SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") dated this 17th day of
June, 2005, by and among HEALTH EXPRESS USA, INC., a Florida corporation
("Health Express"), CSI BUSINESS FINANCE, INC., a Texas corporation (the
"Company"), and the individuals listed on Exhibit A attached hereto
(individually, a "Shareholder" and collectively, the "Shareholders").
RECITALS:
A. The Shareholders own all of the outstanding capital stock of the
Company. The authorized capital stock of the Company consists of Nine Thousand
(9,000) shares of common stock, par value $0.01 per share, One Thousand (1,000)
of which are issued and outstanding (the "Company Common Stock"). The Company
has also authorized Five Hundred (500) shares of Series A Preferred Stock, par
value $0.01 per share (the "Company Preferred Stock"), of which Two Hundred
(200) shares of the Company Preferred Stock are issued and outstanding.
B. The Shareholders desire to transfer and exchange the Company Common
Stock for shares of preferred stock of Health Express so that effectively after
the conversion of the preferred stock, shares of common stock issued upon
conversion of the preferred stock shall equal Ninety-Seven and One Half percent
(97.5%) of the issued and outstanding shares of common stock of Health Express,
on the terms and conditions set forth herein and Health Express desires to
consummate such transfer and exchange pursuant to the terms and conditions set
forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual premises herein set
forth and certain other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. THE SHARE EXCHANGE AND RELATED TRANSACTIONS.
1.1. Share Exchange. In accordance with the provisions of this
Agreement, Florida Statutes and other applicable law, on the Closing Date (as
defined below), the Shareholders shall exchange with, and deliver to Health
Express, the Company Common Stock, and in exchange therefore, Health Express
shall issue, and deliver to the Shareholders in the denominations set forth
opposite each Shareholder's name on Exhibit A attached hereto, One Hundred
Thousand (100,000) shares of Series A Convertible Preferred Stock of Health
Express (the "Health Express Series A Preferred Stock") so that effectively
after the conversion of the preferred stock, the common stock issued upon
conversion shall equal Ninety-Seven and One Half percent (97.5%) of the issued
and outstanding common stock of Health Express (the exchange transaction is
referred to herein as the "Share Exchange"). The total number of Health Express
Series A Preferred Shares to be issued to the Shareholders shall be equal to One
Hundred Thousand (100,000) shares of preferred stock as set forth on Exhibit A.
The shares of preferred stock shall be designated Series A Convertible Preferred
Stock, and shall have the rights of preferences as set forth in Exhibit B
hereto.
1.2. Closing. The parties to this Agreement shall file
Articles of Share Exchange (as defined below) pursuant to section 607.1105 of
the Florida Statutes, cause the Share Exchange to become effective as of date
first written above and consummate the other transactions contemplated by this
Agreement (the "Closing") no later than July 29, 2005; provided, in no event
shall the Closing occur prior to the satisfaction of the conditions precedent
set forth in Sections 6, 7 and 8 hereof. The date of the Closing is referred to
herein as the "Closing Date." The Closing shall take place at the offices of
counsel to Health Express, or at such other place as may be mutually agreed upon
by Health Express and the Shareholders. At the Closing, (i) the Shareholders
shall deliver to Health Express the original stock certificates representing the
Company Common Stock, together with stock powers duly executed in blank; and
(ii) Health Express shall deliver to the Shareholders stock certificates
representing the Exchange Consideration.
1.3. Plan of Exchange; Articles of Share Exchange. The parties
to this Agreement shall cause the Company and Health Express to enter into a
Plan of Exchange on the date hereof, a copy of which is attached hereto as
Exhibit "C" (the "Plan of Exchange"), and, at the Closing, to execute the
Articles of Share Exchange in the form attached hereof as Exhibit "D" (the
"Articles of Exchange"). The Articles of Exchange shall be filed with the
Secretary of State of Florida on the Closing Date.
1.4. Approval of Share Exchange. By his execution of this
Agreement, each Shareholder hereby ratifies, approves and adopts the Plan of
Exchange for all purposes. On or before the execution of this Agreement, the
respective Boards of Directors of Health Express and the Company shall have
approved this Agreement, the Plan of Exchange and the transactions contemplated
hereby and thereby. The parties acknowledge that approval by the shareholders of
Health Express is required prior to the Closing Date, and a Schedule 14C
Information Statement shall be required to be mailed to all shareholders of
record of Health Express. All parties to this Agreement agree to vote in favor
of the Share Exchange to the extent such party is a holder of shares of Common
Stock of Health Express (the "Health Express Common Stock") on the record date.
1.5. Increase of Authorized Shares. The parties to this
Agreement acknowledge that as of the date hereof, Health Express has no unissued
shares of Common Stock and that a Schedule 14C Information Statement proposing
that the authorized shares of Common Stock be increased to Five Billion
(5,000,000,000) shall be mailed to all shareholders of record of Health Express.
Without such increase in the authorized Health Express Common Stock, the parties
hereby acknowledge that there will not be sufficient Health Express Common Stock
for the Health Express Series A Preferred Stock to be converted into shares of
Health Express Common Stock.
2. ADDITIONAL AGREEMENTS.
2.1. Access and Inspection, Etc. Each party to this Agreement
has allowed and shall allow the other party and its authorized representatives
full access during normal business hours from and after the date hereof and
prior to the Closing Date to all of its properties, books, contracts,
commitments and records for the purpose of making such investigations as the
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other party may reasonably request in connection with the transactions
contemplated hereby, and shall cause the other party to furnish such information
concerning its affairs as reasonably requested. Each party to this Agreement has
caused and shall cause its personnel to assist the other party in making such
investigation and shall use his best efforts to cause its counsel, accountants,
and other non-employee representatives to be reasonably available to the other
party for such purposes.
2.2. Confidential Treatment of Information. From and after the
date hereof, the parties hereto shall and shall cause their representatives to
hold in confidence all data and information obtained with respect to the other
parties or their business, except such data or information as is published or is
a matter of public record, or as compelled by legal process. In the event this
Agreement is terminated pursuant to Section 10 hereof, each party shall promptly
return to the other(s) any statements, documents, schedules, exhibits or other
written information obtained from them in connection with this Agreement, and
shall not retain any copies thereof.
2.3. Public Announcements. After the date hereof and prior to
the Closing, none of the parties hereto shall make any press release, statement
to employees or other disclosure of this Agreement or the transactions
contemplated hereby without the prior written consent of the other parties,
except as may be required by law. Neither the Company nor the Shareholders shall
make any such disclosure unless Health Express shall have received prior notice
of the contemplated disclosure and has had adequate time and opportunity to
comment on such disclosure, which shall be satisfactory in form and content to
Health Express and its counsel.
2.4. Securities Law Compliance. The issuance of the Health
Express Shares to the Shareholders hereunder shall not be registered under the
Securities Act of 1933, as amended, by reason of the exemption provided by
Section 4(2) thereof, and such shares may not be further transferred unless such
transfer is registered under applicable securities laws or, in the opinion of
Health Express's counsel, such transfer complies with an exemption from such
registration. All certificates evidencing the Health Express Shares to be issued
to the Shareholders shall be legended to reflect the foregoing restriction.
2.5. Best Efforts. Subject to the terms and conditions
provided in this Agreement, each of the parties shall use its best efforts in
good faith to take or cause to be taken as promptly as practicable all
reasonable actions that are within its power to cause to be fulfilled those
conditions precedent to its obligations or the obligations of the other parties
to consummate the transactions contemplated by this Agreement that are dependent
upon its actions.
2.6. Further Assurances. The parties shall deliver any and all
other instruments or documents required to be delivered pursuant to, or
necessary or proper in order to give effect to, the provisions of this
Agreement, including, without limitation, all necessary stock powers and such
other instruments of transfer as may be necessary or desirable to transfer
ownership of the Company Common Stock and to consummate the transactions
contemplated by this Agreement.
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2.7. Certain Tax Matters.
(a) Cooperation on Tax Matters.
(i) Health Express, the Company and the Shareholders shall
cooperate fully, as and to the extent reasonably requested by the other party,
in connection with the filing of tax returns pursuant to this Section 2.7 and
any audit, litigation or other proceeding with respect to taxes. Such
cooperation shall include the retention and (upon the other party's request) the
provision of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Company and the Shareholders agree (A) to
retain all books and records with respect to tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by
Health Express or any Shareholder, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the Company or any Shareholder, as
the case may be, shall allow the other party to take possession of such books
and records.
(ii) Health Express and the Shareholders further agree, upon
request, to use their best efforts to obtain any certificate or other document
from any governmental authority or any other person as may be necessary to
mitigate, reduce or eliminate any tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
2.8. Release of Claims By Each Shareholder. Effective as of the Closing
Date, and except for any obligations arising out of this Agreement, each
Shareholder, and his successors, predecessors, assigns, agents, advisors, legal
representatives, partners and all persons acting by, through or under him,
hereby release the Company and each of their successors, predecessors, assigns,
agents, advisors, officers, directors, employees, legal representatives,
partners and all persons acting by, through or under each of them, from any and
all claims, obligations, causes of action, actions, suits, contracts,
controversies, agreements, promises, damages, demands, costs, attorneys' fees
and liabilities of any nature whatsoever from the beginning of time up to and
including the Closing Date, in law or at equity, whether known now or on the
Closing Date, anticipated or unanticipated, suspected or claimed, fixed or
contingent, liquidated or unliquidated, arising out of, in connection with or
relating to any matter, cause or thing whatsoever.
2.9. No-Shop. From the date hereof until the termination of this
Agreement, neither the Company nor any Shareholder shall, directly or
indirectly, make, solicit, initiate or encourage submission of proposals or
offers from any persons (including any of their employees or officers) relating
to an Acquisition Proposal (as defined below). As used herein, "Acquisition
Proposal" means any proposal or offer involving a liquidation, dissolution,
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recapitalization, merger, consolidation or acquisition or purchase of all or
substantially all of the assets of, or equity interest in, the Company or other
similar transaction or business combination involving the Company. Each of the
Company and each Shareholder shall immediately cease and cause to be terminated
all discussions or negotiations with third parties with respect to any
Acquisition Proposal, if any, exiting on the date hereof.
3. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE SHAREHOLDERS.
To induce Health Express to enter into this Agreement and to consummate
the transactions contemplated hereby, the Company and the Shareholders jointly
and severally represent and warrant to and covenant with Health Express as
follows:
3.1. Organization; Compliance. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Texas. The
Company is: (a) entitled to own or lease its properties and to carry on its
business as and in the places where such business is now conducted, and (b) duly
licensed and qualified in all jurisdictions where the character of the property
owned by it or the nature of the business transacted by it makes such license or
qualification necessary, except where the failure to do so would not result in a
material adverse effect on the Company. Schedule 3.1 lists all locations where
the Company has an office or place of business and the nature of the ownership
interest in such property (fee, lease, or other).
3.2. Capitalization and Related Matters.
(a) The Company has an authorized capital consisting of Nine
Thousand (9,000) shares of Common Stock, par value $0.01 per share, of which One
Thousand shares (1,000) shares of Common Stock are issued and outstanding as of
the date hereof. The Company has authorized Five Hundred (500) shares of Series
A Preferred Stock, par value $0.01 per share, of which Two Hundred (200) shares
of Company Preferred Stock are issued and outstanding. All shares of Company
Common Stock are duly and validly issued, fully paid and nonassessable. No
shares of Company Common Stock (i) were issued in violation of the preemptive
rights of any shareholder, or (ii) are held as treasury stock.
(b) There are no outstanding securities convertible into
capital stock of the Company nor any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, such capital stock or securities convertible into such
capital stock. The Company: (i) is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its capital
stock; or (ii) has no liability for dividends or other distributions declared or
accrued, but unpaid, with respect to any capital stock.
(c) The Shareholders are, and will be at Closing, the record
and beneficial owners of One Thousand (1,000) shares of Company Common Stock and
Two Hundred (200) shares of Company Preferred Stock, free and clear of all
claims, liens, options, agreements, restrictions, and encumbrances whatsoever
and no Shareholder is a party to any agreement, understanding or arrangement,
direct or indirect, relating to the Company Common Stock, including, without
limitation, agreements, understandings or arrangements regarding voting or sale
of such stock.
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(d) As of Closing, the Company shall have at least One Hundred
Thousand Dollars ($100,000) available in currency and/or net equity.
3.3. Subsidiaries. The Company owns (a) no shares of capital stock
of any other corporation, including any joint stock company, and (b) no other
proprietary interest in any company, partnership, trust or other entity,
including any limited liability company.
3.4. Execution; No Inconsistent Agreements; Etc.
(a) This Agreement is a valid and binding agreement of the
Company and the Shareholders, enforceable in accordance with its terms, except
as such enforcement may be limited by bankruptcy or similar laws affecting the
enforcement of creditors' rights generally, and the availability of equitable
remedies. The Company and the Shareholders have the absolute and unrestricted
right, power, authority, and capacity to execute and deliver this Agreement and
the documents to be delivered by them in connection with the Closing and to
perform their obligations under this Agreement.
(b) The execution and delivery of this Agreement by the
Company and the Shareholders does not, and the consummation of the transactions
contemplated hereby will not, constitute a breach or violation of the charter or
bylaws of the Company, or a default under any of the terms, conditions or
provisions of (or an act or omission that would give rise to any right of
termination, cancellation or acceleration under) any note, bond, mortgage,
lease, indenture, agreement or obligation to which the Company or any
Shareholder is a party, pursuant to which the Company or any Shareholder
otherwise receives benefits, or to which any of the properties of the Company or
any Shareholder is subject, or violate any judgment, order, decree, statute or
regulation applicable to the Company or any Shareholder or by which any of them
may be subject.
3.5. Corporate Records. The statutory records, including the stock
register and minute books of the Company, fully reflect all issuances, transfers
and redemptions of its capital stock, currently show and will correctly show the
total number of shares of its capital stock issued and outstanding on the date
hereof and on the Closing Date, the charter or other organizational documents
and all amendments thereto, the bylaws as amended and currently in force. To the
knowledge of the Shareholders, the books of account, minute books, stock record,
books, and other records of the Company, all of which have been made available
to Health Express, are complete and correct and have been maintained in
accordance with sound business practices. The minute books of the Company
contain accurate and complete records of all meetings held of, and corporate
action taken by, the Shareholders, the Board of Directors, and committees of the
Boards of Directors of the Company, and no meeting of any such Shareholders,
Board of Directors, or committee has been held for which minutes have not been
prepared and are not contained in such minute books. At the Closing, all of
those books and records will be in the possession of the Company.
3.6. Financial Statements.
(a) The Company and the Shareholders have delivered to Health
Express the audited balance sheet of the Company as of December 31, 2004 (the
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balance sheet as of December 31, 2004 is hereinafter referred to as the "Balance
Sheet") and the related statements of income, shareholders' equity and cash
flows of the Company for the fiscal year ended December 31, 2004 and the
independent auditors' report thereon. In addition, the Company and the
Shareholders have delivered to Health Express the balance sheet of the Company
as of March 31, 2005, and the related statements of income, shareholders' equity
and cash flows of the Company for the month ended March 31, 2005. The Company
represents that the March 31, 2005 financial statements have been reviewed by
the Company's independent certified public accountants. All the foregoing
financial statements, and any financial statements delivered pursuant to Section
3.6(c) below, are referred to herein collectively as the "Company Financial
Statements."
(b) The Company Financial Statements have been and will be
prepared in accordance with applicable GAAP throughout the periods involved,
subject, in the case of interim financial statements, to normal recurring
year-end adjustments (the effect of which will not, individually or in the
aggregate, be materially adverse) and the absence of notes (that, if presented,
would not differ materially from those included in the Balance Sheet), applied
on a consistent basis, and fairly reflect and will reflect in all material
respects the financial condition of the Company as at the dates thereof and the
results of the operations of the Company for the periods then ended, and are
true and complete and are consistent with the books and records of the Company.
(c) Until Closing, the Company will furnish to Health Express
unaudited interim financial statements of the Company for each quarter
subsequent to March 31, 2005 as soon as practicable but in any event within
thirty (30) days after the close of any such month.
3.7. Liabilities. The Company has no debt, liability or obligation
of any kind, whether accrued, absolute, contingent or otherwise, except: (a)
those reflected on the Balance Sheet, including the notes thereto, and (b)
liabilities incurred in the ordinary course of business since March 31, 2005,
none of which have had or will have a material adverse effect on the financial
condition of the Company.
3.8. Absence of Changes. Except as disclosed on Schedule 3.8, from
March 31, 2005 to the date of this Agreement:
(a) there has not been any adverse change in the business,
assets, liabilities, results of operations or financial condition of the Company
or in its relationships with suppliers, customers, employees, lessors or others,
other than changes in the ordinary course of business, none of which, singularly
or in the aggregate, have had or will have a material adverse effect on the
business, properties or financial condition of the Company;
(b) there has not been any: (i) change in the Company's
authorized or issued capital stock, retirement, or other acquisition by the
Company of any shares of any such capital stock; (ii) a declaration or payment
of any dividend or other distribution or payment in respect of shares of capital
stock; (iii) amendment to the Articles of Incorporation or Bylaws of the
Company; (iv) increase by the Company of any bonuses, salaries, or other
compensation to any shareholder, director, officer, or (except in the ordinary
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course of business) employee or entry into any employment, severance, or similar
agreement with any director, officer, or employee; (v) adoption of, or increase
in the payments to or benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement, or other employee benefit
plan for or with any employees of the Company; (vi) sale (other than sales of
inventory in the ordinary course of business), lease, or other disposition of
any asset or property of the Company or mortgage, pledge, or imposition of any
lien or other encumbrance on any material asset or property of the Company;
(vii) cancellation or waiver of any claims or rights with a value to the Company
in excess of $5,000; (viii) material change in the accounting methods used by
the Company; or (ix) agreement, whether oral or written, by the Company to do
any of the foregoing; and
(c) the Company has complied with the covenants and
restrictions set forth in Section 5 to the same extent as if this Agreement had
been executed on, and had been in effect since March 31, 2005.
3.9. Title to Properties. The Company has good and marketable title
to all of its properties and assets, real and personal, including, but not
limited to, those reflected in the Balance Sheet (except as since sold or
otherwise disposed of in the ordinary course of business, or as expressly
provided for in this Agreement), free and clear of all encumbrances, liens or
charges of any kind or character except: (a) those securing liabilities of the
Company incurred in the ordinary course (with respect to which no default
exists); (b) liens of 2004 or 2005 real estate and personal property taxes; and
(c) imperfections of title and encumbrances, if any, which, in the aggregate (i)
are not substantial in amount; (ii) do not detract from the value of the
property subject thereto or impair the operations of the Company; and (iii) do
not have a material adverse effect on the business, properties or assets of the
Company.
3.10. Compliance With Law. The business and activities of the
Company has at all times been conducted in accordance with its Articles of
Incorporation and Bylaws and any applicable law, regulation, ordinance, order,
License (as defined below), permit, rule, injunction or other restriction or
ruling of any court or administrative or governmental agency, ministry, or body,
except where the failure to do so would not result in a material adverse effect
on the Company.
3.11. Taxes. The Company has duly filed all federal, provincial, and
material local and foreign tax returns and reports, and all returns and reports
of all other governmental units having jurisdiction with respect to taxes
imposed on it or on its income, properties, sales, franchises, operations or
employee benefit plans or trusts, all such returns were complete and accurate
when filed, and all taxes and assessments payable by the Company have been paid
to the extent that such taxes have become due. All taxes accrued or payable by
the Company for all periods through December 31, 2004 have been accrued or paid
in full, whether or not due and payable and whether or not disputed. The Company
has withheld proper and accurate amounts from its employees for all periods in
full compliance with the tax withholding provisions of applicable foreign,
federal, state and local tax laws. There are no waivers or agreements by the
Company for the extension of time for the assessment of any taxes. There are no
examinations of the income tax returns of the Company pending, or any proposed
deficiencies or assessments against the Company of additional taxes of any kind.
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3.12. Real Properties. The Company does not have an interest
in any real property, except for the Leases (as defined below).
3.13. Leases of Real Property. All leases pursuant to which
the Company is a lessee of any real property (the "Leases") are listed in
Schedule 3.13 and are valid and enforceable in accordance with their terms.
There is not under any of such Leases any material default or any claimed
material default by the Company or any event of default or event which with
notice or lapse of time, or both, would constitute a material default by the
Company and in respect to which the Company has not taken adequate steps to
prevent a default on its part from occurring. The copies of the Leases
heretofore furnished to Health Express are true, correct and complete, and such
Leases have not been modified in any respect since the date they were so
furnished, and are in full force and effect in accordance with their terms. The
Company is lawfully in possession of all real properties of which they are a
lessee (the "Leased Properties").
3.14. Contingencies. Except as disclosed on Schedule 3.14,
there are no actions, suits, claims or proceedings pending, or to the knowledge
of the Shareholders threatened against, by or affecting, the Company in any
court or before any arbitrator or governmental agency that may have a material
adverse effect on the Company or which could materially and adversely affect the
right or ability of any Shareholder to consummate the transactions contemplated
hereby. To the knowledge of the Shareholders, there is no valid basis upon which
any such action, suit, claim, or proceeding may be commenced or asserted against
the Company. There are no unsatisfied judgments against the Company and no
consent decrees or similar agreements to which the Company is subject and which
could have a material adverse effect on the Company.
3.15. Intellectual Property Rights. The Company has: (a) the
exclusive right to use the name(s) identified on Schedule 3.15 and the use of
such name(s) does not conflict with or infringe upon the rights of any other
person, and (b) made all material filings and publications required to register
and perfect such exclusive right. The Company is not, and will not be, subject
to any liability, direct or indirect, for infringement damages, royalties, or
otherwise, by reason of (a) the use of any name(s) in or outside the United
States or Canada or (b) the business operations of the Company, at any time
prior to the Closing Date. The Company has good and marketable title to its
trade secrets, free and clear of all encumbrances, liens, or charges of any kind
or character.
3.16. Possession of Franchises, Licenses, Etc. The Company:
(a) possess all material franchises, certificates, licenses, permits and other
authorizations (collectively, the "Licenses") from governmental authorities,
political subdivisions or regulatory authorities that are necessary for the
ownership, maintenance and operation of its business in the manner presently
conducted; (b) are not in violation of any provisions thereof; and (c) have
maintained and amended, as necessary, all Licenses and duly completed all
filings and notifications in connection therewith. Schedule 3.16 sets forth a
list of all of the Company's Licenses.
3.17. Agreements and Transactions with Related Parties. Except
as disclosed on Schedule 3.17, and except as disclosed in the Company Financial
Statements, the Company is not a party to any contract, agreement, lease or
transaction with, or any other commitment to, (a) any Shareholder, (b) any
person related by blood, adoption or marriage to any Shareholder, (c) any
director or officer of the Company, (d) any corporation or other entity in which
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any of the foregoing parties has, directly or indirectly, at least five percent
(5.0%) beneficial interest in the capital stock or other type of equity interest
in such corporation or other entity, or (e) any partnership in which any such
party is a general partner or a limited partner having a five percent (5%) or
more interest therein (any or all of the foregoing being herein referred to as a
"Related Party" and, collectively, as the "Related Parties"). Without limiting
the generality of the foregoing, except as set forth in Schedule 3.17, and
except as disclosed in the Company Financial Statements no Related Party,
directly or indirectly, owns or controls any assets or properties which are used
in the business of the Company.
3.18. Litigation. Except as disclosed on Schedule 3.18, there is no
suit, action or proceeding pending, and no person has overtly-threatened in a
writing delivered to the Company or the Shareholders to commence any suit,
action or proceeding, against or affecting the Company, nor is there any
judgment, decree, injunction, or order of any governmental entity or arbitrator
outstanding against, or, to the knowledge of the Company, pending investigation
by any governmental entity involving, the Company or any Shareholders.
3.19. Full Disclosure. No representation or warranty of the
Shareholders contained in this Agreement, and none of the statements or
information concerning the Company contained in this Agreement and the
Schedules, contains or will contain as of the date hereof and as of the Closing
Date any untrue statement of a material fact nor will such representations,
warranties, covenants or statements taken as a whole omit a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4. REPRESENTATIONS AND WARRANTIES OF HEALTH EXPRESS.
To induce the Shareholders to enter into this Agreement and to consummate
the transactions contemplated hereby, Health Express represents and warrants to
and covenants with the Shareholders as follows:
4.1. Organization. Health Express is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida.
Health Express and each of its subsidiaries is entitled to own or lease its
properties and to carry on its business as and in the places where such business
is now conducted, and Health Express and each of its subsidiaries is duly
licensed and qualified in all jurisdictions where the character of the property
owned by it or the nature of the business transacted by it makes such license or
qualification necessary, except where such failure would not result in a
material adverse effect on Health Express or its subsidiaries.
4.2. Capitalization and Related Matters.
(a) Health Express has an authorized capital stock consisting
of Fifty Million (50,000,000) shares of common stock, par value $0.001 per
share, of which Thirty Seven Million Seven Hundred Seventy Five Thousand Five
Hundred Fifty Four (37,775,554) shares are issued and outstanding. Additionally,
Health Express has authorized the issuance of Ten Million (10,000,000) shares of
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preferred stock, $0.01 per share, of which no shares are currently issued and
outstanding. The Health Express Preferred Shares will be, when issued, duly and
validly authorized and fully paid and non-assessable, and will be issued to the
Shareholder free of all encumbrances, claims and liens whatsoever.
(b) Except as disclosed in documents filed by Health Express
with the Securities and Exchange Commission (the "SEC Documents"), and except
for employee stock options to purchase shares of the Health Express's Common
Stock, Health Express does not have outstanding any securities convertible into
capital stock, nor any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock or securities convertible into its capital stock.
4.3. Execution; No Inconsistent Agreements; Etc.
(a) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly and validly
authorized and approved by Health Express and this Agreement is a valid and
binding agreement of Health Express enforceable against Health Express in
accordance with its terms, except as such enforcement may be limited by
bankruptcy or similar laws affecting the enforcement of creditors' rights
generally, and the availability of equitable remedies.
(b) The execution and delivery of this Agreement by Health
Express does not, and the consummation of the transactions contemplated hereby
will not, constitute a breach or violation of the charter or bylaws of Health
Express or a default under any of the terms, conditions or provisions of (or an
act or omission that would give rise to any right of termination, cancellation
or acceleration under) any material note, bond, mortgage, lease, indenture,
agreement or obligation to which Health Express or any of its subsidiaries is a
party, pursuant to which any of them otherwise receive benefits, or by which any
of their properties may be bound.
4.4. Financial Statements. Health Express has delivered to the
Company the consolidated audited balance sheets of Health Express as of December
26, 2004, the consolidated audited statement of income for the fiscal year ended
December 26, 2004, and the consolidated unaudited balance sheet as of March 27,
2005, collectively, the "Health Express Financial Statements"). The Health
Express Financial Statements have been prepared in accordance with GAAP, applied
on a consistent basis (except that the unaudited statements do not contain all
the disclosures required by GAAP), and fairly reflect in all material respects
the consolidated financial condition of Health Express and its subsidiaries as
at the dates thereof and the consolidated results of Health Express's operations
for the periods then ended. As of December 26, 2004, Health Express had no
operations. Since March 27, 2005, or as disclosed in the SEC Documents or press
releases issued by Health Express, there has been no material adverse change in
the assets or liabilities, in the business or condition, financial or otherwise,
of Health Express, or in its results of operations.
4.5. Liabilities. Except as disclosed in the SEC Documents or press
releases issued by Health Express or Schedule 4.5, Health Express nor any of its
subsidiaries has any material debt, liability or obligation of any kind, whether
accrued, absolute, contingent or otherwise, except (a) those reflected on the
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Health Express Financial Statements, including the notes thereto, and (b)
liabilities incurred in the ordinary course of business since March 27, 2005,
none of which have had or will have a material adverse affect on the financial
condition of Health Express and its subsidiaries taken as a whole.
4.6. Contingencies. Except as disclosed on Schedule 4.6, there are
no actions, suits, claims or proceedings pending or, to the knowledge of Health
Express's management, threatened against, by or affecting Health Express or any
of its subsidiaries in any court or before any arbitrator or governmental agency
which could have a material adverse effect on Health Express or its subsidiaries
or which could materially and adversely affect the right or ability of Health
Express to consummate the transactions contemplated hereby. To the knowledge of
Health Express, there is no valid basis upon which any such action, suit, claim
or proceeding may be commenced or asserted against Health Express or its
subsidiaries. There are no unsatisfied judgments against Health Express and no
consent decrees or similar agreements to which Health Express or its
subsidiaries is subject and which could have a material adverse effect on Health
Express or its subsidiaries or which could materially and adversely affect the
right or ability of Health Express to consummate the transactions contemplated
hereby.
4.7. Full Disclosure. No representation or warranty of Health
Express contained in this Agreement, and none of the statements or information
concerning Health Express contained in this Agreement and the Schedules,
contains or will contain as of the date hereof and as of the Closing Date any
untrue statement of a material fact nor will such representations, warranties,
covenants or statements taken as a whole omit a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
5. CONDUCT OF BUSINESS OF THE COMPANY PENDING CLOSING.
The Company and the Shareholders covenant and agree that between the date
hereof and the Closing Date:
5.1. Business in the Ordinary Course. The business of the Company
shall be conducted only in the ordinary course, and consistent with past
practice. Without limiting the generality of the foregoing:
(a) the Company shall not enter into any contract, agreement
or other arrangement which would constitute a Material Contract, except for
contracts to sell or supply goods or services to customers in the ordinary
course of business at prices and on terms substantially consistent with the
prior operating practices of the Company;
(b) except for sales of personal property in the ordinary
course of its business, the Company shall not sell, assign, transfer, mortgage,
convey, encumber or otherwise dispose of, or cause the sale, assignment,
transfer, mortgage, conveyance, encumbrance or other disposition of any of the
assets or properties of the Company or any interest therein;
(c) the Company shall not acquire any material assets, except
expenditures made in the ordinary course of business as reasonably necessary to
12
enable the Company to conduct its normal business operations and to maintain its
normal inventory of goods and materials, at prices and on terms substantially
consistent with current market conditions and prior operating practices;
(d) the books, records and accounts of the Company shall be
maintained in the usual, regular and ordinary course of business on a basis
consistent with prior practices and in accordance with GAAP;
(e) the Company shall use its best efforts to preserve its
business organization, to preserve the good will of its suppliers, customers and
others having business relations with the Company, and to retain the services of
key employees and agents of the Company after the Closing Date on terms
acceptable to Health Express;
(f) except as they may terminate in accordance with the terms
of this Agreement, the Company shall keep in full force and effect, and not
cause a default of any of its obligations under, each of its contracts and
commitments;
(g) the Company shall duly comply in all material respects
with all laws applicable to it and to the conduct of its business;
(h) the Company shall not create, incur or assume any
liability or indebtedness, except in the ordinary course of business consistent
with past practices;
(i) the Company shall not make or commit to make any capital
expenditures in excess of one thousand dollars ($1,000) in the aggregate;
(j) the Company shall not apply any of its assets to the
direct or indirect payment, discharge, satisfaction or reduction of any amount
payable directly or indirectly to or for the benefit of the Shareholder or any
Related Party; and
(k) neither the Company nor the Shareholders shall take or
omit to take any action which would render any of the Shareholders'
representations or warranties untrue or misleading, or which would be a breach
of any of the Shareholders' covenants.
5.2. No Material Changes. The Company shall not, without the prior
written consent of Health Express which consent shall not be unreasonably
withheld, materially alter its organization, capitalization, or financial
structure, practices or operations. Without limiting the generality of the
foregoing:
(a) no change shall be made in the Articles of Incorporation
or Bylaws of the Company;
(b) no change shall be made in the authorized or issued
capital stock of the Company;
(c) the Company shall not issue or grant any right or option
to purchase or otherwise acquire any of its capital stock or other securities;
13
(d) no dividend or other distribution or payment shall be
declared or made with respect to any of the capital stock of the Company; and
(e) no change shall be made affecting the banking arrangements
of the Company.
5.3. Notification. Each party to this Agreement shall promptly
notify the other parties in writing of the occurrence, or threatened occurrence,
of any event that would constitute a breach or violation of this Agreement by
any party or that would cause any representation or warranty made by the
notifying party in this Agreement to be false or misleading in any respect. The
Shareholders will promptly notify Health Express of any event of which the
Shareholders obtain knowledge which could have a material adverse effect on the
business, assets, financial condition or prospects of the Company. The
Shareholders shall have the right to update the Schedules to this Agreement
immediately prior to Closing; provided, if such update discloses any breach of a
representation, warranty, covenant or obligation of the Shareholders and/or the
Company, Health Express shall have the right to then exercise its available
rights and remedies hereunder.
6. CONDITIONS TO OBLIGATIONS OF ALL PARTIES.
The obligation of the Company, the Shareholders and Health Express to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, on or before the Closing, of each of the following conditions; any
or all of which may be waived in whole or in part by the joint agreement of
Health Express, the Company and the Shareholders:
6.1. Absence of Actions. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation or to seek damages in a material amount by reason of the
transactions contemplated hereby, and no governmental authority shall have
asserted that the within transactions (or any other pending transaction
involving Health Express, any of its subsidiaries, the Shareholders or the
Company when considered in light of the effect of the within transactions) shall
constitute a violation of law or give rise to material liability on the part of
the Shareholders, the Company or Health Express or its subsidiaries.
6.2. Consents. The parties shall have received from any suppliers,
lessors, lenders, lien holders or governmental authorities, bodies or agencies
having jurisdiction over the transactions contemplated by this Agreement, or any
part hereof, such consents, authorizations and approvals as are necessary for
the consummation hereof, including, without limitation, the consents listed on
Schedule 6.2.
7. CONDITIONS TO OBLIGATIONS OF HEALTH EXPRESS.
All obligations of Health Express to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by Health Express:
14
7.1. Representations and Warranties. The representations and
warranties contained in Section 3 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
the Shareholders in connection with the transactions contemplated by this
Agreement shall be true, correct and complete in all material respects (except
for representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects) as of
the date when made and shall be deemed to be made again at and as of the Closing
Date and shall be true, correct and complete at and as of such time in all
material respects (except for representations and warranties which are by their
terms qualified by materiality, which shall be true, correct and complete in all
respects).
7.2. Compliance with Agreements and Conditions. The Shareholders and
the Company shall have performed and complied with all material agreements and
conditions required by this Agreement to be performed or complied with by them
and/or by the Company prior to or on the Closing Date.
7.3. Absence of Material Adverse Changes. No material adverse change
in the business, assets, financial condition, or prospects of the Company shall
have occurred, no substantial part of the assets of the Company not
substantially covered by insurance shall have been destroyed due to fire or
other casualty, and no event shall have occurred which has had or will have a
material adverse effect on the business, assets, financial condition or
prospects of the Company.
7.4. Certificate of the Shareholders. The Shareholders shall have
executed and delivered, or caused to be executed and delivered, to Health
Express one or more certificates, dated the Closing Date, certifying in such
detail as Health Express may reasonably request to the fulfillment and
satisfaction of the conditions specified in Sections 7.1 through 7.3 above.
8. CONDITIONS TO OBLIGATIONS OF THE SHAREHOLDERS.
All of the obligations of the Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment and satisfaction
of each and every of the following conditions on or prior to the Closing, any or
all of which may be waived in whole or in part by the Shareholders:
8.1. Business in the Ordinary Course. Without limiting the
generality of the foregoing:
(a) Health Express shall not enter into any contract,
agreement or other arrangement which would constitute a Material Contract;
(b) Health Express shall not sell, assign, transfer, mortgage,
convey, encumber or otherwise dispose of, or cause the sale, assignment,
transfer, mortgage, conveyance, encumbrance or other disposition of any of the
assets or properties of Health Express or any interest therein;
(c) Health Express shall not acquire or dispose of any
material asset in excess of one thousand dollars ($1,000) individually;
15
(d) the books, records and accounts of Health Express shall be
maintained in the usual, regular and ordinary course of business on a basis
consistent with prior practices and in accordance with GAAP;
(e) except as they may terminate in accordance with the terms
of this Agreement, Health Express shall keep in full force and effect, and not
cause a default of any of its obligations under, each of its contracts and
commitments;
(f) Health Express shall duly comply in all material respects
with all laws applicable to it and to the conduct of its business;
(g) Health Express shall not create, incur or assume any
liability or indebtedness; and
(h) Health Express shall inform the Company of any action
taken which would have a material impact on the Share Exchange transaction.
8.2. Representations and Warranties. The representations and
warranties contained in Section 4 of this Agreement and in any certificate,
instrument, schedule, agreement or other writing delivered by or on behalf of
Health Express in connection with the transactions contemplated by this
Agreement shall be true and correct in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects) when
made and shall be deemed to be made again at and as of the Closing Date and
shall be true at and as of such time in all material respects (except for
representations and warranties which are by their terms qualified by
materiality, which shall be true, correct and complete in all respects).
8.3. Compensation. No increase shall be made in the compensation or
employee benefits payable or to become payable to any director, officer,
employee or agent of Health Express, and no bonus or profit-sharing payment or
other arrangement (whether current or deferred) shall be made to or with any
such director, officer, employee or agent, except in the ordinary course of
business and consistent with prior practices. Total payments to any director,
officer, employee or agent of Health Express, including health insurance
coverage for Xxxx Xxxxx and Xxxxx X'Xxxxxx, shall not exceed $10,000.
8.4. Compliance with Agreements and Conditions. Health Express shall
have performed and complied with all material agreements and conditions required
by this Agreement to be performed or complied with by Health Express prior to or
on the Closing Date.
8.5. Absence of Material Adverse Changes. No material adverse change
in the assets or financial condition, of Health Express and its subsidiaries,
taken as a whole, shall have occurred and no event shall have occurred which has
had, or will have a material adverse effect on the assets or financial condition
of Health Express and its subsidiaries, taken as a whole.
8.6. Certification of Form 10-KSB. The current management of Health
Express shall have certified Form 10-KSB for the fiscal year ended December 26,
16
2004 and Form 10-QSB for the period ended March 27, 2005 prior to the filing of
such form with the Securities and Exchange Commission.
8.7. Management Voting. The current management of Health Express
shall have voted all of the shares owned by them in favor of the transactions
contemplated hereby and an increase in the authorized common stock.
8.8. Board Approval. This Agreement and the transactions
contemplated hereby shall have been approved by Health Express's Board of
Directors.
8.9. Certificate of Health Express. Health Express shall have
delivered to the Shareholders a certificate, executed by an executive officer
and dated the Closing Date, certifying to the fulfillment and satisfaction of
the conditions specified in Sections 8.1 through 8.3 above.
8.10 Special Board Meeting. Health Express shall cause a special
meeting of the Board of Directors, currently consisting of Messrs. Xxxxxxx Xxxxx
and Xxxxx X'Xxxxxx, to be held on or shortly after the Closing Date. At such
meeting, Xxx Xxxxxxxx and a nominee designated by the Company shall be appointed
as new directors of Health Express, and all resignations of officers tendered on
the meeting shall be accepted. Messrs. Xxxxx and X'Xxxxxx shall also submit
their resignations as directors of Health Express which shall become effective
upon the effectiveness of Schedule 14F-1.
8.11 Schedule 14F-1 Filing. Upon the consummation of this Agreement,
Health Express shall file with the SEC an Information Statement on Schedule
14F-1 (the "Schedule 14F-1") or such other documents as may be required,
disclosing the anticipated resignation of Messrs. Xxxxx and X'Xxxxxx in a form
that will satisfy the requirements of law. The parties agree to cooperate in the
preparation and filing of such report or any other filings to be filed with the
SEC.
9. INDEMNITY.
9.1. Indemnification by Shareholders. Subject to Section 9.5, the
Shareholders (hereinafter, collectively, called the "Shareholder Indemnitors")
shall jointly and severally defend, indemnify and hold harmless Health Express
and its direct and indirect subsidiaries (including the Company after Closing)
and affiliates, their officers, directors, employees and agents (hereinafter,
collectively, called "Health Express Indemnitees") against and in respect of any
and all loss, damage, liability, fine, penalty, cost and expense, including
reasonable attorneys' fees and amounts paid in settlement (collectively, "Health
Express Losses"), suffered or incurred by any Health Express Indemnitee by
reason of, or arising out of:
(a) any misrepresentation, breach of warranty or breach or
non-fulfillment of any agreement of the Shareholders contained in this Agreement
or in any certificate, schedule, instrument or document delivered to Health
Express by or on behalf of the Shareholders or the Company pursuant to the
provisions of this Agreement (without regard to materiality thresholds contained
therein); and
17
(b) any liabilities of the Company of any nature whatsoever
(including tax liability, penalties and interest), whether accrued, absolute,
contingent or otherwise, (i) existing as of the date of the Balance Sheet, and
required to be shown therein in accordance with applicable GAAP, to the extent
not reflected or reserved against in full in the Balance Sheet; or (ii) arising
or occurring between March 27, 2005 and the Closing Date, except for liabilities
arising in the ordinary course of business, none of which shall have a material
adverse effect on the Company.
9.2. Indemnification by Health Express. Subject to Section 9.5,
Health Express (hereinafter called the "Health Express Indemnitor") shall
jointly and severally defend, indemnify and hold harmless the Shareholders
(hereinafter called "Shareholder Indemnitees") against and in respect of any and
all loss, damage, liability, fine, penalty, cost and expense, including
reasonable attorneys' fees and amounts paid in settlement (collectively,
"Shareholder Losses"), suffered or incurred by any Shareholder Indemnitees by
reason of, or arising out of:
(a) any misrepresentation, breach of warranty or breach or
non-fulfillment of any material agreement of Health Express contained in this
Agreement or in any other certificate, schedule, instrument or document
delivered to the Shareholders by or on behalf of Health Express pursuant to the
provisions of this Agreement (without regard to materiality thresholds contained
therein); and
(b) any liabilities of the Company of any nature whatsoever
(including tax liability, penalties and interest), whether accrued, absolute,
contingent or otherwise, arising from Health Express's ownership or operation of
the Company after Closing, but only so long as such liability is not the result
of an act or omission of the Company or any Shareholder occurring prior to the
Closing. Health Express Losses and Shareholder Losses are sometimes collectively
referred to as "Indemnifiable Losses."
9.3. Defense of Claims.
(a) Each party seeking indemnification hereunder (an
"Indemnitee"): (i) shall provide the other party or parties (the "Indemnitor")
written notice of any claim or action by a third party arising after the Closing
Date for which an Indemnitor may be liable under the terms of this Agreement,
within ten (10) days after such claim or action arises and is known to
Indemnitee, and (ii) shall give the Indemnitor a reasonable opportunity to
participate in any proceedings and to settle or defend any such claim or action.
The expenses of all proceedings, contests or lawsuits with respect to such
claims or actions shall be borne by the Indemnitor. If the Indemnitor wishes to
assume the defense of such claim or action, the Indemnitor shall give written
notice to the Indemnitee within ten (10) days after notice from the Indemnitee
of such claim or action, and the Indemnitor shall thereafter assume the defense
of any such claim or liability, through counsel reasonably satisfactory to the
Indemnitee, provided that Indemnitee may participate in such defense at their
own expense, and the Indemnitor shall, in any event, have the right to control
the defense of the claim or action.
(b) If the Indemnitor shall not assume the defense of, or if
after so assuming it shall fail to defend, any such claim or action, the
Indemnitee may defend against any such claim or action in such manner as they
18
may deem appropriate and the Indemnitees may settle such claim or litigation on
such terms as they may deem appropriate but subject to the Indemnitor's
approval, such approval not to be unreasonably withheld; provided, however, that
any such settlement shall be deemed approved by the Indemnitor if the Indemnitor
fails to object thereto, by written notice to the Indemnitee, within fifteen
(15) days after the Indemnitor's receipt of a written summary of such
settlement. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all expenses, legal and otherwise, incurred by the Indemnitee in
connection with the defense and settlement of such claim or action.
(c) If a non-appealable judgment is rendered against any
Indemnitee in any action covered by the indemnification hereunder, or any lien
attaches to any of the assets of any of the Indemnitee, the Indemnitor shall
immediately upon such entry or attachment pay such judgment in full or discharge
such lien unless, at the expense and direction of the Indemnitor, an appeal is
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final judgment is rendered in any such action, the
Indemnitor shall forthwith pay such judgment or discharge such lien before any
Indemnitee is compelled to do so.
9.4. Waiver. The failure of any Indemnitee to give any notice or to
take any action hereunder shall not be deemed a waiver of any of the rights of
such Indemnitee hereunder, except to the extent that Indemnitor is actually
prejudiced by such failure.
9.5. Limitations on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement:
9.5.1. Time Limitation. No party shall be responsible hereunder for
any Indemnifiable Loss unless the Indemnitee shall have provided such party with
written notice containing a reasonable description of the claim, action or
circumstances giving rise to such Indemnifiable Loss within three (3) years
after the Closing Date (the "Indemnity Notice Period"); provided, however, that:
(a) with respect to any Indemnifiable Loss resulting or
arising from any breach of a representation or warranty of the Shareholders
relating to taxes, or any tax liability of the Company arising or relating to
periods prior to the Closing Date, the Indemnity Notice Period shall extend for
the full duration of the statute of limitations; and
(b) there shall be no limit on the Indemnity Notice Period for
indemnity claims: (i) against the Shareholders for Indemnifiable Losses arising
or resulting from a breach of a representation or warranty relating to
Environmental Laws, or any liability which relates to the handling or disposal
of Wastes or the failure to comply with any Environmental Law; and (ii) against
any party based on fraud or intentional breach or misrepresentation.
9.5.2. Caps on Losses. The aggregate liability of the Shareholders
after the Closing for Health Express Losses shall not exceed an amount equal to
the Exchange Consideration paid to the Shareholders. The aggregate liability of
Health Express after the Closing for Shareholder Losses shall not exceed the
Exchange Consideration paid to the Shareholders.
19
9.5.3. Basket. No party shall have any liability hereunder for
Indemnifiable Losses after the Closing, with respect to a breach of the
representations and warranties contained herein, until the aggregate of all
Indemnifiable Losses for which the Shareholder or Health Express as applicable,
are responsible under this Agreement exceeds Ten Thousand ($10,000) Dollars (the
"Basket"); provided that once such Basket is exceeded for the Shareholders or
Health Express as applicable, the responsible party or parties shall be
responsible for all Indemnifiable Losses, from the first dollar as if such
Basket never existed; and further provided that this Section 9.5.3 shall not
limit in any respect indemnity claims: (a) based upon fraud or intentional
breach or intentional misrepresentation; (b) arising from a breach by the Health
Express Indemnitor of any covenant contained in this Agreement; (c) arising from
a breach by the Shareholders of any representation or warranty contained in
Section 3.2 hereof; or (d) related to any tax or tax liability of the Company
for periods prior to the Closing Date.
10. TERMINATION.
10.1. Termination. This Agreement may be terminated at any time on
or prior to the Closing:
(a) By mutual consent of Health Express and the Shareholders;
or
(b) At the election of Health Express if: (i) any Shareholder
has breached or failed to perform or comply with any of his representations,
warranties, covenants or obligations under this Agreement; or (ii) any of the
conditions precedent set forth in Section 6 or 7 is not satisfied as and when
required by this Agreement; or (iii) the Closing has not been consummated by
August 19, 2005; or
(c) At the election of the Shareholders if: (i) Health Express
has breached or failed to perform or comply with any of its representations,
warranties, covenants or obligations under this Agreement; or (ii) any of the
conditions precedent set forth in Section 6 or 8 is not satisfied as and when
required by this Agreement.
10.2. Manner and Effect of Termination. Written notice of any
termination ("Termination Notice") pursuant to this Section 10 shall be given by
the party electing termination of this Agreement ("Terminating Party") to the
other party or parties (collectively, the "Terminated Party"), and such notice
shall state the reason for termination. The party or parties receiving
Termination Notice shall have a period of ten (10) days after receipt of
Termination Notice to cure the matters giving rise to such termination to the
reasonable satisfaction of the Terminating Party. If the matters giving rise to
termination are not cured as required hereby, this Agreement shall be terminated
effective as of the close of business on the tenth (10th) day following the
Terminated Party's receipt of Termination Notice. Upon termination of this
Agreement prior to the consummation of the Closing and in accordance with the
terms hereof, this Agreement shall become void and of no effect, and none of the
parties shall have any liability to the others, except that nothing contained
herein shall relieve any party from: (a) its obligations under Sections 2.2 and
20
2.3; or (b) liability for its intentional breach of any representation, warranty
or covenant contained herein, or its intentional failure to comply with the
terms and conditions of this Agreement or to perform its obligations hereunder.
11. MISCELLANEOUS.
11.1. Notices.
(a) All notices, requests, demands, or other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given upon receipt if delivered in person, or upon the expiration of
four (4) days after the date sent, if sent by federal express (or similar
overnight courier service) to the parties at the following addresses:
(i) If to Health Express: Health Express Enterprises, Inc.
0000 Xxxx Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxx
with a copy to: Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx
Xxxxxx, LLP
000 Xxxxx Xxxxxxxx Xxxx.
Xxxxx 0000, Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
(ii) If to a Shareholder: The name and address as listed on the
Exhibit A attached hereto.
(b) Notices may also be given in any other manner permitted by
law, effective upon actual receipt. Any party may change the address to which
notices, requests, demands or other communications to such party shall be
delivered or mailed by giving notice thereof to the other parties hereto in the
manner provided herein.
11.2. Survival. Except as provided in the next sentence, the
representations, warranties, agreements and indemnifications of the parties
contained in this Agreement or in any writing delivered pursuant to the
provisions of this Agreement shall survive any investigation heretofore or
hereafter made by the parties and the consummation of the transactions
contemplated herein and shall continue in full force and effect after the
Closing, subject to the limitations of Section 9.5. The representations,
warranties and agreements of the Company contained in this Agreement shall not
survive the Closing.
11.3. Counterparts; Interpretation. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
all of which shall constitute one and the same instrument. This Agreement
supersedes all prior discussions and agreements between the parties with respect
to the subject matter hereof, and this Agreement contains the sole and entire
agreement among the parties with respect to the matters covered hereby. All
Schedules hereto shall be deemed a part of this Agreement. This Agreement shall
not be altered or amended except by an instrument in writing signed by or on
behalf of all of the parties hereto. No ambiguity in any provision hereof shall
21
be construed against a party by reason of the fact it was drafted by such party
or its counsel. For purposes of this Agreement: "herein", "hereby", "hereunder",
"herewith", "hereafter" and "hereinafter" refer to this Agreement in its
entirety, and not to any particular section or paragraph. References to
"including" means including without limiting the generality of any description
preceding such term. Nothing expressed or implied in this Agreement is intended,
or shall be construed, to confer upon or give any person other than the parties
hereto any rights or remedies under or by reason of this Agreement.
11.4. Governing Law. The validity and effect of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Florida, without regard to principles of conflicts of laws thereof.
Any dispute, controversy or question of interpretation arising under, out of, in
connection with or in relation to this Agreement or any amendments hereof, or
any breach or default hereunder, shall be litigated in the state or federal
courts in Broward County, Florida, U.S.A. Each of the parties hereby irrevocably
submits to the jurisdiction of any state or federal court sitting in Broward
County, Florida. Each party hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of any such action in Broward County, Florida.
11.5. Successors and Assigns; Assignment. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, and successors; provided,
however, that no Shareholder may assign this Agreement or any rights hereunder,
in whole or in part.
11.6. Partial Invalidity and Severability. All rights and
restrictions contained herein may be exercised and shall be applicable and
binding only to the extent that they do not violate any applicable laws and are
intended to be limited to the extent necessary to render this Agreement legal,
valid and enforceable. If any terms of this Agreement not essential to the
commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof shall constitute their agreement with
respect to the subject matter hereof and all such remaining terms shall remain
in full force and effect. To the extent legally permissible, any illegal,
invalid or unenforceable provision of this Agreement shall be replaced by a
valid provision which will implement the commercial purpose of the illegal,
invalid or unenforceable provision.
11.7. Waiver. Any term or condition of this Agreement may be
waived at any time by the party which is entitled to the benefit thereof, but
only if such waiver is evidenced by a writing signed by such party. No failure
on the part of a party hereto to exercise, and no delay in exercising, any
right, power or remedy created hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy by any such
party preclude any other future exercise thereof or the exercise of any other
right, power or remedy. No waiver by any party hereto to any breach of or
default in any term or condition of this Agreement shall constitute a waiver of
or assent to any succeeding breach of or default in the same or any other term
or condition hereof.
22
11.8. Headings. The headings as to contents of particular
paragraphs of this Agreement are inserted for convenience only and shall not be
construed as a part of this Agreement or as a limitation on the scope of any
terms or provisions of this Agreement.
11.9. Expenses. Except as otherwise expressly provided herein,
all legal and other costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by Health
Express or the Shareholders as each party incurs such expenses, and none of such
expenses shall be charged to or paid by the Company.
11.10. Finder's Fees. Health Express represents to the
Shareholders that no broker, agent, finder or other party has been retained by
it in connection with the transactions contemplated hereby and that no other fee
or commission has been agreed by the Health Express to be paid for or on account
of the transactions contemplated hereby. The Shareholders represent to Health
Express that no broker, agent, finder or other party has been retained by
Shareholders or the Company in connection with the transactions contemplated
hereby and that no other fee or commission has been agreed by the Shareholders
or the Company to be paid for or on account of the transactions contemplated
hereby.
11.11. Gender. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.
11.12. Acceptance by Fax. This Agreement shall be accepted,
effective and binding, for all purposes, when the parties shall have signed and
transmitted to each other, by telecopier or otherwise, copies of the signature
pages hereto.
11.13. Attorneys Fees. In the event of any litigation arising
under the terms of this Agreement, the prevailing party or parties shall be
entitled to recover its or their reasonable attorneys fees and court costs from
the other party or parties.
11.14. Opportunity to Hire counsel; Role of Xxxxxxxxxxx &
Xxxxxxxx Xxxxxxxxx Xxxxxx LLP. The Shareholders acknowledge that they have been
advised and have been given an opportunity to hire counsel with respect to this
Agreement and the transactions contemplated hereby. The Shareholders further
acknowledge that the law firm of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP did
not provide them any legal advice, including any tax advice with respect to the
transactions contemplated by this Agreement. The Shareholders further
acknowledge that the law firm of Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx LLP has
solely represented Health Express in connection with this Agreement and the
transactions contemplated hereby and no other person.
11.15. Time is of the Essence. It is understood and agreed
among the parties hereto that time is of the essence in this Agreement and this
applies to all terms and conditions contained herein.
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11.16. NO JURY TRIAL. THE PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement to be duly
executed by their duly authorized officers as of the day and year first above
written.
HEALTH EXPRESS USA, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
SHAREHOLDERS:
CORPORATE STRATEGIES, INC.
By: /s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Executive Officer
THE COMPANY:
CSI BUSINESS FINANCE, INC.
By: /s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Executive Officer
