Exhibit 10.8
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT ("Memorandum") is entered into this 25th day
of February, 1999, by and among XXXXXXXXXXX.XXX, INC., a Delaware corporation
("Mediconsult"), and Xxxx Xxxxxxxxx, Xxxx Xxxxxxxxx and Xxxxxxx Xxxx (each a
"Shareholder" and collectively the "Shareholders").
RECITALS
Shareholders have been discussing with Mediconsult the sale to Mediconsult of
all of the outstanding shares (the "Company Shares") of CybertDiet, Inc. (the
"Company"). Set forth below are the principle understandings of the parties.
PUT AND CALL. The Shareholders shall grant to Mediconsult the right (the
"Call Right") to purchase all but not less than all of the Company Shares.
Mediconsult shall grant to the Shareholders the right (the "Put Right") to
require Mediconsult to purchase all of the Company Shares. The Put Right may be
exercised by the Shareholders only (i) after the delivery by the Shareholders of
audited financial statements of the Company in accordance with SEC requirements
for the period from the inception of the Company through December 31, 1998,
which audited financial statements may not be materially different from the
unaudited financial statements of the Company for such period previously
delivered to Mediconsult and (ii) upon confirmation, in a form reasonable
satisfactory to Mediconsult, that Company web site traffic at the time of the
exercise of the Put Right has not materially decreased from the date of this
Memorandum. The accounting firm will be selected and paid by Mediconsult. The
Put Right may not be exercised prior to the earlier of (i) the date ten days
after the effective date of the S-1 registration statement or (ii) the date the
S-1 is abandoned or withdrawn from the registration process.
Mediconsult acknowledges the existence of the loan to the Company by Xxxx
Xxxxxxxxx in the original principal amount of $53,500 and agrees that after the
exercise of the Put Right or the Call Right, the obligation shall remain an
obligation of the Company and shall be paid pursuant to its terms and
conditions.
Each of the Put Right and the Call Right may be exercised only one time
and must be exercised, if at all, prior to the date six months after the date of
this Memorandum.
PURCHASE PRICE. The purchase price ("Purchase Price") for all of the Company
Shares shall be 400,000 shares of common stock of Mediconsult (the "Mediconsult
Shares"). The Purchase Price shall be allocated pro-rata among each of the
Shareholders based on each Shareholder's respective ownership interest in the
Company. If any change is made in the shares of Mediconsult through stock
splits, stock dividends or
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combination of shares or the like after the date hereof, appropriate adjustment
shall be made in the number of Mediconsult Shares so as to avoid any enlargement
or dilution of the Purchase Price.
EMPLOYMENT AGREEMENTS. Upon the exercise of the Put Right or the Call Right,
Mediconsult and each of Xxxx Xxxxxxxxx and Xxxxxxx Xxxx shall enter into
employment agreements with Mediconsult in form and substance mutually agreeable
to each of the parties.
MANAGEMENT AGREEMENTS. The Shareholders shall cause the Company to enter into
an agreement (the "Management Agreement") with Mediconsult pursuant to which the
Company and Mediconsult will jointly manage the Company's Web site prior to the
exercise or expiration of the Put Right or the Call Right. In conjunction
therewith, Mediconsult shall enter into consulting agreements (the "Consulting
Agreements") with Xxxx Xxxxxxxxx and Xxxxxxx Xxxx. The terms of the Management
Agreement and the Consulting Agreements shall be mutually agreed upon by the
respective parties thereto; provided that the management by Mediconsult shall be
exclusive, and Mediconsult shall have the sole right to place advertisements on
the Web site of the Company, to link traffic, and manage the content of the Web
site. Such rights of Mediconsult shall be subject to such approvals, guidelines
and compensation as the parties may determine. The Management Agreement and the
Consulting Agreements shall terminate upon the first to occur of (i) the mutual
agreement of the Company and Mediconsult, (ii) the date the Put Right or the
Call Right is exercised, or (iii) the date of the expiration of the Put Right
and the Call Right, if neither is exercised.
NON-COMPETITION. Neither Xxxx Xxxxxxxxx nor Xxxxxxx Xxxx for a period of two
years from the date of the exercise of the Put Right or the Call Right shall
directly or indirectly own, participate in the ownership, management or
operation of any business which is competitive with the business of Mediconsult
or the Company as of the date of this Memorandum.
REGISTRATION RIGHTS. The Shareholders will be entitled to customary piggyback
and S-3 registration rights with respect to the Mediconsult Shares, the specific
terms of which shall be mutually agreed upon by Mediconsult and the
Shareholders.
RESTRICTIONS ON TRANSFER. If the Put Right or the Call Right is exercised
prior to the effective date of the Mediconsult S-1, ten percent of the
Mediconsult Shares shall be registered by Mediconsult in such offering. The
balance of the Mediconsult Shares shall not be transferred except pursuant to an
effective registration statement satisfying the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), a valid exemption therefrom or
Rule 144 of the Securities Act. The Shareholders shall execute a customary
lockup agreement for a period not to exceed 180 days with respect to any
Mediconsult Shares not registered under the S-1 on the same terms as the
Mediconsult directors and executive officers.
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The parties intend to enter into one or more formal agreements
incorporating the terms hereof, which documents will include customary
deliveries, closing conditions (including the absence of adverse change other
than due to the actions of Mediconsult under the Management Agreement not
concurred with or approved by a Shareholder) and representations and warranties.
However, until such formal agreement or agreements are signed this memorandum of
agreement will be deemed a binding agreement of the parties, governed and
construed in accordance with the laws of the State of California. This
Memorandum 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 agreement.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date
first above written.
XXXXXXXXXXX.XXX, INC., /s/Xxxx Xxxxxxxxx
a Delaware corporation _______________________
Xxxx Xxxxxxxxx
By, /s/Xxxxxx X. Xxxxxxxx /s/Xxxxxxx Xxxx
_______________________ _______________________
Xxxxxxx Xxxx
Its: CEO
_______________________
/s/Xxxx Xxxxxxxxx
_______________________
Xxxx Xxxxxxxxx
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