Exhibit 10.23
THE XXXXXXXXX GROUP, INC.
INVESTMENT BANKING o MERCHANT BANKING o CONSULTING
--------------------------------------------------------------------------------
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the "Agreement") is made this 1st day of May,
2004, by and between the BLACKMOR GROUP, INC. ("Advisor"), and CIRILIUM
HOLDINGS, INC. (CHI), a corporation with its offices located in West Palm Beach,
Florida (the "Company").
WHEREAS, Advisor and Advisor's Personnel (as identified below) have
experience in evaluating and effecting mergers and acquisitions, advising
corporate management, and in performing general administrative duties for
publicly-held companies and development stage investment ventures; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in its development on the terms and conditions set forth below,
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and Advisor
agree as follows:
1. Engagement
The Company hereby retains Advisor, effective as of the date hereof (the
Effective Date) and continuing until termination, as provided herein, to
assist the Company in its effecting the purchase of businesses and assets
relative to its business and growth strategy, resolution of outstanding
debt and obligations of the Company, preparation of registration
statements, the introduction of the Company to brokers and dealers,
potential investors, public relations firms and consultants and others
that may assist the Company in its plans and future development (the
"Services"). The Services are to be provided on a best efforts basis
directly and through Advisor's officers and others employed or retained
and under the direction of Advisor ("Advisor's Personnel"); provided,
however, that the Services shall expressly exclude all legal advice,
accounting services or other services which require licenses or
certification which Advisor may not have, including capital raising. This
Agreement shall be binding on the post merger company if CHI becomes
public.
2. Term
This Agreement shall have an initial term of one (1) year (the "Primary
Term"), commencing with the Effective Date. At the conclusion of the
Primary Term, this Agreement will automatically be extended on an annual
basis (the "Extension Period") unless Advisor or the Company shall serve
written notice on the other party terminating the Agreement. Any notice to
terminate given hereunder shall be in writing and shall be delivered at
least thirty (30) days prior to the end of the Primary Term or any
subsequent Extension Period.
3. Time and Effort of Advisor
Advisor shall allocate time and Advisor's Personnel as it deems necessary
to provide the Services. The particular amount of time may vary from day
to day or week to week. Except as otherwise agreed, Advisor's monthly
statement identifying, in general, tasks performed for the Company shall
be conclusive evidence that the Services have been performed.
Additionally, in the absence of wilful misfeasance, bad faith, negligence
or reckless disregard for the obligations or duties hereunder by Advisor,
neither Advisor nor Advisor's Personnel shall be liable to the Company or
any of its shareholders for any act or omission in the course of or
connected with rendering the Services including but not limited to losses
that may be sustained in any corporate act in any subsequent Business
Opportunity (as defined herein) undertaken by the Company as a result of
advice provided by Advisor or Advisor's Personnel.
4. Compensation
The Company agrees to pay advisor a fee for the Services ("Advisory Fee")
by way of the delivery by the Company of 150,000 options to purchase CHI
shares at $2 for three years. These options shall either have a cashless
exercise provision or the shares underlying the options are to be
registered. All shares transferred are considered fully earned and
non-assessable as if the date hereof.
As part of this engagement, Blackmor shall pay all its own expenses,
including travel, entertainment and communication costs. If CHI requests
that Blackmor or its representatives make any extraordinary trips, such as
overseas travel or a multi-city road show, CHI shall reimburse Blackmor
for the expenses associated with that travel.
2
5. Place of Service
The Services provided by Advisor or Advisor's Personnel hereunder will be
performed at Advisor's offices except as otherwise mutually agreed by
Advisor and the Company.
6. Independent Contractor
Advisor and Advisor's Personnel will act as an independent contractor in
the performance of its duties under this Agreement. Accordingly, Advisor
will be responsible for payment of all federal, state, and local taxes on
compensation paid under this Agreement, including income and social
security taxes, unemployment insurance, and any other taxes due relative
to Advisor's Personnel, and any and all business license fees as may be
required. This Agreement neither expressly nor impliedly creates a
relationship of principal and agent, or employee and employer, between
Advisor's Personnel and the Company. Neither Advisor nor Advisor's
Personnel are authorized to enter into any agreement on behalf of the
Company. The Company expressly retains the right to approve, in its sole
discretion, each Asset Opportunity or Business Opportunity introduced by
Advisor, and to make all final decisions with respect to effecting a
transaction on any Business Opportunity.
7. Rejected Asset Opportunity or Business Opportunity
If, during the Primary Term of this Agreement or any Extension Period, the
Company elects not to proceed to acquire, participate or invest in any
Business Opportunity identified and/or selected by Advisor,
notwithstanding the time and expense the Company may have incurred
reviewing such transaction, such Business Opportunity shall revert back to
and become proprietary to Advisor, and Advisor shall be entitled to
acquire or broker the sale or investment in such rejected Business
Opportunity for its own account, or submit such assets or Business
Opportunity elsewhere. In such event, Advisor shall be entitled to any and
all profits or fees resulting from Advisor's purchase, referral or
placement of any such rejected Business opportunity, or the Company s
subsequent purchase or financing with such Business Opportunity in
circumvention of Advisor.
3
8. No Agency Expressed or Implied
This Agreement neither expressly or impliedly creates a relationship of
principal and agent between the Company and Advisor, or employee and
employer between Advisor's Personnel and the Company.
9. Termination
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written notice with
mutual written consent. Failing to have mutual consent, without prejudice
to any other remedy to which the terminating Advisory Agreement
(Blackmor/Cirilium) - Page 1 of 8 party may be entitled, if any, either
party may terminate this Agreement with thirty (30) days written notice
under the following conditions:
(A) By the Company
(i) If, during the Primary Term of this Agreement or any Extension
Period, Advisor is unable to provide the Services as set forth
herein for thirty (30) consecutive business days because of
illness, accident, or other incapacity of Advisor's Personnel;
or
(ii) If Advisor wilfully breaches or neglects the duties required
to be performed hereunder; or
(B) By Advisor
(i) If the Company breaches this Agreement or fails to make any
payments or provide information required hereunder; or
(ii) If the Company ceases business or, other than in an Initial
Merger, sells a controlling interest to a third party, or
agrees to a consolidation or merger of itself with or into
another corporation, or enters into such a transaction outside
of the scope of this Agreement, or sell substantially all of
its assets to another corporation, entity or individual
outside of the scope of this Agreement; or
4
(iii) If the Company, subsequent to the execution hereof, has a
receiver appointed for its business or assets, or otherwise
becomes insolvent or unable to timely satisfy its obligations
in the ordinary course of, including but not limited to, the
obligation to pay the Initial Fee, the Transaction Fee, or the
Advisory Fee; or
(iv) If the company, subsequent to the execution hereof,
institutes, makes a general assignment for the benefit of
creditors, has instituted against it any bankruptcy proceeding
for reorganization for rearrangement of its financial affairs,
files a petition in a court of Bankruptcy, or is adjudicated a
bankrupt; or
(v) If any of the disclosures made herein or subsequent hereto by
the Company to Consultant are determined to be materially
false or misleading.
10. Indemnification
Subject to the provisions herein, the Company and Advisor agree to
indemnify, defend and hold each other harmless from and against all
demands, claims, actions, losses, damages, liabilities, costs and
expenses, including without limitation, interest penalties, attorneys fees
and expenses asserted against or imposed or incurred by either party by
reason of or resulting from any action or a breach of any representation,
warranty, covenant, condition, or agreement of the other party to this
Agreement.
11. Remedies
Advisor and the Company acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the
non-breaching party would have no adequate remedy at law. Accordingly, in
the event of any controversy concerning the rights or obligations under
the Agreement, such rights or obligations shall be enforceable in a court
of equity by a decree of specific performance. Such remedy, however, shall
be cumulative and nonexclusive and shall be in addition to any other
remedy to which the parties may be entitled.
5
12. Miscellaneous
(A) Subsequent Events. Advisor and the Company each agree to notify the
other party if, subsequent to the date of this Agreement, either
party incurs obligation which could compromise its efforts and
obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the
parties hereto.
(C) Further Actions and Assurances. At any time, and from time to time,
each party agrees at its or their own expense, to take actions and
to execute and deliver documents as may be reasonably necessary to
effectuate the purposes of this Agreement. (D) Waiver. Any failure
of any party to this Agreement to comply with any of its
obligations, agreements, or conditions hereunder may be waived in
writing by the party to whom such compliance is owed. The failure of
any party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the rights of such party
thereafter to enforce each and every such provision. No waiver of
Advisory Agreement (Blackmor/Cirilium) - Page 1 of 8 any breach of
or noncompliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or noncompliance.
(E) Assignment. Neither this Agreement nor any right created by it shall
be assignable by either party without the prior written consent of
the other.
(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party,
when deposited in the United States mails for transmittal by
certified or registered mail, postage prepaid, or when deposited
with a public telegraph company for transmittal, or when sent by
facsimile transmission charges prepaid, provided that the
communication is addressed:
6
(i) In the case of the Company:
Cirilium Holdings, Inc.
000 X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(ii) In the case of the Advisor:
The Blackmor Group
00000 Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
or to such other person or address designated in writing by
the Company or Advisor to receive notice.
(G) Headings. The section and subsection heading in this Agreement
are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement.
(H) Governing Law. This Agreement was negotiated and is being
contracted for in Florida and shall be governed by the laws of
the State of Florida and the United States of America,
notwithstanding any conflict-of-law provision to the contrary.
(I) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors, and
assigns.
7
(J) Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and supersedes any and all prior
agreements, arrangements, or understandings between the
parties relating to the subject matter of this Agreement. No
oral understandings, statements, promises, or inducements
contrary to the terms of this Agreement exist.
No representations, warranties, covenants, or conditions,
expressed or implied, other than as set forth herein, have
been made by either party.
(K) Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement shall remain in
full force and effect.
(L) Counterparts. A facsimile, telecopy, or other reproduction of
this Agreement may be executed simultaneously in two or m ore
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument, by one or more parties hereto and such executed
copy may be delivered pursuant to which the signature of or on
behalf of such party can be seen. In this event, such
execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party
hereto, all parties agree to execute an original if this
Agreement as well as any facsimile, telecopy or other
reproduction hereof.
(M) Time is of the Essence. Time is of the essence of this
Agreement and of each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date above written.
The "Company" Advisor
Cirilium Holdings, Inc. The Blackmor Group Consulting
By: /s/ Xxxxxx X. Xxxxxx By: /s/ X. Xxxxx, President
-------------------------- ---------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxx 5/26/04
Title: Chairman
-----------------------
8
