TN Capital Equities, Ltd.
00 Xxxx 00xx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX. 10022
(000) 000-0000 tel. x 102
(000) 000-0000 fax
Trinity Learning Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
April 11, 2003
Attention: Xxxxxx Xxxxxx, President
Re: Finder Arrangements
Dear Xx. Xxxxxx:
This letter agreement ("Agreement") will confirm the terms of
arrangements discussed between us, under which, pursuant to the terms and
conditions stated herein, TN Capital Equities Ltd. ("TN") may act as a
finder in connection with a pending private offering (the "Offering") being
conducted by Trinity Learning Corporation, (the "Company"), a publicly-held
corporation formed under the laws of Utah.
The Company is conducting the Offering, which consists of shares
("Shares") of 3 million $1.00 Unites each consisting of two shares of
Common Stock, plus two "Standard" three (3) year warrants strike price
$1.00 per share, and potential to receive one "bonus" warrant strike price
$2.00 per share, pursuant to Regulation D promulgated under the Securities
Act of 1933 (the "Securities Act"). The Offering will be made only to
persons who meet the qualifications of an "accredited investor" as such
term is defined under Regulation D.
TN and the Company agree as follows:
1. Company Representations. The Company represents, warrants and
covenants to TN as of the date hereof and as of each closing of the
Offering, that:
(a) In connection with the Offering, the Company has prepared a
private placement memorandum dated October 2, 2002 (as originally issued
and amended from time to time, the "Memorandum"), which Memorandum
describes the Offering and is being updated and amended to reflect the
correct name of the Company, the extended expiration date of the Offering
and other developments new PPM and information material to investors. The
Company has also prepared a subscription agreement ("Subscription
Agreement") and other Exhibits to the Memorandum, and such other documents
as shall be required in connection with the Offering, the form and
substance of which documents shall be acceptable to TN. The Memorandum,
the Subscription Agreement and such other documents are sometimes
hereinafter collectively referred to as the "Offering Materials".
(b) The Memorandum and all documents included in the Offering
Memorandum do not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) The Shares to be sold in the Offering will be, when issued,
delivered and paid for in accordance with the Subscription Agreement, duly
and validly issued, fully paid and non-assessable; all presently
outstanding shares of Common Stock of the Company have been duly
authorized, validly issued and are fully paid and non-assessable; the
holders of the Shares are not and will not be subject to personal liability
by reason of being such holders; all corporate action required to be taken
by the Company prior to the issuance and sale of the Shares to qualified
subscribers has been or, prior to the sale thereof, will have been taken.
(d) The Company is duly incorporated, validly existing and in good
standing as a corporation under the laws of its state of incorporation.
(e) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which its
activities or its ownership or leasing of property requires such
qualification.
(f) This Agreement has been duly and validly authorized and executed
and delivered by and on behalf of the Company and constitutes a valid and
binding agreement of the Company enforceable in accordance with its terms,
subject to any applicable bankruptcy, insolvency, reorganization or other
laws affecting the enforcement of creditors' rights generally and the
enforceability of the indemnity or contribution provisions contained in
this Agreement.
(g) The Company is not in violation of (i) any term or provision of
its charter or by-laws or (ii) any material term or provision of any
indenture, mortgage, deed of trust, not agreement, or other material
agreement or instrument to which the Company is a party or by which it is
or may be bound or to which any of its material assets, property or
business is or may be subject, or (iii) any material term of any
significant indebtedness, or (iv) of any statute or (v) any material
judgment, decree, order, rule or regulation applicable to the Company of
any court, regulatory bode or administrative agency or other federal, state
or other governmental body, domestic or foreign, having jurisdiction over
it or its material assets, property or business, which violation or
violations, either in any case or in the aggregate, might result in any
material adverse change, financial or otherwise, in the assets, properties,
condition, business, earnings or prospects of the Company; and the
execution and delivery by the Company of this Agreement, the consummation
by the Company of the transactions herein contemplated, and the compliance
bu the Company with the terms of this Agreement will not result in any such
violation or violations. All material licenses, approvals or permits from
the federal or any state, local or foreign government or agency thereof
having jurisdiction over the Company reasonably required for the conduct of
the business or operations of the Company have been obtained and are
outstanding; and there are no proceedings pending or to the Company's
knowledge threatened, seeking to cancel, terminate or limit such licenses,
approvals or permits.
(h) There are no actions, investigations, statutes, rule or
regulations or other proceedings of any nature in effect or pending or to
the Company's knowledge threatened, as the case may be, which either in any
case or in the aggregate, if decided adversely, might result in any
material adverse change, financial or otherwise, in the assets, properties,
condition, business earnings or prospects of the Company or which question
the validity of the capital stock of the Company, this Agreement or any
action taken or to be taken by the Company pursuant to or in connection
with this Agreement.
2. TN Services
(a) TN will act as a finder from time to time in connection with the
Offering, and, when, as and if TN identifies accredited investors who have
a potential interest in the Offering, will refer such potential investors
to the Company, which will extend to such prospective investors the
opportunity to ask questions of, and receive answers from, the Company
(including, but not limited to its employees, officers, directors and other
persons relating to the operations of the Company) and to obtain any
information that such prospective investors consider necessary in making an
informed investment decision or to verify the accuracy of the information
set forth in the Offering Materials, to the extent the Company possess the
same or can acquire it without unreasonable effort or expense. Potential
investors introduced to the Company directly or indirectly by TN are
referred to herein as: "TN Clients".
(b) The arrangements set forth in this agreement are not exclusive,
and TN is not acting as a placement agent for the Company in connection
with the Offering. TN will not prepare any of the Offering Materials, open
or administer an escrow account, conducting a due diligence review, accept
or reject subscriptions, arrange closings or file any regulatory forms such
as Form D or blue sky documentation in connection with Offering.
(c) TN may, at its sole discretion, enter into a selling and/or
similar agreement with one or more other broker/dealers registered with the
National Association of Securities Dealers, Inc. ("NASD") to enable such
other broker-dealers to act as finders in the Offering. TN may also
introduce other broker-dealers, finder or other financial intermediaries to
the Company, who may themselves enter into a separate agreement with the
Company. TN will provide the Company with the name and compensation to be
paid to any broker-dealer engaged subject to this paragraph. The Company
will retain the right to accept or reject any subscriptions from investors
identified by TN and/or any broker/dealer engaged by TN pursuant to this
paragraph.
3. Compensation
(a) If a TN Client purchases Shares in the Offering, then as
compensation to TN for its services as finder, TN will be entitled to a
cash fee equal to ten percent (10%) of the gross proceeds received by the
Company from any such purchase by a TN client. As additional compensation
for TN's services in the event of such purchase of securities, TN will be
entitled to receive five-year warrants (the "Finders Warrants") to be
issued by the Company, permitting the Finder to purchase 10 Unites of the
Company's Unites at original purchase price for every 100 Unites purchased
by a TN Client in the Offering.
(b) If such purchase by a TN Client is arranged through another
broker-dealer with whom TN has entered into an agreement in connection with
the Offering, as set forth in Section 2 above, the compensation due to such
other broker-dealer under such agreement shall be paid out of the
compensation received by TN under paragraph (a) above.
(c) If a sale of Shares in the Offering is made to an investor
introduced to the Company by another broker-dealer or other finder or
financial intermediary which was introduced to the Company by TN and which
entered into a separate compensation arrangement with the Company, then,
upon the purchase of Shares by such investor in the Offering, TN shall be
entitled to receive a fee equal to the difference between the fee set forth
in paragraph (a) of this Section and the fee set forth in the separate
compensation arrangement between the Company and such other broker-dealer,
finder or financial intermediary, but such difference shall not be less
than, and TN shall not receive less than, a cash fee of 2% of the gross
amount of such purchase and Finder Warrants to purchase two (2) Unites for
every 100 Unites purchased by such investor, except that in no case shall
compensation exceed 10% in total.
The compensation payable under this Agreement will be payable
upon the consummation of each sale of Shares under paragraphs (a), (b) or
(c) of this Section. The Finder Warrants will be exercisable for a term of
five-years from issuance, will have an exercise price equal to original
purchase price, and will have registration rights substantially similar to
those granted to investors in the Offering but including a cashless
exercise provision. As example for 100 unites sold the Finder would
receive Finder's Warrants giving right to purchase 10unites which would
allow finder to purchase 20 common at 50 cents per share, 20 common at
$1.00 per share, and 10 common at $2.00 per share.
4. Blue Sky Filings The Company shall be responsible for all blue
sky filings, and the fees and expense thereof, required in connection with
the Offering, and shall furnish Tn with confirmation of a completed blue
sky filing for each and every state in which TN solicits a prospective
investor in the Offering. Upon execution of this agreement, TN will
provide the Company with a list of shares where it expects to contact
investors, and as soon as possible a list of states of where parties
electing to invest reside. All prospective investors must complete an
investor suitability questionnaire prior to acceptance of subscriptions.
5. Offering Expenses. The Company shall have the obligation to pay
all expenses incurred in connection with the Offering, including, but not
limited to, blue sky and other filing fees, printing and duplication costs,
postage and mailing expenses with respect to the distribution of material
in connection with the Offering, the Company's legal and accounting fees,
the costs of any transfer agent, exchange agent, trustee or escrow agent,
and all issue and transfer taxes.
6. Notices. All notices, consents, requests, demands and other
communications required or permitted to be given under this Agreement shall
be in writing and delivered personally, or by nationally-recognized
overnight courier service, next-day delivery guaranteed with receipt
acknowledged, or mailed by registered or certified mail, postage prepaid,
return receipt requested, addressed to the parties hereto as follows (or to
such other addresses as any of the parties hereto shall specify by given
notice in accordance with this provision), or sent by telecopier with a
confirmation copy by overnight courier service, next-day delivery
guaranteed with receipt acknowledged.
If to the Company:
Trinity Learning Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
With a copy to:
It to TN:
TN Capital Equities, ltd.
00 Xxxx 00xx Xxxxxx
Xxxxx 000
Xxx Xxxx, XX. 10022
Attention: Messrs. Xxxx X. Xxxxxxxxx
All such notices, consents, requests, demands and other communications
shall be deemed given when personally delivered as aforesaid, or, if mailed
as aforesaid, on the third business day after the mailing thereof or on the
day actually received, if earlier, of, in the case of a telecopier or
overnight delivery communication, upon receipt, except for a notice of a
change of address which shall be effective only upon receipt.
7. Miscellaneous
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, heirs, personal
representatives, administrators, executors and permitted assigns. Nothing
contained in this Agreement is intended to confer upon any person or
entity, other than the parties hereto, or their respective successors,
heirs, personal representatives, administrators, executors or permitted
assigns, any rights, benefits, obligations, remedies or liabilities under
or by reason of this Agreement. This Agreement shall constitute the entire
Agreement between the parties hereto and shall supercede in its entirety
all other agreements and undersigned between the parties hereto.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York with respect to contracts made and
to be fully performed therein, without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or
proceeding arising under this Agreement, or in connection with the
consummation of the transactions contemplated hereby, shall be brought
solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the Company hereby consents and
irrevocably submits to the in personam jurisdiction of the federal and
state courts located in the City, County and State of New York and agrees
that any process in any suit or proceeding commenced in such courts under
this Agreement may be served upon it personally or by certified or
registered mail, return receipt requested, or by Federal Express or other
courier service, with the same force and effects as if personally served
upon it in New York City. The parties hereto each waive any claim that any
such jurisdiction is not a convenient forum for any such suit or proceeding
and any defense of lack of in personam jurisdiction with respect thereto.
No assignment, transfer or delegation, whether by operation of
law or otherwise, of any rights or obligations under this Agreement by the
Company shall be made.
This Agreement may be executed in any number of counterparts,
each of which shall be enforceable against the parties actually executing
such counterparts, and all of which together shall constitute one (1)
instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign, date and return to us in the enclosed duplicate
hereof, whereupon this letter and your acceptance and dating shall
represent a binding agreement between TN and the Company.
Very Truly yours,
TN Capital Equities, Ltd
By: /S/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
President
Trinity Learning Corporation
By: Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
