EXHIBIT 10.62

March 14, 2001

 

Thomas F. White Via Fax: (650) 873-8367 Senior Vice President   Shaman
Pharmaceuticals, Inc.   213 E. Grand Avenue   South San Francisco, CA 
94080-4812  

Dear Mr. White:

This letter shall serve as a proposal (hereinafter referred to as “Agreement”)
by Sutter Securities Incorporated (“Sutter” or the “Consultant”) to act as the
exclusive financial advisor to Shaman Pharmaceuticals, Inc. and its affiliates,
divisions and subsidiaries, (collectively the “Company”) to assist the Company
in the sale of certain assets identified by the Company and outlined in Schedule
A attached, including the Company’s net operating losses, whether such sale be
in the form of a merger, acquisition, joint venture or other type of
consolidation, and whether such proceeds be in the form of cash, equity, debt,
or otherwise, all or any of which are called a “Transaction.”

Sutter and the Company hereby covenant and agree as follows:

1.          The Company retains the services of Sutter as an independent
contractor to assist in the preparation of a plan and strategy to seek out a
Transaction.

2.          Sutter will, as requested, provide some or all of the following
services to the Company:

  a) Assist the Company in identifying qualified candidates for a Transaction
including those already identified by the Company, its officers, directors and
representatives (the “Prospects”).       b) Review data as it relates to
finances and other areas pertinent to this Agreement.       c) Assist the
Company in preparing information to be made available to potential Prospects
approved in advance by the Company.       d) Counsel the Company as to the
price, terms, strategy and tactics of a Transaction.       e) Assist the Company
in contacting and negotiating with existing and future Prospects as requested.  
    f) Attend meetings of the Company with Prospects as reasonably requested by
the Company.

3.         The Company agrees to furnish Sutter with financial, and other
information (“Information”’) appropriate to this Agreement.  To the best of the
Company’s knowledge, the Information will be complete and correct.  Sutter will
be relying on the Information provided by the Company and its accountants,
bankers, and other agents, and Sutter does not assume responsibility for its
accuracy and completeness.  Sutter will not independently verify Information
provided to it.

4.          Sutter agrees to maintain the confidentiality of Information
provided by the Company not already publicly released.  Upon request by the
Company, Sutter will obtain a signed non-disclosure agreement from the Prospects
prior to disclosing information not publicly available.  However, it is
understood and agreed that Sutter shall have the right to discuss matters
pertaining to the Company’s business and Sutter’s assignment with Prospects and
with the Company’s bankers, accountants, attorneys, and other agents.

5.          The Consultant agrees to commence work under this Agreement
beginning upon approval by the Bankruptcy Court.  This Agreement may be
terminated by either the Company or the Consultant upon 30 days written notice
subject to the other terms and conditions of this Agreement.  Any fees or
expenses which the Company is obligated to pay prior to the effective
termination date shall be payable notwithstanding such termination.

6.          Upon approval of the Agreement by the Bankruptcy Court, the Company
agrees to compensate Sutter for its services with a one-time retainer of
$10,000.  The amount of this retainer will be deducted from any earned success
fees due Sutter from closure of a Transaction.  In addition, Sutter shall
receive an hourly fee of $300 plus reimbursement for all reasonable
out-of-pocket expenses, including travel, telephone, express mail, fax, copying,
etc.  Sutter will maintain and review, in the first week of each month, with the
Company an itemized log of time and expenses. Consultant agrees to notify Shaman
and gain written approval in advance of exceeding $12,000 in hourly fees during
any given month. Sutter shall invoice the Company monthly and Company agrees to
make payment within 30 days of receipt of invoice.

7.          In addition to the retainer and hourly fees, for each Transaction
between the Company and a Prospect identified, contacted or introduced by
Sutter, or with whom negotiations were held by Sutter or the Company during the
term of this Agreement and which closes during the term of this Agreement or
within 12 months after its termination, the Company will pay, or cause to be
paid to Sutter, in cash at each initial closing (or subsequent closing or
defined event) a success fee equal to the following percentages of the value of
the Total Consideration received or to be received by the Company, its
shareholders, or its creditors  in the Transaction(s):

5% of the first $1,000,000 of Consideration plus,
4% of the second $1,000,000 of Consideration plus,
3% of the third $1,000,000 of Consideration plus,
2% of the fourth $1,000,000 plus,
1% of all remaining Consideration.

             Total Consideration shall include the fair market value of all cash
and securities received or exchanged for assets and/or securities of a Prospect
(or a new entity formed with a Prospect), all debt assumed, all contingent
payments, all consulting fees in excess of 10% of the Total Consideration
(before inclusion of the contingency fees), and payment for any non-competition
agreements received from a Prospect, its shareholders, or owners as a result of
a Transaction.  Total Consideration does not include compensation from
employment contracts.

8.          Sutter’s services are provided to the Company on an advisory basis
only.  All negotiations and final decisions shall be held and made by the
Company, its officers, directors and/or shareholders subject to the terms and
conditions set forth by the Bankruptcy Court.  Sutter has no independent
authority to make or implement such decisions or conduct negotiations.  Sutter
shall not provide legal or accounting services under this agreement.

9.          The Company agrees that it will indemnify and hold harmless Sutter,
its directors, employees, agents, and controlling persons (each being an
“Indemnified Party”) from and against any and all losses, claims, damages,
liabilities, and expenses, joint or several (including all reasonable fees of
counsel and other expenses incurred by an Indemnified Party in connection with
the preparation for, or defense of, any claim, action or proceeding, whether or
not resulting in any liability brought by the Company), to which such
Indemnified Party may become subject under any applicable federal or state law,
or otherwise, caused by or arising out of (i) any untrue statement or alleged
untrue statement of a material fact contained in the Information or the omission
or the alleged omission to state therein a material fact necessary in order to
make the statements therein not misleading in light of the circumstances under
which they were made; (ii) any Transaction contemplated by this agreement, or
(iii) Sutter’s performing the services contemplated thereunder, except that the
Company will not be liable under clause (iii) hereof to the extent that any
loss, claim damage, liability or expense if found in a final judgement by a
court to have resulted from Sutter’s negligence or bad faith.  If any action,
suit, proceeding or investigation is commenced, as to which Sutter proposes to
demand indemnification, Sutter shall promptly notify the Company, and have the
right to retain its own counsel at Company expense.  The Company shall be liable
for any judgement (subject to (iii) above) or settlement of any claim against
Sutter, and, in the case of settlement, obtain for Sutter an unconditional
release from liability in respect of such claim.

10.        Any dispute arising under the Agreement shall be determined by the
United States Bankruptcy Court, Northern District of California.

11.        This Agreement shall be governed and construed in accordance with the
laws of the State of California.

If the above correctly states our agreement, please sign and return one copy. 
Thank you.

Agreed By: Sincerely,     Shaman Pharmaceuticals, Inc. SUTTER SECURITIES
INCORPORATED         By: /s/ Thomas F. White

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      By: /s/ Fredric Selinger

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  Senior Vice President

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  Fredric Selinger
Senior Managing Director            (Title) Date: March 19, 2001

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      FS:em  

 

 

Schedule A:  Shaman Assets Identified for Sale

Asset 1: The public shell of Shaman Pharmaceuticals, Inc. Asset 2: Shaman’s Net
Operating Losses Asset 3: Any other available assets as determined during the
course of business by Shaman, the Company and communicated in writing to Sutter.