EXHIBIT 99.1
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LETTER OF ENGAGEMENT
GLOBAL MATRECHS, INC.
DECEMBER 16, 2004
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("Trilogy") by Global Matrechs, Inc. ("GMTH" or the "Company"):
TERM 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 marketing
program to increase the awareness of GMTH and assist
GMTH in business development.
LIMITATIONS 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 public relations, Trilogy
will assume the responsibilities of an in-house
Investor Relations Officer for GMTH 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. Trilogy will assist the
Company with the following:
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
o Media including Interactives and PowerPoints
o Public Relations
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.
Each month Trilogy will provide to the Company a
summary of its activities under this Agreement for the
prior month.
FEES $10,000 per month, with first payment due on
execution. Wiring information is set forth below.
EQUITY COMPENSATION GMTH has concurrently herewith issued to Trilogy an
aggregate of 5,750,000 Warrants. Marketing Budget To
support the financial marketing program, GMTH
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 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.
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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 (not to
exceed $200 per hour) 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
PROVISIONS "Exhibit A"), "Corporate Obligations" and "Additional
Services" 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 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 or the
vesting of the Warrants (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 $250 or more
without the written approval from the Company.
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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:
Global Matrechs, Inc. Trilogy Capital Partners, Inc.
By /s/ Michael Sheppard By /s/ A.J. Cervantes
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Michael Sheppard, CEO & President A.J. Cervantes, President
Wiring:
Trilogy Capital Partners, Inc.
Signature Bank New York
Private Client Group
New York, NY 10016
Account: 1500375287
ABA: 026013576
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EXHIBIT A
Indemnification Provisions
Global Matrechs, 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 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. 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.
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, with the advice of counsel, determine that there exists an
actual or potential conflict of interest which make representation by the same
counsel inappropriate and the Company refuses to provide separate counsel. In
the event that the Company, within ten business days after notice of any such
proceeding, fails to assume the defense thereof, the Indemnified Person shall
have the right to undertake the defense 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. Anything in these provisions to the
contrary notwithstanding, provided that the Company has assumed the defense of
the proceeding, no Indemnified Person shall, without the prior written consent
of the Company, settle or compromise such proceeding or consent to the entry of
any judgment with respect to such proceeding; provided, however that any
Indemnified Person may settle or compromise any such proceeding or consent to
entry of any judgment with respect to any such proceeding if the Indemnified
Person waives all claims for indemnification arising out of or in connection
with such proceeding or the facts and circumstances underlying the proceeding
and releases the Company from all liability to the Indemnified Person in
connection therewith.