STOCK EXCHANGE AGREEMENT
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AGREEMENT made this 25th day of March ,1994, by and between F & H
Mining Corp. Limited, a Canadian Corporation, The Promenade 0
Xxxxxxxxx Xxxxxx, # 000-0xx Xxxxx, Xxxxxxxxx, Xxxxxxx X0X0X0
(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 $
1.00 (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 $0.02 per share, of
which approximately 38 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. REPRESENTATINS 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 Province of Ontario 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 1, 000 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 12-31-94 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 3-25-94, 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 initialled 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 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 encumbrance except as disclosed in
such balance sheet or in Exhibit "A" annexed hereto and made
a part hereof.
(e) As of 3/25/1994 date Stockholders' Corporation
has no obligation, liabilities or commitments,
[GRAPHIC OMITTED]
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
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) "Stockholders 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 Stotkholders 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 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 "Stockholders" 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
"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 laves, 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.
12. 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 38 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 the 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 December 8, 1993, 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 or 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, 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 materials, 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.
(n) 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 21.
1994 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
- Nevada or at such other time and place as may be mutually agreed upon
between the parties in writing (hereinafter "the Closing").
4. EXCHANGE OF XXXXXX 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 12, 000,000 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 tile full number of
shares of HCCA stock into which the Stockholders' stock so
delivered shall have been exchanged as aforesaid, based on the
exchnage 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.
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 is a "C" corporation duly
organized, validly existing, and in good standing under the
laws of the State of Nevada 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 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 have delivered to HCCA a Certificate
issued by the appropriate governmental authority evidencing the
good standing of Stockholders' Corporation as of the date not more
than SEVEN (7) days prior to the Closing as a domestic corporation
under the laws of the State of Nevada.
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 and 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 there 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 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 twenty-four (24) 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.
10.NOTICES. Any notice under this Agreement shall be deemed to have
been sufficiently 312 given if sent by registered or certified
mail postage prepaid, addressed as follows:
If to the Stockholders, to
Xxx Xxxxxxxxx, 0 Xxxxxxxxx Xx.
#000 - 0xx Xxxxx
Xxxxxxxxx. Xxxxxxx X0X0X0
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 enters of America, Inc.
By:
Title: President
STOCKHOLDERS:
