Document:

EXHBIT 10

 

 

 

 

 

 

 

 

EXHIBIT 10.3

ESCROW AGREEMENT

 

 

 

 

 

 

 

 

 

 

ESCROW AGREEMENT

THIS ESCROW AGREEMENT, dated as of November 10, 2003 among Zion Oil & Gas, Inc., a Delaware Corporation (the "Company"), COMMERCE BANK/DELAWARE, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (the "Escrow Agent") and NETWORK 1 FINANCIAL SECURITIES, INC. (the "Underwriter")..

WITNESSETH:

The Company, pursuant to a registration statement and preliminary prospectus filed with the Securities and Exchange Commission ("SEC") on Form SB-2 dated July 15, 2003, and subject to further amendment(the "Prospectus") is offering securities (the "Offering") to certain qualified subscribers (the "Subscribers") consisting of shares of the Company's common stock (the "Shares"), for a purchase price of $5.00 per Share.  The aggregate subscriptions that must be received before any subscription payments will be released to the Company from the escrow created pursuant to the terms and conditions contained herein is 1,300,000 Shares, or $6,500,000 (the "Minimum Subscription Amount"), which amount may be changed by the Company by amendment to the Prospectus and written notice to the Escrow Agent and Underwriter prior to the "Effective Date" (as hereinafter defined).  Thereafter, subscription payments will be released to the Company and commissions paid directly to the Underwriter upon written request by the Company and the Underwriter to the Escrow Agent.

The offering will be made on a "best efforts minimum/maximum" basis by the Underwriter, and by some other placement agents who are registered with the NASD, beginning on a day (the "Escrow Effective Date") designated by the Company promptly after being notified by the SEC that the registration statement is effective. If the Minimum Subscription Amount is not received by March 31, 2004 (or 90 days later if extended by the Company) the offering and sale of the Shares will terminate on such date (the "Minimum Offering Termination Date").  If the minimum is reached, then the maximum of 7,000,000 Shares or $35,000,000 may be accepted by the Company before December 31, 2004 (the "Maximum Offering Termination Date").  The minimum subscription is 100 Shares ($500) and all subscriptions that comply with the terms of the Prospectus will be denominated in $500 increments.

NOW, THEREFORE, the Company, the Underwriter and the Escrow Agent agree as follows:

1.  Deposits.  The Company agrees to provide the Escrow Agent, in writing, with the Escrow Effective Date promptly upon its determination.  Pursuant to the terms of the Offering, the Underwriter will deliver (or cause the other placement agents to deliver) to the Escrow Agent each subscription payment (a "Subscription Payment") received by the Company, the Underwriter and/or the other placement agents from subscribers. The Subscription Payments of such subscribers will be collectively held in one escrow account by the Escrow Agent on the terms and conditions hereinafter set forth.  The Underwriter will maintain all subscriber records and at least bi-weekly supply the Escrow Agent and the Company with a list showing each new subscriber not on any previous list with the subscriber's name, address and amount of Subscription Payment.  Each Subscription Payment received by the Underwriter from a subscriber shall be forwarded to the Escrow Agent along with a copy of the subscription agreement signed by the subscriber, in the form of Annex A hereto (the "Subscription 

Agreement"), setting forth the name, address, social security number and telephone number of such subscriber, the number of Shares being purchased and the purchase price being paid for same.  If the Subscription Payment is in the form of a check, it shall be enclosed with the Subscription Agreement.  If the Subscription Payment is to be made by wire transfer, the Subscription Agreement shall also state the name, address and telephone number of the financial institution that will be wiring such Subscription Payment.

 

Each Subscription Payment received by the Escrow Agent from the Underwriter will be deposited and held in accordance with Section 6(a) below.  Such account will be held in the name of Zion Oil & Gas, Inc. Escrow Account (the "Escrow").  All monies in the Escrow shall be called, in the aggregate, the "Escrow Fund."  It is understood that all checks received by Escrow Agent are subject to clearance time and the funds represented thereby cannot be drawn upon or invested until such time as the same constitute good and collected funds.  It is additionally understood that should any checks be returned to the Escrow Agent as uncollectible, or returned because of insufficient funds, the Escrow Agent is authorized and instructed to charge expenses incurred by the Escrow Agent on such uncollected checks to the Escrow.  The Escrow Agent shall redeposit such check(s) for collection only upon the verbal instruction of the Underwriter; however, in no instance shall the check(s) be presented for collection more than two (2) times.  Should the check(s) be uncollectible after the second presentation, the Escrow Agent, shall promptly notify the Company and return the check(s) to the Company (or the placement agent who delivered it to the Escrow Agent).

2.  Acceptance or Rejection of Subscription Payment.  The Company hereby certifies that the Subscription Agreement provides that the purchase of any Shares is subject to the approval of the Company.  The Company agrees to notify the Escrow Agent and the Underwriter in writing or telephonically with written confirmation as to which Subscriptions are being accepted and which rejected.  Subscription Payments for rejected subscriptions shall be refunded to the respective subscribers at the close of the Escrow pursuant to the procedure described in Paragraph 4 hereof, as applicable, or as otherwise directed in writing by the Company.  Interest on rejected subscriptions shall be paid to the subscribers, pro rata.

3.  Release of Escrow Fund on Closing.  If on a Closing Date (as defined in the Prospectus) the Escrow Agent (a) holds Subscription Payments, representing subscriptions as to which the Company has notified the Escrow Agent, pursuant to paragraph 2 hereof, that the Company has accepted, and (b) has received from the Company and the Underwriter a certificate stating that all conditions to such Closing have been met (i.e. specifically, in the case of the Initial Closing, that the Minimum Subscription Amount has been accepted), then the Escrow Agent is authorized and instructed to make the following payments: (i) all principal amounts, and accumulated interest thereon, held by the Escrow Agent in the Escrow representing subscriptions as to which the Company and the Underwriter have notified the Escrow Agent, pursuant to Paragraph 2 hereof, that the Company has accepted, shall be paid to the Company and the Underwriter in the proportions designated in the certificate; (ii) all principal amounts held by the Escrow Agent in the Escrow, representing subscriptions as to which the Company has notified the Escrow Agent, pursuant to paragraph 2 hereof, that the Company has rejected, shall be paid to the rejected subscribers pro rata.  All payments to be made by the Escrow Agent to a subscriber shall be forwarded to the last known address of the subscriber, as communicated in writing to the Escrow Agent by the Underwriter, mailed by first class mail. All payments to be made by the Escrow Agent to the Company shall be forwarded to the Company at 6510 Abrams Road, Suite 300, 

Dallas, Texas 75231, or transmitted by wire transfer to such account as the Company shall direct.  All payments to be made by the Escrow Agent to the Underwriter shall be transmitted by wire transfer to such account as the Underwriter shall direct.  Upon release of any funds pursuant to this Paragraph 3, the Escrow shall be closed as to the funds released; provided, however, that this Agreement shall remain in effect for further Subscription Payments received by the Escrow Agent from subscribers which shall be placed in Escrow and held by the Escrow Agent in accordance with the terms of this Agreement.

4.  Other Refunds.  If the Escrow Agent has received from the Company and the Underwriter a certificate stating that the Offering is being terminated without the Minimum Subscription Amount having been received, then the Escrow Agent is authorized and instructed to make the following payments: (i) all principal amounts held by the Escrow Agent in the Escrow shall be paid to the subscribers of the Company; (ii) all earnings, less the expenses incurred by the Escrow Agent for uncollected checks, if any, shall be paid to the subscribers pro rata.  All payments to be made by the Escrow Agent to a subscriber, as communicated in writing to the Escrow Agent by the Company, will be mailed by first class mail.  All payments to be made by the Escrow Agent to the Company shall be forwarded to the Company at 6510 Abrams Road, Suite 300, Dallas, TX 75231 or transmitted by wire transfer to such account as the Company may direct.  Upon release of the funds pursuant to this Paragraph 4, the Escrow Agent's duties as Escrow Agent will cease and the Escrow shall be closed.

5.  Fees.  The Company hereby agrees that the Escrow Agent shall be entitled to an acceptance fee of  $1,000, and an annual administration fee of $4,000 plus all out of pocket expenses (approved by the Company) incurred by the Escrow Agent (the "Escrow Fee"). The acceptance fee is due and payable by upon execution of the Escrow Agreement. The first year's annual administration fee is due and payable upon execution of the Escrow Agreement.    The Escrow Agent agrees that in the event that a subsidiary company to the Company is formed to facilitate investment in the Company, the Escrow Fee shall include services to the subsidiary Company which are the same as the services set forth herein to the Company and the Escrow Fee shall be prorated between the two companies

6. Rights, Liabilities and Indemnification of the Escrow Agent.

(a) The Escrow Fund shall be invested by the Escrow Agent in accordance with the signed, written instructions of chairman, the President, any executive vice-president or the Vice President of Finance of the Company (the "Authorized Officers").  In the absence of written instructions from the above-named party, the Escrow Agent shall invest the Escrow Fund in the money market mutual funds customarily utilized by the Escrow Agent's corporate trust department in the ordinary course of its corporate trust and escrow agent duties.  Such money market mutual fund is the Commerce Capital Treasury Obligations Money Market Fund. In investing the Escrow Fund, the Escrow Agent shall rely upon the written instructions of an Authorized Officer and the Escrow Agent shall be and hereby is relieved of all liability with respect to making, holding, redeeming or selling such investments in accordance with such instructions.  In the absence of the written investment instructions contemplated herein, for any reason whatsoever, the Escrow Agent shall be and hereby is relieved of all liability with respect to making, holding, redeeming or selling investments made in accordance with the preceding paragraph which prescribes the permissible investment vehicles for the Escrow Fund absent written instructions from an Authorized Officer.

Escrow Agent is and shall be under no duty to enforce the obligation of the Company to furnish written investment instructions.

(b) The Escrow Agent shall not be responsible for or be required to enforce any of the terms or conditions of any agreement between the Company and the Underwriter or its placement agents.

(c) The parties hereto represent to the Escrow Agent that they are authorized to enter into the Escrow Agreement by their duly authorized representatives and that the Escrow Agent is entitled to rely on this representation without the need to confirm the authority of the representatives.

(d) The duties and obligations of the Escrow Agent shall be limited to and determined solely by the express provisions of this Escrow Agreement and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent.

(e) The Escrow Agent is not bound by and is under no duty to inquire into the terms or validity of any other agreements or documents, including any agreements or documents which may be related to, referred to in or deposited with the Escrow Agent in connection with this Escrow Agreement.

(f) The Escrow Agent shall be entitled to rely upon and shall be protected in acting in reliance upon any instruction, notice, information, certificate, instrument or other document which is submitted to it in connection with its duties under this Escrow Agreement and which the Escrow Agent in good faith believes to have been signed or presented by the proper party or parties.  The Escrow Agent shall have no liability with respect to the form, execution, validity or authenticity thereof.

 

(g) The Escrow Agent shall not be liable for any act which the Escrow Agent may do or omit to do hereunder, or for any mistake of fact or law, or for any error of judgment, or for the misconduct of any employee, agent or attorney appointed by it, while acting in good faith, unless caused by or arising from its own gross negligence or willful misconduct.

(h) The Escrow Agent shall be entitled to consult with counsel of its own selection and the opinion of such counsel shall be full and complete authorization and protection to the Escrow Agent in respect of any action taken or omitted by the Escrow Agent hereunder in good faith and in accordance with the opinion of such counsel.

(i) The Escrow Agent shall have the right at any time to resign for cause and be discharged of its duties as Escrow Agent hereunder by giving written notice of its resignation to the other parties hereto at least sixty days prior to the date specified for such resignation to take effect. Such "cause" permitting the Escrow Agent to resign shall occur upon (i) the non-payment of any fees 

due from the Company hereunder for thirty (30) days after written notification of such non-payment from Escrow Agent; and (ii) the Company's receipt of a final, non-appealable cease and desist order from the SEC terminating the purchase and sale of the Shares in the public market place.  In addition to the forgoing, the Company shall have the right to terminate this Agreement for any reason or for no reason upon thirty (30) days written notice to the Escrow Agent.  All obligations of the Escrow Agent hereunder shall cease and terminate on the effective date of its resignation and its sole responsibility thereafter shall be to hold the Escrow Fund (including accrued interest thereon),  for a period of thirty days following the effective date of resignation.

(j)  If a successor escrow agent shall have been appointed and written notice thereof shall have been given to the resigning Escrow Agent by parties hereto and the successor escrow agent, then the resigning Escrow Agent shall deliver the Escrow Fund (including accrued interest thereon), to the successor escrow agent.

(k) If a successor escrow agent shall not have been appointed, for any reason whatsoever, the resigning Escrow Agent shall deliver the Escrow Fund (including accrued interest thereon). to a court of competent jurisdiction and give written notice of the same to the parties hereto. The resigning Escrow Agent shall be entitled to be reimbursed by the Company for any reasonable expenses incurred in connection with its resignation and transfer of the Escrow Fund, pursuant to and in accordance with the provisions of this section.

(l) The Company and the Underwriter agree to indemnify and hold the Escrow Agent harmless from and against any and all liabilities, causes of action, claims, demands, judgments, damages, costs and expenses (including reasonable attorneys fees and expenses) that may arise out of or in connection with the Escrow Agent's good faith acceptance of or performance of its duties and obligations under this Escrow Agreement.

(m)  In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions with respect to the Escrow Fund which, in its sole discretion, are in conflict either with other instructions received by it or with any provision of this Agreement, the Escrow Agent shall have the absolute right to suspend all further performance under this Escrow Agreement (except for the safekeeping of the Escrow Fund) until the resolution of such uncertainty or conflicting instructions to the Escrow Agent's sole satisfaction by final judgment of a court of competent jurisdiction, joint written instructions from all of the other parties hereto, or otherwise.

(n) In the event that any controversy arises between one or more of the parties hereto or any other party with respect to this Escrow Agreement or the Escrow Fund, the Escrow Agent shall not be required to determine the proper disposition of such controversy or the proper disposition of the Escrow Fund and shall have the absolute right, in its sole discretion, to deposit the Escrow Fund with the Clerk of a court of competent jurisdiction, file a suit in interpleader and obtain an order from the court requiring all parties involved to litigate in such court their respective claims arising out of or in connection with the Escrow Fund.  Upon the deposit by the Escrow Agent of the Escrow Fund with the Clerk of a court of competent jurisdiction in accordance with this provision, the Escrow Agent shall be relieved of all further obligations and released from all liability hereunder.  

(o) Neither this Escrow Agreement, nor any other agreement between or among the Company, the Underwriter and the Escrow Agent shall be deemed to create a joint venture between or among the Escrow Agent, the Underwriter and the Company.  The Escrow Agent shall not be considered the alter ego of the Company or the Underwriter by virtue of this Agreement, or any other agreement.

7.  Modification, Amendment, Rescission.  No rescission, modification, amendment, supplement or change of this Escrow Agreement shall be valid or in effect unless notice thereof in writing is signed by all three parties hereto.

8.  Successors and Assigns.  The provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, heirs, successors or assigns.

9.  Copies.  This Escrow Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

10.  Notices.  All notices, instructions and other communications under this Escrow Agreement shall be in writing except as otherwise specified herein and shall be deemed duly given if sent by (i) confirmed facsimile transmission or (ii) certified or registered mail, postage prepaid, return receipt requested and addressed as follows:

(a)  If to the Escrow Agent:

Commerce Bank/Delaware, National Association

Attn: Corporate Trust Services

1701 Route 70 East

Cherry Hill, NJ 08034

Phone Number (856) 751-2737

Fax Number: (856) 470-6186

(b) If to the Company:

Zion Oil & Gas, Inc.

Attn:  Vice-President of Finance

6510 Abrams Road, Suite 300

Dallas, TX 75231

Phone Number 214-221-4610

Fax Number: 214-221-6510

(c) If to the Underwriter:

Network 1 Financial Securities, Inc.

Attn:  Michael Zarraga

Building 2 Penthouse

2 Bridge Street

Red Bank, NJ  07701

Phone Number: 800-886-7007

Fax Number: 732-758-6671

11. Applicable Law.  This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on the day and year first above written.

ZION OIL & GAS, INC. (the "Company")                                                      

By:   s/E. A. Soltero                                               

Title:   President                                             

COMMERCE BANK/DELAWARE, National Association (the "Escrow Agent")

By Authorized Officer:  s/Caren Chabora                                            

Title:  Vice President

 

NETWORK 1 FINANCIAL SECURITIES, INC. (the "Underwriter")

By Authorized Officer:  s/William Hunt                                             

Title: President

 

ANNEX A 

Zion Oil & Gas, Inc.

SUBSCRIPTION AGREEMENT

 

The Investor named below, by payment of a wire transfer or check payable to ZION OIL & GAS, INC. - ESCROW ACCOUNT, hereby subscribes for shares of common stock, $.01 par value ("the Shares") indicated below (minimum purchase of 100 shares at a purchase price of $5.00 per Share) of Zion Oil & Gas, Inc. Shares must be purchased in increments of $500. By such payment, the named Investor acknowledges receipt of the Prospectus and any amendment, the terms of which govern the investment in the Shares. 

A.   INVESTMENT:

(1) No. of Shares purchased _________.  Dollar Amount: $___________ 

(2) [  ]Initial Purchase; or      [  ]Additional Purchase

(3) [  ]Check Payment Enclosed:   Number:_________ Date:___/___/____; or

(4) [  ]Wire Transfer:  Sending Bank:_______________________Wire #:_________ Date:___/___/____

                                     Bank Address:______________________________Phone Number__________________

B.   REGISTRATION:

(1) Registered Owner:    [  ]Mr.   [  ]Mrs.   [  ]Ms.   [  ]Dr.   [  ]Other ____________________________

Name:______________________________________________________________________________

(2) Co-owner:   [  ]Mr.   [  ]Mrs.   [  ]Ms.   [  ]Dr.   [  ]Other ____________________________________

Name:______________________________________________________________________________

(3) Mailing Address: __________________________________________________________________

(4) Residence Address (if different from above):_____________________________________________

(5) Telephone #:      (Home) (_____) _____ - ________ (Office) (_____) _____ - __________________

(6) Email Address:____________________________________________________________________

(7) Birth Date:______ /______ /____(8)Birth Date Co-Owner_____/_____/____________________

(9) Please indicate Citizenship Status: [  ]U.S. Citizen               [  ]Other___________________________

(10) Social Security or (National Identity) Number___________________________________________________

 

(11) Co-Owner _______________________________________________________________________________

Corporate or Custodial Taxpayer ID      #: __________________________________________________

C.   OWNERSHIP:       [  ]Individual Ownership  [  ]IRA or Keogh  [  ]Joint Tenants with Rights of Survivorship  [  ]Trust/Date of Trust Established Pension/Trust  ___ / ___ / ___  (S.E.P.)

[  ]Tenants in Common  [  ]Tenants by the Entirety  [  ]Corporate Ownership  [  ]Partnership

[  ]Other _____________________________________________________________________________ 

Zion Oil & Gas, Inc.-Subscription Agreement, page 2

D.   SIGNATURES: By signing below, I/we represent that I/we have relied on the information set forth in the Prospectus, as and if amended, and on no other statement whatever, whether written or oral.

Signatures - Registered Owner: ___________________   Co-Owner: _____________________________

E.   PRINT NAMES OF CUSTODIAN OR TRUSTEE:

_____________________________________________________________Date:___________________

Authorized Signature: ________________________Witness Signature:  __________________________

F.   RETURN OF PAYMENT SHOULD BE SENT TO (IF DIFFERENT FROM REGISTERED OWNER):

Name: _________________________________c/o: __________________________________________

Address: _____________________________________________________________________________

Account #___________________________       Phone: (_____) ______ - _________________________

G.   BENEFICIAL OWNER(S): All reports and financial statements will normally be sent to the registered owner at the address in Section B. If reports and financial statements are to be sent to the Beneficial Owner of an IRA or Keogh, insert name of the Beneficial Owner.

Name of Beneficial Owner Only: _______________________________  Phone: (___)___- ___________

Address: _____________________________________________________________________________

H.   BROKER-DEALER/REGISTERED REPRESENTATIVE DATA (broker-dealer use only):

Broker-Dealer NASD Firm Name: ________________________Telephone Number: (___)_____- _____

Main Office Address: ___________________________________________________________________

Authorized Signature: ______________________________________________Date: ______________

Print or Type Name of Registered Representative:____________________________________________

Signature: _________________________________________________Phone: (___)______- ________

Branch Office Address: _________________________________________________________________

	
SEND TO:
	
Network 1 Financial Securities, Inc.

Attn: Mr, Mike Zarraga, Vice President

2 Bridge Avenue, Penthouse Suite

Red Bank, NJ 07701

Phone (800)866-7007     Fax (732)758-6671
	
ACCEPTED:

ZION OIL & GAS, INC.

By:_______________________

Title:                     Date:[LETTERHEAD OF HAWK ASSOCIATES, INC.]
Tel: (305) 852-2383

                                       Frank N. Hawkins, Chief Executive Officer
                                                    Julie W. Marshall, President
                                                         info@hawkassociates.com

         AGREEMENT made as of July 28, 2003 (the "Effective  Date") between Hawk
Associates, Inc., an investor relations firm having its place of business at 204
Ocean Drive,  Tavernier, FL 33070 (hereinafter referred to as "Hawk") and Health
Express  USA,  Inc.  with an address  at 1761  Hillsboro  Boulevard,  Suite 203,
Deerfield Beach, FL 33442 (herein after referred to as the "Company").

WITNESSETH:

         WHEREAS,  Hawk  is  engaged  in  the  business  of  providing  investor
relations,  financial media relations,  public  relations and other  appropriate
consulting and advisory services; and

         WHEREAS,  the  Company  is  desirous  of  entering  into  an  agreement
utilizing Hawk services and expertise; and

         WHEREAS,  the Company  desires to accept such a  relationship  upon the
terms and conditions hereinafter set forth;

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, it is agreed as follows:

      1. The Company  desires to retain the  services of Hawk as an  independent
contractor to provide  investor  relations  consulting and advisory  services in
numerous areas and Hawk desires to accept such  engagement by Company,  pursuant
to the terms and conditions of this Agreement. These areas include providing the
following services as appropriate, but are not limited to:

          o    Development  of  Investor/Media  Relations  Wall Street  Branding
               Strategy
          o    Creation and Regular Updating of Investment Profiles
          o    Hawk Associates Website Virtual Investor Kit/Virtual Media Kit
          o    Email Alerts
          o    Drafting and Management of Press Releases

                                                            INITIALS: ____ _____

<PAGE>

Hawk Associates Consulting Agreement                                 Page 2 of 5

          o    Development and Maintenance of  Investor/Media  Email and Contact
               Database Road Shows/Investor Meetings
          o    Handling of Investor Information Queries
          o    Mailings  to Targeted  Members of the  Investment  Community  and
               Media
          o    Quarterly Conference Calls
          o    Crisis Management Consulting
          o    IR Presenter and Virtual Roadshows
          o    Annual Reports/Quarterly Reports to Shareholders
          o    Expanded Company Backgrounder or Fact Sheets
          o    PowerPoint Investor Presentation
          o    Road Shows/Investor Meetings

      2. In consideration for such services,  Company will provide the following
compensation to Hawk:

     A.   Upon the signing of this  agreement,  Hawk will be granted a five-year
          warrant to purchase  100,000 shares of the Company's common stock at a
          price of $.55 per share. The warrants will immediately vest.

          If still  engaged by the  Company,  Hawk will be  granted a  five-year
          warrant to purchase  100,000 shares of the Company's common stock at a
          price of $1.50 per share when the price of the Company's  common stock
          closes at $1.50. The options will immediately vest.

          If still  engaged by the  Company,  Hawk will be  granted a  five-year
          warrant to purchase  75,000 shares of the Company's  common stock at a
          price of $2.50 per share when the price of the Company's  common stock
          closes at $2.50. The options will immediately vest.

          If still  engaged  by the  Company,  Hawk  will be  granted  five-year
          warrant to purchase  50,000 shares of the Company's  common stock at a
          price of $5.00 per share when the price of the Company's  common stock
          closes at $5.00. The options will immediately vest.

          B. Hawk will be paid a  retainer  fee of  $7,000  per month  effective
          August 1, 2003. In addition, Hawk will be reimbursed for normal out of
          pocket  operating  expenses such as phones,  faxes,  Fedexes,  routine
          printing  and routine  postage  incurred by Hawk on behalf of Company.
          These  expenses  will be  invoiced  at a rate of $400 per  month.  All
          billings with the  exception of the initial  billing will be one month
          in advance  and will be paid  within the first 10 days of the  billing
          month by wire  transfer to Hawk  Associates.  These cash payments will
          begin  with an  initial  payment  of  $22,200  representing  the first
          three-months of the retainer (August,  September and October 2003) and

                                                            INITIALS: ____ _____

<PAGE>

Hawk Associates Consulting Agreement                                 Page 3 of 5

          basic expenses.  The next invoice covering the retainer will be issued
          on November 1, 2003.  Travel expenses and other  non-routine  expenses
          will be billed monthly in arrears.

          C.  Company  shall  reimburse  Hawk and its  representatives  for such
          reasonable out-of-pocket expenses as Hawk may incur in connection with
          the rendition of the services.  Such items shall  include,  but not be
          limited to, all travel related  expenses for Hawk to visit the Company
          facilities as well as entertainment  expenses  incurred with financial
          analysts, fund managers, brokers, potential investors,  members of the
          media and/or financing candidates.

          D. Third party vendor expenses such as design fees, printing costs and
          related materials, database acquisitions, PR Newswire fees, conference
          calls and special promotions will be billed directly to Company by the
          vendors.  It is mutually agreed that Hawk will not benefit financially
          from a markup of these  services  other than any  normal ad  placement
          fees.

      3. Equity Fundraising

     If requested,  Hawk will provide professional presentation of the company's
materials and  introduction  of the Company to potential  funding  sources.  The
packaging  will  include  a  professionally   presented  business  model  and  a
PowerPoint presentation or other support as needed.

          A.   Hawk  will  circulate  the  Company's   applicable  materials  to
               investors  and/or  investment   banking/venture  capital  related
               resources  and contacts  interested  in investing in  enterprises
               similar to the Company and provide  introductions  to appropriate
               investment bankers and other potential funding sources.

          B.   Upon  successful  placement  and/or sourcing of Equity Capital an
               Equity Capital  Placement fee of Two and a half Percent (2.5%) of
               the capital  raised  and/or  placed on behalf of Company  will be
               paid to Hawk.

          C.   In respect of any  transaction  between Company and an individual
               or entity  that was  introduced  directly or  indirectly  by Hawk
               prior to a  termination  hereof which occurs within two (2) years
               from the termination or expiration of this Agreement, the Company
               shall pay to Hawk or Hawk's nominee(s) the Success Fees due Hawk,
               as outlined in Section 3B of this  Agreement.  This Section shall
               survive any termination of this Agreement.

                                                            INITIALS: ____ _____

<PAGE>

Hawk Associates Consulting Agreement                                 Page 4 of 5

          D.   All fees to Hawk will be due by wire  transfer  upon  funding  as
               received by Company.

      4. The initial term  ("Term") of this  Agreement  shall be for a period of
three months commencing on the Effective Date hereof (August 1, 2003) and ending
on  October  31,  2003.   Effective   November  1,  2003,   this  contract  will
automatically  renew for a period of 30 days  every  successive  30 days  unless
terminated by either party. After September 30, 2003, either party will have the
right to terminate this agreement with 30 days notice.

      5. Any controversy  between the parties hereto  involving the construction
or  application of any payments owed to Hawk as part of this  Agreement,  or any
claims  arising  out of or relating to this  Agreement  or the breach  hereof or
thereof,  will be submitted to and settled by final and binding  arbitration  in
Islamorada  FL,  in  accordance  with  the  rules  of the  American  Arbitration
Association,  and  judgment  upon the award  rendered by the  arbitrator  may be
entered  in  any  court  having  jurisdiction  thereof.  In  the  event  of  any
arbitration  under this  Agreement  the  prevailing  party  shall be entitled to
recover from the losing party  reasonable  expenses,  attorneys'  fees and costs
incurred  therein or in the  enforcement  or collection of any judgment or award
rendered  therein.  The  `prevailing  party" means the party  determined  by the
arbitrator to have most nearly prevailed,  even if such party did not prevail in
all matters, not necessarily the one in whose favor a judgment is rendered.

      6. All  proprietary  information  furnished  to Hawk by  Company  shall be
deemed  to be  confidential  and  shall  be  kept  in  strict  confidence  under
appropriate  safeguards.  Company  agrees that the Hawk website and profiles are
protected by applicable  copyright laws and will not be copied or otherwise used
by Company without the written permission of Hawk.

      7. This consulting agreement,  acceptable to both parties and representing
the full and final  execution of this  document,  contains the full agreement of
the  parties  hereto  concerning  the  subject  matter  hereof  and shall not be
modified,  altered, changed or terminated except pursuant to a writing signed by
all of the parties.

      8. This  agreement  shall be binding  upon and inure to the benefit of the
respective  heirs,  executors,  administrators,  successors  and  assigns of the
parties below.

      9. The validity of this agreement  shall be determined in accordance  with
the internal laws of the State of Florida.

      10.  Any  and all  notices,  requests,  demands  or  other  communications
hereunder  shall be in  writing,  and deemed  given and  received  if  delivered
personally  or sent by certified or registered  mail,  postage  prepaid,  return

                                                            INITIALS: ____ _____

<PAGE>

Hawk Associates Consulting Agreement                                 Page 5 of 5

receipt  requested to each of the parties  hereto at the  addresses  hereinabove
first written or such other  addresses as may from time to time be designated by
any of them in writing.

IN WITNESS  WHEREOF,  the  Company and Hawk have  executed  and  delivered  this
agreement as of the day and year first above written.

By:      ______________________
          Frank N. Hawkins, Jr.
          CEO
          Hawk Associates, Inc.

Dated: _________________________

THE UNDERSIGNED HAVE READ
AND HEREBY CONSENT AND AGREE
TO THE TERMS OF THE FOREGOING
AGREEMENT.

By:               ____________________

                  Douglas Baker
                  Health Express USA, Inc.

cc:      Julie W. Marshall, President, Hawk Associates, Inc.

                                                            INITIALS: ____ _____

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}]]