, on the books of
the registrar for the Notes and deliver all accompanying evidences of transfer
and authenticity to, or upon the order of, the Issuer upon receipt by the
Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the
undersigned is entitled upon acceptance by the Issuer of the Tendered Notes
pursuant to the Exchange Offer, and (ii) receive all benefits and otherwise
exercise all rights of beneficial ownership of the Tendered Notes, all in
accordance with the terms of the Exchange Offer.
The undersigned understands that tenders of Notes pursuant to the
procedures described under the caption "The Exchange Offer" in the Prospectus
and in the instructions hereto will constitute a binding agreement between the
undersigned and the Issuer upon the terms and subject to the conditions of the
Exchange Offer, subject only to withdrawal of such tenders on the terms set
forth in the Prospectus under the caption "The Exchange Offer-Withdrawal of
Tenders." All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any Beneficial Owner(s), and
every obligation of the undersigned or any Beneficial Owners hereunder shall be
binding upon the heirs, representatives, successors, and assigns of the
undersigned and such Beneficial Owner(s).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign, and transfer the Tendered
Notes and that the Issuer will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges, encumbrances, and adverse claims
when the Tendered Notes are acquired by the Issuer as contemplated herein. The
undersigned and each Beneficial Owner will, upon request, execute and deliver
any additional documents reasonably requested by the Issuer or the Exchange
Agent as necessary or desirable to complete and give effect to the transactions
contemplated hereby.
The undersigned hereby represents and warrants that the information set
forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the Exchange Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired by
the undersigned and any Beneficial Owner(s) in the ordinary course of business
of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each
Beneficial Owner are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the Exchange Notes, (iii) except as otherwise disclosed in
writing herewith, neither the undersigned nor any Beneficial Owner is an
"affiliate," as defined in Rule 405 under the Securities Act, of the Issuer, and
(iv) the undersigned and each Beneficial Owner acknowledge and agree that any
person participating in the Exchange Offer with the intention or for the purpose
of distributing the Exchange Notes must comply with the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
Act"), in connection with a secondary resale of the Exchange Notes acquired by
such person and cannot rely on the position of the Staff of the Securities and
Exchange Commission (the "Commission") set forth in the no-action letters that
are discussed in the section of the Prospectus entitled "The Exchange Offer." In
addition, by accepting the Exchange Offer, the undersigned hereby (i) represents
and warrants that, if the undersigned or any Beneficial Owner of the Notes is a
Participating Broker-Dealer, such Participating Broker-Dealer acquired the Notes
for its own account as a result of market-making activities or other trading
activities and has not entered into any arrangement or understanding with the
Company or any affiliate of the Company (within the meaning of Rule 405 under
the Securities Act) to distribute the New Notes to be received in the Exchange
Offer, and (ii) acknowledges that, by receiving New Notes for its own account in
exchange for Notes, where such Notes were acquired as a result of market-making
activities or other trading activities, such Participating
2
<PAGE> 3
Broker-Dealer will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED HEREWITH.
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"Use of Guaranteed Delivery" BELOW (Box 4).
[ ] CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE "Use of Book-Entry Transfer" BELOW (Box 5).
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
BOX 1
DESCRIPTION OF NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED NOTE HOLDER(S), CERTIFICATE PRINCIPAL AMOUNT AGGREGATE
EXACTLY AS NAME(S) APPEAR(S) ON NOTE CERTIFICATE(S) NUMBER(S) OF REPRESENTED BY PRINCIPAL AMOUNT
(PLEASE FILL IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED**
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
TOTAL
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by persons tendering by book-entry transfer.
** The minimum permitted tender is $1,000 in principal amount of Notes. All
other tenders must be in integral multiples of $1,000 of principal
amount. Unless otherwise indicated in this column, the principal amount
of all Note Certificates identified in this Box 1 or delivered to the
Exchange Agent herewith shall be deemed tendered. See Instruction 4.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------------------------------
BOX 2
BENEFICIAL OWNER(S)
- -------------------------------------------------------------------------------------------------------------------------
STATE OF PRINCIPAL RESIDENCE OF EACH PRINCIPAL AMOUNT OF TENDERED NOTES
BENEFICIAL OWNER OF TENDERED NOTES HELD FOR ACCOUNT OF BENEFICIAL OWNER
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 4
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF EXCHANGE NOTES EXCHANGED FOR NOTES AND UNTENDERED NOTES
ARE TO BE SENT TO SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE UNDERSIGNED AT
AN ADDRESS OTHER THAN THAT SHOWN ABOVE.
Mail Exchange Note(s) and any untendered Notes to:
Name(s):
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Tax Identification or
Social Security No.:
BOX 4
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
BOX 5
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF TENDERED NOTES IS TO BE MADE BY BOOK-ENTRY
TRANSFER.
Name of Tendering Institution:
Account Number:
Transaction Code Number:
4
<PAGE> 5
BOX 6
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
X Signature Guarantee
- ----------------------------------------------- (If required by Instruction 5)
X
- ----------------------------------------------- Authorized Signature
(SIGNATURE OF REGISTERED X
HOLDER(S) OR AUTHORIZED SIGNATORY) -----------------------------------------------
Note: The above lines must be signed by the
registered holder(s) of Notes as their name(s) Name:
appear(s) on the Notes or by persons(s) -----------------------------------------------
authorized to become registered holder(s) (PLEASE PRINT)
(evidence of which authorization must be
transmitted with this Letter of Transmittal). Title:
If signature is by a trustee, executor, -----------------------------------------------
administrator, guardian, attorney-in-fact,
officer, or other person acting in a fiduciary Name of Firm:
or representative capacity, such person must -----------------------------------------
set forth his or her full title below. See (MUST BE AN ELIGIBLE INSTITUTION AS DEFINED IN
Instruction 5. INSTRUCTION 2)
Name(s): Address:
- ---------------------------------------------- -----------------------------------------------
- ----------------------------------------------- -----------------------------------------------
-----------------------------------------------
Capacity: (INCLUDE ZIP CODE)
- -----------------------------------------------
- ----------------------------------------------- Area Code and Telephone Number:
-----------------------------------------------
Street Address:
- ---------------------------------------- Dated:
- ----------------------------------------------- -----------------------------------------------
- -----------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- -----------------------------------------------
Tax Identification or Social Security Number:
- -----------------------------------------------
</TABLE>
BOX 7
BROKER-DEALER STATUS
- --------------------------------------------------------------------------------
[ ] Check this box if the Beneficial Owner of the Notes is a Participating
Broker-Dealer and such Participating Broker-Dealer acquired the Notes for
its own account as a result of market-making activities or other trading
activities.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: TEAM HEALTH, INC.
- ----------------------------------------------------------------------------------------------------------------------------
Name (if joint names, list first and circle the name of the person or entity whose
number you enter in Part 1 below. See instructions if your name has changed.)
-----------------------------------------------------------------------------------------
Address
-----------------------------------------------------------------------------------------
SUBSTITUTE City, State and ZIP Code
-----------------------------------------------------------------------------------------
FORM W-9 List account number(s) here (optional)
-----------------------------------------------------------------------------------------
DEPARTMENT OF THE PART 1 -- PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION Social Security
TREASURY NUMBER ("TIN") IN THE BOX AT RIGHT AND CERTIFY BY Number or TIN
SIGNING AND DATING BELOW
INTERNAL REVENUE SERVICE
-----------------------------------------------------------------------------------------
PART 2 -- Check the box if you are NOT subject to backup withholding under the
provisions of section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have
not been notified that you are subject to backup withholding as a result of failure to
report all interest or dividends or (2) the Internal Revenue Service has notified you
that you are no longer subject to backup withholding. [ ]
- ----------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I PART 3 --
CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE. Awaiting TIN [ ]
SIGNATURE ------------------------ DATE--------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
6
<PAGE> 7
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND NOTES. A properly completed
and duly executed copy of this Letter of Transmittal, including Substitute Form
W-9, and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein, and either
certificates for Tendered Notes must be received by the Exchange Agent at its
address set forth herein or such Tendered Notes must be transferred pursuant to
the procedures for book-entry transfer described in the Prospectus under the
caption "Exchange Offer -- Book-Entry Transfer" (and a confirmation of such
transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New
York City time, on the Expiration Date. The method of delivery of certificates
for Tendered Notes, this Letter of Transmittal and all other required documents
to the Exchange Agent is at the election and risk of the tendering holder and
the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. Instead of delivery by mail, it is recommended
that the Holder use an overnight or hand delivery service. In all cases,
sufficient time should be allowed to assure timely delivery. No Letter of
Transmittal or Notes should be sent to the Company. Neither the Issuer nor the
registrar is under any obligation to notify any tendering holder of the Issuer's
acceptance of Tendered Notes prior to the closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Notes
but whose Notes are not immediately available, and who cannot deliver their
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Notes according to
the guaranteed delivery procedures set forth below, including completion of Box
4. Pursuant to such procedures: (i) such tender must be made by or through a
firm which is a member of a recognized Medallion Program approved by the
Securities Transfer Association Inc. (an "Eligible Institution") and the Notice
of Guaranteed Delivery must be signed by the holder; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the holder and the
Eligible Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by mail or hand delivery) setting forth the name and address of the
holder, the certificate number(s) of the Tendered Notes and the principal amount
of Tendered Notes, stating that the tender is being made thereby and
guaranteeing that, within five New York Stock Exchange trading days after the
Expiration Date, this Letter of Transmittal together with the certificate(s)
representing the Notes and any other required documents will be deposited by the
Eligible Institution with the Exchange Agent; and (iii) such properly completed
and executed Letter of Transmittal, as well as all other documents required by
this Letter of Transmittal and the certificate(s) representing all Tendered
Notes in proper form for transfer, must be received by the Exchange Agent within
five New York Stock Exchange trading days after the Expiration Date. Any holder
who wishes to tender Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery relating to such Notes prior to 5:00 p.m., New York City
time, on the Expiration Date. Failure to complete the guaranteed delivery
procedures outlined above will not, of itself, affect the validity or effect a
revocation of any Letter of Transmittal form properly completed and executed by
an Eligible Holder who attempted to use the guaranteed delivery process.
3. BENEFICIAL OWNER INSTRUCTIONS TO REGISTERED HOLDERS. Only a holder in
whose name Tendered Notes are registered on the books of the registrar (or the
legal representative or attorney-in-fact of such registered holder) may execute
and deliver this Letter of Transmittal. Any Beneficial Owner of Tendered Notes
who is not the registered holder must arrange promptly with the registered
holder to execute and deliver this Letter of Transmittal on his or her behalf
through the execution and delivery to the registered holder of the Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner form accompanying this Letter of Transmittal.
4. PARTIAL TENDERS. Tenders of Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Notes held by the holder is tendered, the tendering holder should fill
in the principal amount tendered in the column labeled "Aggregate Principal
Amount Tendered" of the box entitled "Description of Notes Tendered" (Box 1)
above. The entire principal amount of Notes delivered to the Exchange Agent will
be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Notes held by the holder is not tendered, then Notes for
the principal amount of Notes not tendered and Exchange Notes issued in exchange
7
<PAGE> 8
for any Notes tendered and accepted will be sent to the Holder at his or her
registered address, unless a different address is provided in the appropriate
box on this Letter of Transmittal, as soon as practicable following the
Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Tendered Notes, the signature must correspond with
the name(s) as written on the face of the Tendered Notes without alteration,
enlargement or any change whatsoever.
If any of the Tendered Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any Tendered
Notes are held in different names, it will be necessary to complete, sign and
submit as many separate copies of the Letter of Transmittal as there are
different names in which Tendered Notes are held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Notes, and Exchange Notes issued in exchange therefor are to be issued
(and any untendered principal amount of Notes is to be reissued) in the name of
the registered holder(s), then such registered holder(s) need not and should not
endorse any Tendered Notes, nor provide a separate bond power. In any other
case, such registered holder(s) must either properly endorse the Tendered Notes
or transmit a properly completed separate bond power with this Letter of
Transmittal, with the signature(s) on the endorsement or bond power guaranteed
by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any Tendered Notes, such Tendered Notes must be endorsed
or accompanied by appropriate bond powers, in each case, signed as the name(s)
of the registered holder(s) appear(s) on the Tendered Notes, with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Tendered Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Issuer, evidence satisfactory to the Issuer of their authority to so act must be
submitted with this Letter of Transmittal.
Endorsements on Tendered Notes or signatures on bond powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Tendered Notes are tendered (i) by a registered holder
who has not completed the box set forth herein entitled "Special Delivery
Instructions" (Box 3) or (ii) by an Eligible Institution.
6. SPECIAL DELIVERY INSTRUCTIONS. Tendering holders should indicate, in
the applicable box (Box 3), the name and address to which the Exchange Notes
and/or substitute Notes for principal amounts not tendered or not accepted for
exchange are to be sent, if different from the name and address of the person
signing this Letter of Transmittal. In the case of issuance in a different name,
the taxpayer identification or social security number of the person named must
also be indicated.
7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the exchange of Tendered Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Tendered Notes pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or on any
other person) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be billed directly
to such tendering holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Tendered Notes listed in this Letter of
Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
holder(s) of any Tendered Notes which are accepted for exchange must provide the
Issuer (as payor) with its correct taxpayer identification number ("TIN"),
which, in the case of a holder who is an individual, is his or her social
security number. If the Issuer is not provided with the correct TIN, the Holder
may be subject to backup withholding and a $50 penalty imposed by the Internal
Revenue Service. (If withholding results in an over-payment of taxes, a refund
may be obtained.) Certain holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting
8
<PAGE> 9
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
To prevent backup withholding, each holder of Tendered Notes must provide
such holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such holder is
awaiting a TIN), and that (i) the holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
failure to report all interest or dividends or (ii) the Internal Revenue Service
has notified the holder that such holder is no longer subject to backup
withholding. If the Tendered Notes are registered in more than one name or are
not in the name of the actual owner, consult the "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for information on
which TIN to report.
The Issuer reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Issuer's obligation regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and withdrawal of Tendered
Notes will be determined by the Issuer in its sole discretion, which
determination will be final and binding. The Issuer reserves the right to reject
any and all Notes not validly tendered or any Notes the Issuer's acceptance of
which would, in the opinion of the Issuer or their counsel, be unlawful. The
Issuer also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Notes as to any ineligibility of any
holder who seeks to tender Notes in the Exchange Offer. The interpretation of
the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Issuer shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Notes must be cured within such time as the Issuer
shall determine. Neither the Issuer, the Exchange Agent nor any other person
shall be under any duty to give notification of defects or irregularities with
respect to tenders of Notes, nor shall any of them incur any liability for
failure to give such notification. Tenders of Notes will not be deemed to have
been made until such defects or irregularities have been cured or waived. Any
Notes received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to
amend, waive or modify any of the conditions in the Exchange Offer in the case
of any Tendered Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Notes or transmittal of this Letter of Transmittal will be
accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any tendering Holder
whose Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated herein for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance and requests for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address
indicated herein. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF NOTES; RETURN OF
NOTES. Subject to the terms and conditions of the Exchange Offer, the Issuer
will accept for exchange all validly tendered Notes as soon as practicable after
the Expiration Date and will issue Exchange Notes therefor as soon as
practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be
deemed to have accepted tendered Notes when, as and if the Issuer has given
written or oral notice (immediately followed in writing) thereof to the Exchange
Agent. If any Tendered Notes are not exchanged pursuant to the Exchange Offer
for any reason, such unexchanged Notes will be returned, without expense, to the
undersigned at the address shown in Box 1 or at a different address as may be
indicated herein under "Special Delivery Instructions" (Box 3).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures
set forth in the Prospectus under the caption "The Exchange Offer."
9
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
WITH RESPECT TO
12% SENIOR SUBORDINATED NOTES DUE 2009
OF
TEAM HEALTH, INC.
PURSUANT TO THE PROSPECTUS DATED , 1999
This form must be used by a holder of 12% Senior Subordinated Notes due
2009 (the "Notes") of Team Health, Inc., a Tennessee corporation (the
"Company"), who wishes to tender Notes to the Exchange Agent pursuant to the
guaranteed delivery procedures described in "The Exchange Offer -- Guaranteed
Delivery Procedures" of the Company's Prospectus, dated (the
"Prospectus") and in Instruction 2 to the related Letter of Transmittal. Any
holder who wishes to tender Notes pursuant to such guaranteed delivery
procedures must ensure that the Exchange Agent receives this Notice of
Guaranteed Delivery prior to the Expiration Date of the Exchange Offer.
Capitalized terms used but not defined herein have the meanings ascribed to them
in the Prospectus or the Letter of Transmittal.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1999 UNLESS EXTENDED
(THE "EXPIRATION DATE").
United States Trust Company
(the "Exchange Agent")
<TABLE>
<S> <C> <C>
By Overnight Courier By Hand before 4:30 pm: By Registered or Certified Mail:
and By Hand after 4:30 pm United States Trust Company United States Trust Company
on the Expiration Date: of New York of New York
United States Trust Company 111 Broadway P.O. Box 844
of New York Lower Level Cooper Station
770 Broadway, 13th Floor New York, New York 10006 New York, New York 10276-0844
New York, New York 10003 Attn: Corporate Trust Services Attn: Corporate Trust Services
Attn: Corporate Trust Services
</TABLE>
By Facsimile:
212-780-0592
Attn: Corporate Trust Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
FOR ANY QUESTIONS REGARDING THIS NOTICE OF GUARANTEED DELIVERY OR FOR ANY
ADDITIONAL INFORMATION, YOU MAY CONTACT THE EXCHANGE AGENT BY TELEPHONE AT
800-548-6565, OR BY FACSIMILE AT 212-780-0592.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below pursuant to the guaranteed delivery procedures set forth
in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Notes listed below:
<TABLE>
<S> <C> <C>
CERTIFICATE NUMBER(S) (IF KNOWN) OF NOTES OR AGGREGATE PRINCIPAL AGGREGATE PRINCIPAL
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE SIGN AND COMPLETE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Signatures of Registered Holder(s) or Date:
Authorized Signatory: ------------------------------------------------,
- ------------------------------------ 1998
- -------------------------------------------------
- ------------------------------------------------- Address:
Name(s) of Registered Holder(s): -------------------------------------------------
- ------------------------------------------------- -------------------------------------------------
- -------------------------------------------------
- ------------------------------------------------- Area Code and Telephone No.:
--------------------------
</TABLE>
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly
as their name(s) appear on certificates for Notes or on a security position
listing as the owner of Notes, or by person(s) authorized to become Holder(s) by
endorsements and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Capacity:
- --------------------------------------------------------------------------------
Address(es):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, guarantees deposit with the Exchange Agent of the Letter of Transmittal
(or facsimile thereof), together with the Notes tendered hereby in proper form
for transfer (or confirmation of the book-entry transfer of such Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility described in the
prospectus under the caption "The Exchange Offer -- Guaranteed Delivery
Procedures" and in the Letter of Transmittal) and any other required documents,
all by 5:00 p.m., New York City time, on the fifth New York Stock Exchange
trading day following the Expiration Date.
<TABLE>
<S> <C>
Name of firm:
------------------------------------------
-----------------------------------------------
(AUTHORIZED SIGNATURE)
Address: Name:
- ----------------------------------------------- -----------------------------------------------
(PLEASE PRINT)
Title:
- ----------------------------------------------- -----------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Tel. No.: Dated:
- -----------------------------------------------
</TABLE>
DO NOT SEND SECURITIES WITH THIS FORM. ACTUAL SURRENDER OF SECURITIES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, AN EXECUTED LETTER OF TRANSMITTAL.
3
<PAGE> 4
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail, the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Notes referred
to herein, the signature must correspond with the name(s) written on the face of
the Notes without alteration, enlargement, or any change whatsoever. If this
Notice of Guaranteed Delivery is signed by a participant of the Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of the Notes, the signature must correspond with the name shown on the security
position listing as the owner of the Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Notes or signed as the name of the participant shown on the Book-Entry
Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
4
<PAGE> 1
EXHIBIT 99.3
INSTRUCTIONS TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER
OF
TEAM HEALTH, INC.
12% SENIOR SUBORDINATED NOTES DUE 2009
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledges receipt of the Prospectus, dated
(the "Prospectus") of Team Health, Inc., a Tennessee corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to action to be taken by you relating to the Exchange
Offer with respect to the 12% Senior Subordinated Notes due 2009 (the "Notes")
held by you for the account of the undersigned.
The aggregate face amount of the Notes held by you for the account of the
undersigned is (FILL IN AMOUNT):
$ of the 12% Senior Subordinated Notes due 2009
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[ ] TO TENDER the following Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY):
$
[ ] NOT TO TENDER any Notes held by you for the account of the undersigned.
If the undersigned instruct you to tender the Notes held by you for the
account of the undersigned, it is understood that you are authorized (a) to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representation and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations that (i) the
undersigned's principal residence is in the state of (FILL IN
STATE) , (ii) the undersigned is acquiring the Exchange Notes in
the ordinary course of business of the undersigned, (iii) the undersigned is not
participating, does not participate, and has no arrangement or understanding
with any person to participate in the distribution of the Exchange Notes, (iv)
the undersigned acknowledges that any person participating in the Exchange Offer
for the purpose of distributing the Exchange Notes must comply with the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "Act"), in connection with a secondary resale transaction of the
Exchange Notes acquired by such person and cannot rely on the position of the
Staff of the Securities and Exchange Commission set forth in no-action letters
that are discussed in the section of the Prospectus entitled "The Exchange
Offer -- Resales of the Exchange Notes," and (v) the undersigned is not an
"affiliate," as defined in Rule 405 under the Act, of the Company; (b) to agree,
on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c)
to take such other action as necessary under the Prospectus or the Letter of
Transmittal to effect the valid tender of such Notes.
<PAGE> 2
SIGN HERE
Name of beneficial owner(s):
- --------------------------------------------------------------------------------
Signature(s):
- --------------------------------------------------------------------------------
Name (please print):
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Telephone number:
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number:
- ----------------------------------------------------------------
Date:
- --------------------------------------------------------------------------------
2
