AMENDMENT NO. 1 TO THE SECURITIES ESCROW AGREEMENT
EXHIBIT
10.4
AMENDMENT
NO. 1 TO THE SECURITIES ESCROW AGREEMENT
This Amendment,
dated as of November 23, 2009 (the “Amendment”), to the
Securities Escrow Agreement, dated
as of November 29, 2007 (the “Escrow Agreement”), is made by and among Camden
Learning Corporation, a Delaware corporation (the “Company”), the undersigned
parties (the “Initial Stockholders”), and Continental Stock Transfer & Trust
Company, a New York corporation (the “Escrow Agent”).
WHEREAS,
the Company consummated its initial public offering (the “IPO”) on December 5,
2007, pursuant to an Underwriting Agreement dated November 29, 2007 between the
Company and Xxxxxx Xxxxxx & Co. Inc., acting as representative of the
several underwriters (collectively, the “Underwriters”), pursuant to which the
Underwriters agreed to purchase 6,250,000 units (the “Units”) of the Company;
and
WHEREAS,
each Unit consists of one share of common stock, par value $0.0001 per share
(the “Common Stock”), of the Company and one warrant to purchase one share of
Common Stock at an exercise price of $5.50 per share; and
WHEREAS,
in conjunction with the IPO, the Company issued 1,562,650 shares of restricted
Common Stock (the “Escrow Shares”) to the Initial Stockholders with such Escrow
Shares subject to the terms and conditions of the Securities Escrow Agreement
(as amended by this Amendment); and
WHEREAS,
the Company has entered into that certain Agreement and Plan of Reorganization
as amended and restated in its entirety on August 11, 2009 and further amended
on October 26, 2009 by Amendment No. 1 to the Amended and Restated Agreement and
Plan of Reorganization (as amended, the “Merger Agreement”) pursuant to which
Dlorah Subsidiary, Inc., a newly formed, wholly-owned subsidiary of the Company
(“Merger Sub”), will merge with and into Dlorah, Inc., a South Dakota
corporation (Dlorah, Inc., together with its divisions and subsidiaries, is
referred to herein as “Dlorah”), with Dlorah surviving as a wholly-owned
subsidiary of the Company, as a result of which the stockholders of Dlorah will
contribute all of the outstanding capital stock of Dlorah to the Company in
exchange for shares of a newly created class of common stock, common stock
purchase warrants and restricted shares of the Company’s currently authorized
Common Stock (the “Acquisition”); and
WHEREAS, in connection with the
Acquisition, the Initial Stockholders have decided to transfer up to an
aggregate of 838,772 Escrow Shares to certain stockholders of the Company;
and
WHEREAS, in connection with the
consummation of the Acquisition, the Initial Stockholders have agreed to cancel
all 2,800,000 warrants to purchase Common Stock, at an exercise price of $5.50
per share of Common Stock owned by such Initial Stockholders.
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NOW,
THEREFORE, in consideration of the mutual agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
to amend the Escrow Agreement as set forth herein:
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1.
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Escrow
Agreement.
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1.1 Section
3.1. Section 3.1 of the Escrow Agreement is hereby amended and
restated in its entirety as follows:
“(a) Upon
compliance with Section 3.2 hereof, upon the effective time of the acquisition
(the “Acquisition”) of 100% of the capital stock of Dlorah, Inc. (“Dlorah”) by
the Company (the “Effective Time”), and regardless of whether the Initial
Stockholders provide instructions directing as such, the Escrow Agent is hereby
authorized to release 838,772 Escrow Shares from the accounts of Camden
Learning, LLC (the “Transferred Stock”) and to irrevocably transfer the
Transferred Stock, as soon as practicable following the Acquisition, to the
accounts of those certain institutional or strategic investors set forth on
Exhibit A
attached hereto (the “Investors”). Except as set forth above, the
Escrow Agent shall hold the Escrow Shares until the termination of the Escrow
Period. The Escrow Period shall be the period beginning on the date
of the certificates representing the shares are deposited with the Escrow Agent
and ending on the date that is twelve (12) months following the consummation of
the Acquisition. On the termination date of the Escrow, the Escrow
Agent shall, upon written instructions from the Company or the Company’s
counsel, disburse each of the Initial Stockholder’s Escrow Shares to such
Initial Stockholder; provided, however, that if after the Company consummates
the Acquisition, it (or the surviving entity) subsequently consummates a
liquidation, merger, stock exchange or other similar transaction which results
in all of its stockholders having the right to exchange their shares of Common
Stock for cash, securities or other property, then the Escrow Agent will, upon
consummation of such transaction, immediately release the Escrow Shares to the
Initial Stockholders so they can participate. The Escrow Agent shall
have no further duties hereunder after the disbursement of the Escrow Shares in
accordance with this Section 3.
(b) The
Transferred Stock released at the Effective Time shall not be subject to the
Escrow Period; however, the
Transferred Stock shall remain restricted pending registration pursuant to an
effective registration statement filed by the Company or another exemption from
the Securities Act of 1933, as amended.
(c) At
the Effective Time, the Inside Stockholder owning the Private Warrants shall
have no further right, title or interest in the Private Warrants which shall be
released from escrow and immediately cancelled, in whole and not in part, by the
Escrow Agent (the “Cancellation”). At such time of the Cancellation,
the Private Warrants shall cease to exist.”
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1.2 Section
4.3. Section 4.3 shall be amended restated in its entirety as
follows:
“Except
with respect to the Transferred Stock, which shall not be subject to the Escrow
Period, during the Escrow Period, no sale transfer or other disposition may be
made of any or all of the Escrow Shares except (i) by gift to a member of
Initial Stockholder’s immediate family or to a trust or other entity, the
beneficiary of which is an Initial Stockholder or a member of an Initial
Stockholder’s immediate family, (ii) by virtue of the laws of descent and
distribution upon death of any Initial Stockholder, (iii) pursuant to a
qualified domestic relations order, (iv) to an entity that is an Initial
Stockholder, (v) to any person or entity controlling, controlled by, or under
common control with, an Initial Stockholder or (vi) with respect to an Initial
Stockholder who is an individual, to an entity controlled by such Initial
Stockholder; provided, however, that such
permitted transfers may be implemented only upon the respective transferee’s
written agreement to be bound by the terms and conditions of this Agreement and
of the Insider Letter signed by the Initial Stockholder transferring the Escrow
Shares. During the Escrow Period, the Initial Stockholders shall not pledge or
grant a security interest in the Escrow Securities or grant a security interest
in their rights under this Agreement.”
1.3 Escrow
Securities. All references to the “Escrow Securities” shall be
replaced by the “Escrow Shares” which shall not include the Transferred
Stock.
2. Definitions. Capitalized
terms used but not defined herein shall have the meaning given to such term in
the Escrow Agreement.
3. Governing Law. The
validity, interpretation, and performance of this Amendment and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles. The parties agree that all actions
and proceedings arising out of this Amendment or any of the transactions
contemplated hereby shall be brought in the United States District Court for the
Southern District of New York or in a New York State Court in the County of New
York and that, in connection with any such action or proceeding, submit to the
jurisdiction of, and venue in, such court. Each of the parties hereto also
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of this Amendment or the transactions contemplated
hereby.
4. Binding
Effect. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns.
5. Entire Agreement.
This Amendment sets forth the entire agreement and understanding between the
parties as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
Except as set forth in this Amendment, provisions of the Escrow Agreement which
are not inconsistent with this Amendment shall remain in full force and
effect.
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6. Severability. This
Amendment shall be deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or enforceability of
this Amendment or of any other term or provision hereof. Furthermore, in lieu of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as part of this Amendment a provision as similar in
terms to such invalid or unenforceable provision as may be possible and be valid
and enforceable.
7. Counterparts. This
Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall constitute but one and the same instrument.
8. Indemnity. Notwithstanding
any provision of this Amendment or the Escrow Agreement to the contrary, the
Company hereby agrees to indemnify the Escrow Agent and save it harmless from
and against any and all expenses, including reasonable counsel fees and
disbursements, or losses incurred by the Escrow Agent in connection with any
action, suit or other proceeding brought against the Escrow Agent involving any
claim or potential claim, or in connection with any claim or demand, which in
any way arises out of or relates to this Amendment or the Escrow Agent’s
execution thereof.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment to the Escrow
Agreement as of the date first set forth above.
| CAMDEN LEARNING, LLC | |||
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By:
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Camden Partners Strategic III, LLC | |
| Title: Manager | |||
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By:
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Camden Partners Strategic Manager, LLC | |
| Title: Manager | |||
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By:
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/s/ Xxxxx Xxxxxxx | |
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Name:
Xxxxx Xxxxxxx
Title:
Managing Member
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By:
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/s/ Xxxxxxx Xxxxx Xxxxx, Xx. D. | |
| Xxxxxxx Xxxxx Crane Ed.D | |||
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By:
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/s/ Xxxxxx Xxxxxxx | |
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Xxxxxx
Xxxxxxx
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By:
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/s/ Xxxxxxx Jews | |
| Xxxxxxx Jews | |||
Agreed
and acknowledged, this 23rd day of November, 2009:
CAMDEN
LEARNING CORPORATION
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By:
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/s/ Xxxxx Xxxxxxx | |
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Name:
Xxxxx Xxxxxxx
Title: President
and Chief Executive Officer
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CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
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By:
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/s/ Xxxxxxxxx Xxxxxxxx | |
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Name: Xxxxxxxxx
Xxxxxxxx
Title: Vice
President
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XXXXXX
XXXXXX & CO. INC.
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By:
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/s/ Xxxx Xxxxxx | |
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Name: Xxxx
Xxxxxx
Title: Managing
Director
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