EXHIBIT 10.1
Consulting Agreement with Stanton, Walker & Company
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is entered into this 19th
day of July, 2006 by and between Stanton, Walker & Company, a New Jersey
Corporation (hereinafter referred to as, "Consultant"), and Trudy Corporation
(OTCBB: TRDY) (hereinafter referred to as, "Client"), a Delaware corporation,
(collectively referred to as the "Parties") with reference to the following:
Preliminary Statement
The Client desires to be assured of the association and services of the
Consultant in order to avail itself of the Consultant's experience, skills,
abilities, knowledge, and background and is therefore willing to engage
Consultant upon the terms and conditions set forth herein. Consultant desires to
be assured, and Client desires to assure Consultant, that, if Consultant
associates with Client and allocates its resources necessary to provide Client
with its consulting services, Consultant will be paid the consideration
described herein and said consideration will be nonrefundable, regardless of the
circumstances.
Consultant agrees to be engaged and retained by Client and upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
Engagement. Client hereby engages Consultant on a non-exclusive basis, and
Consultant hereby accepts the engagement to a mergers and acquisition Consultant
to Client and to render such advice, consultation, information, and services to
the Directors and/or Officers of Client regarding general business combination
and mergers and acquisition matters including, but not limited to the following:
1. Advice and Counsel. Consultant will provide advice and counsel
regarding Client's strategy and negotiations with potential business
strategic partnering, and/or other general business consulting needs as
expressed by Client and as agreed to by Consultant.
2. Client and/or Client's Affiliate Transaction Due Diligence. Consultant
will participate and assist Client, where possible, on all proposed
financial transactions affecting Client of which Consultant is notified in
writing in advance, including providing advice on the financial, valuation
and stock price implications of the proposed transaction(s).
3. Mergers and Acquisitions. Consultant will provide assistance to Client,
as mutually agreed, in identifying merger and/or acquisition candidates and
assisting in any due diligence process. It is expressly understood that
Consultant shall have no power to bind Client to any contract or
transaction obligation. An introduction bonus shall be due Consultant for
the successful mutual execution of a Letter of Intent and/or Definitive
Agreement pursuant to Section 3.a.ii. below.
a. Mergers and Acquisitions. Consultant agrees, from time to
time, to provide consultative services to Client in acquiring,
merging, and/or divesting businesses, and/or operations on a
non-exclusive basis, as Consultant deems appropriate in its
sole discretion. Consultant will introduce the Client to one
or more parties who might be interested in (whether by way of
merger, consolidation, asset purchase, technology license, or
substantially similar transaction) either, (a) acquiring some
or all of Client's assets or, (b) selling some or all of their
own assets to Client and/or, (c) entering into some form of
strategic alliance with Client. In consideration of
Consultant's services, Client agrees to pay Consultant the
bonus set forth in paragraph 3.a.ii.
i. Performance by Consultant. Consultant shall be deemed
to have earned its introduction bonus under Section
3.a.ii upon the occurrence of (A) either (i)
Consultant's introduction of any potential acquirer or
seller of assets or merger candidate or, (ii) upon
Consultant providing consultative services to Client on
merger, acquisition and/or divestiture efforts for an
introduced or non-introduced merger, acquisition and/or
divestiture candidate* and (B) (iii) the execution by
Client of a Letter of Intent ("LOI") and/or Definitive
Agreement ("DA") with respect to a merger, acquisition,
and/or divestiture by Client made within the Term of
this Agreement or the first twelve months after the
completion of the Term of this Agreement. Consultant
shall be entitled to receive an introduction bonus (as
described in paragraph 3.a.ii., below) for each merger,
acquisition and/or divestiture by the Client. Each such
obligation of Client to pay such introduction bonus
shall be deemed a separate agreement hereunder
severable from each of the other obligations to pay
engagement fees or other introduction bonuses hereunder
and each obligation shall be separately enforceable as
if separate written agreements existed for each
introduction and/or consultative service made by
Consultant.
* The Consultant's bonus fee will be reduced by 50% if
Delta Capital Group LLC introduces the potential
acquirer or seller of assets or merger candidate and
provides material support and reduces its fee
accordingly. Consultant will not reduce its bonus fee
if it introduces the potential acquirer or seller of
assets or merger candidate. If Client introduces the
potential acquirer or seller of assets or merger
candidate the bonus fee shall be deemed to have been
earned under section 3.a.ii, provided that Section
3.a.i (B above) is satisfied. If Delta Capital provides
material support in relation to a potential acquirer or
seller of assets or merger candidate introduced by
Client, then Consultant will reduce its bonus fee by
25%. Consultant will make the exception for Chart
Studio, Inc for which it will receive a bonus fee of 2%
if a Definitive Agreement is mutually executed.
ii. Amount and Payment of Consultant's Introduction Bonus
For Merger/Acquisition.
For a signed Letter of Intent or similar document that
is mutually executed between Client and another
organization, Client shall pay Consultant cash,
according to the schedule below based upon the total
value of the transaction outlined in the executed
Letter of Intent. The cash payment shall be made within
ten (10) business days of the execution of the Letter
of Intent.
Bonus Schedule:
If the LOI Total Value is: The bonus payment is:
-------------------------- ---------------------
Up to $500,000 $15,000**
From $500,000 to $1,500,000 $25,000**
From $1,500,000 to $4,000,000 $45,000**
From $4,000,000 to $7,500,000 $75,000**
From $7,500,000 $100,000**
For a signed Definitive Agreement or similar document
that is mutually executed between Client and another
organization, Client shall pay Consultant cash
according to the schedule below based upon the Total
value of the transaction outlined in the executed
Definitive Agreement. The cash payment shall be made
within ten (10) business days of the execution of the
Definitive Agreement.
If the DA Total Value is: The bonus payment is(1):
------------------------- ------------------------
Up to $500,000 $20,000**
From $500,000 to $1,500,000 $50,000**
From $1,500,000 to $4,000,000 $80,000**
From $4,000,000 to $7,500,000 $125,000**
From $7,500,000 $150,000**
(1) Provided there was a previously executed LOI.
If a Definitive Agreement was mutually executed but
previously no LOI was executed, then the bonus payment
shall be:
If the DA Total Value is: The bonus payment is:
------------------------- ---------------------
Up to $500,000 $35,000**
From $500,000 to $1,500,000 $75,000**
From $1,500,000 to $4,000,000 $125,000**
From $4,000,000 to $7,500,000 $200,000**
From $7,500,000 $250,000**
** Bonus payment will not exceed 5% of the Total Value.
In the event Consultant introduces Client to a Joint
Venture Partner or Consultant provides consultative
services to Client who then successfully enters into a
Joint Venture Agreement with any organization, Client
shall pay Consultant, in cash, one (1.0) percent of the
Joint Venture's quarterly gross revenue, within thirty
days after the end of each quarter.
Note: "Total value" shall include, but is not limited
to cash, cash equivalents, stock, and the value of any
consideration other than cash paid or received by
Client.
b. Payment. In addition to the payment of the Engagement Fee,
which is due and payable upon the execution of this Agreement
pursuant to the terms of Section 5 below, each time an
introduction bonus is due as specified in any other provision
of this Agreement, the introduction bonus amount shall be
payable as specified therein. The introduction bonus due
Consultant shall be in addition to any bonus, fees or funds
which may be payable to any other person or entity as a result
of the transaction. If for any reason, Client fails to make
payment within the time period specified, then Client shall
pay Consultant an additional fee equal to one (1) percent of
the balance outstanding compounded monthly. This additional
fee is earned each month and is payable immediately.
c. Registered Stock In Lieu of Cash. For all introduction bonuses
earned under section 3.a.ii. above, Consultant agrees to
accept registered shares in lieu of cash provided such shares
are received by Consultant within the same time period as cash
is due. The exact number of shares shall be calculated by
taking the closing price of Client's common stock for the last
trading day prior to the execution of the Letter of Intent or
the Definitive Agreement and dividing that number into the
cash introduction bonus(es) as set forth in 3.a.ii above.
Consultant makes no guarantee that it will be able to
successfully locate a merger or acquisition target nor, if one
is located, for that transaction to be consummated within
client's desired time frame. Any comments made regarding
potential time frames or anything that pertains to the outcome
of client's needs are expressions of consultant's opinion
only, and for purposes of this agreement are specifically
disavowed.
4.0 Standard of Performance. Consultant shall devote such time and efforts
to the affairs of the Client as is reasonably necessary to render the
services contemplated by this Agreement. Any work or task of Consultant
provided for herein which requires Client to provide certain information to
assist Consultant in completion of the work shall be excused (without
effect upon any obligation of Client) until such time as Client has fully
provided all information and cooperation necessary for Consultant to
complete the work. The services of Consultant shall not include the
rendering of any legal opinions, the preparation of any legal documents,
the performance of any work that is in the ordinary purview of an attorney
or certified public accountant, or other licensed professional. Any
documents or work papers that Consultant prepares in conjunction with the
performance of its services on behalf of Client shall not be considered as
final or legal documents and shall always be submitted to Client's legal
representative for review before considering them as final documents or
submitting them to a third party. Consultant cannot guarantee results on
behalf of Client, but shall use commercially reasonable efforts in
providing the services listed above.
5.0 Compensation to Consultant. As consideration for Consultant entering
into this Agreement, Client agrees to cause twelve million and five hundred
thousand shares (12,500,000) shares (the "Engagement Fee") of its common
stock, par value $ .0001 per share, to be issued to Richard P. Stanton and
Richard H. Walker, alter egos of Stanton, Walker & Company in equal
quantities of 6,250,000 shares each. The issuance of said shares shall be
registered with the U.S. Securities and Exchange Commission. The issuance
of said shares shall take place within 15 business days of the execution of
this agreement.
Note: Consultant shall have no obligation to perform any duties provided
for herein if payment [cash and/or stock] is not received by consultant
within the time periods as stipulated above. In addition, consultant's
obligations under this agreement shall be become null and void if any
payment owing hereunder is not delivered within the time periods as
stipulated above. Furthermore, the receipt of any fees due to consultant
upon execution of this agreement are not contingent upon any prior
performance of any duties whatsoever described within this agreement.
Client expressly agrees that the engagement fee is deemed earned upon
execution of this agreement and is thereafter non-refundable and
non-cancelable.
6.0 Indemnification. The Client agrees to indemnify and hold harmless
Consultant against any and all liability, loss and costs, expenses or
damages, including but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever or howsoever
caused by reason of any injury (whether to body, property, personal or
business character or reputation) sustained by any person or to any person
or property, arising out of any act, failure to act, neglect, any untrue or
alleged untrue statement of a material fact or failure to state a material
fact which thereby makes a statement false or misleading, or any breach of
any material representation, warranty or covenant by Client or any of its
agents, employees, or other representatives. Nothing herein is intended to
nor shall it relieve either party from liability for its own willful act,
omission or negligence. All remedies provided by law, or in equity shall be
cumulative and not in the alternative.
7.0 Confidentiality. Consultant and Client each agree to keep confidential
and provide reasonable security measures to keep confidential information
where release may be detrimental to their respective business interests.
Consultant and Client shall each require their employees, agents,
affiliates, other licensees, and others who will have access to the
information through Consultant and Client respectively, to first enter
appropriate non-disclosure Agreements requiring the confidentiality
contemplated by this Agreement in perpetuity. Consultant will not, either
during its engagement by the Client pursuant to this Agreement or at any
time thereafter, disclose, use or make known for its or another's benefit
any confidential information, knowledge, or data of the Client or any of
its affiliates in any way acquired or used by Consultant during its
engagement by the Client. Confidential information, knowledge or data of
the Client and its affiliates shall not include any information that is, or
becomes generally available to the public other than as a result of a
disclosure by Consultant or its representatives.
8.0 Amendment and Modification. This Agreement may be amended, modified
and supplemented only by written agreement of Consultant and Client.
9.0 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The obligations of either
party hereunder cannot be assigned without the express written consent of
the other party.
10.0 Governing Law; Venue. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with
the laws of the State of New Jersey, without regard to its conflict of law
doctrine. Client and Consultant agree that if any action is instituted to
enforce or interpret any provision of this Agreement, the jurisdiction and
venue shall be Glen Rock, New Jersey.
11.0 Attorneys' Fees and Costs. If any action is necessary to enforce and
collect upon the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and costs, in addition to any other
relief to which that party may be entitled. This provision shall be
construed as applicable to the entire Agreement.
12.0 Survivability. If any part of this Agreement is found, or deemed by a
court of competent jurisdiction, to be invalid or unenforceable, that part
shall be severable from the remainder of the Agreement.
13.0 Facsimile Signatures. The Parties hereto agree that this Agreement
may be executed by facsimile signatures and such signature shall be deemed
originals. The Parties further agree that within ten (10) days following
the execution of this Agreement, they shall exchange original signature
pages.
14.0 Arbitration. All disputes, controversies, or differences between
client, consultant or any of their officers, directors, legal
representatives, attorneys, accountants, agents or employees, or any
customer or other person or entity, arising out of, in connection with or
as a result of this agreement, shall be resolved through arbitration rather
than through litigation. With respect to the arbitration of any dispute,
the undersigned hereby acknowledge and agree that:
A. Arbitration is final and binding on the parties;
B. The parties are waiving their right to seek remedy in court,
including their right to jury trial;
C. Pre-arbitration discovery is generally more limited and
different from court proceeding;
D. The arbitrator's award is not required to include factual
findings or legal reasoning and any party's right of appeal or
to seek modification of ruling by the arbitrators is strictly
limited;
E. This arbitration provision is specifically intended to include
any and all statutory claims which might be asserted by any
party;
F. Each party hereby agrees to submit the dispute for resolution
to the American Arbitration Association, in Glen Rock, New
Jersey within five (5) days after receiving a written request
to do so from the other party;
G. If either party fails to submit the dispute to arbitration on
request, then the requesting party may commence an arbitration
proceeding, but is under no obligation to do so;
H. Any hearing scheduled after an arbitration is initiated shall
take place in Glen Rock, New Jersey;
I. If either party shall institute any court proceeding in an
effort to resist arbitration and be unsuccessful in resisting
arbitration or shall unsuccessfully contest the jurisdiction
of any arbitration forum located in Glen Rock, New Jersey,
over any matter which is the subject of this agreement, the
prevailing party shall be entitled to recover from the losing
party its legal fees and any out-of-pocket expenses incurred
in connection with the defense of such legal proceeding or its
efforts to enforce its rights to arbitration as provided for
herein;
J. The parties shall accept the decision of any award as being
final and conclusive and agree to abide thereby;
K. Any decision may be filed with any court as a basis for
judgment and execution for collection.
15.0 Term/Termination. This Agreement shall expire twelve months from the
date first written above.
16.0 Representations, Warrants and Covenants. The Client represents,
warrants and covenants to the Consultant as follows:
The Client has the full authority, right, power and legal capacity to
enter into this Agreement and to consummate the transactions that are
provided for herein.
The business and operations of the Client have been and are being
conducted in all material respects in accordance with all applicable
laws, rules and regulations of all authorities that affect the Client
or its properties, assets, businesses or prospects. The performance of
this Agreement shall not result in any breach of, or constitute a
default under, or result in the imposition of any lien or encumbrance
upon any property of the Client or cause acceleration under any
arrangement, agreement or other instrument to which the Client is a
party or by which any of its assets are bound. The Client has performed
in all respects all of its obligations which are, as of the date of
this Agreement, required to be performed by it pursuant to the terms of
any such agreement, contract or commitment.
17.0 Notices. Any notice or other communication required or permitted
hereunder must be in writing and sent by either (i) certified mail, postage
prepaid, return receipt requested and First Class mail; or (ii) overnight
delivery with confirmation of delivery; or (iii) facsimile transmission
with an original mailed by first class mail, postage prepaid, addressed as
follows:
If to the Client: William W. Burnham
Trudy Corporation
353 Main Avenue
Norwalk, CT 06851
Facsimile No: (203) 846-1776
If to Consultant: Richard P. Stanton
Stanton, Walker & Company
55 Harristown Road
Glen Rock, NJ 07452
Facsimile No: (201) 689-8142
or in each case to such other address and facsimile number as shall have
last been furnished by like notice. If mailing is impossible due to an
absence of postal service, and other methods of sending notice are not
otherwise available, notice shall be hand-delivered to the aforesaid
addresses. Each notice or communication shall be deemed to have been given
as of the date so mailed or delivered, as the case may be; provided,
however, that any notice sent by facsimile shall be deemed to have been
given as of the date sent by facsimile if a copy of such notice is also
mailed by first class mail on the date sent by facsimile; if the date of
mailing is not the same as the date of sending by facsimile, then the date
of mailing by first class mail shall be deemed to be the date upon which
notice given.
18.0 Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19.0 Preliminary Statement. The Preliminary Statement is incorporated
herein by this reference and made a material part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
CLIENT: TRUDY CORPORATION (TRDY)
------------------------
/s/ WILLIAM W. BURNHAM
- --------------------------------
Name: William W. Burnham
Title: Chairman
CONSULTANT:
/s/ RICHARD P. STANTON
- --------------------------------
Richard P. Stanton
Its Managing Director