Exhibit 4.4
SECURED REVOLVING NOTE
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FOR VALUE RECEIVED, each of TRINITY LEARNING CORPORATION, a Utah corporation
(the "PARENT"), and the other companies listed on Exhibit A attached hereto
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(such other companies together with the Parent, each a "COMPANY" and
collectively, the "COMPANIES"), jointly and severally, promises to pay to LAURUS
MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Xxxxxx
House, South Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands, Fax:
000-000-0000 (the "HOLDER") or its registered assigns or successors in interest,
the sum of Five Million Dollars ($5,000,000), or, if different, the aggregate
principal amount of all Loans (as defined in the Security Agreement referred to
below), together with any accrued and unpaid interest hereon, on August __, 2009
(the "MATURITY DATE") if not sooner indefeasibly paid in full.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Security Agreement among the Companies and the
Holder dated as of the date hereof (as amended, modified and/or supplemented
from time to time, the "SECURITY AGREEMENT").
The following terms shall apply to this Secured Revolving Note (this "NOTE"):
ARTICLE I
CONTRACT RATE
1.1 Contract Rate. Subject to Sections 2.2 and 3.9, interest payable on the
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outstanding principal amount of this Note (the "PRINCIPAL AMOUNT") shall accrue
at a rate per annum equal to the "prime rate" published in The Wall Street
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Journal from time to time (the "PRIME RATE"), plus two percent (2.0%) (the
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"CONTRACT RATE"). The Contract Rate shall be increased or decreased as the case
may be for each increase or decrease in the Prime Rate in an amount equal to
such increase or decrease in the Prime Rate; each change to be effective as of
the day of the change in the Prime Rate. The Contract Rate shall not at any
time be less than nine percent (9.0%). Interest shall be (i) calculated on the
basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on
September 1, 2006 on the first business day of each consecutive calendar month
thereafter through and including the Maturity Date, and on the Maturity Date,
whether by acceleration or otherwise.
1.2 Contract Rate Payments. The Contract Rate shall be calculated on the
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last business day of each calendar month hereafter (other than for increases or
decreases in the Prime Rate which shall be calculated and become effective in
accordance with the terms of Section 1.1) until the Maturity Date and shall be
subject to adjustment as set forth herein.
ARTICLE II
EVENTS OF DEFAULT AND DEFAULT RELATED PROVISIONS
2.1 Events of Default. The occurrence of an Event of Default under the
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Security Agreement beyond any applicable grace period shall constitute an event
of default ("EVENT OF DEFAULT") hereunder.
2.2 Default Interest. Following the occurrence and during the continuance
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of an Event of Default, the Companies shall, jointly and severally, pay
additional interest on the outstanding principal balance of this Note in an
amount equal to one percent (1%) per month, and all outstanding Obligations,
including unpaid interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such Event
of Default is cured or waived.
2.3 Default Payment. Following the occurrence and during the continuance of
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an Event of Default, the Holder, at its option, may elect, in addition to all
rights and remedies of the Holder under the Security Agreement and the other
Ancillary Agreements and all obligations and liabilities of each Company under
the Security Agreement and the other Ancillary Agreements, to require the
Companies, jointly and severally, to make a Default Payment ("DEFAULT PAYMENT").
The Default Payment shall be 120% of the outstanding principal amount of the
Note, plus accrued but unpaid interest, all other fees then remaining unpaid,
and all other amounts payable hereunder, under the Security Agreement or any
other Ancillary Agreement. The Default Payment shall be applied first to any
fees due and payable to the Holder pursuant to the Note, the Security Agreement
and/or the Ancillary Agreements, then to accrued and unpaid interest due on the
Notes and then to the outstanding principal balance of the Note. Subject to the
last sentence of Section 17 of the Security Agreement, the Default Payment shall
be due and payable within three (3) business days of the date that the Holder
has demanded payment of the Default Payment pursuant to this Section 2.3.
ARTICLE III
MISCELLANEOUS
3.1 Issuance of New Note. Upon any partial redemption of this Note, a new
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Note containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Companies to the Holder for the principal
balance of this Note and interest which shall not have been paid. Subject to
the provisions of Article II of this Note, the Companies shall not pay any
costs, fees or any other consideration to the Holder for the production and
issuance of a new Note.
3.2 Cumulative Remedies. The remedies under this Note shall be cumulative.
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3.3 Failure or Indulgence Not Waiver. No failure or delay on the part of
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the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
3.4 Notices. Any notice herein required or permitted to be given shall be
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in writing and shall be deemed effective given (a) upon personal delivery to the
party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
respective Company at the address provided for such Company in the Security
Agreement executed in connection herewith, and to the Holder at the address
provided in the Security Agreement for the Holder, with a copy to Laurus Capital
Management, LLC, Attn: Portfolio Services, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, xxxxxxxxx number (000) 000-0000, or at such other address
as the respective Company or the Holder may designate by ten days advance
written notice to the other parties hereto.
3.5 Amendment Provision. The term "Note" and all references thereto, as
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used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may be
amended or supplemented.
3.6 Assignability. This Note shall be binding upon each Company and its
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successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Security Agreement. No Company may assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.
3.7 Cost of Collection. In case of an occurrence of an Event of Default
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under this Note, the Companies shall, jointly and severally, pay the Holder the
Holder's reasonable costs of collection, including reasonable attorneys' fees.
3.8 Governing Law, Jurisdiction and Waiver of Jury Trial.
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(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICTS OF LAW.
(b) EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY COMPANY,
ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE, THE
SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF THE
OTHER ANCILLARY AGREEMENTS; PROVIDED, THAT, EACH COMPANY ACKNOWLEDGES THAT ANY
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APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE
COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT, NOTHING IN
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THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. EACH COMPANY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION WHICH
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
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NON CONVENIENS. EACH COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
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COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE
SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT
IN THE U.S. MAILS, PROPER POSTAGE PREPAID
(c) EACH COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING
SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVES
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE
SECURITY AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED
HERETO OR THERETO.
3.9 Severability. In the event that any provision of this Note is invalid
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or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of this
Note.
3.10 Maximum Payments. Nothing contained herein shall be deemed to
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establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate
of interest required to be paid or other charges hereunder exceed the maximum
rate permitted by such law, any payments in excess of such maximum rate shall be
credited against amounts owed by the Companies to the Holder and thus refunded
to the Companies.
3.11 Security Interest. The Holder has been granted a security interest (i)
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in certain assets of the Companies as more fully described in the Security
Agreement and (ii) pursuant to the Stock Pledge Agreement dated as of the date
hereof.
3.12 Construction. Each party acknowledges that its legal counsel
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participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Note to favor any party against the other.
3.13 Registered Obligation. This Note is intended to be a registered
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obligation within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)
and the Companies (or their agents) shall register this Note (and thereafter
shall maintain such registration) as to both principal and any stated interest.
Notwithstanding any document, instrument or agreement relating to this Note to
the contrary, transfer of this Note (or the right to any payments of principal
or stated interest thereunder) may only be effected by (i) surrender of this
Note and either the reissuance by the Companies of this Note to the new holder
or the issuance by the Companies of a new instrument to the new holder, or (ii)
transfer through a book entry system maintained by the Companies (or their
agents), within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).
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IN WITNESS WHEREOF, each Company has caused this Secured Revolving Note to be
signed in its name effective as of this __ day of August 2006.
TRINITY LEARNING CORPORATION
By:__________________________________
Name:
Title:
WITNESS:
__________________________________
TRINITY WORKPLACE LEARNING CORPORATION
By:__________________________________
Name:
Title:
WITNESS:
__________________________________
EXHIBIT A
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OTHER COMPANIES
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Trinity Workplace Learning Corporation, a Delaware corporation
