Exhibit 10.1

AGREEMENT

     This Agreement (the “Agreement”) is entered into this 13th day of July,
2005, by and between RedEnvelope, Inc., a Delaware corporation (“RedEnvelope” or
the “Company”), on the one hand, and Scott Galloway, on behalf of himself, R.
Ian Chaplin, Martin McClanan, Michael L. Meyer, Firebrand Partners, LLC, a
Delaware limited liability company, Glenn J. Krevlin, Krevlin Advisors, LLC, a
Delaware limited liability company, GJK Capital Management, LLC, a Delaware
limited liability company, Glenhill Capital LP, a Delaware limited partnership,
Glenhill Capital Overseas GP, Ltd., a Cayman Islands exempted company and
Glenhill Capital Overseas Master Fund, L.P., a Cayman Islands exempted limited
partnership (collectively, the “Galloway/Krevlin Group”), on the other hand.

RECITALS

     A. On May 12, 2005, Scott Galloway filed, on behalf of himself, R. Ian
Chaplin, Martin McClanan and Michael L. Meyer (the “Galloway Group”) Amendment
No. 3 to the Schedule 13D initially filed by and on behalf of the Galloway Group
on June 30, 2004 (the “Schedule 13D”), indicating that the Galloway Group may
consider, among other alternatives, soliciting authority from RedEnvelope
stockholders to elect an alternative slate of nominees for election as
RedEnvelope directors at RedEnvelope’s upcoming 2005 annual meeting of
stockholders (the “2005 Stockholder Meeting”).

     B. In a letter dated May 27, 2005, Mr. Galloway provided notice to
RedEnvelope, pursuant to Section 2.5 of the RedEnvelope Bylaws, to nominate
himself, Robert M. Perkowitz, John Pound and Gregory Shove (the “Galloway
Candidates”) for election as RedEnvelope directors at the 2005 Stockholder
Meeting.

     C. On May 31, 2005, Mr. Galloway filed, on behalf of the Galloway/Krevlin
Group, Amendment No. 4 to the Schedule 13D, which included additional members to
the group on whose behalf the Schedule 13D was filed and which stated that
Mr. Galloway had expressed to the RedEnvelope Board of Directors (the “Board”)
his hope that the RedEnvelope nominating committee would review and select the
Galloway Candidates as Board nominees to be presented to the RedEnvelope
stockholders. Amendment No. 4 to the Schedule 13D then stated the
Galloway/Krevlin Group’s intention to consider a number of alternatives in the
event that it is unsuccessful in convincing the RedEnvelope nominating committee
or Board to accept the Galloway Candidates or effect other governance changes,
including soliciting authority from the RedEnvelope stockholders to elect the
Galloway Candidates to the RedEnvelope Board at the 2005 Stockholder Meeting.

     D. On June 14, 2005 and June 17, 2005, the Galloway/Krevlin Group filed
Amendments No. 5 and No. 6, respectively, to the Schedule 13D.

 

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     E. In a letter dated July 5, 2005, Mr. Galloway made written demand
pursuant to Section 220 of the Delaware General Corporation Law to inspect
certain records and lists of RedEnvelope stockholders and certain other
documents (the “Demand Letter”).

     F. Following a rigorous review process that involved careful consideration
and evaluation of, and interviews with, numerous prospective director candidates
over the course of the past year, the RedEnvelope nominating committee has
identified three new director candidates, willing and able to serve on the
Board, that the Board (including its nominating committee) deems to be qualified
and suitable to serve on the Board, including one candidate who initially was
recommended to the Board’s nominating committee by the Galloway/Krevlin Group
(and who is one of the Galloway Candidates) and two other candidates acceptable
to the Galloway/Krevlin Group, and that the Board will present to the
RedEnvelope stockholders such three candidates as nominees for election to the
Board at the 2005 Stockholder Meeting.

     G. The parties desire to set forth certain covenants and agreements
relating to the matters set forth above, and to resolve amicably their current
disputes regarding the individuals to be presented to the RedEnvelope
stockholders as nominees for election to the Board without the burden,
distraction or expense of a proxy contest.

     NOW, THEREFORE, in consideration for the covenants and other agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

AGREEMENT

     1. Covenants of RedEnvelope. RedEnvelope covenants and agrees that, in
reliance on the covenants and agreements of Scott Galloway and the
Galloway/Krevlin Group set forth in Section 2 below:

     (a) the Board (including its nominating committee) will nominate, present
and recommend for election to the RedEnvelope stockholders at the 2005
Stockholder Meeting a slate of up to nine (9) director candidates that includes
Greggory Hammond, Brett Hendrickson and John Pound (these three persons herein
referred to as the “New Candidates”), subject to any decision one or more of
such individuals may make not to stand for election (although RedEnvelope
currently is not aware of any such decision not to so stand);

     (b) its Board will appoint at least one of the New Candidates, if elected,
to serve on its Nominating/Corporate Governance Committee, which committee has
expanded its charter to include corporate governance functions and that such
committee is charged with, among other things, the responsibility to, at least
annually, review the performance of the Company’s Chief Executive Officer; and

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     (c) on or before July 15, 2005, it will issue or cause to be issued a press
release announcing the slate of directors, including the New Candidates, that
the Board intends to present to the RedEnvelope stockholders for election at the
2005 Stockholder Meeting. RedEnvelope shall give the Galloway/Krevlin Group a
reasonable opportunity to review and comment on this press release before its
issuance.

     2. Covenants of Scott Galloway and the Galloway/Krevlin Group. Scott
Galloway, on behalf of himself and the other members of the Galloway/Krevlin
Group, covenants and agrees that, in reliance on the covenants and agreements of
RedEnvelope set forth in Section 1 above:

     (a) they will not solicit authority, directly or indirectly, from any
RedEnvelope stockholder to elect or vote for any candidate or candidates for
election to the Board at the 2005 Stockholder Meeting other than the candidates
nominated by the Board and its nominating committee (the “Board Nominees”) or
otherwise present for consideration to any RedEnvelope stockholder in connection
with the 2005 Stockholder Meeting any candidates other than the Board Nominees,
nor will they engage in any campaign or efforts to have votes withheld from or
otherwise discredit any of the Board Nominees in connection with the 2005
Stockholder Meeting or cause any other party to do, or assist any other party in
doing, any of the foregoing;

     (b) on or before July 13, 2005, they will amend or cause to be amended the
Schedule 13D to indicate that they no longer intend to solicit authority to
elect candidates to the Board at the 2005 Stockholder Meeting in light of
reaching an agreement with the Company to nominate three mutually acceptable
candidates (who shall not be named in such amendment) for election to the
Company’s Board at such meeting, one of whom will be appointed to sit on the
Company’s Nominating/Corporate Governance Committee, which is charged with,
among other things, at least annually reviewing the performance of the Company’s
Chief Executive Officer. (The Galloway/Krevlin Group shall give RedEnvelope a
reasonable opportunity to review and comment on this amendment before it is
filed.); and

     (c) immediately following the Company’s public announcement of the New
Candidates in accordance with this Agreement, Galloway shall rescind notice of
his intention to nominate the Galloway Candidates at the 2005 Stockholder
Meeting and agree that the Galloway/Krevlin Group will not propose or seek to
propose any director candidates or any other matters to come before the
stockholders at the 2005 Stockholder Meeting. For purposes of clarity, the
demand to inspect certain records and lists of RedEnvelope stockholders and
certain other documents as set forth in the Demand Letter is hereby rescinded.

     3. No Assurances. No party to this Agreement provides any quarantees or
assurances that each of the Board Nominees will be elected by the stockholders,
will

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agree to serve, or will actually serve, a full term if elected and no party
makes any representation or warranty as to the fitness of any Board Nominee to
serve on the Board.

     4. General.

          (a) RedEnvelope represents that the individual set forth below as
signatory to this Agreement for RedEnvelope has the authority to execute this
Agreement on behalf of RedEnvelope and to bind RedEnvelope to the terms hereof.
Scott Galloway represents that the he has the authority to execute the Agreement
on behalf of himself and the other members of the Galloway/Krevlin Group to bind
each of them to the terms hereof.

          (b) This Agreement shall be governed by the laws of the State of
Delaware, without regard to the conflicts of law provisions thereof.

          (c) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one instrument.

          (d) The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
Parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

          (e) If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision(s) in good faith so as to become enforceable while hewing as closely
as possible to the original intent. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision(s), then
(i) such provision shall be excluded from this Agreement, (ii) the balance of
this Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of this Agreement shall remain enforceable in accordance with
its terms.

          (f) Each party acknowledges that its breach of this Agreement would
cause irreparable injury to the other for which monetary damages would not be an
adequate remedy. Accordingly, a party will be entitled to injunctions and other
equitable remedies in the event of such a breach by the other Party (or any of
its members).

          (g) This Agreement constitutes the entire agreement between the
parties hereto pertaining to the subject matter hereof, and any and all other
written or oral agreements existing between the parties with respect to the
subject matter hereof are expressly canceled.

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     In Witness Whereof, the Parties have caused this Agreement to be executed
and delivered by themselves or their duly authorized officer or attorney-in-fact
as of the date first set forth above.

         
 
  REDENVELOPE, INC.    
 
       
 
  /s/ Alison L. May    
 
       
 
       
 
  Print Name: Alison L. May    
 
       
 
  Title: President and CEO    
 
       
 
  SCOTT GALLOWAY on behalf of himself and the other members of the
Galloway/Krevlin Group    
 
       
 
  /s/ Scott Galloway    
 
       
 
  Scott Galloway    
 
       
 
  Firebrand Partners, LLC    
 
       
 
  /s/ Scott Galloway    
 
       
 
  Scott Galloway, Manager    

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