Item 1.01.
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Entry into a Material Definitive Agreement
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VKidz SPA Amendment and Rights Agreement Amendment
On November 8, 2018, Cambium Learning Group, Inc. (the
Company
) entered into the Third Amendment (the
VKidz
SPA Amendment
) to the Stock Purchase Agreement (as amended from time to time, the
VKidz SPA
), with Edcity Holding Inc., a Florida corporation (
Edcity
), VSS VKidZ LLC, a Delaware limited liability
company (
VSS VKidZ
and together with Edcity, the
Sellers
), VKidz Holdings Inc., a Delaware corporation (
VKidz
), and VSS VKidZ, solely in its capacity as Representative, pursuant to which the
Company agreed to acquire from the Sellers all of the issued and outstanding capital stock of VKidz (the
VKidz Acquisition
). As previously disclosed, pursuant to the terms of the VKidz SPA, the Company agreed to issue an aggregate
of 6,742,000 shares of its common stock, par value $0.001 per share (the
Common Stock
), subject to adjustment as set forth in the VKidz SPA, as consideration to the Sellers. Pursuant to the VKidz SPA Amendment, in lieu of the
shares of Common Stock, the Sellers will receive as consideration an aggregate payment in the amount of $77,533,000 in cash, subject to adjustment as set forth in the VKidz SPA and the VKidz SPA Amendment. In addition, as previously disclosed, on
October 12, 2018, the Company entered into an Agreement and Plan of Merger (the
Merger Agreement
) with Campus Holding Corp. (
Parent
), a Delaware corporation, and Campus Merger Sub Inc., a Delaware
corporation and newly formed wholly-owned subsidiary of Parent, providing for the acquisition of the Company by Parent (the
Merger
). Pursuant to the terms of the Merger Agreement, upon consummation of the Merger, the Sellers were
to receive consideration in the form of a fixed per share price of $11.50 per share of Common Stock. The aggregate dollar amount of $77,533,000 to be paid to the Sellers, in accordance with the terms of the VKidz SPA Amendment, upon consummation of
the VKidz Acquisition represents the product of (i) $11.50 multiplied by (ii) 6,742,000 shares of Common Stock. The VKidz SPA Amendment was approved by a Special Committee of the Companys Board of Directors comprised entirely of independent
and disinterested directors to evaluate certain aspects of the VKidz Acquisition and the Audit Committee of the Companys Board of Directors.
In addition, on November 8, 2018, the Company entered into the Amendment (the
Rights Agreement Amendment
) to the Tax
Asset Protection Rights Agreement, dated as of September 21, 2016 (the
Rights Agreement
), between the Company and Equiniti Trust Company (successor of interest of Wells Fargo Bank, National Association), as Rights Agent.
Pursuant to the terms of the Rights Agreement Amendment, the parties agreed to amend the Final Expiration Date (as defined in the Rights Agreement) to mean the moment in time that is immediately prior to the effective time of the Merger.
The foregoing descriptions of the VKidz SPA Amendment and the Rights Agreement Amendment are qualified in their entirety by reference to the
full text of the VKidz SPA Amendment and Rights Agreement Amendment, copies of which are attached hereto as Exhibit 10.1 and 10.2, respectively, and incorporated by reference. Except as expressly modified in the VKidz SPA Amendment and the Rights
Agreement Amendment, the VKidz SPA and the Rights Agreement remain in full force and effect.