EXHIBIT 10.1
Letter of Engagement
SBS Interactive, Co.
November 19, 2004
The following sets forth the agreement for the engagement of Trilogy Capital
Partners, Inc. ("Trilogy") by SBS Interactive, Co. ("SBSS" or the "Company"):
TERM Six months, commencing as of the date set forth above (the
"Initial Term"), and terminable thereafter upon 30 days'
written notice.
OBJECTIVE Trilogy will assist the Company with the preparation of
press releases that are factual in nature, website design,
responses to communications from stockholders and strategic
business planning, including budget preparation and product
marketing. Trilogy will gather the data necessary to engage
in financial marketing activities as provided in the
"Critical Path Outline and Deliverables" provided to the
Company with this agreement.
Trilogy will also develop, but not launch without permission
from the Company, a proactive marketing program to increase
awareness of the Company's technology to generate a
significant increase in market capitalization. The marketing
program will be structured and implemented by Trilogy to
create extensive financial market and investor awareness for
SBSS to drive long-term shareholder support. The core
drivers of the program will be to create institutional and
retail buying in the Company's stock through a proactive
sales and marketing program emphasizing technology-driven
communications, coupled with 1-to-1 selling and leveraging
SBSS' image to attract additional long term investors and to
create additional opportunities in M&A and Business
Development. As share price is affected by various factors,
Trilogy can give no assurance that the marketing program
will result in an increase in the Company's stock price.
SBSS has advised Trilogy that it will file a registration
statement under the Securities Act of 1933, as amended,
registering the sale of shares of its Common Stock. Trilogy
understands that during any period in which the Company is
in "registration" for a public offering of securities, and
during the distribution of such securities, the Company's
investor relations efforts will be severely limited.
However, it will be the responsibility of the Company (with
the advice of its securities counsel) to determine what
efforts are permissible and non-permissible during such
periods, and Trilogy will follow the direction of the
Company and its securities counsel.
RESPONSIBILITIES Trilogy will assume the responsibilities of an in-house
Investor Relations Officer for SBSS on a full turnkey basis
and provide advice to the Company's management on various
aspects of the Company's business development on an "as
needed" basis. In the capacity of advisor, Trilogy will
provide the Company with database development and
management, the preparation of factual press releases, image
analysis, website overhaul and public relations. Trilogy
will work in conjunction with the Company's management,
securities counsel, investment bankers and auditors and
under supervision of management.
Trilogy will provide the following services:
o Campaign Development and Execution
o Press Announcements: drafting, approval and
distribution
o Messaging: institutional and retail
o Online presentations: drafting and production
responsibilities
o Email messaging: targets: Retail and Institutional/
Other databases
o Media including Interactives and PowerPoints
o Direct Mail: shareholder, media, SBSS relationship
universe
o Capital Conferences
FEES $7,500 per month, with first payment due on execution.
Wiring information is set forth below.
EQUITY Compensation Concurrently herewith SBSS has issued to
Trilogy Warrants to purchase 450,000 shares of its Common
Stock, and SBSS and Trilogy have entered into an escrow
agreement with Richardson and Patel, LLC, in the capacity of
Escrow Agent, pursuant to which SBSS has deposited the
shares issuable upon exercise of the Warrants for delivery
to Trilogy against payment of the exercise price upon
exercise by Trilogy.
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MARKETING BUDGET Once it is able to begin financial marketing activities,
SBSS acknowledges that it will incur certain third party
marketing costs related to the marketing program. Those
costs will be approved in advance, in writing, by SBSS and
in no event be greater than the following:
o Month 1: $20,000
o Month 2: $10,000
o Months 3-6: $5,000 per month
Trilogy may finance some or all of these marketing costs
provided that SBSS executes and delivers a secured
promissory note in form and substance satisfactory to
Trilogy for repayment of such costs, and SBSS and its
subsidiaries grant to Trilogy a security interest in all of
their assets (which security interest may be subordinate to
an existing $100,000 loan to SBSS).
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.
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 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
PROVISIONS The Sections entitled "Indemnification" (including Exhibit
A"), "Corporate Obligations" and "Additional Services" shall
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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 for non-payment or other
material breach by the Company, shall not terminate
Trilogy's right to the monthly fee through the entire
Initial Term (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. Trilogy travel and
entertainment costs directly attributable to this program
will be reimbursed on an actual cost basis upon submission
of reasonable supporting documentation. The Company will
approve airfare within the United States at coach rates.
Trilogy will not incur a single reimbursable expense of $250
or more without the express approval of SBSS.
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:
SBS Interactive, Co. Trilogy Capital Partners, Inc.
By /s/ Todd Gotlieb
Its President By /s/ A.J. Cervantes
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A.J. Cervantes, President
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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
SBS Interactive, Co., (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 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 determine that there exists actual or potential conflicts 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 five days after notice of any such proceeding, fails to assume the
defense thereof, the Indemnified Person shall have the right to undertake the
defense, compromise or settlement 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.