1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of this 8th
day of January, 1997 by and between Transworld Home HealthCare, Inc., a New York
corporation (the "Company"), and Hyperion Partners II L.P., a Delaware limited
partnership ("HPII" or the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Shares.
1.1 Sale and Issuance of Shares. Subject to the terms and
conditions of this Agreement, at the Closing (as hereinafter defined),
the Investor agrees to purchase and the Company agrees to sell and
issue to the Investor 898,877 shares (the "Shares") of common stock,
par value $.01 per share, of the Company (the "Common Stock") at a
price of $11.125 per Share, for an aggregate purchase price of
$10,000,000.
1.2 Closing. The purchase and sale of the Shares shall take
place at the offices of Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, within 15 days following the
satisfaction of the conditions set forth in Sections 4 and 5, or at
such other time and place as the Company and the Investor mutually
agree upon orally or in writing (which time and place are designated as
the "Closing"). At the Closing, in addition to satisfying the other
conditions set forth herein, the Company shall deliver to the Investor
one or more certificates representing the Shares, against delivery to
the Company by the Investor of a wire transfer in the amount of
$10,000,000.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to, and agrees with, the Investor that:
2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York. The Company has all requisite
power and authority to own, lease, license and use its properties and
assets and to carry on its business as now conducted and as proposed to
be conducted. The Company has all requisite power and authority to
enter into and perform this Agreement and the transactions contemplated
hereby.
2.2 Authorization. All corporate action on the part of the
Company and its officers, directors and shareholders necessary for the
authorization, execution and delivery of
2
this Agreement, the performance of all obligations of the Company
hereunder and the authorization, sale, issuance and delivery of the
Shares has been taken. This Agreement constitutes the valid and legally
binding obligation of the Company, enforceable in accordance with its
terms, except (i) as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights
generally, and (ii) as enforceability may be limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
2.3 Valid Issuance of Shares.
(a) The Shares, when issued, sold and delivered in accordance
with the terms hereof and for the consideration expressed herein, (i)
will be duly and validly issued and fully paid and nonassessable, (ii)
will be free of any pledges, liens, security interests, claims or other
encumbrances of any kind, (iii) will be issued in compliance with all
applicable federal and state securities laws, and (iv) will not be
issued in violation of any preemptive rights of shareholders. The
Shares have been duly and validly reserved for issuance.
(b) The outstanding shares of Common Stock are all duly and
validly authorized and issued, fully paid and nonassessable, and were
issued in compliance with all applicable federal and state securities
laws.
2.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local governmental
authority on the part of the Company or any of its subsidiaries is
required in connection with the consummation of the transactions
contemplated by this Agreement except for (i) filings with respect to
compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended; (ii) filing with the Securities and Exchange
Commission on Form 10-C; and (iii) such filings as have been made.
2.5 Compliance with Other Instruments. The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in a violation of, or
be in conflict with, or constitute, with or without the passage of time
or the giving of notice or both, a default under, any provision of the
Company's certificate of incorporation, as amended, or bylaws, as
amended, or any judgment, order, writ or decree, or any contract,
agreement or instrument, or require any consent, waiver or approval
thereunder, or give rise to a right to terminate or accelerate the
performance required
2
3
thereby, or constitute an event which results in the creation of any
lien, charge or encumbrance upon any asset of the Company. The
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, will not
constitute a "change of control" under any agreement or contract or
give rise to any right to receive severance or similar payments.
2.6 Registration Rights Agreement. The Shares are "Registrable
Securities" as that term is used in the Registration Rights Agreement
dated as of May 29, 1996 between the Company and the Investor (the
"Registration Rights Agreement"), and are entitled to all of the
benefits of the Registration Rights Agreement.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company that:
3.1 Authorization. The Investor has all requisite power and
authority to enter into this Agreement. This Agreement has been duly
executed and delivered and constitutes the Investor's valid and legally
binding obligation, enforceable in accordance with its terms, except
(i) as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and
(ii) as enforceability may be limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable remedies.
3.2 Purchase Entirely for Own Account. The Shares to be
purchased by the Investor will be acquired for investment for its own
account, and, except as contemplated by the Registration Rights
Agreement or otherwise in accordance with applicable securities laws,
not with a view to the resale or distribution of any part thereof and
without the present intention of selling, granting any participation
in, or otherwise distributing the same.
3.3 Investment Experience. The Investor can bear the economic
risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Shares.
3.4 Restricted Securities. The Investor understands that the
Shares it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired
from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be
resold without registration under the Act, only in certain limited
circumstances. In this connection, the Investor
3
4
represents that it is familiar with Rule 144 of the Securities and
Exchange Commission, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
3.5 Legends. The Investor understands that the certificates
evidencing the Shares will bear the following legend:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY
INTEREST THEREIN MAY BE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR SUCH
LAWS AND THE RULES AND REGULATIONS THEREUNDER."
The Shares shall not be required to bear such legend if an
opinion of counsel reasonably satisfactory to the Company is delivered
to the Company to the effect that neither the legend nor the
restrictions on transfer contained in this Agreement are required to
insure compliance with the Act. Whenever, pursuant to the preceding
sentence, any certificate for any of the Shares is no longer required
to bear the foregoing legend, the Company may, and if requested by the
holder thereof, shall, issue to the holder, at the Company's expense, a
new certificate not bearing the foregoing legend.
4. Conditions to the Investor's Obligations at Closing. The obligations
of the Investor under this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions:
4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all
material respects on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of
the Closing.
4.2 Performance. The Company shall have performed and complied
with all agreements, covenants, obligations and conditions contained in
this Agreement in all material respects that are required to be
performed or complied with by it on or before the Closing.
4.3 No Material Adverse Change. There shall have been no
material adverse change in the business, affairs, prospects,
operations, properties, assets or condition (financial or otherwise) of
the Company and its subsidiaries taken as a whole.
4
5
4.4 Compliance Certificate. The President or Chief Executive
Officer of the Company shall deliver to the Investor at the Closing a
certificate certifying that the conditions specified in Sections 4.1,
4.2, 4.3, 4.5, 4.6 and 4.11 have been fulfilled.
4.5 Qualifications; Litigation. All authorizations, approvals
or permits, if any, of any governmental authority or regulatory body
that are required in connection with the lawful issuance and sale of
the Shares pursuant to this Agreement shall be duly obtained and
effective as of the Closing. There shall not have been instituted or
threatened any legal proceeding relating to, or seeking to prohibit or
otherwise challenge, this Agreement or the consummation of the
transactions contemplated by this Agreement, or seeking to obtain
substantial damages with respect thereto.
4.6 Consents and Coordination. All consents and waivers that
are required in connection with the Closing under this Agreement, and
the consummation of the transactions contemplated hereby, shall be duly
obtained and effective as of the Closing.
4.7 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the
Closing and all documents incident thereto shall be satisfactory in
form and substance to the Investor, and the Investor shall have
received all such counterpart original and certified or other copies of
such documents as it may reasonably request.
4.8 Opinion of Company Counsel. ▇▇▇▇, Marks & ▇▇▇▇▇ LLP,
counsel for the Company, shall have delivered an opinion which is
addressed to the Investor, dated as of the Closing and substantially in
the form delivered pursuant to the Unit Purchase Agreement dated as of
November 20, 1995 between the Company and the Investor (the "Unit
Purchase Agreement").
4.9 Banks Waiver and Consent. The Company shall have received,
in form and substance satisfactory to the Investor, (i) the waiver of
the lenders (the "Banks") party to the Credit Agreement dated as of
July 31, 1996, as amended (the "Credit Agreement") among the Company,
the Banks and Bankers Trust Company, as Agent, of any right the Banks
may have to the proceeds of the transactions contemplated hereby to
prepay outstanding indebtedness of the Company under the Credit
Agreement, (ii) the consent of the Banks to the issuance and sale of
the Shares and waiver of any events of default caused in connection
therewith, (iii) the consent of the Banks to the Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of November 13,
1996, as amended, between the Company and
5
6
Health Management, Inc. ("HMI") and the consummation of the
transactions contemplated thereby, (iv) the consent of the Banks to the
Agreement and Plan of Merger (the "Merger Agreement") among the
Company, IMH Acquisition Corp. and HMI dated as of November 13, 1996,
and the consummation of the merger (the "Merger") and other
transactions contemplated thereby and (v) such other consents and
waivers of the Banks as may be required in connection with the
transactions hereunder and under the Stock Purchase Agreement and
Merger Agreement.
4.10 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods in
respect of the transactions contemplated by this Agreement under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, shall
have expired at or prior to the Closing.
4.11 Investment in and Merger with Health Management, Inc. The
transactions contemplated by the Stock Purchase Agreement and the
Merger Agreement (including, without limitation, the Merger) shall have
been consummated.
5. Conditions to the Company's Obligations at the Closings. The
obligations of the Company to the Investor under Section 1 of this Agreement are
subject to the fulfillment on or before the Closing of the following conditions,
any of which may be waived by the Company:
5.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true in all
material respects on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of
the date of the Closing.
5.2 Payment of Purchase Price. The Investor shall have
delivered the purchase price specified in Section 1.2.
5.3 Performance. The Investor shall have performed and
complied with all agreements, covenants, obligations and conditions
contained in this Agreement in all material respects that are required
to be performed or complied with by it on or before the Closing.
5.4 Qualifications; Litigation. All authorizations, approvals
or permits, if any, of any governmental authority or regulatory body
that are required in connection with the lawful issuance and sale of
the Shares pursuant to this Agreement shall be duly obtained and
effective as of the Closing. There shall not have been instituted or
threatened any legal proceeding relating to, or seeking to prohibit or
otherwise challenge, this Agreement or the consummation of
6
7
the transactions contemplated by this Agreement, or seeking to obtain
substantial damages with respect thereto.
5.5 Banks Waiver and Consent. The Company shall have received,
in form and substance satisfactory to the Company, (i) the waiver of
the Banks of any right they may have to the proceeds of the
transactions contemplated hereby to prepay outstanding indebtedness of
the Company under the Credit Agreement, (ii) the consent of the Banks
to the issuance and sale of the Shares and waiver of any events of
default caused in connection therewith, (iii) the consent of the Banks
to the Stock Purchase Agreement and the consummation of the
transactions contemplated thereby, (iv) the consent of the Banks to the
Merger Agreement and the consummation of the Merger and other
transactions contemplated thereby and (v) such other consents and
waivers of the Banks as may be required in connection with the
transactions hereunder and under the Stock Purchase Agreement and
Merger Agreement.
5.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods in
respect of the transactions contemplated by this Agreement under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, shall
have expired at or prior to the Closing.
5.7 Consents and Coordination. All consents and waivers that
are required in connection with the Closing under this Agreement, and
the consummation of the transactions contemplated hereby, shall be duly
obtained and effective as of the Closing.
5.8 Investment in and Merger with Health Management, Inc. The
transactions contemplated by the Stock Purchase Agreement and the
Merger Agreement (including, without limitation, the Merger) shall have
been consummated.
6. Covenants of the Company. The Company covenants and agrees
with the Investor as follows:
6.1 Advice of Changes. The Company will promptly advise the
Investor in writing of (i) any event occurring subsequent to the date
of this Agreement which would render any representation or warranty of
the Company contained in this Agreement, if made on or as of the date
of such event or the date of the Closing, untrue or inaccurate in any
material respect and (ii) any material adverse change in the business
of the Company and its subsidiaries taken as a whole.
6.2 Information. The Company covenants and agrees that the
Company shall deliver to the Investor the information specified in
Section 6.9 of the Unit Purchase
7
8
Agreement, unless the Investor at any time specifically requests that
such information not be delivered to it.
6.3 Observer and Director Rights. The Company covenants and
agrees that it will afford to the Investor the observer, director and
other rights specified in Sections 6.11 and 8.1(a) of the Unit Purchase
Agreement.
6.4 Listing Application. The Company shall prepare and file
with the NASD an Additional Listing Application, in the form and within
the time period prescribed by the NASD, with respect to the listing of
the Shares.
7. Indemnification. The Company agrees to indemnify the Investor and
its general partner, and each officer, director, employee, partner, agent and
affiliate of the Investor and its general partner (the "Indemnified Parties")
for, and hold each Indemnified Party harmless from and against: (i) any and all
damages, losses, claims and other liabilities of any and every kind, including,
without limitation, judgments and costs of settlement, and (ii) any and all
out-of-pocket costs and expenses of any and every kind, including, without
limitation, reasonable fees and disbursements of one counsel for such
Indemnified Parties (selected by the Investor) (all of which expenses
periodically shall be reimbursed as incurred), in each case, arising out of or
suffered or incurred in connection with (A) any investigative, administrative or
judicial proceeding or claim brought or threatened relating to or arising out of
the Investor's purchase of the Shares, or this Agreement, the Registration
Rights Agreement, the Stock Purchase Agreement, the Merger Agreement or the
transactions contemplated hereby and thereby, or (B) any material inaccuracy or
alleged inaccuracy in any representation or warranty of the Company made or
incorporated by reference in this Agreement or any material breach or alleged
breach by the Company of any covenant or agreement made or incorporated by
reference in this Agreement or the Registration Rights Agreement.
8. Termination.
8.1 Termination Prior to Closing. This Agreement may be
terminated at any time prior to the Closing:
(a) by the mutual consent of the Investor and the Company;
(b) by the giving of notice by the Investor or the Company at
any time after June 30, 1997 (or such later date as shall have been
agreed to in writing by the parties hereto), if at the time notice of
such termination is given the Closing shall not have been consummated;
8
9
(c) by the giving of notice by the Investor or the Company at
any time after the Stock Purchase Agreement or the Merger Agreement is
terminated; or
(d) by the Investor, if there has been a material
misrepresentation or material breach on the part of the Company in any
of the representations, warranties, covenants or agreements of the
Company set forth herein, or if there has been any material failure on
the part of the Company to comply with its obligations hereunder, or by
the Company if there has been a material misrepresentation or material
breach on the part of the Investor in any of the representations,
warranties, covenants or agreements of the Investor set forth herein,
or if there has been any material failure on the part of the Investor
to comply with its obligations hereunder.
8.2 Liability Upon Termination.
(a) In the event of termination of this Agreement pursuant to
Sections 8.1(a), 8.1(b) or 8.1(c), no party hereto shall have any
liability or further obligation to any other party hereto except as
provided in Sections 7, 9.7 and 9.8.
(b) In the event of termination pursuant to Section 8.1(d),
(i) if the Investor is the non-breaching party, the Investor shall be
entitled to reimbursement of expenses as set in Section 9.8 and (ii)
the non-breaching party shall have the right to pursue all rights and
remedies available to it hereunder or otherwise provided at law or
equity, including without limitation, the right to seek specific
performance and money damages.
9. Miscellaneous.
9.1 Survival of Warranties. The warranties, representations,
covenants and agreements of the Company and the Investor contained in
or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing. Neither any investigation
by or on behalf of the Investor nor the receipt by the Investor of any
data or information from the Company, shall in any way affect the right
of the Investor to rely on the representations, warranties, covenants
and agreements of the Company or the right of the Investor to terminate
this Agreement as provided in Section 8.
9.2 Successors and Assigns. The Investor and each assignee of
the Investor may, without the consent of the Company, assign its rights
under this Agreement, in whole or in part, in connection with any sale
or transfer to an affiliate or a partner, and the terms and conditions
of this
9
10
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided in this
Agreement.
9.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to
agreements among New York residents entered into and to be performed
entirely within New York.
9.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
9.5 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be
deemed effectively given upon receipt by the party to be notified or
five days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the
party to be notified (i) if to the Company, at the following address:
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
(ii) if to HPII, at the following address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ 11553-3600
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇
10
11
with a copy to:
Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
or at such other address as any of the parties may designate by 10
days' advance written notice to the other parties.
9.7 No Finder's Fee. Each party represents that it is not, and
will not be, obligated for any finder's fee or commission in connection
with this transaction.
The Investor agrees to indemnify and hold harmless the Company
from any liability for any commission or compensation in the nature of
a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Investor or any of its
officers, employees or representatives is responsible.
The Company agrees to indemnify and hold harmless the Investor
from any liability for any commission or compensation in the nature of
a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of their
respective officers, employees or representatives is responsible.
9.8 Expenses. The Company agrees to pay all out-of-pocket fees
and reasonable expenses incurred by HPII in connection with this
Agreement and the transactions contemplated hereby (whether or not the
transactions contemplated hereby are consummated) including, without
limitation, (i) the reasonable fees and expenses of counsel for HPII
incurred in connection with this Agreement and the transactions
contemplated hereby (including the reasonable fees and expenses of
Proskauer ▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP, and including, without
limitation, any legal fees and expenses relating to any future waiver,
consent or amendment, whether or not any such future action is given or
consummated) and (ii) all filing fees relating to filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1974, as amended.
9.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of HPII and the
Company.
9.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law,
11
12
such provision shall be excluded from this Agreement and the balance of
this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
9.11 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof.
9.12 Equitable Adjustments. Prior to the consummation of the
Closing, all number of Shares referred to herein shall be equitably
adjusted to account for stock splits, stock dividends, mergers and
similar corporate events.
[END OF TEXT]
12
13
IN WITNESS WHEREOF, the parties have executed this agreement
as of the date first above written.
"COMPANY"
TRANSWORLD HOME HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
and Chief Administrative
Officer
"THE INVESTOR OR HPII"
HYPERION PARTNERS II L.P.
By: HYPERION VENTURES II L.P.,
its General Partner
By: HYPERION FUNDING II CORP.,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
13
