EXHIBIT 10.11
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (this "Agreement"), is made and entered into as of
the first day of December, 1998 between CyberSentry, Inc (the "Client"), and
Patriot Advisors, Inc (the "Advisor").
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed between the parties hereto as follows:
1. ADVISORY SERVICES.
(a) The Advisor undertakes to act as an advisor to the Client and
shall, subject to the supervision of the Client (the "Client"), provide
financial and investment advisory services to the Client which shall include,
but not be limited to, (x) reviewing and analyzing all material documentation
(legal, financial or otherwise) of the Client to determine the Client's most
effective internal organizational financial structure for the purpose of
financing, (y) determining the Client's best course of action, which may include
(i) private placements of common or preferred stock, or debt, for the expansion
of its working capital, acquisition financing or the restructuring of existing
indebtedness, (ii) mergers and acquisitions, (iii) initial public offerings, and
(iv) any other transactions deemed by the Advisor to be in the best interests of
the Client.
(b) Consistent with its duties described in paragraph (a) hereof,
the Advisor shall use its best efforts to provide advice on equity or debt
financing of a minimum of $2,000,000 and a maximum of $25,000,000 through the
end of calendar year 1998. The Client shall cooperate with the Advisor in
structuring one or more transactions to manage these sums on such commercially
reasonable terms as may be acceptable to the Client. Such proceeds shall be used
by the Client for such purposes as the Client deems appropriate. If the Client
requests the Advisor to participate in any other transactions or perform any
other specific services, such services shall be described in an addendum hereto,
in a form to be agreed upon by the parties.
The Advisor may, in its discretion, appoint one or more sub-advisors
to perform one or more of the foregoing services with respect to all or a
portion of the investments of the Client. The Advisor shall also have full
authority and discretion as to all matters which are necessary or incidental to
the foregoing. Upon the request of the Client, the Advisor shall furnish the
Client with full information concerning activities undertaken by the Advisor for
the Client.
2. ADVISORY FEE.
For services to be rendered hereunder to the Client, the Client will pay
to the Advisor advisory fees as follows: USD $10,000 per month, as of January 1,
1998, in the form of cash and /or equity as a management fee. There shall be a
minimum of USD $6,500 per month in cash, and any equity shall be paid in the
form of CyberSentry, Inc common shares at the rate of USD $1.00 per share. The
Client shall pay these fees, in advance, to the advisor, on a monthly basis. If
the Client and the Advisor agree on additional services pursuant to paragraph
1(c), any additional fees would be included in the addendum.
3. EXPENSES.
It is understood that if agreed to in advance, the Client will pay, or
reimburse the Advisor for, all expenses incurred by Advisor in connection with
its services provided hereunder, including but not limited to, (x) all
reasonable travel fees and expenses, including those associated with
investigating the Client or its affiliates, or any potential investments of the
Client or maximizing return on existing investments of the Client, (y) any legal
fees and expenses in connection with services provided by Advisor hereunder
which are not in the ordinary course of business, and (z) any extraordinary
expenses such as the fees and expenses of counsel in connection with any
litigation arising out of or in connection with this Agreement, except as
otherwise determined in accordance with the last sentence of Section 10
hereunder. The Advisor acknowledges that if no agreement with the Client
regarding reimbursement of certain expenses is made prior to any such expenses
being incurred, the Client shall have no obligation to reimburse Advisor for
such expenses.
4. SERVICES TO OTHER COMPANIES.
The services of the Advisor hereunder are not to be deemed exclusive, the
Advisor being free to render services to others and engage in other activities;
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere in a material manner with the Advisor's
ability to meet all of its obligations with respect to rendering services to the
Client hereunder.
5. STANDARD OF CARE.
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Advisor, the Advisor shall not be subject to liability to the company or to any
director, shareholder, employee or agent thereof for any act or omission in the
course of, or connected with, rendering services hereunder.
6. TERM OF AGREEMENT; AMENDMENTS.
(a) This Agreement shall commence as of the date hereof and, subject to
prior termination as provided in section 6(b) hereof, shall continue in force
until December 31, 2000 and thereafter shall be renewed automatically for
additional one-year periods, unless terminated by either party by written notice
nor later than ninety (90) day prior to the expiration of the then-current term.
(b) Either party hereto may, at any time on sixty (60) days prior written
notice to the other, terminate this Agreement, without payment of any penalty;
provided, however, that if any transaction in which Advisor shall have
participated prior to such termination closes or is otherwise funded in whole or
in part within six months after the effective date of termination, the Company
shall still be obligated to pay to the Advisor the fee described in section 2
hereof in respect of such transaction.
(c) This Agreement may he modified only by the mutual consent of the
parties evidenced in writing.
7. ADVISOR BEST EFFORTS; COMPANY INDEMNITY.
Advisor shall use its best efforts in the performance of the investment
advisory and management services to be performed hereunder. All recommendations
and instructions made by the Advisor will be based upon information received
from the Client and from sources which it believes to be reliable, but whose
accuracy is not and cannot be guaranteed. Such information may or may not have
been independently verified by the Advisor. The Client agrees to indemnify
Advisor and hold it harmless from and against any liability of any nature
resulting from the Client furnishing information which is false or inaccurate.
8. NOTICES.
Except as otherwise specifically provided herein, all notices or
communications provided for herein shall be in writing, delivered in person, by
overnight mail or by facsimile followed by a hard copy sent first class mail
postage pre-paid, and addressed as follows, or to such other address or
addresses as may be designated by either party by written notice to the other:
If to Client: CyberSentry, Inc
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
If to Advisor: Patriot Advisors, Inc
00 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
9. GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without reference to its choice of law principles.
10. ARBITRATION.
All disputes between the parties arising out of or relating to this
Agreement shall be submitted to and settled by arbitration as hereinafter
provided. Any arbitration proceeding shall be by a single arbitrator experienced
in the matters at issue selected by the parties involved in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration proceeding shall be held in such place in the New York City
metropolitan area as may be selected by the arbitrator (or any other place
agreed to by the parties involved and the arbitrator). The decision of the
arbitrator shall be final and binding as to any matters submitted to him/her
under this Agreement; provided, however, that if necessary, such decision and
satisfaction procedure may be enforced by either the Company or Consultant, as
the case may be, in any United States District Court having jurisdiction over
this matter. The determination of which party (or combination thereof) bears the
costs and expenses incurred in connection with any such arbitration proceeding
shall be determined by the arbitrator.
11. ILLEGALITY; UNENFORCEABILITY.
If any provision of this Agreement is found to be illegal or
unenforceable, all other provisions to this Agreement will remain in full force
and effect.
12. AUTHORIZED SIGNATORIES.
Each of the individuals signing below hereby represents and warrants that
he is a duly authorized signatory of the entity bearing his signature below,
that he is authorized and empowered to enter into this Agreement and to effect
the transactions contemplated hereby on behalf of such entity, and that this
Agreement is the legal and valid binding obligation of the entity bearing his
signature below, and enforceable against such entity in accordance with its
terms, except as they may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors' rights generally, and general
principles of equity.
IN WITNESS WHEREOF, the parties have caused this instrument to be signed
on their behalf by their respective officers there unto duly authorized all as
of the date first written above.
CYBERSENTRY, INC
The Client
By: /s/ Xxxxxx Xxxxxxx, Pres
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Name: Xxxxxx Xxxxxxx
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Title: President
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PATRIOT ADVISORS, INC
The Advisor
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President
