EXHIBIT 4.5
ADAM SMITH & COMPANY, INC.
101 East 52nd Street
New York, NY 10022
Tel (212) 751-4900
Fax (212) 751-2892
December 3, 1999
Eugene Gordon
Chairman of the Board & CEO
Medjet Inc.
1090 King George Post Road
Edison, New Jersey 08837
Re: Investment Banking Agreement
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Gentlemen:
1. Medjet Inc. and/or related entities (the "Company") hereby engages Adam
Smith & Company, Inc. ("Adam Smith") to provide investment banking services
under the terms described herein. Adam Smith will provide investment banking
services that the Company may reasonably request including providing advice
concerning relations with securities analysts, the evaluation of potential
public or private financings, acquisitions, purchases or sales of major assets
and mergers that have been proposed to the Company and those which may be
proposed to the Company in the future. We shall not be responsible, of course,
for your effectuating any particular transaction. In the event we perform any
functions other than acting as your agent hereunder, such as obtaining funds for
you or placing your securities, acting as tender agent or arranging for
acquisitions or mergers, we shall be entitled to such compensation for such
services as we may hereafter agree upon, in addition to the compensation
provided for in the next paragraph; however, inability to reach agreement shall
not be deemed a breach hereof.
2. In consideration of the execution and delivery of this investment banking
agreement, the Company will irrevocably issue to Adam Smith warrants to purchase
500,000 (five hundred thousand) shares of the Company's common stock ("Common
Stock") at a price of U.S. $3.50 (three dollars and fifty cents) per share. All
warrants referred to herein will be substantially in the form attached hereto as
Exhibit A. The rights granted pursuant to the warrant shall not be affected by
the performance of services hereunder or payment of other compensation for such
services.
3. Adam Smith shall have the right of first refusal during the Term to act as
your investment banker in any transaction(s) such as a merger or sale of the
Company, a sale by the Company of all or substantially all of its assets, an
acquisition of another company or business, a public or
private financing of the Company, a joint venture or licensing arrangement or
similar transaction (each a "Transaction").
4. In the event that, during the period of the engagement of Adam Smith
hereunder, the Company or any of its officers, directors, employees or
representatives are considering retaining an investment banker or other
financial advisor in connection with a proposed Transaction, the Company will
notify Adam Smith, including providing information concerning the nature of the
proposed Transaction and proposed investment banking compensation, in order that
Adam Smith can evaluate such Transaction and its interest in exercising its
right of first refusal.
5. In the event that for any reason the Company shall fail to pay to Adam
Smith all or any portion of any fees payable hereunder when due, interest shall
accrue and be payable on the unpaid cash balance hereunder from the date then
first due through and including the date when actually collected by Adam Smith,
at a rate equal to fourteen percent (14%) per year.
6. This Agreement shall be effective on the date hereof and shall be in effect
for a minimum of three years following the date hereof (the "Initial Term"). At
the end of the Initial Term, this Agreement shall be automatically extended
until thirty (30) days after written notice is given by either party to
terminate this Agreement (the Initial Term as extended, the "Term").
Notwithstanding anything herein to the contrary, if the Company shall, within
one year immediately following the termination of the Agreement, conclude a
Transaction based on any Transaction that was initiated during the Term and with
respect to which Adam Smith performed any services hereunder, the Company shall
also pay Adam Smith the fee determined above.
7. (a) The Company agrees to indemnify and hold harmless Adam Smith, its
directors, officers, employees, legal counsel, agents and stockholders, (all of
such persons being hereinafter collectively referred to as the "Indemnified
Parties") against any and all losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements (and any and
all actions, suits, proceedings and investigations in respect thereof and any
and all legal and other costs, expenses and disbursements reasonably incurred in
giving testimony or furnishing documents in response to a subpoena or
otherwise), including, without limitation, the reasonable costs, expenses and
disbursements, as and when incurred, of investigating, preparing or defending
any such action, suit, proceeding or investigation (whether or not in connection
with litigation in which an Indemnified Party is a party), directly or
indirectly caused by, relating to, based upon, arising out of or in connection
with (a) Adam Smith's acting for the Company, including, without limitation,
any act or omission by an Indemnified Party in connection with its acceptance of
or the performance or nonperformance of its obligations under the Agreement, as
it may be amended from time to time; (b) any untrue statement or alleged untrue
statement of material fact contained in, or omissions or alleged omissions from,
any information furnished to an Indemnified Party, an investor, lender, provider
of funding or any party to the transaction; or (c) any Consummated Transaction,
provided, however, such indemnity agreement shall not apply to any portion of
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any such loss, claim, damage, obligation, penalty, judgment, award, liability,
cost, expense or disbursement to the extent it is found in a final judgment by a
court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the gross negligence or willful misconduct of the
particular Indemnified Party. The Company also agrees that an Indemnified Party
shall not have any liability (whether direct or indirect, in contract or tort or
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otherwise) to the Company or to any person claiming through the Company for or
in connection with the engagement of Adam Smith, except to the extent that any
such liability is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from
Adam Smith's gross negligence or willful misconduct.
(b) The provisions shall be in addition to any liability the Company may
otherwise have to any of the Indemnified Parties.
(c) If any action, suit, proceeding or investigation is commenced, as to
which an Indemnified Party proposes to demand indemnification, it shall notify
the Company with reasonable promptness; provided, however, that any failure by
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an Indemnified Party to notify the Company shall not relieve the Company from
its obligations hereunder. Each Indemnified Party shall have the right to
retain counsel of its own choice to represent it, and the Company shall pay the
fees, expenses and disbursements of such counsel; and such counsel shall to the
extent consistent with its professional responsibilities cooperate with the
Company and any counsel designated by the Company. The Company shall be liable
for any settlement of any claim against an Indemnified Party made with the
Company's written consent, which consent shall not be unreasonably withheld.
The Company shall not, without the prior written consent of an Indemnified
Party, settle or compromise any claim, or permit a default or consent to the
entry of any judgment in respect thereof, unless such settlement, compromise or
consent includes, as an unconditional term thereof, the giving by the claimant
to the respective Indemnified Party of an unconditional release from all
liability in respect of such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these Indemnification Provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and the respective Indemnified Party or
Indemnified Parties, as applicable on the other hand, shall contribute to the
losses, claims, damages, obligations, penalties, judgments, awards, liabilities,
costs, expenses and disbursements to which the indemnified persons may be
subject in accordance with the relative benefits received by the Company, on the
one hand, and the respective Indemnified Party or Indemnified Parties, as
applicable on the other hand, and also the relative fault of the Company, on the
one hand, and the respective Indemnified Party or Indemnified Parties, as
applicable on the other hand, in connection with the statements, acts or
omissions which resulted in such losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements and
the relative equitable considerations shall also be considered. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from
any person who is not also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, the respective Indemnified Party or Indemnified
Parties, as applicable, shall not be obligated to contribute any amount
hereunder that exceeds the amount of fees previously received by the respective
Indemnified Party or Indemnified Parties, as applicable, in connection with the
foregoing.
Neither termination nor completion of the engagement of Adam Smith pursuant
to the Agreement shall affect the provisions of this Section 7 which then shall
remain operative and in full force and effect.
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8. The Company shall bear Adam Smith's reasonable expenses incurred in
connection with performance of its duties hereunder, including without
limitation the reasonable fees and expenses of its outside counsel and travel
expenses; provided that Adam Smith will obtain the Company's prior approval
before incurring travel expenses or retaining experts (other than counsel).
9. Neither the Company nor Adam Smith shall make any public statement about
this agreement or any transactions or services described herein mentioning the
other party without the prior written consent of the other party, unless that
party determines in good faith, on the advice of legal counsel, that public
disclosure is required by law, in which case that party shall consult with the
other party prior to making a statement.
10. The Company represents and warrants to Adam Smith that Adam Smith's
engagement and compensation hereunder has been duly authorized and approved by
the Board of Directors of the Company and this Agreement has been duly executed
and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company.
11. The parties hereto acknowledge and agree that Adam Smith is not acting as
an agent or a fiduciary of the Company or its stockholders in connection with
any services that may be performed hereunder.
12. Any advice rendered by Adam Smith hereunder is solely for the benefit of
the Company's board of directors only and may not be relied upon by any other
person.
13. This Agreement has been executed and delivered in the State of New York and
shall be governed by the laws of such state, without giving effect to the
conflict of laws rules thereunder.
14. This Agreement shall be binding upon, and enforceable against, the
successors and assigns of each of the undersigned.
15. This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
Please sign this letter at the place indicated below and return it to the
undersigned.
Very truly yours,
ADAM SMITH & COMPANY, INC.
By: /s/ Richard Grossman
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Managing Director
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AGREED:
MEDJET INC.
By: /s/ Eugene Gordon
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Eugene Gordon
Chairman of the Board & CEO
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