Letter of Engagement FERMAVIR PHARMACEUTICALS, INC. December 12, 2005
December
12, 2005
The
following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. (“Trilogy”)
by
FermaVir Pharmaceuticals, Inc. (“FMVR”
or
the “Company”):
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Term
and Termination
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Twelve months,
commencing as of the date set forth above (the “Initial
Term”),
and terminable thereafter by either party upon 30 days’ prior written
notice. In addition, either party may terminate this Agreement
by written
notice for material breach by the other party of any of its obligations
or
agreements under this Agreement unless such material breach is
cured and
corrected within 10 days following receipt of such
notice.
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Objective
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The
development and implementation of a proactive marketing program
to
increase the awareness of FMVR and generate a significant increase
in
liquidity and market capitalization. In addition, upon request,
Trilogy
will advise FMVR in business development and strategic advisory
services.
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The
Program
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Trilogy
will structure and implement a marketing program designed to
create
extensive financial market and investor awareness for FMVR to
drive
long-term shareholder support. The core drivers of the program
will be to
create institutional and retail buying in the Company’s stock through a
proactive sales and marketing program emphasizing technology-driven
communications, coupled with 1-to-1 selling and leveraging FMVR’s image to
attract additional long term investors and to create additional
opportunities in M&A and Business Development. As share price is
affected by various factors, Trilogy can give no assurance that
the
marketing program will result in an increase in FMVR’s stock
price.
Trilogy
understands that during any period in which the Company is
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| in “registration” for a public offering of securities under the Securities Act of 1933, and during the distribution of such securities, the Company’s investor relations and marketing efforts will be severely limited. However, it will be the responsibility of the Company (with the advice of its securities counsel) to determine what investor relations and financial marketing efforts are permissible and non-permissible during such periods, and Trilogy will follow the direction of the Company and its securities counsel. Trilogy agrees that it will not take any action to influence anyone to purchase the Company’s stock by making an improper or illegal payment, directly or indirectly. | |||
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Responsibilities
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In
addition to marketing and financial public relations, Trilogy
will assume
the responsibilities of in-house investor relations for FMVR
on a full
turnkey basis, including the generation of corporate and shareholder
communications, retail and institutional investor contact and
media.
Trilogy will work in conjunction with the Company’s management, securities
counsel, investment bankers and auditors and under supervision
of
management. The content is as follows:
Trilogy
represents that it has the corporate power and authority to
execute,
deliver and perform its obligations under this agreement. Notwithstanding
any provision of this Agreement, the obligation to perform
the services
under this Agreement is personal to Trilogy and Trilogy may
not
subcontract, transfer or otherwise delegate any of its obligations
or
duties under this Agreement, without the Company’s prior written
consent.
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Trilogy
will not publish or publicly release any press release or
other document
(“IR
Documents”)
regarding the Company that has not been approved in writing
by the
Company. The Company assumes responsibility for the accuracy
and
completeness of all IR Documents and the compliance of such
Documents with
applicable laws, rules and regulations. The Company agrees
that Trilogy
has no obligation or duty to and does not guaranty the accuracy
or
completeness of the IR Documents.
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Confidentiality
and Material Information
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Trilogy
agrees that all Confidential Information (defined below)
shall remain the
property of the Company and will be held and treated by Trilogy,
its
affiliates, directors, officers, employees, agents, attorneys
accountants
and representatives (collectively, the “Representatives”)
in confidence and will not, expect as provided in this Agreement,
without
the prior written consent of the Company, be disclosed by
Trilogy or its
Representatives, in any manner whatsoever, in whole or in
part, and will
not be used by Trilogy or its Representatives other than
in connection
with performing the duties and responsibilities of Trilogy
under this
Agreement.
Confidential
Information means all technical, commercial, financial or
other
information concerning the business, affairs and operations
of the Company
and its affiliates and which the Company or its agents or
representatives
have provided or will provide to Trilogy in connection with
its services
hereunder whether provided in writing, electronically or
verbally.
Notwithstanding the foregoing, the following will not constitute
"Confidential Information" for purposes of this Agreement:
(i) information
which is available in the public domain or marketplace; (ii)
information
which after disclosure to Trilogy by the Company becomes
part of the
public domain by publication or otherwise, expect by breach
by Trilogy of
the terms of this Agreement; (iii) information which was
rightfully in the
possession of Trilogy at the time of disclosure to Trilogy
by the Company;
(iv) information which is rightfully received by Trilogy
from a third
party who is not prohibited from transmitting the information
to Trilogy
by a contractual, legal or fiduciary obligation to the Company;
and (v)
information which is required to be disclosed by law, in
which case, to
the extent practicable, Trilogy will give the Company advance
notice of
the proposed disclosure (including a copy of any written
request or order)
and will cooperate with the Company in any effort to limit
or restrict
such disclosure via protective order or otherwise..
Trilogy
agrees that within ten (10) business days of the
Company’s
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| request,
it shall either deliver to the Company
(i) originals and any copies of any documentation, electronic
or
otherwise, which constitutes Confidential Information or
(ii) a
certificate signed by an officer of Trilogy certifying that
all copies of
any documentation, electronic or otherwise, which constitutes
Confidential
Information have been destroyed. Notwithstanding
the foregoing, Trilogy shall be entitled to retain one copy
of all
documentation related to the services that it performs pursuant to
this Agreement.
Trilogy
acknowledges that it is aware, and will inform its Representatives,
that
the securities laws of the United States (as well as the
regulations of
the stock exchanges, Nasdaq and other quotation systems)
prohibit any
person who has material, non-public information concerning
the Company
from purchasing or selling the Company’s securities when in possession of
such information and from communicating such information
to any other
person or entity under circumstances in which it is reasonably
foreseeable
that such person or entity is likely to purchase or sell
such securities
in reliance upon such information.
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Fees
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$12,500
per month, with the first payment due on execution, payable
by wire
transfer of funds to the account designated by Trilogy..
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Equity
Compensation
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FMVR
has concurrently herewith issued to Trilogy 1,000,000 Warrants.
Each
Warrant represents the right to purchase one share of Common
Stock for
$1.50 per share at any time through the third year following
issuance. The
Company agrees to file a Registration Statement with the
Securities and
Exchange Commission registering the resale of the shares
underlying the
Warrants no later than forty-five (45) days from the date
of this
Agreement.
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Marketing
Budget
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To
support the financial marketing program, FMVR acknowledges
that it will
incur certain third party marketing costs. Trilogy will
not incur these
costs on behalf of the Company except with the approval
of the Company or
pursuant to a budget approved by the Company (which budget
shall not be
less than $200,000). The Company shall have no obligation
to reimburse
Trilogy for any third party marketing cost that exceeds
the approved
budget or is otherwise not approved by the Company. The
Company
understands that prompt payment of these costs is vital
to the on-going
investor relations program, and therefore shall pay these
costs promptly
upon invoice, to Trilogy (to enable Trilogy to promptly
reimburse these
third parties). The
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| Company shall indemnify and hold Trilogy harmless from any losses, claims, costs, expenses, liabilities and damages from failure to timely pay these third party marketing costs. | |||
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Indemnification
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The
Company agrees to provide the indemnification set forth
in “Exhibit A”
attached hereto.
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Corporate
Obligations
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The
obligations of Trilogy under this Agreement are solely
corporate
obligations, and no officer, director, employee, agent,
shareholder or
controlling person of Trilogy shall be subject to any
personal liability
whatsoever to any person, nor will any claim be asserted
by or on behalf
of the Company, with respect to breach of the terms of
this Agreement.
This provision does not limit or restrict in any way
claims with respect
to any matters other than breach of the terms of this
Agreement.
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Additional
Services
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If
Trilogy is called upon to render services directly or
indirectly relating
to the subject matter of this Agreement, beyond the services
contemplated
above (including, but not limited to, production of documents,
answering
interrogatories, giving depositions, giving expert or
other testimony,
whether by agreement, subpoena or otherwise), the Company
shall pay to
Trilogy a reasonable hourly rates for the persons involved
for the time
expended in rendering such services, including, but not
limited to, time
for meetings, conferences, preparation and travel, and
all related costs
and expenses and the reasonable legal fees and expenses
of Trilogy’s
counsel.
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Survival
of Certain Provisions
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The
Sections entitled “Indemnification” (including “Exhibit A”), “Corporate
Obligations,” “Confidentiality and Material Information” and “Additional
Services” shall survive any termination of this Agreement and Trilogy’s
engagement pursuant to this Agreement. In addition, termination
shall not
affect any right of Trilogy’s to compensation accrued through the date of
termination and for reimbursement of expenses (including
third party
marketing costs). Any termination of this Agreement by
the Company prior
to the end of the Initial Term, other than in the event
of a material
breach of the Agreement by Trilogy which Trilogy has
not cured or
corrected within 15 days of written notice of the breach,
or any
termination by Trilogy as a result of non-payment or
other material breach
by the Company
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| (including the failure to pay third-party marketing costs), shall not terminate Trilogy’s right to the fees through the entire Initial Term (as Trilogy’s time and commitment are expected to be greater in the first part of its engagement). | |||
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Services/Costs
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The
compensation paid to Trilogy under this Agreement will
cover all costs for
Trilogy personnel. Reasonable travel and entertainment
costs for Trilogy
personnel, in addition to certain third-party costs,
will be borne by the
Company. Trilogy will provide reasonable documentation
to support such
reimbursement claims. Trilogy will not incur, individually
or in the
aggregate, any reimbursable cost of $500 or more without
the written
approval of the Company. These costs do not included
third-party marketing
costs under “Marketing Budget.”
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Attorneys’
Fees
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If
any action or proceeding is brought to enforce or interpret
any provision
of this Agreement, the prevailing party shall be entitled
to recover as an
element of its costs, and not its damages, reasonable
attorneys’ fees to
be fixed by the court.
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Governing
Law
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California,
without giving effect to the principles of conflicts
of law
thereof.
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Agreed
and Accepted:
| FermaVir Pharmaceuticals, Inc. | Trilogy Capital Partners, Inc. | ||||
| By | /s/ Xxxxxxxx X. Xxxxxx | By | /s/ Xxxx Xxxxx | ||
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Xxxxxxxx
X. Xxxxxx
President
and CEO
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Xxxx
Xxxxx
President
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EXHIBIT
A
Indemnification
Provisions
Fermavir
Pharmaceuticals, Inc. (the
“Company”)
unconditionally, absolutely and irrevocably agrees to and shall indemnify
and
hold harmless Trilogy Capital Partners, Inc. (“Trilogy”)
and
its past, present and future directors, officers, affiliates, counsel,
shareholders, employees, agents, representatives, contractors, successors
and
assigns (Trilogy and such persons are collectively referred to as the
“Indemnified
Persons”)
from
and against any and all losses, claims, costs, expenses, liabilities and
damages
(or actions in respect thereof) arising out of or related to this Agreement,
and
any actions taken or omitted to be taken by an Indemnified Party in connection
with this Agreement (“Indemnified
Claim”).
Without limiting the generality of the foregoing, such indemnification shall
cover losses, claims, costs, expenses, liabilities and damages imposed on
or
incurred by the Indemnified Persons, directly or indirectly, relating to,
resulting from, or arising out of any misstatement of fact or omission of
fact,
or any inaccuracy in any information provided or approved by the Company
in
connection with the engagement, including information in any SEC filing,
press
release, website, marketing material or other document, whether or not the
Indemnified Persons relied thereon or had knowledge thereof, claims of third
parties providing marketing services to the Company. In addition, the Company
agrees to reimburse the Indemnified Persons for legal or other expenses
reasonably incurred by them in respect of each Indemnified Claim at the time
such expenses are incurred. Notwithstanding the foregoing, the Company shall
not
be obligated under the foregoing for any loss, claim, liability or damage
that
is finally determined by a court with proper jurisdiction to have resulted
primarily from the willful misconduct, bad faith or gross negligence of the
Indemnified Person or from the failure of the Indemnified Person to be
registered or licensed as a broker or dealer under the Securities Exchange
Act
of 1934 or applicable state securities laws or as an investment advisor under
the Investment Advisors Act of 1940 or applicable investment advisor state
laws.
