EXHIBIT 10.77
Bridgewater Capital Corporation
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
CONFIDENTIAL
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July 23, 2004
Xx. Xxxx Xxxx
Chief Executive Officer
Trinity Learning Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX00000
Dear Xx. Xxxx:
The purpose of this Letter Agreement is to confirm the engagement of Bridgewater
Capital Corporation ("Bridgewater") to act as a non-exclusive finder for Trinity
Learning Corporation (together with its affiliates and subsidiaries, the
"Company") in connection with a potential Transaction with the Oceanus Value
Fund ("the Introduced Investor"). For purposes hereof, the "Transaction" shall
mean a private placement of the Company's debt securities which Bridgewater
places with the Introduced Investor pursuant to the terms of this Agreement. The
terms of such offering shall be as agreed to between the Company and the
Introduced Investor.
1. As compensation for Bridgewater's services hereunder, the Company hereby
agrees to pay Bridgewater (or to its designees as it pertains to the
warrants) the following fee:
a. A cash fee equal to four percent (4.0%) of the gross amount of funds
committed to the Company by the Introduced Investor, also referred to
as the Investment Amount in the Introduced Investor's proposal and
final documentation, payable immediately upon consummation of the
Transaction through the escrow account established for the purpose of
the Transaction.
b. A number of warrants exercisable for shares of the Company's Common
Stock (the "Warrant Shares"), whose dollar value shall be equal to
five percent (5.0%) of the gross amount of funds committed to the
Company by the Introduced Investor, also referred to as the Investment
Amount in the Introduced Investor's proposal and final documentation,
at an exercise price equal to one dollar ($1.00). The Warrants shall
have a term of five years from the Closing Date, shall provide
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for "piggyback" registration rights for the underlying shares of
common stock (whose registration shall remain in effect for a period
of five years from the date of exercise), shall provide for cashless
exercise, and shall provide for antidilution protections for stock
splits, reclassifications and stock combinations that will ensure
uniform dilution to all securityholders. The Warrant Shares shall be
delivered to Bridgewater (or to its designees) within thirty (30) days
after the Closing and shall have registration rights on the same terms
and conditions as those provided to the Introduced Investor, if any.
c. In the event that the Company issues and sells any new or additional
debt securities to the Introduced Investor at any time within 18
months after the expiration or termination of this Agreement, the
Company shall pay the above-defined fees with respect to such issuance
and sale immediately upon consummation of any such sale.
d. The Company agrees to pay Bridgewater for reasonable out-of-pocket
expenses pre-approved by the Company and supported by invoices
incurred by Bridgewater in connection with the performance of the
Services.
2. The term of Bridgewater's engagement as a finder to the Company, relative
to the investor named above, shall commence on the date hereof and shall
continue for thirty (30) days after the date hereof. The Term shall
automatically renew for two (2) additional thirty (30) day periods, for a
maximum total term of ninety (90) days, unless Bridgewater is notified in
writing by the Company prior to the expiration of any thirty-day term;
provided however that no such termination shall affect the indemnification
and confidentiality obligations of the Company and Bridgewater, nor the
right of Bridgewater to receive any fees payable hereunder or fees that
accrued prior to such expiration or termination.
3. This Agreement may be terminated prior to the expiration of the term hereof
by (i) notice by the Company to Bridgewater as provided in Section 2 above
or (ii) by a written agreement signed by both parties hereto. In addition,
either party may terminate this Agreement at any time if the other party
breaches any term or defaults in the performance of any of its obligations
under this Agreement and the breach or default continues for a period of
fifteen days after written notice from the other party. Sections 4 and 5
shall survive the expiration or prior termination of this Agreement.
4. Indemnification:
a. To the fullest extent permitted by law, the Company agrees to
indemnify Bridgewater and its directors, officers, employees, agents
and controlling persons (Bridgewater and such other persons and
entities each being an "Indemnified Party" for purposes of this
section) from and against any and all losses, claims, damages,
liabilities, costs and expenses (collectively, "damages") as the same
are incurred (including, without limitation, any actual, legal or
other expenses reasonably incurred in connection with investigation,
preparing to defend or defending against any action, claim, suit or
proceeding commenced or threatened,
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or in appearing or preparing for pretrial proceedings) which arise out
of the sale of securities to the Introduced Investor, provided that
the Company shall not be liable for any damages to the extent they
arise from the bad faith, willful misconduct, negligence, or
recklessness of the Indemnified Party, and provided further that such
Indemnified Party agrees to refund such reimbursed expenses if and to
the extent it is finally judicially determined that such Indemnified
Party is not entitled to indemnification. The Company shall not have
any indemnification obligations for, from, or with respect to any
settlement of any claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
b. To the fullest extent permitted by law, Bridgewater agrees to
indemnify and hold harmless the Company, and its respective partners,
employees, agents, representatives, directors, stockholders and
controlling persons from and against any and all losses, claims,
damages, liabilities, costs and expenses, arising out of or based upon
any claims (i) relating to any untrue statement of a material fact or
the omission to state a material fact necessary to make a statement
not misleading made by Bridgewater to an Introduced Investor, and (ii)
for services in the nature of a finder's or origination fee with
respect to the sale of the securities contemplated hereby (and all
actions, suits, proceedings or claims in respect thereof) and any
legal or other expenses in giving testimony or furnishing documents in
response to a subpoena or otherwise (including, without limitation,
the cost of investigating, preparing or defending any such action,
suit, proceeding or claim, whether or not in connection with any
action, suit, proceeding or claim in which Bridgewater or the Company
is a party), as and when incurred, directly or indirectly, caused by,
relating to, based upon or arising out of Bridgewater's actions.
Notwithstanding the foregoing, Bridgewater shall not be liable for any
damages to the extent they arise from the bad faith, willful
misconduct, negligence, or recklessness of the Company, and the
Company agrees to refund such reimbursed expenses if and to the extent
it is finally judicially determined that the Company is not entitled
to indemnification. Bridgewater shall not be liable for any settlement
of any claim effected without its written consent, which consent shall
not be unreasonably withheld or delayed.
5. The Company recognizes and confirms that Bridgewater, in acting pursuant to
this engagement, will be using information in reports and other information
provided by others, including, without limitation, information provided by
or on behalf of the Company, and that Bridgewater does not assume
responsibility for and may rely, without independent verification, on the
accuracy and completeness of any such reports and information. The Company
hereby warrants that any information relating to the Company that is
furnished to Bridgewater by or on behalf of the Company will be fair,
accurate and complete in all material respects and will not contain any
material omissions or misstatements of fact. The Company agrees that any
information or advice rendered by Bridgewater or its representatives in
connection with this engagement is for the confidential use of the Company
only in its evaluation of a Transaction and, except as otherwise required
by law, the Company will not and will not permit any third party to
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disclose or otherwise refer to such advice or information in any manner
without Bridgewater's written consent.
6. Bridgewater agrees that it and its affiliates and personnel (i) have not
made and shall not make any general solicitation, announcement, or
advertisement in connection with its services hereunder; (ii) have not made
and shall not make any recommendation in regard to the Company or the
purchase or sale of the Company's securities, whether to an Introduced
Investor or any other person; (iii) have not taken and shall not take any
other action, or permitted or will permit any inaction, that would cause
the Company's issuance and sale of securities to the Introduced Investor or
any other person to fail to qualify for the exemption from securities
registration afforded by the provisions of Regulation D promulgated under
the Securities Act of 1933, as amended; or (iv) provided to the Introduced
Investor or any other person any non-public information about the Company
or its securities.
7. This Agreement (a) shall be governed by and construed in, accordance with
the laws of the State of California regardless of the laws that might
otherwise govern under applicable principles of conflicts of law thereof,
(b) incorporates the entire understanding of the parties with respect to
the subject matter hereto and supersedes all previous agreements should
they exist with respect thereto, (c) may not be amended or modified except
in a writing executed by the Company and Bridgewater and (d) shall be
binding and inure to the benefit of the Company, Bridgewater, and other
Indemnified Parties and their respective successors and assigns. The
Company acknowledges that Bridgewater in connection with its engagement
hereunder is acting as independent contractor with duties solely to the
Company and that nothing in this agreement is intended to confer upon any
other person any rights or remedies hereunder or by reason hereof.
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This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the same
agreement. Please confirm that the foregoing is in accordance with your
understanding or our agreement by signing and returning to a copy of this Letter
Agreement.
Sincerely,
Accepted and agreed to as of the date set forth above:
Bridgewater Capital Corporation Trinity Learning Corporation
By:___________________________ By:___________________________
Name:_________________________ Xxxx Xxxx
Title:________________________ Chief Executive Officer
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