Exhibit 10.68
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (this "Agreement") is made and entered
into as of the 31st day of August, 1999, by and between American Physicians
Service Group, Inc., a Texas corporation ("APS") and Xxxxxxx Xxxxxxx, III, M.D.
(the "Shareholder").
R E C I T A L S:
WHEREAS, pursuant to that certain Asset Purchase Agreement (the
"Purchase Agreement") dated April 1, 1998, entered into by Shareholder and
Syntera HealthCare Corporation, a Texas corporation ("Syntera"), and the other
contracts and agreements to which Shareholder is a party as contemplated in the
Purchase Agreement (the Purchase Agreement and all such other contracts and
agreements are hereinafter referred to collectively as the "Acquisition
Documents"), Shareholder acquired 70,000 shares (the "Syntera Shares") of the
$0.001 par value per share common stock of Syntera; and
WHEREAS, in connection with the execution of the Purchase Agreement,
APS and Shareholder entered into that certain Share Exchange Agreement dated
April 1, 1998 (the "Original Agreement"); and
WHEREAS, APS and Shareholder have agreed to terminate the Original
Agreement upon the execution of this Agreement; and
WHEREAS, at the time of execution of this Agreement, Syntera and
Shareholder (in his capacity as a shareholder of Syntera) are contemplating a
proposed merger (the "Merger") between Syntera and a subsidiary of FemPartners,
Inc., a Delaware corporation ("FemPartners"), pursuant to which Syntera may or
may not be the surviving corporation; and
WHEREAS, notwithstanding the Merger and any effect it might have on
Shareholder's rights under the Original Agreement, APS has agreed, on the terms
and subject to the conditions hereof, to exchange cash, certain shares of its
$0.10 par value per share common stock ("APS Common"), or a combination thereof,
as determined by APS, for the Subject Shares (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. TERMINATION OF SHARE EXCHANGE AGREEMENT. Contemporaneous with
and contingent only upon the execution of this Agreement, the Original
Agreement is hereby terminated and revoked, and all rights and privileges
of the parties thereto are nullified.
2. EFFECT OF MERGER. In the event the Merger occurs on or before
December 31, 1999, the shares of FemPartners received by Shareholder in the
Merger, in return for the Syntera shares (the "FemPartners Shares"), shall be
treated as Syntera Shares for all purposes hereunder. As used herein, "Subject
Shares" shall refer exclusively to the Syntera
Shares, unless the Merger occurs on or before December 31, 1999, in which event
"Subject Shares" shall, after the Merger, refer exclusively to the FemPartners
Shares. As used herein, "Gross Exchange Value" shall mean the amount of
$350,000, and such amount shall not be adjusted in the event of any stock
dividends, stock splits, reverse stock splits or recapitalizations to which the
Subject Shares are subject after the date of this Agreement.
3. CONDITIONS TO EXCHANGE RIGHT. In addition to the other terms and
conditions contained in this Agreement, Shareholder shall only be entitled to
exchange the Subject Shares if each of the following conditions has been
satisfied:
(a) There shall not have been, on or before September 30, 2000
(the "Determination Date"), any registered public offering of shares of the same
class as the Subject Shares, or any other transaction or event pursuant to which
shares of the same class as the Subject Shares shall have become publicly traded
at a per share price (existing immediately after such public offering or other
transaction or event) which would yield an amount equal to or greater than the
Gross Exchange Value upon a sale of all of the Subject Shares at such price; and
(b) Shareholder shall not be, or have been, at any time on or
prior to the date of the closing of any exchange of stock pursuant to this
Agreement (the "Closing Date"), in breach of, or default under, this Agreement,
any of the Acquisition Documents or any other contract or agreement to which
Shareholder and Syntera, FemPartners, APS and/or any of their affiliates are
parties; and
(c) At the Closing Date, Shareholder has all requisite legal
capacity and authority to engage in the transactions contemplated by this
Agreement, is the owner of all the Subject Shares, and the Subject Shares are
free of any and all liens, claims or encumbrances of any kind whatsoever; and
(d) If the Merger has not occurred on or prior to December 31,
1999, then on or before the Closing Date, Syntera shall not be, or have been, a
party to any merger, consolidation or similar transaction, or agreement with
respect thereto, pursuant to which Syntera was not or would not be, the named
surviving entity after such merger, consolidation or other transaction.
4. EXCHANGE NOTICE. In the event all of the conditions described in
Section 1 are satisfied as of the Determination Date and Shareholder elects to
exercise its right to exchange its Exchangeable Subject Shares (as hereinafter
defined), Shareholder shall provide written notice thereof (the "Exchange
Notice") to APS, which Exchange Notice must be received by APS not later than
the date (the "Expiration Date") which is one hundred eighty (180) calendar days
after the Determination Date. In the event (i) any of the conditions required
for an exchange to be permissible, as described in Section 1 above, fail to be
satisfied on or prior to the Determination Date, or (ii) any of the conditions
specified in subsections (b), (c) and (d) of Section 1 fail to be satisfied on
or prior to the Closing Date, or (iii) APS fails to receive an Exchange Notice
from Shareholder on or prior to the Expiration Date; then, in any such case, all
of Shareholder's rights under this Agreement shall automatically terminate and
be of no further force or effect whatsoever.
5. SHARE EXCHANGE.
(a) Shareholder's right to exchange its Subject Shares hereunder shall
apply as to all, but not less than all, of the Subject Shares which are eligible
for exchange as described in this subparagraph (a). Assuming Shareholder has
complied with all of the conditions allowing for an exchange pursuant to this
Agreement, 42.9% of the Subject Shares shall be eligible for exchange as
provided in this Agreement; and the remaining 57.1% of the Subject Shares, or a
portion thereof, will only be eligible for an exchange hereunder in the event
there is consummation of a transaction between Syntera or its successor in
interest and one or more physicians (or their professional associations) in
Bexar County, Texas, save and except for those physicians set forth on Exhibit A
attached hereto and incorporated herein for all purposes, whereby each such
physician not set forth on Exhibit A enters into, on or before March 31, 2000
(the "Vesting Cutoff Date"), a binding and enforceable agreement with Syntera
(or its successor in interest) of the type and nature ordinarily relied upon by
Syntera (or its successor in interest) in its dealings with physicians. In the
event that there is a consummation of any such transaction on or before the
Vesting Cutoff Date, then the portion of the 57.1% of the Subject Shares which
will be eligible for exchange pursuant to this Agreement (assuming compliance
with all other conditions provided for in this Agreement) will be determined by
multiplying 7.14% by the number of physicians in Bexar County, Texas
consummating such transactions, save and except for those physicians set forth
on Exhibit A.
Notwithstanding the above or any other provision in this
Agreement, (i) the Shareholder shall not benefit from, and the above provisions
shall not apply to, any such transaction between Syntera or its successor in
interest and any of the physicians set forth on Exhibit A and (ii) any portion
of the 51.7% of the Subject Shares which has not, as of the Vesting Cutoff Date,
become eligible for exchange hereunder (pursuant to the above provisions) shall
no longer be eligible for exchange under any circumstances.
(b) In the event Shareholder has complied with all of the conditions
allowing for an exchange pursuant to this Agreement, the closing of any such
exchange (the "Closing") shall occur at the offices of APS in Austin, Texas, on
such day and at such time as the parties hereto may mutually agree upon, or in
the failure to so agree, at 10:00 a.m. Austin, Texas time on the first business
day that falls thirty (30) days after the later of (x) the Expiration Date, (y)
if a Lock-Up Period (as hereinafter defined) is imposed pursuant to Section 6
hereof, the day on which such Lock-Up Period ends, or (z) if a Market Delay (as
hereinafter defined) is imposed pursuant to Section 5(c) hereof, the day on
which such Market Delay ends. The maximum number of Subject Shares which
Shareholder has the right to exchange pursuant to subparagraph (a) of this
Section are hereinafter referred to as the "Exchangeable Subject Shares." At the
Closing, Shareholder shall be entitled to receive either:
(i) such shares of APS Common as is determined by dividing the
Gross Exchange Value by the average of the "bid" and "ask" prices for APS Common
as quoted by the National Association of Securities Dealers Automated Quotation
System at the close of trading on each of the last five (5) business days
immediately preceding the Closing Date; or
(ii) cash or immediately available funds in the amount of
the Gross Exchange Value; or
(iii) any combination thereof (as determined by APS in its
sole discretion), equal in aggregate value to the Gross Exchange Value.
(c) In the event APS elects to satisfy its obligations under this
Section 5 in whole or in part with the issuance to Shareholder of shares of APS
Common, APS shall have the right, as long as a Lock-Up Period has not been
imposed pursuant to Section 6 hereof, to delay the issuance of such shares of
APS Common for up to ninety (90) calendar days (the "Market Delay"), if, in APS'
sole discretion, an issuance of shares of APS Common pursuant to this Agreement,
or in combination with any similar agreement or agreements, would depreciate the
market value of the APS Common.
(d) At the Closing, Shareholder shall tender its share certificate(s)
for all of the Exchangeable Subject Shares, duly endorsed in blank, to APS, and
shall also provide APS with an executed blank stock power, in form and substance
reasonably acceptable to APS, wherein Shareholder represents and warrants to APS
(i) that Shareholder has all necessary legal capacity, power and authority to
engage in the transactions contemplated hereby, and (ii) that Shareholder owns
all interests in and to the Exchangeable Subject Shares and that the
Exchangeable Subject Shares are being transferred to APS free and clear of all
liens, claims or encumbrances of any kind whatsoever.
(e) The parties acknowledge and agree that Shareholder shall receive a
whole number of shares of APS Common only, and that any fractional share amounts
resulting from the foregoing exchange calculation shall be rounded up or down,
as the case may be, to the next whole number of shares. At the Closing,
Shareholder shall receive a share certificate or certificates for all its shares
of APS Common.
6. TRANSFERABILITY. APS will have registered any shares of APS Common
exchanged hereunder with the Securities and Exchange Commission (the
"Commission"), and made such other filings and taken such other steps as
necessary, so that Shareholder may immediately sell, or otherwise convey, such
shares of APS Common without restriction (except as otherwise provided below).
Shareholder agrees to cooperate fully and in all respects with APS in connection
with any such registration, whether such cooperation is requested before or
after the Determination Date. Failure of Shareholder to cooperate fully,
including without limitation, promptly providing complete and accurate
information to APS, in connection with the registration of any APS Common
shares, whether such cooperation and/or information is requested before or after
the Determination Date or before or after Shareholder delivers any Exchange
Notice, shall automatically terminate Shareholder's rights under this Agreement.
Notwithstanding anything contained herein to the contrary, in the event that APS
is in the process, either at the Closing Date or at the Determination Date, of
registering and/or selling any of its capital stock in or pursuant to any
underwritten public offering, upon the written request of the lead underwriter
involved therein, Shareholder agrees, and shall then agree in writing in form
and substance reasonably acceptable to APS, to not sell, attempt to sell, or
solicit or accept any
offers to sell or otherwise convey, any of its shares of APS Common for such
period of time (not to exceed one hundred eighty (180) days) as may be requested
by such lead underwriter (the "Lock-Up Period").
7. MISCELLANEOUS.
(a) FEES AND EXPENSES. Except as otherwise provided herein,
each party hereto agrees to bear all fees and expenses (including without
limitation all fees and expenses for its legal counsel and any accountants or
other professional advisors) incurred in connection with the transactions
contemplated hereby.
(b) GOVERNING LAW AND VENUE. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Texas (except the laws of Texas that would render such choice of law
ineffective). Venue for any action relating to this Agreement shall be proper
only in Texas.
(c) COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument.
(d) INUREMENT. This Agreement shall be binding upon the
parties hereto and their respective heirs, legal representatives, successors and
permitted assigns. No party hereto may assign this Agreement, or any of their
rights or obligations hereunder, without the express
prior written consent of all parties hereto in each instance.
(e) NOTICES. Any notices required or permitted to be given
under this Agreement shall be given in writing and shall be deemed received (a)
when personally delivered to the relevant party at its address as set forth
below or (b) if sent by mail, on the third day following the date when deposited
in the United States mail, certified or registered mail, postage pre-paid to the
relevant party at its address indicated below:
APS: American Physicians Service Group, Inc.
0000 Xxxxxxx xx Xxxxx Xxxxxxx, Xxxxx X-000
Xxxxxx, Xxxxx 00000-0000
Attn: President
Shareholder: Xxxxxxx Xxxxxxx, III, M.D.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Any party may change its address for purposes of this Agreement by proper notice
to the other party.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending to be legally bound hereby, as of the date first above written.
APS: AMERICAN PHYSICIANS SERVICE GROUP, INC.
By: /s/ X.X. Xxxxx
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Printed Name: X.X. Xxxxx
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Title: Sr. VP - Finance
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SHAREHOLDER:
/s/ Xxxxxxx Xxxxxxx, III, M.D.
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