EXHIBIT 4.4
AGREEMENT TO EXCHANGE STOCK
This agreement to exchange stock is entered into between Medical Asset
Management, Inc., a Delaware Corporation, hereafter "MAM", and Xxxxxx Xxxxxxxxx
and Xxxxx Xxxxxxx Xxxxxxxxx as trustees of the Xxxxxxxxx Family Trust dated
12/15/1988, as amended, hereafter, "XXXXXXXXX".
1. PURPOSE. This agreement is made with respect to the ownership of
1,176,581 shares of Class A and 133,000 shares of Class B Preferred Stock of
Medical Asset Corporation (formerly known as Medical Asset Management, Inc.),
hereafter "MAC". Control of MAC passed to MAM on or about June 24, 1994. This
agreement provides for the exchange of the above referenced Preferred shares of
MAC for Preferred shares of MAM.
2. REPRESENTATIONS OF MAM.
MAM represents:
A. MAM is duly organized and in good standing in the State of
Delaware and has qualified to do business in all jurisdictions in which it
conducts business.
B. MAM has furnished to XXXXXXXXX its unaudited financial
statements for the year ended December 31, 1994.
C. MAM has furnished to XXXXXXXXX a copy of the draft offering
memorandum prepared for the offering of $ 3,000,000 of convertible subordinated
debentures by Global Securities of Vancouver, B.C., Canada.
D. MAM has made available to XXXXXXXXX all material contracts in
effect on the date of this agreement.
E. The officers and directors of MAM have been available to
XXXXXXXXX to answer any question concerning the current state of affairs of MAM
and its subsidiary.
F. MAM by action of its Board of Directors has established a Class
of Preferred Stock consisting of 5,000,000 shares designated as Series A with
the following rights, preferences and privileges:
(1) the Series shall be referred to as "Series A", (2) all
shares of this series shall be non-voting, (3) the shares
shall be convertible into common shares of the corporation on
the basis of one (1) share of Series A preferred stock for one
(1) share of common stock, (4) none of the shares of this
series shall have any dividend rights, (5) none of the shares
of this series may be redeemed prior to liquidation
for any amount, and (6) upon liquidation the shares of this
series shall participate ratably in any liquidation amounts
equally with the common shares and shall have no preference
with respect thereto.
G. MAM and its predecessor MAC have previously entered into the
following agreements:
1. Management and Rental Agreement dated 5/1/91;
2. Asset Purchase Agreement dated 5/1/91;
3. Convertible Subordinated Note for $ 950,000 dated
5/1/91;
4. Exchange Agreement and Release dated 6/19/91;
5. Collateral Agreement dated 6/19/91;
6. Continuous Security Agreement dated 7/29/91;
7. Loan Purchase Agreement dated 9/1/91;
8. Second Amendment to Exchange Agreement and Release
dated 6/22/92;
9. First Amendment to Exchange Agreement and to 10%
Convertible Adjustable Subordinated Secured Note dated 9/18/92;
10. Promissory Note dated 10/1/92 for $ 1,400,000, and;
11. Third Amendment to Exchange Agreement, Convertible
Adjustable Note and First Amendment to Certain Promissory Notes date 12/1/93.
3. REPRESENTATIONS OF XXXXXXXXX.
XXXXXXXXX represents:
A. The material set forth above in subparagraphs B, C, D and G
above has been made available to XXXXXXXXX and receipt thereof is hereby
acknowledged.
X. XXXXXXXXX acknowledges having had an opportunity to review the
material provided and ask any questions of the officers and directors of MAM as
he may have wanted. XXXXXXXXX acknowledges receiving satisfactory answers to
said questions and that as
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of the date of this agreement there are no questions unanswered or requests for
further information still pending.
X. XXXXXXXXX represents and warrants as of the date of this
agreement it is the owner of 1,176,581 shares of Class A and 133,000 shares of
Class B Preferred Stock of MAC, that it has full and complete title thereto, and
has not previously converted into common stock or tendered for conversion any of
said Preferred Stock. XXXXXXXXX further warrants and represents that no other
person or entity has any interest in or to said shares of Preferred Stock.
X. XXXXXXXXX represents and warrants that as of the date of this
Agreement only the following documents remain in effect:
1. Management and Rental Agreement dated 5/1/91;
2. Asset Purchase Agreement dated 5/1/91, but only to the
extent that rights and obligations continue to exist under Sections 4.7,6 and 7;
3. Continuous Security Agreement dated 7/29/91, but only to
the extent that it purports to secure obligations under the $ 2,250,000 Note;
and
4. The Third Amendment to Exchange Agreement and Release and
to the 10% Convertible Adjustable Secured Subordinated Note Due 1995 and First
Amendment to Certain Other Promissory Notes, hereafter Third Amendment, but only
to the extent that it documents the only outstanding obligation of MAM to
Xxxxxxxxx, which is the $ 2,250,000 Note and only to the extent that rights and
obligations continue to exist under Sections 2, 4 and 5 of the Third Amendment.
References to other documents in each of the agreements and specific sections
referred to above are specifically excluded and are not made a part of this
Agreement.
X. Xxxxxxxxx represents and warrants that it has received all sums
and other consideration due it as provided in the agreements and amendments
thereto set forth in Subparagraph G of Paragraph 2 above. With respect to the
payments of principal and interest due under Section 4 of the Third Amendment,
XXXXXXXXX acknowledges that it has received a portion of the $ 540,000 due and
owing to it during 1994. XXXXXXXXX agrees to forgive any and all unpaid interest
that accrued but was unpaid from January 1, 1994 through the date of this
Agreement, and hereby acknowledges that as of the date of this Exchange
Agreement, the $ 2,250,000 Note is current and MAM is not in default on such
note.
X. XXXXXXXXX represents and warrants that it is, and the
beneficiaries of the trust are "accredited investors," as that term is defined
in Rule 501(a) of Regulation D promulgated by the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and that the
trustees and the beneficiaries of the Xxxxxxxxx Family Trust dated 12/15/1988,
as amended, have sufficient knowledge and experience in financial and business
matters to be capable of evaluating the merits and risks of the transactions
contemplated herein.
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4. CONSENT. XXXXXXXXX, as holder of all shares of Preferred Stock of MAC
hereby consents and agrees to the change of control of MAC that occurred on or
about June 24, 1994 with respect to the exchange of Class A common shares of MAC
for common shares of MAM. XXXXXXXXX, as holder of all shares of Preferred Stock
of MAC hereby consents and agrees to the issuance of shares of Preferred Stock
of MAM as set forth below for all issued and outstanding Preferred Stock of MAC
as set forth in this Exchange Agreement. XXXXXXXXX as holder of all shares of
Preferred Stock of MAC hereby consents and agrees to the rights, preferences and
privileges of the Class A Preferred Stock of MAM as now constituted.
5. EXCHANGE. XXXXXXXXX hereby agrees to exchange 1,176,581 shares of Class
A Preferred stock and 133,000 shares of Class B Preferred Stock of MAC for
3,000,000 shares of Class A Preferred Stock of MAM. Upon receipt, said shares
shall constitute the total consideration to be received under the agreements set
forth in paragraph 2(g) above, except for the Management and Rental Agreement
dated 5/1/91 and the $ 2,250,000 Note.
6. CONVERSION. XXXXXXXXX agrees that the rights of conversion of the shares
of Class A Preferred Stock of MAM into common shares of MAM shall be continued
to be governed by the contractual limitations that existed with respect to the
shares of Preferred Stock of MAC. These limitations are that the right to
convert shall be limited to the extent that at no time may Xxxxxx Xxxxxxxxx or
any member of his family hold, directly, indirectly or beneficially, more than
4.9% of the common stock of MAM. The parties agree that no more than 25% of the
Class A Preferred Stock may be converted into common shares of MAM in any one
calendar year.
7. MODIFICATION OF OPERATING AGREEMENT. The parties agree that the
Management and Rental Agreement dated 5/1/91 shall be amended by inserting the
following language in paragraph 5.3(B)(ii) in lieu of the language following the
words "provided, however," as follows:
"provided however, that in lieu of complying with the provisions of
Section 2.6 hereof, Doctor may, in his sole discretion, pay to
Manager the reasonable fair value of such covenant not to compete
which the Parties agree is equal to all sums paid to Doctor under
this Agreement except for those related to the compensation for
Professional Services rendered plus the assignment of Doctor's
interest in any collections from receivables created after the
Effective Date of this agreement, outstanding as of the Effective
Date of the termination of this agreement ("Residual Collections")."
8. ANTI-DILUTION AND CONSIDERATION. XXXXXXXXX consents to the number
of shares of Preferred Stock of MAM to be issued hereunder and waives any claim
to any different number of shares based on any prior agreement. XXXXXXXXX
acknowledges receiving good and valuable consideration with respect to the
issuance of Preferred Stock under this Exchange Agreement. The parties agree
that in the event of any change in the issued and outstanding
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shares of common stock of MAM by way of a stock dividend, merger, stock split or
reverse stock split an appropriate adjustment shall be made in the conversion
ratio between the Series A Preferred Stock and common shares of MAM so that the
same relative conversion ratio will be maintained that is in existence at the
date this Exchange Agreement is executed.
9. LEGAL ADVICE. The parties hereto acknowledge that this agreement may
have substantial legal implications to the respective parties. The parties have
had an opportunity to consult with legal counsel of their choice and have not
relied on the other party as to the legal interpretation or meaning of any part
of this agreement or any representation or warranty made in connection with the
preparation and execution of this Exchange Agreement.
10. GOVERNING LAW AND ATTORNEY'S FEES. The parties agree that this Exchange
Agreement is made in the state of California and California law shall govern as
to any interpretation thereof. In the event of litigation with respect to this
Exchange Agreement the prevailing party shall be entitled to attorney's fees and
costs.
11. COMPLETE AGREEMENT. The parties agree that this Agreement to Exchange
Stock is complete in and to itself and that there are no other agreements,
understandings, or contracts dealing with any matters contained in this
Agreement. This Agreement may only be changed, amended or modified by a writing
signed by the parties hereto.
In witness whereof the parties have executed this Agreement To Exchange Stock
this 28th day of March, 1995 at Los Angeles, California.
Medical Asset Management, Inc.
By /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
Xxxxxxxxx Family Trust dated
12/15/1988, as amended
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, Trustee
/s/ Xxxxx Xxxxxxx Xxxxxxxxx
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Xxxxx Xxxxxxx Xxxxxxxxx, Trustee
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