Exhibit 99.1
TRIOLOGY CAPITAL PARTNERS, INC.
LETTER OF ENGAGEMENT
UNIVERSAL DETECTION TECHNOLOGY
AUGUST 19, 2005
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("TRILOGY") by Universal Detection Technology ("UDTT" or the
"COMPANY"):
TERM AND TERMINATION 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.
OBJECTIVE The development and implementation of a proactive marketing program to increase the
awareness of UDTT and generate a significant increase in liquidity and market
capitalization. In addition, upon request, Trilogy will advise UDTT in business
development and strategic advisory services.
THE PROGRAM Trilogy will structure and implement a marketing program designed to create extensive
financial market and investor awareness for UDTT 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 UDTT'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 UDTT's stock price.
Trilogy understands that during any period in which the Company is 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.
RESPONSIBILITIES In addition to marketing and financial public relations, Trilogy will assume the
responsibilities of an in-house Investor Relations Officer for UDTT 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:
o Campaign Development and Execution
o Press Announcements: drafting, approval and distribution
o Database Development and Management
o Image Analysis: recommendations and implementation
o Messaging: institutional and retail
o Online presentations: drafting and production responsibilities
o Website Overhaul - installation and maintenance of auto IR program
o Email messaging: targets: Retail and Institutional/Other databases
o Media including Interactives and PowerPoints
o Direct Mail: shareholder, media, UDTT relationship universe
o Public Relations
o Capital Conferences
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.
CONFIDENTIALITY AND Trilogy agrees that all Confidential Information (defined below) shall remain the
MATERIAL INFORMATION 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; and (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.
Trilogy agrees that within ten (10) business days of the Company's 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
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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.
FEES $12,500 per month, with first payment due on execution. Wiring information is set forth
below.
EQUITY UDTT has concurrently herewith issued to Trilogy 3,600,000 Warrants. Each Warrant
COMPENSATION represents the right to purchase one share of Common Stock for $0.17 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 October 15, 2005.
MARKETING BUDGET To support the financial marketing program, UDTT 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 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 The Company agrees to provide the indemnification set forth in "Exhibit A" attached
hereto.
CORPORATE OBLIGATIONS 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.
ADDITIONAL SERVICES 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.
SURVIVAL OF CERTAIN The Sections entitled "Indemnification" (including "Exhibit A"), "Corporate Obligations,"
PROVISIONS "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 (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 The compensation paid to Trilogy under this Agreement will cover all costs for Trilogy
personnel. 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."
ATTORNEYS' FEES 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.
GOVERNING LAW California, without giving effect to the principles of conflicts of law thereof.
_______________________________________________
Agreed and Accepted:
UNIVERSAL DETECTION TECHNOLOGY TRILOGY CAPITAL PARTNERS, INC.
By /s/ Xxxxxxx Xxxxxx By /s/ Xxxx Xxxxxxx
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Xxxxxxx Xxxxxx Xxxx Xxxxxxx
President and CEO Vice Chairman
WIRING:
Trilogy Capital Partners, Inc.
SIGNATURE BANK NEW YORK
Private Client Group
New York, NY 10016
Account: 1500565515
ABA: 000000000
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EXHIBIT A
INDEMNIFICATION PROVISIONS
Universal Detection Technology (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 or bad faith of the Indemnified Person.
