Prepared by MerrillDirect





	[letterhead graphic]	EXHIBIT 10.61



 


EXCLUSIVE AGREEMENT TO CONDUCT
A SEALED-BID AUCTION


 


This Exclusive Agreement to Conduct a
Sealed-Bid Auction (“Agreement”) is made as of March 1, 2001


             BETWEEN:


Shaman
Pharmaceuticals, as debtor-in-possession

213 East Grand Avenue

South San Francisco, California 94080

Attention:        Ms. Lisa Conte

Telephone:      (650) 266-7466

Fax:                   (650) 873-8367



             (“Seller”),



             AND


DoveBid,
Inc.

1241 East Hillsdale Boulevard

Foster City, California 94404

Attention:        Kirk Dove

Telephone:      (650) 571-7400

Fax:                   (650) 572-1502



             (“Auctioneer”).



             WHEREAS,
on January 5, 2001, Seller filed a petition for relief under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the Northern District
of California  (the “Court”); and


             WHEREAS,
Seller wishes to sell certain assets by sealed-bid auction, and Auctioneer has
agreed to conduct that auction on the terms and conditions set forth below;


             NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are mutually acknowledged, Auctioneer and Seller agree as follows:


             1.                       REPRESENTATION: 
 Seller agrees to retain Auctioneer on an
exclusive basis to conduct a sealed-bid auction (the “Auction”) of the
intellectual property (the “Assets”) set forth on Exhibit A to this
Agreement.  Auctioneer’s engagement
pursuant to this Agreement, and all of its obligations hereunder, are subject
to and contingent upon the Court’s approval of this Agreement.


             2.                       
CONDUCT OF THE AUCTION:  (a)  Auctioneer
and Seller will cooperate to establish a mutually agreeable deadline for bid
submission.  Auctioneer may, in its
discretion, choose to: (i) offer the Assets for sale by the piece or by the
lot, and/or (ii) promote the Auction over the Internet at www.dovebid.com
(the “Website”).  Seller agrees that
Auctioneer may use the Seller's name, street address and logo in the
advertising of this Auction, as well as on the Website.


             (b)                      All Assets in the Auction
shall be sold to the highest bidder (subject only to Seller’s minimum bid
requirements placed on any individual Asset, if any, and to the purchaser’s
timely payment in full and removal of purchased Assets).  Auctioneer, however, does not guarantee that
any sale will be completed, and Auctioneer is not responsible in the event that
a purchaser fails to live up to its agreement and complete a purchase.





             (c)                      Auctioneer assumes no
obligation, and makes no representations or warranties, with respect to the
requirements necessary to effect the transfer of Assets.  It shall be the Seller’s sole obligation to
prepare all necessary documents and take all necessary steps to transfer title
to the Assets.


             3.                       DISCLAIMERS OF
WARRANTIES:  Auctioneer shall state both in its
advertising for the Auction and at the Auction that all Assets are being sold “as
is, where is and with all faults” and with any additional disclaimers of
warranty, including disclaimers of the warranties of merchantability and
fitness for a particular purpose. 
Seller agrees to defend (by counsel satisfactory to Auctioneer) and indemnify
Auctioneer and hold Auctioneer harmless from and against any claim or liability
asserted against Auctioneer by any third party (including any purchaser of any
Assets at the Auction) based on the alleged existence or breach of any alleged
warranties (including alleged warranties of merchantability or fitness for a
particular purpose), or from or against any fees or expenses (including
attorney’s fees) incurred by Auctioneer in defending against any such claim or
liability.  Seller acknowledges and agrees
that Auctioneer has no knowledge with respect to, and has no obligation to
investigate, the merchantability or fitness for any particular use of any
Asset.


             4.                       
COMMISSION:  Auctioneer shall receive a commission equal
to a percentage of the gross proceeds of sale after expenses are deducted (the
“Commission”) according to the following schedule:


(i)          Auctioneer shall receive 10% of the
first $2,000,000 of gross proceeds after expenses are deducted, or any portion
thereof.



(ii)         In the event that gross proceeds after
expenses are deducted exceed $2,000,000, Auctioneer shall receive 7.5% of the
first $1,000,000 of such excess, or any portion thereof.



(iii)        Auctioneer shall receive 5% of all gross
proceeds after expenses are deducted in excess of $3,000,000.



For purposes of this Agreement, “gross
proceeds” means all revenue from the sale of Assets pursuant to this Agreement,
excluding any sales taxes collected by Auctioneer.


             5.                       
AUCTION EXPENSES:  (a)    Seller
shall provide Auctioneer an allowance toward certain Auction advertising
expenses, which may include digital photography of the Assets, print and
electronic media production, creative services, ad placement fees, brochure and
catalog production, telemarketing, data list purchases, fax and email advertising
and postage incurred in connection with the Auction. Seller also agrees to
reimburse Auctioneer for miscellaneous expenses related to the Auction,
including accounting, insurance, permits and UCC searches/lien releases.  Auctioneer’s total reimbursable expenses
shall not exceed $20,000.  Seller
acknowledges and agrees that all of the above amounts (collectively referred to
as the “Auction Allowance”) shall in all events be deducted from the gross
proceeds and paid to Auctioneer following the Auction.  Seller’s responsibility for reimbursing
Auctioneer for the Auction Allowance is not contingent on the consummation of
the sale of any or all of the Assets.


             (b)                      Seller authorizes
Auctioneer, and grants to Auctioneer a power of attorney coupled with an
interest, to incur expenses on its behalf and to recoup such expenses from the
gross proceeds to the extent that such expenses are reasonably necessary for
the conduct of the Auction and arise from Seller’s breach of its
representations, warranties or covenants contained in this Agreement.


             6.                       
PRE-AUCTION ASSET TRANSACTIONS:  Seller may not withdraw, sell or otherwise
dispose of any of the Assets except at the Auction without the written consent
of Auctioneer.


             7.                       COLLECTION AND
DISBURSEMENT OF AUCTION
PROCEEDS:  (a)     Auctioneer shall collect from the
purchasers of the Assets the gross proceeds, any applicable sales taxes and
deposit such funds into a bank depository account maintained by the
Auctioneer.  All applicable sales taxes
collected by Auctioneer shall be paid to the appropriate taxing authorities out
of the account.  Thereafter, Seller
shall be issued a check from the account (a “Settlement Check”) within 15
business days after the auction check-out period (which shall be deemed to end
when all sold Assets have been removed by each purchaser and all payments from
purchasers have been received by Auctioneer, notwithstanding any check-out
instructions that Auctioneer may communicate to the public), and after
Auctioneer has been paid from the account its reimbursable expenses pursuant to
Section 5 and amounts allocable to Commission, subject to open items or
uncollected accounts, if any; provided however, that Seller shall receive a
Settlement Check for the remaining balance no later than 30 calendar days after
the Auction, subject to open items or uncollected accounts, if any.





             (b)                      No later than 30 calendar
days after the Auction, Auctioneer shall also issue to Seller, Seller’s
counsel, the U.S. Trustee and the Court a settlement report (the “Settlement
Report”) itemizing, specifically, a record of sales of the Assets and the
allocation of the funds generated by such sales.  The Settlement Report shall be deemed to comply with Federal Rule
of Bankruptcy Procedure 6004(f)(1).


             (c)                      Seller shall have sole
responsibility for obtaining all court approvals necessary in connection with
the settlement of Seller’s auction account.


             (d)                      Notwithstanding the
provisions of Section 726(b) of the Bankruptcy Code, in all instances where the
Court and the terms of this Agreement permit Auctioneer to retain proceeds
received from sales of the Assets (as compensation for Auction services, as
reimbursement for expenses incurred in connection with the Auction or
otherwise), Auctioneer shall have the right to retain such proceeds without
obtaining the approval of Seller or any other party unless explicitly
instructed by the Court.  Moreover,
Auctioneer’s right to retain such proceeds shall survive the conversion of
Seller’s bankruptcy proceeding into a proceeding under a different chapter of
the federal bankruptcy code.


             8.                       
RIGHT OF SURRENDER:  In the event that some Assets
remain unsold at the conclusion of the Auction, or a purchaser fails to perform
its obligation to pay the purchase price of an Asset, Auctioneer shall have the
right to surrender, and shall have no further obligations with respect to such
Assets.


             9.                       USE OF PREMISES: 
 (a)         For the purposes of this Agreement, the “Premises” shall
mean any location where any information or documentation concerning the Assets
is stored.  Seller authorizes Auctioneer
and its representatives to enter upon and use the Premises for such purposes as
are reasonable and necessary to conduct the Auctions.  Seller agrees that Auctioneer shall not be charged a fee for the
use of the Premises.  Seller further
agrees that it shall furnish utilities to the Premises, at Seller’s sole
expense.


             (b)                      Seller acknowledges and
agrees that Auctioneer has no interest of any kind or nature in the Premises,
and that Auctioneer has no knowledge as to any previous use or occupancy of the
Premises.  Seller acknowledges and
agrees that Auctioneer shall not be responsible for damage or injury to the
Premises resulting from or arising in connection with the sale of the Assets,
except to the extent that such damage or injury is caused by Auctioneer’s gross
negligence.


             10.                     REPRESENTATIONS AND
WARRANTIES:  Seller represents and warrants to
Auctioneer as follows:


             (a)                      Seller is authorized to
execute and perform this Agreement, and this Agreement constitutes a valid and
legally binding obligation of Seller, enforceable in accordance with its terms.


             (b)                      Seller now holds (and, up
to the moment of the Auction or other sale provided for under this Agreement,
will hold) good and marketable title to all Assets free and clear of any lien,
security interest, leasehold interest, co-ownership interest or any other type
of encumbrance or interest.


             (c)                      None of the Assets
infringes or violates (or contains any parts or components which infringe or
violate) any third party’s copyright, patent, trademark, trade secret or other
proprietary rights.


             (d)                      No sale of the Assets will
constitute a bulk sale subject to the Bulk Transfer Article of the Uniform
Commercial Code for any state in which any of the Assets are located (the “Bulk
Transfer Article”).





             (e)                      No Hazardous Substances
are contained in or made a part of the Assets. 
For purposes of this Agreement, the term “Hazardous Substances” shall
mean, either individually or collectively, any chemical, solid, liquid, gas, or
other substance having the characteristics identified in, listed under, or
designated pursuant to (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA) as amended, 42 USCA Section
9601(4), as a “hazardous substance,” (ii) the Resource, Conservation and
Recovery Act, 42 USCA Sections 6903(5) and 6921, as a “hazardous waste,” or
(iii) any other laws, statutes, or regulations of a government or political
subdivision or agency thereof, as presenting an imminent and substantial danger
to the public health or welfare or to the environment, or as otherwise
requiring special handling, collection, storage, treatment, disposal, or
transportation.  Seller agrees that
nothing in this Agreement shall be construed to require Auctioneer to remove
any Hazardous Substances that are present on the Premises or are contained in
or a part of the Assets.


             Seller
acknowledges and agrees that Auctioneer is relying on the foregoing
representations and warranties in proceeding to conduct the Auction and/or
sales provided for under this Agreement. 
Seller agrees to defend (by counsel satisfactory to Auctioneer) and
indemnify Auctioneer and hold Auctioneer harmless from and against any claim,
demand, cause of action, liability or expense (including attorneys’ fees)
asserted against or incurred by Auctioneer in connection with Seller’s breach
of any of its representations, warranties or obligations in this
Agreement.  If any action at law or in
equity is brought to enforce the terms of this Agreement, the prevailing party
shall be entitled to recover its reasonable attorneys’ fees and costs from the
other party.


             Seller
further acknowledges and agrees that Auctioneer shall rely entirely on
information provided by Seller concerning ownership of and title to the Assets,
and that Auctioneer has no responsibility to conduct any independent
investigation in respect thereof.


             11.                     LIMITATION OF LIABILITY:
 
Auctioneer’s maximum liability for the breach of any obligation in
connection with this Agreement or the Auction, and for any and all damages of
any type or nature (whether in contract, tort or otherwise) sustained or
claimed by Seller or any other person or entity in connection with this
Agreement or the Auction, shall be limited to the amounts actually received by
Auctioneer as compensation under this Agreement.


             12.                     TECHNOLOGY DISCLAIMER: 
AUCTIONEER DOES NOT WARRANT THAT THE
FUNCTIONS, FEATURES OR CONTENT CONTAINED IN THE WEBSITE, INCLUDING ANY
THIRD-PARTY SOFTWARE, PRODUCTS OR OTHER MATERIALS USED IN CONNECTION WITH THE
WEBSITE, WILL BE TIMELY, SECURE, UNINTERRUPTED OR ERROR-FREE, OR THAT DEFECTS
WILL BE CORRECTED.


             13.                     INDEPENDENT PARTIES: 
This Agreement shall not be construed (i) to
create a partnership or joint venture between Seller and Auctioneer, or (ii) to
imply that Auctioneer is buying the assets of, or any interest in, Seller.


             14.                     COUNTERPARTS; FACSIMILE
SIGNATURES:  This Agreement may be executed in
any number of counterparts, each of which, when executed, will be deemed to be
an original and all of which, when taken together, will be deemed to be but one
and the same instrument.  Delivering
signatures via facsimile shall be an acceptable means of executing this
Agreement, and signatures so delivered shall be fully binding on the signing
party.


             15.                     GOVERNING LAW; J
URISDICTION:  This Agreement shall be governed
by, and construed and enforced in accordance with, the substantive laws of the
State of California as applied to agreements made in California, without regard
to choice of law principles.  Each party
consents to jurisdiction and service of process within California for any
action or proceeding arising under this Agreement, and any such action will lie
within the exclusive jurisdiction of the Court, which shall hear any such
action upon motion and as a core matter without a jury.


             16.                     
SEVERABILITY:  The provisions of this Agreement shall be
severable.  Should any part, term or
provision of this Agreement be construed by any court of competent jurisdiction
to be illegal, invalid or unenforceable for any reason, the legality, validity
and enforceability of the remaining parts, terms and provisions shall not be
affected thereby.





             17.                     COMPLETE
AGREEMENT:  This agreement constitutes the
entire understanding between the parties and replaces any and all prior
agreements related to the Auction.  This
Agreement may not be modified or amended except in writing signed by both
parties.


	DoveBid,
  Inc.	Shaman
  Pharmaceuticals, as debtor-in-possession
	(“Auctioneer”)	(“Seller”)
	California
  Bond Number 57BSBAI7624	 
	 	 
	By:   Kirk Dove	By:   Thomas F. White
	 	 
	Title:
  President of Auction Services	Title:
  SVP Commercial Strategy






 


EXHIBIT
A


ASSETS