Exhibit 10.1
[Letterhead]
Via e-mail
May 9, 2005
Pacificap Entertainment Holdings, Inc.
Gentlemen,
Per discussions with Pacificap Entertainment Holdings, Inc. ("Pacificap")
principals today, Brenda will consider and agree to modification of the
Agreement as follows, all items constituted as a package:
Please note that until this Proposal is approved in writing by all parties, the
proposal remains reserved as presented for settlement purposes only under the
restrictions set forth in my e-mail message of April 4, 2005 at 4:19 PM, which
are incorporated herein by reference thereto.
1. Anti-dilution. Brenda will give up her anti-dilution rights so long as
all of the terms and conditions of the Proposal and continuing terms
of the Agreement are adhered to by Pacificap.
2. Full Issuance. Pacificap shall promptly issue to Brenda an aggregate
of 10 million shares of Pacificap Common Stock, crediting all
previously issued stock in regard to such aggregate issuance amount.
Brenda will agree to put and call provisions to be attached to such
stock on mutually acceptable terms to be negotiated under separate
agreement.
3. Funding and Disbursements.
a. Tranche A: $210,000 plus $25,000 for coverage of legal fees will
be disbursed to the Battleship Bank Account on the NIR-Pacificap
SB-2 funding date (not later than five business days following
Pacificap filing of the SB-2);
b. Subsequent Financing: All gross revenues generated and/or
attributable to Battleship after the Tranche A will be utilized
by Battleship to self-finance all production and business model
revenue generation of Battleship, provided, however, upon
Battleship receipt of the first $250,000 in revenues, Battleship
shall promptly repay $25,000 to Pacificap in reimbursement of
legal fees;
c. All disbursements are to be made by wire directly to the
Battleship Bank Account: Bank of America, 67 Technology Drive,
Irvine, CA, Tel: 949-837-3482, Account Name: Battleship VFX,
Inc., Account # 25198 00411, Routing# 122000661.
4. Employment Agreement. The employer will be special purpose Pacificap
subsidiary holding the Battleship assets. The minimum term will be
five (5) years with automatic three (3) year renewal term periods
thereafter. Bonuses will be paid by reference to net profits of
Battleship without any offsets, charges or reduction in regard to
Pacificap accounting or administration. If the subsidiary elects not
to renew the Employment Contract, a termination payment will be
payable to Brenda in amount equal to three times the aggregate of all
salary and bonus payments paid or payable during the most recent term.
Pacificap will continue to retain its right to terminate Brenda for
"Cause" as defined in the Agreement.
5. Buy-Back Right. Brenda shall have a call right exercisable at any time
for any reason, to buy-back all of the Battleship assets (as defined
in the Agreement, together with all improvements, enhancements,
accounts, deposits, production allocations, revenue rights, and all
ancillary and derivative rights thereof, collectively, the "Assets")
from the subsidiary of Pacificap holding such Battleship assets, at a
buy-back price equal to the Pacificap cash payments made to the
Battleship VFX bank account (the "Buy Back Price") without giving
effect to any portion of such purchase price which may have been paid
to Brenda (i) in the stock of Pacificap; and (ii) any portion of which
was allocated to Brenda as employment compensation. If Brenda has been
terminated for "Cause" as defined in the Agreement the Buy-Back Right
will also terminate.
6. Liquidated Damages. If at any time Pacificap breaches the Agreement or
this Amendment or Pacificap does not perform in accordance with any
aspect of the Agreement and the Amendment reflecting the terms and
conditions of this Proposal, or if Brenda is involuntarily terminated
from employment by Pacificap at any time for any reason other than
"Cause", then any such event shall trigger a liquidated damages
payment to Brenda equal to the Buy Back Price which will
simultaneously be applied to the Buy-Back Right and all such Assets
will simultaneously deemed to be assigned to such corporate entity as
designated by Brenda as to which Brenda is duly authorized to take and
any and all further actions necessary to execute the same, and to the
extent any such Assets are not transferable pursuant to actions which
may be taken directly by Brenda, Pacificap shall thereafter promptly
but no later than ten (10) business days after any request from Brenda
take any and all actions necessary to accomplish the same.
7. Earn Out. Pacificap earn-out fees to be issued to Brenda, as provided
in the Agreement, when and if granted, will be disbursed within three
(3) business days of the respective confirmation date of revenues
underlying such earn-out rights. No stock of Pacificap will be issued
in respect of attainment of earn-out benchmarks.
8. Legal Fees. Pacificap will promptly pay all legal fees, costs,
expenses and disbursements of legal counsel to Brenda (i) incurred to
date in connection with this proposal and through closing of the
Amendment, (ii) thereafter in regard to monitoring and enforcement of
performance of all terms and conditions of the Agreement and the
Amendment, and (iii) all general legal advice pertaining to Pacificap
and/or Battleship.
9. Board Matters. Brenda will not serve on the Board of Directors of
Pacificap. The Board of Directors of Pacificap will in writing, prior
to execution of this Amendment, approve all aspects of this Proposal
and the current business plan for Battleship and the Battleship
cross-license agreement with Eden X Entertainment, each attached
hereto as Exhibit A.
10. All other Terms. All other terms and conditions of the Agreement will
remain in full force and effect, except to the extent modified by the
Amendment.