PLAN AND AGREEMENT OF EXCHANGE
This Plan and Agreement of Exchange (the "AGREEMENT") is executed as
of January 22, 2001 (the "EFFECTIVE DATE"), between National Health and
Safety Corporation, a Utah corporation (the "PURCHASER"), and the
shareholders of MedSmart Healthcare Network, Inc., listed on the attached
Exhibit "A" ( the "SHAREHOLDERS"), pursuant to the Fourth Amended Joint
Plan of Reorganization of National Health & Safety Corporation dated as of
August 21, 2000, as further amended, modified, or supplemented from time to
time and as confirmed by the Court (the "PLAN").
RECITALS
A. On July 1, 1999, the Purchaser filed a petition for
reorganization under chapter 11 of the Bankruptcy Code in the U. S.
District Court for the Eastern District of Pennsylvania (the "COURT"), Case
No. 99-18339-DWS.
B. The Plan provides for the acquisition of the MedSmart Healthcare
Network, Inc. (the "ACQUIRED CORPORATION") by the Purchaser.
C. This Agreement specifies a reorganization within the meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. The
Purchaser will acquire from the Shareholders all of the issued and
outstanding shares of Common Stock of the Acquired Corporation in exchange
solely for shares of voting stock of the Purchaser. Under this Agreement,
the Acquired Corporation will become a subsidiary of the Purchaser.
B. Immediately prior to the Closing of this Agreement, the
Shareholders will own 5,728,509 shares of common stock, $0.01 par value per
share, of the Acquired Corporation, being 100% of the issued and
outstanding voting stock of the Acquired Corporation. All such shares will
be acquired by the Purchaser on the Closing Date (defined herein).
NOW THEREFORE, in accordance with the Plan and the Confirmation
Order, and in consideration of the valuable consideration expressed herein,
the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 INCORPORATION OF DEFINITIONS. Unless the context requires
otherwise, all capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in the Plan, the
Disclosure Statement, or the Bankruptcy Code - in that order, which
definitions are incorporated herein by this reference for all purposes.
ARTICLE 2
EXCHANGE OF STOCK
2.1 CLOSING DATE. Subject to the conditions precedent set forth in
this Agreement, and the other obligations of the parties set forth in this
Agreement, the Plan of Exchange shall be consummated at the offices of
Sheinfeld, Maley, & Xxx, P.C., 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, on Monday, January 22, 2001, at the hour of 10:00 a.m. or at
any other place and date as the parties fix by mutual consent. Consummation
shall include the delivery by the Shareholders of the Acquired Corporation
of all of its shares of Capital Stock of the Acquired Corporation, as
provided in Paragraph 8.01 of this Agreement, and the delivery by the
Purchaser of its shares of Common Stock, as provided in Paragraph 8.02 of
this Agreement. The date of the consummation of this Agreement is referred
to as the "CLOSING DATE."
2.2 TRANSFER OF ACQUIRED CORPORATION'S COMMON STOCK. Subject to the
terms and conditions of this Agreement, the Shareholders will transfer and
deliver to the Purchaser on the Closing Date all of their certificates for
shares of capital stock of the Acquired Corporation, duly endorsed in blank
or accompanied by stock powers duly executed in blank, in proper form for
transfer as provided in this Agreement.
2.3 CONSIDERATION FOR TRANSFER. In exchange for the capital stock of
the Acquired Corporation transferred by the Shareholders pursuant to
Paragraph 2.01, Purchaser will issue and cause to be delivered to each
Shareholder on the Closing Date 22.69 shares of Common Stock of Purchaser
for each one share of the Acquired Corporation being transferred by that
Shareholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
ACQUIRED CORPORATION
3.1 ORGANIZATION AND STANDING OF ACQUIRED CORPORATION. The Acquired
Corporation is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, with corporate power to own
property and carry on its business as it is now being conducted.
3.2 CAPITALIZATION. The Acquired Corporation has an authorized
capitalization of 100,000,000 shares of Capital Stock, par value $0.01 per
share, and as of the date of this Agreement 5,728,509 shares are issued and
outstanding, fully paid, and nonassessable. There are no outstanding
subscriptions, options, contracts, commitments, or demands relating to any
authorized but unissued stock of the Acquired Corporation or other
agreements of any character under which the Acquired Corporation would be
obligated to issue or purchase shares of its capital stock.
3.3 CONDUCT OF BUSINESS BY ACQUIRED CORPORATION PENDING CLOSING.
During the period commencing on the date hereof an continuing through the
Closing Date, the Acquired Corporation shall have:
(3) maintained all qualifications to transact business and
remained in good standing in the State of Nevada and in such other
jurisdictions in which it owns or leases any property, or conducts any
business so as to require such qualification.
(3) conducted its business in, and only in, the ordinary course
and, to the extent consistent with such business, shall have preserved
intact its current business organization and its properties and assets
in good condition and repair.
(3) not (i) amended its articles of incorporation or bylaws, (ii)
acquired by merging or consolidating with, or agreeing to merge or
consolidate with, or purchased substantially all of the stock or
assets of, or acquired, any business or any corporation, partnership,
association, or other business organization or division thereof, (iii)
entered into any partnership or joint venture, (iv) declared, set
aside, made or paid any dividend or other distribution in respect of
its capital stock or purchased or redeemed, directly or indirectly,
any shares if its capital stock, (v) issued or sold any shares of its
capital stock of any class or any options, warrants, conversion or
other rights to purchase any such shares or any securities convertible
into or exchangeable for such shares or (vi) liquidated or dissolved
or obligated themselves to do so.
(3) not incurred any indebtedness, sold any debt securities or
lent money to or guaranteed the indebtedness of any person or
restructured or refinanced their existing indebtedness or paid any
intercompany debt.
(3) not made any change in the accounting principles, methods,
records or practices followed by them or depreciation or amortization
policies or rate heretofore adopted by it.
(3) complied promptly with all requirements that applicable law
may impose upon it in its operations and with respect to the
transactions contemplated by this Agreement.
(3) not have sold, transferred, licensed, leased, or otherwise
disposed of, or suffered or caused the encumbrance by lien upon any of
their properties or assets, tangible or intangible, or any interest
therein.
(3) not terminated or modified any agreement to which it is a
party and shall have met all to its contractual obligations in
accordance with its respective terms.
(3) not purchased or entered into any contract to purchase any
assets.
(3) used its best efforts to obtain any consent, authorization or
approval of, or exemption by, any Person required to be obtained or
made by any party hereto in connection with the transactions
contemplated hereby or the taking of any action in connection with the
consummation thereof.
(3) maintained any insurance policies in full force and effect
and shall not have done, permitted or willingly allowed to be done any
act by which any of the insurance policies may be suspended, impaired,
or canceled.
(3) not canceled, compromised, released or discharged any claim
upon or against any person or entity or waived any right.
(3) maintained in full force and effect, and complied with, all
permits.
3.4 ASSETS. As of the Closing Date the property described in
Exhibit "B" shall be owned by the Acquired Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
PURCHASER
4.1 ORGANIZATION AND STANDING OF PURCHASER. Purchaser is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Utah, with corporate power to own property and
carry on its business as it is now being conducted.
4.2 CAPITALIZATION. At Closing, the Purchaser will have authorized
capitalization of 500,000,000 shares of common stock, par value $0.001 per
share, and 50,000,000 shares of preferred stock, par value $0.001 per
share. At Closing, the Purchaser will have those common and preferred
shares, and warrants to purchase common shares, outstanding as provided in
the Plan. At Closing, there will be no outstanding subscriptions, options,
contracts, commitments, or demands relating to any authorized but unissued
stock of the Purchaser or other agreements of any character under which the
Purchaser would be obligated to issue or purchase shares of its capital
stock, except as provided by the Plan. Purchaser is qualified to transact
business as a foreign corporation and is in good standing in all
jurisdictions in which its principal properties are located.
ARTICLE 5
CONDUCT OF BUSINESS OF ACQUIRED
CORPORATION PENDING CLOSING DATE
5.1 CONDUCT OF BUSINESS IN ITS ORDINARY COURSE. The Acquired
Corporation will carry on its business in substantially the same manner as
previous to the date of execution of this Agreement, and will:
(5) Continue in full force the amount and scope of insurance
coverage carried prior to that date;
(5) Maintain its business organization and keep it intact,
(5) Exercise due diligence in safeguarding and maintaining
confidential reports and data used in its business;
(5) Maintain its assets and properties in good condition and
repair, and not sell or otherwise dispose of any of its assets or
properties, except sales of inventory in the ordinary course of
business. Notwithstanding the foregoing it is understood that cash,
cash equivalents and the property described in Exhibit B may be
dividended, distributed, transferred or sold.
ARTICLE 6
CONDUCT OF BUSINESS OF PURCHASER PENDING CLOSING DATE
6.1 CONDUCT OF BUSINESS IN ITS ORDINARY COURSE. Purchaser will carry
on its business in substantially the same manner as before the date of
execution of this Agreement.
6.2 SATISFY CONDITIONS PRECEDENT. Purchaser will use its best
efforts to satisfy all conditions precedent contained in this Agreement.
ARTICLE 7
COMPLIANCE WITH SECURITIES LAWS
7.1 NO TRANSFERS IN VIOLATION OF THE 1933 ACT. Each Shareholder
individually (and not jointly or severally) covenants and represents, with
respect to the shares being issued to him, her or it as set forth on
Schedule A, that none of the shares of Common Stock that will be issued to
him, her, or it pursuant to this Agreement, will be offered, sold,
assigned, pledged, transferred, or otherwise disposed of except after full
compliance with all of the applicable provisions of the Securities Act of
1933 and the rules and regulations of the Securities and Exchange
Commission.
7.2 INVESTMENT LEGEND ON CERTIFICATES. The Shareholders agree that
the certificates evidencing the shares the Shareholders will receive under
this Agreement will contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT.
THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, IS IN EFFECT FOR THE SECURITIES, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH
OFFER OR SALE.
ARTICLE 8
ACTIONS TO BE TAKEN AT THE CLOSING
The following actions shall be taken at the Closing, each of which
shall be conditioned on completion of the other and shall be deemed to have
taken place simultaneously:
8.1 ACQUIRED CORPORATION'S STOCK CERTIFICATE. The Shareholders shall
deliver to the Purchaser the stock certificates representing all of the
outstanding Common Stock of the Acquired Corporation, duly endorsed in
blank or accompanied by stock powers duly executed in blank, in proper from
for transfer, in accordance with the terms of Paragraph 2.01 of this
Agreement.
8.2 ISSUANCE OF NEW SHARE CERTIFICATE. The Purchaser shall deliver
to the Shareholders stock certificates representing a total of 130,000,000
shares of Common Stock of the Purchaser, issued to and in the name of the
Shareholders in amounts reflecting the consideration due to each of them
for their shares of the Acquired Corporation under Paragraph 2.02 of this
Agreement, as specified on Exhibit A.
ARTICLE 9
TERMINATION
This Agreement may be terminated at any time prior to the Closing Date
by mutual agreement of the parties hereto.
ARTICLE 10
MISCELLANEOUS
10.1 AMENDMENT. This Agreement may be amended or modified at any time
and in any manner only by an instrument in writing executed by the
President of the Purchaser and the Shareholders.
10.2 WAIVER. Either Purchaser or each of the Shareholders may, in
writing:
(10) Extend the time for the performance of any of the
obligations of any other party to the Agreement.
(10) Waive any inaccuracies and misrepresentations contained in
this Agreement or any document delivered pursuant to the Agreement
made by any other party to the Agreement.
(10) Waive compliance with any of the covenants or performance of
any obligations contained in this Agreement by any other party to the
Agreement.
(10) Waive the fulfillment of any condition precedent to the
performance by any other party to the Agreement.
10.3 NOTICES. Any notice or other communication required or permitted
by this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public telegraph
company for transmittal, charges prepaid, provided that the communication
is addressed:
(10) In the case of the Purchaser, to:
National Health & Safety Corporation
0000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
or to such other person or address designated by Purchaser to receive
notice.
(10) In the case of the Shareholders, to the address listed
beneath the name of each respective Shareholder on attached Exhibit
"A",
MEDSMART EXCHANGE AGREEMENT Page 1
or to such other person or address designated by the Shareholders to
receive notice.
10.4 HEADINGS. Paragraph and other headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
10.5 ENTIRE AGREEMENT. This instrument and the exhibits to this
instrument contain the entire Agreement between the parties with respect to
the transaction contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
10.6 EFFECT OF PARTIAL INVALIDITY. In the event that any one or more
of the provisions contained in this Agreement shall for any reason be held
to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
10.7 CONTROLLING LAW. The validity, interpretation, and performance
of this agreement shall be controlled by and construed under the laws of
the State of Utah.
10.8 SPECIFIC PERFORMANCE. The parties declare that it is impossible
to measure in money the damages that will accrue to a party or its
successors as a result of the other parties' failure to perform any of the
obligations under this Agreement. Therefore, if a party or its successor
institutes any action or proceeding to enforce the provisions of this
Agreement, any party opposing such action or proceeding agrees that
specific performance may be sought and obtained for any breach of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
NATIONAL HEALTH & SAFETY CORPORATION, PURCHASER
/S/ XXXXX X. XXXXXXX
By: Xxxxx X. Xxxxxxx
Title: President
SHAREHOLDERS:
/S/ XXXXXXX XXX XXX TRUST
/S/ XXXX XXXXXX XXX TRUST
/S/ XX X. XXX
/S/ XXXXX X. XXX XX TRUST
/S/ EQUITY MANAGEMENT STRATEGIES, LLC
/S/ XXXXXX X. KIR,
/S/ XXXX X. XXXXX
/S/ EWMW LIMITED PARTNERSHIP
/S/ XXXXXXX X. XXXXXX
/S/ XXXXXXX X. XXXXXXX
/S/ XXXX X. XXXXXX
MEDSMART EXCHANGE AGREEMENT Page 2
EXHIBIT "A"
SHAREHOLDERS AND CONSIDERATION
SHARES OF SHARES OF
SHAREHOLDER ACQUIRED PURCHASER TO
CORPORATION TO BE RECEIVED
BE EXCHANGED
Xxxxxxx Xxx Xxx Trust 643,165 14,595,678
Xxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Xxxx Xxxxxx Xxx Trust 643,165 14,595,675
Xxxx Xxxxxx
0000 Xxxxxxxxxxxx Xxxx Xxxxx
Xxxxx Xxxx, XX 00000
Xx X. Xxx 643,165 14,595,675
0000 Xxxxxxx
Xxxxxx Xxxxxxx, XX 00000
Xxxxx X. Xxx XX Trust 643,166 14,595,675
Xxxxx Xxx XX
0000 Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Equity Management Strategies, LLC 1,277,898 14,000,000
C/O Xxxx Xxxxxx
000 Xxxxx Xx.
Xxxx X-00
Xxxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx 44,455 16,008,840
00000 Xxxxx Xxxxx Xxxxx
000-X
Xxxxxxxx Xxxxx, Xxxxxxx 00000
Xxxx X. Xxxxx 370,149 8,399,982
0000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
EWMW Limited Partnership 982,958 22,306,780
0000 Xxxxxxx Xxx.
Xxxxxx, Xxxxx 00000
Xxxxxxx X. Xxxxxx 265,296 6,020,490
C/O Vignette Corp.
000 Xxxxx XxXxx Xxxxx.
Xxxxxxxx XXX
Xxxxxx, Xxxxx 00000-0000
Xxxxxxx X. Xxxxxxx 159,311 3,615,332
0000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Xxxx X. Xxxxxx 55,781 1,265,873
C/O E-Comm Networks, LLC
0000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
TOTAL 5,728,509 130,000,000
MEDSMART EXCHANGE AGREEMENT - EXHIBIT "A" Page 3
EXHIBIT "B"
ASSETS OWNED BY ACQUIRED CORPORATION AT CLOSING
AS OF JANUARY 22, 0000
XXXX XXXXXX
Xxxx - Xxxxxx Xxxxx Bank $2,875.00
Cash - Family Value Benefits $197.00
Cash - PoweRx $3,694.00
Accounts Receivable- National Health and Safety $23,431.00
Note Receivable - R. Xxxxxx Xxxxxx $10,000.00
Note Receivable - National Health Debtor in Possession $238,100.00
Facility
Security Deposits $6,593.00
Computer Equipment - Pennsylvania $14,874.00
Computer Equipment - Texas $24,525.00
Furniture and Fixtures - Texas $11,947.00
Telephone Equipment $21,158.00
Equipment Leasing $4,990.00
Equipment - Pennsylvania $2,330.00
Tenant Finish - Pennsylvania $3,423.00
Tenant Finish - Texas $13,245.00
Unamortized Software Development Cost (1) $206,638.00
Unamortized Organization Expense $1,738.00
PoweRx Network Acquisition Cost $90,967.00
National Health and Safety Acquisition Costs $47,396.00
TOTAL: $728,121.00
MedSmart Health Care Network owns all rights to the PoweRx Medical Benefits
Network
(1) Participating payments for the development of the PoweRx web site and
back end system paid to Wesson International, Inc. The software is owned
by E-Comm Networks, LLC and licensed back to MedSmart under a royalty
agreement.
MEDSMART EXCHANGE AGREEMENT - EXHIBIT "B" Page 4
