Exhibit 10.1
[Trilogy Capital Partners, Inc. Letterhead]
Letter of Engagement
Xenomics, Inc.
January 10, 2005
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("Trilogy") by Xenomics, Inc. ("XNOM" 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.
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 or the
Confidentiality Agreement unless such material breach
is cured and corrected within 10 days following
receipt of such notice.
Objective The development and implementation of a proactive
marketing program to increase the awareness of XNOM
and to generate a significant increase in liquidity
and market capitalization. In addition, upon request,
Trilogy will advise XNOM 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 XNOM 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 XNOM'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 XNOM'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. 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.
Responsibilities In addition to marketing and financial public
relations, Trilogy will assume the responsibilities
of an in-house Investor Relations Officer for XNOM 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, XNOM
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 which 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 $10,000 per month, with first payment due on
execution. Wiring information is set forth below.
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Equity Compensation Concurrently herewith XNOM has issued to Trilogy
Warrants to purchase 1,000,000 shares of its Common
Stock.
Marketing Budget To support the financial marketing program, XNOM
acknowledges that it will incur certain third party
marketing costs. Trilogy will not incur these costs
without the prior written approval of the Company,
which approval may be pursuant to a budget. At
Trilogy's request, the Company will pay these
approved costs directly to the third party.
Indemnification The Company agrees to provide the indemnification set
forth in "Exhibit A" attached hereto.
Corporate Obligations The obligations of Trilogy 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 such claim be asserted by
or on behalf of any other party to 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 rate
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.
Confidentiality Trilogy agrees to execute the confidentiality
agreement with the Company set forth in "Exhibit B"
attached hereto.
Survival of Certain The Sections entitled "Indemnification" (including
Provisions "Exhibit A"), "Corporate Obligations," "Additional
Services" and "Confidentiality" (including "Exhibit
B") shall 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
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expenses. 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,
shall not terminate Trilogy's right to the monthly
fee 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.
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 reimbursement
claims. Trilogy will not incur any particular
reimbursable cost of $500 or more or aggregate costs
of $10,000 or more without the prior written approval
from the Company.
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:
Xenomics, Inc. Trilogy Capital Partners, Inc.
By /s/ V. ▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
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V. ▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇▇, President
Chief Executive Officer
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Wiring:
Trilogy Capital Partners, Inc.
Signature Bank New York
Private Client Group
New York, NY 10016
Account: 1500375287
ABA: ▇▇▇▇▇▇▇▇▇
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EXHIBIT A
Indemnification Provisions
Xenomics, Inc., (the "Company"), unconditionally, absolutely and irrevocably
agrees to and shall defend, 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 Person 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.
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 which is finally determined 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 state laws.
If any proceeding shall be brought or asserted under these provisions against an
Indemnified Person in respect of which indemnity may be sought under these
provisions from the Company, the Indemnified Person shall give prompt written
notice of such proceeding to the Company who shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the Indemnified
Person (or if more than one, Trilogy), and the payment of all reasonable
expenses; provided that any delay or failure to notify the Company shall relieve
the Company of its obligations hereunder only to the extent, if at all, that it
is materially prejudiced by reason of such delay or failure. In no event shall
any Indemnified Person be required to make any expenditure or bring any cause of
action to enforce the Company's obligations and liability under and pursuant to
the indemnifications set forth in these provisions. The Indemnified Person shall
have the right to employ separate counsel in any of the foregoing proceedings
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless: (i) the
Company has agreed to pay such fees and expenses; or (ii) the Indemnified Person
shall in good faith determine that there exists actual or potential conflicts of
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interest which make representation by the same counsel inappropriate and the
Company refuses to provide separate counsel. In the event that the Company,
within five days after notice of any such proceeding, fails to assume the
defense thereof, the Indemnified Person shall have the right to undertake the
defense, compromise or settlement of such proceeding, for the account of the
Company, subject to the right of the Company to assume the defense of such
proceeding with counsel reasonably satisfactory to the Indemnified Person at any
time prior to the settlement, compromise or final determination thereof by
reimbursing the Indemnified Person for all fees and costs incurred to date.
Anything in these provisions to the contrary notwithstanding, the Company shall
not, without the prior written consent of Trilogy (if Trilogy is an Indemnified
Person) or the Indemnified Person if Trilogy is not an Indemnified Person,
settle or compromise any proceeding or consent to the entry of any judgment with
respect to any proceeding; provided, however, that the Company may, without the
Indemnified Person's prior written consent, settle or compromise any such
proceeding or consent to entry of any judgment with respect to any such
proceeding that requires solely the payment of money damages by the Indemnified
Person and that includes as an unconditional term thereof, the release by the
claimant or the plaintiff of the Indemnified Person from all liability in
respect of such proceeding.
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