STOCK EXCHANGE AGREEMENT
AGREEMENT made this 21st day of April, 1995, by and between Nashville Music
Consultants (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:
WHEREAS, the Stockholders are the holders of all of the currently issued and
outstanding shares of the common stock, par value of (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 $0.01 per share, of which approximately 160 million
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 as 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
(B) Stockholders' Corporation is a corporation duly organized and
validly existing and
in good standing under the laws of the State of Tennessee, is duly qualified to
transact business as a foreign corporation and is in good standing in the State
of N/A, 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 __________Stockholders 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 March 31,
1995, 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 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 3/31/95 (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
(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 or 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) Nashville Music Consultants 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 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 encumbrance 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, or (vi) made any loan or advance to any
stockholder of Nashville Music Consultants 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 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 an
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 Stockholders threatened against
or affecting Stockholders 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. Stockholders 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 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 160 million 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 it s 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 March 31, 1995, 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 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
commitments or disbursements or incurred any obligations or liabilities of a
substantial natural 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) 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 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.
(l) 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 governmental court,
department, commission, board bureau, agency or instrumentality domestic or
foreign.
(m) The issued and outstanding shares of HCCA have been admitted to
trading in the over-the-counter market.
3. DATE AND TIME OF CLOSING. The closing shall be held on April 22, 1995
immediately following the resolution by the Board of Directors of HCCA as set
forth in Paragraph 5 of this Agreement, at the offices of HCCA, 000 Xxxxxxxxxxx,
Xxxxxxxx Xxxx., XX 00000 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 Stockholder's stock then issued and
outstanding shall be exchanged for 4,000,000 shares of HCCA stock (as
hereinafter defined). Each holder of outstanding shares of Stockholder's
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 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 $1.00 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:
(1) That Stockholders Corporation is a "C" corporation duly organized,
validly existing, and in good standing under the laws of the State of Tennessee
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 execution 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 commons 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 Stockholders'
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
assigns, 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 their
aforementioned balance sheet. HCCA shall give the Stockholders prompt notice of
the assertion of any such claim, and HCCA shall afford the Stockholders an
opportunity to participate with counsel of their own choosing, at their own
expense, in the defense or other contest thereof. In connection therewith, HCCA
shall afford the Stockholders access to such books and records of HCCA as may be
reasonably required.
(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
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 the 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
annual 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 to 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,
addresses as follows:
If to the Stockholders, to
Nashville Music Consultants
0000 00xx Xxx X
Xxxxxxxxx XX 00000
If to HCCA, to
Health Care Centers of America, Inc.
000 Xxxxxxxxxxx Xxxx.
Xxxxxxxx Xxxx XX 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 n 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 its
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: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Title: President
Stockholder(s):
/s/ Xxxx Xxxxxxx, President
Xxxx Xxxxxxx, President
Nashville Music Consultants, Inc.
REINCORPORATION AGREEMENT
AND
AMENDMENT TO STOCK EXCHANGE AGREEMENT
This Amendment made this 1st day of September, 1998, by and between Nashville
Music Consultants, Inc. (NMC) (also known as Nashville Music Group, Inc. (NMG)
and health Care Centers of America, Inc. (HCCA) in consideration of the mutual
promises and undertakings of the parties and for other good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged.
WITNESSETH:
WHEREAS, NMC and HCCA entered into a Stock Exchange Agreement (Agreement) on
April 21, 1995; and
WHEREAS, NMC has since changed its corporate name to Nashville Music Group, Inc.
(NMG); and
WHEREAS, at the time of this Agreement, the only business activity of NMC was
that in the area of publishing songs for the country music market; and
WHEREAS, since the date of the Agreement, NMC/NMG has diversified its business
activities to areas in which it was not intended the HCCA would have any
interest; and
WHEREAS, the song publishing activity of NMC/NMG has become a separate division
with NMG; and
WHEREAS, since the date of the Agreement, Xxxx Xxxxxxx has funded the overall
operations of NMC/NMG in the approximate amount of $400,000; and
WHEREAS, since the date of the Agreement, Xxxxxxx X. Xxxxxxx, on behalf of HCCA,
has funded the publishing division of NMC/NMG in the approximate amount of
$500,000; and
WHEREAS, the parties wish to amend the Agreement to conform to the Intent of the
parties; and
WHEREAS, NMG represents and warrants that its publishing division currently
owns, free and clear, approximately 400 songs, of which approximately 200 have
been recorded as demonstration tapes.
NOW, THEREFORE, in consideration of the promises of the parties and or other
good and valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. NMG has incorporated a subsidiary under the laws of the State of Tennessee as
a separate entity named "MUSIC ALLY, INC." (MAI). It is intended by the parties
that the transfer of MAI stock in exchange for HCCA stock under the Agreement
and this Amendment, shall qualify as a tax
free acquisition under Section 368(s)(1)(8) of the Internal Revenue Code.
2. NMG agrees to transfer the publishing division of NMG to MAI. NMG agrees to
transfer the stock of MAI to HCCA in order to meet its obligation as set out in
the Agreement.
3. All of the stock would thereafter be owned by HCCA making MAI a wholly owned
subsidiary of HCCA.
4. The president of MAI shall by Xxxx Xxxxxxx. Xxxxxxx X. Xxxxxxx shall be a
member of the board of directors of MAI.
5. HCCA hereby relinquishes any right, title or interest it may have in any of
the operations of NMG as a result of the Agreement which are not directly
related to the publishing activities of NMG and MAI.
6. The effectiveness of this amendment shall be the date of July 1, 1997.
7. The remaining portions of the Agreement not affected by this amendment shall
continue in full force and effect.
Health Care Centers of America, Inc.
By: /s/ Xxxxxxx WE. Xxxxxxx
Xxxxxxx X. Xxxxxxx, president and CEO
Nashville Music Group, Inc.
By: /s/ Xxxx Xxxxxxx, President & CEO
Xxxx Xxxxxxx, President and CEO
STATE OF NEVADA
DEPARTMENT OF STATE
CERTIFICATE OF REINSTATEMENT
I, XXXXXX X. XXX, the duly elected Secretary of State of the State of Nevada, do
hereby certify that SCN, LTD., a corporation formed under the laws of the State
of NEVADA having paid all filing fees, licenses, penalties and costs, in
accordance witht he provisions of Section 78.180.NRS, as amended, for the years
and in the amoiunts as follows:
1990-91 LIST OF OFFICERS AND PENALTY $100.00
1991-92 LIST OF OFFICERS AND PENALTY $100.00
1992-93 LIST OF OFFICERS AND PENALTY $100.00
1993-94 LIST OF OFFICERS AND PENALTY $100.00
REINSTATEMENT FEE $ 50.00
and otherwise complied with the provisions of said section, the said corporation
has been reinstated, and that by virtue of such reinstatement it is authorized
to transact its business in the same manner as if the aforesaid filing fees,
licenses, penalties and costs had been paid when due.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Great Seal
of State, at my office, in Carson City, Nevada, this 29TH day of JUNE, A.D.,
1993
/s/ Xxxxxx X. Xxx
Secretary of State
[Great Seal
of the State
of Nevada]
