STANDSTILL AGREEMENT
Standstill
Agreement made this 13th day
of September, 2007, by and between MEDirect Latino, Inc. (the
“Company”), Xxxxxxx Xxxxxxxx and Xxxxx X. Xxxxxxx (“T and T”), Granite Creek
FlexCap I, L.P ("Granite Creek") and Xxxxxx X. Xxxxxxxx and TBeck Capital Inc.
(collectively, "Xxxxxxxx") and Xxxx X. Xxxxxxxxx ("Xxxxxxxxx" and together
with
Xxxxxxxx, the "Additional Consenting Shareholders").
WHEREAS,
the Company,
T and T and Xxxxx X. Xxxxxxxxx are parties to litigation pending in the Circuit
Court of the 17th Judicial Circuit, in and for Broward County, Florida, Case
Nos. 07-015563 and 07-015753, and T and T, Xxxxxxxxx and Granite Creek are
parties to litigation in the Circuit Court of Xxxx County, Illinois (Case No.
2007 L 008378) (the "Cases").
WHEREAS,
the parties
have certain differences and disputes as to, among other things, the membership
of the Company’s Board of Directors, the validity and exercise of certain
options by T and T, the number of outstanding shares of the Company held by
others, the validity of Granite Creek's conversion of a portion of its debt
from
the Company into equity, and the accuracy of certain filings with the Securities
and Exchange Commission.
WHEREAS,
T and T
authorized Bank Atlantic to transfer the Company’s funds into a single account
at Bank Atlantic, and said funds have been received on or before the date hereof
in the Company's account at Bank of America pursuant to the Company’s
instructions previously delivered to Bank Atlantic’s counsel and such funds
shall be held subject to execution of this Agreement.
WHEREAS,
the parties
agree to a standstill as defined herein to give the parties time to attempt
to
resolve their litigation, differences and disputes as set forth
herein.
NOW,
THEREFORE, in
consideration of the mutual covenants contained herein, the parties
agree:
1. For
the period from the date of this Standstill Agreement through October 7, 2007,
unless sooner terminated as provided herein (the “Standstill Period”), (i)
except as may be required by a presiding judge or magistrate in the Cases,
no
party to this Standstill Agreement will take any action in the Cases including,
without limitation, the setting of hearings, the filing of motions, propounding
of discovery, setting of depositions, or amending the pleadings, (ii) the
parties to this Standstill Agreement will not, during such period, file or
take
any action with respect to any other case or action against any other party
or
parties to this Standstill Agreement any additional legal proceedings in state
and federal court or file any complaints, pleadings or notifications with any
state or federal regulatory agency and (iii) the Company will not initiate
any
bankruptcy or liquidation or similar proceedings in state or federal
court. Notwithstanding the foregoing, (a) a party to this Standstill
Agreement may file or take action (1) against another party to the Standstill
Agreement if, on the advice of counsel, such party is required by law to file
or
take action; or (2) that is derivative in nature to the extent such action
is
taken by a non-party in the name of the Company and a party is a party thereto
by virtue of its status as a shareholder of the Company; or (3) in response
to
an action filed prior to execution by any party of this Standstill Agreement
and
of which the party(ies) against which such action was filed had not been served
prior to such party's(ies') execution of this Standstill Agreement; and (b)
other than with respect to those matters set forth in Granite Creek's case
in
the Circuit Court of Xxxx County referenced in this Standstill Agreement (which
is subject to this Standstill Agreement), neither Granite Creek nor its
affiliate, which is the agent for Granite Creek and certain other lenders under
that certain loan and security agreement between with the Company dated December
8, 2006, as amended to date and from time to time hereafter (the "Loan
Agreement"), shall be precluded from pursuing its or their respective or
collective remedies under the Loan Agreement and the contracts entered into
with
the Company in connection therewith (together with the Loan Documents, the
"Transaction Documents") as a result of Granite Creek being a party to this
Standstill Agreement.
2. During
the Standstill Period, none of T and T, Granite Creek and the Additional
Consenting Shareholders will singly, jointly or collectively among
them or with others, will call, or attempt to call, or solicit or
encourage others to call, a meeting of the Company's shareholders, or
take or attempt to take or solicit or encourage others to take or solicit any
action as shareholders of the Company by written consent or otherwise, and
will
not vote any of their shares of the Company for any purpose, including but
not
limited to an effort to replace the current Board of Directors or to elect
new
members to the Board of Directors or to take any action to replace the Board
of
Directors. Neither of T and T or both of them shall hold his- or
herself or themselves out as officers of the Company, Xxxxxxxxx shall not hold
himself out as a director or other authorized agent of the Company and Xxxxxxxx
will not hold himself out as an authorized agent of the Company, and none of
them will take or attempt to take any action in which they or any of them
purports to be an officer or authorized agent of the Company.
3. T
and T further agree to assist in the orderly closing of the remaining open
accounts at Bank Atlantic. The Company accounts that are closed hereafter will
be closed and the funds transferred in accordance with any applicable Medicare
rules and regulations.
4. T
and T agree to assist, if requested by the Company, in the transfer of any
and
all licenses to the Company in accordance with any applicable Medicare rules
and
regulations.
5. The
terms of this Standstill Agreement may be specifically enforced in any court
or
administrative proceedings in the event either party acts in contravention
of
the terms of this Standstill Agreement. This Standstill Agreement
shall be governed by Florida law without regard for conflict of
laws.
6. This
Standstill Agreement may be terminated by any party hereto effective on the
5th
day after written notice to all parties hereto via email, facsimile or overnight
mail to the address, fax number or email address specified on the signature
page
hereto (with notice deemed delivered on the day sent, if by email or fax, or
if
sent by overnight mail as of the close of business on the day after it is sent
(or if the next day is not a business day, at 5:00 p.m. eastern time on that
day). The termination of this Standstill Agreement by any one party
hereto shall terminate the Standstill Agreement as to all parties
hereto.
7. The
parties have freely entered into this Agreement after advice of
counsel.
8. The
parties agree to keep the terms of this Standstill Agreement confidential except
as a party may be required to disclose it for purposes of enforcement, on the
advice of counsel, or pursuant to laws or regulations applicable to him or
it. The terms of this Standstill Agreement may not be used as
evidence in any current or pending action before any state or federal court,
arbitration or mediation proceedings.
IN
WITNESS WHEREOF, the parties hereto
have executed this Standstill Agreement as of the date first above
written.
MEDIRECT
LATINO, INC.
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By: /s/
Xxxxxxx X. Xxxxxx III
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/s/
Xxxxxxx Xxxxxxxx
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XXXXXXX
XXXXXXXX
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Address
for notice:
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0000
Xxxx Xxxxxxxx Xxxxxxxxx
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43
S. Pompano Parkway, #106
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Suite
101
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Pompano
Beach, FL 33069
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Xxxxxxx
Xxxxx, Xxxxxxx 00000
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[fax
#]
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(000)
000-0000
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xxxxxx@xxxx.xxx
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xxxxxxx@xxxxxxxxxxxxxx.xxx
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GRANITE
CREEK FLEXCAP I, L.P.
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By: /s/
Xxxx X. Xxxxxx
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/s/
Xxxxx X. Xxxxxxx
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XXXXX
X. XXXXXXX
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000
Xxxx Xxxxx, Xxxxx 0000
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00
X. Xxxxxxx Xxxxxxx, #000
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Xxxxxxx,
Xxxxxxxx 00000
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Xxxxxxx
Xxxxx, XX 00000
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(000)
000-0000
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[fax
#]
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xxxx@xxxxxxxxxxxx.xxx
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xxxxxxxx@xxxx.xxx
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/s/
Xxxxxx X. Xxxxxxxx
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XXXXXX
X. XXXXXXXX
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000
X. Xxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxxxxx,
XX 00000
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[insert
fax # and email]
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/s/
Xxxx X. Xxxxxxxxx
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XXXX
X. XXXXXXXXX
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000
X. Xxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxxxxx,
XX 00000
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Fax: (000)
000-0000
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xxxxxxxx@xxx.xxx
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TBECK
CAPITAL INC.
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By:
/s/ Xxxxxx X. Xxxxxxxx
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000
X. Xxxx Xxxxxxxxx, Xxxxx 000
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Xxxxxxxxx,
XX 00000
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[insert
fax # ]
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xxxxxxxxxxxx@xxx.xxx
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