/letterhead/
Xxxxxxxx
Xxxxx
Ford & Co.
May 29, 2003
Xx. Xxxx Xxxx
CEO
Trinity Learning Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
PERSONAL & CONFIDENTIAL
-----------------------
XXXXXXXX CURHAN FORD & CO. ADVISORY AGREEMENT
Dear Xxxx:
Xxxxxxxx Xxxxxx Ford & Co., ("MCF") is pleased to act as financial advisor
to Trinity Learning Corporation (the "Company"). We will provide financial
and capital market advisory services to the Company which may include: (i)
review of financial statements and non-public internal business plans, (ii)
evaluation of strategic alternatives based on Company objectives and MCF
industry expertise, (iii) advise on appropriate capital structure and
strategies to acheive maximum return to shareholders and (iv) sponsorship
for an introductions to institutional investors. The purpose of this
letter is to memorialize the terms of our engagement by the Company.
1. Services. In connection with this engagement, MCF will perform the
following services:
a. Institutional Sponsorship: MCF will review the Company's Investor
Presentations (Power Point presentations, handouts, letters to
shareholders, etc.) and advise the Company on any recommended
changes. MCF will also introduce Company management to its
institutional sales force and select institutional investor
clients for group and individual meetings.
b. Review of Financial Condition/Capital Structure: MCF will review
both publicly available documents and confidential Company
materials to determine if the Company has an appropriate capital
structure given its market opportunity. MCF will advise changes
in capital structure as a result of this review and present
strategies to effect such changes. In the event that specific
transactions are identified, MCF will execute additional
engagement letters to specify the compensation and
responsibilities of MCF in each case.
c. Strategic/Competitive Analysis: MCF will help the Company assess
its strategic positioning within its industry sector and advise
the Company on appropriate corporate development strategies
including potential acquisitions, merger and sale strategies. In
the event that specific transactions are identified, MCF will
execute additional engagement letters to specify the compensation
and responsibilities of MCF in each case.
___________________________________________________________________________
000 XXXX XXXXXX, XXXXX 000 - XXX XXXXXXXXX, XX. 94111
(000) 000-0000 MAIN - (000) 000-0000 FAX
(000) 000-0000 TRADING
Trinity Learning Corporation
May 29, 2003
Page 2
2. Information Provided to MCF. In connection with our engagement, the
Company has agreed to furnish to MCF, on a timely basis, all relevant
information needed by MCF to perform under the terms of this
agreement. During our engagement, it may be necessary for us: to
interview the management of, the auditors for, and the consultants and
advisors to, the Company; to rely (without independent verification)
upon data furnished to us by them; and to review any financial and
other reports relating to the business and financial condition of the
Company as we may determine to be relevant under the circumstances.
In this connection, the Company will make available to us such
information as we may request, including information with respect to
the assets, liabilities, earnings, earning power, financial condition,
historical performance, future projections and the assumptions used in
the development of such projections of the Company. We agree that all
nonpublic information obtained by us in connection with our engagement
will be held by us in strict confidence and will be used by us solely
for the purpose of performing financial advisory services and will not
be used for institutional marketing, sales, trading or market making.
We do not assume any responsibility for, or with respect to, the
accuracy, completeness or fairness of the information and data supplies to
us by the Company or its representatives. In addition, the Company
acknowledges that we will assume, without independent verification, that
all information supplied to us with respect to the Company will be true,
correct and complete in all material respects and will not contain any
untrue statements of material fact or omit to state a material fact
necessary to make the information supplied to us not misleading. If at any
time during the course of our engagement the Company becomes aware of any
material change in any of the information previously furnished to us, it
will promptly advise us of the changes.
3. Scope of Engagement. The Company acknowledges that we will not
make, or arrange for others to make an appraisal of any physical
assets of the Company. Nonetheless, if we determine after review
of the information furnished to us that any such appraisal or
appraisals are necessary or desirable, we will so advise the
Company and, if approved by the Company in writing, the costs
incurred in connection with such appraisal(s) will be borne by the
Company.
MCF has been engaged by the Company only in connection with the matters
described in this letter agreement and for no other purpose. We have not
made, and will assume no responsibility to make any representation in
connection with our engagement as to any legal matter.
Term of Engagement. This agreement will be effective for one year
form the date this letter agreement is executed. Either party may
terminate the relationship, at any time, upon thirty days written
notice to the other party. However, Company hereby agrees to a nine-
month minimum engagement with MCF (the "Initial Term"). In the event
of termination or expiration of this agreement, MCF's financial
advisory fee and expenses incurred will be payable in full.
___________________________________________________________________________
000 XXXX XXXXXX, XXXXX 000 - XXX XXXXXXXXX, XX. 94111
(000) 000-0000 MAIN - (000) 000-0000 FAX
(000) 000-0000 TRADING
Trinity Learning Corporation
May 29, 2003
Page 3
5. Fees and Expenses. As compensation for our professional services,
MCF will receive a non-refundable financial advisory fee of $5,000
upon execution of this letter agreement by the Company. This
payment will be in consideration of the first month of services
provided by MCF. MCF will receive a financial advisory fee of
$5,000 for the second month through the sixth month of its
engagement by the Company and a financial advisory fee of $10,000
for the seventh month through the ninth month of its engagement by
the Company ($60,000 total). After nine months, MCF will receive a
financial advisory fee of $10,000 for each month of its engagement
by the Company. Following the first payment, all payments will be
payable on the first day of each month. The Company also agrees to
reimburse our reasonable out-of-pocket expenses (including, but not
limited to, messenger, overnight courier, printing, travel and
counsel fees) on a monthly basis, up to a maximum of $2,500 without
written consent of the Company. In addition, upon execution of
this letter agreement by the Company, MCF will receive a warrant to
purchase 20,000 share of common stock of the Company at an exercise
price equal to the closing price of the Company's common stock as
reported by the appropriate exchange on the date of this letter
agreement. The number of shares each warrant will be adjusted for
stock splits or other dilutive events. The warrants will also
include piggyback registration rights, a net exercise provision,
will be fully exercisable on their issuance date and will have a
term of five years from the issuance date.
6. Indemnity and Contribution. The parties agree to the terms of
MCF's standard indemnification agreement, which is attached hereto
as Appendix A and incorporated herein by reference. The provisions
of this paragraph 6 shall survive any termination of this
Agreement.
7. Other Business. For one year from the effective date of this
agreement, if the Company is considering an offer of securities to
the public, the Company agrees to offer MCF the opportunity to
participate as an advisor, with no less than a 30% role in the
investment activity. If the Company is considering a private offer
of securities, the Company agrees to offer MCF the opportunity to
participate as sole advisor. MCF will also be given first right of
refusal to act as financial advisor in the case of a merger or
acquisition and to prepare any fairness opinion related to a merger
or acquisition transaction. As compensation for any of the
foregoing services, MCF will be paid customary fees to be mutually
agreed upon at the appropriate time. The terms of any such
additional engagements will be set forth in separate letter
agreements containing terms and conditions to be mutually agreed
upon, including without limitation appropriate indemnification
provisions.
___________________________________________________________________________
000 XXXX XXXXXX, XXXXX 000 - XXX XXXXXXXXX, XX. 94111
(000) 000-0000 MAIN - (000) 000-0000 FAX
(000) 000-0000 TRADING
Trinity Learning Corporation
May 29, 2003
Page 4
The Company further understands that if MCF is asked to act for the Company
in any other formal additional capacity relating to this engagement, but
not specifically addressed in this letter, than such activities shall
constitute separate engagements and the terms and conditions of any such
additional engagements will be embodied in one or more separate written
agreements, containing provisions and terms to be mutually agreed upon,
including without limitation appropriate indemnification provisions. The
indemnity provisions in Appendix A shall apply to any such additional
engagements, unless superseded by an Indemnity provisions set forth in a
separate agreement applicable to any such additional engagements, and shall
remain in full force and effect regardless of any completion, modification,
or termination of MCF's engagement(s).
8. Other MCF Activities. MCF is a securities firm engaged in
securities trading and brokerage activities as well as corporate
financial advisory services. In the ordinary course of our trading
and brokerage activities, MCF or its affiliates may hold positions,
for its own accounts of the account of customers, in equity debt of
other securities of the Company.
THIS AGREEMENT MAKES NO REPRESENTATION; NOR DOES IT SUGGEST, IMPLY OR
GUARANTEE THAT A XXXXXXXX CURHAN FORD & CO. ANALYST WILL PUBLISH A
REPORT REGARDING THE COMPANY. FURTHER, IF A XXXXXXXX CURHAN FORD & CO
ANALYST SHOULD CHOOSE TO PREPARE A REPORT REGARDING THE COMPANY: THIS
AGREEMENT MAKES NO REPRESENTATION , NOR DIES IT SUGGEST, IMPLY OR
GUARANTEE THAT SUCH REPORT WILL CAST THE COMPANY IS A FAVORABLE LIGHT,
NOR RECOMMEND PURCHASE OF THE COMPANY'S STOCK.
9. Compliance with Applicable Law. In connection with this
engagement, the Company and MCF will comply with all applicable
federal, state and foreign securities laws and other applicable
laws.
10. Independent Contractor. MCF is and at all times during the term
hereof will remain an independent contractor, and nothing contained
in this letter agreement will create the relationship of employer
and employee or principal and agent as between the Company and MCF
of any of its employees. Without limiting the generality of the
foregoing, all final decisions with respect to matters about which
MCF has provided services hereunder shall be solely those of the
Company, and MCF shall have no liability relating thereto or
arising therefrom. MCF shall have no authority to bind or act for
the Company in any respect. It is understood that MCF
responsibility to the Company is solely contractual in nature and
that MCF does not owe the Company, or any other party, any
fiduciary duty as a result of this engagement.
11. Successors and Assigns. This letter agreement and all obligations
and benefits of the parties hereto shall bind and shall insure to
their benefit and that of their respective successors and assigns.
The indemnity and contribution provisions incorporated into this
letter agreement are for the express benefit of the officers,
directors, employees, consultants, agents and controlling persons
of MCF and their respective successors and assigns.
___________________________________________________________________________
000 XXXX XXXXXX, XXXXX 000 - XXX XXXXXXXXX, XX. 94111
(000) 000-0000 MAIN - (000) 000-0000 FAX
(000) 000-0000 TRADING
Trinity Learning Corporation
May 29, 2003
Page 5
12. Announcements. The Company grants to MCF the right to place
customary announcement(s) of this engagement in certain newspapers
and to mail announcement(s) to persons and firms selected by MCF,
and all costs of such announcement(s) will be borne by MCF.
13. Arbitration. Any dispute between the parties concerning the
interpretation, validity or performance of this letter agreement of
any of its terms and provisions shall be submitted to binding
arbitration in San Francisco County, California, before the
American Arbitration Association, and the prevailing party in such
arbitration shall have the right to have any award made by the
arbitrators confirmed by a court of competent jurisdiction. The
provisions of Section 1283.05 of the California Code of Civil
Procedure, authorizing the taking of depositions and obtaining
discovery, are incorporate herein by this reference and shall be
applicable to any such arbitration.
14. General Provisions. No purported waiver or modification of any of
the terms of this letter agreement will be valid unless made in
writing and signed bu the parties hereto. Section heading used in
this letter agreement are for convenience only, are not a part of
this letter agreement and will not be used in construing any of the
terms hereof. This letter agreement constitutes and embodies the
entire understanding and agreement of the parties relating to the
subject matter hereof and there are no other agreements or
understandings, written or oral, in effect between the parties
relating to the subject matter hereof. No representation, promise,
inducement or statement of intention has been made by either of the
parties hereto which is to be embodied in this letter agreement,
and none of the parties hereto shall be bound by or liable for
alleged representation, promise, inducement or statement of
intention, not so set forth herein. No provision of this letter
agreement shall be construed in favor of or against either of the
parties hereto by reason of the extent to which either of th
parties or its counsel participated in the drafting hereof. If any
provisions of this letter agreement is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, the remaining
provisions hereof shall in no way be affected and shall remain in
full force and effect. In case of any litigation or arbitration
between the parties hereto, the prevailing party shall be entitled
to its reasonable legal fees. This letter agreement is made and
entered into in the State of California, and the laws of that state
relating to contracts made in, and to be performed entirely in, the
State shall govern the validity and the interpretation hereof.
This letter agreement may be executed in any number of counterparts
and by facsimile signature.
___________________________________________________________________________
000 XXXX XXXXXX, XXXXX 000 - XXX XXXXXXXXX, XX. 94111
(000) 000-0000 MAIN - (000) 000-0000 FAX
(000) 000-0000 TRADING
Trinity Learning Corporation
May 29, 2003
Page 6
If the foregoing correctly sets forth your understanding of our
agreement, please sign the enclosed copy of this letter and return it to
RTX, whereupon it shall constitute a binding agreement between us.
Very Truly Yours,
XXXXXXXX CURHAN FORD & CO.
By:
X. Xxxxxxxx Xxxxxxxx
Chairman & CEO
The undersigned hereby accepts, agrees to and becomes party to the
foregoing letter agreement, effective as of the date first written above.
TRINITY LEARNING CORPORATION
By: Xxxx Xxxx
Xxxx Xxxx
CEO
Investigation The Indemnification Party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof at its own expense; provided, however, that the reasonable fees and
expenses of such counsel shall be at the expense of the Company if the
names parties to any such action (including any impleaded parties) include
both the Indemnified Party an the Company and the Indemnified Party shall
have reasonably concluded, based on advise of counsel that there may be a
legal defenses available to the Indemnified Party which are different from
, or in conflict with, any legal defenses which may be available to the
Company (in which event the Company shall not have the right to assume the
defense of such action on behalf of the Indemnified Party, it being
understood however, that the Company shall not be liable for the reasonable
fees and expenses of more than one separate firm of attorneys for all
Indemnified Parties in each jurisdiction in which counsel is needed).
Despite the foregoing, the Indemnified Party shall not settle any claim
without the prior written approval of the Company, which approval shall not
be unreasonable withheld, so long as the Company is not in material breach
of this Appendix A. Also, each Indemnified Party shall make reasonable
efforts to mitigate its losses and liabilities. In addition to the
Company's other obligations hereunder and without limitation, the Company
agrees to pay monthly, upon receipt of itemized statements therefor all
reasonable fees and expenses of counsel incurred by an Indemnified Party in
defending any claim of the type set forth in the preceding paragraphs or in
producing documents, assisting in answering any interrogations, giving any
deposition testimony or otherwise becoming involved in any action or
response to any claim relating to the engagement referred to herein, or any
deposition testimony or otherwise becoming involved in any action or
response to any claim relating to the engagement referred to herein, or any
of the matters enumerated in the preceding paragraphs, whether or not any
claim is made against an Indemnified Party or an Indemnified Party is name
as a party to any such action.
___________________________________________________________________________
Appendix A
