ex4_5.htm


    
      

    

    Exhibit
      4.5


    


    ASSUMPTION
      AGREEMENT AND FIRST
      AMENDMENT TO MANAGEMENT STOCKHOLDERS AGREEMENT

     

    THIS
      ASSUMPTION AGREEMENT AND THIS FIRST AMENDMENT (together, this “Amendment”) TO THE
      MANAGEMENT STOCKHOLDERS AGREEMENT (the “Agreement”) dated as
      of January 1, 2002, by and among LINCOLN TECHNICAL INSTITUTE, INC., a New Jersey
      corporation (“LTI”), the Management
      Investors (as such term is defined in the Agreement) and BACK TO SCHOOL
      ACQUISITION L.L.C., a Delaware limited liability corporation (“Stonington”), is
      entered into as of December 20, 2007 (the “Effective Date”) by
      and among LINCOLN EDUCATIONAL SERVICES CORPORATION, a New Jersey corporation
      (“LESC”), LTI,
      Stonington and the undersigned Management Investors (together, the “Consenting
      Investors”).

     

    RECITALS

     

    WHEREAS,
      LTI, Stonington and Management Investors entered into the Agreement to provide
      for certain rights and obligations among them, including, but not limited to,
      the right, under certain circumstances, of the Other Stockholders to have their
      Registrable Securities included in a registration statement filed by
      LTI;

     

    WHEREAS,
      Section 5.10 of the Agreement provides that the Agreement shall be binding
      upon
      and shall inure to the benefit of the parties thereto and their respective
      successors, assigns and transferees;

     

    WHEREAS,
      LESC, LTI, Stonington and the Consenting Investors desire to amend Section
      4.01
      of the Agreement to reduce the notice period to be afforded to the Other
      Stockholders in connection with certain registration rights and to enter into
      certain other amendments;

     

    WHEREAS,
      LTI desires to amend the Agreement and to assign its rights, duties and
      obligations under the Agreement to LESC and LESC wishes to so assume all rights,
      duties and obligations of LTI under the Agreement;

     

    WHEREAS,
      Section 5.04 of the Agreement provides, among other things, that the Agreement
      may be amended by a written instrument signed by LTI, Stonington and Management
      Investors beneficially owning at least a majority of the then outstanding
      Management Shares; and

     

    WHEREAS,
      the Consenting Investors own at least a majority of the currently outstanding
      Management Shares;

     

    NOW,
      THEREFORE, in consideration of the premises and covenants hereinafter set forth,
      the receipt, sufficiency and adequacy of which are hereby acknowledged, LESC,
      LTI, Stonington and the Consenting Investors hereto mutually agree as
      follows:

     

    ARTICLE
      I

    DEFINITIONS

     

    1.1           Capitalized
      terms used but not otherwise defined in this Amendment shall have the meanings
      set forth in the Agreement.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    1.2           Each
      reference in the Agreement to “the Company” shall mean and be a reference in all
      respects to LESC.

     

    ARTICLE
      II

    ASSUMPTION
      OF
      AGREEMENT

     

    2.1           Assignment.  LTI
      hereby assigns, transfers, conveys and delegates to LESC any and all of LTI’s
      interest in and rights, duties and obligations under the Agreement, and LESC
      hereby accepts such assignment, transfer, conveyance and
      delegation.

     

    2.2           Assumption.  LESC
      hereby assumes full responsibility for the full performance of, and undertakes,
      assumes and agrees to perform, pay or otherwise discharge when due, any and
      all
      duties and obligations of LTI arising under the Agreement.

     

    2.3           Further
      Assurances.  Each of LESC, LTI, Stonington and the Consenting
      Investors hereto agrees that it will hereafter execute all further instruments
      or documents and do such other acts and things as may be necessary or desirable
      to more fully effectuate the assignment and assumption provided for
      herein.

     

    2.4           Release
      of
      LTI.  Notwithstanding anything to the contrary contained
      herein, upon the execution and delivery of this Amendment, LESC, Stonington
      and
      the Consenting Investors hereby agree that LTI shall be released from all of
      its
      duties and obligations under the Agreement.

     

    ARTICLE
      III

    FIRST
      AMENDMENT TO THE
      AGREEMENT

     

    3.1           Amendment
      of Section 4.01 of
      the Agreement. Section 4.01 of the Agreement shall be deleted and
      replaced with the following:

     

    “If
      at
      any time the Company determines that it shall file a registration statement
      under the Securities Act (other than a registration statement on a Form S-4
      or
      S-8 or filed in connection with an exchange offer or an offering of securities
      solely pursuant to the Company’s employee benefit plans) on any form that would
      also permit the registration of the Registrable Securities and such filing
      is to
      be on behalf of the Company and/or on behalf of selling holders of its
      securities for the general registration of its Common Stock to be sold for
      cash,
      the Company shall promptly give each Other Stockholder written notice of such
      determination, setting forth the earliest date on which the Company proposes
      to
      file such registration statement, which date shall be no earlier than fifteen
      (15) days from the date of such notice, and advising each Other Stockholder
      of
      its right to have such Other Stockholder’s Registrable Securities included in
      such registration; provided that the
      Other Stockholders shall not have any right to have their Registrable Securities
      included in the initial public offering of the Company if no other Stockholder
      has its Registrable Securities so included. Upon the written request of any
      Other Stockholder received by the Company no later than seven (7) days after
      the
      date of the Company’s notice, the Company shall use all reasonable efforts to
      cause to be registered under the Securities Act all of the Registrable
      Securities that each Other Stockholder has so requested to be
      registered.  If, in the written opinion of the managing underwriter
      (or, in the case of a non-underwritten offering, as reasonably determined by
      the
      Board and communicated in writing to the Stockholders), the total amount of
      such
      securities to be so registered, including such Registrable Securities, will
      exceed the maximum amount of the Company’s securities which can be marketed (i)
      at a price reasonably related to the then current market value of such
      securities, or (ii) without otherwise materially and adversely affecting the
      entire offering, then the Company shall be entitled to reduce the number of
      Registrable Securities to be sold in the offering by the Other Stockholders,
      and
      any other stockholders of the Company exercising incidental registration rights
      similar to those set forth herein, to that number which in the written opinion
      of the managing underwriter (or, in the case of a non-underwritten offering,
      as
      reasonably determined by the Board and communicated in writing to the Other
      Stockholders) would permit all such securities (including Shares held by any
      other stockholder of the Company who proposes to exercise such incidental
      registration rights) to be so marketed. Such reduction shall be allocated among
      the Other Stockholders in proportion (as nearly as practicable) to the amount
      of
      Registrable Securities owned by each such Other Stockholder and the number
      of
      Shares owned by any other stockholders of the Company which are sought to be
      included in the registration statement by such other stockholders of the
      Company, all measured at the time of filing the registration
      statement.”

    


    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    


    3.2           Addition
      of Section 4.08 to
      the Agreement.  The Agreement is hereby amended by adding the
      following Section 4.08 thereto:

     

    “SECTION
      4.08.   Limitation on Registration
      Rights. Notwithstanding anything to the contrary contained in this
      Article IV, the Company shall not be required to give notice of a proposed
      filing of a registration statement pursuant to this Article IV of this Agreement
      to an Other Stockholder or include Registrable Securities of an Other
      Stockholder in a proposed registration if such Other Stockholder, at the date
      immediately prior to the date of the Company’s notice (if such notice is
      required) beneficially owns less than twenty-five thousand (25,000) Registrable
      Securities (the “Ineligible Other
      Stockholder”). An Ineligible Other Stockholder shall have no rights under
      this Agreement to have its Registrable Securities included in a registration
      statement of the Company, and shall have no other rights under this Article
      IV
      of the Agreement that may be available to any Other Stockholder.”

     

    3.3           Amendment
      to the Term
“Registrable Shares”.  Each reference in the Agreement to
“Registrable Shares” shall be deleted and replaced with “Registrable
      Securities”.

     

    3.4           Amendment
      of Section 5.5 of
      the Agreement.  Section 5.5 of the Agreement shall be deleted
      and replaced with the following:

     

    “All
      notices and other communications provided for herein and in the Agreement shall
      be dated and in writing and shall be deemed to have been duly given when
      delivered, if delivered personally, or when deposited in the mail if sent by
      registered or certified mail, return receipt requested, postage prepaid and
      when
      received if delivered otherwise, to the party to whom it is
      directed:

     

    
      	
              (a)

            	
               if
                to LESC, to:

            
	 	 
	 	
              Lincoln
                Educational Services Corporation

            
	 	
              200
                Executive Drive

            
	 	
              West
                Orange, New Jersey 07052

            
	 	
              Facsimile:
                (973) 243-0841

            
	 	
              Attention:
                David F. Carney

            


    

    


    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    


    
      	 	
              with
                a copy to:

            
	 	 
	 	
              Stonington
                Partners, Inc.

            
	 	
              767
                Fifth Avenue, 48th Floor

            
	 	
              New
                York, New York 10153

            
	 	
              Attention:
                James J. Burke, Jr.

            
	 	 
	 	
              and
                a copy to:

            
	 	 
	 	
              Shearman
                & Sterling LLP

            
	 	
              599
                Lexington Avenue

            
	 	
              New
                York, New York 10022

            
	 	
              Facsimile:
                646-848-7088 and 646-848-8167

            
	 	
              Attention:
                Rohan S. Weerasinghe, Esq.

            
	 	
                                 Ferdinand
                J. Erker, Esq.

            


    

    


    (b)           if
      to any of the Management Investors, to the address of such Management Investor
      as shown in the stock record book of LESC or LTI;

    


    
      	
              (c)

            	
              if
                to Stonington to:

            
	 	 
	 	
              Stonington
                Partners, Inc.

            
	 	
              767
                Fifth Avenue, 48th Floor

            
	 	
              New
                York, New York 10153

            
	 	
              Attention:
                James J. Burke, Jr.

            
	 	 
	 	
              with
                a copy to:

            
	 	 
	 	
              Shearman
                & Sterling LLP

            
	 	
              599
                Lexington Avenue

            
	 	
              New
                York, New York 10022

            
	 	
              Facsimile:
                646-848-7088 and 646-848-8167

            
	 	
              Attention:
                Rohan S. Weerasinghe, Esq.

            
	 	
                                
                Ferdinand J. Erker, Esq.

            


    

     

    ARTICLE
      IV

    MISCELLANEOUS

     

    4.1           Effective
      Date. This Amendment
      shall
      become effective on the Effective Date.

     

    4.2           Applicable
      Law.  The laws of the State of New York without reference to
      the choice of law principles thereof shall govern the interpretation, validity
      and performance of the terms of this Amendment, regardless of the law that
      might
      be applied under principles of conflicts of law.

    


    4.3           Integration.    This
      Amendment and the documents referred to herein or delivered pursuant hereto
      which form a part of the Agreement, contain the entire understanding of the
      parties with respect to its subject matter.  There are no
      restrictions, agreements, promises, representations, warranties, covenants
      or
      undertakings with respect to the subject matter hereof other than those
      expressly set forth herein or therein and in the Management Subscription
      Agreement, the Management Stock Option Plan, the Stock Option Agreements, and,
      if any, the employment agreement between a Management Investor and LESC or
      one
      of its subsidiaries.  The Agreement, as amended by this Amendment,
      supersedes all prior agreements and understandings between the parties with
      respect to its subject matter other than such agreements and understandings
      set
      forth in the Management Subscription Agreement, the Management Stock Option
      Plan, the Stock Option Agreements and any such employment
      agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    4.4           Descriptive
      Headings,
      Etc.  The headings in this Amendment are for convenience of
      reference only and shall not limit or otherwise affect the meaning of terms
      contained herein. Unless the context of the Agreement or this Amendment
      otherwise requires, (i) words of any gender shall be deemed to include each
      other gender; (ii) words using the singular or plural number shall also include
      the plural or singular number, respectively; and (iii) references to “hereof,”
“herein,” “hereby” and similar terms shall refer to this entire
      Amendment.

     

    4.5           Counterparts.  This
      Amendment may be executed in multiple counterparts, each of which shall be
      deemed an original, but all of which shall constitute one and the same
      instrument, and it shall not be necessary in making proof of this Amendment
      to
      produce or account for more than one such counterpart.

     

    4.6           Successors,
      Assigns and
      Transferees.  This Amendment shall be binding upon and shall
      inure to the benefit of the parties hereto and the parties in the Agreement
      and
      their respective successors, assigns and transferees except to the extent that
      the terms of this Amendment limit or otherwise restrict the transferability
      of
      any rights or obligations hereunder.

     

    4.7           Severability.  In
      the event that any one or more of the provisions, paragraphs, words, clauses,
      phrases or sentences contained herein, or the application thereof in any
      circumstances, is held invalid, illegal or unenforceable in any respect for
      any
      reason, the validity, legality and enforceability of any such provision,
      paragraph, word, clause, phrase or sentence in every other respect and of the
      other remaining provisions, paragraphs, words, clauses, phrases or sentences
      hereof shall not be in any way impaired, it being intended that all rights,
      powers and privileges of the parties hereto shall be enforceable to the fullest
      extent permitted by law.

     

    4.8           Consent
      to
      Jurisdiction.  (a) Each party hereto hereby irrevocably
      consents and submits to the exclusive jurisdiction of any state or federal
      court
      whose situs is within New York City in any action or proceeding arising out
      of
      or relating to the Agreement or this Amendment, and each party hereby
      irrevocably agrees that all claims in respect of such action or proceeding
      may
      be heard and determined in any federal court sitting in New York that possesses
      subject matter jurisdiction over the asserted claims or by any state court
      sitting in New York City.

     

    (b)         Each
      party further irrevocably agrees that venue for any action or proceeding arising
      out of or relating to the Agreement or this Amendment shall be proper in any
      state or federal court located in New York City, and each party irrevocably
      waives any right it may have to transfer or change the venue of any such action
      or proceeding brought against it in a state or federal court located in New
      York
      City.  Each party agrees that a final judgment in any such action or
      proceeding shall be conclusive and may be enforced in other jurisdictions by
      suit on the judgment or in any other manner provided by law.

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    


    (c)          Nothing
      in this Section 4.9 shall affect the right of any party to serve legal process
      in any other manner permitted by law or affect the right of any party to bring
      any action or proceeding against any other party or its property in the courts
      of other jurisdiction.

     

    4.9           WAIVER
      OF JURY
      TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT
      TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
      OR
      RELATING TO THE AGREEMENT OR THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED
      HEREBY OR THEREBY.

     

    4.10          Benefits
      of this
      Amendment.  Nothing in this Amendment, express or implied,
      shall give to any party, other than the parties hereto and the parties under
      the
      Agreement, including their successors or Permitted Transferees, any benefit
      of
      any legal or equitable right, remedy or claim under the Agreement or this
      Amendment.

     

     

    [Signatures
      on Following
      Pages]

     

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    


    IN
      WITNESS WHEREOF, the parties hereto
      have executed this Amendment to the Management Stockholders Agreement as of
      the
      Effective Date.

     

     

      
        	 	
                LINCOLN
                  EDUCATIONAL SERVICES
                  CORPORATION

              
	 	 
	 	
                By:

              	/s/
                David
                F. Carney
	 	
                Name:

              	
                David
                  F. Carney

              
	 	
                Title:

              	
                Chairman
                  and Chief Executive Officer

              
	 	 	 
	 	
                LINCOLN
                  TECHNICAL INSTITUTE,
                  INC.

              
	 	 
	 	
                By:

              	/s/
                David
                F. Carney
	 	
                Name:

              	
                David
                  F. Carney

              
	 	
                Title:

              	
                Chairman
                  and Chief Executive Officer

              
	 	 	 
	 	
                BACK
                  TO SCHOOL ACQUISITION,
                  L.L.C.

              
	 	 
	 	
                By:

              	/s/
                James
                J. Burke, Jr.
	 	
                Name:

              	
                James
                  J. Burke, Jr.

              
	 	
                Title:

              	
                President

              
	 	 	 
	 	
                MANAGEMENT
                  INVESTORS

              
	 	 
	 	
                By:

              	/s/
                David
                F. Carney
	 	
                Name:

              	David
                F. Carney
	 	 	 
	 	
                By:

              	/s/
                Scott M. Shaw
	 	
                Name:

              	Scott
                M. Shaw
	 	 	 
	 	
                By:

              	/s/
                Cesar Ribeiro
	 	
                Name:

              	Cesar
                Ribeiro
	 	 	 
	 	
                By:

              	/s/
                Lawrence E. Brown 
	 	
                Name:

              	Lawrence
                E. Brown