EXHIBIT 10.12
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, effective January 1, 1998, is by and
between Xxxxxx X. Xxxxxxx ("Stockholder") and U.S. Laboratories Inc., a
Delaware corporation ("US Labs").
RECITALS:
A. Stockholder is presently a minority stockholder in San Diego
Testing Engineers, Inc., a Delaware corporation ("Subsidiary"). The majority
stockholder of Subsidiary is US Labs.
B. US Labs desires to purchase the shares held by Stockholder in
Subsidiary (the "Subsidiary Shares") to make such Subsidiary a wholly-owned
subsidiary of US Labs, and Stockholder desires to sell the Subsidiary Shares
to US Labs. Such purchase and sale shall be effected through an exchange of
the Subsidiary Shares for shares in US Labs, as set forth in this Agreement.
NOW THEREFORE, for good and valuable consideration as herein provided,
the parties agree as follows:
1. SALE OF SUBSIDIARY SHARES. US Labs hereby agrees to purchase and
Stockholder hereby agrees to sell, all of the Subsidiary Shares held by
Stockholder.
2. PURCHASE PRICE. The aggregate purchase price for the Subsidiary
Shares shall be equal to Twenty Eight Thousand Six Hundred (28,600) shares of
US Labs common stock (the "Exchange Shares").
3. EFFECTUATION OF SHARE EXCHANGE. Contemporaneously with the
execution of this Agreement:
(a) Stockholder has delivered to US Labs original certificates for
the Subsidiary Shares, each duly endorsed for transfer, or duly executed
affidavits of loss.
(b) US Labs has delivered to Stockholder original certificates for
the Exchange Shares.
4. REPRESENTATIONS AND WARRANTIES OF US LABS. US Labs represents and
warrants to Stockholder that:
(a) Upon consummation of the transactions contemplated by this
Agreement, the Exchange Shares will be duly authorized, validly issued,
fully paid and nonassessable.
(b) US Labs is a Delaware corporation validly existing and in good
standing.
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(c) The Exchange Shares are sold and issued to Stockholder free and
clear of all liens, encumbrances and restrictions on transfer except those
imposed by federal and state securities laws and by this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents
and warrants to US Labs that:
(a) Stockholder has good and marketable title to the Subsidiary
Shares, free and clear of all liens, encumbrances and restrictions on
transfer. Stockholder has not granted to any third person any options,
warrants or other contractual rights to purchase the Subsidiary Shares.
Stockholder has not provided to any third person a proxy with respect to
the voting of the Subsidiary Shares.
(b) Stockholder has the right, power, legal capacity, and authority
to enter into and perform his obligations under this Agreement, and this
Agreement constitutes the valid and legally binding obligation of
Stockholder enforceable in accordance with its terms.
(c) Stockholder has received adequate information to make an informed
investment decision with respect to the exchange of the Subsidiary Shares
for the Exchange Shares, that he has knowledge and experience in business
and financial matters sufficient to enable him to make such investment
decision, and has obtained such investment, legal, tax and other advice as
he considers necessary to make such decision.
(d) No representations, whether written or oral, regarding the
financial condition, business or prospects of Subsidiary or US Labs have
been made to him by Subsidiary, US Labs, or any of their officers or
agents.
(e) Stockholder is not acquiring the Exchange Shares with a view
toward any distribution or resale of such shares to any person except in
accordance with the provisions of the Securities Act of 1933 and applicable
state securities laws. Stockholder acknowledges that the certificate
evidencing the Exchange Shares will bear the following legends:
The securities represented by the within certificate have not
been registered under the Securities Act of 1933 or under
applicable provisions of any state blue sky laws, and may not be
sold, transferred or otherwise disposed of except pursuant to
registration, exemption from registration or operation of law.
This certificate of stock and the shares represented hereby are
held subject to restrictions contained in an agreement between
the corporation and the person named on this certificate and may
not be transferred except in accordance with the terms and
provisions thereof.
6. RESTRICTED NATURE OF SHARES. As used herein, the "Restrictions Term"
shall commence on the date of this Agreement and shall continue until the
effective date of US Labs'
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initial registered public offering of its common stock under the Securities
Act of 1933 or a "Sale of the Company," whichever occurs first. For purposes
of this Agreement, "Sale of the Company" means a sale of all or substantially
all the assets of US Labs or a sale by the stockholders of US Labs of such
number of shares of US Labs common stock as constitutes a controlling
interest in US Labs.
(a) Except as otherwise provided herein, Stockholder agrees that,
during the Restrictions Term, he will not sell or otherwise transfer any
one or more of the Exchange Shares (other than to US Labs) except with US
Labs' prior written consent. Such prior written consent may be given or
withheld solely at the discretion of US Labs.
(b) During the Restrictions Term, US Labs shall have an option (the
"Employment Purchase Option") to purchase all the Exchange Shares from
Stockholder or his estate or personal representative, as the case may be,
at such point as Stockholder ceases to be employed by Subsidiary, US Labs,
or any other subsidiary or affiliate of US Labs (any such entity, a "US
Labs Entity"). The Employment Purchase Option shall not be applicable if
Stockholder, at the request of any US Labs Entity, agrees to be employed by
a different US Labs Entity. If US Labs exercises the Employment Purchase
Option, it will pay Stockholder (or his estate or personal representative,
as the case may be) an amount equal to the book value of the Exchange
Shares as of the date of termination of Stockholder's employment, and
Stockholder will be required to sell the Exchange Shares to US Labs for
such purchase price. The Employment Purchase Option will expire if not
exercised by US Labs within ninety (90) days of the date of termination of
Stockholder's employment. US Labs may, at its option, offset the purchase
price due pursuant to the Employment Purchase Option against any payments
due Stockholder from US Labs pursuant to any employment agreement or
otherwise.
(c) During the Restrictions Term, US Labs shall have a further option
(the "General Purchase Option") to purchase all the Exchange Shares from
Stockholder or his estate or personal representative, as the case may be.
If US Labs exercises the General Purchase Option, it will pay Stockholder
(or his estate or personal representative, as the case may be) an amount
equal to the fair market value of the Exchange Shares as of the date US
Labs notifies stockholder that it wishes to exercise the General Purchase
Option, such fair market value to be determined by US Labs' independent
public accountants, and Stockholder will be required to sell the Exchange
Shares to US Labs for such purchase price. Any payments US Labs is
required to make by reason of its exercise of the General Purchase Option
shall be made in full within sixty (60) days of US Labs' exercise of such
option.
(d) Stockholder agrees that if at any time during the Restrictions
Term the stockholders of US Labs elect to transfer to a third party such
number of shares of US Labs common stock held by them as constitutes a
controlling interest in US Labs, then the selling stockholders may require
Stockholder to sell, on the same terms and conditions and at the same price
per share as the proposed sale by the selling stockholders, all or any
portion of the Exchange Shares.
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7. BINDING EFFECT. This Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors and assigns.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first written above.
STOCKHOLDER: U.S. LABORATORIES INC.
/s/: Xxxxxx X. Xxxxxxx By: /s/: Xxxxxxxxx Xxxxxx, President
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