ASSIGNMENT AGREEMENT AND PLAN OF MERGER
Exhibit 10.43
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 & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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
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.
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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
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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
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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
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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 | ||||
| 00 Xxxxxxx Xxxxx, 00xx Xxxxx | ||||
| Xxxxxxxxxx, Xxxxx Xxxxxx 00000 | ||||
| Attention: | Xxxxx X. Xxxxx | |||
| Xxxxx Xxxxxxxx | ||||
| Facsimile: | (000) 000-0000 | |||
| Email: | x.xxxxx@xxxxxxxxxx.xxx | |||
| x.xxxxxxxx@xxxxxxxxxx.xxx | ||||
If to the Company, to:
| Archipelago Learning, Inc. | ||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx 000 | ||||
| Xxxxxx, Xxxxx 00000 | ||||
| Attention: | Xxx XxXxxx | |||
| Facsimile: | (000) 000-0000 | |||
| Email: | xxx.xxxxxx@xxxxxxxxxxxx.xxx | |||
with a copy (which shall not constitute notice) to:
| Weil, Gotshal & Xxxxxx LLP | ||||
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | ||||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||||
| Attention: | Xxxxx X. Xxxxxxxx | |||
| Facsimile: | (000) 000-0000 | |||
| Email: | xxxxx.xxxxxxxx@xxxx.xxx | |||
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.
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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.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written
above.
| ARCHIPELAGO LEARNING, INC. |
||||
| By: | ||||
| Name: | Xxx XxXxxx | |||
| 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: | ||||
