Exhibit 10.8
MANAGEMENT AGREEMENT
This Management Agreement (the "AGREEMENT") is entered into as of February
10, 2005, by and among Onex Partners Manager LP, a Delaware limited partnership
(the "CONSULTANT"), AMR HoldCo, Inc., a Delaware corporation ("AMR"), and EmCare
HoldCo, Inc., a Delaware corporation ("EMCARE" and, together with AMR, the
"COMPANIES"). The Consultant and the Companies are referred to jointly as the
"PARTIES".
The Companies, Emergency Medical Services L.P., a Delaware limited
partnership and the parent of the Companies ("HOLDINGS"), and their direct or
indirect subsidiaries which receive the services performed by the Consultant are
referred to collectively as the "CLIENTS".
RECITALS
A. The Consultant is skilled in corporate finance, strategic corporate
planning and other management services.
B. Pursuant to that certain (i) Stock Purchase Agreement, dated December
6, 2004 (the "EMCARE STOCK PURCHASE AGREEMENT"), by and among Xxxxxxx
International, Inc., Xxxxxxx Medical Holdings, Inc. and Emergency Medical
Services Corporation (f/k/a EMSC, Inc.) and (ii) Stock Purchase Agreement, dated
December 6, 2004 (the "AMR STOCK PURCHASE AGREEMENT" and, together with the
EmCare Stock Purchase Agreement, the "PURCHASE AGREEMENTS"), by and among
Xxxxxxx International, Inc., Xxxxxxx Medical Holdings, Inc. and Emergency
Medical Services Corporation, AMR HoldCo, Inc. and EmCare HoldCo, Inc. acquired,
on the date hereof, all of the issued and outstanding capital stock of American
Medical Response, Inc. and EmCare Holdings Inc., respectively (the
"ACQUISITIONS").
C. Prior to the date hereof, the Consultant rendered substantial and
valuable services to the Clients in connection with the negotiation and
execution of the Purchase Agreements and raising of debt financing for the
Acquisitions.
D. The Clients will continue to require the Consultant's skills and
management advisory services in connection with their general business
operations after the date hereof.
E. The Consultant is willing to make such skills available and to provide
such services to the Clients on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the Parties, intending to be legally bound, do hereby
agree as follows:
1. Engagement. The Companies hereby engage the Consultant for the Term (as
hereinafter defined) to provide consulting and management advisory services to
the Clients as the Consultant and the Clients shall mutually agree from time to
time. These services will be in the field of financial and strategic corporate
planning and such other management areas as the Consultant and the Clients shall
mutually agree. In consideration of the compensation to the Consultant herein
specified, the Consultant accepts such engagement and agrees to perform the
services specified herein.
2. Term. The engagement shall be for a term commencing on the date hereof
and expiring on the fifth anniversary of the date hereof (the "INITIAL TERM").
Upon expiration of the Initial Term, this Agreement shall automatically extend
for successive periods of one year each
unless the Consultant or the Companies gives notice to the other at least 90
days prior to the end of the Initial Term (or any annual extension thereof)
indicating that it does not intend to extend the term of this Agreement. The
Initial Term, together with all such annual extensions of the Initial Term, is
referred to herein as the "TERM."
3. Services to be Performed. The Consultant shall devote reasonable time
and efforts to the performance of the consulting and management advisory
services contemplated by this Agreement. However, no precise number of hours is
to be devoted by the Consultant on a weekly or monthly basis. The Consultant may
perform services under this Agreement directly, through its employees or agents,
or with such outside consultants as the Consultant may engage for such purpose.
Each Client acknowledges that such services to them will not be exclusive, and
that the Consultant and its affiliates will render similar services to other
persons.
4. Confidentiality. The Consultant shall hold in confidence all
proprietary and confidential information of the Clients which may come into the
Consultant's possession or knowledge as a result of its performance of services
hereunder, exercising a degree of care in maintaining such confidence as is used
by the Consultant to protect its own proprietary or confidential information
that it does not wish to disclose. The Consultant shall use all reasonable
efforts to ensure that its employees, agents and outside consultants similarly
maintain the confidentiality of such proprietary and confidential information of
the Clients.
5. Compensation; Expense Reimbursement.
5.1 Management Fee. In consideration of the management advisory
services hereunder, the Consultant shall be paid a fee (the "MANAGEMENT FEE")
equal to $1,000,000 annually; provided that the Companies may increase the
amount of the annual fee, and may pay special advisory fees and investment
banking fees to Consultant as it deems appropriate, provided, that in no event
shall the aggregate Management Fee paid pursuant to this Agreement exceed
$2,000,000 in any fiscal year (the "MAXIMUM FEE"). Any increase in the
Management Fee shall be authorized by a majority of the members of each
Company's board of directors who are not affiliates of Consultant; for this
purpose, executive officers of the Clients who are not otherwise affiliates of
Onex Corporation shall not be deemed to be an affiliate of the Consultant. The
Management Fee shall be payable as agreed from time to time by the Consultant
and the Companies, but not less frequently than in quarterly installments of the
annual fee. In the event the Companies are unable to pay the Management Fee due
to restrictions contained in their revolving credit or term bank agreements, the
Management Fee shall not be paid, but shall accrue until such payment is no
longer restricted, at which time the accrued but unpaid Management Fee shall be
paid to the Consultant, together with interest at the Companies' borrowing rate
if permitted by its credit agreements. The Clients shall allocate the Management
Fee among themselves according to the services received.
5.2 Additional Fees. If the Consultant is requested by the Companies
to perform services relating to activities outside the ordinary course of the
Clients' business, compensation for such services shall be mutually agreed to by
the Companies and the Consultant and require the approval of a majority of the
members of the Companies' board of directors who are not affiliates of the
Consultant.
5.3 Expenses. The Clients shall reimburse the Consultant for all
reasonable out-of-pocket expenses incurred in connection with the services
provided by the Consultant under this Agreement, including, without limitation,
reasonable costs in connection with agents or outside consultants described in
Section 3 and reasonable travel, lodging and similar out-of-
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pocket costs incurred by the Consultant in connection with or on account of its
performance of services for the Clients under this Agreement. Reimbursement
shall be made upon presentation to the Clients by the Consultant of reasonably
itemized documentation therefor.
6. Indemnification. In addition to their agreements and obligations under
this Agreement, the Clients agree, jointly and severally, to indemnify and hold
harmless the Consultant and its affiliates, including its officers, directors,
stockholders, partners, members, employees and agents (collectively, the
"INDEMNITEES"), from and against any and all claims, liabilities, losses and
damages or actions, suits or proceedings in respect thereof (collectively, the
"OBLIGATIONS"), as and when incurred by the Indemnitees, in any way related to
or arising out of the performance by the Consultant of services under this
Agreement, and to reimburse the Indemnitees for reasonable out-of-pocket legal
and other expenses ("EXPENSES") as and when incurred by any of them in
connection with or relating to investigating, preparing to defend, or defending
any actions, claims or other proceedings (including any investigation or
inquiry) arising in any manner out of or in connection with the Consultant's
performance under this Agreement (whether or not such Indemnitee is a named
party in such proceeding); provided, that the Clients shall not be responsible
under this Section 6 for any Obligations or Expenses incurred by an Indemnitee
to the extent that it is finally judicially determined (in an action in which
such Indemnitee is a party) that the Obligations resulted primarily from such
Indemnitee's gross negligence or willful misconduct. Without limiting the
foregoing, in no event shall any Indemnitee have any liability, including,
without limitation, liability for any Obligations or Expenses in contract, tort
or otherwise, to the Clients in connection with this Agreement, the Consultant's
engagement under this Agreement, or the matters contemplated by this Agreement
except to the extent that any such liability is finally judicially determined
(in an action in which such Indemnitee is a party) to have resulted primarily
from such person's gross negligence or willful misconduct; nor shall any
Indemnitee have liability for lost profits or other consequential, incidental,
indirect, special or punitive damages or for any amount in excess of the fees
collected by it under this Agreement.
7. Third-Party Beneficiaries. All Indemnitees not signatory to this
Agreement are intended third-party beneficiaries of Section 6 of this Agreement.
8. Notice. Any notice or other communication required or permitted to be
given or made under this Agreement by one Party to the other shall be deemed to
have been duly given or made when delivered, if personally delivered, when
transmitted, if sent by confirmed facsimile transmission, or when actually
received, if sent by mail, to the Party at the following addresses (or at such
other address as shall be given in writing by one Party to the other):
(i) If to the Consultant, addressed to it at:
Onex Partners Manager LP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Xx Xxxxx and
Ms. Xxxxx Soenderop
Facsimile No.: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Xxxx Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
(ii) If to the Companies, addressed to the Companies at:
Emergency Medical Services L.P.
0000 X. Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
9. Modifications. This Agreement constitutes the entire agreement among
the Parties with regard to the subject matter hereof, superseding all prior
understandings and agreements, whether written or oral. This Agreement may not
be amended or revised except by a writing signed by the Parties.
10. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns, but may not be assigned by any Party without the prior written consent
of the other Parties hereto, except that the Consultant may assign its rights
and obligations hereunder to one or more of its affiliates without the
Companies' prior written consent.
11. Captions. Captions have been inserted solely for the convenience of
reference and in no way define, limit or describe the scope or substance of any
provision and shall not affect the validity of any other provision.
12. Governing Law; Jurisdiction; Service of Process. This Agreement shall,
in accordance with Section 5-1401 of the General Obligations Law of the State of
New York, be governed by the laws of the State of New York, without regard to
any conflicts of laws principles thereof that would call for the application of
the laws of any other jurisdiction. Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against any Party in the courts of the State of New York, or if it has
or can acquire jurisdiction, in the United States District Court for the
Southern District of New York, and each Party hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any Party anywhere in the world, whether within or without the State
of New York.
13. Severability. If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be affected or impaired
thereby.
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14. Counterparts. This Agreement may be executed in several counterparts
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first above written.
ONEX PARTNERS MANAGER LP
By: Onex Partners Manager GP Inc., its General Partner
By: /s/ Xxxxxx X. Xx Xxxxx
-------------------------------------
Name: Xxxxxx X. Xx Xxxxx
Title: Managing Director
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Managing Director
AMR HOLDCO, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
EMCARE HOLDCO, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
[Signature Page to Management Agreement]
