EXCHANGE AGREEMENT
This Exchange Agreement (this "Agreement") is entered into as of the
11th day of November, 1999, to be effective as of the 1st day of November, 1999
(the "Effective Date"), and is by and among MB Software Corporation, a Colorado
corporation ("MB"), and Consolidated National Corp. and Xxxxx X. Xxxxx
(collectively, the "Debtholders").
W I T N E S S E T H:
WHEREAS, MB owes the Debtholders an aggregate of $1,250,000 as of the
Effective Date (the "Debt"); and
WHEREAS, MB has contributed all of the stock of its wholly owned
subsidiary, MB Software Solutions, Inc. ("MBSSI") to XxxXXxx.xxx, Inc.
("MedEWay"), in exchange for 552,900 validly issued, duly authorized, fully
paid, and non-assessable shares of common stock, $.001 par value per share, of
MedEWay (the "MedEWay Shares"); and
WHEREAS, the parties hereto wish to evidence their agreement pursuant
to which, among other things, the Debtholders will purchase the MedEWay Shares
in exchange for the Debt and cash, all upon the terms set forth herein; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
EXCHANGE
1.1 Exchange. Effective as of the Effective Date, MB shall assign, transfer
and convey to the Debtholders, and the Debtholders shall purchase, free and
clear of all liens, pledges, security interests, restrictions, claims, charges
and other encumbrances, the MedEWay Shares.
1.2 Payment. As consideration for the MedEWay Shares to be sold hereunder,
the Debtholders shall (i) pay to MB an amount equal to $250,000 (the "Cash") and
(ii) contribute the Debt to MB. Additionally, concurrently with the closing of
the transactions contemplated herein, MedEWay shall issue to MB a warrant to
purchase 5% of the outstanding common stock of MedEWay at a purchase price equal
to $.001 per share (the "Warrant"), with the Warrant being exercisable only upon
the initial public offering or sale of MedEWay.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of MB. MB hereby represents and warrants
to the Debtholders as follows:
(a) Incorporation. Each of MB, MBSSI and MedEWay is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation. MB has all requisite corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby.
(b) Capitalization. The authorized capital stock of MedEWay consists
of 40,000,000 shares of common stock, $.001 par value per share, of which
552,900 shares are issued and outstanding and 100,000 shares of Preferred
Stock, $.001 par value per share, of which no shares are issued and
outstanding. All of the issued and outstanding MedEWay Shares have been
duly authorized and validly issued, are fully paid and nonassessable and
are owned by MB.
(c) Execution, Delivery, Binding Effect. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the board of directors of MB. This Agreement
is a valid and binding obligation of MB enforceable against it in
accordance with its terms, except as may be limited by applicable
bankruptcy and similar laws and general principles of equity.
(d) MedEWay Shares. The MedEWay Shares are being transferred to the
Debtholders free and clear of all liens, pledges, security interests,
restrictions, claims, charges and other encumbrances.
2.2 Representations and Warranties of Debtholders. The Debtholders hereby
represent and warrant to MB that this Agreement is a valid and binding
obligation of the Debtholders enforceable against the Debtholders in accordance
with its terms, except as may be limited by applicable bankruptcy and similar
laws and general principles of equity.
ARTICLE III
CLOSING
3.1 Closing. At the closing of the transactions contemplated herein, the
Debtholders shall deliver to MB (i) the Cash, in immediately available funds,
and (ii) all written evidences of the Debt, marked "canceled", MB shall deliver
to the Debtholders certificates representing the MedEWay Shares, properly
registered and issued in the names of the Debtholders as directed by the
Debtholders, and MedEWay shall deliver to MB the Warrant.
2
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification by MB. MB will indemnify the Debtholders for any loss,
liability, claims, damages, expenses, including reasonable attorneys fees
("Damages"), suffered by the Debtholders as a result of any breach by MB of any
of its representations and warranties or covenants hereunder.
4.2 Indemnification by Debtholders. The Debtholders shall indemnify MB for
any Damages suffered by MB as a result of any breach by the Debtholders of any
of the Debtholders' representations and warranties or covenants hereunder.
4.3 Indemnification Procedures. Any party claiming indemnification
hereunder shall give written notice thereof to the party against whom
indemnification is sought. If such claim involves a third party claim, such
notice shall be given timely in order to allow the indemnifying party the
opportunity to participate in the defense of such claim, to the extent such
party wishes; provided, however, that no failure of an indemnified party to give
such notice timely shall relieve the indemnifying party of any obligation
hereunder except to the extent, if any, that such failure materially prejudices
the ability of the indemnifying party to defend such third-party claim.
ARTICLE V
MISCELLANEOUS MATTERS
5.1 Notices. All notices, requests, demands, payments and other
communications under this Agreement shall be in writing and shall be duly given
if delivered personally to the person to whom it is authorized to be given, or
it is sent by mail or overnight courier service or similar service at such
person's address set forth below, or at such other address as such person may
from time to time specify by written notice pursuant to this Section VI. Any
such notice shall be deemed to be given as of the date so delivered, if
delivered personally, or upon confirmation of the telecopy, or as of the date
the same was deposited in the United States mail, or delivered to an overnight
courier service, in each case with all applicable charges prepaid, addressed as
set forth below.
If to MB: 0000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
If to the Debtholders: 0000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxx
5.2 Binding Agreement. This Agreement shall be binding upon and shall inure
to the benefit of MB, its successors and assigns, and to the Debtholders and
their heirs, personal representatives, successors and assigns.
5.3 Expenses. The Debtholders shall reimburse MB for up to $20,000 of
expenses for professional fees incurred by MB in connection with the
transactions contemplated by this Agreement.
5.4 Interim Operations. It is anticipated that MedEWay and MBSSI will use
facilities and other resources of MB during a transition period. MedEWay and
MBSSI shall reimburse MB for the actual costs of such facilities and other
resources used by them.
5.5 Entire Agreement. This Agreement constitutes the entire agreement
between MB and the Debtholders relating to the subject matter hereof; there are
no terms other than those contained herein and therein and this Agreement may
not be modified or amended except in a writing signed by the parties hereto.
5.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of Texas, without
giving effect to principles of conflicts of law thereof.
5.7 Counterparts. This Agreement may be executed in counterparts and by
each party hereto on separate counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date set forth above.
MB SOFTWARE CORPORATION, INC.
By: ______________________________
Its: ______________________________
CONSOLIDATED NATIONAL CORP.
By: ______________________________
Its: ______________________________
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XXXXX X. XXXXX
