ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT ("Agreement"), made as of March 10, 2002, is by
and between IQ BIOMETRIX INC., a California corporation (the "Company"), and
XXXXXXX XXXXXX (the "Advisor"). In consideration of the mutual covenants
contained in this Agreement, the Company and Advisor hereby agree as follows:
1. ADVISORY PERIOD. The Company will engage Advisor for an initial period
commencing March 10, 2002 and ending December 31, 2002 the "Initial
Advisory Period", and thereafter, the Agreement shall automatically
renew for additional periods of one year each (the "Renewal Advisory
Periods") (collectively, the "Advisory Period"), unless either party
provides written notice of termination to the other at least ten (10)
days prior to the expiration of the Initial Advisory Period, or any
Renewal Advisory Period.
2. ADVISORY SERVICES. During the Advisory Period, Advisor shall report
to the Company's Board of Directors ("Board") and will provide
advisory services to the Company as necessary to accomplish the
objectives set forth. Specifically, Advisor shall provide the Company
with the following (the "Advisory Services"):
(a) Introductions to institutions and individual public equity
investors and brokers; (b) Introductions to investment banking and
private equity finns; (c) Introductions and advice related to the
recruitment of board members and advisory board members; (d) Such other
matters as may be determined from time-to-time by the Board with the
consent of
Advisor.
Advisor agrees to exercise the highest degree of professionalism and to
utilize his expertise and creative talents in performing the Advisory
Services.
Company specifically acknowledges that its relationship with Advisor is
not exclusive and that during the Advisory Period Advisor may engage in
other work and/or projects on behalf of himself or other persons or
entities that are not directly related to the Company, at Advisor's
sole discretion. Advisor specifically acknowledges that Company may at
its sole discretion engage other advisor(s) to serve in a similar
capacity to Advisor as contained in this agreement.
3. ADVISORY FEES AND ADMINISTRATIVE COSTS. As compensation for advisory
services rendered pursuant to this Agreement, Company shall:
(a) Issue the Advisor Two Hundred Thousand (200,000) options for IQ
Biometrix stock under the Company's 2001 stock plan (the "Advisory
Fee"). Such options shall be exerciseable at a price of $0.10 per share
for a period of five years from the date of issuance, and shall vest at
the rate of 50,000 options upon the thirty-day trailing average closing
price of IQ Biometrix stock exceeding $2.00, $3.00, $4.00 and $5.00,
respectively:
(b) Reimburse Advisor for pre-approved expenses.
4. BUSINESS EXPENSES. The Company shall reimburse Advisor for the
reasonable cost of all corporate travel, hotels, meats and other
business expenses Advisor incurs on behalf of the Company pursuant to
this Agreement and pursuant to standard company policies. The Company
shall have the right to make flight, auto and hotel reservations and
pay for such reservations in advance or arrange for payment to the
travel vendor at time of expense incurrence. No expenditure shall be
undertaken without the express, prior approval of an authorized officer
of the Company. Advisor shall submit to the Company receipts or other
documentation sufficient to reflect any such claimed expenses.
5. INDEPENDENT CONTRACTOR RELATIONSHIP. Advisor's relationship with the
Company is that of an independent contractor, and nothing in this
Agreement is intended to, or should be construed to, create a
partnership, agency, joint venture or employment relationship.
Advisor will not be entitled to any of the benefits that the Company
may make available to its employees, including, but not limited to,
group health or life insurance, profit sharing or retirement benefits.
Advisor is solely responsible for, and will file, on a timely basis,
all tax returns and payments required to be filed with, or made to,
any federal, state or local tax authority with respect to the
performance of services and receipt of fees under this Agreement.
No part of Advisor's compensation will be subject to withholding by
the Company for the payment of any social security, federal, state of
any other employee payroll taxes.
6. TERMINATION. The Company may terminate this Agreement at any time.
without Cause in its sole discretion, and Advisor may terminate this
Agreement at any time without Good Reason in its sole discretion upon
giving thirty (30) days written notice to the other party ("Effective
Termination Date"). The Company may terminate this Agreement for Cause,
and Advisor may terminate this Agreement for Good Reason, upon giving
written notice to the other party, which shall be the Effective
Termination Date in such event.
In the event the Company terminates this Agreement without Cause, or
Advisor terminates this Agreement for Good Reason, (a) the Company
shall pay Advisor a termination fee equal to the amount of Advisory
Fees Advisor would have been entitled to receive had the Advisor
continued to perform services hereunder through the end of the Initial
Advisory Period or the Renewal Advisory Period in which the Effective
Termination Date falls ("Termination Advisory Period"). If the Company
terminates this agreement for Cause or Advisor terminates this
agreement without Good Reason, then the agreement will terminate upon
the Effective Termination Date without further obligation by the
Company to pay additional fees to Advisor, including the termination
fees. As used herein, "Cause" shall mean: (a) Advisor's indictment or
conviction (including a no contest or guilty plea) or any felony or of
any crime involving dishonesty or moral turpitude; or (b) Advisor's
participation in a fraud or willful misconduct that materially damages
the Company.
As used herein, "Good Reason" shall mean : (a) the Company makes a
general assignment for the benefit of creditors, files a voluntary
bankruptcy petition, files a petition or answer seeking a
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law, there shall have been
filed any petition or application for the involuntary bankruptcy of
Company, or other similar proceeding, in which an order for relief is
entered or which remains undismissed for a period of 30 days or more,
or the Company seeks, consents to, or acquiesces in the appointment of
a trustee, receiver, or liquidator of the Company or any material part
of its assets; (b) the Company makes material changes to the nature or
extent of the Advisory Services without Advisor's express written
consent or (c) the Company fails to pay Advisor the compensation and
benefits required under this Agreement.
7. INDEMNIFICATION. To be fullest extent permitted by applicable law,
the Company agrees to indemnify, defend and hold Advisor harmless
from any and all claims, actions, costs, expenses, damages and
liabilities including, without limitation, reasonable attorneys'
fees, hereafter or heretofore arising out of or in connection with his
performance of the Advisory Services or other activities on behalf of
the Company, or by reason of the fact that he is or was a director
or officer of the Company or any affiliate of the Company. To the
fullest extent permitted by applicable law, the Company shall advance
proceeding. The Company shall not be obligated to indemnify Advisor
or defend Advisor against, or hold him harmless from any claims,
damages, expenses or liabilities, including attorneys' fees,
resulting from the gross negligence or willful misconduct of Advisor.
For purposes of this paragraph, no act, or failure to act, on the part
of the Advisor shall be considered "willful" unless done, or omitted
to be done, not in good faith and without reasonable belief by him
that his actin or omission was in the best interests of the Company,
as determined by the final judgment of a court of competent
jurisdiction. The duty to indemnify shall survive the expiration or
early termination of this Agreement as to any claims based on facts
or conditions that occurred or are alleged to have occurred prior
to such expiration or termination.
8. SUCCESSORS AND ASSIGNS. Advisor may not subcontract or otherwise
delegate his obligations under this Agreement without the Company's
prior written consent. Subject to the foregoing, this Agreement will
be for the benefit of the Company's successors and assigns, and will
be binding on Advisor's assignees.
9. NOTICES. Any notice required or permitted by this Agreement shall be in
writing and shall be delivered as follows with notice deemed given as
indicated: (i) by personal delivery when delivered personally; (ii) by
overnight courier upon written verification of receipt; (iii) by
telecopy or facsimile transmission upon acknowledgment or receipt of
electronic transmission or (iv) by certified or registered mail, return
receipt requested, upon verification of receipt. Notices shall be sent
to the following addresses:
If to Advisor: If to Company:
Xxxxxxx Xxxxxx IQ Biometrix Inc.
000 000xx Xxxxxx 2555 Clovis Avenue, Suite E
Drummundville QC Clovis, CA 93612
CANADA J2B 4H8 Xxx: CEO
10. GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California, as such laws are applied to
agreements entered into and to be performed entirely within
California between California residents.
11. SEVERABILITY. Should any provisions of provisions of this Agreement
be held by a court of law to be illegal, invalid or unenforceable, the
legality, validity and enforceability of the remaining provisions of
this Agreement shall not be affected or impaired thereby.
12. BOARD APPROVAL. The issuance of any shares provided hereunder shall
be effective upon approval by the Board of Directors of the Company.
All other terms and conditions set forth herein are immediately
effective as to both parties.
13. JURISDICTION. This agreement is subject to the laws and regulations
of the State of California, County of Santa Xxxxx.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relating to this subject matter and supersedes all
priors or contemporaneous oral or written agreements concerning such
subject matter. This Agreement may only be changed by mutual agreement
of authorized representatives of the parties in writing.
IQ BIOMETRIX INC. ADVISOR
/s/ Xxxxxx Xxxx /s/ Xxxxxxx Xxxxxx
By: XXXXXX XXXX, CEO XXXXXXX XXXXXX
Dated as of: March 10, 2002 Dated as of: March 10, 2002
