QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.5    
    


EDUCATION MEDIA, INC.

INVESTMENT MANAGEMENT TRUST AGREEMENT  


        THIS INVESTMENT MANAGEMENT TRUST AGREEMENT (the "Agreement") is
made as of                        , 2008, by and between Education Media, Inc.,
 a Delaware corporation (the
"Company") and Continental Stock Transfer & Trust Company, a New York corporation (the
"Trustee"). 



        WHEREAS,
the Company's Registration Statement on Form S-1, [as amended,] No. 333-                        (together with any
registration statement filed pursuant to Rule 462(b), the "Registration Statement"), for its initial public offering (the
"IPO") of units (the "Units"), each consisting of one share of the Company's common stock, par value
$0.0001 per share (the "Common Stock"), and one warrant (collectively, the "Warrants") to purchase one
share of Common Stock, has been declared effective as of the date hereof by the Securities and Exchange Commission (the "Effective Date"); and 


        WHEREAS,
Ferris, Baker Watts, Incorporated is acting as the underwriter (the "Underwriter") in the IPO; and 


        WHEREAS,
the Company has agreed to sell certain of its securities to its existing stockholders in a private placement to be effected concurrently with the IPO
("Private Placement"); and 



        WHEREAS,
as described in the Registration Statement, and in accordance with the Company's Certificate of Incorporation, as amended, $98,325,000 of the gross proceeds of the IPO and the
sale of securities in the Private Placement ($112,725,000 if the Underwriter's over-allotment option is exercised in full) will be delivered to the Trustee to be deposited and held in a
trust account for the benefit of the Company and the public stockholders of the Common Stock issued in the IPO (the amount to be delivered to the Trustee will be referred to herein as the
"Property"; the stockholders for whose benefit the Trustee shall hold the Property will be referred to as the "Public
Stockholders," and the Public Stockholders and the Company will be referred to together as the "Beneficiaries"); and 


        WHEREAS,
a portion of the Property consists of $3,000,000 attributable to the Underwriter's non-accountable expense allowance ("Deferred
Allowance") which the Underwriter has agreed to deposit in the Trust Account (defined below); and 


        WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property; 


        IT
IS AGREED: 


        1.    Agreements and Covenants of Trustee.    The Trustee hereby agrees and covenants to: 



        (a)
Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement, in segregated trust accounts (collectively, the "Trust
Account") established by the Trustee at a branch of Lehman Brothers Inc., and at a brokerage institution selected by the Trustee; 


        (b)
Manage, supervise and administer the Trust Account subject to the terms and conditions set forth herein; 



        (c)
In a timely manner, upon the written instruction of the Company, to invest and reinvest the Property in any "Government Security"
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 180 days or less, or in money market funds selected by the Company meeting
the conditions specified in Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, as determined by the Company; 










        (d)
Collect and receive, when due, all principal and income arising from the Property, which income, net of taxes, shall become part of the
"Property," as such term is used herein; provided,  however, that, notwithstanding the foregoing or any
contrary provision contained herein, the Trustee shall release to the Company an aggregate amount of
up to $2,100,000 from interest earned and collected on the Trust Account, net of taxes, upon the Company's demand, to fund working capital requirements; 



        (e)
Notify the Company of all communications received by it with respect to any Property requiring action by the Company; 


        (f)
Supply any necessary information or documents as may be requested by the Company in connection with the Company's preparation of the tax returns relating to income from the Property
in the Trust Account or otherwise; 


        (g)
Participate in any plan or proceeding for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the Company in writing to do so; 



        (h)
Render to the Company, and to such other person as the Company may instruct, monthly written statements of the activities of and amounts in the Trust Account reflecting all receipts
and disbursements of the Trust Account; 


        (i)
If there is any income or other tax obligation relating to the income from the Property in the Trust Account as determined by the Company, then, from time to time, at the written
instruction of the Company, the Trustee shall promptly, to the extent there is not sufficient cash in the Trust Account to pay such tax obligation, liquidate such assets held in the Trust Account as
shall be designated by the Company in writing, and disburse to the Company by wire transfer or by check, out of the Property in the Trust Account, the amount indicated by the Company as owing in
respect of such income tax obligation; and 


        (j)
Commence liquidation of the Trust Account only upon receipt of and only in accordance with the terms of a letter (the "Termination
Letter"), in a form substantially similar to that attached hereto as either Exhibit A or  Exhibit B, signed on behalf of
the Company by its Chief Executive Officer or Chairman of the Board, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account only as directed in the Termination Letter and the other documents referred to therein. The Company agrees that it shall direct the Trustee to
distribute the Property in the Trust Account only as provided for in the Agreement. 




        2.    Limited Distributions Of Income From Trust Account.    


        Except
for an aggregate amount of up to $2,100,000 from the interest earned and collected on the Trust Account, net of taxes, that the Trustee shall release to the Company upon the
Company's demand to fund working capital requirements, no distributions from the Trust Account shall be permitted except in accordance with Sections 1(i) and 1(j) hereof. The Trustee shall have
no responsibility or liability to verify calculations, qualify or otherwise approve Company requests for distributions pursuant to this Section 2. 


        3.    Agreements and Covenants of the Company.    The Company hereby agrees and covenants to: 



        (a)
Give all instructions to the Trustee hereunder in writing, signed by the Company's Chief Executive Officer or Chairman of the Board. In addition, except with respect to its duties
under Sections 1(i) and 1(j) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it in good faith
believes to be given by any one of the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in writing. The Company shall provide
the Underwriter with a copy of any Termination Letter and/or any other correspondence that it transmits with respect to any proposed withdrawal from the Trust Account promptly after it transmits the
same; 


        (b)
Hold the Trustee harmless and indemnify the Trustee from and against, any and all expenses, including reasonable counsel fees and disbursements, or loss suffered by the Trustee in
connection with any action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand which in any way arises out of or relates to this
Agreement, the services of the Trustee 









hereunder,
or the Property or any income earned from investment of the Property, except for expenses and losses resulting from the Trustee's gross negligence or willful misconduct. Promptly after the
receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this paragraph, it shall
notify the Company in writing of such claim (hereinafter referred to as the "Indemnified Claim"). The Trustee shall have the right to conduct and manage
the defense against such Indemnified Claim, provided, that the Trustee shall obtain the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably
withheld. The Company may participate in such action with its own counsel; 



        (c)
Pay the Trustee an initial acceptance fee, an annual fee and a transaction processing fee for each disbursement made pursuant to Section 1(i) as set forth on  Schedule A hereto, which fees
shall be subject to modification by the parties from time to time. It is expressly understood that the Property
shall not be used to pay such fees and further agreed that said transaction processing fees shall be deducted by the Trustee from the disbursements made to the Company pursuant to Section 1(i).
The Company shall pay the Trustee the initial acceptance fee and first year's fee at the completion of the IPO and thereafter on the anniversary of the Effective Date. The Trustee shall refund to the
Company the annual fee (on a pro rata basis) with respect to any period after the liquidation of the Trust Fund. The Company shall not be responsible for any other fees or charges of the Trustee
except as set forth in this Section 3(c) and as may be provided in Section 3(b) hereof (it being expressly understood that the Property shall not be used to make any payments to the
Trustee under such Sections); 


        (d)
Provide to the Trustee any letter of intent, agreement in principle or definitive agreement that is executed prior to
[    •    ], 2009 in connection with a Business Combination; 


        (e)
In connection with any vote of the Company's stockholders regarding a Business Combination, provide to the Trustee an affidavit or certificate of a firm regularly engaged in the
business of soliciting proxies and tabulating stockholder votes verifying the vote of the Company's stockholders regarding such Business Combination; and 



        (f)
if the Company does not effect a Business Combination within 24 months after completion of the IPO (or obtain the written consent of the holders of 95% of the shares purchased
in the IPO to continue the Company's existence), the Company's existence shall cease except for the purposes of the Company winding up its affairs and liquidating pursuant to Section 278 of the
Delaware General Corporation Law, in which case as promptly as practicable thereafter the Company shall adopt a plan of distribution in accordance with Section 281(b) of the Delaware General
Corporation Law. Upon the Company's adoption of such plan of distribution, the Company shall promptly provide the Trustee a Termination Letter substantially in the form of  Exhibit B hereto.





        4.    Limitations of Liability.    The Trustee shall have no responsibility or liability to: 



        (a)
Take any action with respect to the Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability to any party except for liability arising out
of its own gross negligence or willful misconduct; 


        (b)
Institute any proceeding for the collection of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of the
Property unless and until it shall have received written instructions from the Company given as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay
any expenses incident thereto; 


        (c)
Change the investment of any Property, other than in compliance with Section 1(c); 


        (d)
Refund any depreciation in principal of any Property; 


        (e)
Assume that the authority of any person designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation, or unless the
Company shall have delivered a written revocation of such authority to the Trustee; 









        (f)
The other parties hereto or to anyone else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the exercise of its own
best judgment, except for its gross negligence or willful misconduct. The Trustee may rely conclusively and shall be protected in acting upon any order, judgment, instruction, notice, demand,
certificate, opinion or advice of counsel (including counsel chosen by the Trustee), statement, instrument, report or other paper or document (not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Trustee, in good faith, to be genuine and to be signed or
presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this agreement or any of the terms hereof,
unless evidenced by a written instrument delivered to the Trustee signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its prior written
consent thereto; 


        (g)
Verify the correctness of the information set forth in the Registration Statement (other than information provided by the Trustee) or to confirm or assure that any acquisition made
by the Company or any other action taken by it is as contemplated by the Registration Statement; 


        (h)
Prepare, execute and file tax reports, income or other tax returns and pay any taxes with respect to income and activities relating to the Trust Account, regardless of whether such
tax is payable by the Trust Account or the Company (including but not limited to income tax obligations), it being expressly understood that as set forth in Section 1(i), if there is any income
or other tax obligation relating to the Trust Account or the Property in the Trust Account, as determined from time to time by the Company and regardless of whether such tax is payable by the Company
or the Trust, at the written instruction of the Company, the Trustee shall make funds available in cash from the Property in the Trust Account an amount specified by the Company as owing to the
applicable taxing authority, which amount shall be paid directly to the Company by electronic funds transfer and the Company shall forward such payment to the taxing authority; or 


        (i)
Verify calculations, qualify or otherwise approve Company requests for distributions pursuant to Sections 1(i) and 2 above. 




        5.    Termination.    This Agreement shall terminate as follows: 



        (a)
If the Trustee gives written notice to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor trustee. At such
time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has agreed to become subject to the terms of this Agreement, the Trustee shall transfer the
management of
the Trust Account to the successor trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate;
provided, however, that, in the event that the Company does not locate a successor trustee within ninety days of receipt of the resignation notice from the Trustee, the Trustee may submit an
application to have the Property deposited with the United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune from any liability whatsoever
that arises due to any actions or omissions to act by any party after such deposit; 


        (b)
At such time that the Trustee has completed the liquidation of the Trust Account in accordance with the provisions of Section 1(j) hereof, and distributed the Property in
accordance with the provisions of the Termination Letter, this Agreement shall terminate except with respect to Section 3(b). 




        6.    Miscellaneous.    



        (a)
The Company and the Trustee each acknowledge that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust Account. The
Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has
reason to believe unauthorized persons 









may
have obtained access to such information, or of any change in its authorized personnel. In executing funds transfers, the Trustee will rely upon account numbers or other identifying numbers of a
beneficiary, beneficiary's bank or intermediary bank, rather than names. The Trustee shall not be liable for any loss, liability or expense resulting from any error in an account number or other
identifying number, provided it has accurately transmitted the numbers provided. 



        (b)
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws. It may be executed in
several counterparts, each one of which shall constitute an original, and together shall constitute one instrument. This Agreement or any counterpart may be executed via facsimile or other electronic
transmission, and any such executed facsimile or other electronic copy shall be treated as an original. 


        (c)
This Agreement contains the entire agreement and understanding of the parties hereto with respect to the subject matter hereof. The parties hereto may change, waive, amend or modify
any provision contained herein that may be defective or inconsistent with any other provision contained herein only upon the written consent of each of the parties hereto; provided that such action
shall not materially adversely affect the interests of the Public Stockholders. Any other change, waiver, amendment or
modification to this Agreement shall be subject to approval by a majority of the Public Stockholders. As to any claim, cross-claim or counterclaim in any way relating to this Agreement, each party
waives the right to trial by jury. 


        (d)
The parties hereto consent to the non-exclusive jurisdiction and venue of any state or federal court located in the City of New York for purposes of resolving any
disputes hereunder. 


        (e)
Any notice, consent or request to be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail or similar
private courier service, by certified mail (return receipt requested), by hand delivery or by facsimile transmission: 



if
to the Trustee, to: 



Continental
Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, NY 10004

Attn: Richard Kretz 




if
to the Company, to: 



Education
Media, Inc.

1700 Pennsylvania Avenue, N.W.

Suite 900

Washington, DC 20006

Attn: Peter A. Kirsch, CEO 




with
a copy to: 



Kalbian
Hagerty LLP

888 17th Street, N.W.

10th Floor

Washington, DC 20006

Attn: John F. McCarthy III, Esq. 












in
either case with a copy on behalf of the Underwriter to: 



Ferris,
Baker Watts Incorporated

100 Light Street

8th Floor

Baltimore, MD 21202

Attn: Scott T. Bass 




with
a copy to: 



Gersten
Savage, LLP

600 Lexington Avenue

9th Floor

New York, NY 10022

Attn: Arthur S. Marcus, Esq. 





        (f)
This Agreement may not be assigned by the Trustee without the prior consent of the Company. 


        (g)
Each of the Trustee and the Company hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and to perform its respective
obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall
not be entitled to any part of the Property under any circumstance. 



        (h)
The Trustee hereby waives any and all right, title, interest or claim of any kind ("Claim") in or to any distribution of any property
held in trust for the Company in the Trust Account, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. 


        (i)
The Trustee hereby consents to the inclusion of Continental Stock Transfer & Trust Company in the Registration Statement and other materials relating to the IPO. 


        (j)
Each of the Company and Trustee agrees and acknowledges that the Underwriter is a third party beneficiary of this Agreement. 




        IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above. 



	 	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee
	

 	
 	

By:	

 
	 	 	Name:	 
	 	 	Title:	Trust Officer & CFO
	

 	
 	

EDUCATION MEDIA, INC.
	

 	
 	

By:	

 
	 	 	Name:	Peter A. Kirsch
	 	 	Title:	Chief Executive Officer











 
 

EXHIBIT A    
    


[LETTERHEAD OF COMPANY]

[INSERT DATE]  


Continental
Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, NY 10004

Attn: 


Re:
Trust Account No. [    •    ] Termination Letter 


Gentlemen:



        Pursuant
to Section 1(j) of the Investment Management Trust Agreement between Education Media, Inc. (the "Company") and Continental Stock Transfer & Trust Company
(the "Trustee"), dated as of [    •    ], 2007 (the "Trust Agreement"), this is to advise you
that the Company has entered into an agreement ("Business Agreement") with [    •    ] (the
"Target Business") to consummate a business combination with Target Business (a "Business Combination") on or about [INSERT DATE]. The Company shall notify you at least
48 hours in advance of the actual date of the consummation of the Business Combination (the "Consummation Date"). Defined terms used but not otherwise defined herein shall have the meaning
ascribed to such terms in the Trust Agreement. 


        Pursuant
to Section 3(e) of the Trust Agreement, we are providing you with [an affidavit] [a certificate] of    , which
verifies the vote of the Company's stockholders in connection with the Business Combination. In accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the
Trust Account to the effect that, on the Consummation Date, all of the funds held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall
direct in writing on the Consummation Date. 


        On
the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated and (ii) the Company shall
deliver to you written instructions with respect to the transfer of the funds held in the Trust Account (the "Instruction Letter"). You are hereby directed and authorized to transfer the funds held in
the Trust Account immediately upon your receipt of the counsel's letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In the event that certain deposits held in
the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify the Company of the same and the Company shall direct you as to whether such funds should remain in the
Trust Account and be distributed after the Consummation Date to the Company or, with respect to the Deferred Allowance, to the Underwriter. Upon the distribution of all the funds in the Trust Account
pursuant to the terms hereof, the Trust Agreement shall be terminated. 


        In
the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original Consummation
Date of a new Consummation Date, then, upon receipt of written instructions from the Company, the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business
day immediately following the Consummation Date as set forth in the notice. 



	 	 	Very truly yours,
	

 	
 	

EDUCATION MEDIA, INC.
	

 	
 	

By:	


	 	 	Name:	Peter A. Kirsch
	 	 	Title:	Chief Executive Officer











 
 

EXHIBIT B    
    


[LETTERHEAD OF COMPANY]

[INSERT DATE]  


Continental
Stock Transfer & Trust Company

17 Battery Place, 8th Floor

New York, NY 10004

Attn: 


Re:
Trust Account No. [    •    ] Termination Letter 


Gentlemen:



        Pursuant
to paragraph 1(j) of the Investment Management Trust Agreement between Education Media, Inc. (the "Company") and Continental Stock Transfer & Trust Company
(the "Trustee"), dated as of [    •    ], 2007 (the "Trust Agreement"), this is to advise you
that the Company's existence has ceased due to the Company's inability to effect a Business Combination within the time frame specified in the Company's prospectus relating to its IPO. Defined terms
used but not otherwise defined herein shall have the meaning ascribed to such terms in the Trust Agreement. 


        In
accordance with the terms of the Trust Agreement, we hereby authorize you to commence liquidation of the Trust Account. You will notify the Company in writing as to when all of the
funds in the Trust Account will be available for immediate transfer (the "Transfer Date") in accordance with the Company's plan of distribution attached hereto. You shall commence distribution of such
funds in accordance with the terms of such plan of distribution and you shall oversee the distribution of the funds. Upon the distribution of all the funds in the Trust Account, your obligations under
the Trust Agreement shall be terminated and the Trust Account shall be closed. 



	 	 	Very truly yours,
	

 	
 	

EDUCATION MEDIA, INC.
	

 	
 	

By:	


	 	 	Name:	Peter A. Kirsch
	 	 	Title:	Chief Executive Officer









SCHEDULE A 


Schedule of fees pursuant to Section 3(c) of

Investment Management Trust Agreement

between Education Media, Inc. and

Continental Stock Transfer & Trust Company 



	Fee Item
	 	Time and method of payment
	 	Amount

	Initial acceptance fee	 	Initial closing of IPO by wire transfer	 	$	1,000
	

Annual fee	
 	

First year, initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO by wire transfer or check	
 	
$	

3,000
	

Transaction processing fee for disbursements to Company under Sections 1(i) and 2	
 	

Deduction by Trustee from disbursement made to Company under Section 2	
 	
$	

4,000





Dated:
November            , 2008 



	 	 	Agreed:
	

 	
 	

Education Media, Inc.
	

 	
 	

By:	


	 	 	Title:	Chief Executive Officer
	

 	
 	

Continental Stock Transfer & Trust Company
	

 	
 	

By:	


	 	 	Title:	Trust Officer













QuickLinks



Exhibit 10.5



EXHIBIT A



EXHIBIT B