Exhibit 10.4
trilogy capital partners, inc.
Letter of Engagement
Applied DNA Sciences, Inc.
June 20, 2005
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("Trilogy") by Applied DNA Sciences, Inc. ("APDN" or the
"Company"):
Term and Twelve months, commencing as of the date set forth above
Termination (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 APDN and generate a
significant increase in liquidity and market capitalization.
In addition, upon request, Trilogy will advise APDN 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 APDN 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 APDN'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 APDN'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 APDN 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, APDN relationship
universe
o Public Relations
o Capital Conferences
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
verify the accuracy or completeness of the IR Documents.
Fees $12,500 per month, with first payment due on execution.
Wiring information is set forth below.
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Equity APDN has concurrently herewith issued to Trilogy 7,500,000
Compensation Warrants. Each Warrant represents the right to purchase one
share of Common Stock for $0.55 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 shares underlying
the Warrants no later than the earlier to occur of: (i) 15
days following the effectiveness of the Company's current
registration statement on Form SB-2 (File No. 333-122848)
and (ii) September 19, 2005.
Marketing To support the financial marketing program, APDN
Budget 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 more than $200,000 unless
approved by an officer of the Company). 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.
Indemnification The Company agrees to provide the indemnification set forth
in "Exhibit A" attached hereto.
Corporate The obligations of Trilogy are solely corporate obligations,
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
such claim be asserted by or on behalf of any other party to
this Agreement.
Additional If Trilogy is called upon to render services directly or
Services 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
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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 The Sections entitled "Indemnification" (including "Exhibit
Certain A"), "Corporate Obligations" and "Additional Services" shall
Provisions survive any termination of this Agreement and Trilogy's
engagement pursuant to this Agreement. In addition, such
termination shall not terminate Trilogy's right to
compensation accrued through the date of termination and for
reimbursement of expenses (including third party marketing
costs). Any purported termination of this Agreement by the
Company prior to the end of the Initial Term, 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).
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
reimbursement claims. Trilogy will not incur any particular
reimbursable cost of $500 or more without the written
approval from the Company. These reimbursable costs are not
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.
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[Signatures on following page.]
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Agreed and Accepted:
Applied DNA Sciences, Inc. Trilogy Capital Partners, Inc.
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President President
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COO / CFO
