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EXHIBIT 2.1
MC HEALTH HOLDINGS, INC.
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (the "Agreement") entered into as of
October 1, 1997 by and among MC Health Holdings, Inc., a Delaware corporation
("Holdings"), each of those persons and entities, severally and not jointly,
whose names are set forth on the Schedule of ▇▇▇▇▇▇▇ Investors attached hereto
as Schedule A (which persons and entities are hereinafter collectively referred
to as "▇▇▇▇▇▇▇ Investors" and each individually as a "▇▇▇▇▇▇▇ Investor"), each
of those persons and entities, severally and not jointly, whose names are set
forth on the Schedule of Investors in ▇▇▇▇▇▇▇▇ Health Enterprises, Inc., a
California corporation ("▇▇▇▇▇▇▇▇") attached hereto as Schedule B (which persons
and entities are hereinafter collectively referred to as "▇▇▇▇▇▇▇▇ Investors"
and each individually as a "▇▇▇▇▇▇▇▇ Investor"), and solely for the purposes of
Sections 5 and 6 hereof, ▇▇▇▇▇▇▇ & Associates, Inc., a Colorado Corporation
("▇▇▇▇▇▇▇"). Collectively, the ▇▇▇▇▇▇▇ Investors and the ▇▇▇▇▇▇▇▇ Investors are
herein referred to as the "Security Holders."
WHEREAS, Holdings has authorized the issuance of an aggregate
of 6,286,729 shares, par value $.001 per share, of its Common Stock in exchange
for all the equity interests in ▇▇▇▇▇▇▇, held by the ▇▇▇▇▇▇▇ Investors (as more
fully set forth on Schedule A hereto), as a transfer pursuant to Section 351 of
the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, Holdings has authorized the issuance of an aggregate
of 3,891,666 shares of its Common Stock in exchange for the equity interests in
▇▇▇▇▇▇▇▇, all held by the ▇▇▇▇▇▇▇▇ Investors (as more fully set forth on
Schedule B hereto), as a transfer pursuant to Section 351 of the Code, such
Shares together with the Shares issued to ▇▇▇▇▇▇▇ Investors being sometimes
referred to herein as the "Securities,"; and
WHEREAS, Security Holders desire to acquire the Securities on
the terms and conditions set forth herein; and
WHEREAS, Holdings desires to issue the Securities to the
Security Holders on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, Holdings and the Security Holders agree as
follows:
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1. AGREEMENT TO ISSUE AND ACQUIRE.
1.1 Authorization of Shares and Options. On or prior to the
Closings (as defined in Section 2 below), Holdings will have authorized the
issuance to the ▇▇▇▇▇▇▇ Investors and ▇▇▇▇▇▇▇▇ Investors of the Securities.
1.2 Sale and Purchase of Shares to ▇▇▇▇▇▇▇ Investors. On the
terms and subject to the conditions hereof, at the Closing, Holdings will issue
to each ▇▇▇▇▇▇▇ Investor, severally and not jointly, and each ▇▇▇▇▇▇▇ Investor
will acquire from Holdings, severally and not jointly, the number of Shares set
forth opposite such ▇▇▇▇▇▇▇ Investor's name on Schedule A under the heading
"Shares Acquired" for the consideration (which shall constitute shares of
▇▇▇▇▇▇▇) set forth opposite such ▇▇▇▇▇▇▇ Investor's name on Schedule A under the
heading "Consideration."
1.3 Sale and Purchase of Shares to ▇▇▇▇▇▇▇▇ Investors. On the
terms and subject to the conditions hereof, Holdings will issue to each ▇▇▇▇▇▇▇▇
Investor, severally and not jointly, and each ▇▇▇▇▇▇▇▇ Investor will acquire
from Holdings, severally and not jointly, the number of Shares set forth
opposite such ▇▇▇▇▇▇▇▇ Investor's name on Schedule B under the heading "Shares
Acquired" for the consideration (which shall constitute shares of ▇▇▇▇▇▇▇▇) set
forth opposite such ▇▇▇▇▇▇▇▇ Investor's name on Schedule B under the heading
"Consideration."
2. CLOSING, DELIVERY AND PAYMENT.
2.1 Closings. The closing of the issuance of the Shares to be
issued to the ▇▇▇▇▇▇▇ Investors under this Agreement (the "▇▇▇▇▇▇▇ Closing")
will take place effective as of October 1, 1997, at the offices of Ireland,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or effective such other time or place as Holdings and a majority in
interest of the ▇▇▇▇▇▇▇ Investors may mutually agree (such date is hereinafter
referred to as the "▇▇▇▇▇▇▇ Closing Date"). Simultaneous with the ▇▇▇▇▇▇▇
Closing, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ will sell to Holdings 483,333 shares of Holdings
Common Stock received by him in exchange for $1.00. The closing of the issuance
of the Shares to be issued to the ▇▇▇▇▇▇▇▇ Investors under this Agreement (the
"▇▇▇▇▇▇▇▇ Closing") will take place effective as of October 1, 1997, at one
minute after the ▇▇▇▇▇▇▇ Closing, at the offices of Ireland, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇, P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or effective
such other time or place immediately after the ▇▇▇▇▇▇▇ Closing as Holdings and a
majority in interest of the ▇▇▇▇▇▇▇▇ Investors may mutually agree (such date is
hereinafter referred to as the "▇▇▇▇▇▇▇▇ Closing Date").
2.2 Delivery. At the ▇▇▇▇▇▇▇ Closing, on the terms and subject
to the conditions hereof, Holdings will deliver to the ▇▇▇▇▇▇▇ Investors
certificates representing the
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number of Shares to be acquired at the Closing by each ▇▇▇▇▇▇▇ Investor, against
valid and effective transfer of the consideration therefor as set forth on
Schedule A hereto. At the ▇▇▇▇▇▇▇▇ Closing, on the terms and subject to the
conditions hereof, Holdings will deliver to the ▇▇▇▇▇▇▇▇ Investors certificates
representing the number of Shares to be acquired at the Closing by each ▇▇▇▇▇▇▇▇
Investor, against valid and effective transfer of the consideration therefor as
set forth on Schedule B hereto. The ▇▇▇▇▇▇▇ Closing and the ▇▇▇▇▇▇▇▇ Closing and
the ▇▇▇▇▇▇▇ Closing Date and the ▇▇▇▇▇▇▇▇ Closing Date are hereinafter referred
to collectively as the Closings and the Closing Dates, respectively.
3. REPRESENTATIONS AND WARRANTIES OF HOLDINGS.
Holdings hereby represents and warrants to each Security
Holder as follows:
3.1 Organization and Good Standing. Holdings is a corporation
duty organized, validly existing and in good standing under the laws of the
State of Delaware. Holdings has all requisite corporate power and authority to
own and operate its properties and assets, to execute and deliver this
Agreement, to issue the Securities and to carry out the provisions of this
Agreement, and to carry on its business as presently proposed to be conducted.
3.2 Capitalization. The authorized capital stock of Holdings
immediately prior to the Closings will consist of (a) Ten Million (10,000,000)
shares of Common Stock, none of which are issued and outstanding.
When issued in compliance with the provisions of this
Agreement the Securities will be validly issued, fully paid and nonassessable,
and will be free of any liens or encumbrances; provided, however, that the
Securities may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time a transfer is proposed and shall be subject to the rights and restrictions
of the Employee Stock Agreements as set forth in Section 5 hereof.
3.3 Authorization: Binding Obligation. All corporate action on
the part of Holdings necessary for the authorization of this Agreement, the
performance of all obligations of Holdings hereunder at the Closings and the
authorization, issuance and delivery of the Securities pursuant to this
Agreement has been taken or will be taken prior to the Closings. The Agreement
when executed and delivered will be the valid and binding obligation of Holdings
enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights; and (b) as limited by
general principles of equity that restrict the availability of equitable
remedies.
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4. REPRESENTATIONS AND WARRANTIES OF THE SECURITY HOLDERS
Each Security Holder hereby represents and warrants to
Holdings as follows:
4.1 Requisite Power and Authority. Security Holder has all
necessary power and authority under all applicable provisions of law to execute
and deliver this Agreement and to carry out its provisions. All action on
Security Holder's part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closings. Upon its
execution and delivery, this Agreement will be the valid and binding obligation
of such Security Holder, enforceable in accordance with its terms, except (a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights,
(b) as limited by general principles of equity that restrict the availability of
equitable remedies.
4.2 Consents. All consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings with any
governmental or other authority on the part of Security Holder required in
connection with the consummation of the transactions contemplated in this
Agreement have been or will have been obtained prior to and be effective as of
the Closings.
4.3 Investment Representations. Security Holder understands
that none of the Securities have been registered under the Securities Act of
1933, as amended (the "Securities Act"). Security Holder hereby represents and
warrants as follows:
(a) Security Holder Bears Economic Risk. Security
Holder is capable of evaluating the merits and risks of its investment in
Holdings. Security Holder acknowledges that he or it may be required to bear the
economic risk of this investment indefinitely.
(b) Acquisition for Own Account. Security Holder is
acquiring the Securities for Security Holder's own account for investment only,
and not with a view towards their distribution.
(c) Security Holder Can Protect Its Interest.
Security Holder, by reason of its, or of its management's, business or financial
experience, has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement. Further, Security Holder is aware
of no publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(d) Access to Information. Security Holder has had an
opportunity to
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discuss Holdings's business, management and financial affairs with directors,
officers and management of Holdings and has had the opportunity to review
Holdings's operations and facilities. Security Holder has also had the
opportunity to ask questions of and receive answers from, Holdings and its
management regarding the terms and conditions of this investment.
(e) Residence. If the Investor is an individual, then
the Investor resides in the state identified in the address of the Investor set
forth on Investor's signature page hereto; if the Investor is a partnership,
corporation, limited liability company or other entity, then the office of the
Investor in which its investment decision was made is located at the address of
the Investor set forth on Investor's signature page hereto.
4.4 Title to Equity Interest. Security Holder has good and
marketable title to the equity interest identified opposite such Security
Holder's name on Schedule A or B under the heading "Consideration" (the
"Consideration"), subject to no mortgage, pledge, lien, lease, encumbrance or
charge.
4.5 Compliance With Other Instruments. The execution, delivery
and performance of and compliance with this Agreement, and the acquisition of
the Securities pursuant hereto, will not, with or without the passage of time or
giving of notice, result in (a) any material violation of, conflict with, or
default under any charger document, mortgage, indenture, contract, agreement or
instrument to which it is a party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to it; or (b) the creation of any mortgage, pledge, lien, lease,
encumbrance or charge upon such Investor's Consideration.
4.6 Legends. Investor understands that each certificate
representing Securities will be stamped or imprinted with appropriate legends
required under the Securities Act and applicable state securities laws.
5. AMENDMENT TO EMPLOYEE STOCK AGREEMENTS
The parties hereto recognize that it is necessary to amend the
Employee Stock Agreements (the "Stock Agreements") by and among ▇▇▇▇▇▇▇ and
certain of the ▇▇▇▇▇▇▇ Investors in order to replace ▇▇▇▇▇▇▇ with Holdings,
since all stockholders of ▇▇▇▇▇▇▇ will now be stockholders of Holdings.
Therefore, the above parties hereby agree that the Stock Agreements are amended
to provide that Holdings shall become a party to the Stock Agreements for the
purpose of replacing ▇▇▇▇▇▇▇, and all rights, responsibilities, obligations and
liabilities of ▇▇▇▇▇▇▇, to the other parties thereto and of such other parties
to ▇▇▇▇▇▇▇ under the Stock Agreements, shall instead become the rights,
responsibilities, obligations and liabilities of Holdings. The shares of common
stock of ▇▇▇▇▇▇▇ which are the subject of the
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Stock Agreements shall be replaced in the Stock Agreements by the various
▇▇▇▇▇▇▇ Investors shares of Holdings.
6. WAIVER OF STOCK AGREEMENT PROVISIONS
The various ▇▇▇▇▇▇▇ Investors and ▇▇▇▇▇▇▇ hereby agree that
the provisions of Section 2(b) and Section 4 of the Stock Agreements are hereby
waived in their entirety to the extent that the transactions contemplated by
this Agreement would be considered a merger or a transfer (as that term is used
in such Sections of the Stock Agreements).
7. MISCELLANEOUS
7.1 Governing Law. This Agreement will be governed by and
construed and enforced in accordance with, the laws of the State of Delaware.
7.2 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof will inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and will inure to the benefit of and be enforceable by each
person who will be a holder of the Shares from time to time.
7.3 Entire Agreement. This Agreement and the Schedules hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party will be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
7.4 Severability. In case any provision of the Agreement will
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions will not in any way be affected or impaired thereby.
7.5 Amendment and Waiver.
(a) This Agreement may be amended or modified only
upon the written consent of Holdings and persons who hold (or will hold, after
the transactions contemplated by this Agreement are consummated) at least a
majority of the Securities.
(b) The obligations of Holdings and the rights of the
holders of the Securities under this Agreement may be waived only with the
written consent of persons who hold (or will hold, after the transactions
contemplated by this Agreement are consummated) at least a majority of the
Securities.
7.6 Notices. All notices required or permitted hereunder will
be in writing
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and will be deemed effectively given: (a) upon personal delivery to the party to
be notified; (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day; (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications will be sent to Holdings at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and to each Investor at the
address set forth on Schedules A and B hereto or at such other address as
Holdings or Investor may designate by written notice to the other parties
hereto.
7.7 Expenses. Each party will pay all costs and expenses that
it incurs with respect to the negotiation, execution, delivery and performance
of this Agreement.
7.8 Dispute Resolution. Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be settled by
binding arbitration administered by the American Arbitration Association in
accordance with its commercial rules, and judgement on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The place of
arbitration shall be Denver, Colorado.
7.9 Attorneys' Fees. In the event that any dispute among the
parties to this Agreement should result in arbitration or litigation, the
prevailing party in such dispute will be entitled to recover from the losing
party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without limitation,
such reasonable fees and expenses of attorneys and accountants, which will
include, without limitation, all fees, costs and expenses of appeals.
7. 10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be an original, but all of which
together will constitute one instrument.
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Exchange Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Exchange
Agreement as of the date set forth in the first paragraph hereof.
MC HEALTH HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Chairman
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▇▇▇▇▇▇▇ & ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: CEO
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▇▇▇▇▇▇▇▇ HEALTH ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: President & CEO
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