EXHIBIT 10.3
EURONET INTERNATIONAL, INC.
ADVISORY AGREEMENT
THIS AGREEMENT made as of the 26th day of March 2002, by and between Euronet,
International, Inc. a Nevada Corporation (hereinafter referred to as "Euronet")
whose principal office located at 000 Xxxx 00xx Xxxxxx, #0X, Xxx Xxxx, XX 00000
and MEDICAL DISCOVERIES, INC. (hereinafter "MDI" or "Company"), a Utah
corporation with principal offices located at 000 Xxxxxxxxx Xxxx, Xxxx Xxxxx, XX
00000.
WHEREAS EURONET, a business and financial advisory firm, consists of principals
with expertise in corporate operations, mergers and acquisitions, leveraged
buyouts, investor and public relations, raising funds and rendering strategic
business and financial advice focused on actualizing various financing and
operational strategies; and
WHEREAS MDI requires a business and financial plan to serve as a basis to secure
financing through a private placement with accredited investors and/or an
Initial Public Offering ("IPO") via the Internet utilizing a Dutch auction
and/or a reverse merger; and
WHEREAS EURONET is prepared to enter into an advisory agreement with MDI for the
purposes of developing and structuring a business and financial plan, producing
an investor slide presentation, producing a corporate financial model, and
preparing a private placement memorandum complete with summary and backup
pro-forma financials. Such advisory services are for the purpose of negotiating
various transactions (each, a "Transaction"), specifically advising on the
funding, management team, and structuring any financing including a reverse
merger transaction applicable to MDI; and
WHEREAS MDI seeks to retain the services of Euronet to perform on a best efforts
basis one or more of the following services for MDI:
(a) Document Preparation inclusive of business advisory and consulting
services to develop and structure a business and financial plan,
produce an investor slide presentation, produce a corporate financial
model, and prepare a private placement memorandum complete with
summary and backup pro-forma financials;
(b) Business Advisory Services including but not limited to introducing
MDI to accredited investor funding sources, providing public
relations services, and raising financing and venture capital funds
on behalf of the Company (Euronet shall use its best efforts on
behalf of MDI to raise such funds in a private offering exempt from
the registration requirements of the Securities Act of 1933, as
amended (the "Act") under Section 505 or Section 506 of Regulation D
and MDI shall use its best efforts to prepare and approve an
acceptable subscription agreement to accompany the appropriate
documents in which said funds may be raised);
(c) Business Advisory and Introductory Services focused on: (i)
corporate strategic relationships (each, a "Transaction") which
result in the generation of revenues for MDI (The Company shall be
required to report all such private transactions on Form D to the
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Securities and Exchange Commission); and, (ii) merger and acquisition
services, upon payment of the appropriate optional fees.
WITNESSETH that MDI its affiliates, successors and assigns has engaged Euronet
and its affiliates, successors and assigns, as appropriate, to act as its
financial advisor with respect to the Company's continuing review of strategic
and financial planning matters on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the aforesaid, it is hereby agreed by and
between the parties as follows:
ARTICLE I -- PERIOD OF PERFORMANCE
The term of this best efforts Advisory Agreement is for twelve (12) months.
Euronet shall advise MDI with respect to personnel that may be required from a
strategic perspective.
ARTICLE II -- EXCLUSIVITY AGREEMENT
During the term of this Agreement, Euronet shall be the exclusive agent for the
purposes for which this Advisory been executed. As such Euronet will receive
full credit for any transactions, whether or not it is the procuring cause,
during the exclusivity period. All transactions that are the subject of this
Advisory Agreement, including issuing securities, shall be subject to the
approval of MDI's Board of Directors in their sole discretion.
ARTICLE III -- FEE BASED COMPENSATION
MDI agrees to compensate Euronet for performance of the advisory and business
services described herein as follows:
(a) COMMON AND PREFERRED STOCK--Euronet shall receive 4.9% of the issued
and outstanding shares of common and preferred stock in MDI
immediately upon the closing of one or more Transactions equaling or
greater than one million dollars in certificate form. In addition,
for the duration of this agreement, MDI shall issue all necessary
shares to maintain Euronet's 4.9% ownership of MDI excluding any
shares Euronet receives in connection with the Initial Retainer or
other source. The stock should bear a restriction legend but is
subject to piggyback registration rights as set forth in this
Agreement. The execution of this Agreement by MDI shall constitute an
endorsement of the stock certificate.
(b) INITIAL RETAINER--Euronet's initial retainer of $50,000 (Euronet
agrees that in lieu of cash it will accept 360,000 Common shares of
MDI), payable within five (5) business days of the date of this
Agreement, shall include payment for developing and structuring a
business and financial plan, producing an investor slide
presentation, producing a corporate financial model, and preparing a
private placement memorandum complete with summary and backup
pro-forma financials, all to be completed within 60 days of the date
of this Agreement.
(c) COMMON STOCK PURCHASE WARRANTS--Upon Euronet being the procuring
cause for an investment equal to or greater than $1 million, either
by way of debt or equity, into MDI, common stock purchase warrants in
the amount of 10% of the investment exercisable for five (5) years.
The exercise price of the common stock purchase warrants shall be
equal to 120% of the purchase price paid by the investor in the case
of an equity offering. In the case of a debt offering, Euronet's
exercise price shall be 120% of the average price after the first 20
trading days following the closing of the offering.
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(d) MONTHLY RETAINER--After the company receives one million dollars
through financing procured by Euronet, Euronet shall receive a
monthly retainer of $6,000 per month for 12 consecutive months.
(e) STRATEGIC RELATIONSHIP SUBSEQUENT TRANSACTIONS-- MDI hereby agrees
that in the event that Euronet is responsible for introducing MDI to
another party or entity that becomes a purchaser or licensee of MDI
goods, services or technology at any time during the three year
period from the date of the payment of the initial retainer (the
"Term") and that, as a result of such introduction, a Strategic
Relationship between such party or entity and MDI is consummated (a
"Consummated Transaction"), MDI shall pay to Euronet a fee (the
"Fee") equal to: (1) 2% of the gross revenues received by MDI on a
quarterly basis from said Customer or any portion thereof of the
consideration paid in such Transaction over a one year period; and
(2) stock warrants issued quarterly exercisable within three (3)
years from the date of issuance or they shall expire. The number of
stock warrants shall equal 2% of the gross revenues on a quarterly
basis and shall be issued within twenty business days of the
completion of each quarter. The exercise price of such warrants shall
be 120% of the average daily market closing price as provided by
xxxxxxxx.xxx or Xxxxxxxxx.xxx at the election of Euronet during the
90 day period immediately prior to the end of the quarter for said
Consummated Transaction. However in the event MDI is not a public
company the exercise price shall be 100% of the last price paid by a
bona fide investor.
ARTICLE IV -- CASH EQUIVALENT COMPENSATION
Transactions that result in any "cash equivalent" consideration being received
by MDI shall result in an immediate payment of the percentage owed of the "cash
equivalent" compensation in the form in which it was received. "Cash equivalent"
as used herein means any stock, stock options, warrants, rights, underwriter
warrants, promissory notes or other forms of compensation if the consideration
paid in the Consummated Transaction consists of securities of the acquiring
party, securities of MDI or securities of any other entity, the cash
consideration to be paid in the Consummated Transaction shall be deemed to
include, for purposes of calculating the Fee, any payments or distributions of
cash or any other assets made to MDI or to the principals of MDI simultaneously
with the Consummated Transaction if such payments or distributions were agreed
to in the Consummated Transaction.
ARTICLE V -- TRANSFER OF STOCK
The following representations are made relating to the private stock of MDI in
the event pursuant to the terms of this Agreement any stock or warrants are
delivered to Euronet:
(a) RESTRICTED LEGEND AND PIGGYBACK REGISTRATION RIGHTs--Any shares
transferred to Euronet are restricted for one year under Rule 144 and
will bear an appropriate legend. However, in the event the Company
seeks to offer securities through a bona fide primary or secondary
offering of its securities in the public marketplace, the Company
will automatically, without the necessity of any request, register
the above issued shares of stock under the Securities Act for resale
to the public in the event that such a public offering is initiated.
These rights, commonly referred to as piggyback registration rights,
are subject to limitations, including the right of the underwriters
to limit the number of shares included in such registration. If the
number of shares is so limited, MDI will include shares with
piggyback registration rights in the registration statement in
accordance with their priority level, subject to the consent of the
underwriter. The Company is generally required to bear all of the
expenses of all these registrations, except underwriting discounts,
selling commissions, applicable transfer taxes and fees of counsel
retained by any shareholder. Registration of any of the shares of
common stock held by security holders with registration rights would
result in such shares becoming freely tradable without restriction
under the securities Act immediately upon effectiveness of the
registration. All warrants
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must be exercised prior to the cutoff date established by the
Company's underwriters for inclusion in the piggyback registration.
(b) RESTRICTIONS ON SALE AND TRANSFER OF SECURITIES--The securities
offered hereby have not been registered under the Securities Act of
1933 and are being transferred in lieu of payment of an initial cash
and monthly retainer. Euronet further understands the provisions of
Rule 144 may be applicable regarding the current public information
requirement. In addition under Rule 144 as currently in effect, a
person (or persons whose shares are aggregated) who has beneficially
owned shares acquired privately or indirectly from the Company or
from an Affiliate, for at least one (1) year, or who is an Affiliate,
is entitled to sell within any three (3) month period a number of
shares that does not exceed the greater of 1% of the then outstanding
shares of the Company's common stock or the average weekly trading
volume in the Company's common stock during the four calendar weeks
immediate preceding such sale. A person (or persons whose shares are
aggregated) who is not deemed to have been an Affiliate at any time
during the 90 days preceding a sale, and who has beneficially owned
restricted shares for at least three years, is entitled to sell all
such shares under Rule 144 without regard to the volume limitations,
current public information requirements, manner of sale provisions or
notice requirements. Euronet will only sell its shares after
obtaining a written opinion from the Company's General Counsel that
the provisions of Rule 144 do not restrict the sale of all or a
portion of the shares sought to be sold. Said opinion shall be
rendered at the expense of MDI.
ARTICLE VI -- BUSINESS ADVISORY SERVICES
Euronet will assist with the preparation of a business plan, with any private
placement memorandum subscription agreement and other documents prepared by MDI
in connection with the referral of bona fide accredited investors to MDI, the
Company agrees to cooperate in providing all necessary due diligence materials
to Euronet. No document shall be delivered to any investor without the Company's
knowledge and approval.
ARTICLE VII -- BOARD OF DIRECTORS
Upon raising five million dollars attributable to Euronet, either during the
exclusivity period or upon being the procuring cause of over five million
dollars, then Euronet shall have the right to designate a seat for a one (1)
year term on the board of directors of MDI, subject to the approval of MDI
Shareholders, which approval MDI's Board of Directors shall recommend. As a
prerequisite to acceptance of a board seat by Euronet or its delegate, MDI must
obtain Directors and Officers Liability Insurance.
ARTICLE VIII -- EXPENSES
Expense Reimbursement--Euronet shall send monthly statements that shall include
receipts and evidence of expenses detailing the expenses incurred. Euronet shall
not be permitted to obtain any expense reimbursement in excess of $1,000.00 in
the aggregate unless the expenditures are pre-approved in writing or email. MDI
shall pay said expenses promptly upon receipt of a billing statement, subject to
pre defined detailed guidelines for said expenses.
ARTICLE IX -- COMPANY INFORMATION
(a) INDEMNITY--Since Euronet must at all times rely upon the accuracy and
the completeness of information supplied to it by officers,
directors, agents and employees of MDI, in any proceeding or suit
which may arise out of the relationship to Euronet, MDI agrees to
indemnify and hold Euronet, its officers, directors, employees, and
affiliates harmless for any false or misleading information which was
provided to Euronet by MDI.
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(b) SEPARATE LIABILITY--No party to this agreement shall be liable for
any damages for failure to perform its obligations hereunder due to
any cause beyond their control.
(c) TERMINATION BY EURONET--Euronet shall be entitled to terminate this
Agreement forthwith without prejudice to any of its rights hereunder
in the event that MDI shall:
i. DEFAULT--Fail to pay any sum due under the terms of this
Agreement on the date due and shall fail to cure such failure
within seven (7) days after having received notice of such
failure; or
ii. BREACH--By materially breaching any other term of this
Agreement and failure within twenty-one (21) days notice to
cure such breach.
(d) TERMINATION BY MDI--MDI shall have the right to terminate this
Agreement at any time upon notice to Euronet in the event the
following milestones have not been achieved within the following time
periods:
i. MDI shall have raised at least $1 million in capital within the
first 30 days of the term of this Agreement.
ii. MDI shall have raised at least $5 million in capital within the
first 90 days of the term of this Agreement.
iii. MDI shall have raised at least $10 million in capital within
the first 180 days of the term of this Agreement.
ARTICLE X -- CONFIDENTIALITY
Each party agrees that during the course of this Agreement, information that is
confidential or of a proprietary nature may be disclosed to the other party,
including, but not limited to, product and business plans, software, technical
processes and formulas, source codes, product designs, sales, costs and other
unpublished financial information, advertising revenues, usage rates,
advertising relationships, projections, and marketing data ("Confidential
Information"). Each party and affiliates shall use Confidential Information only
for the purposes contemplated by this Agreement, and shall not use or disclose
it to any third party except with the prior written consent of the providing
party. Confidential Information shall not include information that the receiving
party can demonstrate (a) is, as of the time of its disclosure, in the public
domain, or thereafter becomes part of the public domain through a source other
than the receiving party, (b) was known to the receiving party as of the time of
its disclosure, (c) is independently developed by the receiving party, or (d) is
subsequently learned from a third party not under a confidentiality obligation
to the providing party.
ARTICLE XL -- INDEMNIFICATION
(a) MDI agrees to indemnity, defend, and shall hold harmless Euronet, its
affiliates, and/or their agents, and to defend any action brought
against said parties with respect to any claim, demand, cause of
scion, debt or liability arising out of this Agreement, including
reasonable attorneys' fees to the extent that such action is based
upon a claim that if true would constitute a breach of any of MDI's
representations, or any Client Content to be provided by Client and
does not violate any rights of third parties, including, without
limitation, rights of publicity, privacy, patents, copyrights,
trademarks, trade secrets, and/or licenses.
(b) Euronet agrees to indemnify, defend, and shall hold harmless MDI, its
directors, employees and agents, and defend any action brought
against same with respect to any claim, demand, cause of action, debt
or liability, including reasonable attorneys' fees, to
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the extent that such an action arises out of the gross negligence or
willful misconduct of Euronet or any actions by Euronet or its
agents, employees or affiliates.
(c) Notice -- In claiming any indemnification hereunder, the indemnified
party shall promptly provide the indemnifying party with written
notice of any claim, which the indemnified party believes falls
within the scope of the foregoing paragraphs. The indemnified party
may, at its expense, assist in the defense if it so chooses, provided
that the indemnifying party shall control such defense, and all
negotiations relative to the settlement of any such claim. Any
settlement intended to bind the indemnified party shall not be final
without the indemnified party's written consent, which shall not be
unreasonably withheld.
(d) Limitation of Liability -- Neither MDI nor Euronet shall have any
liability with respect to their obligations under this Agreement or
otherwise for consequential, exemplary, special, incidental, or
punitive damages even if the other party has been advised of the
possibility of such damages. In any event, the liability of Euronet
to MDI for any reason and upon any cause of action, regardless of the
form in which the legal or equitable action may be brought,
including, without limitation, any action in tort or contract, shall
not exceed the amounts paid by MDI to Euronet hereunder; provided,
however, that this limitation shall not apply to the indemnification
obligations of Euronet as set forth above.
ARTICLE XII -- ASSIGNMENT
The rights and obligations of MDI and Euronet under this Agreement shall inure
to the benefit of and be binding upon their successors and assigns, Euronet
shall not delegate or subcontract its obligations hereunder without the prior
written consent of MDI.
ARTICLE XIII -- ARBITRATION/JURISDICTION OF ARBITRATION PANEL
Any controversy or claim arising out of or relating to this contract or the
breach hereof shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules, and judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The parties also agree that the AAA Optional Rules for
Emergency Measures of Protection shall apply to the proceedings. Notwithstanding
any rules of the AAA the matter may be heard upon application or a party
telephonically upon two days notice for an injunction and ten days notice
otherwise with both parties required to waive their personal appearances and
appear via telephone. It is the intention of this provision not to cause a party
and its witnesses to be disadvantaged by having to travel great distances to
have its cause heard. This Agreement shall in all respects be interpreted and
construed under the laws of the State of New York. Jurisdiction for any
arbitration shall lie in the City and State of New York.
ARTICLE XIV -- NOTICES
Any notice which is required or desired under this Agreement shall be given in
writing and may be sent by personal delivery or by mail any of the following
methods email combined with a confirmatory Fax or United States mail, postage
prepaid, or Federal Express or similar generally recognized overnight carrier,
addressed as follows subject to the right to designate a different address by
notice similarly given:
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TO MDI:
Medical Discoveries, Inc.
(Attention: Xxxx X. Xxxxxxxx)
000 Xxxxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxx@xxxxxxxxx.xxx
WITH A COPY TO:
Stole Xxxxx LLP
Attn: Xxxxxxx X. Xxxxx
000 X. Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxx@xxxxx.xxx
TO EURONET:
Euronet International, Inc.
(Attention: Xxxx X. Xxxxx)
000 Xxxx 00xx Xxxxxx, #0X
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Email: XxxxxxxXxxx@xxx.xxx
ARTICLE XV -- DEFAULT
In the event that, for any reason, MDI shall fail to pay to Euronet all or any
portion of any Fee when due, interest shall accrue and be payable on the unpaid
cash balance thereof from the date when first due through and including the date
when actually collected by Euronet at a rate equal to ten percent (10%) per
annum. Additionally all future payments that have been earned but are not yet
due shall be accelerated and become due within thirty days after the first
default. At the option of MDI and Euronet, any interest accrued and payable may
be convertible into stock options and/or warrants in an amount and on terms and
conditions to be agreed between the parties.
ARTICLE XVI -- NO AGENCY
The parties expressly intend and agree that Euronet will not be, and will not
hold itself out as being, an agent of MDI. Euronet will have no authority to
bind MDI to any agreement or obligation, express or implied.
ARTICLE XVII -- WARRANTS
Any Warrant issued by the Company shall be done promptly and shall have terms
and conditions which do not conflict with this Agreement in the event the
underlying securities or warrants are restricted the Company grants Euronet
piggyback registration rights and will use its best efforts to clear Rule 144
restrictions.
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ARTICLE XVIII -- PAYMENTS
All payments under this Agreement shall be wired to a New York City bank to be
designated by Euronet at the time of completion of a Transaction.
ARTICLE XIX -- MISCELLANEOUS
EURONET AND MDI. Euronet, its employees, and affiliates will maintain the
confidentiality of MDI and not violate any xxxxxxx xxxxxxx rules. Euronet shall
not release any press releases alluding to MDI without the express written
permission of MDI. Only an instrument in writing executed by all the parties
hereto may amend this Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied, between them
with respect to this Agreement or the matters described in this Agreement,
except as set forth in this Agreement. Any such negotiations, promises, or
understandings shall not be used to interpret or constitute this Agreement. This
Agreement may be executed in counterparts and a facsimile copy bearing the
signature of a party shall be the same for all purposes as an original. It
supersedes all prior or contemporaneous communications, representations and
agreements, whether oral or written, with respect to the subject matter hereof
and has been induced by no representations, statements or agreements other than
those expressed herein. No oral agreements hereinafter made between the parties
shall be binding on either party unless reduced to writing and signed by an
authorized officer of the party bound.
IN WITNESS THEREOF, the parties have agreed to and executed this Agreement on
the dates set forth below their respective signatures.
ACCEPTED AND AGREED ACCEPTED AND AGREED
EURONET INTERNATIONAL, INC. MEDICAL DISCOVERIES, INC. ("EURONET")
("MDI")
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxx
-------------------------------- ---------------------------------
Name: Xxxx X. Xxxxx Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer Title: President and CEO
Date: March 26, 2002 Date: March 25, 2002
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