Document:

exv10w42

Exhibit 10.42

TRANSFER AND CONTRIBUTION AGREEMENT

     This Transfer and Contribution Agreement (the “Agreement”) is entered into as
of the ___day of November, 2009 by and among Archipelago Learning, Inc., a Delaware corporation
(“ALI”), those holders of Class A Shares of Archipelago Learning Holdings, LLC, a Delaware
limited liability company (the “Company”), (the “Class A Shares”) listed on Exhibit
A as the Class A Shareholders (the “Class A Shareholders”), those holders of Class A-2
Shares of the Company (the “Class A-2 Shares”) listed on Exhibit B as the Class A-2
Shareholders (the “Class A-2 Shareholders”), those holders of Class B Shares of the Company
granted on May 22, 2007 (the “2007 Class B Shares”) listed on Exhibit C as the 2007 Class B
Shareholders (the “2007 Class B Shareholders”), those holders of Class B Shares of the
Company granted on May 7, 2008 (the “2008 Class B Shares”) listed on Exhibit D as the 2008
Class B Shareholders (the “2008 Class B Shareholders”), those holders of Class B Shares of
the Company granted on January 8, 2009 a portion of which have vested as of the date hereof (the
“2009 Class B Shares”) listed on Exhibit E as the 2009 Class B Shareholders (the “2009
Class B Shareholders”), those holders of Class B Shares of the Company granted on January 8,
2009 none of which have vested as of the date hereof (the “2009U Class B Shares”, and
together with the 2007 Class B Shares, the 2008 Class B Shares and the 2009 Class B Shares, the
“Class B Shares”) listed on Exhibit F as the 2009U Class B Shareholders (the “2009U
Class B Shareholders”, and together with the 2007 Class B Shareholders, the 2008 Class B
Shareholders and the 2009 Class B Shareholders, the “Class B Shareholders”), those holders
of Class C Shares of the Company (the “Class C Shares” and together with the Class A Shares
and the Class B Shares, the “Company Interests”) listed on Exhibit G as the Class C
Shareholders (the “Class C Shareholders”) and those holders of Class C Shares listed on
Exhibit H as the Executive Class C Shareholders (the “Executive Class C Shareholders”, and
together with the Class A Shareholders, the Class B Shareholders and the Class C Shareholders, the
“Sellers”).

RECITALS

     Whereas, ALI was formed pursuant to the Delaware General Corporation Law on August 4,
2009;

     Whereas, the Sellers are the beneficial and record owners of the Company Interests,
and each Seller owns the Company Interests set forth in the Company’s records;

     Whereas, the Class A Shareholders desire to contribute their respective Company
Interests to ALI in exchange for shares of common stock of ALI, par value $0.001 per share (the
“Common Stock”), and ALI desires to accept such Company Interests and issue the Common
Stock to the Class A Shareholders in consideration for their Company Interests;

     Whereas, the Class A-2 Shareholders desire to contribute their respective Company
Interests to ALI in exchange for shares of Common Stock, and ALI desires to accept such Company
Interests and issue the Common Stock to the Class A-2 Shareholders in consideration for their
Company Interests;

     Whereas, the Class B Shareholders desire to contribute their respective Company
Interests to ALI in exchange for, based upon the vesting of such Company Interests, shares of

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Common Stock and / or shares of restricted Common Stock, subject to time-based vesting (the
“Time Based Restricted Common Stock”) in accordance with the form of agreement attached as
Exhibit I, and ALI desires to accept such Company Interests and issue the Common Stock and / or
Time Based Restricted Common Stock to the Class B Shareholders in consideration for their Company
Interests;

     Whereas, the Class C Shareholders desire to contribute their respective Company
Interests to ALI in exchange for shares of Common Stock, and ALI desires to accept such Company
Interests and issue the Common Stock to the Class C Shareholders in consideration for their Company
Interests;

     Whereas, the Executive Class C Shareholders desire to contribute their respective
Company Interests to ALI in exchange for shares of restricted common stock subject to vesting based
on, among other things, the cash returns to Providence Equity Partners V, L.P. (“PEP V LP”)
and Providence Equity Partners V-A L.P. (“PEP V-A LP” and together with PEP V LP, the
“Providence Stockholders”) in respect of the Common Stock held by the Providence
Stockholders (the “Cash Return Based Restricted Common Stock”, and together with the Common
Stock and the Time Based Restricted Common Stock, the “ALI Interests”) in accordance with
the form of agreement attached as Exhibit J (such forms attached as Exhibit I and Exhibit J,
collectively, the “Restricted Grant Agreements”), and ALI desires to accept such Company
Interests and issue the Cash Return Based Restricted Common Stock to the Executive Class C
Shareholders in consideration for their Company Interests;

     Whereas, concurrently with the execution of this Agreement, the interests in
Providence Equity Partners V-A Study Island L.P. (the “Carry Partnership”) will be
transferred to ALI by way of a contribution of the general partnership interest held by the general
partner of the Carry Partnership to ALI and a merger of Providence Equity Partners V-A Study Island
L.L.C. with and into ALI with ALI being the surviving corporation in which ALI will issue shares of
Common Stock to PEP V-A LP;

     Whereas, in accordance with Section 16.1 of the Second Amended and Restated Limited
Liability Company Agreement of the Company (the “LLC Agreement”), the Board of Managers of
the Company has reviewed the exchange of the Company Interests for the ALI Interests and has
determined that such exchange of interests is in the best interest of the Company; and

     Whereas, the parties intend that this Agreement and the transactions contemplated
hereby shall become effective as of immediately prior to the closing of the Company’s initial
public offering (the “IPO”).

     Now, Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

AGREEMENT

     1. Exchange of the Company Interests for the ALI Interests.

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          (a) Each of the Class A Shareholders hereby transfers and contributes all of their respective
Class A Shares to ALI, and in exchange for such contribution, ALI hereby issues to each such Seller
0.1822617 shares of Common Stock for each Class A Share so transferred and contributed.

          (b) Each of the Class A-2 Shareholders hereby transfers and contributes all of their
respective Class A-2 Shares to ALI, and in exchange for such contribution, ALI hereby issues to
each such Seller 0.3176184 shares of Common Stock for each Class A-2 Share so transferred and
contributed.

          (c) Each of the 2007 Class B Shareholders hereby transfers and contributes all of their
respective 2007 Class B Shares to ALI, and in exchange for such contribution, ALI hereby issues to
each such Seller 0.1575176 shares of ALI Interests for each 2007 Class B Share so transferred and
contributed, 40% of which shall be shares of Common Stock and 60% shall be shares of Time Based
Restricted Common Stock.

          (d) Each of the 2008 Class B Shareholders hereby transfers and contributes all of their
respective 2008 Class B Shares to ALI, and in exchange for such contribution, ALI hereby issues to
each such Seller 0.1481129 shares of ALI Interests for each 2008 Class B Share so transferred and
contributed, 20% of which shall be shares of Common Stock and 80% shall be shares of Time Based
Restricted Common Stock.

          (e) Each of the 2009 Class B Shareholders hereby transfers and contributes all of their
respective 2009 Class B Shares to ALI, and in exchange for such contribution, ALI hereby issues to
each such Seller 0.1206981 shares of ALI Interests for each 2009 Class B Shares so transferred and
contributed, 20% of which shall be shares of Common Stock and 80% shall be shares of Time Based
Restricted Common Stock.

          (f) Each of the 2009U Class B Shareholders hereby transfers and contributes all of their
respective 2009U Class B Shares to ALI, and in exchange for such contribution, ALI hereby issues to
each such Seller 0.1206981 shares of ALI Interests for each 2009U Vesting Class B Shares so
transferred and contributed, 100% of which shall be shares of Time Based Restricted Common Stock.

          (g) Each of the Class C Shareholders hereby transfers and contributes all of their respective
Class C Shares to ALI, and in exchange for such contribution, ALI hereby issues to each such Seller
0.1526937 shares of Common Stock for each Class C Share so transferred and contributed.

          (h) Each of the Executive Class C Shareholders hereby transfers and contributes all of their
respective Class C Shares to ALI, and in exchange for such contribution, ALI hereby issues to each
such Seller 0.1526937 shares of Cash Return Based Restricted Common Stock for each Class C Share so
transferred and contributed.

          (i) All other existing agreements regarding the Company Interests are hereby terminated.

     2. Limited Representations and Warranties; Waiver.

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          (a) ALI hereby represents, to and for the benefit of the Sellers that:

               (i) ALI is a corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.

               (ii) ALI has all requisite corporate power and authority to execute and deliver this Agreement
and the Restricted Grant Agreements, issue the ALI Interests and otherwise perform its obligations
hereunder. This Agreement and the Restricted Grant Agreements have been duly and validly executed
and delivered by ALI and (assuming the due authorization, execution and delivery by each Seller)
this Agreement and the Restricted Grant Agreements constitute the legal, valid and binding
obligation of ALI, enforceable against it in accordance with their terms.

               (iii) None of the execution and delivery by ALI of this Agreement, the Restricted Grant
Agreements, the consummation by ALI of the transactions contemplated hereby, or compliance by ALI
with any of the provisions hereof does or will conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under: (i) any provision of the
certificate of incorporation or bylaws of ALI; (ii) any contract to which ALI is a party or by
which any of the properties or assets of ALI are bound; (iii) any order of any governmental
authority applicable to ALI or by which any of the properties or assets of ALI are bound; or (iv)
any applicable law.

               (iv) No consent, waiver, approval, order, permit or authorization of, or declaration or filing
with, or notification to, any person or governmental authority is required on the part of ALI in
connection with the execution, delivery or performance by ALI of this Agreement, the Restricted
Grant Agreements, or the consummation by ALI of the transactions contemplated hereby.

               (v) The ALI Interests, when issued in accordance with this Agreement, will be duly authorized
and validly issued, fully paid and non-assessable and will not have been issued in violation of any
purchase or call option, right of first refusal, subscription right, preemptive right or any
similar rights.

          (b) Each Seller hereby represents, to and for the benefit of ALI, that:

               (i) Such Seller is the record and beneficial owner of the Company Interests being contributed
and transferred hereunder, free and clear of (commensurate with the effectiveness of Section 1(f)
hereof) any liens, encumbrances, taxes, security interests, equities, claims or demands or any
restrictions on transfer.

               (ii) Such Seller understands that the ALI Interests have not been, and will not be, registered
under the Securities Act or any state securities laws and are instead being offered, and will be
issued to such Seller, in reliance on an exemption from such registration requirements based on
representations made by such Seller to ALI herein. Such Seller is acquiring the ALI Interests for
its own account and not with a view to or for sale in connection with any public distribution of
ALI Interests. Such Seller understands that the certificate representing the ALI Interests will
contain appropriate legends reflecting the requirement that the

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ALI Interests not be resold by such Seller without registration under such laws or the
availability of an exemption from such registration.

               (iii) Such Seller understands that the ALI Interests shall be subject to restrictions on
transfer imposed by (a) state and federal securities laws, (b) the Restricted Grant Agreements and
(c) the Stockholders Agreement dated as of the date hereof among the Company and certain Sellers,
as applicable. Such Seller further understands that the certificates representing the ALI
Interests will contain appropriate legends reflecting the foregoing applicable restrictions.

               (iv) Such Seller is an “accredited investor” as that term is defined in Rule 501 of Regulation
D under the Securities Act.

               (v) Such Seller has all requisite power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. This Agreement has been duly and validly executed and
delivered by such Seller and (assuming the due authorization, execution and delivery by ALI)
constitutes the legal, valid and binding obligation of such Seller, enforceable against him in
accordance with its terms.

               (vi) None of the execution and delivery by such Seller of this Agreement, the consummation by
such Seller of the transactions contemplated hereby, or compliance by such Seller with any of the
provisions hereof does or will conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under: (a) any contract to which such Seller is a party
or by which any of the properties or assets of such Seller are bound; (b) any order of any
governmental authority applicable to such Seller or by which any of the properties or assets of
such Seller are bound; or (c) any applicable law.

               (vii) No consent, waiver, approval, order, permit or authorization of, or declaration or
filing with, or notification to, any person or governmental authority is required on the part of
such Seller in connection with the execution, delivery or performance by Seller of this Agreement,
or the consummation by such Seller of the transactions contemplated hereby.

          (c) The parties have made no representations of fact or law, and no warranty of any nature
whatsoever, in connection with the execution and delivery of this Agreement or any aspect of the
subject matter of this Agreement, except as expressly set forth in this Agreement.

          (d) Each Seller hereby waives any rights such Seller has with respect to the Transfer of
Shares under Sections 9.7 and 9.8 of the LLC Agreement.

     3. Miscellaneous.

          (a) This Agreement constitutes the entire agreement of the parties with respect to the subject
matter thereof. All prior discussions, negotiations, and agreements (if any) are hereby expressly
merged herein.

          (b) This Agreement may be amended or modified only by an instrument in writing duly executed
by the parties hereto.

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          (c) This Agreement may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.

          (d) This Agreement and any claim, dispute, controversy or other matter arising out of or
related to this Agreement or the subject matter hereof shall be interpreted in accordance with, and
governed by, the laws of the State of Delaware without reference to the choice of law rules in
effect at any time in the State of Delaware.

[Signature pages follow]

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     In Witness Whereof, the parties hereto have executed this Agreement as of the date
first above written.

	 	 	 	 	 
	 	 	ARCHIPELAGO LEARNING, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Tim McEwen
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 	 	PROVIDENCE EQUITY PARTNERS V L.P.
	 
	 	 	 	 
	 	 	By: Providence Equity GP V L.P.,

Its General Partner
	 
	 	 	 	 
	 	 	By: Providence Equity Partners V L.L.C.,

Its General Partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Paul J. Salem
	 

	 	Title:
	 	Senior Managing Director
	 
	 	 	 	 
	 	 	MHT-SI, L.P.
	 
	 	 	 	 
	 	 	By: MHT-SI GP, LLC,

Its General Partner
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:
	 	Shawn D. Terry
	 

	 	Title:
	 	Manager

Signature Pages to Archipelago Learning, Inc. Transfer and Contribution Agreement

 

 

	 	 	 	 	 
	 
	 	 	 	 
	 

Jeanne Bodnar

	 	 

Laura Briceno
	 	 
	 
	 	 	 	 
	 

Blake Broyles

	 	 

Catherine Caldwell
	 	 
	 
	 	 	 	 
	 

Cameron Chalmers

	 	 

James Creech
	 	 
	 
	 	 	 	 
	 

Wendy Fischer

	 	 

Heather Harper
	 	 
	 
	 	 	 	 
	 

Julie Huston

	 	 

Ray Lowrey
	 	 
	 
	 	 	 	 
	 

JW Marshall

	 	 

Tim McEwen
	 	 
	 
	 	 	 	 
	 

David Muzzo

	 	 

Aaron Quiggle
	 	 
	 
	 	 	 	 
	 

Michael Roseman

	 	 

Amy Shenoy
	 	 
	 
	 	 	 	 
	 

Alan Skinner

	 	 

Jeremy Verrett
	 	 
	 
	 	 	 	 

Signature Pages to Archipelago Learning, Inc. Transfer and Contribution Agreement

 

 

	 	 	 	 	 
	 
	 	 	 	 
	 

James Walburg

	 	 

Heather Watson
	 	 
	 
	 	 	 	 
	 

Becky Wofford

	 	 	 	 

Signature Pages to Archipelago Learning, Inc. Transfer and Contribution Agreement

 

 

EXHIBIT A

CLASS A SHAREHOLDERS

Providence Equity Partners V, L.P.

Cameron Chalmers

David Muzzo

MHT-SI, L.P.

Jeanne Bodnar

 

 

EXHIBIT B

CLASS A-2 SHAREHOLDERS

Jeanne Bodnar

 

 

EXHIBIT C

2007 CLASS B SHAREHOLDERS

McEwen, Tim

Muzzo, Dave

Chalmers, Cam

Walburg, James

Roseman, Mike

Quiggle, Aaron

Huston, Julie

Skinner, Alan

Caldwell, Cathy

Harper, Heather

Wofford, Becky

Verrett, Jeremy

Broyles, Blake

Marshall, J W

 

 

EXHIBIT D

2008 CLASS B SHAREHOLDERS

Walburg, James

Huston, Julie

Caldwell, Cathy

Harper, Heather

Wofford, Becky

Broyles, Blake

Watson, Heather

Fischer, Wendy

Shenoy, Amy

 

 

EXHIBIT E

2009 CLASS B SHAREHOLDERS

Lowrey, Ray

 

 

EXHIBIT F

2009U CLASS B SHAREHOLDERS

Creech, James

Briceno, Laura

 

 

EXHIBIT G

CLASS C SHAREHOLDERS

Roseman, Mike

Quiggle, Aaron

Huston, Julie

Skinner, Alan

Caldwell, Cathy

Harper, Heather

Wofford, Becky

Verrett, Jeremy

Broyles, Blake

Marshall, J W

Watson, Heather

Fischer, Wendy

Shenoy, Amy

Creech, James

Briceno, Laura

 

 

EXHIBIT H

EXECUTIVE CLASS C SHAREHOLDERS

McEwen, Tim

Muzzo, Dave

Chalmers, Cam

Walburg, James

Lowrey, Ray

 

 

EXHIBIT I

TIME BASED RESTRICTED COMMON STOCK GRANT AGREEMENT

 

 

EXHIBIT J

CASH RETURN BASED RESTRICTED COMMON STOCK GRANT AGREEMENTexv10w43

Exhibit 10.43

ASSIGNMENT AGREEMENT AND PLAN OF MERGER

     This ASSIGNMENT AGREEMENT AND PLAN OF MERGER, dated as of November [ ], 2009 (this
“Agreement”), is among Providence Equity GP V L.P., a Delaware limited partnership
(“Assignor”), Providence Equity Partners V-A L.P., a Delaware limited partnership (“PEP
V-A”), Providence Equity Partners V-A Study Island L.L.C., a Delaware limited liability company
and a direct subsidiary of PEP V-A (“Merger Co.”), and Archipelago Learning, Inc., a
Delaware corporation (the “Company”).

     WHEREAS, Assignor is the sole general partner of Providence Equity Partners V-A Study Island
L.P., a Delaware limited partnership (the “Carry Partnership”) and Merger Co. is the
limited partner of the Carry Partnership;

     WHEREAS, Assignor is the sole general partner of PEP V-A, and PEP V-A is the sole member of
Merger Co.;

     WHEREAS, the Carry Partnership holds Class A Shares of Archipelago Learning Holdings, LLC, a
Delaware limited liability company (“Holdings”);

     WHEREAS, the Company intends to undertake an initial public offering of its equity interests,
and in connection therewith, the holders of the membership interests in Holdings desire to
contribute or otherwise transfer their membership interests in Holdings to the Company (the
“Reorganization”), in order that Holdings may become a direct wholly-owned subsidiary of
the Company and the Company may effectuate the initial public offering through an offering of its
common stock to the public (the “Offering”);

     WHEREAS, in connection with the Reorganization, Assignor desires to assign all of its rights,
title and interests in and to the general partnership interest in the Carry Partnership to the
Company in a transaction governed by Section 351 of the Code (the “Assignment”);

     WHEREAS, in connection with the Reorganization, the parties hereto desire that Merger Co. be
merged with and into the Company (the “Merger”) with the Company as the surviving
corporation in the Merger;

     WHEREAS, in consideration of the Assignment, Assignor directs the Company to transfer the
consideration for the assignment to PEP V-A, and, as consideration for such direction to transfer
the consideration to PEP V-A, PEP V-A shall issue to Assignor additional partnership interest (the
“Carried Interest”);

     WHEREAS, in consideration of the Merger and the direction to transfer Assignor’s consideration
pursuant to the Assignment to PEP V-A, the Company shall issue to PEP V-A common stock, par value
$0.001 per share, of the Company (“Surviving Corporation Common Stock”);

     WHEREAS, concurrently with the execution of this Agreement and pursuant to the Reorganization,
all other interests in Holdings will be transferred and contributed to

 

 

the Company, and in exchange
for such contribution, the Company will issue to each such transferee shares of Surviving
Corporation Common Stock;

     WHEREAS, for federal income tax purposes, it is intended that the Merger shall qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder (the “Code”), and that this
Agreement constitutes a plan of reorganization;

     WHEREAS, as a result of the Assignment and the Merger, the Carry Partnership will have only
one partner and will therefore dissolve by operation of law;

     WHEREAS, the Board of Directors of the Company and the sole member of Merger Co. each have
approved and declared advisable this Agreement, the Assignment and the Merger, on the terms and
subject to the conditions provided for in this Agreement; and

     WHEREAS, immediately prior to the execution and delivery of this Agreement, each of PEP V-A,
as the sole member of Merger Co., and Archipelago Learning, LLC, as the sole stockholder of the
Company, have executed and delivered a written consent approving this Agreement (the “Merger
Co. Member Approval” and the “Company Stockholder Approval”, respectively).

     NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, Assignor, PEP V-A, Merger
Co. and the Company hereby agree as follows:

ARTICLE I

The Assignment

     Section 1.1. Assignment. Assignor hereby assigns, transfers and conveys to
the Company all of its right, title and interest in and to its general partnership interest in the
Carry Partnership. Assignor hereby assigns all consideration that it would otherwise receive as a
result of the Assignment to PEP V-A, and in consideration therefor, PEP V-A hereby issues to
Assignor the Carried Interest.

ARTICLE II

The Merger

     Section 2.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of the State of
Delaware (the “DGCL”) and the Delaware Limited Liability Company Act (the “DLLCA”
and collectively with the DGCL, “Delaware Law”), at the Effective Time (as defined below)
Merger Co. shall be merged with and into the Company, and the separate limited liability company
existence of Merger Co. shall thereupon cease, and the Company shall be the surviving corporation in the Merger (the “Surviving Corporation”).

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     Section 2.2. Closing. The closing of the Merger (the “Closing”) shall
take place at 10:00 a.m. (New York City time) on the date hereof (the “Closing Date”), at
the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, unless
another time, date or place is agreed to by the parties hereto.

     Section 2.3. Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on the Closing Date the parties shall file with the Secretary of State of the
State of Delaware a certificate of merger, executed in accordance with the relevant provisions of
Delaware Law (the “Certificate of Merger”). The Merger shall become effective upon the
filing of the Certificate of Merger or at such later time as is agreed to by the parties hereto and
specified in the Certificate of Merger (the time at which the Merger becomes effective is herein
referred to as the “Effective Time”).

     Section 2.4. Effects of the Merger. The Merger shall have the effects set
forth in Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the properties, rights, privileges, powers and franchises of the Company
and Merger Co. shall vest in the Surviving Corporation, and all debts, liabilities and duties of
the Company and Merger Co. shall become the debts, liabilities and duties of the Surviving
Corporation.

     Section 2.5. Certificate of Incorporation and By-laws of the Surviving
Corporation.

     (a) The [amended and restated] Certificate of Incorporation of the Company (the
“Certificate of Incorporation”), as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation until
thereafter amended as provided therein or by the DGCL.

     (b) The [amended and restated] bylaws of Company (the “Bylaws”), as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation
until thereafter amended as provided therein or by the DGCL.

     Section 2.6. Directors and Officers of the Surviving Corporation.

     (a) The directors of the Company immediately prior to the Effective Time shall be the
directors of the Surviving Corporation immediately following the Effective Time, to serve
as such until their respective successors are duly elected or appointed and qualified or
their earlier death, resignation or removal in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation.

     (b) The officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until their respective successors are duly appointed
and qualified or their earlier death, resignation or removal in
accordance with the certificate of incorporation and bylaws of the Surviving
Corporation.

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ARTICLE III

Effect of the Merger on the Capital Stock of the

Constituent Corporations

     Section 3.1. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of common stock, par value
$0.001 per share, of the Company (“Company Common Stock”), or any membership interests of
Merger Co.:

     (a) Conversion of Membership Interests of Merger Co. All membership interests
of Merger Co. shall together be converted into and become an aggregate of [ ]
validly issued, fully paid and nonassessable shares of Surviving Corporation Common Stock.

     (b) Company Common Stock. Each share of Company Common Stock shall remain
outstanding as one validly issued, fully paid and nonassessable share of Surviving
Corporation Common Stock.

     Section 3.2. Stock Certificates in Surviving Corporation. The Surviving
Corporation shall issue one stock certificate to PEP V-A in respect of the Surviving Corporation
Common Stock to be issued to PEP V-A pursuant to Section 3.1, the amount of shares
represented by such stock certificate to be [ ] shares of Surviving Corporation Common
Stock.

ARTICLE IV

Termination of the Carry Partnership; Winding Up of Partnership Assets

     Section 4.1. Effective immediately upon the Merger, the parties hereby agree that the
Carry Partnership is dissolved and that, notwithstanding any provision of the General Partnership
Agreement of the Carry Partnership, dated as of January 10, 2007 (the “Carry Partnership
Agreement”), subject to the payment of any debts and liabilities of the Carry Partnership as
provided in Section 9.2 of the Carry Partnership Agreement, the distribution of all of the assets
of the Carry Partnership, consisting of the Class A Shares of Holdings held by the Carry
Partnership, to the Company shall constitute the final liquidation of the assets of the Carry
Partnership.

ARTICLE V

Representations and Warranties of the Company

     The Company represents and warrants to PEP V-A and Merger Co. as follows:

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     Section 5.1. Organization, Standing and Corporate Power.

     (a) The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.

     Section 5.2. Authority; Noncontravention; Voting Requirements.

     (a) The Company has all necessary corporate power and authority to execute and deliver
this Agreement and, as a result of obtaining the Company Stockholder Approval, to perform
its obligations hereunder and to consummate the Merger. The execution, delivery and
performance by the Company of this Agreement, and the consummation of the Merger, have been
duly authorized and approved by its Board of Directors, and except for obtaining the
Company Stockholder Approval for the adoption of this Agreement, no other corporate action
on the part of the Company is necessary to authorize the execution, delivery and
performance by the Company of this Agreement and the consummation by it of the Merger.
This Agreement has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery hereof by the other parties hereto, constitutes a
legal, valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar
laws of general application affecting or relating to the enforcement of creditors’ rights
generally and (ii) is subject to general principles of equity, whether considered in a
proceeding at law or in equity (the “Bankruptcy and Equity Exception”).

     (b) Neither the execution and delivery of this Agreement by the Company nor the
consummation by the Company of the Merger, nor compliance by the Company with any of the
terms or provisions hereof, will (i) conflict with or violate any provision of the
Certificate of Incorporation or Bylaws of the Company or (ii) violate any law, judgment,
writ or injunction of any governmental authority applicable to the Company or any of its
properties or assets. Except for the Company Stockholder Approval, no consent, waiver,
approval, order, permit or authorization of, or declaration or filing with, or notification
to, any person or governmental body is required on the part of the Company in connection
with the execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.

     Section 5.3. Issuance of Surviving Corporation Common Stock; Capitalization of the
Surviving Corporation. The Surviving Corporation Common Stock to be issued as a result of the
Merger has been duly authorized and, when issued as contemplated by this Agreement, will be validly
issued, fully paid and nonassessable. After giving effect to the Reorganization and the Offering,
the capitalization of the Surviving Corporation is as set forth in the prospectus filed pursuant to
Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “Securities Act”)
by the Company with the Securities and Exchange Commission with respect to the Offering.

5

 

ARTICLE VI

Representations and Warranties of Merger Co. and PEP V-A

          Merger Co. and PEP V-A, jointly and severally, represent and warrant to the Company as
follows:

     Section 6.1. Organization, Standing and Corporate Power.

     (a) Merger Co. is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware.

     (b) PEP V-A is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware.

     Section 6.2. Merger Co. Authority; Noncontravention.

     (a) Merger Co. has all necessary limited liability company power and authority to
execute and deliver this Agreement and, as a result of obtaining the Merger Co. Member
Approval, to perform its obligations hereunder and to consummate the Merger. The
execution, delivery and performance by Merger Co. of this Agreement, and the consummation
of the Merger, have been duly authorized and approved by its sole member, and except for
obtaining the Merger Co. Member Approval for the adoption of this Agreement, no other
limited liability company action on the part of Merger Co. is necessary to authorize the
execution, delivery and performance by Merger Co. of this Agreement and the consummation by
it of the Merger. This Agreement has been duly executed and delivered by Merger Co. and,
assuming due authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of Merger Co., enforceable against Merger
Co. in accordance with its terms, except that such enforceability may be limited by the
Bankruptcy and Equity Exception.

     (b) Neither the execution and delivery of this Agreement by Merger Co. nor the
consummation by Merger Co. of the Merger, nor compliance by Merger Co. with any of the
terms or provisions hereof, will (i) conflict with or violate any provision of the limited
liability company agreement of Merger Co. or (ii) violate any law, judgment, writ or
injunction of any governmental authority applicable to Merger Co. or any of its properties
or assets. Except for the Merger Co. Member Approval, no consent, waiver, approval, order,
permit or authorization of, or declaration or filing with, or notification to, any person
or governmental body is required on the part of Merger Co. in connection with the execution
and delivery of this Agreement or the consummation of the transactions contemplated hereby.

     Section 6.3. PEP V-A Authority; Noncontravention.

     (a) PEP V-A has all necessary limited partnership power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated

6

 

hereby. The execution, delivery and performance by PEP V-A of this Agreement have
been duly authorized and approved by its general partner and no other action on the part of
the general partner of PEP V-A is necessary to authorize the execution, delivery and
performance by PEP V-A of this Agreement and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by PEP V-A and,
assuming due authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of PEP V-A, enforceable against PEP V-A
in accordance with its terms, except that such enforceability may be limited by the
Bankruptcy and Equity Exception.

     (b) Neither the execution and delivery of this Agreement by PEP V-A nor compliance by
PEP V-A with any of the terms or provisions hereof, will (i) conflict with or violate any
provision of the limited partnership agreement of PEP V-A or (ii) violate any law,
judgment, writ or injunction of any governmental authority applicable to PEP V-A or any of
its properties or assets. No consent, waiver, approval, order, permit or authorization of,
or declaration or filing with, or notification to, any person or governmental body is
required on the part of PEP V-A in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.

     Section 6.4. Capitalization. Merger Co. is wholly-owned by PEP V-A. Merger
Co. has no existing option, warrant, call, right, or contract of any character to which Merger Co.
is a party requiring, and there are no securities of Merger Co. outstanding which upon conversion
or exchange would require, the issuance of any membership interests of Merger Co. or other
securities convertible into, exchangeable for or evidencing the right to subscribe for or purchase
membership interests of Merger Co. Except for this Agreement, neither PEP V-A nor Merger Co. is a
party to any voting trust or other contract with respect to the voting, redemption, sale, transfer
or other disposition of Merger Co.’s membership interests.

     Section 6.5. Operations of Merger Co. Merger Co. was formed solely for the
purpose of holding a partnership interest in Providence Equity Partners V-A Study Island L.P., a
Delaware limited partnership formed solely for the purpose of (and that has conducted no activities
other than) holding membership interests in Holdings. Merger Co. has engaged in no business other
than as set forth in this Section 6.5, has no liabilities, and has conducted its operations
solely as contemplated hereby.

     Section 6.6. Investment Intent and Eligibility. PEP V-A is an “accredited
investor” within the meaning of Rule 501(a) under Regulation D promulgated under the Securities Act
by the Securities and Exchange Commission. The Surviving Corporation Common Stock to be acquired
by PEP V-A pursuant to this Agreement is being acquired for PEP V-A’s own account, not as a nominee
or agent for any other person and without a view to the distribution of such Surviving Corporation
Common Stock or any interest therein in violation of the Securities Act or any state securities
laws.

ARTICLE VII

7

 

Miscellaneous

     Section 7.1. Entire Agreement. This Agreement and the other documents
referred to herein represent the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof.

     Section 7.2. Amendments and Waivers. This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by written instrument making
specific reference to this Agreement signed by the party against whom enforcement of any such
amendment, supplement, modification or waiver is sought. No action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute
a waiver by the party taking such action of compliance with any representation, warranty, or
agreement contained herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of such breach or as
a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy.

     Section 7.3. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and permitted assigns.
Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in
any person or entity not a party to this Agreement except as expressly contemplated by this
Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made
by any of the parties hereto without the prior written consent of the other parties and any
attempted assignment without the required consents shall be void. No assignment of any obligations
hereunder shall relieve the parties hereto of any such obligations.

     Section 7.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same agreement.

     Section 7.5. Governing Law; Jurisdiction; Waiver of Jury Trial. This
Agreement, and all claims or causes of action (whether in contract or tort) that may be based
upon, arise out of or relate to this Agreement or the negotiation, execution or performance of
this Agreement (including any claim or cause of action based upon, arising out of or related to
any representation or warranty made in or in connection with this Agreement), shall be governed by
and construed in accordance with the internal laws of the State of Delaware. Any action against
any party relating to the foregoing shall be brought in any federal or state court of competent
jurisdiction located within the State of Delaware, and the parties hereto hereby irrevocably
submit to the non-exclusive jurisdiction of any federal or state court located within the State of
Delaware over any such action. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection that they

8

 

may now or hereafter have to the laying of venue of any such action brought in such court or
any defense of inconvenient forum for the maintenance of such action.

     Section 7.6. Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be deemed given if delivered personally, facsimiled
(which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at
the following addresses:

          If to Assignor, PEP V-A or Merger Co., to:

	 	 	 	 	 
	 	 	c/o Providence Equity Partners
	 	 	50 Kennedy Plaza, 18th Floor
	 	 	Providence, Rhode Island 02703
	 

	 	Attention:
	 	Peter O. Wilde
	 

	 	 	 	David Phillips
	 

	 	Facsimile:
	 	(401) 751-1790
	 

	 	Email:
	 	p.wilde@provequity.com
	 

	 	 	 	d.phillips@provequity.com

          If to the Company, to:

	 	 	 	 	 
	 	 	Archipelago Learning, Inc.
	 	 	3400 Carlisle Street, Suite 345
	 	 	Dallas, Texas 75204
	 

	 	Attention:
	 	Tim McEwen
	 

	 	Facsimile:
	 	(866) 515-9145
	 

	 	Email:
	 	tim.mcewen@archlearning.com

          with a copy (which shall not constitute notice) to:

	 	 	 	 	 
	 	 	Weil, Gotshal & Manges LLP
	 	 	100 Federal Street, 34th Floor
	 	 	Boston, Massachusetts 02110
	 

	 	Attention:
	 	Kevin J. Sullivan
	 

	 	Facsimile:
	 	(617) 772-8333
	 

	 	Email:
	 	kevin.sullivan@weil.com

or such other address or facsimile number as such party may hereafter specify by like notice to the
other parties hereto. All such notices, requests and other communications shall be deemed received
on the date of receipt by the recipient thereof if received prior to 5:00 P.M. in the place of
receipt and such day is a business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the next succeeding
business day in the place of receipt.

9

 

     Section 7.7. Severability. If any term or other provision of this Agreement
is invalid, illegal, or incapable of being enforced by any law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as closely as possible
in an acceptable manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

     Section 7.8. Tax Treatment of the Merger. Each of Assignor, PEP V-A, Merger
Co. and the Company agrees to treat the Merger as a reorganization within the meaning of Section
368(a) of the Code and to take no action inconsistent with such treatment.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

10

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written
above.

	 	 	 	 	 
	 	ARCHIPELAGO LEARNING, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Tim McEwen 	 
	 	 	Title:  	Chief Executive Officer 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	PROVIDENCE EQUITY GP V L.P.

 	 
	 	By:  	Providence Equity Partners V L.L.C.,
 	 
	 	Its General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	 By: 	
 	 
	 	 Name: 	 	 
	 	 Title: 	 	 
	 

	 	 	 	 	 
	 	PROVIDENCE EQUITY PARTNERS V-A L.P.

 	 
	 	By:  	Providence Equity GP V L.P.,
 	 
	 	Its General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  Providence Equity Partners V L.L.C.,
 	 
	 	Its General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	 By: 	
 	 
	 	 Name: 	 	 
	 	 Title: 	 	 
	 

	 	 	 	 	 
	 	PROVIDENCE EQUITY PARTNERS V-A STUDY ISLAND L.L.C.

 	 
	 	By:  	Providence Equity Partners V-A L.P.,
 	 
	 	Its Sole Member 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  Providence Equity GP V L.P.,
 	 
	 	Its General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                  Providence Equity Partners V L.L.C.,
 	 
	 	Its General Partner 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	 By: 	
 	 
	 	 Name: 	 	 
	 	 Title:

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