Exhibit 4.12
Lockup Agreement
August 31, 2006
Trinity Learning Corporation
0000 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
RE: TRINITY LEARNING CORPORATION (THE "COMPANY")
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Gentlemen:
The undersigned ("Laurus") proposes to enter into a financing transaction
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with the Company and certain of its subsidiaries (the "Transaction"). In
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connection with the Transaction, Laurus is purchasing from the Company 1,500,000
shares of 7% convertible preferred stock (the "7%Preferred Stock") which is to
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be issued to Laurus as of the date hereof and is convertible into up to
15,000,000 shares of common stock, no par value per share, of the Company, as
same may be adjusted pursuant to the terms of the 7% Preferred Stock (the
"Shares"). The undersigned acknowledges that the Company is relying on the
representations and agreements of the undersigned contained in this letter
agreement in carrying out the Transaction and, in particular, issuing the 7%
Preferred Stock.
In consideration of the foregoing and so long as no Event of Default (as defined
in the Security Agreement dated as of the date hereof among the Company, certain
subsidiaries of the Company and Laurus, as same may be amended, modified and/or
supplemented from time to time) has occurred and is continuing, the undersigned
hereby agrees that the undersigned will not, without the prior written consent
of the Company (which consent may be withheld in its sole discretion), directly
or indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open "put
equivalent position" within the meaning of Rule 16a-1(h) under the U.S.
Securities Exchange Act of 1934, as amended, or otherwise dispose of any Shares
received upon conversion of the 7% Preferred Stock or publicly announce an
intention to do any of the foregoing, for a period of no less than twelve (12)
months from the date hereof (the "Restricted Period"). The foregoing sentence
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shall not apply to the transfer of any or all of the Shares to an affiliate
within the meaning of Rule 405 promulgated under the U.S. Securities Act of
1933, as amended; provided, however, that in any such case it shall be a
condition to such transfer that the transferee executes and delivers to the
Company an agreement stating that the transferee is receiving and holding the
Shares subject to the provisions of this letter agreement and there shall be no
further transfer of such Shares except in accordance with this letter agreement.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Shares except in compliance with the foregoing restrictions.
Following the Restricted Period, the undersigned hereby agrees that, at the time
of each proposed date of sale of Shares, the undersigned shall only be permitted
to sell on the proposed date of sale of Shares such number of Shares of the
Company that is not in excess of the twenty percent (20%) of the aggregate
dollar trading volume of the Company's common stock for the twenty-two (22)
trading days immediately prior to and including the proposed date of sale of
Shares.
This letter agreement is irrevocable and will be binding on the undersigned and
the respective successors, heirs, personal representatives and assigns of the
undersigned.
LAURUS MASTER FUND, LTD.
By:
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Name:
Title:
