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.
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
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the Securities Exchange Act of 1934, and the rules and regulations of the
SEC promulgated thereunder.
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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