STOCK EXCHANGE AGREEMENT
AGREEMENT made this 18 day of June, 1994, by and between Xxxxxxx Mining Co., LLC
(hereinafter "Stockholders"), and Health Care Centers of America, Inc., a Nevada
corporation (hereinafter "HCCA") in consideration of the mutual promises and
undertakings of the parties.
WITNESSETH:
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WHEREAS, the Stockholders are the holders of all of the currently issued and
outstanding shares of the common stock, par value of One Dollar (hereinafter
referred to as "Stockholders' Corporation"); and
WHEREAS, the authorized capital stock of HCCA consists of 900,000,000 shares of
capital stock, par value $0.001 per share, of which approximately 52,000,000
shares are currently issued and outstanding; and
WHEREAS, HCCA and the Stockholders agree that it would be to their mutual
benefit for HCCA to acquire all of the outstanding stock of Stockholders in
Stockholders' Corporation from the Stockholders in exchange for shares of HCCA
stock.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto hereby agree ac follows:
1. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS: Stockholders, jointly and
severally, hereby represent and warrant to HCCA that:
(a) Stockholders collectively own on the date hereof, and on the Closing Date
hereinafter provided, will own, free and clear of all liens, charges and
encumbrances, all of the issued and outstanding shares of common stock of
Stockholders' Corporation.
(b) Stockholders' Corporation is a corporation duly organized and validly
existing and in good standing under the laws of the State of Arizona is duly
qualified to transact business as a foreign corporation and is in good standing
in the State of Arizona, has all corporate power to engage in the business in
which it is presently engaged, and has an authorized capital stock consisting of
shares of par value common stock, of which there are validly issued and
outstanding Shares fully paid and non-assessable.
(C) Stockholders have initialed and furnished to HCCA copies of the balance
sheet of Stockholders' Corporation as of the period ended June 30, 1994 together
with related statements of income and expense for the period then ended prepared
by Stockholders. Said balance sheet and related statements accurately set forth
the financial condition of Stockholders as of said date, and of the results of
operations for the period involved, prepared in conformity with generally
accepted accounting principles consistently applied. If not previously furnished
to HCCA, Stockholders will have initialed and furnished to HCCA, upon request,
copies of income and expense statements and related balance sheets and financial
records for additional past years as may be deemed necessary by HCCA, and shall
provide access to any records of Stockholders' Corporation deemed necessary for
verification of information requested by or furnished to HCCA.
(d) Stockholders' Corporation has good and marketable title to all of its
property and assets (except property and assets disposed of since such date in
the usual and ordinary course of business), subject to no mortgages, pledges,
liens or other encumbrances except as disclosed in such balance sheet or in
Exhibit "A" annexed hereto and made a part hereof.
(e) As of June 30, 1994 (date), Stockholders' Corporation has no obligations,
liabilities or commitments, contingent or otherwise, of a material nature which
were not provided for, except as set forth in such balance sheet or in Exhibit
"A".
(f) Since the date of the aforementioned balance sheet, there has been no change
in the nature of the business of Stockholders' Corporation nor in its financial
condition property, other than changes in the usual and ordinary course of
business, none of which has been materially adverse, and Stockholders'
Corporation has incurred no obligations or liabilities or made any commitments
other than in the usual and ordinary course of business or as disclosed in
Exhibit "A".
(g) Xxxxxxx Mining is not a party to any employment contract with any officer,
director, or stockholder, or to any lease, agreement or other commitment not in
the usual and ordinary course of business, or to any operation, insurance,
profit-sharing or bonus plan, except as disclosed in Exhibit "A" .
(h) Neither Stockholders nor Stockholders' Corporation are defendants (or
plaintiff, against whom a counterclaim has been asserted) in any litigation,
pending or threatened; nor has any material claim been made or asserted against
Stockholders or Stockholders' Corporation; and there are no proceedings
threatened or pending before any federal, state or municipal government, or any
department, board, body or agency thereof, involving stockholders or
Stockholders' Corporation except as disclosed in Exhibit "A".
(i) Stockholders or Stockholders' Corporation is not in default under any
agreement to which it is a party nor in the payment of any of its obligations.
(j) Between the date of the balance sheet referred to in subparagraph "c" hereof
and the Closing, Stockholders' Corporation will not have (i) paid or declared
any dividends on or made any distributions in respect of, or issued, purchased
or redeemed, any of the outstanding shares of its common stock, or (ii) made or
authorized any changes in its Certificate of Incorporation or in any amendment
thereto or in its By-Laws, or (iii) made any commitments or disbursements or
incurred any obligations or liabilities or substantial nature and which are not
in the usual and ordinary course of business or (iv) mortgaged or pledged or
subjected to any lien, charge or other encumbrance any of their assets, tangible
or intangible, except in the usual and ordinary course of its business, or (v)
[GRAPHIC OMITTED]
sold, leased or transferred or contracted to sell, lease or transfer any assets,
tangible or intangible, or entered into any other transactions, except in the
usual and ordinary course of business, or (vi) made any loan or advance to any
stockholder of Xxxxxxx Mining or to any other person, firm, or corporation
except in the usual and ordinary course of business, or (vii) made any material
change in any existing employment agreement or increased the compensation
payable or made any arrangement for the payment of any bonus to any officer,
employee or agent, except as set forth in Exhibit "A" hereof.
(k) This Agreement has been duly executed by Stockholders, and the execution and
performance of this Agreement will not violate, or result in a breach of, or
constitute a default in, any agreement, instrument, judgment, order or decree to
which either of them or Stockholders or Stockholders' Corporation is a party or
to which either of them or Stockholders' Corporation is subject nor will such
execution and performance constitute a violation of or conflict with any
fiduciary to which either of them or Stockholders' Corporation is subject.
(l) Stockholders' Corporation has timely filed or timely filed necessary
extensions with the appropriate governmental authorities all tax and other
returns required to be filed by it, and such returns are true and complete and
all taxes shown thereon to be due have been paid. All material federal, state,
local, county, franchise, sales, use, excise and other taxes, assessed or due
have been duly paid, and no reserves for unpaid taxes have been set up or
required on the basis of the facts and in accordance with generally accepted
accounting principles.
(m) Stockholders' Corporation is not in default with respect to any order, writ,
injunction, or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
and there are no actions, suits, claims, proceedings or investigations pending
or, to the knowledge of Xxxxx X. Xxxxxxxxx threatened against or affecting
4
[GRAPHIC OMITTED]
Xxxxxxx Mining at law or in equity, or before or by any federal, state,
municipal or other governmental court, department, commission, board, bureau,
agency or instrumentality, domestic or foreign. Xxxxxxx Mining, LLC has complied
in all material respects with all laws, regulations and orders applicable to its
business.
(n) No representation or warranty in this section, nor statement in any
document, certificate or schedule furnished or to be furnished pursuant to this
Agreement by the Stockholders or Stockholders' Corporation, or in connection
with the transactions contemplated hereby, contains or contained any untrue
statement of a material fact, nor does or will omit to state a material fact
necessary to make any statement of fact contained herein or therein not
misleading. Stockholders' Corporation has maintained, and will until the
Closing, maintain, in full force and effect adequate policies of insurance,
including malpractice insurance, with coverage sufficient to meet the normal
requirements of its business. Malpractice insurance must be maintained at all
times during the duration of this agreement, as applicable, by the health care
physician. Any representation, duty, agreement, or warranty contained herein by
or relating to Stockholders' Corporation shall be deemed to be a representation,
duty, agreement, or warranty of Stockholders, and ,Stockholders shall cause
Stockholders' Corporation to fully comply with the terms of this Stock Exchange
Agreement as it applied to Stockholders' Corporation.
2. REPRESENTATIONS AND WARRANTIES OF HCCA. HCCA represents and warrants to
Stockholders that:
(a) HCCA is a corporation duly organized and validly existing and
in good standing under the laws of the State of Nevada; HCCA is
qualified to transact business in any other state and has an authorized
capitalization of 900,000,000 shares of which there
are issued and outstanding 52,000,000 shares of capital stock, par
value $0.001 per share.
(b) HCCA has delivered to Stockholders its financial statements
for the three years, prepared by W. Xxxx XxXxxx, Certified Public
Accountant. These financial statements accurately set forth the
financial condition of HCCA as of the dates specified, and the results
of operations for the fiscal years involved, prepared in conformity
with generally accepted accounting principles consistently applied.
(c) HCCA has good and marketable title to,. all of its property
and assets (except property and assets disposed of since such date in
the usual and ordinary course of business), subject to no mortgages,
pledges, liens or other encumbrances except as disclosed in such balance
sheet or in Exhibit "B" annexed hereto and made a part hereof.
(d) As of June 30, 1994, HCCA has no obligations, liabilities or
commitments, contingent or otherwise, of a material nature which were
not provided for, except as set forth in such balance sheet or in
Exhibit "B".
(e) Since the date of the aforementioned balance sheet, there has
been no change in the nature of the business of HCCA nor in its
financial condition or property, other than changes in the usual and
ordinary course of business, none of which has been materially adverse,
and HCCA has incurred no obligations or liabilities or made any
commitments other than in the usual and ordinary course of business
except as disclosed in Exhibit "B" .
(f) HCCA is not a party to any employment contract with any
officer, director, or stockholder, or to any lease, agreement or other
commitment not in the usual and ordinary course of business, nor to any
pension, insurance, profit-sharing or bonus plan, except as disclosed in
Exhibit "B".
(g) HCCA is neither a defendant, nor a plaintiff against whom a
counterclaim has been asserted in any litigation, pending or threatened,
nor has any material claim been made or asserted against HCCA nor are
there any proceedings threatened or pending before any federal, state or
municipal government, or any department, board, body or r agency
thereof, involving HCCA except as disclosed in Exhibit "B".
(h HCCA is not in default under any agreement to which it is a
party nor in the payment of any of its obligations.
(i) Between the date of the balance sheet referred to in subparagraph
"b" hereof and the Closing, HCCA will not have (i) paid or
declared any dividends on its capital stock, (ii) made or
authorized any changes in its Articles of Incorporation or in any
amendment thereto or in its By-Laws, or (iii) made any
comm9itments or disbursements or incurred any obligations or
liabilities of a substantial nature and which are not in the usual
and ordinary course of business, or (iv) mortgaged or pledged or
subjected to any lien, charge or other . Encumberance any of their
assets, tangible or intangible, except in the usual; and ordinary
course of its business, or (v) sold, leased, or transferred or
contracted to sell lease or transfer any assets, tangible or
intangible, or entered into any other transactions, except in the
usual and ordinary course of business, and except as set forth in
Exhibit "B" hereof.
(j) This Agreement has been duly executed by HCCA and the execution
and performance of this Agreement will not violate, or result in a
breach of, or. constitute a default in, any agreement, instrument,
judgment, order or decree to which it is a party or to which it is
subject nor will such execution and performance constitute a
violation of or conflict with any fiduciary duty to which it is
subject.
(k)HCCA will file with the appropriate governmental authorities, all
tax and other returns required to be filed by it, such returns are
true and complete and all taxes shown thereon to be due have been
paid. All material, federal, state, local, county, franchise,
sales, use, excise and other taxes assessed or due have been duly
paid and no reserves for unpaid taxes have been set up or are
required on the basis of the facts and in accordance with
generally accepted accounting principles.
(1) HCCA is not in default with respect to any other writ, injunction,
or decree of any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, and there are no actions, suits, claims,
proceedings or investigations pending or, to the knowledge of HCCA
threatened against or affecting HCCA at law or in equity, or
before or by any federal, state, municipal or other -lovernmental
court, department, rnmmission, board, bureau, agency or
instrumentality, [GRAPHIC OMITTED] domestic or foreign.
(m) The issued and outstanding shares of HCCA have been admitted to
trading in the over-the-counter market.
3. DATEAND TIME OF CLOSING. The closing shall be held on June 30, 1994
immediately following the resolution by the Board of Directors of
HCCA, Inc. as net forth in Paragraph 5 of this Agreement, at the
offices of HCCA, Inc. or at such other time and place as may be
mutually agreed upon between the parties in writing (hereinafter "the
Closing").
4. EXCHANGE OF SHARES OF STOCK. The mode of carrying into effect the
exchange provided for in this Agreement shall be as follows:
(a) At or prior to the Closing, the Articles of Incorporation of HCCA
shall be amended as set forth in Paragraph 5(b) below.
(b) At the Closing, each share of Stockholders' stock then issued and
outstanding shall be exchanged for Twenty Million shares of HCCA
stock (as hereinafter defined). Each holder of outstanding shares
of Stockholders' Corporation stock, upon delivery to HCCA of one
or more duly endorsed stock certificates, shall be entitled to
receive one or more stock certificates for the full number of
shares of HCCA stock into which the Stockholders' stock so
delivered shall have been exchanged as aforesaid, based on the
exchange ratio set forth above.
(c) Fractional shares shall not be issued. In lieu thereof, the number
of shares of HCCA stock to be issued upon such exchange shall be
rounded up or down to the nearest full share.
(d) All shares of HCCA stock to be issued as set forth above shall be
fully paid and non-assessable and shall be issued in full
satisfaction of all rights pertaining to the shares of stock
exchanged therefore.
(e) HCCA's stock closing price, as of this date, is $ 4.00 per share.
5. RESOLUTIONS BY BOARD OF DIRECTORS OF HCCA. Prior to closing, the Board
of Directors of HCCA will enter a resolution approving the exchange
between HCCA and Shareholders' Corporation.
(a) HCCA shall have received an opinion from counsel to the
Stockholders or Stockholders' Corporation, to the following
effect:
(f) That Stockholders Corporation is a "C" corporation duly organized,
validly existing, and in good standing under the laws of the State
of Arizona and has the corporate power to own properties and carry
on its business as it is now being conducted;
(2) That the outstanding shares of stock have been duly and validly issued and
are fully paid and non-assessable;
(3) That this Agreement has been duly executed and delivered by the Stockholders
and is legally and validly binding upon them in accordance with its terms;
(4) That the executiun and delivery of this agreement, the consummation of the
transactions herein contemplated and in compliance with the terms and provisions
of this Agreement on the part of the Stockholders will not breach any statute or
any regulation nor conflict with or result in a breach of the Articles of
Incorporation or By-Laws of Stockholders' Corporation or any of the terms,
conditions or provisions of any agreement or instrument known to said counsel to
which either of the Stockholders or Stockholders' Corporation is a party or is
bound;
(5) That there are no options, agreements or commitments of any kind, relating
to the common stock of Stockholders' Corporation to which it is a party other
than as disclosed in the financial statements furnished to HCCA by the
Stockholders;
(6) That, to the best of its knowledge, there is no litigation, proceedings,
claim or governmental investigation pending or threatened against or relating to
Stockholders, Stockholders' Corporation or its properties or business;
(7) That, upon transfer of the shares of Stockholders stock in accordance with
the terms of this Agreement, HCCA will have title to such stock free of any
liens, encumbrances, claims or other limitations thereon, except for
restrictions imposed by federal or state security laws and regulations.
(b) The Stockholders shall deliver to HCCA a Certificate issued by the
appropriate governmental authority evidencing the good standing of Stpckholders'
Corporation. 7. INDEMNITIES. (a) The Stockholders shall deliver to HCCA at the
Closing an indemnity agreement in the form of Exhibit "C" attached hereto
pursuant to which they shall agree to indemnify and hold harmless HCCA and/or
its successors and asigns, of and from any and all loss, liability or damage,
including reasonable attorney's fees and expenses, arising out of or resulting
from the assertion against HCCA of any claims, debts or obligations, fixed,
contingent or otherwise, including federal, state and local tax obligations
attributable to periods prior to this date, except to the extent reserved
against in there aforementioned balance sheet. HCCA shall give the Stockholders
prompt notice of the asertion of any such claim, and HCCA shall afford the
Stockholders an opportunity to participate with counsel of thier own choosing,
at their own expense, in the defense or other contest thereof. In connection
wherewith, HCCA shall afford the Stockholders aaccess to such books and records
of HCCA as may be reequired. (b) HCCA shall deliver to the Stockholders at the
Closing an indemnity agreement (in the form of Exhibit "D" attached hereto)
pursuant to which HCCA will agree to indemnify and hold harmless the
Stockholders, and their respective heirs, administrators and assigns, of and
from any and all loss, liability or damage, including reasonable attorney's fees
and expenses, arising out of the breach of any of the representations and
warranties of HCCA contained in this Agreement.
8. ACCESS TO RECORDS. During the period between the date of this Agreement and
the Closing, HCCA and the Stockholders shall each afford representatives of the
other party free access to HCCA's and Stockholders' offices,plants, records,
files, books of account and tax returns, under such circumstances as will not
unreasonably interfere with the normal operations of such companies. 9.
TERMINATION AND ABANDONMENT. HCCA acknowledges that the Stockholders have the
absolute power and authority to annul their sale to HCCA if HCCA stock is not
trading on the NASDAQ Daily Quotation Sheets. In addition, the Stockholders may
annul the sale in eighteen (18) months if HCCA fails to complete its planned
secondary stock offering. This sale may be annulled by either party hereto, if
any action or proceeding before any court or governmental body or agency shall
have been instituted or threatened o restrain or prohibit the consummation of
this Agreement.
SPIN-OFF CLAUSE. If HCCA, is adjudicated a bankrupt, or voluntarily
files for bankruptcy, or makes any assignment for the benefit of the creditors,
Stockholders may terminate this agreement, effective as of the date of notice of
the termination.
10. NOTICES. Any notice under this Agreement shall be deemed to have been
sufficiently given if sent by registered or certified mail postage prepaid,
addressed as follows: If to the Stockholders, to Xxxxx X. Xxxxxxxxx 0000 Xx. Xx
00 Xxxxxx, Xxxx 00000 If to HCCA, to Health Care Centers of America, Inc. 000
Xxxx Xxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxxxxxx, Xxxxxxxxx 00000 or to any other
address which may hereafter be designated by either party by notice given in
like manner. All notices shall be deemed to have been given as of the date of
receipt.
11. FURTHER ASSURANCES. Each party hereto hereby agrees to take any further
action necessary or expeditious to carry out the provisions of this Agreement.
12. \ COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same instrument. 13.
MERGER CLAUSE. This Agreement supersedes all prior agreements and understandings
between the parties and may not be changed or terminated orally, and no
attempted change, termination or waiver of any of the provisions hereof shall be
binding unless in writing and signed by the parties hereto.
14. GOVERNING LAW. This Agreement shall be governed by and construed, according
to the election of HCCA, the laws of the State of Nevada, or of any State in
which either the closing occurs or the Stockholders' Corporation transacts it
primary business.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
HCCA:
Health Care Centers of America, Inc.
By: Xxxxxxx Xxxxxxx
Title: President
Stockholder(s):Xxxxxxx Mining, LLCAlvin Xxxxxxxxx, Manager
