Exhibit 10.1
AMENDMENT NO. 1
This Amendment No. 1 (this "Amendment"), dated as of January 31, 2005, is
entered into by and between TRINITY LEARNING CORPORATION, a Utah corporation
(the "Company"), and LAURUS MASTER FUND, LTD., a Cayman Islands company
("Laurus"), for the purpose of amending the terms of (i) the Security Purchase
Agreement, dated as of August 31, 2004, by and between the Company and Laurus
(as amended, modified or supplemented from time to time, the "Securities
Purchase Agreement"), (ii) the Secured Convertible Term Note, dated August 31,
2004 (as amended, modified or supplemented from time to time, the "Secured
Convertible Term Note") issued by the Company pursuant to the Security Purchase
Agreement, and (iii) the Registration Rights Agreement by and between the
Company and Laurus, dated as of August 31, 2004 (as amended, modified or
supplemented from time to time, the "Registration Rights Agreement" and,
together with the Security Purchase Agreement and the Secured Convertible Term
Note, the "Loan Documents"). Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Securities Purchase
Agreement.
WHEREAS, the Company and Laurus have agreed to make certain changes to the
Loan Documents as set forth herein; and
NOW, THEREFORE, in consideration of the above, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Section 2.1 (a) of the Secured Convertible Term Note is hereby amended
by deleting the said Section in its entirety and inserting the following new
Section 2.1(a) in lieu thereof:
"Section 2.1(a) Payment of Monthly Amount in Cash or Common Stock. If the
Monthly Amount (or a portion thereof of such Monthly Amount if such portion of
the Monthly Amount would have been converted into shares of Common Stock but for
Section 3.2) is required to be paid in cash pursuant to Section 2.1(b), then the
Borrower shall pay the Holder an amount equal to 102% of the Monthly Amount due
and owing to Holder on the Repayment Date in cash. If the Monthly Amount (or a
portion of such Monthly Amount if not all of the Monthly Amount may be converted
into shares of Common Stock pursuant to Section 3.2) is required to be paid in
shares of Common Stock pursuant to Section 2.1(b), the number of such shares to
be issued by the Borrower to the Holder on such Repayment Date (in respect of
such portion of the Monthly Amount converted into in shares of Common Stock
pursuant to Section 2.1(b)), shall be the number determined by dividing (x) the
portion of the Monthly Amount converted into shares of Common Stock, by (y) the
then applicable Fixed Conversion Price. For purposes hereof, the initial "Fixed
Conversion Price" means $0.72, provided, however, that the first Two Hundred
Fifty Thousand Dollars ($250,000) aggregate principal amount of the Note
converted into shares of Common Stock on or after January 31, 2005 shall be
converted at a Fixed Conversion Price equal to $0.45; thereafter the Fixed
Conversion Price shall revert to $0.72, subject to adjustment as set forth
herein."
2. The Company hereby agrees to, on or prior to February 2, 2005, file a
Rule 424(b) supplement (the "Post-Effective Supplement") to its Registration
Statement with the Securities and Exchange Commission (the "SEC") relating to
the Secured Convertible Term Note and the warrants issued in connection
therewith (the "Existing Registration Statement"), which Post-Effective
Supplement states the Fixed Conversion Price applicable to the Secured
Convertible Term Note, as set forth in Section 1 of this Amendment.
3. Laurus and the Company hereby agree that as promptly as practicable
following receipt by Laurus of confirmation by the Securities and Exchange
Commission that the Existing Registration Statement is effective after giving
effect to this Amendment or remains effective after giving effect to the filing
by the Company of the Post Effective Supplement, Laurus shall convert into
Common Stock of the Company, outstanding Obligations of the Company in an amount
equal to $60,000 (to be applied first against the interest and then principal
portions of such outstanding Obligations), at a conversion price of $0.45 per
share. Laurus and the Company hereby agree that, notwithstanding any prior
agreement to the contrary, the shares of Common Stock issuable as a result of
such amendment and the change to the fixed conversion price shall be registered
in the Company's next registration statement on Form S-3 (or such other
appropriate form, excluding a Form S-8); provided, however, that the Company
shall register such shares immediately upon the written demand from Laurus if
registration does not occur on or before September 15, 2005.
4. This Amendment shall be effective as of the date hereof following the
execution and delivery of same by each of the Company and Laurus.
5. Except as specifically set forth in this Amendment, there are no other
amendments to the Loan Documents, and all of the other forms, terms and
provisions of the Loan Documents remain in full force and effect.
6. The Company hereby represents and warrants to Laurus that as of the date
hereof all representations, warranties and covenants made by Company in
connection with the Loan Documents are true, correct and complete and all of
Company's and its Subsidiaries' covenant requirements have been met.
7. This Amendment shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall constitute one instrument.
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IN WITNESS WHEREOF, each of the Company and Laurus has caused this Amendment to
the Loan Documents to be signed in its name effective as of this 31st day of
January, 2005.
TRINITY LEARNING CORPORATION
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
LAURUS MASTER FUND, LTD.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Partner
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