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EXHIBIT 10.65
March 29, 1996
EPOCH PHARMACEUTICALS, INC.
1725 220th Street, S.E., Suite 104
Bothell, Washington 98021
Gentlemen:
This letter will confirm the understanding and agreement that you have
retained me as a consultant to assist you for a period of one year from the
date hereof in connection with transactions including the structuring of, among
other things, equity placements, licensing agreements and research and
development collaborations as follows:
1. In consideration of my services, should I introduce the
Company to an opportunity that yields immediately available funds to the
Company, the following fee structure will apply:
(a) Seven percent (7%) of the gross proceeds received by
the Company in the transaction.
(b) Warrants to purchase shares of the Company's Common
Stock with an aggregate exercise price amount equal
to ten percent (10%) of the gross proceeds received
by the Company in the transaction, with a per share
exercise price of $1.00. Such Warrants will be held
in escrow by the Company until such time as the
balance of the Ribonetics Debt (as defined in
paragraph 1(c) below) is satisfied.
(c) In the event that at least $5,000,000 is received by
the Company by April 30, 1996, the Company will
cancel fifty percent (50%) of the obligations of
David Blech to the Company arising in connection with
the Ribonetics' transaction, including the "put"
rights contained in the agreement dated December 1,
1993, between David Blech and the Company (the
"Ribonetics Debt"). The parties acknowledge that the
amount of the Ribonetics Debt is $3,271,175, and is
now due and payable and is accruing interest at the
minimum applicable federal rate in effect under IRC
Section 1274 in effect on September 27, 1994.
For purposes of this Agreement, "Warrants" mean warrants to
purchase shares of Common Stock of the Company at a price of
$1.00 per share exercisable commencing one year after the
closing of a transaction under 1(a) above for a term of four
years after such closing. The Warrants would have customary
anti-dilution provisions and demand and piggyback
registration rights attached to the shares of Common Stock
issuable upon exercise thereof.
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Epoch Pharmaceuticals, Inc.
March 29, 1996
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The fee payable under this Section 1 shall be payable for only
one transaction during the term of this Agreement. Any fees payable for
additional transactions shall be separately negotiated by the parties prior to
any such transaction and shall only be effective pursuant to a written
agreement signed by both parties; provided, however, that the parties agree
that if fees are paid under this Section 1 for any transaction where the gross
proceeds to the Company are less than $5,000,000, then fees to be negotiated
for subsequent transactions during the term of the letter shall not be on terms
any more favorable than those set forth in Sections 1(a) and 1(b) until such
time, if any, as the aggregate gross proceeds to the Company from all such
transactions total at lease $5,000,000.
2. I also agree to meet and consult with and advise the Company
concerning opportunities which I identify and, if requested, participate in
negotiations together with the Company.
3. You have also agreed to pay my legal fees in the amount of up
to $17,500 at the closing of a transaction under Section 1 above. Cash
compensation and legal fees should be wired to the account listed on the
enclosed instructions and the Warrants will be held in an escrow account as
provided in Section 1(b).
4. The Company will have no obligation to pay any fee or other
amounts except as specifically set forth above.
5. Either party may terminate the engagement hereunder at any
time by giving the other party at least ten days' prior written notice. Upon
termination, I will return to the Company any materials of the Company then in
my possession.
Please confirm your agreement to these terms by executing the enclosed
copy of this letter where indicated below.
Sincerely.
/s/ DAVID BLECH
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David Blech
ACCEPTED AND AGREED:
EPOCH PHARMACEUTICALS, INC.
By: /s/ SANFORD ZWEIFACH
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Its: Chief Financial Officer
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