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EXHIBIT 99.7
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is entered into this 29th day of
July, 1997, among Xxxxxxx Inc., a Canadian corporation ("Parent"), Xxxxxxx X.
Xxxxx, Xx., M.D. ("Xxxxx") and Xxxxxxx X. Xxxxxx, III ("Xxxxxx" and, together
with Xxxxx, the "Purchasers").
The Company, EHI Acquisition Corp., a wholly owned Delaware
subsidiary of Parent ("Acquisition"), and EmCare Holdings Inc., a Delaware
corporation ("EHI") have entered into an Agreement and Plan of Merger dated
July 29, 1997 providing for a tender offer by Acquisition for shares of common
stock of EHI and the subsequent merger of Acquisition with and into EHI (the
"Merger Agreement"). Xxxxx and Xxxxxx are the Chairman of the Board and Chief
Executive Officer and the President and Chief Operating Officer, respectively,
of EHI. In connection with the transactions contemplated by the Merger
Agreement, Parent desires the Purchasers to make, and the Purchasers desire to
make, an equity investment in Parent as provided in this Agreement.
In consideration of the agreements set forth below, Parent and
the Purchasers agree as follows:
1. Sale and Purchase. Subject to the terms and
conditions of this Agreement, at the closing provided for in Section 2, Parent
shall sell to Xxxxx, and Xxxxx shall purchase from Parent, a number (rounded to
the nearest whole number) of common shares of Parent (the "Common Shares")
determined by dividing US$7,000,000 by the Market Price (as defined below), and
Parent shall sell to Xxxxxx, and Xxxxxx shall purchase from Parent, a number
(rounded to the nearest whole number) of Common Shares determined by dividing
US$3,000,000 by the Market Price, in each case for cash at a price per share
equal to the Market Price. The Market Price shall be the closing sale price of
the Common Shares on the New York Stock Exchange on the trading day immediately
preceding the day of the closing. Only whole Common Shares will be issued. The
Common Shares sold and purchased pursuant to this Agreement shall be referred
to as the "Shares."
2. Closing. The purchase and sale of the Shares shall
take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 0000 Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000 immediately following the acceptance of shares
of EHI stock pursuant to the Offer contemplated by the Merger Agreement, or at
such other time place and/or time as Parent and the Purchasers may agree in
writing.
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3. Transfer Restrictions.
a. None of the Shares shall be sold, pledged,
assigned or otherwise transferred, voluntarily or involuntarily, by
either of the Purchasers except as set forth in Section 3(b) hereof
and except as follows:
i. On the first anniversary of the date
of this Agreement, the restrictions on transfer shall lapse
with respect to 10% of the Shares purchased by each Purchaser;
ii. On the second anniversary of the
date of this Agreement, the restrictions on transfer shall
lapse with respect to an additional 10% of the Shares
purchased by each Purchaser; and
iii. On the third anniversary of the date
of this Agreement, the restrictions on transfer shall lapse
with respect to all remaining Shares.
Moreover, since the Shares have not been registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), or applicable state
securities laws, the economic risk of investment in the Shares must be borne by
the Purchasers, and the Shares cannot be sold by the Purchasers unless
subsequently registered under the Securities Act and such laws or unless an
exemption from such registration is available.
b. The restrictions contained in this Section 3
will not apply with respect to transfers of Shares (i) pursuant to
applicable laws of descent and distribution, or (ii) among Purchaser's
Family Group (as defined below), provided that the restrictions
contained in this Section 3 will continue to be applicable to the
Shares after any such transfer and the transferees of such Shares
shall agree in writing to be bound by the provisions of this
Agreement. "Family Group" means, with respect to each Purchaser, such
Purchaser's spouse and descendants (whether natural or adopted) and
any trust or partnership solely for the benefit of such Purchaser
and/or Purchaser's spouse and/or descendants. Any transferee of Shares
pursuant to a transfer in accordance with the provisions of this
Section 3(b), is herein referred to as a "Permitted Transferee." Upon
the transfer of the Shares pursuant to this Section 3(b), Purchaser
will deliver a written notice (the "Transfer Notice") to Parent. The
Transfer Notice will disclose in reasonable detail the identity of the
Permitted Transferees.
c. This provision of this Section 3 will
terminate with respect to each Purchaser upon the first to occur of
(i) the death of such Purchaser, and (ii) the sale of EHI by Parent
(whether by stock or asset sale, merger or otherwise).
4. Rights as Shareholder. From and after the closing,
each Purchaser shall be entitled to all of the rights of a shareholder with
respect to the Shares purchased by him, including
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the right to vote such Shares and to receive dividends and other distributions
payable with respect to such Shares.
5. Stock Certificates and Legend. Certificates
representing the Shares shall be issued in the Purchasers' names, shall bear
the legends set forth in Section 8, and shall be delivered to the Purchasers at
the closing.
6. Representations and Warranties of Parent. Parent
represents and warrants to each of the Purchasers as follows:
a. Organization. Parent is a corporation duly
organized, validly existing and in good standing under the Canada
Business Corporations Act and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to
conduct its business as currently conducted.
b. Authority. Parent has all requisite power and
authority to execute and deliver this Agreement and to perform the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the
part of Parent, and no other approval on the part of Parent is
necessary for the execution, delivery and performance of this
Agreement. This Agreement constitutes the legal, valid and binding
obligation of Parent, enforceable against it in accordance with its
terms.
c. No Conflicts. Subject to compliance with the
requirements of federal, state and provincial securities laws with
respect to the issuance of the Shares, the execution and delivery of
this Agreement by Parent and the consummation of the transactions
contemplated hereby (a) do not require Parent to file any notice with
or obtain any consent, approval, authorization or exemption from any
person, (b) will not violate any court order, judgment, law, rule or
regulation and (c) will not constitute a default or breach under any
agreement to which Parent is a party or by which it or any of its
properties may be bound.
d. SEC Reports. Parent's Annual Report on Form
10-K for the year ended August 31, 1996, as filed with the Securities
and Exchange Commission (the "SEC"), and all reports, schedules,
forms, statements and other documents subsequently filed by Parent
with the SEC, as of their respective dates, (a) complied with the
applicable requirements of the Securities Act or the Securities
Exchange Act of 1934, as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and (b) did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. During the entire term of this Agreement,
Parent agrees to continue to file all reports, schedules, forms,
statements and other documents in accordance with the applicable
requirements of the Securities Act and the Securities Exchange Act of
1934, and the rules and regulations of the SEC promulgated thereunder.
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e. Shares Valid. The Shares will be, when
issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights.
7. Representations and Warranties of the Purchasers.
Each of the Purchasers severally represents and warrants, as to himself only,
as follows:
a. Authority. Such Purchaser has all requisite
authority to execute and deliver this Agreement and to perform the
transactions contemplated hereby. This Agreement constitutes the
legal, valid and binding obligation of such Purchaser, enforceable
against him in accordance with its terms.
b. No Conflicts. The execution and delivery of
this Agreement by such Purchaser and the consummation of the
transactions contemplated hereby (a) do not require such Purchaser to
file any notice with or obtain any consent, approval, authorization or
exemption from any person, (b) will not violate any court order,
judgment, law, rule or regulation and (c) will not constitute a
default or breach under any agreement to which such Purchaser is a
party or by which he or any of his properties may be bound.
c. Exempt Offering. Such Purchaser understands
that the Shares are not being and will not be registered under the
Securities Act and are being distributed to him in a transaction that
is exempt from the registration requirements of the Securities Act.
d. Access to Information. Such Purchaser has
reviewed the Merger Agreement and Parent's SEC Filings and understands
the information contained therein. Such Purchaser has had an
opportunity to ask questions of and receive information and answers
from Parent, Acquisition and EHI concerning the terms and conditions
of the Merger Agreement, the Common Shares and other matters
pertaining to this investment and has been given the opportunity to
verify the information provided to such Purchaser in order for him to
evaluate the merits and risks of an investment in the Shares, and all
such questions have been answered and all such information has been
provided to the full satisfaction of such Purchaser. No oral or
written representations have been made to such Purchaser in connection
with the Shares which were in any way inconsistent with the
information provided by Parent. Such Purchaser has determined that an
investment in the Common Shares is a suitable investment for such
Purchaser, and that at this time such Purchaser could bear a complete
loss of the investment.
e. Investor Sophistication. Such Purchaser has
the capacity to protect his interest in connection with this
investment and has such knowledge and experience in financial, tax and
business matters as to be capable of evaluating the merits and risks
of
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an investment in the Common Shares and protecting such Purchaser's
interests in connection with the investment and, in such Purchaser's
judgment, has obtained sufficient information from Parent to evaluate
the merits and risks of an investment in the Common Shares. Such
Purchaser is an "accredited investor" (within the meaning of Rule
501(a) of Regulation D under the Securities Act) and has the financial
ability to bear the economic risk of investment in the Shares
(including such Purchaser's possible loss), has adequate means for
providing for his current needs and personal contingencies and has no
need for liquidity with respect to the investment in the Shares.
f. Investment Intent. Such Purchaser is
acquiring the Shares solely for his own account, for investment
purposes only and not with a view to the resale or distribution
thereof.
g. Restrictions on Transfer. Such Purchaser
understands that (i) the Shares will be considered "restricted
securities" within the meaning of Rule 144 under the Securities Act
("Rule 144"); (ii) Rule 144 may not be available to exempt from the
registration requirements of the Securities Act sales of such
"restricted securities"; (iii) if Rule 144 is available, sales may be
made in reliance upon Rule 144 only in accordance with the terms and
conditions of Rule 144, which among other things generally requires
that the securities be held for at least one year and that sales be
made in limited amounts (which amounts are subject to certain
exceptions depending upon whether the seller is an "affiliate" within
the meaning of Rule 144 and how long the securities have been held);
(iv) a Purchaser may dispose of his Shares pursuant to an exemption
from the registration requirements of the Securities Act other than
the exemption available under Rule 144 if prior to such disposition
such Purchaser has delivered to Parent an opinion of counsel
experienced in securities law matters to the effect that such
disposition does not require registration under the Securities Act;
and (v) if an exemption for the disposition of Shares is not
available, registration of the Shares may be required, but that Parent
is under no obligation to effect such a registration.
8. Restrictive Legends. The certificates representing
the Shares shall bear a legend substantially to the following effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR UNDER ANY APPLICABLE STATE LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
BY THE REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A
VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE 1933 ACT. THE SHARES MAY NOT
BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A
TRANSACTION WHICH IS EXEMPT
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UNDER THE PROVISIONS OF THE 1933 ACT OR ANY APPLICABLE STATE
SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
IN ADDITION, UNTIL JULY 29, 2000, THE SALE OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED BY AND SUBJECT TO THE PROVISIONS OF A STOCK
PURCHASE AGREEMENT DATED JULY 29, 1997, A COPY OF WHICH IS
AVAILABLE UPON REQUEST FOR INSPECTION AT THE OFFICES OF THE
CORPORATION. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE
SECRETARY OF THE CORPORATION."
9. Investor Awareness. Each Purchaser further
acknowledges, represents, agrees and is aware that:
(i) no federal or state agency has passed upon the Common
Shares or made any finding or determination as to the fairness of this
investment; and
(ii) the representations, warranties, agreements,
undertakings and acknowledgments made by such Purchaser in this
Agreement are made with the intent that they be relied upon by Parent
in determining such Purchaser's suitability as a purchaser of Common
Shares, and shall survive the acquisition of the Shares. In addition,
such Purchaser undertakes to notify Parent immediately of any change
in any representation, warranty or other information relating to him
set forth herein.
10. Government Regulations. Notwithstanding anything
contained herein to the contrary, Parent shall not be required to issue or
deliver any certificates for Shares pending compliance with applicable federal,
state and provincial securities laws (including any registration required) and
compliance with applicable stock exchange rules and practices. Parent shall use
its best efforts to cause compliance with those laws, rules and practices.
11. No Right to Service. Nothing in this Agreement shall
be construed as creating any right in either Purchaser to continued employment
or as altering or amending the existing terms and conditions of employment of
the Purchasers.
12. Termination. This Agreement shall automatically
terminate upon termination of the Merger Agreement.
13. Governing Law. This Agreement shall be governed by
and construed under the laws of the State of Delaware.
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14. Sole Agreement. This Agreement is the entire
agreement between the parties hereto with respect to the matters described
herein, all prior oral and written representations being merged herein. No
amendment or modification of the terms of this Agreement shall be binding on
either party unless reduced to writing and signed by the party to be bound.
15. Severability. The invalidity of any provision of the
Agreement shall not in any manner affect the validity of any other provisions
hereof and each and every provision of the Agreement shall be enforceable
regardless of the invalidity, if any, of any other provision hereof.
16. Notice. Notices under the Agreement shall be in
writing and sent by registered mail, return receipt requested, to the following
addresses or to such other address as the party being notified may have
previously furnished to the others by written notice.
If to Parent: Xxxxxxx Inc.
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx X. Xxxxxx
If to Xxxxx: Xxxxxxx X. Xxxxx, Xx., M.D.
c/o EmCare Holdings Inc.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to Xxxxxx: Xxxxxxx X. Xxxxxx, III
c/o EmCare Holdings Inc.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
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In Witness Whereof, Parent by its duly authorized officer and
each of the Purchasers have signed this Agreement the day and year first above
written.
XXXXXXX INC.
By:
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Its:
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Xxxxxxx X. Xxxxx, Xx., M.D.
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Xxxxxxx X. Xxxxxx, III
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