Letter of Engagement FlexSCAN, INC. April 26, 2006
Letter
of Engagement
April
26, 2006
The
following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. (“Trilogy”)
by
FlexSCAN, Inc. (“FXSC”
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 FXSC and generate a significant increase
in
liquidity and market capitalization. In addition, upon request, Trilogy
will advise FXSC 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 FXSC to drive
long-term shareholder support. The core drivers of the program will
be to
inform potential institutional and retail investors of FXSC’s business and
stimulate interest in investment in the Company’s stock through a
proactive sales and marketing program emphasizing technology-driven
communications, and leveraging FXSC’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 FXSC’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.
|
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Responsibilities
|
Trilogy
will structure and implement the program described above in accordance
with a marketing plan provided to FXSC. Trilogy will work in conjunction
with the Company’s management, securities counsel, investment bankers,
auditors and marketing director, and under supervision of executive
management. Trilogy will designate a principal account representative
to
FXSC responsible for this engagement. The content is as follows:
· Campaign
Development and Execution
· Press
Announcements: drafting, approval and distribution
· Database
Development and Management
· Image
Analysis: recommendations and implementation
· Messaging:
institutional and retail
· Online
presentations: drafting and production responsibilities
· Website
Overhaul - installation and maintenance of auto IR program
· Email
messaging: targets: Retail and Institutional/Other databases
· Media,
including Interactives and PowerPoints
· Direct
Mail: shareholder, media, FXSC relationship universe
· Public
Relations
· 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 and does not guaranty the accuracy or
completeness of the IR Documents.
|
Fees
|
$12,500
per month, with first payment due on execution, payable by wire transfer
of funds to the account designated by Trilogy.
|
Equity
Compensation
|
FXSC
has concurrently herewith issued to Trilogy 3,000,000 Warrants. Each
Warrant represents the right to purchase one share of Common Stock
for
$0.35 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.
|
2
Marketing
Budget
|
To
support the financial marketing program, FXSC 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 which
Trilogy
becomes subject to arising from the 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
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 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. Trilogy will provide the Company written notice of any additional
services potentially triggering additional fees and/or
charges.
|
3
Survival
of Certain Provisions
|
The
Sections entitled “Indemnification” (including “Exhibit A”), “Corporate
Obligations” 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).
|
Services/Costs
|
The
compensation paid to Trilogy under this Agreement will cover all
costs for
Trilogy personnel. Travel 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.
|
[Signatures
on following page]
4
AGREED
AND ACCEPTED:
FlexSCAN, Inc. | Trilogy Capital Partners, Inc. | ||
By
|
/s/ Xxxxxx Xxxxx |
By
|
/s/ Xxxx Xxxxx |
Xxxxxx Xxxxx | Xxxx Xxxxx | ||
Chief Executive Officer | President |
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EXHIBIT
A
Indemnification
Provisions
FlexSCAN,
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 or bad faith of the Indemnified Person.
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