Exhibit
10.1


 





 


Letter
of Engagement


Sub-Urban
Brands, Inc.


May 16,
2006


 


The following sets forth the agreement for the engagement of Trilogy
Capital Partners, Inc. (“Trilogy”)
by Sub-Urban Brands, Inc. (“SUUB”
or the “Company”):


 


	
  Term and Termination

  	
   

  	
  Twelve months,
  commencing as of the date set forth above (the “Initial Term”), and terminable thereafter by either party
  upon 30 days’ prior written notice.

  
	
   

  	
   

  	
   

  
	
  Objective

  	
   

  	
  The development and implementation of a
  proactive marketing program designed to increase the investor awareness of
  SUUB in the investment community and generate a significant increase in
  liquidity and market capitalization.

  
	
   

  	
   

  	
   

  
	
  The Program

  	
   

  	
  Trilogy will structure and implement a
  marketing program designed to create extensive financial market and investor
  awareness for SUUB to drive long-term shareholder support.  The core drivers of the program will be to
  inform potential institutional and retail investors of SUUB’s business and
  stimulate interest in investment in the Company’s stock through a proactive
  sales and marketing program emphasizing technology-driven communications and
  leveraging SUUB’s 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 SUUB’s stock price.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trilogy understands that during any period
  in which the Company is in “registration” for a public offering of securities
  under the Securities Act of 1933, and during the distribution of such
  securities, the Company’s investor relations and marketing efforts will be
  severely limited.  However, it will be
  the responsibility of the Company (with

  



 

















 


	
   

  	
   

  	
  the advice of its securities counsel) to
  determine what investor relations and financial marketing 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 structure and implement the
  program described above in accordance with a marketing plan provided to
  SUUB.  Trilogy will work in conjunction
  with the Company’s management, securities counsel, investment bankers,
  auditors and marketing director, and under supervision of executive
  management.  Trilogy will designate a
  principal account representative to SUUB responsible for this engagement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The content is as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •
  Campaign Planning, Development and Execution

  
	
   

  	
   

  	
  •
  Press Announcements: drafting, approval and distribution

  
	
   

  	
   

  	
  •
  Database Development and Management

  
	
   

  	
   

  	
  •
  Image Analysis: recommendations and implementation

  
	
   

  	
   

  	
  •
  Messaging: institutional and retail

  
	
   

  	
   

  	
  •
  Online presentations: drafting and production responsibilities

  
	
   

  	
   

  	
  •
  Website Overhaul — installation and maintenance of auto IR program

  
	
   

  	
   

  	
  •
  Email messaging: targets: Retail and Institutional/Other databases

  
	
   

  	
   

  	
  •
  Media including Interactives and PowerPoints

  
	
   

  	
   

  	
  •
  Direct Mail: shareholder, media, SUUB relationship universe

  
	
   

  	
   

  	
  •
  Public Relations

  
	
   

  	
   

  	
  •
  Capital Conferences

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trilogy will not publish or publicly
  release any press release or other public communication or document referring
  to the Company (“IR Documents”)
  regarding the Company, or cause any other party to do so, that has not been
  approved in writing by the Company. 
  The Company assumes responsibility for the accuracy and completeness
  of all IR Documents which it has approved and the compliance of such IR
  Documents with applicable laws, rules and regulations.  The Company agrees that Trilogy has no
  obligation or duty to verify the accuracy or completeness of the IR
  Documents.

  
	
   

  	
   

  	
   

  
	
  Confidentiality and Material Information

  	
   

  	
  Trilogy agrees that all Confidential
  Information shall remain the property of the Company and will be held and
  treated by Trilogy and its affiliates, directors, officers and employees
  (collectively, the 

  



 


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  “Representatives”)
  in confidence and will not, except as provided in this Agreement, without the
  prior written consent of the Company, be disclosed by Trilogy or its
  Representatives, in any manner whatsoever, in whole or in part, and will not
  be used by Trilogy or its Representatives other than in connection with
  performing the duties and responsibilities of Trilogy under this Agreement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Confidential
  Information” means all technical, commercial, financial or other
  information concerning the business, affairs and operations of the Company
  and its affiliates and which the Company or its agents or representatives
  have provided or will provide to Trilogy in connection with its services
  hereunder whether provided in writing, electronically or verbally.  Notwithstanding the foregoing, the
  following will not constitute “Confidential Information” for purposes of this
  Agreement: (i) information which is available in the public domain or
  marketplace; (ii) information which after disclosure to Trilogy by the
  Company becomes part of the public domain by publication or otherwise, expect
  by breach by Trilogy of the terms of this Agreement; (iii) information
  which was rightfully in the possession of Trilogy at the time of disclosure
  to Trilogy by the Company; and (iv) information which is rightfully
  received by Trilogy from a third party who is not prohibited from transmitting
  the information to Trilogy by a contractual, legal or fiduciary obligation to
  the Company.

  
	
   

  	
   

  	
   

  
	
  Fees

  	
   

  	
  $12,500 per month, with the first payment
  due on execution, payable by wire transfer of funds to the account designated
  by Trilogy.   

  
	
   

  	
   

  	
   

  
	
  Equity Compensation

  	
   

  	
  SUUB has concurrently herewith issued to
  Trilogy 3,600,000 Warrants, each Warrant representing the right to purchase
  one share of Common Stock for $0.25 per share at any time through the third
  year following issuance.  The Company
  agrees to file a Registration Statement with the Securities and Exchange
  Commission registering the resale of the shares underlying the Warrants no
  later than six (6) months from the date of this Agreement.  

  
	
   

  	
   

  	
   

  
	
  Marketing Budget

  	
   

  	
  To support the financial marketing program,
  SUUB acknowledges that it will incur certain third party marketing
  costs.  Trilogy will not incur these
  costs on behalf of the Company except with the written approval of the
  Company or pursuant to a budget approved by the Company (which budget shall
  not be less than $200,000 over 12 months). 
  The Company shall have no obligation to reimburse Trilogy for any
  third party marketing cost that exceeds the approved budget or is otherwise
  not approved by the Company.  The
  Company

  



 


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  understands that prompt payment of these
  costs is vital to the on-going investor relations program, and therefore
  shall pay these costs promptly upon invoice, including supporting
  documentation and third party receipts, to Trilogy (to enable Trilogy to
  promptly reimburse these third parties). 
  The Company shall indemnify and hold Trilogy harmless from any losses,
  claims, costs, expenses, liabilities and damages from failure to timely pay
  these third party marketing costs.

  
	
   

  	
   

  	
   

  
	
  Indemnification

  	
   

  	
  The Company agrees to provide the
  indemnification set forth in “Exhibit A” attached hereto.  

  
	
   

  	
   

  	
   

  
	
  Corporate Obligations

  	
   

  	
  The obligations of Trilogy under this
  Agreement 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. 
  This Section is not intended to address circumstances in which
  Trilogy has a claim for indemnification, which circumstances are addressed by
  Exhibit A to this Agreement.

  
	
   

  	
   

  	
   

  
	
  Survival of Certain Provisions

  	
   

  	
  The Sections entitled “Indemnification”
  (including “Exhibit A”), “Corporate Obligations” and “Additional
  Services” shall 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
  allowed expenses (including third party marketing costs).  Any purported termination of this Agreement
  by the Company prior to the end of the Initial Term other than for material
  breach or default, or any termination by Trilogy as a result of non-payment
  or other material breach by the Company (including the failure to pay
  third-party marketing costs), shall not terminate Trilogy’s right to the fees
  through the entire Initial Term (as

  



 


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  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 services by Trilogy and Trilogy
  personnel.  Travel and entertainment
  costs for Trilogy personnel, in addition to certain third-party costs, will
  be borne by the Company and included in the marketing budget prepared by
  Trilogy.  Trilogy will provide
  reasonable documentation to support reimbursement claims.  Trilogy will not incur any particular
  reimbursable cost of $500 or more without the written approval from the
  Company.  These reimbursable costs are
  not third-party marketing costs under “Marketing Budget.”

  
	
   

  	
   

  	
   

  
	
  Arbitration and Attorneys’ Fees

  	
   

  	
  SUUB and Trilogy agree that any dispute
  shall be settled by binding arbitration under the rules of the American
  Arbitration Association.  

  
	
   

  	
   

  	
   

  
	
  Governing Law

  	
   

  	
  California, without giving effect to the
  principles of conflicts of law thereof.

  



 


 


	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  Sub-Urban Brands, Inc.

  	
  Trilogy Capital Partners, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Joseph Shortal

  	
  A. J. Cervantes,

  
	
  Chief Executive Officer

  	
  Chairman and CEO

  
						



 


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EXHIBIT A


 


Indemnification
Provisions


 


Sub-Urban Brands, Inc. (the “Company”)
unconditionally, absolutely and irrevocably agrees to and shall 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: (i) actual
or alleged misstatement of fact or omission of fact, or any actual or alleged
inaccuracy in any information provided or approved by the Company in connection
with the engagement, including any actual or alleged misstatement, omission or
inaccuracy in any SEC filing, press release, website, marketing
material or other document, or oral presentation or webcast, 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 that is finally determined by a court with proper
jurisdiction to have resulted primarily from the willful misconduct (including
a willful breach of the obligations of Trilogy under the Agreement) or bad
faith of the Indemnified Person.


 


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