EXHIBIT 10.76
TN Capital Equities, Ltd.
A subsidiary of
XxxxxXxxx Capital Partners, Inc.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
000-000-0000
Fax 000-000-0000
CONFIDENTIAL
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July 8, 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 TN Capital
Equities, Ltd. ("TN Capital") to act as a non-exclusive placement agent 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 TN Capital
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 TN Capital's services hereunder, the Company hereby
agrees to pay TN Capital (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).
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The Warrants shall have a term of five years from the Closing Date,
shall provide 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 TN Capital (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 TN Capital for reasonable out-of-pocket
expenses pre-approved by the Company and supported by invoices
incurred by TN Capital in connection with the performance of the
Services.
2. The term of TN Capital's engagement as placement agent 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 TN Capital 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 TN Capital, nor the
right of TN Capital 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 TN Capital 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 TN Capital and its directors, officers, employees, agents
and controlling persons (TN Capital 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
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against any action, claim, suit or proceeding commenced or threatened,
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, TN Capital 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 TN Capital to an Introduced Investor, (ii) relating
to any violation or alleged violation by TN Capital of the provisions
of Rule 502(c) of Regulation D of the Securities Act of 1933, as
amended, (iii) relating to any violation or alleged violation by the
TN Capital of Section 15(a) of the Securities Exchange Act of 1934, as
amended, (iv) 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 TN Capital or the
Company is a party), as and when incurred, directly or indirectly,
caused by, relating to, based upon or arising out of TN Capital's
actions. Notwithstanding the foregoing, TN Capital 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. TN Capital 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 TN Capital, 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 TN Capital 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 TN Capital 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
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by TN Capital 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 disclose or otherwise refer to such
advice or information in any manner without TN Capital's written consent.
6. TN Capital 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 New York 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 TN Capital and (d) shall be
binding and inure to the benefit of the Company, TN Capital, and other
Indemnified Parties and their respective successors and assigns. The
Company acknowledges that TN Capital 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.
REST OF PAGE LEFT INTENTIONALLY BLANK
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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:
TN Capital Equities, Ltd. Trinity Learning Corporation
By:_____________________________ By:_______________________________
Xxxx Xxxxxxxxx Xxxx Xxxx
President Chief Executive Officer
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