EXHIBIT 10.119(a)
TYPHOON CONSULTING AGREEMENT
TYPHOON
Capital Consultants, LLC
February 1, 1999
Rich Brady, President
Play Co. Toys, Inc.
550 Rancheros Drive
San Marcos, CA 92069
Re: Consulting Agreement
Dear Mr. Rashbaum:
This letter confirms Play Co. Toys, Inc. at 550 Rancheros Drive, San
Marcos, CA 92069 (the "Company") agreement (this "Consulting Agreement" or
"Agreement") to retain Typhoon Capital Consultants and its respective agents and
employees ("Typhoon") to position management and the Company so as to increase
the Company's visibility in its industry and position it for growth in the
future. Attached hereto is a summary of the major activities that Typhoon will
perform in connection with this Consulting Agreement. This summary is
incorporated into the terms of this Consulting Agreement between Typhoon and the
Company. Below are additional agreements between the parties with respect to
this Consulting Agreement:
Term. The Company hereby appoints Typhoon to perform the duties and render
the services described in the attached Summary of Services for a term of one (1)
years commencing the date hereof and terminating on March 31, 2000.
Notwithstanding anything to the contrary contained herein, the Agreement is
immediately terminable by the Company in the event (I) Typhoon breaches its
fiduciary duty to the Company or (ii) Typhoon, or any of its principals, are
convicted of a felony.
Death or Disability. Notwithstanding the provisions of Paragraph 1 above,
during the term of this Agreement, if Typhoon fails to perform any of its duties
on account of an illness or other incapacity of Sanjay Sabnani, the president of
Typhoon, and such illness or incapacity shall continue for a period of more than
60 days, the Company shall have the right to terminate Typhoon upon the
provision of 30 days written notice.
Discontinuance of Business. Notwithstanding the provisions of Paragraph 1
above, during the term of this Agreement, if the Company shall discontinue or
interrupt the operation of its business for a period of 30 days, this Agreement
shall automatically terminate without further liability on the part of either of
the parties.
Non-Exclusive Services. Typhoon will devote part of the time and efforts of
its employees to the Company during the term of this Agreement.
Compensation. The Company agrees to compensate Typhoon in Stock Options by
granting a total of 150,000 options to buy free-trading shares of Company's
common stock (OTCBB:PLCO). 50,000 options will be issued to Typhoon immediately
upon signing of this agreement. Additionally, beginning April 1, 1999 Typhoon
will be granted 20,000 options per month through August of 1999 at which point a
total of 150,000 options will have been issued to Typhoon. The term of these
options will be 30 months (2 1/2 years) expiring on August 30, 2001. These
options will be exercisable at $1.75 per share and shall be registered by the
Company no later than December 31, 1999. The Company may, with 30 day written
notice, terminate this agreement. In the event the Company exercises this right
prior to April 1, 1999, then only the original 50,000 options are owed to
Typhoon. After April 1, 1999 and through August 1999, the Company is responsible
for issuing all options owed to Typhoon through the calendar month in which the
notice of termination is served.
Non-Competition. Typhoon from time to time may represent entities in
competition with the Company, and the Company acknowledges that such
representation is not a breach of this Consulting Agreement. Nevertheless,
Typhoon: (i) shall not divulge trade secrets or confidential information of any
sort with respect to the Company, and (ii) shall advise the Company of any such
business relationship.
Non-Assignability. This Consulting Agreement shall inure to the benefit of
and shall be binding upon the successors and the assigns of the Company. Since
this Consulting Agreement is based upon the unique abilities and personal
confidence in Typhoon and its employees, Typhoon shall have no right to assign
this Consulting Agreement or any of the rights hereunder written without the
consent of the Company.
Notices. Any notice required or permitted to be given hereunder shall be
sufficient if in writing and if sent by certified mail or facsimile to the
parties at their present principal business addresses. Any change of address
must be sent to the other party via such procedure to be valid against such
other party.
Severability. If any provision of this Consulting Agreement shall be found
invalid by any court of competent jurisdiction, such findings shall not effect
the validity of the other provisions hereof and the invalid provisions shall be
deemed to have been severed herefrom.
Attorney's Fees. If any action is brought to enforce the terms of this
Consulting Agreement, the prevailing party shall be entitled to its costs and
reasonable attorneys' fees.
Arbitration. Any dispute concerning this Agreement shall be settled by
binding Arbitration in accordance with the Rules of the American Arbitration
Association in New York, NY.
If the terms hereof meet with your approval, please indicate by signing
below.
Sincerely,
TYPHOON CAPITAL CONSULTANTS
By: _________________________
Sanjay Sabnani, its President
Agreed and accepted as of the date first above stated:
Play Co. Toys, Inc.
By: _________________________
Rich Brady, President
90885-1
SUMMARY OF CONSULTING SERVICES
Corporate and Industry Profile/Summary Business Plan
On a cost effective basis Typhoon will assist the Company in producing a
summary business plan. This business plan will summarize the Company's business
activities, its objectives, management, capitalization and incorporate pro forma
financial information. The purpose of this plan is to condense the Company's
principal business objectives into an attractive package which can be circulated
to potential customers and/or investors. Separate from the business plan,
Typhoon will assist the Company in connection with the production of a four-page
corporate profile which summarizes the plan and acts as an additional corporate
and industry profile brief on the Company which can be independently sent to
parties interested in the Company.
Board of Directors and Advisory Board
Typhoon will assist the Company in providing the necessary corporate
governance infrastructure for the support of the Company's board of directors.
Typhoon will work with management of the Company in constructing a schedule of
items which should be reviewed to put into place all key components of a
sophisticated company in advance of any due diligence procedures which may be
performed by potential customers and/or investing partners. In addition, Typhoon
will assist the Company in putting together an advisory board which will bring
together certain people helpful to the Company without such people assuming the
general risk of liability for serving on a board of directors of a public
company.
E-Commerce and Internet Strategy
Typhoon will assist the Company with building significant recognition for
their online sales and marketing efforts. Alliance and strategic partners will
be sought for the purpose of identifying sources of traffic for the Company's
web-sites. Additionally, Typhoon will attempt to showcase the Company's efforts
at industry events and other high profile venues.
Corporate Finance Consulting
Typhoon will introduce the Company to sources of capital and assist in
packaging and presenting the Company's story in the most attractive light.
Primary among Typhoon's objectives will be seeking the highest Company valuation
in order to generate the lowest cost of capital.
90885-1