EXHIBIT 10.1
February 19, 2003
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
Brilliant Digital Entertainment
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: ENGAGEMENT LETTER
Dear ▇▇▇▇▇:
The purpose of this letter agreement is to set forth the terms and conditions of
the retention of Scheinrock Advisory Group (SAG) by Brilliant Digital
Entertainment (the Company). This agreement will supercede, in all aspects, the
agreement dated December 20, 2002 between SAG and the Company. SAG appreciates
this opportunity to render services to the Company and requests that, as
confirmation of the Company's approval and acceptance of the terms and
conditions set forth herein, the Company sign and return the enclosed copy of
this letter agreement.
1. SAG will render advisory services to the Company in connection with new
business development and negotiating strategic partner and investor
agreements. Services rendered by SAG on behalf of the Company will be
performed in such a manner, at such times, and at such places as
determined by SAG to be necessary or appropriate thereto. SAG will
provide a maximum of two (2) days of services per month, additional
services, if requested, will be at a daily rate of two thousand five
hundred dollars ($2,500) per day. The Company acknowledges that SAG
will be rendering services to multiple clients at any one time and that
SAG's services will not be exclusive as to the Company. The initial
term of this Agreement shall three (3) months, and shall commence
February 21, 2003. After the initial term, this agreement will renew on
a month-to-month basis at a fee structure to be determined at that time
and can be cancelled by either party pursuant to paragraph 9.
2. In connection with SAG's activities on the Company's behalf, the
Company will cooperate with SAG and will furnish SAG with relevant
information and data concerning the Company and other parties (the
"Information") that is necessary to effectuate the requirements of this
agreement and will provide SAG with reasonable access to the Company's
personnel and professional advisers. The Company represents that, to
the best of its knowledge, all Information made available to SAG will
be complete and correct in all material respects. The Company
understands that, in rendering its services hereunder, SAG will be
relying on the Information without independent verification thereof by
SAG. SAG does not assume
responsibility for the accuracy or completeness of the Information or
any other information regarding the Company that is supplied to SAG by
the Company.
3. In consideration for SAG's services hereunder, the Company agrees to
pay SAG a monthly retainer fee (the "Retainer Fee") in the sum of Six
Thousand Dollars ($6,000.00) per month on the 21st day of each month
commencing February 21, 2003. With respect to any revenue generating
activity, in connection with which SAG has provided services to the
Company hereunder, the Company shall pay or cause to be paid to SAG a
commission equal to 15% of Net Receipts (the "Commission"). For the
purposes of this Agreement, "Net Receipts" means the fair market value
of all consideration (whether in the form of cash, advances,
securities, benefits, lines of credit, debt, other property or
otherwise) actually received by the Company and its subsidiaries or
equity holders, and not refundable pursuant to any written agreement
with a third party, at any time from and after the date hereof
(including after expiration of the term) to the extent received
pursuant to a written or oral agreement entered into during the Term,
with any deferred or contingent consideration calculated and paid when
received by the Company or such other parties.
4. In addition to the consideration provided above, SAG shall receive from
the Company warrants (the "Warrants") to purchase an aggregate total of
three hundred fifty thousand (350,000.00) shares of the capital stock
(the "Stock") of the Company at an exercise price per share as of the
close of business February 18th, 2003. The warrants shall be
exercisable by SAG for a period of five (5) years from and after the
date of execution of this agreement and shall vest upon execution of
the Agreement.
5. If and to the extent that the total number of issued and outstanding
shares of Stock shall be increased or reduced by a change in par value,
split, reverse split, re-classification, distribution of a dividend
payable in stock, or the like, the number of warrants and/or Stock
subject to this Agreement and the purchase price therefore shall be
proportionately adjusted.
6. In addition to the compensation described in paragraph 3 above, the
Company agrees promptly to reimburse SAG, upon request from time to
time, for all direct and verifiable out-of-pocket expenses incurred by
SAG in connection with this agreement and the matters contemplated
hereby (including, but not limited to, duplicating charges, postage and
delivery costs, telecopying and long-distance telephone charges,
computer charges, and all approved travel, lodging, and meal expenses).
It is agreed that any single expense item over $300 must be
pre-approved by the Company. Without limiting the generality of the
foregoing, the Company specifically agrees that SAG may retain counsel,
and other consultants or advisors, to assist it in connection herewith,
and that the Company will reimburse SAG hereunder for the reasonable
fees and disbursements of such counsel, consultants, and advisors
provided that prior approval has been obtained in writing from the
Company.
7. The Company agrees to indemnify and hold harmless SAG, the members and
managers of SAG, and their agents, attorneys, employees, and affiliates
from and against all claims, actions, or demands that arise out of this
letter agreement and the services provided hereunder or in connection
herewith and any expenses (including reasonable attorneys' fees),
liabilities, losses, or
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damages resulting from such claims, actions, and demands, including
without limitation amounts paid in settlement or compromise thereof;
provided, however, that this indemnity will not extend to conduct of
such an indemnified party which is finally determined by a judgment of
a court of competent jurisdiction not to have been undertaken in good
faith and in a manner reasonably believed to be in or not opposed to
the best interests of the Company.
8. The obligations of SAG and the Company are solely entity-level
obligations, and no officer, director, manager, employee, agent,
shareholder, member, or controlling person will be subjected to any
personal liability whatsoever to any person or entity, nor will any
such claim be asserted by or on behalf of any other party to this
letter agreement or any person or entity relying on the services
provided hereunder.
9. Either party hereto may terminate this letter agreement at any time
upon thirty (30) days written notice, without liability or continuing
obligation, except as set forth in the following sentence. Neither
termination of this letter agreement nor completion of the assignment
contemplated hereby will affect: (i) any compensation or fee earned by
SAG up to the date of termination or completion, as the case may be,
(ii) the reimbursement of expenses incurred by SAG up to the date of
termination or completion, as the case may be, or (iii) the provisions
of paragraphs 3 through 13, inclusive, of this letter agreement, all of
which will remain operative and in full force and effect.
10. Any advice rendered by SAG pursuant to this letter agreement may not be
disclosed publicly without SAG's prior written consent. ▇▇▇ agrees to
sign the Company's standard Confidentiality and Non Disclosure
Agreement.
11. The validity and interpretation of this letter agreement will be
governed by the laws of the State of California applicable to
agreements made and to be fully performed therein.
12. SAG is and shall be deemed to be an independent contractor of the
Company and nothing contained herein shall be deemed to constitute a
partnership or joint venture by the parties hereto, or constitute
either party the employee or agent of the other.
13. This agreement may not be assigned by either party without the other
party's prior written consent. Nothing in this letter agreement,
expressed or implied, is intended to confer or does confer on any
person or entity other than the parties hereto and their respective
successors and permitted assigns and, to the extent expressly set forth
herein, the indemnified parties and their successors and permitted
assigns, any rights or remedies under or by reason of this letter
agreement or as a result of the services to be rendered by SAG
hereunder. The obligations and liabilities assumed in this letter
agreement by the parties hereto will be binding upon their respective
successors and permitted assigns.
14. This agreement incorporates the entire understanding of the parties and
supersedes all previous agreements or understandings, whether written
or oral, and may be modified or amended only by an express writing
executed by all parties hereto.
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15. The invalidity or unenforceability of any provision of this letter
agreement will not affect the validity or enforceability of any other
provision of this letter agreement, which will remain in full force and
effect pursuant to the terms hereof.
16. For the convenience of the parties hereto, any number of counterparts of
this letter agreement may be executed by the parties hereto. Each such
counterpart will be, and will be deemed to be, an original instrument, but
all such counterparts taken together will constitute one and the same
letter agreement.
SAG trusts that the foregoing terms and conditions are agreeable to the Company
and requests that the Company sign the enclosed copy of this letter agreement
and return it to SAG.
Sincerely,
SCHEINROCK ADVISORY GROUP
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, CEO
The foregoing has been approved and accepted, and the undersigned agrees to
retain ▇▇▇▇▇▇▇▇▇▇ Advisory Group upon the foregoing terms and conditions.
Dated: _____________________
Brilliant Digital Entertainment
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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