Subordination and Convertible Preferred Stock Agreement between Trinity Learning Corporation and Palisades Master Fund, LP

Summary

Trinity Learning Corporation and Palisades Master Fund, LP have agreed that Palisades will subordinate its $4.5 million convertible debenture to allow Trinity to secure $7.5 million in financing from Laurus Master Funds. In exchange, Trinity will issue $2.8 million in convertible preferred stock to Palisades, with specific conversion rights, a 7% coupon, and a 5-year maturity. Trinity must also register the underlying shares within a set timeframe. The agreement is contingent on the Laurus financing closing by August 31, 2006, and other existing terms remain in effect.

EX-4.11 12 ex1011.txt EXHIBIT 4.11 Exhibit 4.11 July 31, 2006 Dennis Cagan Patrick Quinn Trinity Learning Corporation 4101 International Parkway Carrollton, TX 75007 Dear Dennis & Pat, This letter is intended to formalize the discussions that have taken place regarding Palisades Master Fund, LP ("PMF") subordinating its $4.5 million Convertible Debenture in order for Trinity Learning Corp ("Trinity") to close on a $7.5 million on financing transaction with Laurus Master Funds ("Laurus"). PMF is willing to subordinate its term loan predicated upon: 1) Trinity issuing to Palisades Master Fund, LP, a $ 1,000,000 Convertible Preferred priced at $1.00 per share, each preferred share is convertible into 10 common shares priced at $0.10 with a 7% coupon. The Preferred will have a 5-year maturity and will pay semi-annually. The Preferred will be issued to Palisades on or before July 31, 2006. 2) Trinity may redeem any non-converted preferred shares at par value for a period up to 5 years. 3) Trinity will be required to register the shares underlying the Convertible Preferred at the earlier of the next registration statement being filed or 210 days from the date of issuance. 4) All other terms and conditions of the existing Palisades Master Fund Convertible Debenture and related agreements will remain in place, including all anti dilution provisions. The Company agrees that the conversion price of the Debenture shall be reduced to $0.10 per share 5) The Company will issue to Palisades Master Fund, LP, a $1,800,000 Convertible Preferred priced at $1.00 per share, each preferred share is convertible into 10 common shares priced at $0.10 with a 7% coupon. The Preferred will have a 5-year maturity and will pay semi-annually. The Preferred will be issued to Palisades upon the closing of the contemplated financing with Laurus or with another fund on terms similar or better. The Preferred will be identical to the terms and conditions that were issued to Laurus. 6) The Laurus financing will need to be completed and funded no later than August 31, 2006. Agreed to: Agreed to: PEF Advisors Trinity Learning Corporation