March 24, 2000
Euburn R.A. Forde
Tutornet.com, Inc.
11410 Isaac Newton Square North
Reston, VA 20190
Dear Euburn:
On March 23, 2000, Van Perkins and Euburn Forde reached an understanding for the
emergency interim funding (the "Bridge Loan") of Tutornet.com, Inc. and a have
set a firm date for the closing of the business combination discussed in
paragraph 1 below. Such understanding is derived from our mutual agreement and
ongoing commitment to collectively use our best efforts to effect a series of
transactions:
1. Business Combination of Tutornet and Zycom, Inc. ("Zycom").
It is expected that on Tuesday, March 29, 2000 or the very earliest date
practicable (the "Closing Date"), Zycom and Tutornet will have used their best
efforts to effect the closing of a business combination, the general terms of
which are contained in the letter of intent executed by the parties on March 21,
2000 attached as Exhibit A and whereby post-closing of this transaction Zycom
will have changed its name to Tutornet.com Corp. From this point forward in this
memorandum, for the purpose of communication, the post-closing entity will be
referred to as ("Tutornet").
On the Closing Date Tutornet will commence the process of registering the shares
of its common stock as set forth under the terms of the business combination
agreement executed on the Closing Date.
2. Private Placement.
On the Closing Date Tutornet will commence a best efforts private placement of
its restricted common stock for the sale of all or a part of 200,000 share's of
its restricted common stock for a purchase price of $12.00 per share to
accredited investors. Registration rights will be granted the holders on the
same language, terms and conditions, regarding registration, contained in the
investment agreement between Primus and Tutornet dated __________, a copy of
which is attached as Exhibit B.
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3. The Bridge Loan.
Business Development Corporation ("BDC") will fund, on March 24, 2000, a Bridge
Loan to Tutornet in the amount of $500,000 as follows:
(i) To secure the performance of payment of Tutornet, BDC will be
granted a first lien security interest in all of the existing
technology and intellectual property of Tutornet and any technology
created in the future while this note is outstanding. Appropriate,
commercially reasonable Uniform Commercial Code forms will be provided
to BDC duly executed by Tutornet to be drafted by legal counsel of
Tutornet.
(ii) Counsel for Tutornet will draft and deliver a validly issued,
commercially reasonable promissory note (the "note") containing
appropriate language to provide:
o that the note is payable to BDC from the first $500,000 of
proceeds from the sale of common stock resulting from (i) the
Private Placement discussed in paragraph number 2 above or
(ii) from the first proceeds of any other sale of the common
stock of Tutornet during the following 24 consecutive months;
o in the event that none of the common stock of Tutornet is sold
during the following 24 consecutive months, the note shall be
payable on March 23, 2002; the note shall bear interest at the
rate of 8%, payable quarterly;
o provisions for default and acceleration of the note should
Tutornet breach any of the term of the note;
o that BDC shall be entitled to the collection of legal fees in
the event of default or for the collection of the note;
o that should BDC elect to assign portions of its interest in
the note to Gary J. McAdam or Ronald J. Miller or to legal
entities controlled by them, Tutornet will reissue such notes
as requested by BDC;
o and separately, a resolution of the board of directors of
Tutornet approving all of the transactions set forth in this
memorandum;
(iii) BDC shall receive non-callable warrants to purchase 500,000
shares of the common stock of Tutornet for a purchase price of $12.00
per share at any time before March 24, 2004. The warrants shall contain
the appropriate anti dilutive and registration language similar to the
concept discussed for registration rights under Paragraph 2. In
addition to the language set forth in the Primus agreement, such
500,000 will contain a "cashless" provision, the language for which
will be that same language contained in commercially reasonable
transactions.
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4. The Facilitation Fee:
In lieu of the $250,000 cash fee to be paid BDC at closing as set forth in the
letter of intent, attached as Exhibit C, BDC agrees to accept 21,000 shares of
Tutornet restricted common stock and warrants to purchase 21,000 shares of
common stock On the same terms and conditions set forth in Paragraph 3(iii)
herein.
Euburn, BDC does not serve the business segment of originating "emergency
funding" as a part of its investment strategy. At the end of the day, we would
rather see a more qualified and experienced group undertake such a funding.
Therefore, commercially reasonable terms are an absolute must for our comfort.
Should we complete the above-described transactions, we will be on the same side
and you will see my heart and soul deployed for our common good and protection
while at the same time remaining a very aggressive, loyal supporter of Tutornet.
You are asking a great deal of me to come to the rescue and I believe you to be
a fair and righteous gentleman. Therefore when the wire transfer is made to
Tutornet without appropriate documentation, you are taking on the role for BDC
to receive prompt, fair and reasonable treatment in the delivery of documents.
Should you undertake the role of fiduciary for BDC, then your agreement is all
that is need for the completion of the emergency funding. Should that be the
case please execute this document in the space provided.
Best regards,
/s/ Van R. Perkins
--------------------------
Van R. Perkins
Van R. Perkins /s/ Euburn Forde
on behalf of Zycom, Inc. ---------------------------
Business Development Corporation Euburn Forde as
Gary J. McAdam and President
Ronald J. Miller Tutornet.com, Inc.
Dated: March 24, 2000
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