EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AND STOCK PURCHASE AGREEMENT
by and among
HEALTHCARE NETWORK SOLUTIONS, INC.
as Acquiror
and
▇▇▇▇▇▇ ▇▇▇▇▇▇
And
NOVA BIOGENETICS, INC.
as Acquiree
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and
the Stockholders of
NOVA BIOGENETICS, INC.
December_12, 2002
AGREEMENT AND PLAN OF REORGANIZATION
AND STOCK PURCHASE AGREEMENT
THIS AGREEMENT AND PLAN OF REORGANIZATION and STOCK PURCHASE AGREEMENT
(the "Agreement") is made and entered into this 12th day of December, 2002 by
and among HEALTHCARE NETWORK SOLUTIONS, INC., a Delaware corporation
(hereinafter referred to as "HNS") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter referred to as
"▇▇▇▇▇▇"), and NOVA BIOGENETICS, INC. , a Delaware corporation (hereinafter
referred to as the "Company"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (hereinafter referred to as
"Moses"), and the stockholders of the Company (hereinafter collectively referred
to as the "Stockholders").
RECITALS:
The Stockholders own all of the issued and outstanding shares of the
capital stock of the Company as set forth on Exhibit A hereto.
HNS is willing to acquire all of the issued and outstanding capital
stock of the Company, making the Company a wholly-owned subsidiary of HNS, and
the Stockholders desire to exchange all of their shares of the Company's capital
stock for shares of HNS' authorized but unissued shares of Common Stock as
hereinafter provided.
It is the intention of the parties hereto that: (i) HNS shall acquire
all of the issued and outstanding capital stock of the Company in exchange
solely for 4,497,697 shares of HNS' authorized but unissued Common Stock
(post-reverse split as hereinafter described) set forth below (the "Exchange");
(ii) the Exchange shall qualify as a tax-free reorganization under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and related
sections thereunder; and (iii) the Exchange shall qualify as a transaction in
securities exempt from registration or qualification under the Securities Act of
1933, as amended, (the "Act") and under the applicable securities laws of the
state or jurisdiction where the Stockholders reside.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
SECTION 1. EXCHANGE OF SHARES AND DISPOSITION OF ASSETS OF HNS
1.1 Exchange of Shares. HNS and the Stockholders hereby agree that the
Stockholders shall, on the Closing Date (as hereinafter defined), exchange all
of their issued and outstanding shares of the capital stock of the Company (the
"NBG Shares") for 4,497,697 shares of HNS Common Stock, $0.001 par value (the
"HNS Shares") set forth in Exhibit A hereto. The number of shares of capital
stock owned by the Stockholders and the number of HNS Shares which the
Stockholders will be entitled to receive in the Exchange is set forth in Exhibit
A hereto. In the event the Company shall issue any more shares of its common
stock prior to the Closing Date for this Agreement, the number of HNS Shares
will not be increased but shall be reallocated based on the percentage of NBG
Shares held by the Stockholders of the Company as of the Closing Date. In
addition all Stockholders subsequent to the date hereof shall become signatories
to this Agreement or otherwise provide their written consent to the terms of
this Agreement.
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1.2 Delivery of Shares. On the Closing Date, the Stockholders will
deliver to HNS the certificates representing the NBG Shares, duly endorsed (or
with executed stock powers) so as to make HNS the sole owner thereof. HNS shall
deliver to the Stockholders 4,497,697 shares of HNS' common stock, representing
approximately 80% of HNS' common stock to be outstanding at the Closing Date on
a fully-diluted basis. Except as otherwise indicated, all references to common
stock of HNS reflects a 1:20 reverse stock split of HNS' common stock to take
place at or as of the time of the closing of this Agreement.
1.3 Tax Free Reorganization. The Stockholders acknowledge that, in the
event that capital stock of the Company representing at least 80% in interest of
the Company is not exchanged for shares of HNS voting capital stock pursuant
hereto, the Exchange will not qualify as a tax-free reorganization under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
1.4 Investment Intent. The HNS Shares have not been registered under
the Securities Act of 1933, as Amended, and may not be resold unless the HNS
Shares are registered under the Act or an exemption from such registration is
available. The Stockholders represent and warrant that they are acquiring the
HNS Shares for their own account, for investment, and not with a view to the
sale or distribution of the HNS Shares. Each certificate representing the HNS
Shares will have a legend thereon incorporating language as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless in
the opinion of counsel satisfactory to the Company,
registration is not required under the Act."
1.5 Sale of HNS Assets. Simultaneously with the Closing of this
Agreement, ▇▇▇▇▇▇ or her assigns will acquire the HNS assets as described in the
form of Asset Purchase Agreement attached hereto as Exhibit B in consideration
for the assumption of the HNS liabilities described in the Asset Purchase
Agreement.
1.6 HNS Stockholder Approval. At or prior to the Closing Date, HNS will
obtain Stockholder approval and related approval of its Board of Directors for
(i) this Agreement and issuance of the HNS Stock in exchange for the NBG Stock;
(ii) the Asset Purchase Agreement; (iii) a 1:20 reverse stock split of HNS'
issued and outstanding shares of common stock reducing such number from
22,046,062 shares to approximately 1,102,303 shares of common stock (the
"Reverse Stock Split"). Stockholder approval for these transactions will be
obtained through consent of a majority of interest of the Stockholders of HNS to
be accomplished through use of an applicable Information Statement pursuant to
Regulation 14C of the Securities Exchange Act of 1934 (the "Information
Statement").
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, MOSES AND THE
STOCKHOLDERS
The Company and Moses and the Stockholders (as to Section 2.2 and 2.13
hereof) hereby represent and warrant to HNS and ▇▇▇▇▇▇ as follows:
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2.1 Organization and Good Standing; Ownership of Shares. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and is entitled to own or lease its properties
and to carry on its business as and in the places where such properties are now
owned, leased or operated and such business is now conducted. The Company is
duly licensed or qualified and in good standing as a foreign corporation where
the character of the properties owned by it or the nature of the business
transacted by it make such licenses or qualifications necessary. The Company
does not have any subsidiaries.
2.2 Ownership of Shares. The Stockholders are the owners of record and
beneficially of all of the shares of capital stock of the Company as listed on
Schedule A hereto, all of which NBG Shares are free and clear of all rights,
claims, liens and encumbrances, and have not been sold, pledged, assigned or
otherwise transferred except pursuant to this Agreement.
2.3 Taxes. The Company has prepared and filed all appropriate federal,
state and local tax returns of every kind and category (including, without
limitation, income taxes, estimated taxes, excise taxes, sales taxes, inventory
taxes, use taxes, gross receipt taxes, franchise taxes and property taxes), for
all periods prior to and through the date hereof for which any such returns have
been required to be filed by it and has paid all taxes shown to be due by said
returns or on any assessments received by it or has made adequate provision for
the payment thereof.
2.4 Compliance with Laws. The Company has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business,
including Federal and State securities laws, which, if not complied with, would
materially and adversely affect the business of the Company.
2.5 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation
or By-Laws of the Company;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or other agreement to
which the Company is a party or by or to which it or any of its assets or
properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, the Company, or upon the properties or business of the Company; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein which could have
a materially adverse effect on the business or operations of the Company.
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2.6 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company. There is no action, suit
or claim or legal, administrative or arbitral proceeding or (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or threatened against or involving the Company or any of its properties
or assets. There is no fact, event or circumstances that may give rise to any
suit, action, claim, investigation or proceeding.
2.7 Brokers or Finders. No broker's or finder's fee will be payable by
the Company in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions by the Company or
the Stockholders.
2.8 Patents. The Company has three U.S. granted patents and four
pending U.S. patent applications as well as two foreign patents issued and 25
foreign patents pending as described on Schedule 2.8 hereof. The Company is also
a party to a joint venture agreement with BioShield Technologies, Inc.
("BioShield"), an affiliate of the Company and Moses, and an exclusive license
agreement with BioShield, which agreements have previously been provided to HNS.
Such Agreements are in full force and effect as of the date hereof and as of the
Closing Date.
2.9 Real Estate. The Company neither owns real property nor is a party
to any leasehold agreement.
2.10 Tangible Assets. The Company has full title and interest in all
machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by the Company (the "Tangible Assets"). The Tangible
Assets owned by the Company are free and clear of all liens, pledges, mortgages,
security interests, conditional sales contracts or any other encumbrances.
2.11 Liabilities. The Company does not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, other than incurred in the ordinary course of business.
2.12 Capitalization. The authorized capital stock of the Company
consists of 100,000,000 shares of common stock, $.0001 par value, of which
4,700,000 shares are presently issued and outstanding. Subsequent to the date
hereof and prior to the Closing, the Company may issue additional shares of its
common stock, which will not affect the number of HNS Shares to be issued to the
Stockholders pursuant to this Agreement.
2.13 Access to Information. The Stockholders have been afforded the
opportunity to ask questions of, and receive answers from the officers and/or
directors of HNS acting on its behalf concerning the terms and conditions of
this Agreement and to obtain any additional information, to the extent that HNS
possesses such information or can acquire it without unreasonable effort or
expense, necessary to verify the accuracy of the information furnished; and has
availed himself of such opportunity to the extent it considers appropriate in
order to permit him to evaluate the merits and risks of HNS. It is understood
that all documents, records and books pertaining to HNS have been made available
for inspection, and that the books and records of HNS will be available upon
reasonable notice for inspection by the Stockholders during reasonable business
hours at its principal place of business.
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2.14 Dissenters Right. The Company acknowledges that in connection with
the sale of the assets to ▇▇. ▇▇▇▇▇▇ pursuant to the Asset Purchase Agreement,
HNS will be required to offer dissenter's rights to HNS' non-consenting
shareholders pursuant to the requirements of Delaware law.
2.15 Full Disclosure. No representation or warranty by the Company,
Moses or the Stockholders in this Agreement or in any document or schedule to be
delivered by them pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to HNS pursuant hereto or in connection
with the negotiation, execution or performance of this Agreement, contains or
will contain any untrue statement of a material fact or omits or will omit to
state any fact necessary to make any statement herein or therein not materially
misleading or necessary to a complete and correct presentation of all material
aspects of the businesses of the Company.
2.16 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 2 shall be true and
complete on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF HNS AND ▇▇▇▇▇▇
HNS and ▇▇▇▇▇▇ hereby represent and warrant to the Company, Moses and
the Stockholders as follows:
3.1 Organization and Good Standing. HNS is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased, or
operated and such business is now conducted. HNS is duly licensed or qualified
and in good standing as a foreign corporation where the character of the
properties owned by HNS or the nature of the business transacted by it make such
license or qualification necessary.
3.2 The HNS Shares. The HNS Shares to be issued to the Stockholders
have been or, by the Closing Date, will have been duly authorized by all
necessary corporate and stockholder actions and, when so issued in accordance
with the terms of this Agreement, will be validly issued, fully paid and
non-assessable.
3.3 Financial Statements; Books and Records. There has been previously
delivered to the Company, the audited balance sheet of HNS as at June 30, 2002
and the unaudited balance sheet as at September 30, 2002 (the "HNS Balance
Sheet") and the related audited statements of operations for the periods then
ended (the "Financial Statements"). The Financial Statements are true and
accurate and fairly represent the financial position of the Company as at such
dates and the results of its operations for the periods then ended, and have
been prepared in accordance with generally accepted accounting principles
consistently applied.
3.4 No Material Adverse Changes. Since the date of the HNS Balance
Sheet and except as otherwise disclosed in HNS's reports or filings made under
the Securities Exchange Act of 1934, there has not been:
(i) any material adverse change in the assets, operations,
condition (financial or otherwise) or prospective business of HNS;
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(ii) any damage, destruction or loss materially affecting the
assets, prospective business, operations or condition (financial or otherwise)
of HNS, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to any redemption or repurchase of HNS'
capital stock;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by HNS of any properties or assets; or
(v) adoption of any pension, profit sharing, retirement, stock
bonus, stock option or similar plan or arrangement.
3.5 Taxes. HNS has prepared and filed all appropriate federal, state
and local tax returns of every kind and category (including, without limitation,
income taxes, estimated taxes, excise taxes, sales taxes, inventory taxes, use
taxes, gross receipt taxes, franchise taxes and property taxes) for all periods
prior to and through the date hereof for which any such returns have been
required to be filed by it or the failure to make such filings and resulting
liability would not be material relative to the results of operations of HNS.
HNS has paid all taxes shown to be due by said returns or on any assessments
received by it or has made adequate provision for the payment thereof.
3.6 Compliance with Laws. HNS has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to their businesses, including Federal
and State securities laws, which, if not complied with, would materially and
adversely affect the business of HNS or the trading market for the shares of
HNS' common stock.
3.7 No Breach. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation
or By-Laws of HNS;
(ii) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or lapse
of time or both constitute) a default under, any contract or other agreement to
which HNS is a party or by or to which it or any of its assets or properties may
be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, HNS or upon the properties or business of HNS; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein which could have
a material adverse effect on the business or operations of HNS.
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3.8 Actions and Proceedings. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving HNS. There is no action, suit or claim
or legal, administrative or arbitral proceeding or (whether or not the defense
thereof or liabilities in respect thereof are covered by insurance) pending or
threatened against or involving HNS or any of its properties or assets. Except
as set forth on Schedule 3.8, there is no fact, event or circumstances that may
give rise to any suit, action, claim, investigation or proceeding other than the
default in notes payable in the amount of $275,000 and claims by creditors for
the accounts payable which are set forth on the HNS Balance Sheet.
3.9 Brokers or Finders. No broker's or finder's fee will be payable by
HNS in connection with the transactions contemplated by this Agreement, nor will
any such fee be incurred as a result of any actions by HNS.
3.10 Liabilities. HNS does not have any direct or indirect
indebtedness, liability, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, fixed or unfixed, liquidated or unliquidated,
secured or unsecured, accrued or absolute, contingent or otherwise, including,
without limitation, any liability on account of taxes, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheet. As of the Closing Date, HNS will not have any Liabilities, other
than Liabilities fully and adequately reflected on the HNS Balance Sheet or HNS'
balance sheet dated September 30, 2002, except for Liabilities incurred in the
ordinary course of business. All Liabilities and agreements of HNS are assumable
by third parties.
3.11 Operations of HNS. Except as set forth on Schedule 3.11 or in HNS'
reports or filings made under the Securities Exchange Act of 1934, since the
date of the HNS Balance Sheet and through the Closing Date hereof, HNS has not
and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any shareholder, or made any direct or indirect
redemption, retirement, purchase or other acquisition of any shares in its
capital stock;
(iii) made any loan or advance to any stockholder, officer,
director, employee, consultant, agent or other representative or made any other
loan or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or
assumed any indebtedness or liability (whether or not currently due and
payable);
(v) disposed of any assets of HNS except in the ordinary
course of business; or
(vi) materially increased the annual level of compensation of
any executive employee of HNS;
(vii) increased, terminated amended or otherwise modified any
plan for the benefit of employees of HNS;
(viii) issued any equity securities or rights to acquire such
equity securities; or
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(ix) except in the ordinary course of business, entered into
or modified any contract, agreement or transaction.
3.12 Authority to Execute and Perform Agreements. HNS has the full
legal right and power and all authority and approval required to enter into,
execute and deliver this Agreement and to perform fully their obligations
hereunder. This Agreement has been duly executed and delivered and is the valid
and binding obligation of HNS, enforceable in accordance with its terms, except
as may be limited by bankruptcy, moratorium, insolvency or other similar laws
generally affecting the enforcement of creditors' rights. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and the performance by HNS of this Agreement, in accordance with its
respective terms and conditions will not:
(i) require the approval or consent of any governmental or
regulatory body, the stockholders of HNS, or the approval or consent of any
other person;
(ii) conflict with or result in any breach or violation of any
of the terms and conditions of, or constitute (or with any notice or lapse of
time or both would constitute) a default under, any order, judgment or decree
applicable to HNS, or any instrument, contract or other agreement to which HNS
is a party or by or to which HNS is bound or subject; or
(iii) result in the creation of any lien or other encumbrance
on the assets or properties of HNS.
3.13 Delivery of Periodic Reports; Compliance with 1934 Act. HNS has
provided the Company and to Moses with all of its Periodic Reports filed with
the Securities and Exchange Commission since January 1, 2000. HNS has filed all
required Periodic Reports and is in compliance with its reporting obligations
under the Securities Exchange Act of 1934. All reports filed pursuant to such
Act are complete and correct in all material respects. All material contracts
relative to HNS are included in the Periodic Reports. All material contracts and
commitments for the provision or receipt of services or involving any obligation
on the part of HNS are included as exhibits to such periodic reports or are
listed on Schedule 3.13 hereto.
3.14 Capitalization. The authorized capital stock of HNS consists of
50,000,000 shares of common stock, $.0001 par value, of which 22,046,062 shares
(pre-reverse split) are presently issued and outstanding. Except as indicated in
Schedule 3.14 hereto, HNS has not granted, issued or agreed to grant, issue or
make available any warrants, options, subscription rights or any other
commitments of any character relating to the issued or unissued shares of
capital stock of HNS.
3.15 Full Disclosure. No representation or warranty by HNS in this
Agreement or in any document or schedule to be delivered by it pursuant hereto,
and no written statement, certificate or instrument furnished or to be furnished
to the Company or the Stockholders pursuant hereto or in connection with the
execution or performance of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state any fact necessary
to make any statement herein or therein not materially misleading or necessary
to a complete and correct presentation of all material aspects of the business
of HNS.
3.16 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 3 shall be true and
complete on the Closing Date with the same force and effect as through such
representations and warranties had been made on and as of the Closing Date.
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SECTION 4. COVENANTS OF COMPANY AND MOSES
The Company and Moses covenant to HNS as follows:
4.1 Conduct of Business. From the date hereof through the Closing Date,
the Company and Moses shall cause the Company to conduct its business in the
ordinary course.
4.2 Preservation of Business. From the date hereof through the Closing
Date, the Company and Moses shall cause the Company to use its best efforts to
preserve its business organization intact, keep available the services of its
present employees, consultants and agents.
4.3 Litigation. The Company shall promptly notify HNS of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against the Company or against any officer, director, employee,
consultant, agent, stockholder or other representative with respect to the
affairs of the Company.
4.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, the Company and Moses shall cause the
Company to conduct its business in such a manner so that the representations and
warranties contained in Section 2 shall continue to be true and correct on and
as of the Closing Date and as if made on and as of the Closing Date, and shall:
(i) promptly give notice to HNS of any event, condition or
circumstance occurring from the date hereof through the Closing Date which would
render any of the representations or warranties materially untrue, incomplete,
insufficient or constitute a violation or breach of this Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
SECTION 5. COVENANTS OF HNS AND ▇▇▇▇▇▇
HNS and ▇▇▇▇▇▇ covenants to the Company and the Stockholders as
follows:
5.1 Conduct of Business. From the date hereof through the Closing Date,
HNS shall conduct its business in the ordinary course and, without the prior
written consent of the Company, shall ensure that HNS does not undertake any of
the actions specified in Section 3.11 hereof.
5.2 Preservation of Business. From the date hereof through the Closing
Date, HNS and ▇▇▇▇▇▇ shall cause HNS to use its best efforts to preserve HNS'
business organization intact, keep available the services of its present
employees, consultants and agents.
5.3 Litigation. HNS shall promptly notify the Company of any lawsuits,
claims, proceedings or investigations which after the date hereof are threatened
or commenced against HNS or against any officer, director, employee, consultant,
agent, or stockholder with respect to the affairs of HNS.
5.4 Continued Effectiveness of Representations and Warranties. From the
date hereof through the Closing Date, HNS and ▇▇▇▇▇▇ shall cause HNS to conduct
its business in such a manner so
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that the representations and warranties contained in Section 3 shall continue to
be true and correct on and as of the Closing Date and as if made on and as of
the Closing Date, and shall:
(i) promptly give notice to the Company of any event,
condition or circumstance occurring from the date hereof through the Closing
Date which would render any of the representations or warranties materially
untrue, incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
5.5 No Other Negotiations. From the date hereof until the earlier of
the termination of this Agreement (pursuant to Section 12 herein) or
consummation of this Agreement, HNS will not permit and will not authorize any
officer or director of HNS or any other person on its behalf to, directly or
indirectly, solicit, encourage, negotiate or accept any offer from any party
concerning the possible disposition of all or any substantial portion of the
capital stock by merger, sale or any other means or any other transaction that
would involve a change in control of HNS, or any transaction in which HNS
contemplates issuing equity or debt securities.
SECTION 6. COVENANTS
6.1 Corporate Examinations and Investigations. Prior to the Closing
Date, the parties acknowledge that they have been entitled, through their
employees and representatives, to make such investigation of the assets,
properties, business and operations, books, records and financial condition of
the other as they each may reasonably require. No investigation by a party
hereto shall, however, diminish or waive in any way any of the representations,
warranties, covenants or agreements of the other party under this Agreement.
6.2 Expenses. All reasonable costs, fees and expenses associated with
the preparation of this Agreement, the Asset Purchase Agreement, the Information
Statement and related documents, including the filing and mailing of the
Information Statement, shall be borne by the Company, including the fees and
expenses of HNS' counsel and accountants, and all other fees, costs and expenses
reasonably incurred by HNS in connection with the transactions herein
contemplated. In this regard, the Company has paid on behalf of HNS $2,500 for
HNS' legal fees and expenses incurred in connection with the consummation of
this Agreement, the Asset Purchase Agreement and the Consulting Agreement (as
described in Section 6.5 herein), which such amount represents the total amount
which shall be due by the Company for HNS' legal fees and expenses incurred in
connection with the consummation of this Agreement, the Asset Purchase Agreement
and the Consulting Agreement. Subsequent to the execution of this Agreement, and
as a condition precedent to Section 6.3 hereof, the Company shall deposit an
additional $10,000 in trust with Katz, Barron, Squitero & ▇▇▇▇▇, P.A., attorneys
for HNS, to be drawn down by said firm for reasonable fees incurred in
connection with the Information Statement and HNS stock split.
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6.3 Information Statement. Simultaneous with the execution of this
Agreement and provided HNS has received from the Company audited financial
statements and other required information pursuant to Regulation 14C of the
Securities Exchange Act of 1934, HNS shall prepare and, within 10 days
thereafter, file with the Securities and Exchange Commission pursuant to
Regulation 14C of the Securities Exchange Act of 1934 an Information Statement
relating to the authorization by HNS of the Reverse Stock Split, the Asset
Purchase Agreement and this Agreement.
6.4 Issuance of Additional Shares to HNS Management and Employees. At
or prior to the Closing Date, HNS will issue (i) 100,000 shares of HNS common
stock to ▇▇▇▇▇▇ and (ii) 10,000 shares of HNS common stock to each of ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (collectively referred to as "HNS
Management Stock Issuance"). Following the Closing Date, such shares shall have
piggyback registration rights, at the expense of HNS.
6.5 Consulting Agreement with ▇▇▇▇▇▇. HNS shall engage ▇▇▇▇▇▇ to
provide consulting services to it for the review of business plans, marketing
and other services within ▇▇▇▇▇▇'▇ expertise, for a period of two years
commencing six months from the Closing Date, which consulting agreement will
provide for a minimum of 20 hours per month for such two-year term at an hourly
rate of $125. Such fee shall be payable monthly. The form of Consulting
Agreement is attached hereto as Exhibit C.
6.6 Further Assurances. The parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its best efforts to fulfill or obtain the
fulfillment of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
6.7 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
(i) at the time of disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge
(except due to the action of the receiving party); or
(iii) the receiving party had within its possession at the
time of disclosure.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATION OF HNS TO CLOSE
The obligation of HNS to enter into and complete the Closing is
subject, at the option of HNS, to the fulfillment on or prior to the Closing
Date of the following conditions, any one or more of which may be waived by HNS
in writing.
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7.1 Representations and Covenants. The representations and warranties
of the Company, Moses and the Stockholders contained in this Agreement shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of the Closing Date. The Company, Moses and
the Stockholders shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by the Company, Moses and the Stockholders on or prior to the
Closing Date. The Company and Moses shall have delivered to HNS, if requested, a
certificate, dated the Closing Date, to the foregoing effect.
7.2 Governmental Permits and Approvals; Corporate Resolutions. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained. The Board of
Directors of the Company shall have approved the transactions contemplated by
this Agreement and the Company shall have delivered to HNS resolutions by its
Board of Directors, certified by the Secretary of the Company, authorizing the
transactions contemplated by this Agreement.
7.3 Third Party Consents. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with the Company
which may be required in connection with the performance by the Company of its
obligations under such contracts or other agreements after the Closing shall
have been obtained.
7.4 Satisfactory Business Review. HNS shall have satisfied itself,
after review of the information provided hereby or in connection herewith, or
following any discussions with management or representatives of the Company that
none of the information revealed thereby has resulted in, or in the reasonable
opinion of HNS may result in, a material adverse change in the assets,
properties, business, operations or condition (financial or otherwise) of the
Company.
7.5 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may have,
in the reasonable opinion of HNS , a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of the
Company.
7.6 Stock Certificates. At the Closing, the Stockholders shall have
delivered the certificates representing the NBG Shares, duly endorsed (or with
executed stock powers), and medallion guaranteed, so as to make HNS the sole
owner thereof.
7.7 Stockholder Approval and Information Statement. HNS Stockholders
shall have approved the Reverse Stock Split, this Agreement and the Asset
Purchase Agreement, which will be effective 20 days after the definitive
Information Statement is filed with the Securities and Exchange Commission, the
Reverse Stock Split shall have occurred and the Information Statement shall have
been processed with the Securities and Exchange Commission which shall have
provided "No Further Comment" as to the Information Statement. In connection
with such approval by the HNS Stockholders, holders of no more than 10% of HNS'
issued and outstanding capital stock shall have exercised dissenter's rights
available to them pursuant to applicable Delaware law and as described in the
Information Statement.
7.8 Approval of Supplemental Stock Issuances and Consulting Agreement.
HNS shall have completed the HNS Management Stock Issuances and have entered
into the Consulting Agreement.
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7.9 Other Documents. The Company, Moses and the Stockholders shall have
delivered such other documents, instruments and certificates, if any, as are
required to be delivered pursuant to the provisions of this Agreement or which
may be reasonably requested in furtherance of the provisions of this Agreement.
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AND
STOCKHOLDERS TO CLOSE
The obligation of the Company and the Stockholders to enter into and
complete the Closing is subject, at the option of the Company and the
Stockholders, to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived in writing by the
Company.
8.1 Representations and Covenants. The representations and warranties
of HNS and ▇▇▇▇▇▇ contained in this Agreement shall be true in all material
respects on the Closing Date with the same force and effect as though made on
and as of the Closing Date. HNS and ▇▇▇▇▇▇ shall have performed and complied
with all covenants and agreements required by the Agreement to be performed or
complied with by HNS and ▇▇▇▇▇▇ on or prior to the Closing Date. HNS and ▇▇▇▇▇▇
shall have delivered to the Company and the Stockholders, if requested, a
certificate, dated the Closing Date and signed by an executive officer of HNS
and ▇▇▇▇▇▇, to the foregoing effect.
8.2 Governmental Permits and Approvals; Corporate Resolutions. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained. The Board of
Directors and shareholders of HNS shall have approved the transactions
contemplated by this Agreement, and HNS shall have delivered to the Company and
the Stockholders, if requested, resolutions by their Board of Directors and the
Stockholders of HNS certified by the Secretary of HNS, authorizing the
transactions contemplated by this Agreement.
8.3 Third Party Consents. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with HNS which may
be required in connection with the performance by HNS of their obligations under
such contracts or other agreements after the Closing shall have been obtained.
8.4 Satisfactory Business Review. The Company and the Stockholders
shall have satisfied themselves, after review of the information provided hereby
or in connection herewith, or following any discussions with management or
representatives of HNS that none of the information revealed thereby has
resulted in or in the reasonable opinion of the Company may result in a material
adverse change in the assets, properties, business, operations or condition
(financial or otherwise) of HNS.
8.5 Litigation. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may in the
reasonable opinion of the Company, have a materially adverse effect on the
assets, properties, business, operations or condition (financial or otherwise)
of HNS.
8.6 Stock Certificates. At the Closing, the Stockholders shall receive
certificates representing the HNS Shares to be received pursuant hereto and
subject to the conditions previously described.
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8.7 Stockholder Approval and Information Statement. HNS shall have
approved the Reverse Stock Split, this Agreement and the Asset Purchase
Agreement, which will be effective 20 days after the definitive Information
Statement is filed with the Securities and Exchange Commission, the Reverse
Stock Split shall have occurred and the Information Statement shall have been
processed with the Securities and Exchange Commission which shall have provided
"No Further Comment" as to the Information Statement. In connection with such
approval by the HNS Stockholders, holders of no more than 10% of HNS' issued and
outstanding capital stock shall have exercised dissenter's rights available to
them pursuant to applicable Delaware law and as described in the Information
Statement.
8.8 Officers and Directors. The HNS current officers and directors
shall resign and officers and directors designated by the Company shall have
been elected.
8.9 Other Documents. HNS shall have delivered such other instruments,
documents and certificates, if any, as are required to be delivered pursuant to
the provisions of this Agreement or which may be reasonably requested in
furtherance of the provisions of this Agreement.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF HNS AND ▇▇▇▇▇▇
Notwithstanding any right of the Company and the Stockholders fully to
investigate the affairs of HNS, the former shall have the right to rely fully
upon the representations, warranties, covenants and agreements of HNS and ▇▇▇▇▇▇
contained in this Agreement or in any document delivered by HNS and ▇▇▇▇▇▇ or
any of its representatives, in connection with the transactions contemplated by
this Agreement. All such representations, warranties, covenants and agreements
shall survive the execution and delivery hereof and the Closing Date hereunder
for twelve (12) months following the Closing.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE STOCKHOLDERS
Notwithstanding any right of HNS fully to investigate the affairs of
the Company, HNS have the right to rely fully upon the representations,
warranties, covenants and agreements of the Company, Moses and the Stockholders
contained in this Agreement or in any document delivered to HNS by the latter or
any of their representatives in connection with the transactions contemplated by
this Agreement. All such representations, warranties, covenants and agreements
shall survive the execution and delivery hereof and the Closing Date hereunder
for twelve (12) months following the Closing.
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SECTION 11. INDEMNIFICATION
11.1 Obligation of HNS and ▇▇▇▇▇▇ to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Section 9, HNS and ▇▇▇▇▇▇ hereby agree to indemnify, defend and hold harmless
the Company and the Stockholders from and against any losses, liabilities,
damages, deficiencies, costs or expenses (including interest, penalties and
reasonable attorneys' fees and disbursements) (a "Loss") based upon, arising out
of or otherwise due to any inaccuracy in or any breach of any representation,
warranty, covenant or agreement of HNS and ▇▇▇▇▇▇ contained in this Agreement or
in any document or other writing delivered pursuant to this Agreement.
11.2 Obligation of the Company and Moses to Indemnify. Subject to the
limitations on the survival of representations and warranties contained in
Section 10, the Company and Moses agree to indemnify, defend and hold harmless
HNS from and against any Loss, based upon, arising out of or otherwise due to
any inaccuracy in or any breach of any representation, warranty, covenant or
agreement made by any of them and contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement.
SECTION 12. THE CLOSING
The closing ("Closing") shall take place not later than 45 days after
the date on which the Securities and Exchange Commission shall have "No Further
Comment" on the Information Statement. At the Closing, the parties shall provide
each other with such documents as may be necessary or appropriate in order to
consummate the transactions contemplated hereby including evidence of due
authorization of the Agreement and the transactions contemplated hereby. The
date of Closing is referred to herein as the "Closing Date". In the event the
Closing does not take place on or before 45 days after the date on which the
Securities and Exchange Commission shall have "No Further Comment" on the
Information Statement, then this Agreement shall terminate unless extended by
written mutual consent of the Company and HNS. This Agreement may be terminated
at any time prior to Closing upon the written consent of the parties hereto
SECTION 13. MISCELLANEOUS
13.1 Waivers. The waiver of a breach of this Agreement or the failure
of any party hereto to exercise any right under this Agreement shall in no event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
13.2 Amendment. This Agreement may be amended or modified only by an
instrument of equal formality signed by the parties or the duly authorized
representatives of the respective parties.
13.3 Assignment. This Agreement is not assignable except by operation
of law.
13.4 Notices. Until otherwise specified in writing, the mailing
addresses of both parties of this Agreement shall be as follows:
The Company or
Stockholders: c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Nova BioGenetics, Inc.
Atlanta Financial Center ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
HNS or ▇▇▇▇▇▇: Healthcare Network Solutions, Inc. c/o
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Any notice of statement given under this Agreement shall be deemed to
have been given if sent by registered mail addressed to the other party at the
address indicated above or at such other address which shall have been furnished
in writing to the addressor.
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13.5 Governing Law. This Agreement shall be construed, and the legal
relations be the parties determined, in accordance with the laws of the State of
Delaware, thereby precluding any choice of law rules which may direct the
applicable of the laws of any other jurisdiction.
13.6 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof without advance approval in
writing of the form and substance thereof by the other party except as required
to stay in compliance with the HNS' reporting obligations under the Securities
Exchange Act of 1934.
13.7 Entire Agreement. This Agreement (including the Exhibits and
Schedules hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the purchase and issuance of the NBG
Shares and the HNS Shares and related transactions, and supersede all prior
agreements, written or oral, with respect thereto.
13.8 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
13.9 Severability of Provisions. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
13.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
HEALTHCARE NETWORK SOLUTIONS, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its: President
NOVA BIOGENETICS, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
SHAREHOLDERS OF NOVA BIOGENETICS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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