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ARCHIPELAGO LEARNING, S-1/A Filing

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                                    As filed with the Securities and Exchange Commission on November 17, 2009
                                                                                                          Registration No. 333-161717


                                         SECURITIES AND EXCHANGE COMMISSION
                                                                  Washington, D.C. 20549



                                                   Amendment No. 4 to Form S-1
                          REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933




                                            Archipelago Learning, Inc.
                                                            (Exact name of registrant as specified in its charter)


                         Delaware                                                     8200                                            27-0767387
                 (State or Other Jurisdiction of                          (Primary Standard Industrial                                (I.R.S. Employer
                Incorporation or Organization)                            Classification Code Number)                               Identification No.)


                                                                     Archipelago Learning, Inc.
                                                                    3400 Carlisle Street, Suite 345
                                                                      Dallas, Texas 75204-1257
                                                                           (800) 419-3191
                           (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)


                                                                            Tim McEwen
                                                                       Chief Executive Officer
                                                                     Archipelago Learning, Inc.
                                                                    3400 Carlisle Street, Suite 345
                                                                         Dallas, Texas 75204
                                                                           (800) 419-3191
                                  (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)




                                                                                 Copies to:


                            Alexander D. Lynch, Esq.                                                             Valerie Ford Jacob, Esq.
                           Weil, Gotshal & Manges LLP                                                           Steven G. Scheinfeld, Esq.
                                 767 Fifth Avenue                                                     Fried, Frank, Harris, Shriver & Jacobson LLP
                           New York, New York 10153                                                                One New York Plaza
                             (212) 310-8000 (Phone)                                                            New York, New York 10004
                               (212) 310-8007 (Fax)                                                               (212) 859-8000 (Phone)
                                                                                                                   (212) 859-4000 (Fax)




            Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration
    Statement.

             If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
    Securities Act of 1933, as amended (the ―Securities Act‖), check the following box. 

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the
    following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See the definitions of ―accelerated filer,‖ ―large accelerated filer‖ and ―smaller reporting company‖ in Rule 12b-2 of the Exchange Act.
Large accelerated filer                      Accelerated filer                    Non-accelerated filer                 Smaller reporting company 


        The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
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                                                           EXPLANATORY NOTE

                   Prior to this offering, we conducted our business through Archipelago Learning Holdings, LLC, formerly known as
         Study Island Holdings, LLC, and its subsidiaries. Prior to the consummation of this offering, and in accordance with and as
         contemplated by the limited liability company agreement of Archipelago Learning Holdings, LLC, Archipelago Learning,
         Inc., a newly formed Delaware corporation, will consummate a corporate reorganization whereby Archipelago Learning
         Holdings, LLC will become a wholly owned subsidiary of Archipelago Learning, Inc. See ―Corporate Reorganization‖ in the
         accompanying prospectus for a description of the corporate reorganization. This registration statement, including the
         prospectus contained herein, includes the audited consolidated financial statements, consolidated selected financial and other
         data and other financial information of Archipelago Learning Holdings, LLC, which holds all of our operating subsidiaries
         and, after the corporate reorganization and this offering, will be a direct subsidiary of Archipelago Learning, Inc., as well as
         the audited balance sheet of Archipelago Learning, Inc. Prior to the corporate reorganization and this offering, Archipelago
         Learning, Inc. held no material assets and did not engage in any operations.
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          The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholders
          may sell these securities until the registration statement filed with the Securities and Exchange Commission is
          effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
          securities in any state where the offer or sale is not permitted.
                                                            Subject to Completion
                                               Preliminary Prospectus dated November 17, 2009


         PROSPECTUS


                                                          6,250,000 Shares




                                         Archipelago Learning, Inc.
                                                               Common Stock


                  This is the initial public offering of our common stock. We are offering 3,125,000 shares of the common stock
         offered by this prospectus, and the selling stockholders, which include entities affiliated with members of our board of
         directors, are offering 3,125,000 shares of common stock. We will not receive any proceeds from the sale of the shares to be
         offered by the selling stockholders.

                  We expect the public offering price to be between $15.00 and $17.00 per share. Currently, no public market exists
         for the shares. After pricing the offering, we expect that the shares will be listed on The NASDAQ Stock Market LLC under
         the symbol ―ARCL.‖

                Investing in our common stock involves risks that are described in the “Risk Factors”
         section beginning on page 13 of this prospectus.



                                                                                                    Per Share                    Total


         Public offering price                                                                     $                             $
         Underwriting discount                                                                     $                             $
         Proceeds, before expenses, to us                                                          $                             $
         Proceeds, before expenses, to the selling stockholders                                    $                             $


                  The underwriters may also purchase up to an additional 937,500 shares from the selling stockholders, at the public
         offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover overallotments, if any.

                  Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved
         of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal
         offense.

                    The shares will be ready for delivery on or about     , 2009.
BofA Merrill Lynch                                 William Blair & Company

Robert W. Baird & Co.              Piper Jaffray                  Stifel Nicolaus

                        The date of this prospectus is   , 2009
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Study island Study Island helps students in Kindergarten through 12th grade master grade level academic standards in a fun and engaging manner. Northstr Learning Northstar Learning offers affordable, Web-based programs to provide instructions, practice,
assessment and test prepration for targeted high enrollment post secondary course areas.
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                                                                                                                    Page


Prospectus Summary                                                                                                     1
Risk Factors                                                                                                          13
Forward-Looking Statements                                                                                            31
Providence Equity Transactions                                                                                        33
Corporate Reorganization                                                                                              34
Use of Proceeds                                                                                                       36
Dividend Policy                                                                                                       36
Capitalization                                                                                                        37
Dilution                                                                                                              39
Selected Historical Consolidated Financial Data                                                                       41
Management‘s Discussion and Analysis of Financial Condition and Results of Operations                                 44
Industry and Market Data                                                                                              69
Business                                                                                                              70
Management                                                                                                            83
Compensation Discussion and Analysis                                                                                  89
Certain Relationships and Related Person Transactions                                                                107
Principal and Selling Stockholders                                                                                   112
Description of Capital Stock                                                                                         114
Description of Material Indebtedness                                                                                 118
Shares Eligible for Future Sale                                                                                      120
Certain Material U.S. Federal Income Tax Considerations                                                              122
Underwriting                                                                                                         125
Legal Matters                                                                                                        132
Experts                                                                                                              132
Where You Can Find Additional Information                                                                            132
Index to Financial Statements                                                                                        F-1
  EX-3.1
  EX-3.2
  EX-4.1
  EX-4.2
  EX-5.1
  EX-10.3
  EX-10.36
  EX-10.40
  EX-10.41
  EX-10.42
  EX-10.43
  EX-10.44
  EX-23.1
  EX-23.2
  EX-23.4




         You should rely only on the information contained in this prospectus. We have not, the selling stockholders
have not and the underwriters have not authorized any other person to provide you with different information. If
anyone provides you with different or inconsistent information, you should not rely on it. We are not, the selling
stockholders are not and the underwriters are not making an offer to sell these securities in any jurisdiction where
the offer or sale is not permitted. You should assume that the information appearing in this prospectus is only
accurate as of the date on the front cover of this prospectus. Our business, financial condition, results of operations
and prospects may have changed since that date.

        ―Archipelago Learning,‖ ―Study Island,‖ ―Northstar Learning‖ and their respective logos are our trademarks. Solely
for convenience, we refer to our trademarks in this prospectus without the TM and ® symbols, but such references are not
intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to our
trademarks. Other service marks, trademarks and trade names referred to in this prospectus are the property of their
respective owners. As indicated in this prospectus, we have included market and industry data obtained from industry
publications and other sources. See ―Industry and Market Data.‖
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                                                             PROSPECTUS SUMMARY

                       This section summarizes key information contained elsewhere in this prospectus and is qualified in its entirety by
             the more detailed information and consolidated financial statements included elsewhere in this prospectus. You should
             carefully review the entire prospectus, including the risk factors, the consolidated financial statements and the notes thereto,
             and the other documents to which this prospectus refers before making an investment decision. Prior to this offering, we
             conducted our business through Archipelago Learning Holdings, LLC, formerly known as Study Island Holdings, LLC, and
             its subsidiaries. Prior to the consummation of this offering, and in accordance with and as contemplated by the limited
             liability company agreement of Archipelago Learning Holdings, LLC, Archipelago Learning, Inc., a newly formed Delaware
             corporation, will consummate a corporate reorganization whereby Archipelago Learning Holdings, LLC will become a
             wholly owned subsidiary of Archipelago Learning, Inc. Archipelago Learning, Inc. will act as a holding company for our
             business after the corporate reorganization, and its shares of common stock are offered hereby. Unless the context requires
             otherwise, references in this prospectus to “Archipelago Learning,” “we,” “us,” “our company” or similar terms refer to
             Archipelago Learning, Inc. and its subsidiaries, after giving effect to our corporate reorganization. Prior to the corporate
             reorganization and this offering, Archipelago Learning, Inc., held no material assets and did not engage in any operations.


                                                                     Our Company

                      Archipelago Learning is a leading subscription-based online education company. We provide standards-based
             instruction, practice, assessments and productivity tools that improve the performance of educators and students via
             proprietary web-based platforms. Study Island, our core product line, helps students in Kindergarten through 12th grade, or
             K-12, master grade level academic standards in a fun and engaging manner. As of September 30, 2009, Study Island
             products were utilized by approximately 8.9 million students in 21,000 schools in 50 states. In the 2008-2009 school year,
             students answered over 2.8 billion of our practice questions. We recently began offering online postsecondary programs
             through our Northstar Learning product line.

                       Study Island combines rigorous content that is highly customized to specific standards in reading, math, science and
             social studies with interactive features and games that engage students and reinforce and reward learning achievement. Our
             programs also enable educators to track student performance in real-time to address individual student learning gaps, while
             allowing administrators to monitor student progress and measure teacher effectiveness. Through continued product
             expansion, viral word-of-mouth marketing and a proven sales organization, Study Island has the opportunity to grow by
             increasing sales to existing school customers as well as adding new school customers.

                     We capitalize on two significant trends in the education market: (1) an increased focus on higher academic
             standards and educator accountability for student achievement, which has led to periodic assessment in the classroom to
             gauge student learning and inform instruction, and (2) the increased availability and utilization of web-based technologies to
             enhance and supplement teacher instruction, engage today‘s technology-savvy learners and improve student outcomes.


                                                               Our Market Opportunity

                       The U.S. educational system, consisting of K-12 and postsecondary education, collectively includes approximately
             74 million students and approximately $1 trillion in educational expenditures according to the National Center for Education
             Statistics, or NCES. We operate primarily in the U.S. K-12 education market, which consists of approximately 55 million
             students in more than 118,000 schools according to Market Data Retrieval, or MDR. The U.S. K-12 school system has over
             94,000 public schools in over 15,200 school districts and county and regional centers and more than 24,000 private and
             Catholic schools, according to MDR.

                     We believe that we have a growing market opportunity as a result of an increased emphasis on school and teacher
             accountability, legislative developments, including the reauthorization of the Elementary and


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             Secondary Education Act, commonly referred to as No Child Left Behind, or NCLB, which emphasizes annual student
             assessment, as well as increased access to computers and the internet in and out of the classroom. In addition, schools use a
             variety of supplemental materials to augment the core curriculum, provide remediation and enrichment, and offer additional
             learning opportunities in the classroom and at home. An estimated $11.5 billion was spent on the K-12 instructional
             materials market in 2008, according to Outsell, Inc., a research and advisory firm focused on the publishing, information,
             and education industries, or Outsell. In 2009, Outsell projects that spending on instructional content will grow by about
             2-4%, and spending on assessment, tutoring and test preparation services will grow by about 4.8-5.2%. Between 2010 and
             2012 the overall market is expected to grow at an annual compounded growth rate of 5.5%, according to Outsell.

                      We believe increased accountability, including the need for school districts and states to meet the requirements of
             NCLB and other legislative developments, combined with the increased availability and utilization of web-based
             technologies by teachers, students and administrators has resulted in decreased spending on traditional print-based and
             software-based supplemental materials and increased spending on innovative online programs that offer functionality and
             real-time assessment and reporting not provided by traditional solutions.


                                                             Our Competitive Strengths

                     We believe the following are our key competitive strengths:

                      •       Customized, Standards-Based Content. Study Island offers online, standards-based instruction, practice
                              and assessments for K-12 built from applicable standards in each of the 50 states, as well as Washington,
                              DC. In addition, Northstar Learning offers instruction, practice, assessments and test preparation for the
                              GED and allied health licensure exams, as well as developmental studies in college readiness
                              English/language arts and mathematics.

                      •       Real-time Student Tracking, Built-in Remediation and Enrichment. We provide real-time reporting on
                              student achievement, allowing educators to quickly identify learning gaps and provide targeted instruction
                              and practice. Study Island also provides students with immediate feedback and explanations and, when
                              required, remediation content designed to build foundational skills in order to accelerate students to
                              grade-level proficiency.

                      •       Engaging, Fun and Easy to Use for Students. Our products utilize a simple, graphical user interface that
                              is intuitive and easy to use. In addition, our Study Island products incorporate games and rewards in order
                              to make learning fun and engaging for students. By engaging students and providing them with the tools
                              they need to succeed, we enable them to take control of their own learning, boost their confidence and keep
                              them interested in using our products, while creating a culture of academic success.

                      •       Accessible, Dynamic Web-based Platform. Our products are delivered entirely online so they can be used
                              by teachers and students on computers wherever internet access is available. Our programs are compatible
                              with existing school and school district enterprise systems and require no additional software, no
                              installation or maintenance and no extensive implementation or training.

                      •       High Impact, Low Cost Solution. By providing a single, comprehensive solution for core subjects across
                              a wide range of grade levels, Study Island eliminates the need for schools to have multiple vendors or
                              systems, saving them both time and money. In addition, at an average annual price per student per subject
                              of $3.00, or $10.00 per student for all subjects, our products offer customers a compelling value
                              proposition compared to traditional print, software and online alternatives provided by large education
                              publishers.

                      •       Management Team with Strong Education Industry Expertise. Members of our senior management team
                              have extensive experience in the education industry and in serving the academic community. Our Chief
                              Executive Officer Tim McEwen, who has approximately 34 years of experience in the industry, and our
                              Chief Financial Officer James Walburg, who has


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                           27 years of public company accounting and finance experience, both joined us in 2007. Our Chief
                           Technology Officer Ray Lowrey, who has approximately 14 years of experience in the education industry,
                           joined us in 2008. Under their leadership, the number of school customers and registered student users of
                           our Study Island products have increased from approximately 7,800 and 3.0 million, respectively, in 2006,
                           to approximately 21,000 and 8.9 million, respectively, in September 2009.


                                                     Key Attributes of Our Business Model

                    We believe the following are the key attributes of our business model:

                    •       High Revenue Visibility and Strong Cash Flow Generation. We believe we have an attractive business
                            model characterized by a visible recurring revenue stream and high profit margins. In addition, we believe
                            our low capital expenditure requirements and up-front subscription payments by customers result in strong
                            cash flow generation and high returns on invested capital.

                    •       Scalability and Flexibility. We continue to scale our business by increasing our product offerings, our
                            sales and the number of students, teachers and schools using our products without incurring significant
                            incremental expense. Our content development process, our flexible sales model and our cost-effective
                            centralized, hosted online delivery platform allow us to minimize our costs as we expand our product
                            offerings and our business.

                    •       Powerful, Demand-Driven Sales & Marketing. Our Study Island products are often introduced into the
                            classroom by principals or teachers, rather than mandated by district-level administrators. In addition to
                            this viral demand for our products and services, we have a 124 member team of specialized sales and
                            marketing professionals. As a result of this strategy, we set the price points for our K-8 products at levels
                            that fall within a school principal‘s discretionary budget or that can be funded by individual teachers or
                            through parent fundraising efforts.


                                                              Our Growth Strategy

                    •       Expand the Number of Schools Using Our Study Island Products. As of September 30, 2009, our Study
                            Island products were used by approximately 21,000 schools throughout all 50 states and Washington, DC,
                            representing approximately 17.6% of the over 94,000 public and 24,000 private and Catholic K-12 schools
                            in the United States. We believe that there is a significant opportunity to expand the number of schools that
                            use Study Island, particularly the number of high schools. Our high school products generally have higher
                            price points than our K-8 products and accounted for approximately 10% of our service revenue in 2008.

                    •       Increase Revenue per School. In many schools that we serve, we have the opportunity to sell additional
                            core grade level and subject area products, as well as new products, such as our benchmark assessments
                            and graphic novel reading intervention, to teachers who already subscribe to one or more of our products.

                    •       Develop New Products and Enhance our Online Platform. We continually develop new Study Island
                            products, as well as new features and functionality for our online platform, to address student needs and
                            teacher requests. These new products also provide additional revenue opportunities. For instance, we
                            intend to introduce new high school oriented products, including reading and math remediation products,
                            core subject end of course and exit exam preparation, advanced placement exam preparation, PSAT, SAT,
                            ACT and other test preparation, and high school courses for credit and credit recovery.

                    •       Expand Into New Related Markets. We believe there is a significant opportunity to grow sales of our
                            products and services through the introduction of new products for the postsecondary


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                             market. We launched our Northstar Learning product line in April 2009 to enter this market, utilizing our
                             content development, instruction, exam preparation and assessment expertise. In addition, we believe there
                             are additional market opportunities outside of the United States and outside of the traditional school setting.
                             We introduced our Study Island products in Canada in October 2009. We are exploring the opportunities to
                             introduce our Study Island products in other international markets and to sell our products directly to
                             parents as well as expanding our sales efforts to public libraries, school libraries and homeschool settings.

                     •        Pursue Acquisitions and Strategic Relationships. Since 2007, we have sought acquisitions and strategic
                              relationships that expand our product and service offerings and provide additional revenue opportunities.
                              We intend to continue to pursue acquisitions that have products, services and businesses that are
                              compatible with our Archipelago Learning brand identity, culture and corporate mission. In addition, we
                              believe our large student audience of over 8 million K-12 students provides a significant opportunity to
                              generate cross-sales of other appropriate, teacher- and parent-approved products to this valuable
                              demographic.


                                                         Risks Associated with Our Business

                     Our business is subject to numerous risks, as discussed more fully in the section entitled ―Risk Factors‖ beginning
             on page 13 of this prospectus, which you should read in its entirety. In particular:

                     •        Most of our customers are public schools, which rely on state, local and federal funding. If any state, local
                              or federal funding is materially reduced, our public school customers may no longer be able to afford to
                              purchase our products and services;

                     •        If national educational standards and assessments are adopted, or if existing metrics for applying state
                              standards are revised, new competitors could more easily enter our markets or the demands in the markets
                              we currently serve may change;

                     •        If Congress does not reauthorize the Elementary and Secondary Education Act, commonly referred to as
                              NCLB since the 2001 reauthorization, or other legislation does not continue to mandate state educational
                              standards and annual assessments, demand for our products and services could be materially adversely
                              affected;

                     •        Our recent rapid growth, the recent introduction of a number of our products and services and our entry
                              into new markets make it difficult for us to evaluate our current and future business prospects, and we may
                              be unable to effectively manage our growth and new initiatives;

                     •        The recent ongoing adoption of online learning in established education markets makes it difficult for us to
                              evaluate our current and future business prospects. If web-based education fails to achieve widespread
                              acceptance by students, parents, teachers, schools and other institutions, our growth and profitability may
                              materially suffer;

                     •        Our service revenue is primarily generated by sales of subscriptions to our Study Island products over the
                              term of the subscription. Our customer renewal rates are difficult to predict and declines in our sales of
                              Study Island products or our customer renewal rates may materially adversely affect our business and
                              results of operations; and

                     •        Our Study Island products are predominantly purchased by individual schools, and any decisions at the
                              district or state level to use the products and services of one of our competitors, or to limit or reduce the
                              use of web-based educational products, could materially adversely affect our ability to attract and retain
                              customers.


                                                                Principal Stockholders

                    In January 2007, investment funds affiliated with Providence Equity Partners, together with Cameron Chalmers and
             David Muzzo (our founders and vice presidents) and MHT-SI, LP, acquired 100% of the voting
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             equity interests in Archipelago Learning Holdings, LLC (formerly known as Study Island Holdings, LLC), the parent of
             Archipelago Learning, LLC (formerly known as Study Island, LLC), which subsequently acquired substantially all of the
             assets of Study Island, LP, our predecessor. As a result of these transactions, prior to the Corporate Reorganization described
             below, affiliates of Providence Equity Partners own approximately 77.2% of our voting equity interests, Cameron Chalmers
             and David Muzzo together own approximately 18.2% of our voting equity interests divided equally between them, and
             MHT-SI, LP owns approximately 4.6% of our voting equity interests. For a more detailed description of the acquisition, see
             ―Providence Equity Transactions.‖


                                                               Corporate Reorganization

                       Prior to this offering, Archipelago Learning Holdings, LLC and its subsidiaries conducted our business. Prior to the
             consummation of this offering, and in accordance with and as contemplated by the limited liability company agreement of
             Archipelago Learning Holdings, LLC, the holders of shares of Archipelago Learning Holdings, LLC, and certain of their
             affiliates will enter into transactions with Archipelago Learning, Inc. pursuant to which direct or indirect holders of Class A,
             Class A-2, Class B and Class C shares will exchange their shares for common stock and restricted stock. The purpose of this
             corporate reorganization is to reorganize our corporate structure so that the top tier entity in our corporate structure – the
             entity whose common stock is being offered to the public in this offering – is a corporation rather than a limited liability
             company and so that our existing investors will directly own our common stock. For a more detailed description, see
             ―Corporate Reorganization.‖


                                                                 Recent Developments

                       In November 2009, we completed the sale of TeacherWeb for an aggregate purchase price of $13 million,
             consisting of $6.5 million in cash (reduced by approximately $1.5 million of cash remaining on TeacherWeb‘s balance
             sheet), Series A shares of Edline valued at $3.7 million and $2.8 million of five-year debt securities that bear interest at 9.5%
             per annum and require semi-annual interest-only payments. We believe the sale of TeacherWeb, coupled with our earlier
             investment in Edline, will enable us to focus on growing our core business of providing online standards-based instruction,
             practice, assessment and reporting programs through our Study Island and Northstar Learning products, while partnering
             with Edline to integrate Study Island‘s content with Edline‘s community management solutions. In addition, we repaid
             $6.5 million on our term loan in connection with the sale. As a result of the sale, TeacherWeb‘s guarantee of our credit
             facility was released. We do not expect the sale to have a material negative impact on our net income in the future. Also as a
             result of the sale, we hold 11.2% of Edline‘s outstanding Series A shares and $4.9 million of Edline‘s senior debt. Prior to
             the completion of this offering, Archipelago Learning Holdings, LLC intends to make a distribution of $1.6 million to its
             equity holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb.


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                     Our ownership and corporate structure following the Corporate Reorganization and this offering are set forth in the
             following chart:




                                                               Our Executive Offices

                      Prior to the Corporate Reorganization, we operated our business through Archipelago Learning Holdings, LLC, a
             Delaware limited liability company, and its subsidiaries. Prior to the consummation of this offering, we will consummate the
             Corporate Reorganization and operate our business through a newly formed Delaware corporation, Archipelago Learning,
             Inc. Our principal executive offices are located at 3400 Carlisle Street, Suite 345, Dallas, TX 75204, and our telephone
             number is (800) 419-3191. We have a website at www.archipelagolearning.com. The information that appears on our
             website is not part of, and is not incorporated into, this prospectus.


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                                                                      The Offering

             Common stock offered by us                     3,125,000 shares.

             Common stock offered by the selling
             stockholders                                   3,125,000 shares.

             Total offering                                 6,250,000 shares.

             Common stock to be outstanding after this
             offering                                       25,106,719 shares.

             Overallotment option                           The underwriters have an option to purchase a maximum of
                                                            937,500 additional shares of common stock from the selling stockholders to
                                                            cover overallotments. The underwriters can exercise this option at any time
                                                            within 30 days from the date of this prospectus.

             Use of proceeds                                We estimate that the net proceeds to us from this offering, after deducting
                                                            underwriting discounts and estimated offering expenses, will be
                                                            approximately $42.7 million, assuming the shares are offered at $16.00 (the
                                                            midpoint of the price range set forth on the cover of this prospectus). We
                                                            intend to use the net proceeds of this offering for general corporate purposes.
                                                            We will not receive any proceeds from the sale of shares by the selling
                                                            stockholders. See ―Use of Proceeds.‖

             Dividend policy                                We do not anticipate paying any dividends on our common stock in the
                                                            foreseeable future. See ―Dividend Policy.‖

             Risk factors                                   Investing in our common stock involves a high degree of risk. See ―Risk
                                                            Factors‖ beginning on page 13 of this prospectus for a discussion of factors
                                                            you should carefully consider before investing in our common stock.

             Proposed Nasdaq symbol                         ―ARCL.‖

                     Unless otherwise indicated, the number of shares of common stock to be outstanding after this offering:

                     •         excludes 561,755 shares of our common stock issuable upon exercise of stock options that we intend to
                               grant at the time of this offering, at an exercise price equal to the initial public offering price;
                               1,636,417 shares of our common stock, restricted common stock and restricted stock unit awards reserved
                               for future grants under our 2009 Omnibus Incentive Plan and 500,000 shares of our common stock
                               reserved for future issuance under our employee stock purchase plan; and

                     •         includes 1,394,260 shares of restricted common stock subject to vesting.

                     Unless otherwise indicated, the information in this prospectus:

                     •         gives effect to the Corporate Reorganization;

                     •         gives effect to our amended and restated certificate of incorporation and our amended and restated bylaws,
                               which will be in effect prior to the consummation of this offering;

                     •         assumes no exercise of the underwriters‘ option to purchase up to 937,500 additional shares from the
                               selling stockholders; and

                     •         assumes an initial public offering price of $16.00 per share, the midpoint of the price range set forth on the
                               cover of this prospectus.
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                                           Summary Historical Consolidated Financial and Other Data

                       The following table sets forth the summary historical and adjusted consolidated financial data for Archipelago
             Learning Holdings, LLC for the periods and at the dates indicated. We derived the summary consolidated financial data
             presented below for the years ended December 31, 2008, December 31, 2007 and December 31, 2006 from the audited
             consolidated financial statements of Archipelago Learning Holdings, LLC included elsewhere in this prospectus. We derived
             the summary consolidated financial data for the nine months ended September 30, 2009 and September 30, 2008 and as of
             September 30, 2009 from the unaudited consolidated financial statements of Archipelago Learning Holdings, LLC included
             elsewhere in this prospectus. We have prepared the unaudited consolidated financial information set forth below on the same
             basis as the audited consolidated financial statements and have included all adjustments, consisting of only normal recurring
             adjustments, that we consider necessary for a fair presentation of our financial position and operating results for such
             periods. The interim results set forth below are not necessarily indicative of results for the year ending December 31, 2009 or
             for any other period.

                      In January 2007, Providence Equity Partners, together with Cameron Chalmers and David Muzzo (our founders and
             vice presidents) and MHT-SI, LP, acquired 100% of the voting equity interests in Archipelago Learning Holdings, LLC, the
             parent of Archipelago Learning, LLC, which acquired substantially all of the assets of Study Island, LP. See ―Providence
             Equity Transactions.‖ All periods ending prior to January 1, 2007 are referred to as ―Predecessor,‖ and all periods including
             and after such date are referred to as ―Successor.‖ The consolidated financial statements for all Successor periods may not be
             comparable to those of the Predecessor period.

                      Contained within the 2007 consolidated financial statements are nine calendar days of operations and cash flows of
             the Predecessor. Such amounts are not material to the overall 2007 consolidated financial statements taken as a whole.
             Further, the consolidated financial position of the Predecessor immediately prior to the January 10, 2007, transaction was not
             materially different from that of December 31, 2006. Accordingly, we have chosen January 1, 2007, as a date of convenience
             in presenting successor operating results and the financial statement information for the period from January 1, 2007 through
             January 9, 2007 has not been presented separately.

                      In addition, the summary historical consolidated financial and other data does not include financial statements of
             Archipelago Learning, Inc. because it has been formed recently for the purpose of effecting the offering and until the
             consummation of the Corporate Reorganization described more fully in ―Corporate Reorganization,‖ it will hold no material
             assets and will not engage in any operations. Upon completion of the Corporate Reorganization, Archipelago Learning, Inc.
             will become the parent of Archipelago Learning Holdings, LLC and its subsidiaries and will have no other assets or
             operations. See ―Corporate Reorganization.‖

                      Our historical results are not necessarily indicative of future operating results. You should read the information set
             forth below in conjunction with ―Selected Historical Consolidated Financial Data,‖ ―Management‘s Discussion and Analysis
             of Financial Condition and Results of Operations,‖ and the consolidated financial statements and the related notes included
             elsewhere in this prospectus.


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                                                         Predecessor                                    Successor
                                                         Year Ended               Year Ended
                                                                                                                       Nine Months Ended
                                                     December 31,                December 31,                            September 30,
                                                         2006               2007             2008                   2008              2009
                                                                                                                          (Unaudited)
                                                                                       (Dollars in thousands)


                    Consolidated Statements of
                      Income:
                      Service revenue                $        10,065    $ 18,250          $         32,068      $ 22,319       $         32,685
                      Cost of revenue                            343         750                     2,178         1,253                  2,723
                        Gross profit                           9,722        17,500                  29,890          21,066               29,962
                      Operating expense
                        Sales and marketing                    2,793         7,669                  13,193           9,516               10,630
                        Content development                      712         1,206                   2,162           1,496                2,586
                        General and
                          administrative                       2,581         5,010                   6,644           4,632                   7,059
                      Total operating expense                  6,086        13,885                  21,999          15,644               20,275
                      Income from operations                   3,636         3,615                   7,891           5,422                   9,687
                      Other income (expense)
                        Interest expense                           —          (838 )                (5,161 )        (3,973 )             (2,092 )
                        Interest income                            27          343                     247             194                   44
                        Derivative loss                            —          (173 )                (2,119 )          (857 )               (415 )
                      Total other income
                        (expense)                                  27         (668 )                (7,033 )        (4,636 )             (2,463 )
                      Income before income taxes               3,663         2,947                      858            786                   7,224
                      (Provision) benefit for
                        income taxes                               —           (23 )                    164             11                   (348 )
                      Net income                     $         3,663    $    2,924        $          1,022      $      797     $             6,876

                      Pro forma as adjusted net
                        (loss) income (1)                                                 $            (805 )                  $             4,248

                      Pro forma as adjusted (loss)
                        earnings per share(1):
                        Basic                                                             $           (0.03 )                  $              0.17

                        Diluted                                                           $           (0.03 )                  $              0.17

                      Pro forma as adjusted
                        weighted average shares
                        of common stock
                        outstanding(1):
                        Basic                                                                  23,712,459                           23,712,459

                        Diluted                                                                23,712,459                           23,712,459

                      Other Data:
                      EBITDA(2)                      $         3,707    $ 5,112           $          7,955      $ 6,106        $         11,586
                      Adjusted EBITDA(2)             $         8,146    $ 14,119          $         21,851      $ 17,245       $         22,820
                      Number of schools using
                        Study Island products(3)               7,856        13,100                  17,307          16,836               20,812
    data and footnotes continued on following page



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                                                                                                                  September 30, 2009
                                                                                                                                Pro Forma
                                                                                                             Actual           As Adjusted(1)
                                                                                                                     (Unaudited)
                                                                                                                    (In thousands)
             Balance Sheet Data:
             Deferred revenue                                                                              $ 36,469         $        34,118
             Cash and cash equivalents                                                                     $ 17,111         $        49,002
             Total assets                                                                                  $ 155,703        $       182,633
             Long-term debt                                                                                $ 67,551         $        61,051
             Total liabilities                                                                             $ 109,305        $       105,250
             Total equity                                                                                  $ 46,398         $        77,383

              (1) We present certain amounts pro forma as adjusted, which gives effect to (i) our Corporate Reorganization as more
                  fully described in ―Corporate Reorganization;‖ (ii) cash distributions of $8.0 million made in October 2009 and
                  $0.9 million to be made upon the Corporate Reorganization; (iii) net short-term deferred tax asset of $1.1 million and
                  net long-term deferred tax liability of $5.5 million, as of September 30, 2009 and provision for income taxes of
                  $2.2 million and $2.4 million for the year ended December 31, 2008 and the nine months ended September 30, 2009,
                  respectively, as a result of the Corporate Reorganization; (iv) the sale of our TeacherWeb business, which we
                  completed in November 2009 (consisting of the purchase price of $13 million (reduced by approximately $1.5 million
                  of cash remaining on TeacherWeb‘s balance sheet), the related $6.5 million repayment on our term loan and an
                  approximately $1.6 million cash distribution to be made upon the Corporate Reorganization in connection with certain
                  tax obligations associated with the TeacherWeb sale); and (v) the sale of 3,125,000 shares of our common stock in this
                  offering by us at an assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth
                  on the cover of this prospectus) after deducting underwriting discounts and commissions and estimated offering
                  expenses payable by us and the application of the net proceeds from this offering as described under ―Use of
                  Proceeds.‖ For additional information regarding TeacherWeb services and the sale of TeacherWeb, see ―Business —
                  Our Products and Services — TeacherWeb‖ and ―Management‘s Discussion and Analysis of Financial Condition and
                  Results of Operations — Recent Developments.‖ Pro forma as adjusted earnings per share is calculated by allocating
                  net income (but not net loss) between common stock and restricted common stock, excluding the net income (if any)
                  that was allocated to the restricted common stock, and dividing such amount of net income (or the full amount of the
                  net loss) by the pro forma as adjusted weighted average shares of common stock. Pro forma as adjusted weighted
                  average shares of common stock excludes shares of restricted common stock because the restricted stock is subject to
                  forfeiture.

              (2) We present EBITDA and Adjusted EBITDA in this prospectus to provide investors with supplemental measures of our
                  operating performance and, in the case of Adjusted EBITDA, information utilized in the calculation of the financial
                  covenants under our credit facility and in the determination of compensation. EBITDA, as used in this prospectus, is
                  defined as consolidated net income before net interest expense, consolidated income taxes and consolidated
                  depreciation and amortization. Adjusted EBITDA differs from the term ―EBITDA‖ as it is commonly used. Adjusted
                  EBITDA, as used in this prospectus, means ‗‗Consolidated EBITDA‖ as that term is defined under our credit facility,
                  which is generally consolidated net income before consolidated interest expense, consolidated amortization expense,
                  consolidated depreciation expense and consolidated tax expense, in each case as defined more fully in the agreement
                  governing our credit facility. The other items excluded in this calculation include, but are not limited to, derivative
                  losses, changes in deferred revenue, non-cash compensation expense, certain investment and permitted acquisition
                  expenses, certain permitted payments to Providence Equity Partners, unusual non-recurring charges, agency fees paid
                  to the administrative agent and adjustments related to the acquisition of TeacherWeb.

                    In addition to the financial covenant requirements under our credit facility, management uses EBITDA and Adjusted
                    EBITDA as a measure of operating performance for planning purposes, including the preparation of budgets and
                    projections, as well as to facilitate analysis of the allocation of resources and to evaluate the effectiveness of business
                    strategies. Further, we believe EBITDA and Adjusted EBITDA are frequently used by
                                                                                                          footnotes continued on following page



                                                                         10
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                    securities analysts, investors and other interested parties in the evaluation of companies in industries similar to ours.

                    EBITDA enables investors to isolate the effects on profitability and operating metrics, such as service revenue,
                    operating expense and selling, general and administrative expense. In addition to its use to monitor performance trends,
                    EBITDA provides a comparative metric to management and investors that is consistent across companies that have
                    different capital structures, operate in different tax jurisdictions and have different capital investments. This enables
                    management and investors to compare our performance on a consolidated basis and on a segment basis to that of our
                    peers. Adjusted EBITDA is also used by management to measure operating performance and by investors to measures a
                    company‘s ability to service its debt and other cash needs. Management believes the inclusion of the adjustments to
                    EBITDA and Adjusted EBITDA are appropriate to provide additional information to investors about certain material
                    non-cash items and about unusual items that we do not expect to continue at the same level in the future.

                    EBITDA and Adjusted EBITDA are not recognized terms under accounting principles generally accepted in the United
                    States, or GAAP. Accordingly, they should not be used as indicators of, or alternatives to, net income as measures of
                    operating performance. Although we use EBITDA as a measure to assess the operating performance of our business,
                    EBITDA has significant limitations as an analytical tool because it excludes certain material costs. For example, it does
                    not include interest expense, which has been a necessary element of our costs. Because we use capital assets,
                    depreciation expense is a necessary element of our costs and ability to generate service revenue. In addition, the
                    omission of the substantial amortization expense associated with our intangible assets further limits the usefulness of
                    this measure. EBITDA also does not include the payment of taxes, which is also a necessary element of our operations.
                    Because EBITDA does not account for these expenses, its utility as a measure of our operating performance has
                    material limitations. Because of these limitations management does not view EBITDA in isolation or as a primary
                    performance measure and also uses other measures, such as net income, invoiced sales, average purchase and renewal
                    rate to measure operating performance. Because the definitions of EBITDA and Adjusted EBITDA (or similar
                    measures) may vary among companies and industries, they may not be comparable to other similarly titled measures
                    used by other companies.

                    The following table presents a reconciliation of EBITDA and Adjusted EBITDA to net income for each of the periods
                    presented:


                                                                     Predecessor                             Successor
                                                                    Year Ended                                           Nine Months Ended
                                                                    December 31,       Year Ended December 31,              September 30,
                                                                        2006             2007          2008              2008            2009
                                                                                                                             (unaudited)
                                                                                                (In thousands)


                     Net Income                                    $        3,663     $    2,924     $    1,022      $      797      $    6,876
                     Interest expense                                          —             838          5,161           3,973           2,092
                     Interest income, net                                     (27 )         (343 )         (247 )          (194 )           (44 )
                     Tax provision (benefit)                                   —              23           (164 )           (11 )           348
                     Depreciation/amortization                                 71          1,670          2,183           1,541           2,314

                     EBITDA                                        $        3,707     $    5,112     $    7,955      $    6,106      $ 11,586
                     Derivative loss(A)                                        —             173          2,119             857           415
                     Change in deferred revenue(B)                          4,439          7,613          9,791           8,884         9,546
                     Stock based compensation(C)                               —             631            355             272           298
                     Investments and permitted acquisition
                       expense(D)                                              —              13            263             202              32
                     Sponsor payments(E)                                       —              —              65              53              —
                     Unusual, non-recurring charges(F)                         —             564            955             561             868
                     Agency fees(G)                                            —              13            113              75              75
                     TeacherWeb pro forma adjustments(H)                       —              —             235             235              —

                     Adjusted EBITDA                               $        8,146     $ 14,119       $ 21,851        $ 17,245        $ 22,820

                                                                                                          footnotes continued on following page
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                    (A)            Derivative loss includes our interest rate swap that we entered into as required by our credit facility.

                    (B)            Change in deferred revenue is the net change in deferred revenue at the end of such period from the
                                   deferred revenue at the end of the previous period. For a description of how we calculate deferred
                                   revenue, see ―Management‘s Discussion and Analysis of Financial Condition and Results of
                                   Operations — Components of Service Revenue and Expense — Service Revenue.‖

                    (C)            Stock-based compensation includes non-cash compensation expense recorded in respect of shares of
                                   Archipelago Learning Holdings, LLC issued to our employees. See Note 13 to our financial
                                   statements contained elsewhere in this prospectus.

                    (D)            Investments and permitted acquisition expense includes cash fees and expenses in connection with
                                   investments or acquisitions permitted by our credit facility.

                    (E)            Sponsor payments are payments to Providence Equity Partners that are permitted under our credit
                                   facility, and include the reimbursement of customary fees and reasonable out-of-pocket expenses to
                                   our directors or the managers of Archipelago Learning Holdings, LLC, such as travel and other
                                   expenses.

                    (F)            Unusual, non-recurring charges include severance costs, relocation costs, retention bonuses, and
                                   one-time contract labor, accounting, legal and bank fees. In 2009, we also incurred one-time expenses
                                   in connection with our initial public offering.

                    (G)            Agency fees are fees paid to the agents under our credit facility.

                    (H)            TeacherWeb pro forma includes adjustments to reflect TeacherWeb‘s EBITDA from January 2008
                                   until our acquisition of TeacherWeb in June 2008. We completed the sale of our TeacherWeb
                                   business in November 2009.

              (3) A school is considered to be using our products if it has an active subscription for any or all of the Study Island
                  products available to it.


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                                                               RISK FACTORS

                   An investment in our common stock involves a high degree of risk. You should carefully consider the following
         risks, as well as the other information contained in this prospectus, before making an investment in our company. If any of
         the following risks actually occur, our business, results of operations or financial condition may be materially adversely
         affected. In such an event, the trading price of our common stock could decline and you could lose part or all of your
         investment. Additional risks that we currently do not know about or that we currently believe to be immaterial may also
         impair our business operations.


         Risks Related to Our Business and Industry

         Most of our customers are public schools, which rely on state, local and federal funding. If any state, local or federal
         funding is materially reduced, our public school customers may no longer be able to afford to purchase our products
         and services, and our business, financial condition, results of operations and cash flow could be materially adversely
         affected.

                  In 2008 and the first nine months of 2009, approximately 96.8% and 93.3%, respectively, of our service revenue
         was generated by sales of our Study Island products. Approximately 99.0% and 95.1% of our Study Island customers in
         2008 and the first nine months of 2009, respectively, were public schools and school districts. Although public funding
         varies by state and municipality, public schools and districts typically receive most of their funding from state and local
         governments, and a smaller portion from the federal government. Budget appropriations for education at all levels of
         government are determined through the political process and, as a result, the funding schools receive may fluctuate.

                   State and federal educational funding is primarily funded through income taxes, and local educational funding is
         primarily funded through property taxes. As a result of the ongoing recession, income tax revenue for the 2008 tax year has
         decreased, which has put pressure on state and federal budgets. In addition, with the recent decline in real estate values in
         almost every state and the resulting reassessments, property tax revenue is expected to decline over the next few years. For
         example, in the fourth quarter of 2008, North Carolina, Pennsylvania and Ohio, three of the four states accounting for our
         highest per-state service revenue, had decreases in their tax revenue of 3.9%, 3.6% and 5.4%, respectively, resulting in
         mid-year 2009 budget gaps of $2.0 billion, $2.3 billion and $1.2 billion, respectively. Continuing unfavorable economic
         conditions may result in education budget cuts and lead to lower overall spending, including lower technology spending, by
         our current and potential clients, which may materially adversely affect our service revenue. According to the Center on
         Budget and Policy Priorities, at least 25 states made cuts or have proposed cuts to K-12 and early education funding in their
         2010 budgets. Declines in tax receipts and gaps in states‘ budgets could result in decreased education spending as well as
         cuts in recently enacted federal education spending programs, reduced school budgets and reduced availability of
         discretionary funds, all of which could materially adversely affect our service revenue and results of operations.


         If national educational standards and assessments are adopted, or if existing metrics for applying state standards are
         revised, new competitors could more easily enter our markets or the demands in the markets we currently serve may
         change.

                   With the reauthorization of the Elementary and Secondary Education Act, known as No Child Left Behind, or
         NCLB, in 2001, Congress conditioned the receipt of federal funding for education on the establishment of educational
         standards, annual assessments and the achievement of adequate yearly progress milestones. These standards are established
         at the state level, and there are currently no national educational standards that are required to be assessed pursuant to
         NCLB. As part of NCLB, each state is required to establish clear performance standards for each grade level in reading,
         math and science in grades 3 through 8, and for high school exit or end-of-course exams. Most of our service revenue from
         Study Island is concentrated in grades K-8, which accounted for approximately 87% of our service revenue in 2008. High
         school accounted for approximately 10% of Study Island service revenue for 2008. A shift to national performance standards
         or a reduction in the use of government-imposed standards may result in a material decline in demand in the markets that we
         serve.


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                   In addition, our Study Island products are specifically built from the varying assessment standards in all 50 states,
         which we believe differentiates them from the products offered by our competitors. If national standards and assessments
         replace the current state assessments, it would be easier for competitors to develop similar products tailored to one national
         set of standards rather than multiple state standards. If such an increase in competition occurred, our ability to compete
         effectively could be negatively impacted and our service revenue and profitability could materially decline.


         If Congress does not reauthorize the Elementary and Secondary Education Act, commonly referred to as NCLB since
         the 2001 reauthorization, or other legislation does not continue to mandate state educational standards and annual
         assessments, demand for our products and services could be materially adversely affected.

                  NCLB substantially increased the importance of state-by-state educational standards and assessments by making
         such standards and annual assessments a condition to receipt of federal educational funding. NCLB initially was scheduled
         for reauthorization in October 2008, but was extended in order to allow the new U.S. presidential administration the
         opportunity to impact the direction of any future reauthorization, which we believe is likely to occur in 2010. If NCLB is not
         reauthorized or extended or does not maintain or increase the importance of state-by-state education standards and
         assessments, or if other federal or state legislation were to lessen the importance of such standards and assessments, our
         products and services could become significantly less valuable to our customers, and our service revenue and profitability
         could materially decline.


         Our recent rapid growth, the recent introduction of a number of our products and services and our entry into new
         markets make it difficult for us to evaluate our current and future business prospects, and we may be unable to
         effectively manage our growth and new initiatives, which may increase the risk of your investment and could harm
         our business, financial condition, results of operations and cash flow.

                   We were founded in 2000 and began offering our Study Island products in 2001. Since our founding, we have
         continually launched new Study Island products, entered additional states and experienced rapid growth and increasing
         market share in the expanding market for online learning. We began offering our Study Island products in all 50 states as of
         the 2008-2009 school year, and we launched our Northstar Learning product line in April 2009. Because many of our current
         products and services are relatively new and we have recently entered new markets, we may be unable to evaluate the
         relative success and future prospects, particularly in light of our goals to continually grow our existing and new customer
         base, expand our product and service offerings, acquire and integrate complementary businesses and enter new markets.

                   In addition, our growth, recent product introductions and entry into new markets may place a significant strain on
         our resources and increase demands on our executive management, personnel and systems, and our operational,
         administrative and financial resources may be inadequate. We may also not be able to maintain or accelerate our current
         growth rate, effectively manage our expanding operations, or achieve planned growth on a timely or profitable basis,
         particularly if the number of students and educators using our products and services increase or their demands and needs
         change as our business expands. Our management will be required to expand its knowledge of diverse aspects of the
         education industry and maintain relationships with key customers across several sectors of the education market. If we are
         unable to manage our growth and expand operations effectively, we may experience operating inefficiencies, the quality of
         our products and services could deteriorate, and our business and results of operations could be materially adversely
         affected.


         The recent ongoing adoption of online learning in established education markets makes it difficult for us to evaluate
         our current and future business prospects. If web-based education fails to achieve widespread acceptance by
         students, parents, teachers, schools and other institutions, our growth and profitability may suffer.

                 The use of online learning technology is a relatively new approach in the traditional K-12 education testing and
         assessment markets. There can be no assurance that online products and services will achieve


                                                                        14
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         long-term success in the K-12 or postsecondary education markets. Our success depends in part upon the continued adoption
         by teachers and school districts of technology-based education initiatives. Some academics and educators oppose online
         education in principle and have expressed concerns regarding the perceived loss of control over the education process that
         can result from offering content online. As a necessary corollary to the acceptance of web-based education in the classroom,
         our growth depends in part on parental acceptance of the role of technology in education and the availability of internet
         access in the home. If the acceptance of technology-based education does not continue to increase, our ability to continue to
         grow our business could be materially impaired.


         Our service revenue is primarily generated by sales of subscriptions to our Study Island products over the term of
         the subscription. Our customer renewal rates are difficult to predict and declines in our sales of Study Island
         products or our customer renewal rates may materially adversely affect our business and results of operations.

                  Sales of our Study Island products accounted for 96.8% and 93.3% of our service revenue in 2008 and in the first
         nine months of 2009, respectively, and we anticipate that revenue from sales of our Study Island products will continue to
         account for a substantial majority of our service revenue for the next few years. Our Study Island products are sold as
         subscriptions through purchase orders. The subscription period for our Study Island products is typically 12 months and we
         occasionally sell multi-year subscriptions. Additionally, promotional incentives, such as complimentary months of service,
         are offered periodically to new Study Island customers, resulting in a subscription term longer than one year. Our Study
         Island customers are not obligated to renew their subscriptions at the end of the term, nor are they required to pay any
         penalties if they fail to renew their subscriptions. Because of constraints on the use of state, local and federal funding, most
         of our Study Island customers are only able to purchase subscriptions for 12-month periods. As a result, our Study Island
         customers have no obligation to renew their subscriptions after the expiration of their initial subscription period. Our sales
         team begins the renewal process approximately six months prior to a subscription ending and consider this a renewal
         opportunity; however, our Study Island customers may choose to renew for fewer students or fewer products, which would
         reduce our service revenue. Sales of our Study Island products or services or our customer renewal rates may decline or
         fluctuate as a result of a number of factors, including decreased demand, adverse regulatory actions, decreased school
         funding, pricing pressures, competitive factors or any other reason. These and other factors that have affected our Study
         Island sales or customer renewal rates in the past are not predictive of the future, and, as a result, we cannot accurately
         predict customer renewal rates. If sales to new Study Island customers decline or our Study Island customers do not renew
         their subscriptions at previous levels, our service revenue may decline, which would negatively impact our business,
         financial condition, results of operations and cash flow.


         Our Study Island products are predominantly purchased by individual schools, and any decisions at the district or
         state level to use the products and services of one of our competitors, or to limit or reduce the use of web-based
         educational products, could materially adversely affect our ability to attract and retain customers.

                   The sales model for our Study Island products relies heavily on word-of-mouth referrals among teachers and school
         administrators who purchase our products and services for use by their students. If policymakers at the district or state level
         determine that our products and services are not the best option for schools in their district or state, or if they decide to
         decrease or discontinue the use of web-based educational products, individual teachers and school administrators may lose
         the ability to decide what, if any, online educational products and services they use. Such action may result in the loss of our
         customers and may materially limit our ability to attract new customers. In addition, our competitors may more successfully
         market their products and services at the district or state level, which could result in a decline in sales of our products and
         services.


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         Fluctuations in sales or renewals may not be immediately reflected in our results of operations.

                   We recognize service revenue from our customers monthly over the term of each of their subscriptions, which is
         typically 12 months, and we occasionally sell multi-year subscriptions. Additionally, promotional incentives, such as
         complimentary months of service, are offered periodically to new Study Island customers, resulting in a subscription term
         longer than one year. As a result, substantially all of the service revenue we recognize in any period is deferred revenue from
         subscriptions purchased during previous periods. Consequently, a decline in new sales or subscription renewals in any
         particular period will not necessarily be fully reflected in the service revenue in that period and will negatively affect our
         revenue in future periods. In addition, we may be unable to adjust our cost structure to reflect this reduced service revenue.
         Accordingly, the effect of significant downturns in sales, subscription renewals or market acceptance of our products and
         services may not be fully reflected in our results of operations until future periods. Our subscription model also makes it
         difficult for us to rapidly increase our service revenue through additional sales in any period, as service revenue from new
         customers would be recognized ratably over the applicable subscription term.


         Our business is subject to seasonal fluctuations, which may cause our cash flow to fluctuate from quarter-to-quarter
         and materially adversely impact the market price of our common stock.

                    Our cash flow may fluctuate as a result of seasonal variations in our business, principally due to:

                    •        our customers‘ spending patterns, including shifts in the timing of when individual schools or districts
                             purchase our products and services;

                    •        the timing of school districts‘ funding sources and budgeting cycles;

                    •        the timing of the release of federal funds to states, and the subsequent timing of states‘ release of such
                             funds to districts and schools;

                    •        the timing of expirations and renewals of subscriptions;

                    •        the timing of special promotions and discounts, including additional free months of subscriptions; and

                    •        the timing of acquisitions and non-recurring charges incurred in connection with acquisitions and
                             extraordinary transactions.

                  A significant percentage of our new sales and subscription renewals occur in the third quarter because teachers and
         school administrators typically make purchases for the new academic year at the beginning of their district‘s fiscal year,
         which is usually July 1. The fourth calendar quarter has historically produced the second highest level of sales and renewals,
         followed by the second quarter and finally the first quarter. Because payment in full for subscriptions is typically due at the
         time of subscription or renewal, and our operating expense, of which labor and sales commissions make up the largest
         portion, historically have been fairly consistent throughout the year, we typically have higher cash flow in the quarters with
         stronger sales and renewals. We expect quarterly fluctuations in our cash flow to continue.


         System disruptions, vulnerability from security risks to our networks, databases and online applications and an
         inability to expand and upgrade our systems in a timely manner to meet unexpected increases in demand could
         damage our reputation, impact our ability to generate service revenue and limit our ability to attract and retain
         customers.

                  The performance and reliability of our technology infrastructure is critical to our business. Any failure to maintain
         satisfactory online product performance, reliability, security or availability of our web platform infrastructure may
         significantly reduce customer satisfaction and damage our reputation, which would


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         negatively impact our ability to attract new customers and obtain customer renewals. The risks associated with our web
         platform include:

                    •      breakdowns or system failures resulting in a prolonged shutdown of our servers, including failures
                           attributable to power shutdowns or attempts to gain unauthorized access to our systems, which may cause
                           loss or corruption of data or malfunction of software or hardware;

                    •      disruption or failure in our colocation provider, which would make it difficult or impossible for students
                           and teachers to log on to our websites;

                    •      damage from fire, flood, tornado, power loss or telecommunications failures;

                    •      infiltration by hackers or other unauthorized persons; and

                    •      any infection by or spread of computer viruses.

                  In addition, increases in the volume of traffic on our websites could strain the capacity of our existing infrastructure,
         which could lead to slower response times or system failures. This would cause a disruption or suspension of our product
         and service offerings.

                   Any web platform interruption or inadequacy that causes performance issues or interruptions in the availability of
         our websites could reduce customer satisfaction and result in a reduction in the number of customers using our products and
         services. If sustained or repeated, these performance issues could reduce the attractiveness of our websites and products and
         services.

                  We may need to incur additional costs to upgrade our computer systems in order to accommodate system
         disruptions, security risks and increased demand if we anticipate that our systems cannot handle higher volumes of traffic in
         the future. However, the costs and complexities involved in expanding and upgrading our systems may prevent us from
         doing so in a timely manner and may prevent us from adequately meeting the demand placed on our systems.


         Any significant interruption in the operations of our data centers could cause a loss of data and disrupt our ability to
         manage our network hardware and software and technological infrastructure, and any significant interruption in the
         operations of our call center could disrupt our ability to respond to requests for help or service and process orders in
         a timely manner.

                   All of our web platform servers and routers, including backup servers, are currently located in colocation facilities
         in Dallas, Texas. As part of our disaster recovery arrangements, we intend to replicate all of our customers‘ data in a separate
         backup facility near Chicago, Illinois. If we are not successful in implementing this plan, we will face additional risks
         relating to the central location of our servers. Any disruption of operations of or damage to these servers could materially
         harm our ability to operate our business. We also may need to make additional investments to improve the performance of
         our platform and prevent disruption of our services. Any disruption or significant interruption in the operations of our data
         centers may result in a loss of customer satisfaction and limit our ability to retain and attract customers.

                  We rely in part on our call center to generate sales leads and maintain a high level of customer service. Any
         significant interruption in the operation of our call center, including an interruption caused by our failure to expand or
         upgrade our systems or to manage these expansions or upgrades, could reduce our ability to receive and respond to requests
         for help or service, process orders and provide products and services, which could result in lost or cancelled sales and
         damage to our reputation.


         We are subject to laws and regulations as a result of our collection and use of personal information, particularly from
         our K-12 student users, and any violations of such laws or regulations, or any breach, theft or loss of such
         information, could materially adversely affect our reputation and operations and expose us to costly litigation.

                 Our products and services require the disclosure of student information by educational institutions and credit card
         information by some customers. The vast majority of our Study Island users are minors. The Child
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         Online Protection Act and the Children‘s Online Privacy Protection Act restrict the distribution of materials considered
         harmful to children and impose additional restrictions on the ability of online services to collect information from minors.
         Many states have also passed laws requiring notification to users when there is a security breach of personal data.
         Additionally, the Family Educational Rights and Privacy Act, or FERPA, protects the privacy and restricts the disclosure of
         student information, and we must remain FERPA-compliant through security policies, processes, systems and controls,
         including using software that detects hackers and other unauthorized or illegal activities. We cannot predict whether new
         technological developments could circumvent these security measures. If the security measures that we use to protect
         personal or student information or credit card information are ineffective, we may be subject to liability, including claims for
         invasion of privacy, impersonation, unauthorized purchases with credit card information or other similar claims. In addition,
         the Federal Trade Commission and several states have investigated the use of personal information by certain internet
         companies. We could incur significant expense and our business could be materially adversely affected if new regulations
         regarding use of personal information are introduced, if our security measures are ineffective or if our privacy practices are
         investigated.


         Domestic and foreign government regulation relating to the internet or our products and services could cause us to
         incur significant expense, and failure to comply with applicable regulations could make our business less efficient or
         even impossible to continue to operate.

                  As web-based commerce continues to evolve, increasing regulation by federal, state or foreign agencies becomes
         more likely. In addition, taxation of services provided over the internet or other charges imposed by government agencies or
         by private organizations for accessing the internet may also be imposed. Any regulation imposing greater fees for internet
         use or restricting information exchange over the internet could result in a decline in the use of the internet and the viability of
         internet-based services, which could materially harm our business.


         We may not be able to develop new products and services or expand our existing product lines in a timely and cost
         effective manner.

                  Each of our Study Island products is built from specific state standards for a particular grade level and subject in the
         K-12 market. With these standards continually changing and our release of new Study Island products, as well as the launch
         of our new Northstar Learning product line, our product and content development teams may not be able to respond to
         changing market requirements on a timely basis. We intend to launch upgraded versions of our Study Island products in
         January 2010, but we may be unable to do so in a timely and cost effective manner that appropriately meets market demand.
         In addition, we are entering new markets, such as the postsecondary and international markets, which will place new
         demands on our product and content development teams. These are new, unproven markets for us, and if we are not able to
         generate sufficient new revenue to exceed the incremental costs associated with developing and delivering new products and
         entering new markets, our results of operations may be materially and adversely affected. Furthermore, we may be unable to
         develop and offer additional products and services on commercially reasonable terms and in a timely manner, if at all, or
         maintain the quality and consistency necessary to keep pace with changes in market requirements and respond to competitive
         pressures. A failure to do any of these things may result in a material decline in our service revenue and may prevent us from
         maintaining profitability.


         If we acquire or invest in any companies, services or technologies in the future, they could prove difficult to integrate,
         disrupt our business, dilute stockholder value and materially adversely affect our results of operations.

                   As part of our growth strategy, we may acquire or invest in complementary companies, services and technologies.
         We cannot assure you that we will be able to consummate any such acquisitions or investments on favorable terms or at all.
         If we fail to properly evaluate and execute our acquisitions or investments, our business and prospects may be seriously
         harmed. Such acquisitions and investments involve numerous risks, including:

                    •      difficulties in integrating operations, technologies, services and personnel;

                    •      diversion of financial and managerial resources from existing operations;


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                    •     risk of entering new markets;

                    •     potential write-offs of acquired assets;

                    •     significant one-time costs, including banking, legal and accounting fees and payment of severance
                          packages;

                    •     potential loss of key employees;

                    •     inability to generate sufficient service revenue to offset acquisition or investment costs; and

                    •     delays in customer purchases due to uncertainty.

                   In connection with our acquisitions or investments, we may also incur additional debt and related interest expense,
         as well as unforeseen liabilities, which could have a material adverse effect on our business, financial condition and results
         of operations. Furthermore, we may issue additional equity in connection with these transactions, which would result in
         dilution to our existing stockholders.


         If we are unable to maintain and enhance our brand identity, our business and results of operations may suffer.

                   The continued development of our brand identity is important to our business, and expanding brand awareness is
         critical to attracting and retaining our customers. Although our Study Island brand has existed since 2000, our Northstar
         Learning and Archipelago Learning brands are relatively new, having launched in April 2009 and August 2009, respectively.
         Our existing and potential customers may not be aware of the relationship of our brands with one and another, particularly
         Archipelago Learning serving as an umbrella for each of our products and Northstar Learning serving as a postsecondary
         education product line. Our newer brands are unproven and may not be successfully received by our customers. In addition,
         we have launched our Study Island products in a number of new states over the last two years and intend to launch Study
         Island products in international markets in the future. As we continue to increase subscriptions and extend our geographic
         reach, maintaining quality and consistency across all of our products and services may become more difficult to achieve, and
         any significant and well-publicized failure to maintain this quality and consistency will have a detrimental effect on our
         brand. We cannot provide assurances that our sales and marketing efforts will be successful in further promoting our brand
         in a competitive and cost-effective manner. If we are unable to maintain and enhance our brand recognition and increase
         awareness of our products and services, or if we incur excessive sales and marketing expense, our business and results of
         operations could be materially adversely affected.


         Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing
         expenditures in recruiting new customers.

                 Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing
         expenditures, including our ability to:

                    •     create greater awareness of our brands;

                    •     select the right market, media and specific media vehicles in which to advertise;

                    •     identify the most effective and efficient level of spending in each market, media and specific media
                          vehicle;

                    •     determine the appropriate creative message and media mix for advertising, marketing and promotional
                          expenditures;

                    •     effectively manage marketing costs, including creative and media expense, in order to maintain acceptable
                          customer acquisition costs;

                    •     generate leads for sales, including obtaining educator lists in a cost-effective manner;
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                    •      drive traffic to our website; and

                    •      convert customer inquiries into actual orders.

                  Our planned marketing expenditures may not result in increased service revenue or generate sufficient levels of
         product and brand awareness, and we may not be able to increase our net sales at the same rate as we increase our
         advertising expenditures.


         We operate in a highly competitive market subject to rapid technological changes, and increasing competition could
         lead to pricing pressures, reduced operating margins, loss of market share and increased capital expenditures.

                  The markets for our products and services are highly competitive, and we expect increased competition in the future
         that could adversely affect our service revenue and market share. Our current competitors include but are not limited to:

                    •      providers of online and offline supplemental instructional materials for the core subject areas of reading,
                           mathematics, science and social studies for K-12 institutions;

                    •      companies that provide K-12-oriented software and web-based educational assessment and remediation
                           products and services to students, educators, parents and educational institutions;

                    •      the assessment divisions of established education publishers, including Pearson Education, Inc., The
                           McGraw-Hill Companies and Houghton Mifflin Harcourt Company;

                    •      providers of online and offline test preparation materials;

                    •      traditional print textbook and workbook companies that publish K-12 core subject educational materials,
                           standardized test preparation materials or paper and pencil assessment tools;

                    •      summative assessment companies, which traditionally assess student learning at the end of a class period,
                           that have expanded their line to include products that provide periodic assessment in the classroom to
                           gauge student learning and inform instruction, also known as formative assessment; and

                    •      non-profit and membership educational organizations and government agencies that offer online and
                           offline products and services, including in some cases at no cost, to assist individuals in standards mastery
                           and test preparation.

                  Some of our competitors may have more resources than we do, and several of the largest K-12 educational
         publishers may have more experience, larger customer bases and greater brand recognition in the markets we serve. Further,
         larger established companies with high brand recognition and extensive experience providing various educational products
         to the K-12 market may develop online products and services that are competitive with our core products and services. These
         competitors may be able to devote greater resources than us to the development, promotion and sale of their services and
         respond more quickly than we can to new technologies or changes in customer requirements or preferences. We may not be
         able to compete effectively with current or future competitors, especially those with significantly greater resources or more
         established customer bases, which may materially adversely affect our sales and our business.


         If our products or services contain errors, new product releases could be delayed or our services could be disrupted.
         As a result, our customers may choose not to renew their subscriptions and our business could be materially
         adversely affected.

                   If our products or services contain defects, errors or security vulnerabilities, our reputation could be harmed, which
         could result in significant costs to us and impair our ability to sell our products and services in the future. Because our
         products and services are complex and because we do not ―pre-launch‖ any of our products or upgrades to any third parties
         prior to the official launch, they may contain undetected errors or defects, known as bugs. Bugs can be detected at any point
         in time, but are more common when a new product or service is introduced or when new versions are released. We expect
         that, despite our testing, errors will be
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         found in the future. If an error occurs, our product and service offerings may be disrupted, causing delays or interruptions.
         Significant errors, delays or disruptions could lead to:

                    •      decreases in customer satisfaction with and loyalty toward our products and services;

                    •      delays in or loss of market acceptance of our products and services;

                    •      diversion of our resources;

                    •      a lower rate of subscription renewals or upgrades;

                    •      injury to our reputation; or

                    •      increased service expense or payment of damages.


         If we are unable to adapt our products and services to technological changes, to the emergence of new computing
         devices and to more sophisticated online services, we may lose market share and service revenue, and our business
         could suffer.

                  We need to anticipate, develop and introduce new products, services and applications on a timely and cost effective
         basis that keeps pace with technological developments and changing customer needs. For example, the number of
         individuals who access the internet through devices other than a personal computer, such as personal digital assistants,
         mobile telephones, televisions and set-top box devices, has increased dramatically, and this trend is likely to continue. Our
         products and services were designed for internet use on desktop and laptop computers. The lower resolution, functionality
         and memory associated with alternative devices currently available may make the use of our products and services through
         such devices difficult. We have no experience to date in operating versions of our products and services developed or
         optimized for users of alternative devices. Accordingly, it is difficult to predict the problems we may encounter in
         developing versions of our products and services for use on these alternative devices, and we may need to devote significant
         resources to the creation, support and maintenance of such versions. If we fail to develop or sell products and services cost
         effectively that respond to these or other technological developments and changing customer needs, we may lose market
         share and service revenue and our business could materially suffer.


         Protection of our intellectual property is limited, and any misuse of our intellectual property by others, including
         software piracy, could harm our business, reputation and competitive position.

                  Our trademarks, copyrights, trade secrets, trade dress and designs are valuable and integral to our success and
         competitive position. However, we cannot assure you that we will be able to adequately protect our proprietary rights
         through reliance on a combination of copyrights, trademarks, trade secrets, confidentiality procedures, contractual provisions
         and technical measures. Protection of trade secrets and other intellectual property rights in the markets in which we operate
         and compete is highly uncertain and may involve complex legal questions. We cannot completely prevent the unauthorized
         use or infringement of our intellectual property rights, as such prevention is inherently difficult. Despite enforcement efforts
         against software piracy, we lose significant service revenue due to illegal use of our software. If piracy activities increase,
         they may further harm our business.

                  We also expect that the more successful we are, the more likely that competitors will try to illegally use our
         proprietary information and develop products that are similar to ours, which may infringe on our proprietary rights. In
         addition, we could potentially lose future trade secret protection for our source code if any unauthorized disclosure of such
         code occurs. The loss of future trade secret protection could make it easier for third parties to compete with our products by
         copying functionality. Any changes in, or unexpected interpretations of, the trade secret and other intellectual property laws
         in any country in which we operate may compromise our ability to enforce our trade secret and intellectual property rights.
         Costly and time-consuming litigation could be necessary to enforce and determine the scope of our confidential information
         and trade secret protection. If we are unable to protect our proprietary rights or if third parties independently develop or gain
         access to our or similar technologies, our business, service revenue, reputation and competitive position could be materially
         adversely affected.


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         We may be sued for infringing the intellectual property rights of others and such actions would be costly to defend,
         could require us to pay damages or enter into royalty or license agreements with third parties and could limit our
         ability or increase our costs to use certain content or technologies in the future.

                  We may be sued for infringing the intellectual property rights of others or be subject to litigation based on
         allegations of infringement or other violations of intellectual property rights. Regardless of merits, intellectual property
         claims are often time-consuming and expensive to litigate and settle. In addition, to the extent claims against us are
         successful, we may have to pay substantive monetary damages or discontinue any of our products, services or practices that
         are found to be in violation of another party‘s rights. We also may have to seek a license and make royalty payments to
         continue offering our products and services or following such practices, which may significantly increase our operating
         expense.


         Our customers can input their own content to our websites. We have limited control over this content, which could
         expose us to liability from third parties.

                   As part of a subscription to our websites, our customers are able to input their own content onto our websites, which
         may be accessible by other users who share the same subscription as the creator of the content. For example, educators and
         students may post articles or other materials on class discussion boards, which may give rise to claims from third parties for
         the unauthorized duplication or distribution of this material. We may be exposed to liability, including fines and costly
         litigation, if the content violates the intellectual property rights of a third party, or otherwise violates any law or regulation,
         including FERPA, the Child Online Protection Act and the Children‘s Online Privacy Protection Act.


         The confidentiality, non-disclosure and other agreements we use to protect our products, trade secrets and
         proprietary information may prove unenforceable or inadequate.

                  We protect our products, trade secrets and proprietary information, in part, by requiring all of our employees to
         enter into agreements providing for the maintenance of confidentiality and the assignment of rights to inventions made by
         them while employed by us. We also enter into non-disclosure agreements with our technical consultants, customers,
         vendors and resellers to protect our confidential and proprietary information. We cannot assure you that our confidentiality
         agreements with our employees, consultants and other third parties will not be breached, that we will be able to effectively
         enforce these agreements, that we will have adequate remedies for any breach, or that our trade secrets and other proprietary
         information will not be disclosed or will otherwise be protected.

                   We also rely on contractual and license agreements with third parties in connection with their use of our products
         and technology. There is no guarantee that such parties will abide by the terms of such agreements or that we will be able to
         adequately enforce our rights, in part because we rely, in many instances, on ―click-wrap‖ licenses, which are licenses that
         can only be read and accepted online and are not negotiated or signed by individual licensees. Accordingly, some provisions
         of our licenses, including provisions protecting against unauthorized use, copying, transfer, resale and disclosure of the
         licensed software program, may be unenforceable under the laws of several jurisdictions.


         We have not registered copyrights for all of our products, which may limit our ability to enforce them.

                   We have not registered our copyrights in all of our software, written materials, website information, designs or other
         copyrightable works. The United States Copyright Act automatically protects all of our copyrightable works, but without
         registration we cannot enforce those copyrights against infringers or seek certain statutory remedies for any such
         infringement. Preventing others from copying our products, written materials and other copyrightable works is important to
         our overall success in the marketplace. In the event we decide to enforce any of our copyrights against infringers, we will
         first be required to register the relevant copyrights, and we cannot be sure that all of the material for which we seek
         copyright registration would be registrable in whole or in part, or that once registered, we would be successful in bringing a
         copyright claim against any such infringers.


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         We must monitor and protect our internet domain names to preserve their value. We may be unable to prevent third
         parties from acquiring domain names that are similar to, infringe on or otherwise decrease the value of our
         trademarks.

                  We own several domain names that include the terms Study Island, Archipelago Learning and Northstar Learning,
         among others. Third parties may acquire substantially similar domain names that decrease the value of our domain names
         and trademarks and other proprietary rights which may hurt our business. Moreover, the regulation of domain names in the
         United States and foreign countries is subject to change. Governing bodies could appoint additional domain name registrars
         or modify the requirements for holding domain names. Governing bodies could also establish additional ―top-level‖
         domains, which are the portion of the web address that appears to the right of the ―dot,‖ such as ―com,‖ ―net,‖ ―gov‖ or
         ―org.‖ As a result, we may not maintain exclusive rights to all potentially relevant domain names in the United States or in
         other countries in which we conduct business, which could harm our business and reputation.


         We do not own all of the software, content and other technologies used in our products and services.

                  Some of our products and services include intellectual property owned by third parties, including licensed content
         for reading passages and other educational content. From time to time we may be required to renegotiate with these third
         parties or negotiate with new third parties to include or continue using their technology or content in our existing products, in
         new versions of our existing products or in wholly new products. We may not be able to negotiate or renegotiate licenses on
         commercially reasonable terms, or at all, and the third-party software we use may not be appropriately supported, maintained
         or enhanced by the licensors. If we are unable to obtain the rights necessary to use or continue to use third-party technology
         or content in our products and services, or if those third parties are unable to support, maintain and enhance their software,
         we could experience increased costs or delays or reductions in product releases and functionality until equivalent software or
         content can be developed, identified, licensed and integrated.


         Our future success depends on our ability to retain our key employees.

                  We are dependent on the services of Tim McEwen, our Chief Executive Officer, James Walburg, our Chief
         Financial Officer, Ray Lowrey, our Chief Technology Officer, Julie Huston, our Executive Vice President, Global Sales, our
         other vice presidents and senior editors, and other members of our senior management team. Other than non-compete
         provisions of limited duration included in employment agreements that we have with certain executives, we do not generally
         seek non-compete agreements with key personnel, and they may leave and subsequently compete against us. The loss of
         service of any of our senior management team, particularly those who are not party to employment agreements with us, or
         our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have a material adverse
         effect on our business.


         We may be unable to attract and retain the skilled employees needed to sustain and grow our business.

                   Our success to date has largely depended on, and will continue to depend on, the skills, efforts and motivations of
         our executive team and employees, who generally have significant experience with our company and within the education
         industry. Our success also depends largely on our ability to attract and retain highly qualified IT engineers and programmers,
         content writers and editors, sales and marketing managers and corporate management personnel. We may experience
         difficulties in locating and hiring qualified personnel and in retaining such personnel once hired, which may materially and
         adversely affect our business.


         We may have exposure to greater than anticipated tax liabilities.

                   We are and have been subject to income taxes and other taxes in a variety of jurisdictions and are subject to review
         by both various state and federal taxation authorities. The determination of our provision for income taxes and other tax
         liabilities requires significant judgment and the ultimate tax outcome may differ


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         from the amounts recorded in our consolidated financial statements, which may materially affect our financial results in the
         period or periods for which such determination is made.


         Although we do not currently transact a material amount of business in foreign countries, we intend to expand into
         international markets, which will subject us to additional economic, operational and political risks that could
         increase our costs and make it difficult for us to continue to operate profitably.

                  We recently launched Study Island products in Canada and intend to expand into other international markets. The
         addition of international operations may require significant expenditure of financial and management resources and result in
         increased administrative and compliance costs. As a result of such expansion, we will be increasingly subject to the risks
         inherent in conducting business internationally, including:

                    •      foreign currency fluctuations, which could result in reduced service revenue and increased operating
                           expense;

                    •      potentially longer payment and sales cycles;

                    •      increased difficulty in collecting accounts receivable;

                    •      the effect of applicable foreign tax structures, including tax rates that may be higher than tax rates in the
                           United States or taxes that may be duplicative of those imposed in the United States;

                    •      tariffs and trade barriers;

                    •      general economic and political conditions in each country;

                    •      inadequate intellectual property protection in foreign countries;

                    •      uncertainty regarding liability for information retrieved and replicated in foreign countries;

                    •      the difficulties and increased expense in complying with a variety of domestic and foreign laws,
                           regulations and trade standards, including the Foreign Corrupt Practices Act; and

                    •      unexpected changes in regulatory requirements.


         The current global financial crisis and adverse worldwide economic conditions may have significant effects on our
         business, financial condition and results of operations.

                   The current global financial crisis - which has included, among other things, significant reductions in available
         capital and liquidity, substantial reductions and/or fluctuations in equity and currency values and a worldwide recession, the
         extent of which is likely to be significant and prolonged - may materially adversely affect our business. We have already
         begun to experience some weakening in demand for our products and services, and we cannot predict whether it will
         continue or increase. In an economic downturn like the current one, which is characterized by higher unemployment, lower
         family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our
         products and services may be materially adversely affected. See ―— Most of our customers are public schools, which rely on
         state, local and federal funding. If any state, local or federal funding is materially reduced, our public school customers may
         no longer be able to afford to purchase our products and services, and our business, financial condition, results of operations
         and cash flow could be materially adversely affected.‖

                   The credit markets have been experiencing extreme volatility and disruption since August 2007. The current global
         financial crisis affecting the banking system and the possibility that financial institutions may consolidate or fail has resulted
         in a tightening of the credit markets, which could impair our ability to refinance our existing debt, to draw upon our
         revolving credit facility or incur additional debt, to seek other funding sources to meet our liquidity needs or to fund planned
         expansion. Furthermore, the tightening of the credit markets may delay or prevent our customers from securing funding
         adequate to operate their businesses and purchase our products and services, leading to an increase in our bad debt levels.
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         We may need additional capital in the future, but there is no assurance that funds will be available on acceptable
         terms, or at all.

                  We may need to raise additional funds in order to achieve growth or fund other business initiatives. This financing
         may not be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders if raised
         through additional equity offerings. Additionally, any securities issued to raise funds may have rights, preferences or
         privileges senior to those of existing stockholders. If adequate funds are not available or are not available on acceptable
         terms, our ability to expand, develop or enhance services or products, or respond to competitive pressures may be materially
         limited.


         Our existing indebtedness could adversely affect our financial condition and we may not be able to fulfill our debt
         obligations.

                 As of September 30, 2009, Archipelago Learning, LLC had an outstanding term loan in an aggregate principal
         amount equal to $68.3 million and no revolving credit loans outstanding under its revolving credit facility which expires in
         November 2013. We repaid $6.5 million of the term loan in November 2009 in connection with the sale of TeacherWeb. The
         agreements governing this credit facility contain various covenants that limit our ability to, among other things:

                    •     incur or guarantee additional indebtedness;

                    •     pay dividends or make other distributions to our stockholders;

                    •     make restricted payments;

                    •     incur liens;

                    •     engage in transactions with affiliates; and

                    •     enter into business combinations.

                  These restrictions could limit our ability to withstand general economic downturns that could affect our business,
         obtain future financing, make acquisitions or capital expenditures, conduct operations or otherwise capitalize on business
         opportunities that may arise. Additionally, we will use a significant portion of our cash flow to pay interest on our
         outstanding debt, limiting the amount available for working capital, capital expenditures and other general corporate
         purposes.

                   We may be more vulnerable to adverse economic conditions than less leveraged competitors and thus less able to
         withstand competitive pressures. If our cash flow is inadequate to make interest and principal payments on our debt, we
         might have to refinance our indebtedness or issue additional equity or other securities and may not be successful in those
         efforts or may not obtain terms favorable to us. Additionally, our ability to finance working capital needs and general
         corporate purposes for the public and private markets, as well as the associated cost of funding, is dependent, in part, on our
         credit ratings, which may be adversely affected if we experience declining service revenue. Any of these events could reduce
         our ability to generate cash available for investment or debt repayment or to make improvements or respond to events that
         would enhance profitability. We may incur significantly more debt in the future, which will increase each of the foregoing
         risks related to our indebtedness. In addition as a result of the sale of TeacherWeb, the obligations under our credit facility
         will be guaranteed only by AL Midco, LLC, or AL Midco, as TeacherWeb‘s guarantee was released, and will be secured by
         liens on substantially all of the assets owned by Archipelago Learning, LLC and AL Midco. For a more detailed description
         of our credit facility, see ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations —
         Credit Facility‖ and ―Description of Material Indebtedness.‖


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         Risks Related to Our Common Stock and this Offering

         We expect that our stock price will fluctuate significantly, and you may not be able to resell your shares at or above
         the initial public offering price.

                  The trading price of our common stock is likely to be volatile and subject to wide price fluctuations in response to
         various factors, including:

                    •      market conditions in the broader stock market;

                    •      actual or anticipated fluctuations in our quarterly financial and results of operations;

                    •      introduction of new products or services by us or our competitors;

                    •      issuance of new or changed securities analysts‘ reports or recommendations;

                    •      investor perceptions of us and the educational industry;

                    •      sales, or anticipated sales, of large blocks of our stock;

                    •      additions or departures of key personnel;

                    •      regulatory or political developments;

                    •      litigation and governmental investigations; and

                    •      changing economic conditions.

                  These and other factors may cause the market price and demand for our common stock to fluctuate substantially,
         which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect
         the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that
         stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our
         stockholders were to bring a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could
         also divert the time and attention of our management from our business.


         There is no existing market for our common stock, and we do not know if one will develop to provide you with
         adequate liquidity.

                   Prior to this offering, there has been no public market for shares of our common stock. We cannot predict the extent
         to which investor interest in our company will lead to the development of a trading market on The NASDAQ Stock Market
         LLC, also called Nasdaq, or how liquid that market may become. If an active trading market does not develop or is not
         sustained, you may have difficulty selling any of our common stock that you purchase at an attractive price or at all. The
         initial public offering price of shares of our common stock will be determined by negotiation between us and the
         underwriters and may not be indicative of prices that will prevail following the completion of this offering. The market price
         of shares of our common stock may decline below the initial public offering price, and you may not be able to resell your
         shares of our common stock at or above the initial offering price.


         If securities or industry analysts do not publish research or reports about our business, if they adversely change their
         recommendations regarding our stock or if our results of operations do not meet their expectations, our stock price
         and trading volume could decline.

                  The trading market for our common stock will be influenced by the research and reports that industry or securities
         analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish
         reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading
         volume to decline. Moreover, if one or more of the analysts who cover us downgrade recommendations regarding our stock,
or if our results of operations do not meet their expectations, our stock price could decline and such decline could be
material.


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         Sales of substantial amounts of our common stock in the public markets, or the perception that such sales might
         occur, could reduce the price of our common stock and may dilute your voting power and your ownership interest in
         us.

                   If our existing stockholders sell substantial amounts of our common stock in the public market following this
         offering, the market price of our common stock could decrease significantly. The perception in the public market that our
         existing stockholders might sell shares of common stock could also depress our market price. Upon the consummation of
         this offering, we will have 25,106,719 shares of common stock outstanding, including shares of restricted common stock.
         Our directors, executive officers, employees, the selling stockholders and substantially all of our other stockholders will be
         subject to the lock-up agreements described in ―Underwriting‖ and are subject to the Rule 144 holding period requirements
         described in ―Shares Eligible for Future Sale.‖ After these lock-up agreements have expired and holding periods have
         elapsed, 18,856,719 additional shares will be eligible for sale in the public market. The market price of shares of our
         common stock may drop significantly when the restrictions on resale by our existing stockholders lapse. A decline in the
         price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our
         common stock or other equity securities.


         You will experience immediate and substantial book value dilution after this offering.

                  The initial public offering price of our common stock will be substantially higher than the pro forma net tangible
         book value per share of the outstanding common stock immediately after the offering. Based on an assumed initial public
         offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus) and our net
         tangible book value on a pro forma basis as of September 30, 2009, if you purchase our common stock in this offering, you
         will suffer immediate dilution in net tangible book value per share of approximately $17.23 per share. See ―Dilution.‖


         Insiders will continue to have substantial control over us after this offering and could limit your ability to influence
         the outcome of key transactions, including a change of control.

                   Our principal stockholders, directors and executive officers and entities affiliated with them will own approximately
         73.5% of the outstanding shares of our common stock after this offering. As a result, these stockholders, if acting together,
         would be able to influence or control matters requiring approval by our stockholders, including the election of directors and
         the approval of mergers or other extraordinary transactions. They may also have interests that differ from yours and may
         vote in a way with which you disagree and which may be adverse to your interests. In addition, we have elected to opt out of
         Section 203 of the Delaware General Corporation Law, which prohibits a publicly-held Delaware corporation from engaging
         in a ―business combination‖ with an ―interested stockholder,‖ and we will be able to enter into transactions with our
         principal stockholders. The concentration of ownership may have the effect of delaying, preventing or deterring a change of
         control of our company, could deprive our stockholders of an opportunity to receive a premium for their common stock as
         part of a sale of our company and may materially adversely affect the market price of our common stock.


         We are a “controlled company” within the meaning of Nasdaq rules and will qualify for, and intend to rely on,
         exemptions from certain corporate governance requirements. As a result, you will not have the same protections
         afforded to stockholders of companies that are subject to such requirements.

                  After completion of this offering, Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-SI, L.P.
         will continue to control a majority of the voting power of our outstanding common stock pursuant to the terms of a voting
         agreement. See ―Certain Relationships and Related Person Transactions — Voting Agreement.‖ As a result, we are a
         ―controlled company‖ within the meaning of Nasdaq corporate governance standards. Under these rules, a ―controlled
         company‖ may elect not to comply with certain corporate governance requirements, including:

                    •     the requirement that a majority of the board of directors consist of independent directors;


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                    •     the requirement that we have a nominating/corporate governance committee that is composed entirely of
                          independent directors with a written charter addressing the committee‘s purpose and responsibilities;

                    •     the requirement that we have a compensation committee that is composed entirely of independent directors
                          with a written charter addressing the committee‘s purpose and responsibilities; and

                    •     the requirement for an annual performance evaluation of the nominating and corporate governance and
                          compensation committees.

                  Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of
         independent directors, our nominating and corporate governance committee, and compensation committee will not consist
         entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly,
         you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate
         governance requirements of Nasdaq.


         We will have broad discretion in applying the net proceeds of this offering and we may not use those proceeds in
         ways that will enhance the market value of our common stock.

                  Our management will retain broad discretion to allocate the net proceeds of this offering. The net proceeds may be
         applied in ways with which you and other investors in the offering may not agree or which do not increase the value of your
         investment. We intend to use our net proceeds from this offering for general corporate purposes, which may include the
         acquisition of other businesses, products or technologies. We have not allocated these net proceeds for any specific purposes.
         Our management may not be able to yield a significant return, if any, on any investment of these net proceeds. We will not
         receive any of the proceeds from the sale of the shares of our common stock by the selling stockholders.


         As a result of becoming a public company, we will be obligated to develop and maintain proper and effective internal
         control over financial reporting and will be subject to other requirements that will be burdensome and costly. We
         may not timely complete our analysis of our internal control over financial reporting, or these internal controls may
         not be determined to be effective, which could adversely affect investor confidence in our company and, as a result,
         the value of our common stock.

                   We have historically operated our business as a private company. After this offering, we will be required to file with
         the Securities and Exchange Commission, or SEC, annual and quarterly information and other reports that are specified in
         Section 13 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We will also be required to ensure that
         we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely
         basis. In addition, we will become subject to other reporting and corporate governance requirements, including the
         requirements of Nasdaq, and certain provisions of the Sarbanes-Oxley Act of 2002 and the regulations promulgated
         thereunder, which will impose significant compliance obligations upon us. As a public company, we will be required to:

                    •     prepare and distribute periodic public reports and other stockholder communications in compliance with
                          our obligations under the federal securities laws and Nasdaq rules;

                    •     create or expand the roles and duties of our board of directors and committees of the board;

                    •     institute more comprehensive financial reporting and disclosure compliance functions;

                    •     supplement our internal accounting and auditing function, including hiring additional staff with expertise
                          in accounting and financial reporting for a public company;

                    •     enhance and formalize closing procedures at the end of our accounting periods;

                    •     establish an internal audit function;

                    •     enhance our investor relations function;


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                    •      establish new internal policies, including those relating to disclosure controls and procedures; and

                    •      involve and retain to a greater degree outside counsel and accountants in the activities listed above.

                  These changes will require a significant commitment of additional resources. We may not be successful in
         implementing these requirements and implementing them could adversely affect our business or results of operations. In
         addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to
         report our results of operations on a timely and accurate basis could be impaired.


         Our internal control over financial reporting does not currently comply with Section 404 of the Sarbanes-Oxley Act,
         including the requirement for a public accounting firm attestation report, and failure to achieve and maintain
         effective internal control over financial reporting, including the requirement for a public accounting firm attestation
         report, in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on us.

                  Our internal control over financial reporting does not currently comply with Section 404 of the Sarbanes-Oxley Act,
         including the requirement for a public accounting firm attestation report. We will be required to comply with the
         requirements of Section 404 in the course of preparing our 2010 financial statements. We do not currently have
         comprehensive documentation of our internal controls, nor do we document or test our compliance with these controls on a
         periodic basis in accordance with Section 404. Furthermore, we have not tested our internal controls in accordance with
         Section 404 and, due to our lack of documentation, such a test would not be possible to perform at this time.

                  We are in the early stages of addressing our internal control procedures to comply with Section 404, which requires
         an annual management assessment of the effectiveness of our internal control over financial reporting. We will incur
         additional costs in order to improve our internal control over financial reporting and comply with Section 404, including
         increased auditing and legal fees and costs associated with hiring additional accounting and administrative staff. If, as a
         public company, we are not able to implement the requirements of Section 404 in a timely manner or with adequate
         compliance, our independent registered public accounting firm may not be able to attest to the effectiveness of our internal
         control over financial reporting. If we are unable to maintain adequate internal control over financial reporting, we may be
         unable to report our financial information on a timely basis, may suffer adverse regulatory consequences or violations of
         applicable stock exchange listing rules and may breach the covenants under our credit facility. There could also be a
         negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial
         statements.


         Provisions in our certificate of incorporation and bylaws and Delaware law may discourage, delay or prevent a
         change of control of our company or changes in our management and, therefore, may depress the trading price of our
         stock.

                 Our certificate of incorporation and bylaws include certain provisions that could have the effect of discouraging,
         delaying or preventing a change of control of our company or changes in our management, including, among other things:

                    •      restrictions on the ability of our stockholders to fill a vacancy on the board of directors;

                    •      our ability to issue preferred stock with terms that the board of directors may determine, without
                           stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

                    •      the absence of cumulative voting in the election of directors which may limit the ability of minority
                           stockholders to elect directors; and


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                    •      advance notice requirements for stockholder proposals and nominations, which may discourage or deter a
                           potential acquirer from soliciting proxies to elect a particular state of directors or otherwise attempting to
                           obtain control of us.

                   These provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a transaction
         involving a change in control of our company that is in the best interest of our minority stockholders. Even in the absence of
         a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock
         if they are viewed as discouraging future takeover attempts.


         We do not expect to pay dividends, and any return on your investment will likely be limited to the appreciation of our
         common stock.

                  We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to
         fund the development and growth of our business. We do not intend to pay any dividends to holders of our common stock
         and the agreements governing our credit facility significantly restrict our ability to pay dividends. As a result, capital
         appreciation in the price of our common stock, if any, will be your only source of gain or income on an investment in our
         common stock.


         Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate
         opportunities.

                   Our certificate of incorporation provides for the allocation of certain corporate opportunities between us and
         Providence Equity Partners. Under these provisions, neither Providence Equity Partners, its affiliates and subsidiaries, nor
         any of their officers, directors, agents, stockholders, members or partners will have any duty to refrain from engaging,
         directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
         For instance, a director of our company who also serves as a director, officer or employee of Providence Equity Partners or
         any of its subsidiaries or affiliates may pursue certain acquisition or other opportunities that may be complementary to our
         business and, as a result, such acquisition or other opportunities may not be available to us. These potential conflicts of
         interest could have a material adverse effect on our business, financial condition, results of operations or prospects if
         attractive corporate opportunities are allocated by Providence Equity Partners to itself or its subsidiaries or affiliates instead
         of to us. The terms of our certificate of incorporation are more fully described in ―Description of Capital Stock.‖


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                                                  FORWARD-LOOKING STATEMENTS

                  This prospectus contains forward-looking statements that are subject to risks and uncertainties. All statements other
         than statements of historical fact included in this prospectus are forward-looking statements. Forward-looking statements
         give our current expectations and projections relating to our financial condition, results of operations, plans, objectives,
         future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to
         historical or current facts. These statements may include words such as ―anticipate,‖ ―estimate,‖ ―expect,‖ ―project,‖
         ―forecast,‖ ―plan,‖ ―intend,‖ ―believe,‖ ―may,‖ ―should,‖ ―can have,‖ ―likely,‖ ―future‖ and other words and terms of similar
         meaning in connection with any discussion of the timing or nature of future operating or financial performance or other
         events.

                  The forward-looking statements contained in this prospectus are based on assumptions that we have made in light of
         our industry experience and on our perceptions of historical trends, current conditions, expected future developments and
         other factors we believe are appropriate under the circumstances. As you read and consider this prospectus, you should
         understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of
         which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on
         reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to
         differ materially from those anticipated in the forward-looking statements. We believe these factors include the following
         risks, among others:

                    •     Most of our customers are public schools, which rely on state, local and federal funding. If any state, local
                          or federal funding is materially reduced, our public school customers may no longer be able to afford to
                          purchase our products and services;

                    •     If national educational standards and assessments are adopted, or if existing metrics for applying state
                          standards are revised, new competitors could more easily enter our markets or the demands in the markets
                          we currently serve may change;

                    •     If Congress does not reauthorize the Elementary and Secondary Education Act, commonly referred to as
                          NCLB since the 2001 reauthorization, or other legislation does not continue to mandate state educational
                          standards and annual assessments, demand for our products and services could be materially adversely
                          affected;

                    •     Our recent rapid growth, the recent introduction of a number of our products and services and our entry
                          into new markets make it difficult for us to evaluate our current and future business prospects, and we may
                          be unable to effectively manage our growth and new initiatives;

                    •     The recent ongoing adoption of online learning in established education markets makes it difficult for us to
                          evaluate our current and future business prospects. If web-based education fails to achieve widespread
                          acceptance by students, parents, teachers, schools and other institutions, our growth and profitability may
                          materially suffer;

                    •     Our service revenue is primarily generated by sales of subscriptions to our Study Island products over the
                          term of the subscription. Our customer renewal rates are difficult to predict and declines in our sales of
                          Study Island products or our customer renewal rates may materially adversely affect our business and
                          results of operations; and

                    •     Our Study Island products are predominantly purchased by individual schools, and any decisions at the
                          district or state level to use the products and services of one of our competitors, or to limit or reduce the
                          use of web-based educational products, could materially adversely affect our ability to attract and retain
                          customers.

                  Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect,
         our actual results may vary in material respects from those projected in these forward-looking statements.


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                  Any forward-looking statement made by us in this prospectus speaks only as of the date on which we make it.
         Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to
         predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new
         information, future developments or otherwise, except as may be required by law.

                   This prospectus also contains market data related to our business and industry. See ―Industry and Market Data.‖
         This market data includes projections that are based on a number of assumptions. If these assumptions turn out to be
         incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow
         at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may have a material
         adverse effect on our business, financial condition, results of operations and the market price of our common stock.


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                                                 PROVIDENCE EQUITY TRANSACTIONS

                  In January 2007, Providence Equity Partners V, LP and affiliated investment funds, or Providence Equity Partners,
         together with Cameron Chalmers and David Muzzo (our founders and vice presidents) and MHT-SI, LP, acquired 100% of
         the voting equity interests in Archipelago Learning Holdings, LLC (formerly known as Study Island Holdings, LLC), the
         parent of Archipelago Learning, LLC (formerly known as Study Island, LLC), for an initial investment of $109.5 million,
         and Archipelago Learning, LLC subsequently acquired substantially all of the assets of Study Island, LP, for $104.8 million,
         including transaction costs and working capital adjustments. In connection with the acquisition:

                    •       Providence Equity Partners contributed approximately $84.5 million in cash for approximately 77.2% of
                            the voting equity interests in Archipelago Learning Holdings, LLC;

                    •       Cameron Chalmers and David Muzzo each contributed $10.0 million, for a total of $20.0 million, for
                            approximately 9.1% each, or a total of approximately 18.2%, of the voting equity interests in Archipelago
                            Learning Holdings, LLC;

                    •       MHT-SI, LP contributed approximately $5.0 million in cash for approximately 4.6% of the voting equity
                            interests in Archipelago Learning Holdings, LLC;

                    •       With the cash contributed by Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-SI,
                            LP, (i) Archipelago Learning, LLC purchased substantially all the assets of Study Island, LP for
                            $100.0 million, (ii) Archipelago Learning, LLC paid $4.6 million in transaction costs related to the
                            acquisition of the assets of Study Island, LP and (iii) $5.0 million was retained by Archipelago Learning,
                            LLC for general corporate purposes;

                    •       In November 2007, Archipelago Learning, LLC as borrower, and the other persons designated as credit
                            parties from time to time, entered into a credit facility providing for a $70.0 million term loan and a
                            $10.0 million revolving credit facility with General Electric Capital Corporation, as a lender and as agent
                            for all lenders, NewStar Financial, Inc., as syndication agent, the other parties thereto as lenders and GE
                            Capital Markets, Inc. and NewStar Financial, Inc., as joint lead arrangers and joint bookrunners; and

                    •       With the borrowings under our term loan and cash on hand, (i) Archipelago Learning, LLC paid
                            $1.7 million in financing fees related to our credit facility, (ii) Archipelago Learning, LLC distributed
                            $74.8 million of its proceeds under its term loan and cash on hand to Archipelago Learning Holdings,
                            LLC, and (iii) Archipelago Learning Holdings, LLC made distributions of $74.8 million to the holders of
                            its voting equity interests.

                    We refer to the foregoing transactions collectively as the ―Providence Equity Transactions.‖

                   From January 2007 through September 30, 2009, Archipelago Learning Holdings, LLC paid aggregate distributions
         to its equity holders of approximately $76 million, consisting of $74.8 million in the year ended December 31, 2007 and
         $1.3 million in the nine months ended September 30, 2009. In October 2009, Archipelago Learning Holdings, LLC made an
         $8.0 million special distribution to its equity holders representing a return on such holders‘ investment, which was paid in
         accordance with the Archipelago Learning Holdings, LLC Agreement. In addition, prior to the closing of this offering,
         Archipelago Learning Holdings, LLC intends to make additional distributions of approximately $1.6 million to its equity
         holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb and approximately
         $0.9 million to its equity holders to enable them to meet their other estimated tax obligations for the period from January 1,
         2009 to the date of the Corporate Reorganization, which will be based on Archipelago Learning Holdings, LLC‘s estimated
         net taxable income from January 1, 2009 to the date of the Corporate Reorganization. Investors in this offering will not
         receive these distributions. See ―Dividend Policy.‖


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                                                     CORPORATE REORGANIZATION

                   Prior to this offering, Archipelago Learning Holdings, LLC and its subsidiaries conducted our business. Prior to the
         consummation of this offering, and in accordance with and as contemplated by the limited liability company agreement of
         Archipelago Learning Holdings, LLC, the holders of shares of Archipelago Learning Holdings, LLC, and certain of their
         affiliates will enter into the following transactions with Archipelago Learning, Inc., a newly formed Delaware corporation
         that will act as a holding company for our business:

                    •       The direct or indirect holders of Class A and Class A-2 shares of Archipelago Learning Holdings, LLC
                            (other than Providence Equity Partners V-A Study Island L.L.C. and its subsidiaries) will, directly or
                            indirectly, contribute all such Class A and Class A-2 shares of Archipelago Learning Holdings, LLC held
                            by such parties to Archipelago Learning, Inc. in exchange for an aggregate of 17,955,030 shares of
                            common stock;

                    •       Providence Equity Partners V-A Study Island L.L.C., which will not have any assets other than its Class A
                            shares of Archipelago Learning Holdings, LLC, will merge with and into Archipelago Learning, Inc. and
                            as a result of such merger, the members of Providence Equity Partners V-A Study Island L.L.C. will
                            receive an aggregate of 2,101,955 shares of our common stock;

                    •       Our officers, directors and employees who hold vested Class B shares of Archipelago Learning Holdings,
                            LLC will contribute their vested Class B shares of Archipelago Learning Holdings, LLC to Archipelago
                            Learning, Inc. in exchange for an aggregate of 335,542 shares of common stock;

                    •       Our officers, directors and employees who hold unvested Class B shares of Archipelago Learning
                            Holdings, LLC will contribute their unvested Class B shares of Archipelago Learning Holdings, LLC to
                            Archipelago Learning, Inc. in exchange for an aggregate of 585,009 shares of restricted common stock
                            subject to time-based vesting;

                    •       Our officers, directors and employees (other than our chief executive officer, chief financial officer, chief
                            technology officer and co-founders) who hold Class C shares of Archipelago Learning Holdings, LLC will
                            contribute such Class C shares to Archipelago Learning, Inc. in exchange for an aggregate of
                            194,932 shares of common stock; and

                    •       Our chief executive officer, chief financial officer, chief technology officer and co-founders will contribute
                            their Class C shares of Archipelago Learning Holdings, LLC to Archipelago Learning, Inc. in exchange for
                            an aggregate of 809,251 shares of restricted common stock subject to vesting based on, among other
                            things, the cash returns to Providence Equity Partners in respect of shares of common stock held by
                            Providence Equity Partners.

                    We refer to the transactions listed above as the ―Corporate Reorganization.‖

                 For a more detailed discussion of the Class B and Class C shares and the restricted stock, see ―Compensation
         Discussion and Analysis — Elements of Executive Compensation — Equity Compensation Plan.‖

                   As a result of the Corporate Reorganization, Archipelago Learning, Inc. will own all of the outstanding member
         interests of Archipelago Learning Holdings, LLC, and Archipelago Learning, Inc. will become the parent of Archipelago
         Learning Holdings, LLC and its subsidiaries, and will have no other assets or operations. Archipelago Learning, Inc. will be
         a Delaware ―C‖ corporation, and as such will be subject to federal and state income taxes. Archipelago Learning Holdings,
         LLC was a limited liability company not subject to federal income taxes, and as such, the historical financial data included in
         this prospectus does not reflect what our financial position and results of operations would have been had we been a taxable
         corporation. We expect to record a net deferred tax liability and a corresponding expense to our provision for income taxes
         of approximately $4.4 million upon becoming a ―C‖ corporation before the effectiveness of the registration statement of
         which this prospectus is a part. This deferred tax liability primarily results from the


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         excess of the book basis over the tax basis of certain of our intangible assets. We expect to realize future reductions in our
         current tax expense as these intangibles are amortized and deducted from taxable income on our tax returns. Prior to the
         closing of this offering, Archipelago Learning Holdings, LLC intends to make additional cash distributions of approximately
         $1.6 million to its equity holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb and
         approximately $0.9 million to the members of Archipelago Learning Holdings, LLC to enable them to meet their other
         estimated income tax obligations for the period from January 1, 2009 to the date of the Corporate Reorganization, which will
         be based on Archipelago Learning Holdings, LLC‘s estimated net taxable income from January 1, 2009 to the date of the
         Corporate Reorganization. Purchasers of shares in this offering will not receive these distributions. In addition, in October
         2009, Archipelago Learning Holdings, LLC made an $8.0 million distribution to its members representing a return on such
         members‘ investment, which was paid in accordance with the Archipelago Learning Holdings, LLC Agreement.

                 As a result of the Corporate Reorganization, we may incur compensation expense related to the exchange of our
         Class B and Class C shares for common stock and restricted common stock. Assuming our shares are offered at $16.00 (the
         midpoint of the price range set forth on the cover of this prospectus), there is no significant expense to be recognized. A
         $1.00 decrease in the offering price would cause us to recognize approximately $2.1 million in expense related to this
         exchange, of which $1.0 million would be recorded upon the Corporate Reorganization and the remaining portion would be
         recorded over the required service or performance periods for the restricted common stock.

                 The Corporate Reorganization will not affect our operations, which we will continue to conduct through our
         operating subsidiaries.

                  The purpose of the Corporate Reorganization is to reorganize our corporate structure so that the top-tier entity in our
         corporate structure — the entity whose common stock is being offered to the public in this offering — is a corporation rather
         than a limited liability company and so that our existing investors will own our common stock directly. References in this
         prospectus to our capitalization and other matters pertaining to our equity and participation shares prior to the consummation
         of the Corporate Reorganization relate to the capitalization and equity and participation shares of Archipelago Learning
         Holdings, LLC. This prospectus includes consolidated financial statements and consolidated financial data of Archipelago
         Learning Holdings, LLC. In addition, this prospectus includes an audited balance sheet of Archipelago Learning, Inc.


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                                                                    USE OF PROCEEDS

                  We estimate that the net proceeds to us from our sale of 3,125,000 shares of common stock in this offering will be
         $42.7 million, after deducting underwriting discounts and commissions and estimated expenses payable by us in connection
         with this offering. This assumes a public offering price of $16.00 per share, which is the midpoint of the price range set forth
         on the cover of this prospectus. We intend to use net proceeds from shares that we sell for general corporate purposes.

                  A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share would increase
         (decrease) the net proceeds to us from this offering by $2.9 million, assuming the number of shares offered by us, as set forth
         on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and
         estimated expenses payable by us.

                   We will not receive any proceeds from the sale of shares by the selling stockholders, which include entities
         affiliated with members of our board of directors.


                                                                    DIVIDEND POLICY

                   From January 2007 through September 30, 2009, Archipelago Learning Holdings, LLC paid aggregate distributions
         to its equity holders of approximately $76 million, consisting of $74.8 million in the year ended December 31, 2007 and
         $1.3 million in the nine months ended September 30, 2009. These distributions were made in connection with the Providence
         Equity Transactions and to enable equity holders to meet their estimated tax obligations. See ―Management‘s Discussion and
         Analysis of Financial Condition and Results of Operations.‖ In October 2009, Archipelago Learning Holdings, LLC made an
         $8.0 million special distribution to its equity holders representing a return on such holders‘ investment, which was paid in
         accordance with the Archipelago Learning Holdings, LLC Agreement. In addition, prior to the closing of this offering,
         Archipelago Learning Holdings, LLC intends to make additional distributions of approximately $1.6 million to its equity
         holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb and approximately
         $0.9 million to its equity holders to enable them to meet their other estimated tax obligations for the period from January 1,
         2009 to the date of the Corporate Reorganization, which will be based on Archipelago Learning Holdings, LLC‘s estimated
         net taxable income from January 1, 2009 to the date of the Corporate Reorganization. Investors in this offering will not
         receive these distributions.

                  After this offering, we intend to retain all available funds and any future earnings to reduce debt and fund the
         development and growth of our business and we do not anticipate paying any dividends on our capital stock for the
         foreseeable future. Our ability to pay dividends on our common stock is restricted by the terms of our credit facility and may
         be further restricted by any future indebtedness we incur. Our business is conducted through our subsidiaries. Dividends
         from, and cash generated by our subsidiaries will be our principal sources of cash to repay indebtedness, fund operations and
         pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions
         of funds from our subsidiaries.

                    Any future determination to pay dividends will be at the discretion of our board of directors and will take into
         account:

                    •        restrictions in our credit facility;

                    •        general economic and business conditions;

                    •        the financial condition and results of operations of us and our subsidiaries;

                    •        our capital requirements and the capital requirements of our subsidiaries;

                    •        the ability of our operating subsidiaries to pay dividends and make distributions to us; and

                    •        such other factors as our board of directors may deem relevant.


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                                                                  CAPITALIZATION

                    The following table sets forth our cash and cash equivalents and our capitalization as of September 30, 2009:

                    •          on an actual basis reflecting the capitalization of Archipelago Learning Holdings, LLC; and

                    •          on a pro forma as adjusted basis to give effect to:

                           •          our Corporate Reorganization as more fully described in ―Corporate Reorganization;‖

                           •          cash distributions of $8.0 million made in October 2009 and $0.9 million to be made upon the
                                      corporate reorganization;

                           •          net short-term deferred tax asset of $1.1 million and net long-term deferred tax liability of
                                      $5.5 million, as of September 30, 2009 and provision for income taxes of $2.2 million and
                                      $2.4 million for the year ended December 31, 2008 and the nine months ended September 30, 2009,
                                      respectively;

                           •          the sale of our TeacherWeb business, which we completed in November 2009 (consisting of the
                                      purchase price of $13 million (reduced by approximately $1.5 million of cash remaining on
                                      TeacherWeb‘s balance sheet), the related $6.5 million repayment on our term loan and an
                                      approximately $1.6 million cash distribution to be made upon the Corporate Reorganization in
                                      connection with certain tax obligations associated with the TeacherWeb sale); and

                           •          the sale of 3,125,000 shares of our common stock in this offering by us at an assumed initial public
                                      offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this
                                      prospectus) after deducting underwriting discounts and commissions and estimated offering
                                      expenses payable by us and the application of the net proceeds from this offering as described in
                                      ―Use of Proceeds.‖

                 This table should be read in conjunction with ―Use of Proceeds,‖ ―Selected Historical Consolidated Financial Data,‖
         ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations‖ and the consolidated financial
         statements and the related notes thereto included elsewhere in this prospectus.



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                                                                                                            As of September 30, 2009
                                                                                                                              Pro Forma
                                                                                                           Actual           As Adjusted(1)
                                                                                                              (In thousands, except
                                                                                                                    share data)


         Cash and cash equivalents                                                                     $     17,111        $      49,002

         Debt:
           Current portion of long-term debt                                                                    700                  700
           Long-term debt, less current portion(2)                                                           67,551               61,051
                    Total debt                                                                               68,251               61,751
         Members‘ equity:
          Class A shares, 109,545,064 shares authorized and outstanding                                      34,792                    —
          Class A-2 shares, 286,882 shares authorized and outstanding                                           750                    —
          Class B shares, 6,578,727 shares authorized and 6,028,727 shares outstanding                          941                    —
          Class C shares, 7,126,451 shares authorized and 6,576,451 shares outstanding                          343                    —
          Retained Earnings                                                                                   9,572                    —
               Total members‘ equity                                                                         46,398                    —
         Stockholders‘ equity:
           Preferred stock, $0.001 par value, 10,000,000 shares authorized and no shares issued
             and outstanding, on a pro forma as adjusted basis                                                    —                    —
           Common stock, $0.001 par value, 200,000,000 shares authorized and
             25,106,719 shares issued and outstanding, on a pro forma as adjusted basis                           —                   25
           Additional paid-in capital                                                                             —               71,547
           Retained earnings                                                                                      —                5,811
                    Total stockholders‘ equity                                                                    —               77,383
                      Total capitalization                                                             $ 114,649           $     139,134




           (1) We present certain amounts pro forma as adjusted, which gives effect to (i) our Corporate Reorganization as more
               fully described in ―Corporate Reorganization;‖ (ii) cash distributions of $8.0 million made in October 2009 and
               $0.9 million to be made upon the Corporate Reorganization; (iii) net deferred tax liabilities of $4.4 million; (iv) the
               sale of our TeacherWeb business, which we completed in November 2009 (consisting of the purchase price of
               $13 million (reduced by approximately $1.5 million of cash remaining on TeacherWeb‘s balance sheet), the related
               $6.5 million repayment on our term loan and an approximately $1.6 million cash distribution to be made upon the
               Corporate Reorganization in connection with certain tax obligations associated with the TeacherWeb sale); and (v) the
               sale of shares of our common stock in this offering by us at an assumed initial public offering price of $16.00 per share
               (the midpoint of the price range set forth on the cover of this prospectus) after deducting underwriting discounts and
               commissions and estimated offering expenses payable by us and the application of the net proceeds from this offering
               as described under ―Use of Proceeds.‖ For additional information regarding the sale of Teacher Web See
               ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments.‖
               Assuming the number of shares sold by us in this offering remains the same as set forth on the cover page, a $1.00
               increase or decrease in the assumed initial public offering price would increase or decrease, as applicable, our total
               capitalization by approximately $2.9 million.

           (2) Does not include $10.0 million of our revolving credit facility, of which $0 was outstanding at September 30, 2009.

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                                                                     DILUTION

                  If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the
         difference between the initial public offering price per share and the pro forma as adjusted net tangible book value per share
         of common stock upon the completion of this offering.

                  As of September 30, 2009, our net tangible book value was a deficit of approximately $72.6 million, or $3.30 per
         share. Our net tangible book value represents our total tangible assets less total liabilities, divided by the total number of
         shares of common stock outstanding. Dilution in net tangible book value per share represents the difference between the
         amount per share paid by purchasers of common stock in this offering and the pro forma net tangible book value per share of
         common stock immediately after the consummation of this offering.

                  Our pro forma net tangible book value as of September 30, 2009 would have been a deficit of approximately $73.6
         million, or $3.35 per share, after giving effect to (i) our Corporate Reorganization as more fully described in ―Corporate
         Reorganization;‖ (ii) cash distributions of $8.0 million made in October 2009 and $0.9 million to be made upon the
         Corporate Reorganization; (iii) net deferred tax liabilities of $4.4 million; and (iv) the sale of our TeacherWeb business,
         which we completed in November 2009 (consisting of the purchase price of $13 million (reduced by approximately
         $1.5 million of cash remaining on TeacherWeb‘s balance sheet), the related $6.5 million repayment on our term loan and an
         approximately $1.6 million cash distribution to be made upon the Corporate Reorganization in connection with certain tax
         obligations associated with the TeacherWeb sale).

                  Our pro forma as adjusted net tangible book value as of September 30, 2009 would have been a deficit of
         approximately $30.8 million or $1.23 per share, after making additional adjustments to give effect to the sale of shares of our
         common stock in this offering by us at an assumed initial public offering price of $16.00 per share (the midpoint of the price
         range set forth on the cover of this prospectus) after deducting underwriting discounts and commissions and estimated
         offering expenses payable by us and the application of the net proceeds from this offering as described under ―Use of
         Proceeds.‖

                  This represents an immediate increase in pro forma net tangible book value of $2.12 per share to our existing
         stockholders and an immediate dilution of $17.23 per share to new investors purchasing shares of common stock in this
         offering at the initial public offering price.

                    The following table illustrates the dilution to new investors on a per share basis:


         Assumed initial public offering price per share                                                                      $ 16.00
         Pro forma net tangible book value (deficit) per share as of September 30, 2009                        $ (3.35 )
         Increase in pro forma net tangible book value per share attributable to the sale of shares in this
           offering                                                                                                 2.12
         Pro forma as adjusted net tangible book value (deficit) per share after this offering                                   (1.23 )
         Dilution per share to new investors                                                                                  $ 17.23


                   A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share (the midpoint of the
         price range set forth on the cover of this prospectus) would increase (decrease) our pro forma net tangible book value
         (deficit) after this offering by $2.9 million and increase (decrease) the dilution to new investors by $0.12 per share, assuming
         the number of shares offered by us, as set forth on the cover page of this prospectus remains the same and after deducting the
         estimated underwriting discounts and commissions and estimated offering expenses payable by us.


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                  The following table summarizes, as of September 30, 2009, the total number of shares of our common stock we
         issued and sold, the total consideration we received and the average price per share paid to us by our existing stockholders
         and to be paid by new investors purchasing shares of our common stock in this offering. The table assumes an initial public
         offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus) before deducting
         underwriting discounts and commissions and estimated offering expenses payable by us:


                                                         Shares Purchased                    Total Consideration             Average Price
                                                       Number             Percent           Amount              Percent       Per Share


         Existing stockholders                         21,981,719              87.6 %   $   110,295,064            68.8 %    $       5.02
         New investors                                  3,125,000              12.4 %        50,000,000            31.2 %    $      16.00
            Total                                      25,106,719             100.0 %   $   160,295,064           100.0 %


                  Sales by the selling stockholders in this offering will reduce the number of shares held by the existing stockholders
         to 18,856,719 or 75.1% of the total number of shares of our common stock to be outstanding after the offering, and will
         increase the number of shares held by new investors to 6,250,000 or 24.9% of the total number of shares of our common
         stock to be outstanding after the offering. If the underwriters exercise their overallotment option in full, the percentage of
         shares of common stock held by existing stockholders will decrease to 71.4% of the total number of shares of our common
         stock outstanding after the offering, and the number of shares of our common stock held by new investors will increase to
         7,187,500, or 28.6% of the total shares of our common stock outstanding after this offering.

                  A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share (the midpoint of the
         price range set forth on the cover of this prospectus) would increase (decrease) the total consideration paid by new investors
         by $6.3 million.

                  In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if
         we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised
         through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our
         stockholders.


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                                   SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

                  The following table sets forth the selected historical consolidated financial data for Archipelago Learning Holdings,
         LLC for the periods and at the dates indicated. The selected historical consolidated financial data as of December 31, 2008
         and December 31, 2007 and the statement of operations and other data for each of the years ended December 31, 2008, 2007
         and 2006 are derived from the audited consolidated financial statements included elsewhere in this prospectus. The selected
         historical consolidated financial data as of September 30, 2009 and for the nine months ended September 30, 2008 and
         September 30, 2009 have been derived from the unaudited consolidated financial statements included elsewhere in this
         prospectus. The interim results set forth below are not necessarily indicative of results for the year ending December 31,
         2009 or for any other period.

                  In January 2007, Providence Equity Partners, together with Cameron Chalmers and David Muzzo (our founders and
         vice presidents) and MHT-SI, LP, acquired 100% of the voting equity interests in Archipelago Learning Holdings, LLC, the
         parent of Archipelago Learning, LLC, which acquired substantially all of the assets of Study Island, LP. See ―Providence
         Equity Transactions.‖ All periods ending prior to January 1, 2007 are referred to as ―Predecessor,‖ and all periods including
         and after such date are referred to as ―Successor.‖ The consolidated financial statements for all Successor periods may not be
         comparable to those of the Predecessor period.

                  Contained within the 2007 consolidated financial statements are nine calendar days of operations and cash flows of
         the Predecessor. Such amounts are not material to the overall 2007 consolidated financial statements taken as a whole.
         Further, the consolidated financial position of the Predecessor immediately prior to the January 10, 2007, transaction was not
         materially different from that of December 31, 2006. Accordingly, we have chosen January 1, 2007, as a date of convenience
         in presenting successor operating results and the financial statement information for the period from January 1, 2007 through
         January 9, 2007 has not been presented separately.

                  The selected historical consolidated financial data as of December 31, 2004 and December 31, 2005 and for the
         years ended December 31, 2004 and December 31, 2005 has been omitted. The omitted data is not available and the
         inclusion of such data would require the conversion of cash basis financials to financial statements prepared in accordance
         with GAAP. This conversion would require substantial management time and cannot be completed without the expenditure
         of unreasonable effort and expense. In addition, as a result of our recent growth and the impact of the Providence Equity
         Transactions, the omitted financial data is not comparable to the financial data set forth below and, accordingly, we believe
         the omission of this financial data does not have a material impact on the understanding of our results of operations, financial
         performance and related trends. The selected historical consolidated financial data also does not include financial statements
         of Archipelago Learning, Inc. because it has been formed recently for the purpose of effecting the offering and until the
         consummation of the Corporate Reorganization described more fully in ―Corporate Reorganization,‖ it will hold no material
         assets and will not engage in any operations. Upon completion of the Corporate Reorganization, Archipelago Learning, Inc.
         will become the parent of Archipelago Learning Holdings, LLC and its subsidiaries and will have no other assets or
         operations. See ―Corporate Reorganization.‖


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                 The results indicated below and elsewhere in this prospectus are not necessarily indicative of our future
         performance. You should read this information together with ―Capitalization,‖ ―Management‘s Discussion and Analysis of
         Financial Condition and Results of Operations‖ and our consolidated financial statements and related notes included
         elsewhere in this prospectus.


                                                     Predecessor                            Successor
                                                    Year Ended              Year Ended                    Nine Months Ended
                                                    December 31,           December 31,                       September 30,
                                                        2006            2007            2008              2008             2009
                                                                                                               (Unaudited)
                                                                        (In thousands, except per share data)


         Consolidated Statements of Income:

            Service revenue                         $     10,065   $ 18,250          $ 32,068         $ 22,319         $ 32,685
            Cost of revenue                                  343        750             2,178            1,253            2,723
              Gross profit                                 9,722        17,500           29,890           21,066           29,962
            Operating expense
              Sales and marketing                          2,793         7,669           13,193            9,516           10,630
              Content development                            712         1,206            2,162            1,496            2,586
              General and administrative                   2,581         5,010            6,644            4,632            7,059
                    Total operating expense                6,086        13,885           21,999           15,644           20,275


            Income from operations                         3,636         3,615            7,891            5,422            9,687

            Other income (expense)
              Interest expense                                —           (838 )         (5,161 )         (3,973 )         (2,092 )
              Interest income                                 27           343              247              194               44
              Derivative loss                                 —           (173 )         (2,119 )           (857 )           (415 )
            Total other income (expense)                      27          (668 )         (7,033 )         (4,636 )         (2,463 )


            Income before income taxes                     3,663         2,947              858              786            7,224
            (Provision) benefit for income taxes              —            (23 )            164               11             (348 )


            Net income                              $      3,663   $     2,924       $    1,022       $      797       $    6,876


            Net income per equity share
              attributable to members‘ equity
              (Basic and diluted)                   $      1,832   $       0.03      $     0.01       $     0.01       $     0.06

            Distributions to Predecessor per
              equity share attributable to
              members‘ equity (Basic and
              diluted)                              $      3,177   $       589               —                —                   —

            Distributions to Successor per equity
              share attributable to members‘
              equity (Basic and diluted)                      —    $       0.68              —                —        $     0.01




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                                            Predecessor                                 Successor
                                               As of                   As of                                As of
                                           December 31,             December 31,                        September 30,
                                               2006             2007             2008               2008              2009
                                                                                                         (Unaudited)
                                                                            (In thousands)


         Balance Sheet Data:
         Deferred revenue                  $      9,318     $    16,931      $    26,922        $    26,015      $    36,469
         Cash and cash equivalents                1,387          11,060           13,144             18,865           17,111
         Total assets                             4,227         127,591          142,025            149,335          155,703
         Long-term debt                              —           69,300           68,600             68,775           67,551
         Total liabilities                        9,762          89,244          101,551            109,170          109,305
         Total members‘ equity (deficit)         (5,535 )        38,347           40,474             40,165           46,398

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                                        MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                                     FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                  The following discussion and analysis of our financial condition and results of operations should be read together
         with “Selected Historical Consolidated Financial Data” and the consolidated financial statements and the related notes
         included elsewhere in this prospectus. The historical consolidated financial information discussed below reflects the
         historical results of operations of Archipelago Learning Holdings, LLC, which will be our wholly owned subsidiary after our
         corporate reorganization, and, except as indicated, the discussion below does not give effect to our corporate
         reorganization. See “Corporate Reorganization” for a description of our corporate reorganization. This discussion contains
         forward-looking statements, based on current expectations and related to future events and our future financial
         performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these
         forward-looking statements as a result of many factors, including those set forth under “Risk Factors,” “Forward-Looking
         Statements” and elsewhere in this prospectus.


         Overview

                  Archipelago Learning is a leading subscription-based online education company. We provide standards-based
         instruction, practice, assessments and productivity tools that improve the performance of educators and students via
         proprietary web-based platforms. Study Island, our core product line, helps students in Kindergarten through 12th grade, or
         K-12, master grade level academic standards in a fun and engaging manner. As of September 30, 2009, Study Island
         products were utilized by approximately 8.9 million students in 21,000 schools in 50 states. In the 2008-2009 school year,
         students answered over 2.8 billion of our practice questions. We recently began offering online postsecondary programs
         through our Northstar Learning product line.

                  We were founded in 2000. In 2001, we launched our first Study Island products in two states. By 2009, we
         developed Study Island products for all 50 states, expanded our content to include the subject areas of reading, writing,
         mathematics, social studies and science and grew from serving 57 schools in 2001 to approximately 21,000 schools. We
         entered the postsecondary educational market with the launch of Northstar Learning in April 2009, which uses the same
         web-based platform as our Study Island products to provide various instruction, assessment and exam preparation content.

                  We further expanded our product offerings with our June 2008 acquisition of TeacherWeb, a website portal and
         teacher productivity tool that provides educators with simple, easy-to-use templates to create district, school or classroom
         websites. In August 2009, we made a minority investment in Edline, a private educational technology company offering
         products and services similar to TeacherWeb, and we completed our sale of TeacherWeb to Edline in November 2009.

                   We capitalize on two significant trends in the education market: (1) an increased focus on higher academic
         standards and educator accountability for student achievement, which has led to periodic assessment in the classroom to
         gauge student learning and inform instruction, also known as formative assessment, and (2) the increased availability and
         utilization of web-based technologies to enhance and supplement teacher instruction, engage today‘s technology-savvy
         learners and improve student outcomes.

                   The increased focus on higher academic standards and educator accountability is largely reflected in legislative
         efforts such as No Child Left Behind, NCLB, the common name for the 2001 reauthorization of the Elementary and
         Secondary Education Act. NCLB led states to establish high academic standards for K-12 students. We believe NCLB will
         be considered for reauthorization in 2010, but if it is not reauthorized or extended or does not maintain or increase the
         importance of state-by-state education standards and assessments, our highly customized Study Island products may become
         less competitive, which could result in lower service revenue and profitability. Similarly, new legislation could lessen the
         importance of state-by-state education standards and assessments or Congress may adopt national educational standards,
         which would reduce the importance of our product customization and allow competitors to compete more easily with our
         products.


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                   In addition, most of our customers are public schools and school districts that have to comply with state educational
         standards. As a result, our sales depend on the availability of public funds, which may become more limited as many states
         or districts face budget cuts. If schools lack funding or if budget cuts continue and become more severe, we may not be able
         to maintain our sales to public schools or may have to adjust our pricing, which may result in lower service revenue, lower
         margins and lower liquidity.

                   Seasonal trends associated with school budget years and state testing calendars also affect the timing of our sales of
         subscriptions to new and existing customers. As a result, most new subscriptions and renewals occur in the third quarter
         because teachers and school administrators typically make purchases for the new academic year at the beginning of their
         district‘s fiscal year, which is usually July 1. Subscriptions to our products generate substantially all of our service revenue,
         and customers enter into subscriptions typically for a 12-month term. We rely significantly on our ability to secure renewals
         for subscriptions to our products as well as sales to new customers. We generally contact schools several months in advance
         of the expiration of their subscription, to attempt to secure renewal subscriptions. If a school does not renew its subscription
         within six months after its expiration, we categorize it as a lost school, and if a school subsequently purchases a subscription
         after this renewal period, we consider it to be a new subscription.

                  Our recent expansion outside of the U.S. K-12 market, including our Northstar Learning line for the postsecondary
         market and our plans to create and sell Study Island products for students outside of the United States, may impact our
         financial performance. We have incurred and expect to continue to incur certain preliminary costs associated with creating
         new products and entering new markets, such as increased personnel costs from hiring new employees, product and
         development costs and initial marketing initiatives.

                   In January 2007, investment funds affiliated with Providence Equity Partners, together with Cameron Chalmers and
         David Muzzo (our founders and vice presidents) and MHT-SI, LP, acquired 100% of the voting equity interests in
         Archipelago Learning Holdings, LLC, the parent of Archipelago Learning, LLC, which subsequently acquired substantially
         all of the assets of Study Island, LP, our predecessor. In connection with the acquisition:

                    •      Providence Equity Partners contributed approximately $84.5 million in cash for approximately 77.2% of
                           the voting equity interests in Archipelago Learning Holdings, LLC;

                    •      Cameron Chalmers and David Muzzo each contributed $10.0 million, for a total of $20.0 million, for
                           approximately 9.1% each, or a total of approximately 18.2%, of the voting equity interests in Archipelago
                           Learning Holdings, LLC;

                    •      MHT-SI, LP contributed approximately $5.0 million in cash for approximately 4.6% of the voting equity
                           interests in Archipelago Learning Holdings, LLC;

                    •      With the cash contributed by Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-SI,
                           LP, (i) Archipelago Learning, LLC purchased substantially all the assets of Study Island, LP for
                           $100.0 million, (ii) Archipelago Learning, LLC paid $4.6 million in transaction costs related to the
                           acquisition of the assets of Study Island, LP and (iii) $5.0 million was retained by Archipelago Learning,
                           LLC for general corporate purposes;

                    •      In November 2007, Archipelago Learning, LLC as borrower, and the other persons designated as credit
                           parties from time to time, entered into a credit facility providing for a $70.0 million term loan and a
                           $10.0 million revolving credit facility with General Electric Capital Corporation, as a lender and as agent
                           for all lenders, NewStar Financial, Inc., as syndication agent, the other parties thereto as lenders and GE
                           Capital Markets, Inc. and NewStar Financial, Inc., as joint lead arrangers and joint bookrunners; and

                    •      With the borrowings under our term loan and cash on hand, (i) Archipelago Learning, LLC paid
                           $1.7 million in financing fees related to our credit facility, (ii) Archipelago Learning, LLC distributed
                           $74.8 million of its proceeds under its term loan and cash on hand to Archipelago Learning Holdings,
                           LLC, and (iii) Archipelago Learning Holdings, LLC made distributions of $74.8 million to the holders of
                           its voting equity interests.


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                    We refer to the foregoing transactions collectively as the ―Providence Equity Transactions.‖

                   Prior to this offering, Archipelago Learning Holdings, LLC and its subsidiaries conducted our business. Prior to the
         consummation of this offering, and in accordance with and as contemplated by the limited liability company agreement of
         Archipelago Learning Holdings, LLC, the holders of shares of Archipelago Learning Holdings, LLC, and certain of their
         affiliates will enter into the following transactions with Archipelago Learning, Inc., a newly formed Delaware corporation
         that will act as a holding company for our business:

                    •       The direct or indirect holders of Class A and Class A-2 shares of Archipelago Learning Holdings, LLC
                            (other than Providence Equity Partners V-A Study Island L.L.C. and its subsidiaries) will, directly or
                            indirectly, contribute all such Class A and Class A-2 shares of Archipelago Learning Holdings, LLC held
                            by such parties to Archipelago Learning, Inc. in exchange for an aggregate of 17,955,030 shares of
                            common stock;

                    •       Providence Equity Partners V-A Study Island L.L.C., which will not have any assets other than its Class A
                            shares of Archipelago Learning Holdings, LLC, will merge with and into Archipelago Learning, Inc. and
                            as a result of such merger, the members of Providence Equity Partners V-A Study Island L.L.C. will
                            receive an aggregate of 2,101,955 shares of our common stock;

                    •       Our officers, directors and employees who hold vested Class B shares of Archipelago Learning Holdings,
                            LLC will contribute their vested Class B shares of Archipelago Learning Holdings, LLC to Archipelago
                            Learning, Inc. in exchange for an aggregate of 335,542 shares of common stock;

                    •       Our officers, directors and employees who hold unvested Class B shares of Archipelago Learning
                            Holdings, LLC will contribute their unvested Class B shares of Archipelago Learning Holdings, LLC to
                            Archipelago Learning, Inc. in exchange for an aggregate of 585,009 shares of restricted common stock
                            subject to time-based vesting;

                    •       Our officers, directors and employees (other than our chief executive officer, chief financial officer, chief
                            technology officer and co-founders) who hold Class C shares of Archipelago Learning Holdings, LLC will
                            contribute such Class C shares to Archipelago Learning, Inc. in exchange for an aggregate of
                            194,932 shares of common stock; and

                    •       Our chief executive officer, chief financial officer, chief technology officer and co-founders will contribute
                            their Class C shares of Archipelago Learning Holdings, LLC to Archipelago Learning, Inc. in exchange for
                            an aggregate of 809,251 shares of restricted common stock subject to vesting based on, among other
                            things, the cash returns to Providence Equity Partners in respect of shares of common stock held by
                            Providence Equity Partners.

                    We refer to the transactions listed above as the ―Corporate Reorganization.‖

                For a more detailed discussion of the Class B and Class C shares, the restricted stock and the restricted unit awards
         see ―Compensation Discussion and Analysis — Elements of Executive Compensation — Equity Compensation Plan.‖

                   As a result of the Corporate Reorganization, Archipelago Learning, Inc. will own all of the outstanding member
         interests of Archipelago Learning Holdings, LLC, will become the parent of Archipelago Learning Holdings, LLC and its
         subsidiaries and will have no other assets or operations. Archipelago Learning, Inc. will be a Delaware ―C‖ corporation, and
         as such will be subject to federal and state income taxes. Archipelago Learning Holdings, LLC was a limited liability
         company not subject to federal income taxes, and as such, the historical financial data included in this prospectus does not
         reflect what our financial position and results of operations would have been had we been a taxable corporation. We expect
         to record a net deferred tax liability and a corresponding expense to our provision for income taxes of approximately
         $4.4 million upon becoming a ―C‖ corporation before the effectiveness of the registration statement of which this prospectus
         is a part. This deferred tax liability primarily results from the excess of the book basis over the tax basis of certain of our
         intangible assets. We expect to realize future reductions in our current tax expense as these intangibles are amortized and
         deducted from taxable income on our tax returns. Prior to the closing of


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         this offering, Archipelago Learning Holdings, LLC intends to make additional cash distributions of approximately
         $1.6 million to its equity holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb and
         approximately $0.9 million to the members of Archipelago Learning Holdings, LLC to enable them to meet their other
         estimated income tax obligations for the period from January 1, 2009 to the date of the Corporate Reorganization, which will
         be based on Archipelago Learning Holdings, LLC‘s estimated net taxable income from January 1, 2009 to the date of the
         Corporate Reorganization. Purchasers of shares in this offering will not receive these distributions. In addition, in October
         2009, Archipelago Learning Holdings, LLC made an $8.0 million distribution to its members representing a return on such
         members‘ investment, which was paid in accordance with the Holding LLC Agreement.

                 As a result of the Corporate Reorganization, we may incur compensation expense related to the exchange of our
         Class B and Class C shares for common stock and restricted common stock. Assuming our shares are offered at $16.00 (the
         midpoint of the price range set forth on the cover of this prospectus), there is no significant expense to be recognized. A
         $1.00 decrease in the offering price would cause us to recognize approximately $2.1 million in expense related to this
         exchange, of which $1.0 million would be recorded upon the Corporate Reorganization and the remaining portion would be
         recorded over the required service or performance periods for the restricted common stock.

                For more information on the Providence Equity Transactions and the Corporate Reorganization, see ―Corporate
         Reorganization‖ and ―Certain Relationships and Related Person Transactions.‖


         Recent Developments

                  In August 2009, in conjunction with Providence Equity Partner‘s acquisition of Edline Holdings, Inc., or Edline, a
         private Chicago-based educational technology company, we made a strategic minority investment in Edline. We purchased
         285,601 Series A shares of Edline for $2.7 million (which reflects $0.2 million of transaction fees we received in connection
         with the transactions), representing 6.9% of Edline‘s outstanding Series A shares. In addition, Edline borrowed $2.1 million
         from us pursuant to a five-year promissory note, which bears interest at 9.5% per annum and requires semi-annual
         interest-only payments. Edline provides online Learning Community Management Systems, or LCMS, solutions that help
         schools improve student performance by harnessing the power of parental involvement, supporting teachers and engaging
         the learning community. Services include web hosting, content management, information portals, tools for classroom
         management, gradebook, notification, student data analytics, virtual storage and related technologies.

                  We believe that we can benefit from strategic opportunities with Edline, as Edline is capitalizing on the same trends
         in the K-12 education market as Study Island: (1) an increased focus on higher academic achievement and (2) increased
         availability and utilization of web-based technologies to enhance and supplement instruction and improve school to home
         communications. Accordingly, there are attractive strategic partnership opportunities between us and Edline, including:
         linking Study Island‘s content to Edline‘s school and district LCMS solutions and co-marketing arrangements to capitalize
         on each company‘s customer base and sales force.

                   In November 2009, we completed the sale of TeacherWeb for an aggregate purchase price of $13 million,
         consisting of $6.5 million in cash (reduced by approximately $1.5 million of cash remaining on TeacherWeb‘s balance
         sheet), Series A shares of Edline valued at $3.7 million and $2.8 million of five-year debt securities that bear interest at 9.5%
         per annum and require semi-annual interest-only payments. We believe the sale of TeacherWeb, coupled with our earlier
         investment in Edline, will enable us to focus on growing our core business of providing online standards-based instruction,
         practice, assessment and reporting programs through our Study Island and Northstar Learning products, while partnering
         with Edline to integrate Study Island‘s content with Edline‘s community management solutions. In addition, we repaid
         $6.5 million on our term loan in connection with the sale. As a result of the sale, TeacherWeb‘s guarantee of our credit
         facility was released. We do not expect the sale to have a material negative impact on our net income in the future. Also as a
         result of the sale, we hold 11.2% of Edline‘s outstanding Series A shares and $4.9 million of Edline‘s senior debt. Prior to
         the completion of this offering, Archipelago Learning Holdings, LLC intends to make a distribution of $1.6 million to its
         equity holders to enable them to meet certain tax obligations associated with the sale of TeacherWeb.


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         Components of Service Revenue and Expense

            Service Revenue

                  Substantially all of our service revenue is generated from subscriptions for our products and services. For 2006,
         2007, 2008 and the first nine months of 2009, subscription revenue accounted for 97.3%, 98.0%, 98.4% and 98.8% of our
         service revenue, respectively. Our subscription revenue results from subscriptions sold to new and existing customers. We
         also generate service revenue from individual buys, which are individual purchases for access to a product, and from training
         fees, which are fees from customers for onsite or online training sessions that are primarily provided to new Study Island
         customers.

                   A significant portion of our service revenue has been and is expected to be generated by sales of our Study Island
         products to public schools and school districts, which rely on state, federal and local funding. State, federal and local
         educational funding is primarily funded through income or property taxes, and such tax revenue may increase or decrease as
         a result of general economic conditions and tax policies. The NCLB legislation passed in 2001 conditioned the receipt of
         federal funding for education on the establishment of educational standards, annual assessments and the achievement of
         adequate yearly progress milestones. In addition, budget appropriations for education at all levels of government are
         determined through the political process, and as a result, the funding that schools receive may fluctuate, which may impact
         our sales to schools in future periods.

                  Subscription revenue from our Study Island products accounted for 97.7%, 97.8%, 96.8% and 93.3% of our service
         revenue in 2006, 2007, 2008 and the first nine months of 2009, respectively, and we anticipate that service revenue from
         sales of our Study Island products will account for a substantial majority of our service revenue for the next few years. We
         also generated subscription revenue from our TeacherWeb service, which accounted for 2.0% and 5.5% of our service
         revenue in 2008 and the first nine months of 2009, respectively. As a result of the sale of TeacherWeb in November 2009,
         we will no longer generate subscription revenue related to TeacherWeb. TeacherWeb revenue represented 2.0% and 5.8% of
         our service revenue for 2008 and the nine months ended September 30, 2009, respectively. We have not yet generated
         significant subscription revenue from our Northstar Learning product line, which was launched in April 2009.

                   Pricing for Study Island subscriptions is based on a variety of factors. Subscriptions are priced on a fixed price per
         class or a variable price per school based on the number of students per grade using the products. In addition, subscriptions
         are priced on a per subject matter basis with discounts given if all of the subjects for a given grade are purchased.
         Subscription prices also vary by state based on the number, complexity and comprehensiveness of the applicable standards.
         Our Study Island products are specifically built from the varying assessment standards in all 50 states, which we believe
         differentiates us from our competitors. If national standards and assessments replace current state assessments, we may face
         increased competition as well. The average annual price per student per subject is $3.00, or $10.00 per student for all
         subjects.

                  Our subscription fees are typically billed prior to the commencement of the subscription term; however, we
         recognize subscription revenue ratably over the subscription term beginning on the commencement date of each
         subscription. The traditional subscription term is 12 months for our Study Island products and six months for our Northstar
         Learning product line. We occasionally sell multi-year subscriptions. Additionally, promotional incentives, such as
         complimentary months of service, are offered periodically to new Study Island customers, resulting in a subscription term
         longer than one year. All of our subscriptions are sold on a non-cancelable basis. From time to time, we may enhance or
         upgrade our products. Because we provide our products on a single web-based platform, all of our customers generally
         benefit from new features and functionality released during the subscription term at no additional cost.

                  We increased our standard pricing in August 2007 and August 2008. We do not believe, however, that these pricing
         increases are meaningful to changes in our service revenue. Our pricing structure is complex, using a set of standard prices,
         but offering discretionary discounts of different amounts for a wide range of circumstances with our clients. Additionally,
         considering that we recognize our service revenue ratably over the subscription terms of our clients (which are typically
         12 months, but vary under many circumstances), price increases have a delayed impact on revenue within a single period
         presented in our financial statements.


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                  Factors affecting our service revenue include: (i) the number of schools, classes or students purchasing our
         products; (ii) the term of the subscriptions; (iii) subscription renewals; (iv) the number of states or geographies in which we
         offer products; (v) the number of products we offer in a state or in a geographic region; (vi) the complexity and
         comprehensiveness of applicable standards, which impacts pricing; (vii) the effectiveness of our regional field-based and
         inside sales teams; (viii) recognition of service revenue in any period from deferred revenue from subscriptions purchased or
         renewed during the current and prior periods; (ix) federal, state and local educational funding levels; and (x) discretionary
         purchasing funds available to our customers.

                  The timing of sales to new and existing Study Island customers is affected by seasonal trends associated with school
         budget years and state testing calendars. As a result, most new subscriptions and renewals occur in the third quarter because
         teachers and school administrators typically make purchases for the new academic year at the beginning of their district‘s
         fiscal year, which is usually July 1. The fourth calendar quarter has historically produced the second highest level of new
         subscriptions and renewals, followed by the second quarter and the first quarter. We anticipate that sales of our Northstar
         Learning products will be highest at the beginning of customary academic semesters in September and January. Because our
         service revenue is deferred over the course of the subscription period and our customers pay for their subscriptions at the
         beginning of the subscription period, this seasonality does not cause our service revenue to fluctuate significantly but does
         impact our cash flow.

                   As of September 30, 2009, approximately 21,000 schools used Study Island products. A school is considered to be
         using our products if it has an active subscription for any or all of the Study Island products available to it. The number of
         schools using our products will increase as schools without active subscriptions purchase subscriptions for our products. The
         number of schools using our products will decrease if the schools do not renew their subscriptions. We generally contact
         schools several months in advance of the expiration of their subscription to attempt to secure renewal subscriptions. If a
         school does not renew its subscription within six months after its expiration, we categorize it as a lost school and our count
         of the number of schools using our products decreases. If the school subsequently purchases a subscription to our products
         after this renewal period, we consider it to be a new subscription. In 2008, we had a renewal rate of 77.1%, which reflects
         the percentage of schools that subscribed for our products in one period and then subscribed for our products again in the
         next period, within six months of their subscription end date.

                  Our subscription purchases are generally evidenced by a purchase order. We recognize an invoiced sale in the
         period in which the purchase order is received and the invoice is issued, which may be at a different time than the
         commencement of the subscription. Service revenue for invoiced sales is deferred and recognized ratably over the
         subscription term beginning on the commencement date of the applicable subscription.

                  The following table sets forth information regarding our invoiced sales as well as other metrics that impact our
         service revenue for the periods presented:


                                                           Predecessor                                     Successor
                                                          Year Ended                   Year Ended                      Twelve Months Ended
                                                          December 31,               December 31,                          September 30,
                                                              2006                2007               2008              2008              2009
                                                                                        (Dollars in thousands)


         Invoiced sales to new customers(1)(2)        $           7,021         $ 11,224        $ 14,099          $     14,100      $    14,666
         Invoiced sales to existing
           customers(1)(3)                                        6,896           13,841            24,709              22,298           33,961
         Invoiced other sales(1)(4)                                 587              798             1,023                 815            1,131
         Invoiced TeacherWeb sales(5)                                —                —              2,028               1,578            3,130
         Invoiced sales(1)                                      14,504            25,863            41,859              38,791           52,888
         Change in deferred revenue(6)                          (4,439 )          (7,613 )          (9,791 )           (10,966 )        (10,454 )
         Service revenue                              $         10,065          $ 18,250        $ 32,068          $     27,825      $    42,434



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                                                Predecessor                                      Successor
                                                    At
                                               December 31,               At December 31,                       At September 30,
                                                   2006               2007                2008               2008                2009


         Other metrics:
         Number of schools using Study
           Island products(7)                         7,856             13,100              17,307             16,836              20,812
         Number of students using Study
           Island products(8)                     3,000,000          5,000,000          8,311,501            8,047,608          8,884,559
         Number of products available(9)                429                650                950                  751              1,190
         Number of states(10)                            23                 35                 50                   50                 50

           (1) We present invoiced sales data to provide a supplemental measure of our operating performance. We believe the
               various invoiced sales metrics enable investors to evaluate our sales performance in isolation and on a consistent basis
               without the affects of service revenue deferral and service revenue recognition from sales in prior periods. In addition,
               invoiced sales to new customers and existing customers and invoiced other sales provide investors with important
               information regarding the source of orders for our products and services and our sales performance in a particular
               period. Invoiced sales are not recognized under accounting principles generally accepted in the United States, or
               GAAP, and should not be used an as indicator of, or an alternative to, service revenue and deferred revenue. Invoiced
               sales metrics have significant limitations as analytical tools because they do not take into account the requirement to
               provide the applicable product or service over the subscription period and they do not match the recognition of
               services revenue with the associated cost of revenue.

           (2) Invoiced sales to new customers are recognized in the period in which the school or district purchase order is received
               and the invoice is issued. A new customer is any customer that is not considered to be an existing customer.

           (3) Invoiced sales to existing customers are recognized in the period in which the school or district purchase order is
               received and the invoice is issued. An existing customer is defined as any customer with an existing subscription to
               Study Island products. We generally contact schools several months in advance of the expiration of their subscription
               to attempt to secure renewal subscriptions. If a school does not renew its subscription within six months after its
               expiration, we categorize it as a lost school and our count of the number of schools using our products decreases. If the
               school subsequently purchases a subscription to our products after this renewal period, we consider it to be a new
               subscription.

           (4) Invoiced other sales include invoices from individual buys, which are individual purchases for access to a product, and
               from training fees, which are fees from customers for onsite or online training sessions that are primarily provided to
               new Study Island customers.

           (5) Invoiced TeacherWeb sales are recognized at the point of sale and are not evaluated in the same manner as Study
               Island sales. We completed the sale of our TeacherWeb business in November 2009.

           (6) Our subscription fees are typically billed prior to the commencement of the subscription term. Revenue for invoiced
               sales is deferred and recognized ratably over the subscription term beginning on the commencement date of the
               applicable subscription. The traditional subscription term is 12 months for our Study Island products and six months
               for our Northstar Learning product line.

           (7) A school is considered to be using our products if it has an active subscription for any or all of the Study Island
               products available to it.

           (8) The numbers of students using Study Island products is the number of registered user names. In 2006 and 2007, we
               did not track the number of registered user names and have provided calculated management estimates based on the
               best available data for those years.
                                                                                               footnotes continued on following page



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            (9) A Study Island product is any one subject for one grade level in a single state. A Northstar Learning product is any
                one subject.

           (10) The number of states is the number of states in which Study Island offers products, which are built from the
                standards of such states.


            Cost of Revenue

                  Cost of revenue consists of the direct and indirect costs to host and make available our products and services to our
         customers. A significant portion of the cost of revenue includes salaries, bonuses, stock-based compensation, employee
         benefits costs and taxes related to engineering personnel who maintain our servers and technical equipment and who work
         on our web-based hosted platform. The employee benefits costs and taxes are allocated based upon a percentage of total
         compensation expense. Other direct and indirect costs include recruiting and relocation fees associated with engineering and
         product development employees, contracted labor, facility costs for our web platform servers and routers, including backup
         servers that are maintained in colocation facilities in Dallas, Texas, depreciation expense on those servers and routers,
         network monitoring costs and amortization of Study Island‘s technical development intangible asset as a result of the
         Providence Equity Transactions. We expect cost of revenue to decrease following our sale of TeacherWeb, which we
         completed in November 2009, due to decreased personnel and operational costs related to TeacherWeb.


            Operating Expense

                   We classify our operating expense into three categories: sales and marketing, content development, and general and
         administrative. All of the categories include personnel costs. Personnel costs for each category of operating expense include
         salaries, bonuses, stock-based compensation, employee benefits costs and taxes. Personnel costs for sales and marketing
         expense also include sales commissions. Salary increases are generally given in January of each year. Bonuses are expensed
         monthly as they accrue based on management‘s estimate of the expected bonus amounts, and are actually paid to most
         employees and sales management personnel in July and January. These bonuses are based on a combination of business and
         individual performance for the first six months and the last six months of the year. Senior management bonuses are generally
         paid in the first quarter of the year, after the results for the prior year are known. Sales commissions are generally paid as a
         percentage of sales to new and existing customers, and are paid in the month the customer‘s purchase order is received.

                  Sales and Marketing Expense. Our sales and marketing expense consists primarily of personnel expense, direct
         marketing costs, travel and entertainment expense, and the amortization of customer relationships as an intangible asset.
         Personnel expense has increased significantly since 2006 as we increased our sales and marketing headcount to
         124 employees at September 30, 2009 from 31 employees at December 31, 2006 as a result of the growth in our Study Island
         product line, the TeacherWeb acquisition and the launch of our Northstar Learning product line. In addition, our sales
         commissions increased during this period primarily as a result of an increased number of sales representatives and higher
         Study Island sales volume. Our employees have also received market-driven merit increases in their base salaries during this
         period. Marketing expense consists of direct mail costs, email prospecting expense, ―pay per click‖ advertising costs, search
         engine optimization costs, printed material costs, marketing research expense, and trade show expense. Marketing expense
         generally increases as our sales efforts increase, both in new and existing markets. Our marketing efforts are related to the
         launch of new product offerings, the introduction of our products and services in new states and geographic regions, and
         opportunities within a selected market associated with specific events such as timing for the standardized testing in a
         particular state and upcoming trade shows. Sales and marketing expense also includes the amortization of customer
         relationship costs as a result of the Providence Equity Transactions and the acquisition of TeacherWeb in June 2008. We
         completed the sale of TeacherWeb in November 2009, and will no longer incur any sales and marketing expense related to
         TeacherWeb.

                  Content Development Expense. Our content development expense primarily consists of personnel costs for our
         content development employees, who are responsible for writing the questions for our Study Island and Northstar Learning
         products, and program content amortization expense. Our content development personnel costs have increased significantly
         since 2006 as we increased headcount to 58 at September 30,


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         2009 from 12 at December 31, 2006 to support the development of new Study Island products for each state and the
         expanded number of subjects and grades covered by our Study Island products, as well as the launch of Northstar Learning
         and product enhancements.

                  General and Administrative Expense. Our general and administrative expense includes personnel costs for general
         and administrative employees, accounting and legal professional services fees, rent, insurance, travel and entertainment
         expense, and other corporate expense. General and administrative expense increased as a result of the expansion of our
         Dallas office space in 2007 and 2008 and the implementation of a new financial system and new accounting system in 2008
         and 2009. We expect other operating expense to increase in future periods as we expect to incur additional expense
         associated with being a public company, including increased personnel costs, legal costs, accounting costs, board
         compensation expense, investor relations costs, higher insurance premiums, and costs associated with our compliance with
         Section 404 of the Sarbanes-Oxley Act of 2002, other applicable SEC regulations and the requirements of Nasdaq.


            Other Income (Expense)

                   Our other income (expense) includes the interest expense on our $70.0 million term loan and $10.0 million
         revolving credit facility entered into in November 2007 and amortization of debt financing costs. We borrowed $10.0 million
         under our revolving credit facility in September 2008 and we repaid the full amount in November 2008. No amounts were
         outstanding under the revolving credit facility at September 30, 2009. The amounts borrowed under our term loan bear
         interest at rates based upon either a base rate or LIBOR, plus an applicable margin. We also earn interest income on our cash
         and cash equivalents investments which is included in other income. We utilize an interest rate swap, required by the terms
         of our credit facility, as part of our overall risk management strategy. We entered into the swap arrangement in December
         2007 with an initial notional amount of $45.5 million. In June 2009, the notional amount of the interest rate swap decreased
         to $40.5 million and will decrease in periodic amounts to a notional amount of $30.5 million at the December 31, 2010
         termination date. We swapped a floating rate payment based on the three-month LIBOR for a fixed rate of 4.035% in order
         to minimize the variability in expected future cash flow due to interest rate movements on our LIBOR-base variable rate
         debt. We have not designated our interest rate swap as a cash flow hedge. The unrealized changes in the derivative fair value
         and the realized interest income and/or expense associated with the swap are recorded as a derivative gain (loss) in other
         income (expense).


            Income Tax Expense

                   Income tax expense is comprised of federal, state and local taxes based on our income in the appropriate
         jurisdictions. Prior to the Corporate Reorganization, Archipelago Learning Holdings, LLC was treated as a partnership and
         was not a taxpaying entity for federal income tax purposes and generally is not a taxpaying entity for state income tax
         purposes. As a result, Archipelago Learning Holdings, LLC‘s income was taxed to its members in their individual federal
         income tax returns. TeacherWeb was treated as a taxable corporation for federal income tax purposes. In 2008, we recorded
         a $0.2 million federal and state income tax benefit for TeacherWeb. We are also subject to certain franchise taxes and we
         record these expenses in our income tax expense.


         Other Considerations

                  Equity Compensation Expense. As members of a private limited liability company, our members‘ interests
         consisted of Class A, Class A-2, Class B and Class C shares. Management and other employees were granted Class B and
         Class C shares under our 2007 Equity Compensation Plan. For the years ended December 31, 2007 and 2008 and for the first
         nine months of 2009, we recognized approximately $0.6 million, $0.4 million and $0.3 million, respectively, as stock-based
         compensation expense. Upon completion of this offering, Class A and Class A-2 shares will be converted into shares of
         common stock of Archipelago Learning, Inc. Class B shares will be converted into shares of common stock and restricted
         common stock, and Class C shares will be converted into shares of common stock. See ―Corporate Reorganization‖ and
         ―— Overview.‖ Management‘s participation shares will convert into common stock and restricted common stock. As a result
         of the Corporate Reorganization, we may incur compensation expense


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         related to the exchange of our Class B and Class C shares for common stock and restricted common stock. Assuming our
         shares are offered at $16.00 (the midpoint of the price range set forth on the cover of this prospectus), there is no significant
         expense to be recognized. A $1.00 decrease in the offering price would cause us to recognize approximately $2.1 million in
         expense related to this exchange, of which $1.0 million would be recorded upon the Corporate Reorganization and the
         remaining portion would be recorded over the required service or performance periods for the restricted common stock. In
         addition, in connection with this offering, we intend to implement the 2009 Omnibus Incentive Plan. We intend to grant
         stock options for 561,755 shares of our common stock to employees at the time of this offering, at an exercise price equal to
         the initial public offering price. Assuming an initial public offering price of $16.00 per share, the midpoint of the price range
         set forth on the cover of this prospectus, we expect the fair value of these awards to be approximately $4.5 million, which
         will be recognized in operating expense over the four-year vesting period of the options. We expect to grant additional stock
         options, restricted stock, restricted stock unit awards and other forms of equity-based compensation under that plan after the
         offering, which will result in the incurrence of equity compensation expense.

                 Providence Equity Transactions. As a result of the Providence Equity Transactions in 2007, our interest expense
         and our depreciation and amortization expense have increased. Accordingly, our consolidated financial statements prior to
         January 2007 are not comparable to subsequent periods, primarily as a result of significantly increased interest expense and
         depreciation and amortization expense.

                   Corporate Reorganization. Prior to the consummation of this offering, we will reorganize our corporate structure
         so that the top-tier entity in our corporate structure – the entity whose common stock is being offered to the public in this
         offering – is a corporation rather than a limited liability company. See ―Corporate Reorganization‖ and ―— Overview.‖


         Critical Accounting Policies

                  Our discussion and analysis of our consolidated financial condition and results of operations are based upon our
         consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial
         statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and
         expense, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates including
         those related to long-lived intangible and tangible assets, goodwill and stock-based compensation. We base our estimates on
         historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual
         results may differ from these estimates under different assumptions or conditions. All intercompany balances and
         transactions have been eliminated in consolidation.

                 The accounting policies we believe to be most critical to understanding our results of operations and financial
         condition and that require complex and subjective management judgments are discussed below.

                  Revenue Recognition. We generate service revenue from subscription revenue, training fees and individual buys,
         which are individual purchases for access to our products. For the nine months ended September 30, 2008 and 2009,
         subscription revenue accounted for 98.9% and 98.8% of our service revenue, respectively.

                  Service revenue is recognized when all of the following conditions are satisfied: there is persuasive evidence of an
         arrangement, the service has been provided to the customer, the collection of the fees is reasonably assured, and the amount
         of the fees to be paid by the customer is fixed or determinable. Our arrangements do not contain general rights of return.

                  Our subscription fees are typically billed prior to the commencement of the subscription term. We defer the total
         amount of the sale of subscriptions, training, and support as unearned revenue when the customer is invoiced and recognize
         the revenue on a straight-line basis over the subscription period, beginning on the commencement date of each subscription.
         The traditional subscription term is 12 months for our Study Island products and six months for our Northstar Learning
         products. We occasionally sell multi-year subscriptions. Additionally, promotional incentives, such as complimentary
         months of service, are offered


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         periodically to new Study Island customers, resulting in a subscription term longer than one year. All of our subscriptions are
         sold on a non-cancelable basis. As a result, substantially all of the service revenue that we recognize in any period represents
         deferred revenue from subscriptions purchased or renewed during current and previous periods. As a result of the sale of
         TeacherWeb in November 2009, we will no longer generate subscription revenue related to TeacherWeb. TeacherWeb
         revenue represented 2.0% and 5.8% of our service revenue for 2008 and the nine months ended September 30, 2009,
         respectively. From time to time, we may enhance or upgrade our products. Because we provide our products on a single
         web-based platform, all of our customers generally benefit from new features and functionality released during the
         subscription term at no additional cost.

                  Training sessions are offered to our customers in conjunction with the subscriptions to train the customers on
         implementing, using, and administering the Study Island programs. Training revenue is recognized ratably over the
         subscription term for the related subscription. Customer support is provided to customers following the sale at no additional
         charge and at a minimal personnel cost per call.

                  Goodwill, Intangible Assets and Long-Lived Assets. Goodwill represents the excess of the cost of an acquisition
         over the fair value of net assets acquired. Goodwill is assessed for impairment at the reporting unit level at least annually and
         any time an event occurs or circumstances change that would more likely than not reduce the fair value of the goodwill
         below its carrying value. As of December 31, 2008 and September 30, 2009, goodwill was valued at $103.3 million and
         represented 72.7% and 66.3% of our total assets of $142.0 million and $155.7 million, respectively. Of that $103.3 million
         of goodwill, $94.4 million, or 91.4%, is attributable to the operations of our Study Island reporting unit and the remaining
         $8.9 million is attributable to TeacherWeb. We do not expect to recognize an impairment on goodwill in connection with our
         sale of TeacherWeb, which we completed in November 2009.

                   The goodwill impairment test involves a two-step test. The first step is a comparison of each reporting unit‘s fair
         value to its carrying value. We currently have two reporting units, which are one level below our operating segment. If the
         carrying value of a reporting unit exceeds its fair value, goodwill is considered potentially impaired and we must complete
         the second step of the impairment test. The amount of impairment is determined by comparing the implied fair value of
         reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired
         in a business combination. Specifically, we would allocate the fair value to all of the assets and liabilities of the reporting
         unit, including internally developed intangible assets with a zero carrying value, in a hypothetical analysis that would
         calculate the implied fair value of goodwill. If the implied fair value of goodwill is less than the recorded goodwill, we
         would recognize an impairment charge for the difference. We perform our impairment tests in the fourth quarter of each
         year.

                 Our judgment is a significant factor in determining whether an indicator of impairment has occurred. We rely on
         estimates in determining the fair value of each reporting unit for step one, which include the following factors:

                    • Data from actual open marketplace transactions. We may utilize such information, if available, where those
                      transactions may involve assets or equity, to assist management in evaluating goodwill impairment.

                    • Anticipated future cash flows and terminal value for each reporting unit. The income approach to determining
                      the fair value relies on the timing and estimates of future cash flows, including an estimate of terminal value.
                      The projections use management‘s estimates of economic and market conditions over the projected period
                      including growth rates in service revenue, customer attrition and estimates of any expected changes in operating
                      margins. We have utilized an income growth rate for our estimates, which we believe to be reasonable based on
                      historical growth and market and industry conditions. Our projections of future cash flows are subject to change
                      as actual results are achieved that differ from those anticipated. Because management frequently updates its
                      projections, we would expect to identify on a timely basis any significant differences between actual results and
                      recent estimates. We are not expecting actual results to vary significantly from estimates.


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                    • Selection of an appropriate discount rate. The income approach requires the selection of an appropriate
                      discount rate, which is based on a weighted-average cost of capital analysis. The discount rate is affected by
                      changes in short-term interest rates and long-term yield as well as variances in the typical capital structure of
                      marketplace participants. For our impairment testing in the fourth quarter of 2008, we utilized a
                      weighted-average cost of capital which was developed using a combination of a risk free rate, an equity
                      premium, and a risk factor. For the risk free rate, we utilized the 20-year U.S. government bond rate. The equity
                      premium was developed based on a study of historical security market returns, adjusted for the size of our
                      reporting entities. The risk factor was based on our product lines, potential changes in market demand, current
                      market conditions and other potentially relevant factors. Given the current volatile general economic conditions,
                      it is possible that the discount rate will fluctuate in the near term.

                   In the impairment test performed in the fourth quarter of 2007, the fair value of our Study Island reporting unit
         significantly exceeded the carrying value by a margin in excess of 20%. For the test performed in 2008, the fair value of the
         Study Island unit exceeded the carrying value by an even greater margin. In the 2008 testing for TeacherWeb, due to the
         proximity of the testing to the acquisition date and because there had been no significant changes in operations of the
         reporting unit, the fair value and carrying value remained consistent with the values upon acquisition. Based upon our results
         of impairment testing and events that have occurred subsequently, we do not believe either of our reporting units to be at risk
         of failing step one of impairment testing for the foreseeable future.

                  Intangible assets and other long-lived assets are reviewed for impairment when events or changes in circumstances
         indicate the carrying amount may not be recoverable. If impairment indicators exist, an assessment of undiscounted future
         cash flows to be generated by such assets is made. If the results of the analysis indicate impairment, the assets are adjusted to
         fair market value. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful
         lives. No impairment loss was identified for intangible or long-lived assets in 2007 and 2008.

                    Stock-Based Compensation Expense. We have issued Class B and Class C shares to employees as part of their
         compensation. The holders of such shares are entitled to receive distributions, including distributions in connection with the
         liquidation, dissolution or winding up of Archipelago Learning Holdings, LLC, when and as determined by its board of
         managers, in accordance with, and subject to the terms of, the limited liability company agreement of Archipelago Learning
         Holdings, LLC. The Archipelego Learning Holdings, LLC limited liability company agreement sets forth the priority and
         order in which the holders of the Class B and Class C shares are entitled to receive distributions (commonly referred to as a
         ―waterfall‖), based on amounts of invested capital and preferred returns on invested capital. In addition, the receipt of
         distributions in respect of such shares is subject to certain additional conditions, including vesting and distribution thresholds
         (i.e., various threshold amounts of aggregate distributions on senior classes (i.e., the Class A and Class A-2 shares) before
         distributions are made on the Class B and Class C shares). Each Class B share vests 20% on each anniversary, subject to
         continued employment or service. The Class C shares are subject to performance hurdles, pursuant to which holders of
         Class C shares are entitled to distributions only after holders of Class A and Class A-2 shares receive certain multiples of
         cash-based returns on their respective Class A and Class A-2 shares, subject to such Class C shareholders‘ continued
         employment or service. The distribution thresholds were higher for each of the 2008 and 2009 grants. As a result of the
         waterfall and the distribution thresholds, a liquidity event at the grant-date fair value would yield no proceeds to the holders
         of the Class B and Class C shares.

                  We recognize compensation expense in respect of the Class B and Class C shares based on the grant-date fair value
         of the awards. Compensation expense for the Class B shares is recognized ratably over five years and compensation expense
         for the Class C shares is recognized at the time of issuance. The determination of the grant date fair value of the Class B and
         Class C shares was complex due to the waterfall, the distribution thresholds and the growth of the business, and it required
         the application of judgment regarding Archipelago Learning Holdings, LLC‘s future performance and the likelihood and
         timing of future liquidity events. Accordingly, in connection with the preparation of our audited financial statements for
         2007 and 2008, we hired Waterview Advisors (formerly Phalon George Capital Advisors), an independent valuation firm, to
         conduct valuation analyses, which were relied upon by management to assess the equity value of Archipelago Learning
         Holdings, LLC and the fair value of the


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         Class B and Class C shares at the grant date. The independent valuation analyses were prepared as of December 2007 and
         October 2008 and were relied upon by management for the determination of the grant-date fair value of the May 2007 and
         May 2008 grants. In addition, the October 2008 valuation analysis served as the basis for our grant-date fair value
         determination for the January 2009 grants. Accordingly, these analyses were used to support our determination of the fair
         value of the awards as of the grant date.

                  The valuation analyses were based on information provided by us and used two methods to determine an overall
         enterprise value for Archipelago Learning Holdings, LLC: (i) the use of multiples of Archipelago Learning Holdings, LLC‘s
         earnings before interest, taxes, depreciation and amortization, or EBITDA, derived from prior Archipelago Learning
         Holdings, LLC transactions, principally the Providence Equity Transactions and the TeacherWeb acquisition and (ii) the use
         of EBITDA multiples derived from transactions of companies within the same industry. The valuation analyses also looked
         at comparable companies, but it was determined that this company comparison method would not be relevant in determining
         the valuation because of Archipelago Learning Holdings, LLC‘s smaller size, smaller market, faster growth and significantly
         greater profitability than comparable companies. The multiples described above (adjusted to reflect projected growth rates to
         projected EBITDA in future periods) were then applied to estimate projected overall enterprise values for Archipelago
         Learning Holdings, LLC at various dates in the future based on the probability that an initial public offering or strategic sale
         of Archipelago Learning Holdings, LLC would occur in the future. Using these enterprise values, the estimated distributions
         to the Class B and Class C shares at the time of such future liquidity events (taking into account the applicable distribution
         thresholds) were determined. The present value of the estimated distributions to the Class B shares and certain of the Class C
         shares were then calculated to determine the fair value of Class B and Class C shares on the grant date. This approach
         resulted in a grant-date fair value for the Class B shares of $0.31, $0.29 and $0.26 per share for the grants in 2007, 2008 and
         2009, respectively, and a grant-date fair value for the Class C shares of $0.05, $0.07 and $0.06 per share for the grants in
         2007, 2008 and 2009, respectively. The change in the fair values over the present values primarily reflected the increase in
         the applicable distribution thresholds.

                  The following share-based award activity occurred during the years ended December 31, 2006, 2007 and 2008 and
         the nine months ended September 30, 2008 and 2009:


                                                Predecessor                                         Successor
                                               Year Ended                     Years Ended                              Nine Months Ended
                                               December 31,                   December 31,                                September 30,
                                                   2006                2007                    2008                  2008               2009
                                                                                                                           (Unaudited)
                                                                              (In millions, except share data)


         Class B Shares granted                      —               5,720,692              456,336                456,336           673,287
         Class B grant date fair value               —           $         1.8            $     0.1              $      0.1        $     0.2
         Class C Shares granted                      —               5,720,692              456,336                456,336           673,287
         Class C grant date fair value               —           $         0.3            $     0.0              $      0.0        $     0.1
         Stock-based compensation
           expense recognized                        —           $            0.6         $           0.4        $       0.3       $           0.3

                    The grant date fair value for the Class B and Class C shares granted in January 2009 reflected:

                    • our strong operating performance in the last half of 2008;

                    • the prevailing adverse market conditions;

                    • the financial crisis and reduced initial public offering and merger activity;

                    • the ongoing recession;


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                    • the lack of a liquid market for the Class B and Class C shares, and the assumption that a liquidity event, such as
                      an initial public offering or strategic sale, would not occur prior to 2010 but more likely in 2011, when the
                      market and overall economy were expected to recover;

                    • the decline in state tax receipts and the uncertainty in state education funding;

                    • the decision by Congress in October 2008 to delay the reauthorization of the Elementary and Secondary
                      Education Act (commonly referred to as No Child Left Behind) and the further uncertainty in federal education
                      funding;

                    • the impact of the priority of the Class A shares as well as the Class A-2 shares that were issued in June
                      2008; and

                    • the nearly doubled distribution thresholds applicable to the January 2009 grants as compared to the May 2008
                      grant.

                  It should also be noted that, applying the waterfall and distribution thresholds in the limited liability company
         agreement, at the January 2009 grant date, a liquidation event at the determined equity value on the date of grant would have
         resulted in no distributions to the Class B and Class C shares granted on such date.

                  We believe that the difference between the grant date fair value of the January 2009 grants and the initial public
         offering price range set forth on the cover of this prospectus is the result of the following factors:

                    • our significantly stronger operating performance;

                    • improved stock market performance;

                    • improved prospects for a liquidity event as a result of an improved initial public offering market;

                    • improved economic conditions and the possible end of the recession;

                    • the enactment of the American Recovery and Reinvestment Act of 2009, the largest economic stimulus bill in
                      history, which provided for approximately $100 billion in education funding at the federal and state level; and

                    • the launch of our Northstar Learning postsecondary product line in April 2009.

                  Accounts Receivable. Accounts receivable represents amounts billed to customers for service revenue. We carry
         our accounts receivable at cost, less an allowance for doubtful accounts, which is based on management‘s assessment of the
         collectability of accounts receivable. We extend unsecured credit to our customers in the ordinary course of business, but
         mitigate the associated credit risk by performing ongoing credit evaluations of our customers. The vast majority of our
         customers are public schools, which receive their funding from the local, state and federal government. We evaluate the
         adequacy of the allowance for doubtful accounts based on a specific customer review of the outstanding accounts receivable.


         Results of Operations

                    The following table sets forth our consolidated statement of income for the periods indicated:


                                                                   Predecessor                            Successor
                                                                  Year Ended                                          Nine Months Ended
                                                                  December 31,     Year Ended December 31,               September 30,
                                                                      2006           2007          2008               2008            2009
                                                                                                                          (Unaudited)
                                                                                           (In thousands)


         Consolidated Statements of Income
           Service revenue                                    $         10,065    $ 18,250       $ 32,068         $ 22,319        $ 32,685
           Cost of revenue                                                 343         750          2,178            1,253           2,723
  Gross profit      9,722   17,500   29,890   21,066   29,962
Operating expense


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                                                                Predecessor                               Successor
                                                               Year Ended                                             Nine Months Ended
                                                               December 31,     Year Ended December 31,                  September 30,
                                                                   2006           2007          2008                  2008            2009
                                                                                                                          (Unaudited)
                                                                                         (In thousands)


               Sales and marketing                                     2,793         7,669         13,193              9,516          10,630
               Content development                                       712         1,206          2,162              1,496           2,586
               General and administrative                              2,581         5,010          6,644              4,632           7,059
            Total operating expense                                    6,086        13,885         21,999             15,644          20,275
            Income from operations                                     3,636         3,615          7,891              5,422           9,687
            Other income (expense)
              Interest expense                                            —           (838 )       (5,161 )           (3,973 )        (2,092 )
              Interest income                                             27           343            247                194              44
              Derivative loss                                             —           (173 )       (2,119 )             (857 )          (415 )
            Total other income (expense)                                  27          (668 )       (7,033 )           (4,636 )        (2,463 )
            Income before income taxes                                 3,663         2,947            858                786           7,224
            (Provision) benefit for income taxes                          —            (23 )          164                 11            (348 )
            Net income                                     $           3,663    $    2,924     $    1,022         $      797      $    6,876



         Comparison of Nine Months Ended September 30, 2009 to Nine Months Ended September 30, 2008

                   Service Revenue. Our service revenue for the nine months ended September 30, 2009 was $32.7 million,
         representing an increase of $10.4 million, or 46.4%, as compared to service revenue of $22.3 million for the nine months
         ended September 30, 2008. Subscription and training revenue is recognized over the term of the subscription, which is
         generally 12 months. Consequently, our revenue in any month is impacted by invoiced sales over at least the previous
         12 months. In order to evaluate our revenue fluctuations, we utilize metrics, including invoiced sales over the last 12 months.
         See ―— Components of Service Revenue and Expense — Service Revenue.‖ The increase in service revenue for the nine
         months ended September 30, 2009 is comprised of the revenue impact of invoiced sales to new customers over at least the
         12 months preceding each month within the nine months ended September 30, 2009, along with the retention of the majority
         of the revenue stream resulting from customers existing at the beginning of the period, a price increase to our standard price
         list (before discounts applied) in August 2008, and the acquisition of TeacherWeb in June 2008, which contributed service
         revenue of $0.2 million and $1.9 million during the nine months ended September 30, 2008 and September 30, 2009,
         respectively, representing an increase of $1.7 million of service revenue.

                 Cost of Revenue. Cost of revenue for the nine months ended September 30, 2009 increased by $1.5 million, or
         117.3%, to $2.7 million from $1.3 million for the nine months ended September 30, 2008. This increase in cost of revenue
         was primarily attributable to a $1.2 million increase in engineering personnel costs resulting from increased headcount
         focusing on enhancing resources and management, along with annual salary increases and bonus payments.

                   Sales and Marketing Expense. Sales and marketing expense for the nine months ended September 30, 2009
         increased by $1.1 million, or 11.7%, to $10.6 million from $9.5 million for the nine months ended September 30, 2008. This
         increase was primarily attributable to a $0.6 million increase in personnel costs resulting from increased headcount, annual
         salary increases, bonus payments and increased commissions due to increased sales and $0.2 million in amortization expense
         related to TeacherWeb‘s customer relationship amortization.

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                  Content Development Expense. Content development expense for the nine months ended September 30, 2009
         increased by $1.1 million, or 72.9%, to $2.6 million from $1.5 million for the nine months ended September 30, 2008. This
         increase was primarily attributable to a $0.9 million increase in personnel costs related to increased headcount for the
         continued development of Study Island products, the launch of products in Canada and the development of content for our
         Northstar Learning product line, along with annual salary increases and bonus payments. Headcount for content
         development increased to 58 employees at September 30, 2009 from 47 employees at September 30, 2008.

                  General and Administrative Expense. General and administrative expense for the nine months ended
         September 30, 2009 increased by $2.4 million, or 52.4%, to $7.1 million from $4.6 million for the nine months ended
         September 30, 2008. This increase was primarily attributable to a $1.2 million increase in personnel costs, a $0.5 million
         increase related to costs associated with the preparation of the registration statement of which this prospectus is a part, a
         $0.2 million increase in expenses related to increased employee headcount and $0.3 million of increased depreciation
         expense associated with our increased capital expenditures.

                   Other Income (Expense). Other income (expense) totaled $2.5 million of net expense for the nine months ended
         September 30, 2009, which was a reduction of expense of $2.2 million, or 46.9%, compared to net expense of $4.6 million
         for the nine months ended September 30, 2008. The decrease was primarily due to reduced interest expense of $1.9 million
         during the period on our term loan, due to a combination of reduced outstanding debt, lower LIBOR rates and reduced
         applicable margin as a result of our reduced leverage ratio during the period. Additionally, we had reduced loss on our
         interest rate swap of $0.4 million during the period due to increases in the fair value of the interest rate swap in 2009
         compared to decreases in 2008.

                  Net Income. Net income for the nine months ended September 30, 2009 increased by $6.1 million, or 762.7%, to
         $6.9 million from $0.8 million for the nine months ended September 30, 2008. This increase in net income was due to the
         $10.4 million increase in service revenue and the $2.2 million reduction in other expense, net as noted above. This increase
         was partially offset by the $1.5 million increase in cost of revenue and $4.6 million increase in operating expenses as noted
         above.


         Comparison of Years Ended December 31, 2008 and December 31, 2007

                  Service Revenue. Service revenue for the year ended December 31, 2008 increased by $13.8 million, or 75.7%, to
         $32.1 million from $18.3 million for the year ended December 31, 2007. Subscription and training revenue is recognized
         over the term of the subscription, which is generally 12 months. Consequently, our revenue in any month is impacted by
         invoiced sales over at least the previous 12 months. In order to evaluate our revenue fluctuations, we utilize metrics,
         including invoiced sales over the last 12 months. See ―— Components of Service Revenue and Expense — Service
         Revenue‖. The increase in service revenue for the year ended December 31, 2008 is comprised of the revenue impact of
         invoiced sales to new customers over at least the 12 months preceding each month within the year ended December 31,
         2008, along with the retention of the majority of the revenue stream resulting from customers existing at the beginning of the
         year, a price increase to our standard price list (before discounts applied) in August 2008, and the acquisition of TeacherWeb
         in June 2008, which contributed an additional $0.7 million of service revenue during the year ended December 31, 2008.

                  Cost of Revenue. Cost of revenue for the year ended December 31, 2008 increased by $1.4 million, or 190.4%, to
         $2.2 million from $0.8 million for the year ended December 31, 2007. This increase in cost of revenue was primarily
         attributable to a $0.9 million increase in personnel costs resulting from an increase in engineering headcount from 9 at
         December 31, 2007 to 23 at December 31, 2008. In addition, we incurred $0.3 million of expense attributable to the
         acquisition of TeacherWeb and $0.3 million of expense related to facilities, network security, recruiting and depreciation.

                  Sales and Marketing Expense. Sales and marketing expense for the year ended December 31, 2008 increased by
         $5.5 million, or 72.0%, to $13.2 million from $7.7 million for the year ended December 31, 2007. This increase was
         primarily attributable to $4.4 million in increased personnel costs related to the expansion of the Study Island sales team,
         $0.4 million of marketing expense related to new product releases, $0.3 million for additional contract labor and a
         $0.2 million increase in customer relationship amortization


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         resulting from our acquisition of TeacherWeb in June 2008. Headcount for sales and marketing increased to 114 employees
         at December 31, 2008 from 88 employees at December 31, 2007.

                  Content Development Expense. Content development expense for the year ended December 31, 2008 increased by
         $1.0 million, or 79.3%, to $2.2 million from $1.2 million for the year ended December 31, 2007. This increase was primarily
         attributable to a $0.9 million increase in personnel costs. Headcount for content development increased to 44 employees at
         December 31, 2008 from 20 at December 31, 2007.

                  General and Administrative Expense. General and administrative expense for the year ended December 31, 2008
         increased by $1.6 million, or 32.6%, to $6.6 million from $5.0 million for the year ended December 31, 2007. This increase
         was primarily attributable to accounting expense and subscription fees to an online service associated with the
         implementation of a new financial system in January 2008, increased bank fees associated with our term loan and revolving
         credit facility, increased expense associated with mergers and acquisition activities, and increased rent expense due to our
         leasing additional office space in Dallas to support additional Dallas-based employees. Depreciation expense increased by
         $0.2 million from the year ended December 31, 2007 as compared to the year ended December 31, 2008.

                  Other Income (Expense). Interest income for the year ended December 31, 2008 decreased by $0.1 million, or
         28.0%, to $0.2 million from $0.3 million for the year ended December 31, 2007. This decrease was due to higher average
         cash balances during 2008 offset by lower prevailing interest rates during 2008. Interest expense for the year ended
         December 31, 2008 was $5.2 million, representing an increase of $4.3 million as compared to interest expense of
         $0.8 million for the year ended December 31, 2007. This higher interest expense was due to the full year effect of
         borrowings under the term loan that we entered into in November 2007. Other expense also increased for the year ended
         December 31, 2008 as compared to the year ended December 31, 2007, due to the derivative loss of $2.1 million in the year
         ended December 31, 2008, which reflects an increase of $1.9 million over as compared to a $0.2 million loss for the prior
         year. This loss was due to the fair value changes for our interest rate swap recorded in our statements of income.

                   Net Income. Net income decreased by $1.9 million, or 65.0%, to $1.0 million from $2.9 million for the year ended
         December 31, 2007. This decrease in net income was due to a $1.4 million increase in cost of revenue and an $8.1 million
         increase in operating expense as discussed above, an $4.3 million increase in interest expense associated with the full year
         effect of borrowings under the term loan we entered into in November 2007 and an increase in derivative losses of
         $1.9 million due to the fair value changes for our interest rate swap, which were offset in part by the $13.8 million increase
         in service revenue for the year ended December 31, 2008.


         Comparison of Years Ended December 31, 2007 and December 31, 2006

                  Service Revenue. Service revenue for the year ended December 31, 2007 increased by $8.2 million, or 81.3%, to
         $18.3 million from $10.1 million for the year ended December 31, 2006. Subscription and training revenue is recognized
         over the term of the subscription, which is generally 12 months. Consequently, our revenue in any month is impacted by
         invoiced sales over at least the previous 12 months. In order to evaluate our revenue fluctuations, we utilize metrics,
         including invoiced sales over the last 12 months. See ―— Components of Service Revenue and Expense — Service
         Revenue‖. The increase in service revenue for the year ended December 31, 2007 is comprised of the revenue impact of
         invoiced sales to new customers over at least the 12 months preceding each month within the year ended December 31,
         2007, along with the retention of the majority of the revenue stream resulting from customers existing at the beginning of the
         year and a price increase to our standard price list (before discounts applied) in August 2007.

                  Cost of Revenue. Cost of revenue for the year ended December 31, 2007 increased by $0.4 million, or 118.7%, to
         $0.8 million from $0.3 million for the year ended December 31, 2006. This increase in cost of revenue was primarily
         attributable to an increase in engineering personnel costs.

                  Sales and Marketing Expense. Sales and marketing expense for the year ended December 31, 2007 increased by
         $4.9 million, or 174.6%, to $7.7 million from $2.8 million for the year ended December 31, 2006. This increase was
         primarily attributable to a $2.7 million increase in personnel expense related to


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         expanding the Study Island sales team, a $0.5 million increase in marketing expense related to increased product releases
         and a $0.3 million increase in expense related to contract labor. Headcount for sales and marketing increased to
         88 employees at December 31, 2007 from 31 employees at December 31, 2006. Amortization cost specifically related to
         customer relationships increased by $1.3 million in connection with the Providence Equity Transactions.

                  Content Development Expense. Content development expense for the year ended December 31, 2007 increased by
         $0.5 million, or 69.4%, to $1.2 million from $0.7 million for the year ended December 31, 2007. This increase is primarily
         attributable to a $0.4 million increase in personnel expense. In addition, $0.2 million is attributable to increased amortization
         of our content intangible asset related to the purchase of Study Island, LP in January 2007 in connection with the Providence
         Equity Transactions.

                  General and Administrative Expense. General and administrative expense for the year ended December 31, 2007
         increased by $2.4 million, or 94.1%, to $5.0 million from $2.6 million for the year ended December 31, 2006. This increase
         was primarily attributable to a $1.3 million increase in personnel expense related to headcount which included hiring of our
         chief executive officer and chief financial officer and costs associated with bonus payments made to such personnel in
         connection with the Providence Equity Transactions, $0.2 million increase in rent expense due to the expansion of our Dallas
         office and additional increases related to increased telephone and internet expense to support additional employees,
         increased accounting expense in connection with entry into our term loan and revolving credit facility, and the
         implementation of a new financial system.

                  Other Income (Expense). Interest income for the year ended December 31, 2007 increased by $0.3 million, or
         1170.4%, to $0.3 million from $27,000 for the year ended December 31, 2006. This increase was due to maintaining higher
         average cash balances in 2007 as compared to 2006. Interest expense for the year ended December 31, 2007 was
         $0.8 million. We did not incur interest expense in 2006. This higher interest expense was due to borrowings under our term
         loan that we entered into in November 2007. We incurred $0.2 million of derivative losses in 2007 due to the fair value
         changes for the interest rate swap that we entered into in November 2007.

                  Net Income. Net income for the year ended December 31, 2007 decreased by $0.7 million, or 20.2%, to
         $2.9 million from $3.7 million for the year ended December 31, 2006. This decrease in net income was due to a $0.4 million
         increase in cost of revenue, a $7.8 million increase in operating expense as noted above, a $0.8 million increase in interest
         expense associated with the borrowings under our term loan, $0.2 million in derivative losses, which were offset in part by
         the $8.2 million increase in service revenue and interest income of $0.3 million for the year ended December 31, 2007.


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         Quarterly Information

                   The following tables set forth selected unaudited quarterly consolidated statements of income data for the seven
         most recent quarters. The information for each of these quarters has been prepared on the same basis as the audited
         consolidated financial statements included in this prospectus and, in the opinion of management, includes all adjustments
         necessary for the fair presentation of the results of operations for such periods. This data should be read in conjunction with
         the audited consolidated financial statements and the related notes included in this prospectus. These quarterly operating
         results are not necessarily indicative of our operating results for any future period.

                                                                                         Three Months Ended
                                       March 31,           June 30,          September 30,       December 31,       March 31,          June 30,          September 30,
                                         2008               2008                  2008                2008              2009            2009                 2009
                                                                             (In thousands, except share and per share data)


            Service revenue            $     6,844     $       7,156     $            8,319     $        9,749     $    10,539     $      10,888     $           11,258
            Cost of revenue                    312               391                    550                925             919               863                    941

              Gross profit                   6,532             6,765                  7,769              8,824           9,620            10,025                 10,317
            Operating expense
              Sales and marketing            3,356             2,839                  3,321              3,677           3,304             3,668                  3,658
              Content development              425               501                    570                666             836               752                    998
              General and
                administrative                896              1,414                  2,322              2,012           2,094             2,323                  2,642

            Total operating expense          4,677             4,754                  6,213              6,355           6,234             6,743                  7,298

            Income from operations           1,855             2,011                  1,556              2,469           3,386             3,282                  3,019
            Other income (expense)
              Interest expense              (1,556 )          (1,189 )               (1,228 )           (1,188 )          (740 )            (637 )                 (715 )
              Interest income                   90                70                     34                 53               8                 6                     30
              Derivative gain (loss)        (1,305 )             996                   (548 )           (1,262 )           (60 )             (81 )                 (274 )

            Total other income
              (expense)                     (2,771 )            (123 )               (1,742 )           (2,397 )          (792 )            (712 )                 (959 )

            Income (loss) before
              income taxes                    (916 )           1,888                   (186 )               72           2,594             2,570                  2,060
            (Provision) Benefit for
              income taxes                     (21 )             (21 )                   53                153             (58 )             (75 )                 (215 )

            Net (loss) income          $      (937 )   $       1,867     $             (133 )   $          225     $     2,536     $       2,495     $            1,845

            Net income (loss) per
              equity share
              attributable to
              members‘ equity
              Basic and diluted        $     (0.01 )   $        0.02     $             0.00     $         0.00     $      0.02     $        0.02     $             0.02
            Weighted average
              equity shares and
              equivalents
              outstanding
              Basic and diluted            109,545          109,545                 109,545           109,545          109,545          109,545                109,545
            Increase (decrease) in
              deferred revenue         $        13     $       1,714     $            7,157     $          907     $    (2,231 )   $       1,777     $           10,000


         Liquidity and Capital Resources

                   Our primary cash requirements include the payment of our operating expense, interest and principal payments on
         our debt, and capital expenditures. We also have used cash to make dividend payments and tax-related distributions to our
         equity holders. We may also incur unexpected costs and operating expenses related to any unforeseen disruptions to our
         servers, the loss of key personnel or changes in the credit markets and interest rates, which could increase our immediate
         cash requirements or otherwise impact our liquidity. We finance our operations primarily through cash flow from operations,
         which is typically the highest in the third and fourth quarters when our sales are highest and invoices are paid. Our cash flow
from operations is typically flat in the first and second quarters. Several factors outside of our control may impact our cash
flow. For example, we believe NCLB is likely to be reauthorized in 2010, and the terms of its extension,


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         reauthorization or new legislation that would replace it may materially impact the demand for our products. If new
         legislation lessens the importance of state-by-state testing and assessments, demand for our products may materially
         decrease, or if competitors can more easily enter our markets because of the establishment of national education standards,
         we may experience lower cash flows, both of which would affect our liquidity. In addition, if state and local budget cuts in
         education continue, our public school and school district customers may lack funding to buy our products which may result
         in fewer sales or require us to lower prices for our Study Island products, either of which would have a negative impact on
         our cash flow. See ―— Long-term Liquidity.‖

                   In November 2007, we entered into a six-year $70.0 million term loan and into a $10.0 million revolving credit
         facility. We used the proceeds of the term loan and cash on hand to make a make a dividend payment to the equity holders of
         Archipelago Learning Holdings, LLC in November 2007. We repaid $1.0 million in principal on our term loan during the
         nine months ended September 30, 2009. We repaid $0.7 million in principal on our term loan during the year ended
         December 31, 2008. We did not repay any principal on our term loan in 2007. See ―— Overview‖ above and ―— Credit
         Facility‖ below.

                   Our primary sources of liquidity are our cash and cash equivalent balances as well as availability under our
         revolving credit facility. At December 31, 2008, we had cash and cash equivalents of $13.1 million and $10.0 million of
         availability under our revolving credit facility. Our total indebtedness was $69.3 million at December 31, 2008. At
         September 30, 2009, our principal sources of liquidity were cash and cash equivalents of $17.1 million and $10.0 million of
         availability under our revolving credit facility. Our total indebtedness was $68.3 million at September 30, 2009. We believe
         that our consistent cash flow and our $10.0 million availability combined with our low capital expenditure costs will provide
         us with sufficient capital to continue to grow our business, but we will use a significant portion of our cash flow to pay
         interest on our outstanding debt, limiting the amount available for working capital, capital expenditures and other general
         corporate purposes. As we continue to expand our business, we may in the future require additional working capital for
         increased costs.


            Long-term Liquidity

                   At December 31, 2008, we had cash and cash equivalents of $13.1 million and $10.0 million of availability under
         our revolving credit facility, and at September 30, 2009, we had cash and cash equivalents of $17.1 million and
         $10.0 million of availability under our revolving credit facility. We anticipate that the funds generated by our operations, the
         funds available under our revolving credit facility and the net proceeds that we receive from this offering, will be sufficient
         to meet working capital requirements and to finance capital expenditures over the next several years. There can be no
         assurance, however, that cash resources will be available to us in an amount sufficient to enable us to service our
         indebtedness or to fund our other liquidity needs. Our ability to meet our debt service obligations and other capital
         requirements, including capital expenditures and acquisitions, will depend upon our future results of operations and our
         ability to obtain additional debt or equity capital and our ability to stay in compliance with our financial covenants, which, in
         turn, will be subject to general economic, financial, business, competitive, legislative, regulatory and other conditions, many
         of which are beyond our control. We may also need to obtain additional funds to finance acquisitions, which may be in the
         form of additional debt or equity. Although we believe we have sufficient liquidity under our revolving credit facility, as
         discussed above, under extreme market conditions there can be no assurance that such funds would be available or sufficient,
         and in such a case, we may not be able to successfully obtain additional financing on favorable terms, or at all.


            Cash Flow

            Cash Flow from Operating Activities

                  Net cash provided by operating activities was $13.4 million during the nine months ended September 30, 2009
         compared to $8.5 million during the nine months ended September 30, 2008. This $4.8 million increase was primarily due to
         an increase in net income of $6.1 million offset by a decrease in


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         cash flows from working capital of $1.1 million. The decrease in cash flows from working capital was primarily the result of
         changes in deferred revenues, accounts receivable and other assets.

                   Net cash provided by operating activities was $13.6 million for 2008 compared to $12.7 million in 2007. The
         $0.9 million increase was primarily due to changes in non-cash adjustments totaling $1.7 million and working capital
         improvements of $1.0 million partially offset by a decrease in net income of $1.9 million, The working capital improvements
         were primarily the result of a $2.2 million increase in deferred revenue, offset by a $1.3 million decrease in accrued
         liabilities.

                  Net cash provided by operating activities was $12.7 million for 2007 compared with $7.5 million in 2006. The
         $5.2 million increase was primarily due to changes in non-cash adjustments totaling $2.5 million and working capital
         improvements of $3.5 million partially offset by a decrease in net income of $0.7 million. The increase in working capital
         was primarily due to an increase in deferred revenue of $3.2 million, an increase in accrued liabilities of $1.1 million, offset
         by a decrease in accounts receivable of $0.4 million and a decrease in prepaid expenses and other expenses of $0.5 million.


            Cash Flow from Investing Activities

                  Net cash used for investing activities for the nine months ended September 30, 2009 was $5.9 million, including
         $1.0 million used for the purchase of property and equipment and an investment in and note issued to Edline, for an
         aggregate of $4.9 million.

                  Net cash used for investing activities for the year ended December 31, 2008 was $11.0 million and included
         $9.7 million in net cash used for the purchase of TeacherWeb and $1.3 million used for the purchase of property and
         equipment.

                 Net cash used for investing activities in 2007 was $85.3 million and included $84.8 million net cash used for the
         purchase of Study Island, LP in connection with the Providence Equity Transactions and $0.5 million used for the purchase
         of property and equipment.

                Net cash used for investing activities in 2006 was $0.2 million and included the purchase of property and
         equipment.


            Cash Flow from Financing Activities

                  Net cash used for financing activities in the nine months ended September 30, 2009 was $3.5 million due to
         $1.0 million in principal payments on our term loan, $1.3 million in tax distributions paid to our members and $1.2 million
         paid for costs related to this offering.

                  Net cash used for financing activities was $0.5 million for 2008 and was primarily due to $10.0 million of payments
         on our revolving credit facility and $0.7 million of payments on our term loan, offset in part by the receipt of $10.0 million
         in proceeds from our revolving credit facility and $0.2 million in refunds for debt financing costs incurred in the year ended
         December 31, 2007 in connection with the Providence Equity Transactions.

                  Net cash provided by financing activities for 2007 was $82.2 million and was primarily due to the receipt of
         $89.5 million in proceeds from the issuance of equity and the receipt of $70.0 million in proceeds from the incurrence of
         debt under our term loan in connection with the Providence Equity Transactions. These proceeds were offset in part by
         $74.8 million in distributions to our equityholders, $1.7 million in debt financing costs and $0.8 million in cash distributions
         to the predecessor owners.

                  Net cash used for financing activities was $6.4 million for 2006 due to the $6.4 million of cash distributions made to
         the predecessor owners.

                  In October 2009, Archipelago Learning Holdings, LLC made a special distribution of $8.0 million to its equity
         holders representing a return on such holders‘ investment, which was paid in accordance with the Archipelago Learning
         Holdings, LLC Agreement. In addition, Archipelago Learning Holdings, LLC intends to make additional distributions of
         approximately $1.6 million to its equity holders to enable them to meet
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         certain tax obligations associated with the sale of TeacherWeb and approximately $0.9 million to its equity holders to enable
         them to meet their other estimated tax obligations for the period from January 1, 2009 to the date of the Corporate
         Reorganization, which will be based on Archipelago Learning Holdings, LLC‘s estimated net taxable income from
         January 1, 2009 to the date of the Corporate Reorganization. Investors in this offering will not receive these distributions.


         Credit Facility

                   In November 2007, as part of the Providence Equity Transactions, we entered into an $80.0 million credit facility
         with General Electric Capital Corporation, as agent, composed of a $70.0 million term loan and a $10.0 million revolving
         credit facility, which expires in November 2013. The proceeds of the term loan and $4.9 million in cash were used to pay a
         distribution of $73.2 million to holders of Class A shares of Archipelago Learning Holdings, LLC and debt financing costs
         of $1.7 million. The term loan bears interest at rates based upon either a base rate or LIBOR rate plus an applicable margin
         (3.25% as of September 30, 2009 and December 31, 2008 and 4.00% as of December 31, 2007, in each case for a
         LIBOR-based term loan) determined based on our leverage ratio. Amounts under the revolving credit facility can be
         borrowed and repaid, from time to time, at our option, subject to the pro forma compliance with certain financial covenants.
         In 2008, we received a refund of a portion of our debt financing costs in the amount of $0.2 million.

                   In May 2009 the credit agreement governing the term loan and the revolving credit facility was amended to permit
         the creation of AL Midco, LLC, or AL Midco, a new wholly owned subsidiary of Archipelago Learning Holdings, LLC,
         which assumed all of Archipelago Learning Holdings, LLC‘s interests in Archipelago Learning, LLC. AL Midco, became a
         guarantor under the credit agreement and Archipelago Learning Holdings, LLC was released as a guarantor. In November
         2009, the credit agreement was further amended to permit the sale of TeacherWeb. This amendment further modified certain
         terms of the credit agreement, including adding a LIBOR floor of 1.25% to the calculation of our interest rates and reducing
         the letter of credit sublimit available to us under the credit agreement from $2.0 million to $1.0 million. In addition, we
         repaid an aggregate amount of $6.5 million upon the consummation of the sale of TeacherWeb, which we completed in
         November 2009. As a result of the sale, TeacherWeb, Inc. was released as a guarantor.

                   The obligations under the credit facility are guaranteed by AL Midco. The credit facility is secured on a
         first-priority basis by security interests (subject to permitted liens) in substantially all tangible and intangible assets, subject
         to certain exceptions, owned by Archipelago Learning, LLC and AL Midco, including pledges of the voting stock of the
         subsidiaries of Archipelago Learning, LLC and AL Midco. In addition, any future domestic subsidiaries of Archipelago
         Learning, LLC and AL Midco will be required (subject to certain exceptions) to guarantee the credit facility and grant liens
         on substantially all of its assets to secure such guarantee.

                   Our credit facility requires us to maintain certain financial ratios, including a leverage ratio (based on the ratio of
         consolidated indebtedness, net of cash and cash equivalents subject to control agreements, to consolidated EBITDA, defined
         in the credit facility as earnings before interest, taxes, depreciation, derivative losses, changes in deferred revenue, stock
         based compensation, certain investments and permitted acquisition expenses, certain permitted payments to Providence
         Equity Partners, unusual non-recurring charges, certain agency fees to the administrative agent and adjustments related to the
         acquisition of TeacherWeb, or Adjusted EBITDA), an interest coverage ratio (based on the ratio of Adjusted EBITDA to
         consolidated interest expense, as defined in the credit facility) and a fixed charge coverage ratio (based on the ratio of
         Adjusted EBITDA to fixed charges, as defined in the credit facility). Based on the formulations set forth in the credit facility,
         as of September 30, 2009, we were required to maintain a maximum leverage ratio of 4.50 to 1.00, a minimum interest
         coverage ratio of 2.10 to 1.00 and a minimum fixed charge coverage ratio of 1.40 to 1.00. As of September 30, 2009, our
         leverage ratio was 2.16 to 1.00, our interest coverage ratio was 8.62 to 1.00 and our fixed charge coverage ratio was 4.91 to
         1.00. The financial ratios we are required to maintain become more restrictive over time.

                  Our credit facility also contains certain affirmative and restrictive covenants that, among other things, provide
         limitations on the incurrence of additional indebtedness, liens on property, sale and leaseback


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         transactions, investments, loans and advances, merger or consolidation, asset sales, acquisitions, dividends, transactions with
         affiliates, prepayments of any other indebtedness, modifications of our organizational documents and restrictions on our
         subsidiaries. The credit facility contains events of default that are customary for similar facilities and transactions, including
         a cross-default provision with respect to any other indebtedness and an event of default that would be triggered by a change
         of control, as defined in the credit facility, and which is not expected to be triggered by this offering. As of September 30,
         2009, December 31, 2008 and 2007, we were in compliance with all covenants.

                  We have the right to optionally prepay our borrowings under the term loan or the revolving credit facility, subject to
         the procedures set forth in the credit facility. We may be required to make prepayments on our borrowings under the term
         loan or the revolving credit facility if we receive proceeds as a result of certain asset sales, debt issuances, events of loss or if
         we have excess cash flow (as defined in the credit facility).

                  As of September 30, 2009, $68.3 million of borrowings were outstanding under the term loan and $0 was
         outstanding under the revolving credit facility. As of December 31, 2008, $69.3 million of borrowings were outstanding
         under the term loan and $0 was outstanding under the revolving credit facility. For the nine months ended September 30,
         2009 and for year ended December 31, 2008, the weighted average interest rate under the term loan was 3.71% and 7.03%,
         respectively, before giving effect to the interest rate swap. The rate on our interest rate swap is the difference between our
         fixed rate of 4.035% and the floating rate of three-month LIBOR.


         Contractual Obligations

                    As of December 31, 2008, our contractual obligations and other commitments were as follows:


                                                                                     Payments due by period
                                                    Total         Less than 1 year          1-3 years       3-5 years     More than 5 years
                                                                                         (In thousands)


         Long-term debt obligations(1)           $ 69,300        $             700        $    2,100       $ 66,500                      —
         Operating lease obligations             $ 1,467         $             462        $    1,005             —                       —


           (1) Interest payments based on variable interest rates on our long-term debt obligations are excluded from our contractual
               obligations.


         Off-Balance Sheet Arrangements

                    We do not have any off-balance sheet arrangements.

         Qualitative and Quantitative Disclosures about Market Risk

            Interest Rate Risk

                   We are exposed to interest rate risk in connection with our term loan and any borrowings under our revolving credit
         facility. Amounts borrowed under our term loan and our revolving credit facility bear interest at rates based upon a base rate
         or LIBOR, plus an applicable margin. To manage our interest rate exposure, and as a requirement under our term loan, we
         entered into an interest rate swap agreement with a notional amount totaling $45.5 million, of which $40.5 million remained
         in effect as of September 30, 2009. The notional amount of the interest rate swap will decrease in periodic amounts to a
         notional amount of $30.5 million at the December 2010 termination date. We swapped a floating rate payment based on
         three month LIBOR for a fixed rate of 4.035% in order to minimize the variability in expected future cash flow due to
         interest rate movements on our LIBOR-based variable rate debt. Based on the amount outstanding under our term loan at
         September 30, 2009, we believe that a 1% increase in the applicable interest rate, before giving effect to the interest rate
         swap, would cause an increase in our interest expense of approximately $0.7 million on an annual basis. Because the
         short-term LIBOR, which we use to determine our term loan interest rate, is less than 1%, it cannot decrease by 1%, and any
         decrease would result in a decrease in our


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         interest expense. For further information on our interest rate swap agreement, see ―— Components of Service Revenue and
         Expense — Other Income (Expense)‖ above and note 2 to our audited consolidated financial statements included elsewhere
         in this prospectus.

                 In addition, our interest income is sensitive to changes in the general level of U.S. interest rates. We had cash and
         cash equivalents of $17.1 million and $13.1 million as of September 30, 2009 and December 31, 2008, respectively. Our
         cash and cash equivalents are maintained primarily in short term, treasury-backed accounts.

         Effects of Inflation

                 We believe that inflation has not had a material impact on our results of operations in the periods presented. We
         cannot assure you that future inflation will not affect our operating expense in future periods.

         Recently Issued Accounting Standards

                  In December 2007, the Financial Accounting Standards Board, or FASB, amended Accounting Standards
         Codification, or ASC, Topic 805, Business Combinations , or FASB ASC 805 (formerly, Statement No. 141(R), Business
         Combinations ), which establishes principles and requirements for how an acquirer recognizes and measures in its financial
         statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree, and the
         goodwill acquired in an acquisition. FASB ASC 805 also establishes disclosure requirements to enable the evaluation of the
         nature and financial effects of the business combination. This amended topic is effective for acquisitions in fiscal years
         beginning after December 15, 2008, and early adoption is prohibited. We will apply the provisions of this topic to any future
         acquisitions.

                 In February 2008, the FASB issued an amendment to FASB ASC Topic 820, Fair Value Measurements and
         Disclosures , or FASB ASC 820, (formerly FASB Staff Position, or FSP, FAS No. 157-2, Effective Date for FASB Statement
         No. 157 ). This amendment permitted the delayed application of FASB ASC 820 for all nonrecurring fair value
         measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. We
         adopted this portion of the statement on February 1, 2009, and the adoption did not have a material impact on our
         consolidated financial condition or results of operations or cash flows.

                  In March 2008, the FASB issued an amendment to FASB ASC Topic 815, Derivatives and Hedging , or FASB
         ASC 815, (formerly FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities — an
         amendment of FASB Statement 133 ). This amendment requires enhanced disclosures about a company‘s derivative and
         hedging activities. These enhanced disclosures will discuss (a) how and why a company uses derivative instruments, (b) how
         derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged
         items affect a company‘s financial position, results of operations, and cash flows. This amendment is effective for fiscal
         years beginning on or after November 15, 2008, with earlier adoption allowed. The implementation of this standard did not
         have a material effect on our consolidated financial condition or results of operations or cash flows.

                   In April 2008, the FASB issued an amendment to FASB ASC Topic 350, Intangibles — Goodwill and Other , or
         FASB ASC 350 (formerly FSP FASB No. 142-3, Determination of the Useful Life of Intangible Assets ). This amendment
         modifies the factors that should be considered in developing renewal or extension assumptions used to determine the useful
         life of a recognized intangible asset under FASB ASC 350. This amendment is effective for fiscal years beginning after
         December 15, 2008. The implementation of this topic did not have a material effect on the our consolidated financial
         condition or results of operations or cash flows.

                  In April 2009, the FASB issued an amendment to FASB ASC Topic 825, Financial Instruments , or FASB
         ASC 825 (formerly FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ).
         This amendment requires disclosures about fair value of financial instruments in interim as well as in annual financial
         statements. This amendment also requires those disclosures in all interim financial statements. This amendment was
         effective for interim and annual periods ending after June 15, 2009.


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         The implementation of this amendment did not have a material effect on the Company‘s consolidated financial condition or
         results of operations or cash flows.

                  In May 2009, the FASB issued an amendment to FASB ASC Topic 855, Subsequent Events , or FASB ASC 855
         (formerly FASB Statement No. 165, Subsequent Events ). FASB ASC 855 provides general standards for the accounting and
         reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. The topic
         requires the issuer to recognize the effects, if material, of subsequent events in the financial statements if the subsequent
         event provides additional evidence about conditions that existed as of the balance sheet date. The issuer must also disclose
         the date through which subsequent events have been evaluated and the nature of any nonrecognized subsequent events.
         Nonrecognized subsequent events include events that provide evidence about conditions that did not exist as of the balance
         sheet date, but which are of such a nature that they must be disclosed to keep the financial statements from being misleading.
         The topic is effective for interim and annual periods ending after June 15, 2009. This topic did not have a material impact on
         our financial position, results of operations or cash flows.

                  In June 2009, the FASB issued FASB ASC Topic 105, Generally Accepted Accounting Principles , or FASB ASC
         105 (formerly FASB Statement No. 168, The “FASB Accounting Standards Codification” and the Hierarchy of Generally
         Accepted Accounting Principles — a Replacement of FASB Statement No. 162 ). FASB ASC 105 provides for the FASB
         Accounting Standards Codification (the ―Codification‖) to become the single official source of authoritative,
         nongovernmental GAAP. FASB ASC 105 is effective for interim and annual periods ending after September 15, 2009. This
         topic had no impact on our financial position, results of operations or cash flows.


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                                                     INDUSTRY AND MARKET DATA

                   This prospectus includes industry and market data that we obtained from periodic industry publications, third-party
         studies and surveys, filings of public companies in our industry and internal company surveys. These sources include the
         National Center for Education Statistics, the World Economic Forum, the Nielsen Company, Outsell, Inc., U.S. Bureau of
         Labor Statistics, Consortium for School Networking and Market Data Retrieval. Industry publications and surveys generally
         state that the information contained therein has been obtained from sources believed to be reliable. Although we believe the
         industry and market data to be reliable as of the date of this prospectus, this information could prove inaccurate. Industry and
         market data could be wrong because of the method by which sources obtained their data and because information cannot
         always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary
         nature of the data gathering process and other limitations and uncertainties. In addition, we do not know all of the
         assumptions regarding general economic conditions or growth that were used in preparing the forecasts from sources cited
         herein.


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                                                                   BUSINESS


         Our Company

                  Archipelago Learning is a leading subscription-based online education company. We provide standards-based
         instruction, practice, assessments and productivity tools that improve the performance of educators and students via
         proprietary web-based platforms. Study Island, our core product line, helps students in Kindergarten through 12th grade, or
         K-12, master grade level academic standards in a fun and engaging manner. As of September 30, 2009, Study Island
         products were utilized by approximately 8.9 million students in 21,000 schools in 50 states. In the 2008-2009 school year,
         students answered over 2.8 billion of our practice questions. We recently began offering online postsecondary programs
         through our Northstar Learning product line.

                   We capitalize on two significant trends in the education market: (1) an increased focus on higher academic
         standards and educator accountability for student achievement, which has led to periodic assessment in the classroom to
         gauge student learning and inform instruction, also known as formative assessment, and (2) the increased availability and
         utilization of web-based technologies to enhance and supplement teacher instruction, engage today‘s technology-savvy
         learners and improve student outcomes.

                  Despite spending an estimated $630 billion in the 2007-2008 school year on K-12 education — more than any other
         developed country — the United States ranks 25th in the world in the quality of its primary education system, according to
         the World Economic Forum. In response to this gap, policymakers and parents are paying greater attention to the
         effectiveness of U.S. public schools, demanding higher educational standards and accountability from teachers,
         administrators and school districts. In addition, increased usage and acceptance of online technology is changing how
         educational content, such as lessons, homework and assessments, is delivered and utilized. These new educational tools and
         technologies help improve the learning experience of students by augmenting the teaching techniques of skilled teachers and
         supporting and strengthening the skills of inexperienced or less effective instructors. An estimated $11.5 billion was spent on
         the K-12 instructional materials market in 2008, according to Outsell. In 2009, Outsell projects that spending on instructional
         content will grow by about 2-4%, and spending on assessment, tutoring and test preparation services will grow by about
         4.8-5.2%. Between 2010 and 2012 the overall market is expected to grow at an annual compounded growth rate of 5.5%
         according to Outsell.

                  Our Study Island products are designed to improve educational results and meet accountability criteria, leveraging
         the widespread adoption of online technologies. Study Island combines rigorous content that is highly customized to specific
         standards in reading, math, science and social studies with interactive features that reinforce and reward student
         accomplishments. We believe faculty and school administrators purchase Study Island because it is an innovative, low-cost
         and high-impact solution for enhancing teacher effectiveness, promoting student learning of core subject concepts and skills
         and preparing students for state standardized tests. By enabling teachers to track student performance in real-time, Study
         Island facilitates differentiated instruction to address learning gaps for individual students, while allowing administrators to
         monitor student progress and measure teacher effectiveness. Study Island was recognized as one of the top 100 educational
         products for the 2008-2009 school year by District Administration magazine‘s reader‘s choice survey.

                   Our flexible web-based distribution model and in-house content development capabilities allow us to continually
         update and improve our products, distribute our products in a cost-efficient manner, and price our products affordably. Over
         the last nine years we have created a digital library of approximately 324,000 proprietary questions and explanations, a
         simple but elegant content management system and HTML authoring system, and a built-in ability to dynamically generate
         additional questions.

                  We have significantly grown the number of students and schools served by our products since our inception in
         2000. From 2000 to 2006, we concentrated our efforts on developing our Study Island products, increasing from 27 products
         to 429 products during that period. In 2007, we began focusing on managing our growth and operations more efficiently,
         particularly with the hiring of our current management team. In addition, we have developed a sophisticated sales and
         marketing force that has been successful in growing our


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         sales and customer base. We increased the number of school customers and registered student users of our Study Island
         products, from approximately 7,800 and 3.0 million, respectively, in 2006, to approximately 21,000 and 8.9 million,
         respectively, in September 2009.

                  We intend to utilize our Study Island content development and assessment expertise to target various instruction,
         assessment and exam preparation areas within the postsecondary education market through our Northstar Learning product
         line, which provides instruction, practice, assessment and test preparation for targeted high enrollment postsecondary course
         areas.


         Our Markets

                  The U.S. educational system, consisting of K-12 and postsecondary education, collectively includes approximately
         74 million students and approximately $1 trillion in educational expenditures according to NCES.


            The K-12 Education Market

                  The U.S. K-12 education market consists of approximately 55 million students in more than 118,000 schools,
         according to MDR. The U.S. K-12 school system has over 94,000 public schools in over 15,200 school districts and county
         and regional centers and more than 24,000 private and Catholic schools, according to MDR.


            Key Dynamics in the K-12 Education Market

                    A number of key dynamics have impacted the K-12 education market in recent years:

                  Increased Accountability. Despite spending an estimated $630 billion during the 2007-2008 school year on K-12
         education — more than any other developed country — the United States ranks 25th in the world in the quality of its
         primary education system, according to a 2008-2009 report by the World Economic Forum, which describes this as a
         ―competitive disadvantage.‖ American students are slipping further behind their foreign peers in international assessments,
         and fewer are showing an interest in the science, technology, engineering and math fields that are vital to innovation and
         entrepreneurial vigor. Within the United States, there exists a growing disparity in the academic performance of students in
         public schools in affluent communities compared to that of students in poorer neighborhoods. As a result, policymakers and
         parents have paid greater attention to the effectiveness of U.S. public schools, demanding higher educational standards and
         accountability from teachers, administrators and school districts. States publish accountability reports that show each
         school‘s progress and ability to meet proficiency standards, and these results are often reported by local press outlets. This
         increased visibility into school performance has led to increased parent and policymaker pressure on schools and teachers,
         including at the presidential level. President Obama‘s administration has launched the $4.35 billion ―Race to the Top‖ fund
         to highlight and replicate innovative education strategies as part of the administration‘s highly publicized efforts to reform
         education.

                   Legislative Developments. In 2001, Congress passed the reauthorization of the Elementary and Secondary
         Education Act, commonly referred to as No Child Left Behind, or NCLB. NCLB requires states receiving federal funding
         for education to establish high, state-wide, academic standards in reading, mathematics and science for students in grades 3
         through 8 and in high school and to assess students‘ proficiency in meeting these standards annually. NCLB requires states
         to set incremental milestones for all students to show yearly proficiency improvements, with the goal that all students
         perform at grade-level proficiency by 2014. As states implemented new, higher academic standards and assessments in
         response to NCLB, it became clear that after the first two years of implementation, many schools, particularly those in large,
         urban, poorer communities were not meeting NCLB‘s Adequate Yearly Progress, or AYP, milestones. As a result, educators
         began exploring instructional tools to help students master academic standards and improve performance on accountability
         assessments. This has driven demand for standards-based content and both formative and summative, or end-of-year,
         assessment products. The Elementary and Secondary Education Act initially was scheduled for reauthorization in October
         2008, but was extended in order to allow the new U.S. presidential administration to impact the direction of any future
         reauthorization. We believe NCLB will


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         be considered for reauthorization in 2010. More recently, in early 2009, Congress passed the American Recovery and
         Reinvestment Act, better known as the stimulus act, which provides more than $64 billion of federal funds for the
         Department of Education, with a phased roll-out of such funds to states between April 2009 and the spring of 2010. In order
         to receive these education funds, states must satisfy certain conditions, which are expected to correspond with the basic
         tenets of NCLB reauthorization. These conditions include assurances that states will strive to meet more rigorous educational
         standards, improve underperforming schools, lower high school dropout rates and ensure student readiness for success in
         college and in the workforce.

                  Increased Access to Computers and the Internet. Today‘s students use computer technology in and out of the
         classroom, and many students have access to internet-enabled computers at school and home. Increased usage and
         acceptance of online technology is changing how educational content is delivered and utilized by teachers and students.
         According to the Consortium for School Networking, 98% of rural and wealthy schools have high-speed internet access in
         classrooms, as do 93% of classrooms in poor urban school districts. More than 80% of Americans now have a computer in
         their homes and, of those, almost 92% have internet access, according to a study on home internet access from The Nielsen
         Company. In addition, NCLB mandates that schools improve school-to-home or school-to-parent communication and
         involvement in their child‘s education. As a result, schools are increasingly looking for integrated website portals and
         productivity tools to more easily comply with this mandate, more effectively use student achievement data to keep parents
         informed and more readily guide parents‘ ability to help their children improve their skills and proficiency.

            The Market for Supplemental Learning Materials

                  Schools use a variety of supplemental materials to augment their core curriculum, provide remediation and
         enrichment and offer additional learning opportunities in the classroom and at home. These materials include traditional
         print-based materials, such as textbooks, workbooks, problem sheets and printed reading materials. With increased
         availability and use of computers in the classroom and at home, vendors have developed software and, increasingly, online
         programs and content as an alternative to print-based materials.

                  An estimated $11.5 billion was spent on the K-12 instructional materials market in 2008, according to Outsell. In
         2009, Outsell projects that spending on instructional content will grow by about 2-4%, and spending on assessment, tutoring
         and test preparation services will grow by about 4.8-5.2%. Between 2010 and 2012 the overall market is expected to grow at
         an annual compounded growth rate of 5.5% according to Outsell.

                  Increased accountability, combined with the need for districts and states to meet the requirements of NCLB and
         other legislative developments, has resulted in a significant decrease in spending on traditional print-based and
         software-based supplemental materials and a growing market for innovative online programs that offer functionality and
         real-time assessment and reporting not provided by traditional solutions.

                  Limitations of Traditional Print Products. Educators increasingly are recognizing the limitations of traditional
         print-based textbook and workbook learning materials, which are static, cannot be quickly corrected for errors or updated to
         address evolving standards, cannot provide individualized feedback to students, do not provide teachers with a method to
         quickly track student progress and become ragged and obsolete with time and usage. Such traditional print-based learning
         materials are costly and need to be replaced on a regular basis due to the publication of newer editions or, in the case of
         workbooks, use by students. These materials also do not provide administrators with easily obtainable metrics to measure the
         performance of classes, teachers or individual grades in their schools on a regular basis.

                  Limitations of Software Products. As a result of the recognition of the limitations of print-based products and the
         perceived advantages of computer-based materials, educators began to utilize software-based supplemental materials, such
         as CD-ROMs. However, these materials also have significant limitations. Software products are designed to run on specific
         operating systems with specific memory requirements, and require installation on individual computers or costly and
         time-consuming installations on centralized computer systems. Software products place increased demands on schools‘
         limited IT personnel, systems and


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         budgets. Access to these products is typically limited to the computers in a specific classroom or computer lab and cannot be
         used at home unless schools provide a student with a disk containing the software and the student has access to a computer
         with the appropriate operating system or ability to play a CD-ROM. Any updates require the publication, receipt, distribution
         and installation of new software or CD-ROMs, which could take months and require the school to purchase new versions. In
         addition, software-based products are typically unable to provide real-time feedback about student performance to teachers
         or educators.

                  Advantages of Online Learning Solutions. Online products can provide educators with real-time feedback on
         student progress, allowing for tailored instruction based on individual student or classroom needs, and can generate
         school-wide reports to administrators. Online products also are easily, automatically and frequently updated with new or
         more current content, additional features and enhancements and provide students with instant feedback, positive
         reinforcement and remediation when proficiency levels are not met. Also, unlike software- or CD-ROM-based learning
         materials, web-based products require no software to be installed in school or home computers and can be accessed
         anywhere the internet is available. Web-based products can be offered at lower prices as they do not require expenditures for
         publishing, paper or electronic media, shipping or warehousing.


         Our Competitive Strengths

                    We believe the following are our key competitive strengths:

                  Customized, Standards-Based Content. Study Island offers online, standards-based instruction, practice and
         assessments for K-12 built from applicable standards in all 50 states, as well as Washington, DC. We believe this deep
         customization is attractive to educators, providing them with a resource that meets their specific state and grade-level
         teaching needs in a variety of subjects. We offer over 1,190 grade level Study Island products in math, reading/language arts,
         writing, science and social studies. In addition, Northstar Learning offers instruction, practice, assessments and test
         preparation for the GED and allied health licensure exams, as well as developmental studies in college readiness
         English/language arts and mathematics.

                  Real-time Student Tracking, Built-in Remediation and Enrichment. We provide real-time reporting on student
         achievement, allowing educators to quickly identify learning gaps and provide targeted instruction and practice. Study Island
         also provides students with immediate feedback and explanations and, when required, remediation content designed to build
         foundational skills in order to accelerate students to grade-level proficiency. In addition, our products provide professional
         development materials that provide best-practice techniques for teachers to help students grasp key concepts and skills.

                   Engaging, Fun and Easy to Use for Students. Our products utilize a simple, graphical user interface that is
         intuitive and easy to use. In addition, our Study Island products incorporate games and rewards in order to make learning fun
         and engaging for students. By engaging students and providing them with the tools they need to succeed, we enable them to
         take control of their own learning, boost their confidence and keep them interested in using our products, while creating a
         culture of academic success.

                   Accessible, Dynamic Web-based Platform. Our products are delivered entirely online so they can be used by
         teachers and students on computers wherever internet access is available, such as classrooms, computer labs, media centers,
         school libraries, public libraries or at home. Our programs are compatible with existing school and school district enterprise
         systems and require no additional software, no installation or maintenance and no extensive implementation or training.
         Moreover, unlike traditional workbooks or software products, our Study Island and Northstar Learning content is easily and
         quickly updated whenever content or functionality enhancements are introduced or products are modified due to changes in
         state standards.

                  High Impact, Low Cost Solution. Study Island offers a comprehensive online educational solution on a hosted
         platform and provides high quality content, assessment and reporting for core subjects in a wide range of grade levels. This
         eliminates the need for schools to have multiple vendors or systems, thereby simplifying purchasing, training and
         implementation. At an average annual price per student per subject of $3, or $10 per student for all subjects, Study Island
         products are significantly less expensive than competing traditional print, software and online alternatives provided by large
         education publishers. Northstar Learning


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         products are priced in the $10 to $45 range and are also substantially less expensive than traditional textbook and software
         products currently purchased by students at community colleges, technical colleges, proprietary or for-profit colleges.

                  Management Team with Strong Education Industry Expertise. Members of our senior management team have
         extensive experience in the education industry and in serving the academic community. Our Chief Executive Officer Tim
         McEwen, who has approximately 34 years of experience in the industry, and our Chief Financial Officer James Walburg,
         who has 27 years of public company accounting and finance experience, both joined us in 2007. Our Chief Technology
         Officer Ray Lowrey, who has approximately 14 years of experience in the education industry, joined us in 2008. Under their
         leadership, our business has grown significantly and the number of school customers and registered student users of our
         Study Island products have increased from approximately 7,800 and 3.0 million, respectively, in 2006, to approximately
         21,000 and 8.9 million, respectively, in September 2009.


         Key Attributes of Business Model

                    We believe the following are the key attributes of our business model:

                  High Revenue Visibility and Strong Cash Flow Generation. We believe we have an attractive business model
         characterized by a visible recurring revenue stream and high profit margins. Our subscription-based revenue model and high
         recurring revenue provide strong earnings visibility. Our operations are designed to achieve and maintain attractive profit
         margins through our highly scalable 100% online delivery platform, low research and development requirements and viral
         marketing strategy. In addition, we believe our low capital expenditure requirements and up-front subscription payments by
         customers generate strong cash flow and high returns on invested capital.

                  Scalability and Flexibility. We continue to scale our business by increasing our product offerings, our sales and
         the number of students, teachers and schools using our products without incurring significant incremental expense. Our
         content development processes allow us to quickly and inexpensively update or create products and we can easily add these
         new products as well as new users through our single online delivery platform. Our flexible sales model incorporates
         in-house web optimization, direct mail and email marketing, which allows us to incrementally expand our sales and
         marketing efforts at a relatively low cost. In addition, our centralized, online delivery model is more cost-effective for our
         customers relative to traditional licensed and installed software solutions and traditional textbook and workbook publishers.

                  Powerful, Demand-Driven Sales and Marketing. Our Study Island products are often introduced into the
         classroom by principals or teachers, rather than mandated by district-level administrators. Approximately 58% to 78% of
         surveyed customers of Study Island reported that they discovered Study Island through word-of-mouth endorsements from
         other educators, according to annual independent Market Measurement surveys of 500 Study Island customers conducted
         since 2006. In addition to this viral demand for our products and services, we have a 124 member team of specialized sales
         and marketing professionals who are experienced in generating new sales of online educational products. We believe that
         our focus on the classroom and site-level sales results in greater customer loyalty, as evidenced by growing revenue from our
         existing customer base. In addition, the price points for our Study Island products are set at levels that typically fall within a
         school principal‘s discretionary budget or can be funded by individual teachers or through parent fundraising efforts. Once
         teachers and principals in one school become dedicated customers, we believe their recommendations often lead to
         additional sales within the school and other schools within the district. Over time, these site-based customer advocates are
         instrumental in helping us gain access to district administrators and achieve district-wide purchases.


         Our Growth Strategy

                 Our goal is to be the leading provider of subscription-based online education tools across the K-12 and
         postsecondary education markets through the following strategies:

                 Expand the Number of Schools Using Our Study Island Products. As of September 30, 2009, our Study Island
         products were used in approximately 21,000 schools throughout all 50 states and Washington,


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         DC, representing approximately 17.6% of the over 94,000 public and 24,000 private and Catholic K-12 schools in the United
         States. We believe that there is a significant opportunity to expand the number of schools that use Study Island. For example,
         only approximately 10% of our service revenue in 2008 was derived from sales of our Study Island products to high schools.
         We believe the Obama administration‘s focus on lowering the high school drop-out rate and improving high school graduate
         college and job readiness will drive increased demand for our high school products. Accordingly, we believe high schools
         provide us with a significant market opportunity. We also continue to expand our sales organization in specific states,
         targeting our direct mail and e-marketing efforts to educators in schools that do not use Study Island, encouraging a ―viral‖
         marketing model through the use of customer references and referrals, providing free product trials and optimizing the
         appearance of Study Island in key-word searches on leading web search engines. In addition, as we deepen our school
         penetration, we increasingly are focused on selling Study Island at the district level.

                  Increase Revenue per School. In many schools that we serve, we have the opportunity to sell additional core grade
         level and subject area products, as well as new products, such as our benchmark assessments and graphic novel reading
         intervention, to teachers who already subscribe to one or more of our products. Our inside sales team specifically targets our
         existing customer base to sell add-on products. As we enhance our products with new features and functionality that increase
         the value of Study Island to our customers, we believe we will be able to price these enhancements accordingly. In addition,
         the increased complexity of high school subject matter and related assessment standards allow us to price high school
         products higher than those for the elementary and middle school markets, and high school enrollments are usually larger,
         resulting in higher average revenue from invoiced sales. We intend to leverage our domain expertise in instruction, practice
         and assessment to introduce new high school oriented products, including reading and math remediation products and core
         subject end of course and exit exam preparation, advanced placement exam preparation, PSAT, SAT, ACT and other test
         preparation, and high school courses for credit and credit recovery.

                  Develop New Products and Enhance our Online Platform. We continually develop new Study Island products, as
         well as new features and functionality for our online platform, to address student needs and teacher requests. These products
         also provide additional revenue opportunities. For example, we recently introduced state-specific benchmark assessment
         products to enable teachers to predict student performance and provide diagnostic information to guide instruction, as well as
         a graphic novel reading intervention product that is designed to remediate students who are significantly below grade-level
         reading expectations. We plan to introduce a new version of our Study Island online platform in January 2010, which will
         include a custom assessment builder, lesson plans and lessons, video content, special needs support (including expanded
         text-to-speech functionality), a writing utility, digital locker, new and more sophisticated games, and embedded professional
         development for teachers.

                  Expand Into New Related Markets. We believe there is a significant opportunity to sell our products and services
         in the postsecondary market and in new geographic and end markets.

                    •     Launched in 2009, Northstar Learning targets the postsecondary market utilizing our content development,
                          instruction, exam preparation and assessment expertise. Currently, Northstar Learning has products in
                          developmental studies for the approximately $2.5 billion college remedial studies market and in vocational
                          education and licensure exam preparation in the healthcare occupational field. Our Northstar Learning
                          products also include GED exam preparation products, and we are planning to introduce new PRAXIS
                          teacher certification preparation products in the fourth quarter of 2009 and in 2010. We intend to develop
                          additional Northstar Learning products to address other technical career certification exams. We plan to
                          expand our marketing efforts to increase awareness of the Northstar Learning brand and products.

                    •     We introduced our Study Island products in the three largest English-speaking Canadian provinces in
                          October 2009. We believe other English-speaking countries, including the United Kingdom, Australia,
                          New Zealand and South Africa, also provide potential near-term growth opportunities, and we intend to
                          develop products for these markets. In addition, we are


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                           exploring the opportunities to sell Study Island products directly to parents as well as expanding our sales
                           efforts to public libraries, school libraries and homeschool settings.

                  Pursue Acquisitions and Strategic Relationships. Since 2007, we have sought acquisitions and strategic alliances
         that expand our product and service offerings and provide additional revenue opportunities. We intend to continue to pursue
         acquisitions that have products, services and businesses that are compatible with our Archipelago Learning brand identity,
         culture and corporate mission. We expect that our acquisition activity will be focused primarily on web-based products and
         services for our target markets. In addition, we believe our large student audience of over 8 million K-12 students provides a
         significant and valuable opportunity to enter into strategic relationships in order to cross-sell other appropriate, teacher- and
         parent-approved products to our students.

         Our Products and Services

                  Archipelago Learning is a leading subscription-based online education company. Our products provide
         standards-based instruction, practice, assessments and productivity tools that improve the performance of educators and
         students via proprietary web-based platforms.

            Core Educational Principles

                We believe that one of the keys to our success lies in our core educational principles that guide product design and
         development:

                    •      Clear expectations. Each Study Island and Northstar Learning session focuses on an academic standard
                           or underlying topic and sets forth a clear goal for the student to master the targeted skill or concept.

                    •      High quality, rigorous content. We have internal subject area writer and editor expertise and deep
                           knowledge of each set of specific standards for which we offer products. We build content from the
                           ground-up, customized to each set of standards for a particular subject. We utilize a scaffolding approach
                           to content development that begins with skill building and then builds to higher level thinking skills. This
                           ―building block‖ learning approach ensures that students master grade level content and are prepared for
                           state assessments.

                    •      Fun and engaging assignments. Study Island sessions are embedded with short games segments and
                           reward student mastery of standards with achievement certificates. These features provide continual
                           positive reinforcement and reward learning to engage students and build student confidence.

                    •      Immediate feedback. Students receive immediate feedback and explanations for each question, allowing
                           them to learn and quickly apply new knowledge to subsequent questions and to build skills and conceptual
                           understanding in order to handle more complex content that follows.

                    •      Student responsibility for learning. Study Island automatically offers explanations and prescribes
                           remedial or ―building block‖ topics when a student does not master a standard or sub-topic, allowing the
                           student to quickly address any learning weakness. The student can continue with these remediation topics
                           until he or she gradually accelerates back to grade level proficiency, receiving built-in rewards for learning
                           along the way.


            Study Island

                   Study Island offers subscription-based online products that provide standards-based instruction, practice, assessment
         and productivity tools for teachers and students. Each of Study Island‘s products is specifically built from the requirements
         for a subject area in a grade level in a particular state. We offer products for math, reading, language arts, writing, science
         and social studies. Our in-house content development team creates between five and ten new subject and grade level product
         offerings a month, and we offer specialty products based on national standards in subject areas such as technological
         literacy, health and fine arts. Customers may subscribe to any number of products to best suit their individual classroom or
         school needs. Subscriptions are typically for one year, although we do sell some multi-year subscriptions as well.


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         Additionally, promotional incentives, such as complimentary months of service, are offered periodically to new Study Island
         customers, resulting in a subscription term longer than one year.

                  Students can log in to Study Island from any computer with internet access. Typically, teachers assign topics based
         on the specific standards or topics that were covered in class during a particular week. In some schools, students are
         permitted to take control and move through the Study Island program independently, earning awards as each standard is
         mastered. Once logged in, students can select to move through the content in a traditional, multiple choice test mode or game
         mode, which includes short game segments to reward student achievement. Each topic contains a mini-lesson that can be
         reviewed by the student prior to beginning the session. Teachers can customize sessions for the number of questions asked as
         well as the number of correct answers needed to reach proficiency in a standard or sub-topic. The questions are dynamically
         generated and therefore constantly changing, compelling students to learn concepts rather than memorize answers. Students
         who master a topic receive a ―Blue Ribbon Achievement Award,‖ which is denoted by an icon of a blue ribbon beside the
         topic as well as a printable certificate. Upon answering a question incorrectly, students are shown the correct answer along
         with a detailed explanation of this response. When students are having difficulty answering questions correctly for a
         particular standard or sub-topic and require additional help to reach proficiency, Study Island automatically moves them
         down to appropriate ―building block‖ or remedial topics, where students can earn ―White Ribbon Achievement Awards‖ as
         they gradually accelerate back to grade level proficiency and ultimately earn the ―Blue Ribbon Achievement Award.‖

                  Study Island has also linked its program to popular classroom response hand-held devices, or clickers, which are
         manufactured and sold by other companies and enable Study Island sessions to be conducted in the classroom. The teacher
         typically teaches a particular standard or sub-topic and then projects Study Island questions on a whiteboard or a projection
         screen, and students answer using their handheld clickers. The teacher immediately receives results on his or her computer to
         determine whether the class is comprehending the material or whether additional instruction is required. This classroom
         methodology enables teachers to ensure — as opposed to assume — that learning has effectively occurred.

                  Study Island offers add-on features and programs, such as a benchmark assessment that enables educators to predict
         student performance on the end-of-year state assessment and provides diagnostic information to guide instruction. In
         addition, our graphic novel reading intervention product is designed to remediate students who are behind in grade level
         reading. We regularly release new product enhancements to increase the value of Study Island‘s core standard specific
         learning programs. We plan to introduce a new version of our Study Island online platform in January 2010, which will
         include new features and functionality most desired by our existing customer base and prospects, including a custom
         assessment builder, standards-based lesson plans and lessons, video content, special needs support (including expanded
         text-to-speech functionality), a writing utility, new and more sophisticated games, and embedded professional development
         for teachers. In addition, we intend to introduce new high school oriented products, including reading and math remediation
         products, end of course and exit exam preparation, advanced placement exam preparation, PSAT, SAT, ACT and other
         norm-referenced test preparation, and high school courses for credit and credit recovery.

                 We expanded Study Island‘s market by releasing its first international products in October 2009 for three Canadian
         provinces: Ontario, Alberta and British Columbia.


            TeacherWeb

                  TeacherWeb, which we acquired in June 2008, is a website portal and productivity tool for educators in the K-12
         market, which enables teachers and schools to easily and affordably create and maintain functional, professional-looking
         websites. TeacherWeb was designed to enable teachers and administrators to quickly and easily communicate information to
         students and parents through these websites. We completed the sale of TeacherWeb in November 2009.


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            Northstar Learning

                  In recognition of the significant postsecondary education market opportunity, we developed our Northstar Learning
         product line, which was initially launched in April 2009. Northstar Learning uses the same proprietary web platform as
         Study Island, to provide instruction, practice, assessment and test preparation for targeted high enrollment postsecondary
         course areas. The key features and product functions of Northstar Learning are substantially similar to those of Study Island.

                 We currently offer Northstar Learning products for GED exam preparation, developmental studies in college
         readiness English/language arts and mathematics and allied health, and we launched a PRAXIS teacher certification product
         in September 2009.

                    •     GED exam preparation. Northstar Learning offers products for each of the five GED testing modules
                          covered in the GED exam, which grants a diploma to adults that do not have a high school diploma. These
                          modules are reading, writing, math, social studies and science.

                    •     Developmental Studies. Northstar Learning offers developmental English/language arts and math
                          programs for the approximately 42% of community college freshmen and 20% of four-year college
                          freshmen who are required to raise their proficiency levels before colleges and universities allow them to
                          enroll in credit-bearing courses.

                    •     Allied Health programs. We recently launched six allied health products to help students in these
                          certificate and Associate Degree allied health programs master the required content and pass the applicable
                          health career licensure exams. We intend to launch five additional products in late 2009.

                    •     PRAXIS teacher certification. Northstar Learning has begun publishing products and will continue to
                          launch additional ones through early 2010 to assist educators to prepare for and pass the PRAXIS series
                          assessments developed by the Educational Testing Service and used by states as part of their teacher
                          licensure and certification processes.

                  We intend to develop additional Northstar Learning products to address other vocational-technical career programs
         that require certification exams and online study guides for more difficult college and university courses. We also intend to
         expand our marketing and sales efforts to increase awareness of the Northstar Learning brand and products, and replicate our
         K-12 sales efforts and word-of-mouth viral marketing in the postsecondary market.


            Northstar Market Opportunity

                  We developed Northstar Learning to capitalize on the U.S. postsecondary education market, which is significant.
         NCES estimates that approximately 18.2 million students were enrolled in degree-granting postsecondary institutions during
         the 2007-2008 school year. In 2006, approximately 39 million adults in the United States in the 18-64 age group did not have
         a high school diploma, but only about 0.9% of them earned a GED. Only about 68% of adults who took at least one of the
         five GED tests passed the test in 2006, 72% passed in 2007 and 73% passed in 2008. In 2008, 777,000 candidates took at
         least one of the five GED tests versus 714,000 in 2006, a 8.8% growth rate.

                  In addition, U.S. adult education enrollment in adult basic education, adult secondary education and English as a
         second language programs was about 2.4 million in the 2006-2007 school year. About 38% of these students were enrolled
         in basic education reading and/or math levels below eighth grade courses, 16% were enrolled in adult secondary education
         courses and 46% were enrolled in English as a second language courses.

                  Many of the occupations projected to grow the fastest in the economy are concentrated in the health care industry.
         According to a U.S. Bureau of Labor Statistics report, health care was the largest U.S. industry in 2006 and health care will
         generate 3 million wage and salary jobs between 2006 and 2016, more than any other industry. Many of these occupations
         require some form of licensure or certification, but most workers have jobs that require less than four years of college
         education, according to the U.S. Bureau of Labor Statistics report.


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         Our Customers

                  Approximately 97% of our service revenue in 2008 came from Study Island subscriptions from U.S. public and
         private schools and individual buys. As of September 30, 2009, Study Island products were used by approximately
         8.9 million students in 21,000 schools across 50 states and Washington, DC. Our principle customers are teachers, school
         principals, curriculum directors, Title I and Title III directors, superintendents, chief technology officers and other
         administrators. In 2008, the average school invoice price for Study Island was $1,854. In addition, no single customer
         accounted for more than 1.5% of our total invoiced sales in 2006, 2007 or 2008.

                 As of September 30, 2009 TeacherWeb had 89,332 customers across 13,901 U.S. and Canadian schools and
         approximately 12,634 international customers across 83 countries. We completed the sale of TeacherWeb in
         November 2009.

                    As of September 30, 2009, we had 1,366 Northstar Learning subscribers for our GED products.

         Marketing, Sales and Customer Support

            Marketing Activities

                  Our marketing strategy is to continually increase Study Island brand awareness, to introduce the Northstar Learning
         brand, and to continually generate qualified prospect leads for our sales teams. We focus our marketing efforts on individual
         schools, principals and teachers for sales to both new and existing customers.

                    Our primary Study Island marketing activities include:

                    •       targeted campaigns to schools, such as search engine marketing, direct mail, e-mail marketing and print
                            advertisements;

                    •       participation in tradeshows;

                    •       building on relationships with satisfied school customers to target new sales in other schools in the same
                            district, in the entire district or in adjacent school districts;

                    •       customer newsletters and advertising inserts sent to schools with renewal reminders, including information
                            about new and upgraded products;

                    •       webinars for existing customers introducing them to new products, add-on features and upgrades;

                    •       incentives such as free months to attract new customers or free trials of add-on products to attract
                            renewals; and

                    •       assistance by our grant/bid writer and contract manager to existing customers for funding, grant requests
                            and completion of district contracts.

                  We are developing our marketing plans for our recently launched Northstar Learning product line. We have
         launched successful print advertising campaigns for Northstar Learning and expect additional marketing activities to be
         similar to those of Study Island, but with a focus on adult learning centers and alternative high schools for GED and
         postsecondary public and private institutions for developmental studies and allied health. We recently hired a Northstar
         Learning marketing coordinator who is responsible for search engine optimization, direct mail and e-mail marketing
         campaigns and participation in tradeshows to capture sales and qualified leads in the postsecondary market.

                  Study Island pricing is available on Study Island‘s website (www.studyisland.com) at each state landing page.
         Northstar Learning‘s pricing is available on Northstar Learning‘s website (www.northstarlearning.com). Our products and
         services are strategically priced to fall within the discretionary spending budgets of teachers and school administrators. The
         information that appears on these websites is not part of, or incorporated into, this prospectus. We evaluate our pricing on an
         annual basis and determine increases to reflect product enhancements, operating costs, the increased value of our products to
         our customers, and inflation and other economic factors impacting our markets.
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            Field-based and Inside Sales Channels

                    We have two sales teams: a Study Island sales team and a Northstar Learning sales team.

                  The Study Island sales team, our largest, is led by our vice president of sales and is divided into outside or
         field-based sales representatives overseen by five regional managers, a smaller inside sales team and an inside account
         manager with a team focused on renewals and sales of add-on products. Our field-based sales representatives are
         strategically located in and are responsible for larger enrollment metropolitan customer bases, and our inside sales team
         focuses on sales in more rural geographies. Our Study Island sales strategy begins with site-based or school level contact and
         focuses on individual school principals and teachers. Additionally, the Study Island sales team strives to enhance customer
         awareness of our newer Northstar Learning brand.

                   Similar to the Study Island sales team, our Northstar Learning sales team consists of four field-based sales
         representatives (east, south, midwest and west) and two inside sales representatives who handle rural accounts, both
         managed by our national sales manager. This group will focus exclusively on adult learning centers and postsecondary
         institutions. Over time, we plan to add more sales representatives and eventually hire a dedicated postsecondary sales
         manager.


            Customer Support

                  We provide our customers with service through our Implementation, Training, and Customer Relations teams. Our
         Implementation team provides free customized implementation assistance to schools, including contacting schools when we
         detect low levels of usage to learn how we may improve implementation and usage of our product in the school. Our
         Training department develops teacher and administrator training materials, hosts webinars and conducts site visits and
         in-school training sessions, as well as online trainings and phone consultations. Our Customer Relations team provides free
         unlimited support to our customers, who may contact us via phone, live chat or by email. Approximately 33% of our
         Customer Relations team are former teachers, and 66.7% have customer service and IT backgrounds. Our Customer
         Relations team also recently won the 2009 STEVIE AWARD, sponsored by Business Week, in recognition of its
         outstanding level of customer service.


         Our Competition

                 Study Island competes primarily with other providers of supplemental educational materials and online learning
         tools. We believe Study Island‘s principal competitors include:

                    •       providers of online and offline supplemental instructional materials for the core subject areas of reading,
                            mathematics, science and social studies for K-12 institutions;

                    •       companies that provide K-12-oriented software and online-based educational assessment and remediation
                            products and services to students, educators, parents and educational institutions;

                    •       the assessment divisions of established education publishers, including Pearson Education, Inc., The
                            McGraw-Hill Companies and Houghton Mifflin Harcourt Company;

                    •       providers of online and offline test preparation materials;

                    •       traditional print textbook and workbook companies that publish K-12 core subject educational materials,
                            standardized test preparation materials or paper and pencil assessment tools;

                    •       summative assessment companies that have expanded their product lines to include formative assessment
                            and instruction products;

                    •       non-profit and membership educational organizations and government agencies that offer online and
                            offline products and services, including in some cases at no cost, to assist individuals in standards mastery
                            and test preparation; and

                    •       providers of website hosting for teachers and schools.
We believe the principal competitive factors in Study Island‘s market are:

•       quality of content and deep customization to standards;

•       formative assessment and reporting to inform instruction;


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                    •      ease of use, including whether a product is available online;

                    •      program efficacy and the ability to provide improved student outcomes;

                    •      ability to engage students;

                    •      quality of customer support;

                    •      vendor reputation; and

                    •      price.

                  Northstar Learning competes primarily with textbook, workbook, study guide and software products published by
         the large postsecondary publishers, such as Pearson, McGraw-Hill, Cengage, Wiley and Mosby (Reed Elsevier).

                  We believe the principal competitive factors in Northstar Learning‘s market are similar to those outlined above for
         Study Island.


         Technology

            Engineering

                  Our Study Island and Northstar Learning systems are built upon lightweight platforms enabling our customers to
         access the full set of functionality via a standard browser. Our systems operate in a completely hosted manner, eliminating
         the need for our customers to run any special hardware or software. This is a basic design criteria in our software
         architecture, to provide the most extensive set of services possible that are completely independent from our customer‘s
         unique systems environment. We will continue to invest in improving the performance, functional depth and the usability of
         our services to better meet our customer‘s needs.

                  Our systems are constructed as highly scalable, software-as-a-service (SaaS) applications that use commercially
         available hardware and a combination of proprietary and off-the-shelf software from companies such as Adobe and
         Microsoft. Our software development team has constructed proprietary services and leveraged existing capabilities such as
         database connection pooling and user session management tuned to our specific architecture and environment, allowing us to
         continue to scale our service. This provides a stateless environment, in which users are not bound to a single server but can
         be routed in the most optimal way to any number of servers, with an advanced data caching layer.

                  Our systems have been implemented to allow all customers to operate as logically separate tenants in the central
         applications and databases. This allows us to spread the cost of delivering the total set of services across the user base, such
         that we do not have to manage thousands of distinct applications with their own business logic and database schemas. As a
         result, we have the ability to scale our application and core business in a very fast and efficient manner. Moreover, we can
         focus our resources on building new functionality to deliver to our customer base as a whole rather than on maintaining an
         infrastructure to support each of their distinct applications.

                  Our engineering team is constantly focused on improving and enhancing the features, functionality and security of
         our existing service offerings, as well as developing new capabilities such as the upcoming release of a new version of Study
         Island. As a result of our proven SaaS model, our existing customers will be able to realize the full value of these
         enhancements without the need to go through a massive upgrade process.


            Operations

                  We serve all of our customers and users from a single, third-party web-hosting facility located in Dallas, Texas,
         leased from Colo4Dallas, Inc. The Colo4Dallas facility is built to a high level of availability and control and is secured by
         around-the-clock guards, biometric access screening and escort-controlled access, and is supported by on-site backup
         generators in the event of a power failure. Bandwidth to the internet is provided by multiple independent companies and we
         continuously monitor the performance of this
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         service. The monitoring features that exist include centralized performance consoles, automated load distribution tools and
         various self-diagnostic tools and programs.

                   In the first quarter of 2010, as part of our disaster recovery arrangements, all of our customers‘ data will be
         replicated in a separate back-up facility near Chicago, Illinois. This is designed to both protect our customers‘ data and
         ensure service continuity in the event of a major disaster. Even in the case of a catastrophic disaster at the Colo4Dallas
         facility, our strategy will allow for full operation within 24 hours or less.


            Integration with District Student Interoperability Systems

                   The Study Island core web application has been designed to integrate with Student Interoperability Systems, or SIS,
         which employ the Student Interoperability Framework, of SIF, specifications, as a method for overall student tracking. SIF
         creates a common set of specifications to allow different applications to interact and share data, and facilitates the use of
         technology in education. The use of SIF allows Study Island to maintain a real-time roster for each one of its SIF enabled
         districts, and facilitates the transition of information from one school to another within a district. Our engineering team is
         available to work directly with a school district‘s technology team to assist with information transfers.


         Intellectual Property

                  We develop proprietary educational content and assessment and reporting materials, and a significant majority of
         the questions and materials in our Study Island and Northstar Learning products have been developed internally. We rely on
         copyright protection for our internally developed content. We also own or license a number of trademarks, service marks,
         trade secrets and other intellectual property rights that relate to our products and services. Our content development costs in
         the years ended December 31, 2006, 2007 and 2008 were $0.7 million, $1.2 million and $2.2 million, respectively. We
         continue to invest in our intellectual property as we develop new content and expand the scope of our products and services.
         As appropriate, we also utilize confidentiality and licensing agreements with our employees, students, independent
         contractors and suppliers.

                  We license a portion of our content from third parties. For example, we currently license graphic novels from
         ABDO Books and content based on the ―Timbertoes ® ‖ characters from Highlights for Children. We attempt to use
         internally developed or public domain material in our products when possible, but as we continue to develop new products
         and services, we may enter into licenses with additional third parties.

                 We own several internet domain names that include the terms Study Island, Archipelago Learning and Northstar
         Learning, among others.


         Employees

                 As of September 30, 2009 we had 233 employees, consisting of 228 full-time and 5 part-time employees. As of
         September 30, 2009, we had 58 employees in content development, 124 employees in sales and marketing, 24 employees in
         IT and programming and 27 general and administrative employees. None of our employees are represented by a collective
         bargaining agreement. We believe our employee relations are good.


         Properties

                   Our corporate headquarters are located in Dallas, Texas, where we lease a total of 18,508 square feet of space under
         a lease that expires on May 31, 2012 and 7,304 square feet of space under a lease that expires on June 30, 2010. We do not
         lease office space for our field-sales representatives.


         Legal Proceedings

                    We currently are not subject to any material litigation or regulatory proceedings.


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                                                             MANAGEMENT


         Executive Officers and Directors

                   The following table sets forth the names and ages as of November 17, 2009, of each person who is and who will be
         a director or executive officer of Archipelago Learning, Inc. upon the Corporate Reorganization and the consummation of
         this offering. The descriptions below include each such person‘s service as a board member, executive officer or employee
         of Archipelago Learning Holdings, LLC and our predecessors.


         Nam
         e                                  Age                                          Position


         Tim McEwen                          56      President, Chief Executive Officer and Director
         James Walburg                       55      Executive Vice President, Chief Financial Officer and Secretary
         Ray Lowrey                          52      Senior Vice President and Chief Technology Officer
         Martijn Tel                         40      Senior Vice President and Chief Operating Officer
         Allison Duquette                    50      Senior Vice President and Chief Marketing Officer
         Cameron Chalmers                    33      Vice President and Director
         Julie Huston                        43      Executive Vice President, Global Sales
         David Muzzo                         34      Vice President and Director
         David Phillips                      32      Director
         Michael Powell                      46      Director
         Peter Wilde                         41      Chairman
         Brian H. Hall                       61      Director Nominee

                  Tim McEwen has been our President and Chief Executive Officer since March 2007. From January 2004 to March,
         2007, Mr. McEwen served as Chief Executive Officer of Harcourt Achieve, Inc., a multinational supplemental education
         company. From July 2000 to December 2003, Mr. McEwen served as Executive Vice President and Chief Operating Officer
         of Haights Cross Communications, Inc., which specializes in the development and publication of educational products. From
         1996 to 2000, Mr. McEwen served as President and Chief Executive Officer of Thomson Learning‘s Higher Education and
         Lifelong Learning Groups (now Cengage Learning), a publisher of print and digital educational products. Mr. McEwen
         serves on the board of directors of Edline Holdings LLC, an educational technology company. Mr. McEwen received a B.S.
         in Education from East Stroudsburg State University and an M.S. in Education from the University of Georgia.

                  James Walburg has been our Executive Vice President and Chief Financial Officer since May 2007. From January
         2004 to March 2007, Mr. Walburg served as Senior Vice President and Chief Financial Officer of First American Payment
         Systems, L.P., a large credit card processing company. From September 1994 to January 2004, Mr. Walburg served as
         Senior Vice President of Finance and Administration as well as Vice President and Treasurer of IMCO Recycling Inc., a
         publicly traded metals company. Prior to this, Mr. Walburg also held management positions at NTS, Inc. and Diamond
         Shamrock Corporation. Mr. Walburg is a certified public accountant and received a B.S. in Economics from the University
         of Pennsylvania‘s Wharton School and an M.B.A. from the Southern Methodist University Cox School of Business.

                  Ray Lowrey has been our Senior Vice President and Chief Technology Officer since September 2008. From May
         2006 to September 2008, Mr. Lowrey served as a Senior Vice President and Chief Technology Officer of Cengage Learning,
         a publisher or print and digital educational products. Prior to May 2006, Mr. Lowrey also served as Chief Technology
         Officer of Thomson Gale, an educational publisher, and served in several senior level positions in technology management
         and software development for EG&G Mound Applied Technologies and Monsanto Research Corporation. Mr. Lowrey
         received a B.S. in Computer Science and an M.B.A. from the University of Dayton.

                 Martijn Tel has been our Senior Vice President and Chief Operating Officer since October 2009. From January
         2009 to October 2009, Mr. Tel served as Chief Financial Officer and Chief Operating Officer of


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         Medical Media Holdings LLC, a continuing medical education company. From March 2007 to January 2008, Mr. Tel served
         as the Chief Financial Officer of Harcourt Inc.‘s Global Operations Division, an education publishing company. From April
         2004 to February 2008, Mr. Tel served as the Chief Financial Officer of Harcourt Achieve, Inc., a multinational
         supplemental education company. From November 2002 until March 2004, Mr. Tel served as the Chief Financial Officer of
         Classroom Connect, an education company. Mr. Tel started his career at Elsevier Science and served in several chief
         financial officer roles, most notably for its e-business, including ScienceDirect and the Global Sales Organization. Mr. Tel
         has a graduate degree in accounting and finance and a postgraduate controllers degree from the Vrije Universiteit, located in
         The Netherlands.

                   Allison Duquette has been our Senior Vice President and Chief Marketing Officer since November 2009. From
         October 2008 to November 2009, Ms. Duquette was self-employed as an independent consultant for K-12 technology firms
         in the areas of marketing, sale process, strategic planning, mergers and acquisitions and process re-engineering. From
         February 2007 to October 2008, Ms. Duquette served as President of the Education Systems Division of MAXIMUS, Inc., a
         consulting services company. From January 2003 to December 2006, Ms. Duquette served as President and Chief Executive
         Officer of Spectrum K12, Inc., an education software company. Ms. Duquette received a B.S. in Business Administration
         from the University of Arizona.

                 Cameron Chalmers co-founded Study Island, in May 2000 and has been Vice President and Director since January
         2007. Prior to founding us, Mr. Chalmers served as a software engineering Lead Developer for Lucent Technologies.
         Mr. Chalmers received a B.S. from Vanderbilt University. Mr. Chalmers intends to resign from the board of directors upon
         the consummation of this offering but will continue to serve as Vice President.

                  Julie Huston has been our Executive Vice President, Global Sales since April 2008. Ms. Huston joined us as an
         independent contractor as a Michigan sales representative in August 2002. In January 2007, Ms. Huston was employed by us
         as a regional sales manager before becoming our Vice President of Sales in April 2008. Prior to joining us, Ms. Huston was
         Co-Founder and President of Training Express. From 1989 to 1991, Ms. Huston also served as Director of Public Relations
         and Advertising for Olympia Entertainment. Ms. Huston received a B.A. in English from the University of Michigan.

                   David Muzzo co-founded Study Island in May 2000 and has been Vice President and Director since January 2007.
         Prior to founding us, Mr. Muzzo co-founded Captive Marketing Concepts, an advertising firm specializing in indoor
         billboard advertising which was later sold to AJ Indoor Advertising in 1999. Mr. Muzzo received a B.S. from Vanderbilt
         University. Mr. Muzzo intends to resign from the board of directors upon the consummation of this offering but will
         continue to serve as Vice President.

                   David Phillips has been a member of our board of directors since January 2007. Mr. Phillips is a Vice President of
         Providence Equity Partners. Prior to joining Providence Equity Partners in 2005, Mr. Phillips worked at Hutchison
         Whampoa China and at Goldman Sachs in the Principal Investment Area. Mr. Phillips serves on the board of directors of
         Edline Holdings, Inc. an educational technology company, and JBP Holdings, LLC, which owns Assessment Technologies
         Institute, a provider of online educational products, and Jones & Bartlett Learning, an educational publisher for higher
         education and vocational training. Mr. Phillips received a B.A. from Princeton University and an M.B.A. from Harvard
         Business School.

                  Michael Powell has been a member of our board of directors since December 2008. Mr. Powell is the chairman and
         chief executive of the MK Powell Group, a communications consulting firm, where he has been employed since April 2005.
         Mr. Powell served also as a Senior Advisor of Providence Equity Partners since July 2005. From January 2001 to April
         2005, Mr. Powell served as Chairman of the Federal Communications Commission and just prior, from October 1997 to
         December 2000, as a Commissioner. From December 1996 to October 1997, Mr. Powell served as Chief of Staff of the
         Antitrust Division of the Department of Justice. From July 1994 to December 1996, Mr. Powell was an associate in the law
         firm of O‘Melveny & Meyers and clerked for the Hon. Harry T. Edwards, Chief Judge of the U.S. Court of Appeals for the
         D.C. Circuit from July 1993 to July 1994. From March 1988 to July 1990, Mr. Powell served as a policy advisor to Secretary
         of Defense Richard B. Cheney. Mr. Powell serves on the board of directors of Cisco Systems, Altegrity, Object


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         Video, the Rand Corporation, the Aspen Institute and America‘s Promise. He also serves on the board of advisors for the
         Disabled Veterans for Life Memorial effort. Mr. Powell received a B.A. in Government from the College of William and
         Mary and received a J.D. from Georgetown University Law Center.

                 Peter Wilde has been a member of our board of directors and Chairman since January 2007. Mr. Wilde is a
         Managing Director of Providence Equity Partners. Prior to joining Providence Equity Partners in 2002, Mr. Wilde was a
         General Partner at BCI Partners, where he began his career in private equity investing in 1992. Mr. Wilde is also a director
         of Asurion Corp., a provider of wireless subscriber services, Decision Resources, Inc., a provider of healthcare research,
         Edline Holdings, Inc., an educational technology company, Education Management Corporation, a provider of
         post-secondary education, JBP Holdings, LLC, which owns Assessment Technologies Institute, a provider of online
         educational products, Jones & Bartlett Learning, an educational publisher for higher education and vocational training,
         Kerasotes Theatres, Inc., a motion picture exhibition company, and Survey Sampling International. Mr. Wilde received a
         B.A. from Colorado College and an M.B.A. from Harvard Business School.

                  Brian H. Hall will become a member of our board of directors upon the consummation of this offering. From
         January 2007 to August 2007, Mr. Hall served as Vice Chairman of Thomson Corporation, a business and professional
         information company, where he created and led the new corporate investment process, and directed Thomson‘s corporate
         strategy, marketing, communications and branding initiatives. From 1998 to 2006, Mr. Hall served as President and Chief
         Executive Officer of Thomson Legal & Regulatory and West Publishing. Prior to joining Thomson, Mr. Hall was President
         of Shepard‘s and Executive Vice President of McGraw-Hill. Mr. Hall is a former member of the board of directors of Bank
         One of Colorado Springs and Ryerson of Canada, and currently serves on the board of IHS, Inc., a provider of critical
         information and insight. Mr. Hall graduated from The Defiance College and has an MBA from the Rochester Institute of
         Technology.


         Board of Directors

                  Our business and affairs are managed under the direction of our board of directors. Our bylaws will provide that our
         board of directors will consist of between three and eleven directors. Upon the consummation of this offering, our board of
         directors will consist of five directors.


         Director Independence and Controlled Company Exception

                  Our board of directors has affirmatively determined that Messrs. Hall and Powell are independent directors under
         the rules of Nasdaq and that Mr. Hall is an independent director as such term is defined in Rule 10A-3(b)(1) under the
         Exchange Act.

                  After completion of this offering, Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-SI, L.P.
         will continue to control a majority of the voting power of our outstanding common stock pursuant to the terms of a voting
         agreement. See ―Certain Relationships and Related Person Transactions — Voting Agreement.‖ As a result, we are a
         ―controlled company‖ within the meaning of Nasdaq corporate governance standards. Under these rules, a ―controlled
         company‖ may elect not to comply with certain Nasdaq corporate governance standards, including:

                    •     the requirement that a majority of the board of directors consist of independent directors;

                    •     the requirement that we have a nominating and corporate governance committee that is composed entirely
                          of independent directors with a written charter addressing the committee‘s purpose and responsibilities;

                    •     the requirement that we have a compensation committee that is composed entirely of independent directors
                          with a written charter addressing the committee‘s purpose and responsibilities; and

                    •     the requirement for an annual performance evaluation of the nominating and corporate governance
                          committee and compensation committee.


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                  Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of
         independent directors, our nominating and corporate governance committee and compensation committee will not consist
         entirely of independent directors and such committees will not be subject to annual performance evaluations. Accordingly,
         you will not have the same protections afforded to stockholders of companies that are subject to all of Nasdaq corporate
         governance requirements.


         Board Committees

                 Our board of directors has the authority to appoint committees to perform certain management and administration
         functions. Upon the consummation of this offering, our board of directors will have three committees: the audit committee,
         the compensation committee, the nominating and corporate governance committee.


            Audit Committee

                    The primary purpose of the audit committee is to assist the board‘s oversight of:

                    •       the integrity of our financial statements;

                    •       our systems of control over financial reporting and disclosure controls and procedures;

                    •       our compliance with legal and regulatory requirements;

                    •       our independent auditors‘ qualifications and independence;

                    •       the performance of our independent auditors and our internal audit function;

                    •       all related person transactions for potential conflict of interest situations on an ongoing basis; and

                    •       the preparation of the report required to be prepared by the committee pursuant to SEC rules.

                  Upon the consummation of this offering, Messrs. Hall, Phillips and Wilde will serve on the audit committee.
         Mr. Hall will serve as chairman of the audit committee and also qualifies as an ―audit committee financial expert‖ as such
         term has been defined by the SEC in Item 401(h)(2) of Regulation S-K. Our board of directors has affirmatively determined
         that Mr. Hall meets the definition of an ―independent director‖ for the purposes of serving on the audit committee under
         applicable SEC and Nasdaq rules, and we intend to comply with these independence requirements for all members of the
         audit committee within the time periods specified.


            Compensation Committee

                    The primary purpose of our compensation committee is to:

                    •       recommend to our board of directors for consideration, the compensation and benefits of our executive
                            officers and key employees;

                    •       monitor and review our compensation and benefit plans;

                    •       administer our stock and other incentive compensation plans and programs and prepare recommendations
                            and periodic reports to the board of directors concerning such matters;

                    •       prepare the compensation committee report required by SEC rules to be included in our annual report;

                    •       prepare recommendations and periodic reports to the board of directors as appropriate; and

                    •       handle such other matters that are specifically delegated to the compensation committee by our board of
                            directors from time to time.
       Upon the consummation of this offering, Messrs. Phillips, Wilde and Hall will serve on the compensation
committee, and Mr. Wilde will serve as the chairman. Our board of directors has affirmatively


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         determined that Mr. Hall meets the definition of an ―outside director‖ for the purposes of Section 162(m) of the Internal
         Revenue Code of 1986, as amended and the definition of a ―non-employee director‖ for the purposes of Section 16 of the
         Exchange Act.


            Nominating and Corporate Governance Committee

                    The primary purpose of the nominating and corporate governance committee is to:

                    •       identify and recommend to the board individuals qualified to serve as directors of our company and on
                            committees of the board;

                    •       advise the board with respect to the board composition, procedures and committees;

                    •       develop and recommend to the board a set of corporate governance guidelines and principles applicable to
                            us; and

                    •       review the overall corporate governance of our company and recommend improvements when necessary.

                 Upon the consummation of this offering, Messrs. Powell, Wilde and Hall will serve on the nominating and
         corporate governance committee, and Mr. Hall will serve as the chairman. Our board of directors has affirmatively
         determined that Messrs. Hall and Powell meet the definition of ―independent directors‖ for the purpose of serving on the
         nominating and corporate governance committee under applicable Nasdaq rules.


         Compensation Committee Interlocks and Insider Participation

                  Upon the completion of this offering, none of our executive officers will serve on the compensation committee or
         board of directors of any other company of which any of the members of our compensation committee or any of our
         directors is an executive officer.


         Code of Business Conduct and Ethics

                  We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors,
         including those officers responsible for financial reporting. These standards are designed to deter wrongdoing and to
         promote honest and ethical conduct. The code of business conduct and ethics will be available on our website at
         www.archipelagolearning.com. Any amendments to the code, or any waivers of its requirements, will be disclosed on our
         website. The information that appears on our website is not part of, and is not incorporated into, this prospectus.


         Executive Officers

                  Each of our executive officers has been elected by our board of directors and will serve until his or her successor is
         duly elected and qualified.


         Director Compensation

                  Prior to this offering, we have not paid our directors any compensation for their board service. We expect our board
         of directors to approve a plan for annual compensation for our directors who are not our employees or employees of
         Providence Equity Partners, effective as of the date of the consummation of this offering. These directors will receive an
         annual retainer of $20,000 and a fee of $1,000 for each meeting they attend. The annual retainer will be payable at the
         director‘s option either 100% in cash or 100% in shares of our common stock. In addition, these directors will receive an
         annual restricted share award with a grant date fair market value of $25,000, which will vest on the first anniversary of the
         grant date. The non-management chair of the audit committee will receive an additional $10,000 fee payable at his or her
         option either 100% in cash or 100% in shares of our common stock. No separate committee meeting fees will be paid.


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                  All directors are reimbursed for reasonable travel and lodging expenses incurred by them in connection with
         attending board and committee meetings.


         Indemnification of Officer and Directors

                  Our certificate of incorporation and bylaws provide that we will indemnify our directors and officers to the fullest
         extent permitted by Delaware General Corporation Law, or DGCL. Upon the completion of this offering, we intend to have
         in place directors‘ and officers‘ liability insurance that insures such persons against the costs of defense, settlement or
         payment of a judgment under certain circumstances.

                  In addition, our certificate of incorporation will provide that our directors will not be liable for monetary damages
         for breach of fiduciary duty, except for liability relating to any breach of the director‘s duty of loyalty, acts or omissions not
         in good faith or which involve intentional misconduct or a knowing violation of law, violations under Section 174 of the
         DGCL or any transaction from which the director derived an improper personal benefit.

                  In addition, prior to the completion of this offering, we will enter into indemnification agreements with each of our
         executive officers and directors. The indemnification agreements will provide the executive officers and directors with
         contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under the
         Delaware General Corporation Law.

                  There is no pending litigation or proceeding naming any of our directors or officers to which indemnification is
         being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by
         any director or officer.


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                                            COMPENSATION DISCUSSION AND ANALYSIS

                  This compensation discussion and analysis section provides information about the material elements of the
         compensation paid, awarded to or earned by our ―named executive officers,‖ who consist of our chief executive officer, our
         senior vice president and chief financial officer, and our four other most highly compensated executive officers. For 2008,
         the named executive officers were:

                    •     Tim McEwen, our President and Chief Executive Officer;

                    •     James Walburg, our Executive Vice President, Chief Financial Officer and Secretary;

                    •     Ray Lowrey, our Senior Vice President and Chief Technology Officer;

                    •     Cameron Chalmers, our Vice President and Director;

                    •     Julie Huston, our Executive Vice President, Global Sales; and

                    •     David Muzzo, our Vice President and Director.

                 This compensation discussion and analysis section addresses and explains the compensation practices that were
         followed in 2008 and prior periods, the numerical and related information in the summary compensation and other tables
         presented below as well as a discussion of our anticipated future compensation policy and approach.


         History

                  Prior to this offering, we were a privately held company with a limited number of equityholders. As such, we have
         not been subject to stock exchange listing requirements or SEC rules requiring a majority of our board of directors be
         independent or relating to the formation and functioning of board committees, including a compensation committee. We
         intend to establish a compensation committee in connection with this offering.

                  Most, if not all, of our prior compensation policies have been the product of negotiations between the named
         executive officers and our founders or the board of managers of Archipelago Learning Holdings, LLC. Prior to the
         Providence Equity Transactions, compensation for all of our employees was determined solely by our founders,
         Messrs. Chalmers and Muzzo. In connection with the Providence Equity Transactions and the hiring of Messrs. McEwen,
         Walburg and Lowrey, we entered into employment agreements with our founders, Mr. Chalmers and Mr. Muzzo, as well as
         with certain of our named executive officers, including Mr. McEwen, Mr. Walburg and Mr. Lowrey. In August 2009, we
         entered into an employment agreement with Ms. Huston. In August 2009, Messrs. McEwen and Walburg entered into new
         employment agreements, which we refer to as each of their ―new employment agreements.‖ The terms of all of those
         employment agreements were negotiated by the employee and the board of managers of Archipelago Learning Holdings,
         LLC. Compensation decisions for 2008 relating to our named executive officers who were party to employment agreements,
         including the determination of annual bonuses and other incentive-based awards, were also made by the board of managers
         of Archipelago Learning Holdings, LLC. Compensation decisions for 2008 relating to Ms. Huston, the only named executive
         officer who did not have employment agreement in 2008, were made collectively by Messrs. McEwen and Walburg, in
         consultation with the board of managers of Archipelago Learning Holdings, LLC.


         Objectives and Philosophy of Executive Compensation Policy

                 Our objective is to maintain a compensation policy that provides a competitive total executive compensation
         package that attracts and retains individuals of exceptional ability and managerial talent in a highly competitive market. Our
         executive compensation program is designed to align executive compensation with our key strategic, financial and
         operational goals and with the long-term interests of our stockholders.

                  After the consummation of this offering, the compensation committee will be responsible for implementing and
         administering all aspects of our benefits and compensation plans and programs. Members of our compensation committee
         will be ―outside directors‖ for the purposes of Section 162(m) of the Internal
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         Revenue Code, as amended. We anticipate that the compensation committee will make certain determinations in consultation
         with and based on recommendations by Messrs. McEwen and Walburg.

                   For 2009, the compensation committee will review overall company and individual performance, as well as the
         applicable terms of any employment agreements, in connection with the review and determination of each named executive
         officer‘s compensation. For company performance, it is anticipated that the compensation committee will review service
         revenue, invoiced sales and Adjusted EBITDA. See ―Prospectus Summary — Summary Historical Consolidated Financial
         and Other Data‖ and ―Management‘s Discussion and Analysis of Financial Condition and Results of Operations —
         Components of Service Revenue and Expense‖ for more detailed descriptions of these metrics. As an emerging growth
         company, we believe that increasing revenue and profitability are directly related to increasing stockholder value and linking
         compensation with company performance in these areas is supportive of the long-term interests of stockholders.
         Ms. Huston‘s performance will also be based on the achievement of sales goals, including overall sales, new business sales
         and sales to existing customers. For individual performance, we also anticipate that the compensation committee will review
         the executive‘s achievement of non-financial objectives and will consult with and consider the recommendations of
         Mr. McEwen. The compensation committee may also make compensation decisions on a discretionary basis.

                   We anticipate that in future periods, the compensation committee may engage an independent outside compensation
         consultant to construct a peer group of companies, provide market information, provide advice on market practices and
         support specific decisions regarding compensation for named executive officers. In addition, we expect that
         Messrs. McEwen and Walburg, in consultation with the board of directors, will establish an annual budget that will include
         sales targets and other performance-related goals, which the compensation committee may consult in making decisions with
         respect to bonuses and other payments.


         Tax and Accounting Considerations

                 While we generally considered the financial accounting and tax implications of our executive compensation, neither
         element was a material consideration in the compensation awarded to our named executive officers in 2008.


         Elements of Executive Compensation

                Our executive compensation includes the following elements: base salaries, annual performance bonuses, an equity
         compensation plan, a defined contribution plan and a benefits package.


            Base Salary

                   We establish base salaries for our executive officers generally based on the scope and essential elements of each of
         his or her duties, as well as the abilities, performance and experience of the named executive officers. We seek to set these
         salaries competitively, with the intent to attract and retain our key executive officers. Each of Messrs. McEwen‘s,
         Walburg‘s, Lowrey‘s, Muzzo‘s and Chalmers‘s and Ms. Huston‘s employment agreement establishes their respective base
         salaries, which may be increased at the discretion of the board of managers of Archipelago Learning Holdings, LLC based
         on their evaluation of our performance over the year, the executive officer‘s performance of his or her duties and the impact
         of the executive officer‘s performance in driving our growth and earnings. We use Adjusted EBITDA as a key measure in
         determining our performance and, therefore, Adjusted EBITDA is another factor the board of managers may consider in
         making adjustments to base salaries. We anticipate that the board of directors and the compensation committee may consider
         market practice in adjusting base salaries as well. The board of managers of Archipelago Learning Holdings, LLC approved
         increases in each of Messrs. McEwen‘s, Walburg‘s, Chalmers‘s and Muzzo‘s base salaries for 2008 and approved increases
         in each of Messrs. McEwen‘s and Walburg‘s base salaries for 2009. The board of managers of Archipelago Learning
         Holdings, LLC also approved each of Messrs. McEwen‘s and Walburg‘s new employment agreements. See
         ―— Employment Agreements.‖ Ms. Huston‘s base salary for 2008 was established by the board of managers of Archipelago
         Learning Holdings, LLC in consultation with Messrs. McEwen and Walburg and has been


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         reviewed on an annual basis, based on factors including the general performance of our sales team, growth into additional
         sales markets resulting in increased responsibility, the growth of our sales team and annual increases in our sales. We
         anticipate that Messrs. McEwen and Walburg will continue to make recommendations and consult with our board of
         directors and the compensation committee in making compensation decisions after the completion of this offering.


            Annual Performance Bonus

                  We believe it is important to provide cash incentive bonuses to provide incentives for our executive officers to meet
         annual company and individual objectives established by our board of directors, in consultation with Messrs. McEwen and
         Walburg (other than bonuses for the chief executive officer and chief financial officer, which were established solely by the
         board of managers of Archipelago Learning Holdings, LLC and will be established by our board of directors), and to reward
         performance for meeting those objectives. Bonus arrangements are identified in employment agreements and are generally
         determined by company performance as measured against the budget for the applicable year. For a discussion of the bonus
         arrangements in the employment agreements for the named executive officers and for amounts awarded in 2008, see
         ―— Employment Agreements‖ and ―— Grants of Plan-Based Awards in 2008.‖ In 2008, the board of managers of
         Archipelago Learning Holdings, LLC made discretionary adjustments to the bonus payments to Messrs. McEwen, Walburg,
         Chalmers and Muzzo set forth in their respective employment agreements based on an evaluation of our performance, the
         executive officer‘s performance of his duties and the impact of the executive officer‘s performance in driving our growth
         and earnings. We use Adjusted EBITDA as a key measure in determining our performance and therefore, Adjusted EBITDA
         is another factor the board of managers considers in making adjustments to annual bonus payments. In 2008, Adjusted
         EBITDA was $21.9 million compared to $14.1 million in 2007 and $8.1 million in 2006. Given this 55% increase in
         Adjusted EBITDA from 2007 to 2008 and 73% increase in Adjusted EBITDA from 2006 to 2007, our board of managers
         approved increases in bonus payment for certain of our executive officers for both 2007 and 2008. We anticipate that the
         compensation committee will also exercise a measure of discretion in determining bonus awards in future periods based on
         similar factors.

                   Executive officers and other employees who are not party to employment agreements are also eligible for annual
         performance bonuses. Ms. Huston, as the Executive Vice President, Global Sales, is eligible for a performance bonus twice a
         year, as set forth in her employment agreement, and prior to her entry into an employment agreement, as established by the
         board of directors in consultation with Messrs. McEwen and Walburg, reflecting performance during the two six-month
         sales cycles in a calendar year, ending in June and December. Historically, Messrs. McEwen and Walburg have determined
         Ms. Huston‘s bonus based on the results during the applicable period as compared with target sales levels, previously set
         according to a formula tied to overall sales results for the business and specific performance targets. We expect that the
         compensation committee will continue to assess Ms. Huston‘s and other members of the sales team‘s performance bonus in
         this manner after the consummation of this offering. Bonus payments for Messrs. McEwen, Walburg, Lowrey, Chalmers and
         Muzzo are made once a year after our financial results for the prior year are available. Bonus payments for our other
         executive officers and employees are made twice a year, based on six-month performance periods. We expect that the
         compensation committee will consult with Messrs. McEwen and Walburg and continue to assess these performance bonuses
         in a similar manner after the consummation of this offering.

            Equity Compensation Plan

                 In connection with the Providence Equity Transactions, we established the 2007 Equity Compensation Plan as a
         long-term compensation program that compensates our executive officers and certain other employees using equity-based
         awards and accordingly compensates our executive officers and certain other employees based on the value of our equity.
         We believe that when our executive officers possess an ownership interest in us, they have a continuing stake in our
         long-term success.

                 Under the 2007 Equity Compensation Plan we granted Class B and Class C shares in Archipelago Learning
         Holdings, LLC to our executive officers and certain other employees in accordance with the terms of


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         the Archipelago Learning Holdings, LLC Agreement. These participation shares were granted to employees who we
         determined to be key employees for our business, in connection with certain employee promotions and to certain newly hired
         employees. The Class B shares vest over time subject to the participant‘s continued employment by or service to
         Archipelago Learning, LLC. The Class C shares are subject to performance hurdles and holders of the Class C shares are
         only entitled to distributions if he or she is employed by or provides service to Archipelago Learning, LLC at the time that
         distributions are made.

                   Each vested Class B share and Class C share is entitled to participate in distributions in accordance with the terms
         of the Archipelago Learning Holdings, LLC Agreement. No holder of Class B or Class C shares is eligible to receive
         distributions until the holders of the Class A and Class A-2 shares have received distributions equal to 100% of their capital
         contributions and the holders of Class A shares have also received a preferred return of 12% per annum on the Class A
         capital contributions. Once these distributions have been made, holders of the Class A, Class A-2 and vested Class B shares
         become eligible to receive distributions subject to cumulative percent limitations. No distribution can be made on account of
         a Class B share that has not yet vested. Amounts that would otherwise be paid on account of these shares are credited to the
         member‘s capital accounts and will be distributed once these shares have vested. If any unvested shares are forfeited, such
         amounts will be distributed to the Class A and Class A-2 holders on a pro rata basis, in proportion to the number of shares
         held by Class A and Class A-2 holders. In addition, some of the Class B shares are subject to a distribution threshold, which
         means they are not entitled to receive any portion of any distribution until the aggregate amount of distributions on all shares
         outstanding on the date of grant of such Class B shares has exceeded a specified distribution threshold. Once the distribution
         threshold has been met, such Class B shares are entitled to participate in distributions. The Class C shares are not entitled to
         any portion of any distributions until the holders of Class A and Class A-2 shares have received certain multiples of
         cash-based returns on their respective investment in the Class A and Class A-2 shares.

                   Once the Class B and Class C shares become entitled to participate in distributions, each Class B and Class C share
         entitled to participate in a distribution is entitled to a pro rata amount of the distribution payable on the Class B shares and
         Class C shares, respectively, in proportion to the total number of Class B shares and Class C shares, respectively.

                  All Class C shares and any unvested Class B shares will be forfeited if any participant is no longer our employee.
         All Class B and Class C shares will be forfeited if the participant‘s employment is terminated by us for cause or by the
         participant without good reason. In addition, all Class B shares and Class C shares will be forfeited upon a holder‘s breach of
         any covenants relating to non-competition, non-solicitation or non-disclosure in any agreement.

                  The initial public offering is treated as a liquidation event of Archipelago Learning Holdings, LLC, and holders of
         Class B shares and Class C shares will receive our common stock and restricted common stock in an amount equal to the
         value they would have received upon a liquidation of Archipelago Learning Holding, LLC with liquidation proceeds implied
         by the initial public offering price. In connection with this offering and upon the consummation of the Corporate
         Reorganization, Archipelago Learning, Inc. will:

                    •      issue an aggregate of 335,542 shares of common stock to our officers, directors and employees who hold
                           Class B shares of Archipelago Learning Holdings, LLC in exchange for all of their vested Class B shares;

                    •      issue an aggregate of 585,009 shares of restricted common stock subject to time-based vesting to our
                           officers, directors and employees in exchange for all of their unvested Class B shares of Archipelago
                           Learning Holdings, LLC;

                    •      issue an aggregate of 194,932 shares of common stock, to our officers, directors and employees (other than
                           our chief executive officer, chief financial officer, chief technology officer and co-founders) in exchange
                           for their Class C Shares; and

                    •      issue an aggregate of 809,251 shares of restricted common stock, to our chief executive officer, chief
                           financial officer, chief technology officer and co-founders in exchange for their Class C shares.


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                           See ―Corporate Reorganization‖ and ―Certain Relationships and Related Person Transactions.‖

                         In addition, in connection with this offering, our board of directors will adopt a new equity benefit plan as
                described under ―— 2009 Omnibus Incentive Plan‖ pursuant to which a total of 2,198,172 shares of our common
                stock will be reserved for issuance and an employee stock purchase plan described under ―— Employee Stock
                Purchase Plan‖ pursuant to which 500,000 shares of our common stock will be reserved for issuance. The
                compensation committee will determine, subject to any employment agreements, any future equity awards that each
                named executive officer will be granted pursuant to the 2009 Omnibus Incentive Plan.

                     Other Benefits

                     We provide the following benefits to our named executive officers on the same basis as other eligible employees:

                     •       health, vision and dental insurance;

                     •       life insurance;

                     •       long-term and short-term disability; and

                     •       a 401(k) defined contribution retirement plan.

                  In addition, we provide a matching contribution to all employees of up to 3% of employee contributions to the
         defined contribution retirement plan, plus 50% of the amount of the plan participant‘s deferred compensation that exceeds
         3% of the participant‘s compensation, but not in excess of 5% of the participant‘s compensation.

         Summary Compensation Table

                 The following table sets forth certain information with respect to compensation for the years ended December 31,
         2008, 2007 and 2006 earned by or paid to our named executive officers.

                                                                                 Class B       Class C
                                                                    Cash         Equity        Equity         All Other
                                                 Salary(1)          Bonus       Awards(2)     Awards(2)     Compensation       Total
         Name and
         Principal
         Position                     Year          ($)              ($)           ($)           ($)            ($)             ($)


         Tim McEwen                    2008        259,875          260,000      150,929            —            6,404        677,208
           President and               2007        199,904          123,750      146,794       121,717         134,059        726,224
           Chief Executive
             Officer(3)                2006               —                 —            —             —              —                —

         James Walburg                 2008        215,000          215,000        27,965         6,086           9,308       473,359
           Executive Vice
           President,                  2007        118,974          100,000        23,854        19,779           2,667       265,274
           Chief Financial
             Officer and               2006               —                 —            —             —              —                —
           Secretary(4)

         Ray Lowrey                    2008         82,462          130,000              —             —          6,074       218,536
           Senior Vice
             President and             2007               —                 —            —             —              —                —
           Chief Technology
             Officer(5)                2006               —                 —            —             —              —                —

         Julie Huston                  2008        136,788          132,500         9,099         6,086           9,613       294,086
           Executive Vice
           President,                  2007        134,203           62,760         5,505         4,564           4,815       211,847
           Global Sales(6)             2006        249,829               —             —             —               —        249,829
Cameron Chalmers          2008        131,250         100,000      56,598       —    5,285   293,133
  Vice President(7)       2007        125,000         125,000      55,048   45,644   4,938   355,630
                          2006        213,200              —           —        —       —    213,200

David Muzzo               2008        131,250         100,000      56,598       —    8,973   296,821
  Vice President(8)       2007        125,000         125,000      55,048   45,644   4,938   355,630
                          2006        213,200              —           —        —       —    213,200


 (1) Reflects base salary earned during the fiscal year covered.


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           (2) Reflects the compensation expense we recognized in 2008 and 2007 for financial statement reporting purposes under
               FASB Statement No. 123(R) with respect to grants of Class B and C participations shares to the named executive
               officer. These values have been determined based on the assumptions set forth in Note 12 to our consolidated financial
               statements for 2008.

           (3) Mr. McEwen elected to defer payment of his 2007 salary in the amount of $199,904 to 2008. Mr. McEwen‘s ―All
               Other Compensation‖ for 2008 includes $340 for group term life insurance and $6,064 of 401(k) matching benefits.
               Mr. McEwen‘s ―All Other Compensation‖ for 2007 includes $134,059 of relocation expenses.

           (4) Mr. Walburg‘s ―All Other Compensation‖ for 2008 includes $258 for group term life insurance, $450 for unused
               vacation days and $8,600 of 401(k) matching benefits. Mr. Walburg‘s ―All Other Compensation‖ for 2007 includes
               $2,667 of 401(k) matching benefits.

           (5) Mr. Lowrey‘s ―All Other Compensation‖ for 2008 includes $92 for group term life insurance and $5,982 of relocation
               expenses. Mr. Lowrey‘s ―Cash Bonus‖ for 2008 represents the portion of his signing bonus that he was paid in 2008
               pursuant to his employment agreement and his annual performance bonus in 2008. See ―— Employment Agreements.‖

           (6) Ms. Huston‘s ―All Other Compensation‖ for 2008 includes $41 for group term life insurance and $9,572 of 401(k)
               matching benefits. Ms Huston‘s ―All Other Compensation‖ for 2007 includes $4,815 of 401(k) matching benefits.
               Ms. Huston was engaged as an independent contractor until January 2007, at which point she became employed by us
               first as Regional Sales Manager and subsequently as the Vice President of Sales. In 2006 she received $249,829 as
               total compensation for her work as an independent contractor sales representative. An employment agreement was
               entered into with Ms. Huston on August 28, 2009. See ― — Employment Agreements.‖

           (7) Mr. Chalmers‘s ―All Other Compensation‖ for 2008 includes $35 for group term life insurance and $5,250 of 401(k)
               matching benefits. Mr. Chalmers‘s ―All Other Compensation‖ for 2007 includes $4,938 of 401(k) matching benefits.

           (8) Mr. Muzzo‘s ―All Other Compensation‖ for 2008 includes $35 for group term life insurance and $8,938 of 401(k)
               matching benefits. Mr Muzzo‘s ―All Other Compensation‖ for 2007 includes $4,938 of 401(k) matching benefits.


         Grants of Plan-Based Awards in 2008

               The following table sets forth certain information with respect to grants of plan-based awards for the year ended
         December 31, 2008 with respect to the named executive officers.

                                                                                                    Estimated Future                    All Other
                                                  Estimated Future                                Payouts Under Equity                    Equity     Grant Date
                                             Payouts Under Non-Equity                           Incentive Plan Awards(2)                 Awards:     Fair Value
                                              Incentive Plan Awards(1)                                                     Number       Number of     of Equity
                                                                                                                 Maximu
                            Grant   Threshold        Target              Maximum    Threshold      Target          m       of Shares    Shares(3)    Awards(4)
         Nam
         e                  Date       ($)             ($)                 ($)         (#)           (#)           (#)        (#)          (#)          ($)



         Tim McEwen                    —             103,950              129,938      —                   —       —                —            —            —
                            May
                              7,
         James Walburg      2008       —               86,000             107,500      —            91,288         —        91,288        91,288       32,458
         Ray Lowrey                    —                   —               55,000      —                —          —            —             —            —
                            May
                              7,
         Julie Huston       2008       —                                               —            91,288         —        91,288        91,288       32,458
         Cameron
           Chalmers                    —               87,544              87,544      —                   —       —                —            —            —
         David Muzzo                   —               87,544              87,544      —                   —       —                —            —            —



           (1) Represents payments made pursuant to the annual performance bonus described under ―— Elements of Executive
               Compensation — Annual Performance Bonus‖ and as set forth in the employment agreements described under
               ―— Employment Agreements.‖ Messrs. McEwen‘s, Walburg‘s and Lowrey‘s target amounts are equal to 40% of each
               of his base salary, and their maximum amounts are equal to 50% of each of his base salary, subject to increases or
decreases at the discretion of the board of managers of Archipelago Learning Holdings, LLC. Messrs. Chalmers‘s and
Muzzo‘s target amounts and maximum


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                amounts are equal to two-thirds of each of his base salary, subject to increases or decreases at the discretion of the
                board of managers of Archipelago Learning Holdings, LLC. For 2008, Ms. Huston‘s compensation was determined by
                board of managers of Archipelago Learning Holdings, LLC in consultation with Messrs. McEwen and Walburg. The
                board of managers of Archipelago Learning Holdings, LLC determined that each of Messrs. McEwen, Walburg,
                Chalmers and Muzzo would be awarded bonus amounts exceeding the maximum amounts set forth for 2008.

           (2) Represents grants of Class C shares pursuant to the 2007 Equity Compensation Plan. The Class C shares are subject to
               performance hurdles and holders of Class C shares are entitled to distributions after holders of Class A and
               Class A-2 shares receive certain threshold multiples of cash-based returns on their respective Class A and
               Class A-2 shares, subject to such Class C share holders‘ continued employment by or service to us. See ―— Elements
               of Executive Compensation — Equity Compensation Plan.‖

           (3) Represents grants of Class B shares, which vest ratably over five years from the grant date subject to a participant‘s
               continued employment by or service to us. See ―— Elements of Executive Compensation — Equity Compensation
               Plan.‖

           (4) Represents management‘s determination of the fair market value of the Class B shares and Class C shares on the grant
               date computed in accordance with SFAS 123(R).


         Outstanding Equity Awards at 2008 Fiscal Year-End

                  The following table sets forth certain information with respect to outstanding equity awards of our named executive
         officers as of December 31, 2008 with respect to the named executive officers. The market value of the shares in the
         following table is the fair value of such shares at December 31, 2008.


                                                                                                                        Equity Incentive
                                                                                                   Equity Incentive      Plan Awards:
                                                                                                    Plan Awards:        Market Value of
                                                           Number of                                 Number of            Shares That
                                                            Shares            Market Value of          Shares                Have
                                                                               Shares That
                                                          That Have Not           Have             That Have Not         Not Vested ($)
         Nam
         e                                                  Vested (#)        Not Vested ($)(1)     Vested (#)(3)            (1)(3)


         Tim McEwen
           Class B Shares(2)                                  1,947,468      $     1,226,905                   —                    —
           Class C Shares(3)                                         —                    —             2,434,335      $       365,150
         James Walburg
           Class B Shares(2)                                    407,751      $       245,929                   —                    —
           Class C Shares(3)                                         —                    —               486,867      $        70,291
         Ray Lowrey
           Class B Shares(2)                                             —                  —                   —                     —
           Class C Shares(3)                                             —                  —                   —                     —
         Julie Huston
           Class B Shares(2)                                    164,318      $        92,566                   —                    —
           Class C Shares(3)                                         —                    —               182,576      $        24,648
         Cameron Chalmers                                                                 —
           Class B Shares(2)                                    456,439      $       287,556                   —                    —
           Class C Shares(3)                                         —                    —               639,014      $        95,852
         David Muzzo
           Class B Shares(2)                                    456,439      $       287,556                   —                    —
           Class C Shares(3)                                         —                    —               639,014      $        95,852


           (1) The market value of unvested shares is based on management‘s determination of the fair market value at
               December 31, 2008 computed in accordance with SFAS No. 123(R).
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           (2) The unvested Class B shares vest ratably on an annual basis over five years subject to a participant‘s continued
               employment by or service to us. As of December 31, 2008, 486,867 of Mr. McEwen‘s Class B shares were scheduled
               to vest on January 10 of each of 2009, 2010, 2011 and 2012. As of December 31, 2008, 79,116 of Mr. Walburg‘s
               Class B shares were scheduled to vest on January 10 of each of 2009, 2010, 2011 and 2012, and 18,258 of
               Mr. Walburg‘s Class B shares were scheduled to vest on May 7 of each of 2009, 2010, 2011, 2012 and 2013. As of
               December 31, 2008, Mr. Lowrey had no Class B shares. As of December 31, 2008, 18,258 of Ms. Huston‘s Class B
               shares were scheduled to vest on January 10 of each of 2009, 2010, 2011, 2012 and 2013, and 18,258 of Ms. Huston‘s
               Class B shares were scheduled to vest on May 7 of each of 2009, 2010, 2011, 2012 and 2013. As of December 31,
               2008, 182,575 of Mr. Chalmers‘s Class B shares were scheduled to vest on January 10 of 2009 and 91,288 of
               Mr. Chalmers‘s Class B shares were scheduled to vest on January 10 of each of 2010, 2011 and 2012. As of
               December 31, 2008, 182,575 of Mr. Muzzo‘s Class B shares were scheduled to vest on January 10 of 2009 and 91,288
               of Mr. Muzzo‘s Class B shares were scheduled to vest on January 10 of each of 2010, 2011 and 2012.

           (3) The Class C shares are subject to performance hurdles and holders of Class C shares are entitled to distributions after
               holders of Class A and Class A-2 shares receive certain threshold multiples of cash-based returns on their respective
               Class A and Class A-2 shares, subject to such Class C share holders‘ continued employment by or service to us.


         Stock Vested

                  The following table sets forth certain information with respect to equity awards of our named executive officers that
         have fully vested as of December 31, 2008 with respect to the named executive officers.


                                                                                                   Number of
                                                                                                 Shares Acquired        Value Realized
                                                                                                   on Vesting            on Vesting
         Nam
         e                                                                                            (#)(1)                ($)(2)


         Tim McEwen                                                                                      486,867              306,726
         James Walburg                                                                                    79,116               49,843
         Ray Lowrey                                                                                           —                    —
         Julie Huston                                                                                     18,258               11,502
         Cameron Chalmers                                                                                182,575              115,022
         David Muzzo                                                                                     182,575              115,022


           (1) Represents Class B shares for each of Messrs. McEwen, Walburg, Chalmers and Muzzo and Ms. Huston that in each
               case were granted on May 22, 2007 and vested on January 10, 2008.

           (2) Represents management‘s determination of the fair market value at December 31, 2008 computed in accordance with
               SFAS No. 123(R).


         Pension Benefits

                In the year ended December 31, 2008, our named executive officers received no pension benefits and had no
         accumulated pension benefits.


         Nonqualified Deferred Compensation

                In the year ended December 31, 2008, our named executive officers received no nonqualified deferred
         compensation and had no deferred compensation balances.


         Potential Payments Upon Termination or Upon Change in Control

                 The information below describes and quantifies certain compensation that would become payable under each named
         executive officer‘s employment agreement if, as of December 31, 2008, his employment
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         had been terminated, if 80% of the voting securities of Archipelago Learning Holdings, LLC or its subsidiaries were to be
         sold or if all or substantially all of the assets of Archipelago Learning Holdings, LLC or its subsidiaries were to be sold. Due
         to the number of factors that affect the nature and amount of any benefits provided upon the events discussed below, any
         actual amounts paid or distributed may be different. Factors that could affect these amounts include the timing during the
         year of any such event.

                   Each of Messrs. McEwen, Walburg, Lowrey, Chalmers and Muzzo and Ms. Huston are entitled to payment upon
         termination of their employment pursuant to their respective employment agreements. If any of Messrs. McEwen, Walburg,
         Lowrey, Chalmers or Muzzo or Ms. Huston were terminated for cause or if he terminates his or her employment without
         good reason, he or she will be entitled to receive (i) his or her base salary though the termination date; (ii) all benefits that
         are accrued but unpaid as of the termination date; and (iii) all benefits expressly available upon termination of employment
         in accordance with the plans and programs applicable to each such executive officer on the termination date. If any of
         Messrs. McEwen, Chalmers or Muzzo were terminated without cause or if he terminates his employment for good reason, he
         would additionally be entitled to receive an amount payable equal to his base salary during a 12-month period commencing
         on the termination date; if Mr. Walburg or Ms. Huston were terminated without cause or if he or she terminates his or her
         employment for good reason, he or she would additionally be entitled to an amount payable equal to his or her base salary
         during a six-month period commencing on the termination date; and if Mr. Lowrey were terminated without cause or if he
         terminates his employment for good reason, he would additionally be entitled to an amount payable equal to his base salary
         during a nine-month period, in each case payable in equal installments in accordance with our normal payroll practices.
         Under the terms of each of their new employment agreements, if either of Messrs. McEwen or Walburg were terminated
         without cause or for good reason, he would additionally be entitled to receive a bonus or pro-rated bonus for the year in
         which the termination date fell. In addition, under the terms of his new employment agreement, Mr. Walburg would also be
         entitled to an amount payable equal to his base salary during a 12-month period upon termination without cause or for good
         reason. If any of Messrs. McEwen, Chalmers or Muzzo or Ms. Huston is terminated as a result of the expiration of the term
         of his or her employment or as a result of his or her death or disability, he or she is entitled to receive the same payments as
         he would receive if he or she were terminated for cause. If any of Messrs. Walburg or Lowrey were terminated as a result of
         the expiration of the term of his employment, he would be entitled to receive the same payments as he would receive if he
         were terminated without cause, and if he were terminated as a result of death or total disability, he would be entitled to
         receive the same payments as he would receive if he were terminated for cause. Under the terms of each of their new
         employment agreements, if either of Messrs. McEwen or Walburg is terminated as a result of the expiration of the term of
         his employment or as a result of death or disability, he is entitled to receive the same payments as he would receive if he
         were terminated for cause.

                   Under each executive officer‘s employment agreement, ―cause‖ generally means any of the following events: (i) the
         executive officer repeatedly refuses or fails to perform any of his or her duties and responsibilities, including his or her
         persistent neglect of duty, chronic unapproved absenteeism or refusal to comply with any lawful directive or policy of the
         board of managers of Archipelago Learning Holdings, LLC, in each case not cured within 30 days notice to the executive
         officer by us, (ii) the executive officer acts in a manner that constitutes gross and willful misconduct or gross negligence in
         the performance of his or her duties, (iii) the executive officer commits a material act of fraud, personal dishonesty or
         misappropriation relating to us, (iv) the executive officer commits a material act of dishonesty, embezzlement, unauthorized
         use or disclosure of confidential information or other intellectual property or trade secrets or any other fraud with respect
         thereto, (v) a breach by the executive officer of a material provision of his or her employment agreement, (vi) the executive
         officer‘s indictment for or conviction of a felony or misdemeanor involving material dishonesty or moral turpitude or
         (vii) the executive officer‘s habitual or repeated misuse of, or habitual or repeated performance of the executive officer‘s
         duties under the influence of, alcohol or controlled substances.

                  Under each executive officer‘s employment agreement, ―good reason‖ generally means any of the following events
         without the executive officer‘s express written consent: (i) any breach by us of a material provision of the executive officer‘s
         employment agreement, (ii) a reduction in the executive officer‘s base


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         salary or (iii) a material reduction or diminution of the executive officer‘s duties, responsibilities or authorities, which are
         caused by an act by us.

                  In addition, upon the sale of more than 80% of the voting securities of Archipelago Learning Holdings, LLC or its
         subsidiaries or upon the sale of all or substantially all of the assets of Archipelago Learning Holdings, LLC or its
         subsidiaries, Mr. McEwen may be entitled to the repurchase of his equity incentive participation shares in an amount equal
         to $500,000 times the number of his complete years of employment with Archipelago Learning Holdings, LLC, such amount
         to be called the incentive gap, or a bonus equal to such incentive gap, in each case not to exceed $2,000,000, if at the time of
         the event, the total amount that he would receive in respect of these equity incentive shares would be less than $500,000
         multiplied by the total number of his complete years of employment by Archipelago Learning Holdings, LLC or its
         subsidiaries.

                 Furthermore, upon the sale of more than 80% of the voting securities of Archipelago Learning Holdings, LLC or
         upon the sale of all or substantially all of the assets of Archipelago Learning Holdings, LLC, each of Messrs. McEwen‘s,
         Walburg‘s, Lowrey‘s, Chalmers‘s, Muzzo‘s and Ms. Huston‘s unvested Class B shares will fully vest to the extent that his or
         her employment is not terminated prior to such sale or his or her employment with us is terminated other than for cause
         within 60 days prior to the execution of definitive and final agreements with respect to such sale.

                  All Class C shares and any unvested Class B shares will be forfeited if any participant is no longer our employee.
         All Class B and Class C shares will be forfeited if the participant‘s employment is terminated by us for cause or by the
         participant without good reason. In addition, all Class B shares and Class C shares will be forfeited upon a holder‘s breach of
         any covenants relating to non-competition, non-solicitation and non-disclosure in any agreement.

                 The following table summarizes the potential payments to our named executive officers assuming that such events
         occurred as of December 31, 2008.


                                                                                                               Equity
                                                        Severance                         Benefit             Incentive
                                                        Amounts          Benefits       Continuation          Payments           Total
                                                           ($)             ($)              ($)                  ($)              ($)


         Tim McEwen
         Termination for cause or without good reason           —              —                   —                      —              —
         Termination without cause or for good
           reason(1)                                       259,875             —                   —              306,726          566,601
         Termination other than for cause upon a
           change of control(2)                            259,875             —                   —            1,533,631        1,793,506
         Change of control(3)                                   —              —                   —            1,533,631        1,533,631
         James Walburg
         Termination for cause or without good reason           —              —                   —                      —              —
         Termination without cause or for good
           reason(1)                                       107,500             —                   —               49,843          157,343
         Termination other than for cause upon a
           change of control(2)                            107,500             —                   —              295,772          403,272
         Change of control(3)                                   —              —                   —              295,772          295,772
         Ray Lowrey
         Termination for cause or without good reason           —              —                   —                      —              —
         Termination without cause or for good
           reason(1)                                       240,000             —                   —                      —        240,000
         Termination other than for cause upon a
           change of control(2)                            240,000             —                   —                      —        240,000
         Change of control(3)                                   —              —                   —                      —             —
                                                                                                       footnotes continued on following page



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                                                                                                            Equity
                                                             Severance                     Benefit         Incentive
                                                             Amounts          Benefits   Continuation      Payments         Total
                                                                ($)             ($)          ($)              ($)            ($)


         Cameron Chalmers
         Termination for cause or without good reason               —               —               —             —              —
         Termination without cause or for good reason(1)       131,250              —               —        115,022        246,272
         Termination other than for cause upon a change of
           control(2)                                          131,250              —               —        402,578        533,828
         Change of control(3)                                       —               —               —        402,578        402,578
         David Muzzo
         Termination for cause or without good reason               —               —               —             —              —
         Termination without cause or for good reason(1)       131,250              —               —        115,022        246,272
         Termination other than for cause upon a change of
           control(2)                                          131,250              —               —        402,578        533,828
         Change of control(3)                                       —               —               —        402,578        402,578
         Julie Huston
         Termination for cause or without good reason               —               —               —             —              —
         Termination without cause or for good reason(1)            —               —               —         11,502         11,502
         Termination other than for cause upon a change of
           control(2)                                               —               —               —        104,068        104,068
         Change of control(3)                                       —               —               —        104,068        104,068



           (1) ―Severance Amounts‖ includes the amount payable to each of Messrs. McEwen, Walburg, Lowrey, Chalmers and
               Muzzo pursuant to each of his agreement as of December 31, 2008. ―Equity Incentive Payments‖ includes the fair
               value of each of Messrs. McEwen‘s, Walburg‘s, Lowrey‘s, Chalmers‘s and Muzzo‘s and Ms. Huston‘s vested Class B
               shares (which we may repurchase from an employee upon a termination without cause or for good reason) at
               December 31, 2008.

           (2) ―Severance Amounts‖ includes the amount payable to each of Messrs. McEwen, Walburg, Lowrey, Chalmers and
               Muzzo pursuant to his employment agreement as of December 31, 2008. ―Equity Incentive Payments‖ includes the
               fair value of each of Messrs. McEwen‘s, Lowrey‘s, Chalmers‘s and Muzzo‘s and Ms. Huston‘s vested Class B shares
               (which we may repurchase from an employee upon a termination other than for cause upon change of control) at
               December 31, 2008 and unvested Class B shares (which would be accelerated upon a change of control) at
               December 31, 2008.

           (3) ―Equity Incentive Payments‖ includes the fair value of each of Messrs. McEwen‘s, Walburg‘s, Chalmers‘s and
               Muzzo‘s and Ms. Huston‘s vested Class B shares (which each employee would in any case be entitled to) at
               December 31, 2008 and unvested Class B shares (which would be accelerated upon a change of control) at
               December 31, 2008.


         Employment Agreements

                  We have entered into employment agreements with each of Mr. McEwen, our chief executive officer, Mr. Walburg,
         our chief financial officer, Mr. Lowrey, our chief technology officer, Ms. Huston, our executive vice president of global
         sales, Mr. Chalmers, our vice president, Mr. Muzzo, our vice president and Mr. Martijn Tel, our chief operating officer, and
         Ms. Duquette, our chief marketing officer.

                   Pursuant to the terms of their respective employment agreements, Mr. McEwen‘s annual base salary is $247,500,
         Mr. Walburg‘s annual base salary is $200,000, Mr. Lowrey‘s annual base salary is $320,000, Mr. Chalmers‘s annual base
         salary is $125,000, Mr. Muzzo‘s annual base salary is $125,000, Mr. Tel‘s annual base salary is $300,000 and Ms.
         Duquette‘s annual base salary is $265,000. Pursuant to the terms of her employment agreement, as amended, Ms. Huston‘s
         annual base salary is $200,000. Pursuant to the terms of each of their new employment agreements entered into in August
         2009, Mr. McEwen‘s annual base salary is $328,000 and Mr. Walburg‘s annual base salary is $275,000. The board of
         managers of Archipelago Learning


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         Holdings, LLC may, in its sole discretion, make any increase in any of Messrs. McEwen‘s, Walburg‘s, Lowrey‘s,
         Chalmers‘s, Muzzo‘s or Tel‘s or Ms. Huston‘s annual base salary, as it deems appropriate. The board of managers of
         Archipelago Learning Holdings, LLC approved increases in base salaries for Messrs. McEwen, Walburg, Chalmers and
         Muzzo for 2008, for which their base salaries were $259,875, $215,000, $131,250 and $131,250, respectively, representing
         payment above their base salaries set forth in their employment agreements of 5%, 7.5%, 5% and 5%, respectively. The
         board of managers of Archipelago Learning Holdings, LLC also approved increases in each of Messrs. McEwen‘s and
         Walburg‘s base salaries for 2009, for which their base salaries are $300,000 and $255,000, respectively, representing
         payment above their base salaries set forth in their employment agreements of approximately 21% and 28%, respectively. In
         addition, under the terms of Mr. McEwen‘s previous employment agreement, but not his new employment agreement, the
         board of managers of Archipelago Learning Holdings, LLC may consider in good faith an appropriate adjustment to
         Mr. McEwen‘s annual base salary if our Adjusted EBITDA, as determined based on the provisions of our credit facility as of
         the end of any fiscal year, exceeds $25.0 million. In addition, each of Messrs. Chalmers and Muzzo agreed that as a result of
         their reducing their working hours and taking an extended leave of absence beginning in or around June 2009 and ending in
         or around October 2009, as of January 10, 2009 each of their base salaries beginning would be $62,500, the total number of
         each of their vested Class B shares would be 365,150.4 shares and the total number of each of their unvested Class B shares
         would be reduced by 273,862.8 shares.

                   Each of Messrs. McEwen, Walburg, Lowrey and Tel and Ms. Duquette are eligible to receive an annual
         performance bonus of up to 40% of his or her base salary based on performance targets established by the board of managers
         of Archipelago Learning Holdings, LLC in any particular fiscal year, and if such performance targets are exceeded in any
         fiscal year, the maximum bonus that each of Messrs. McEwen, Walburg, Lowrey and Tel are eligible to receive will be an
         amount equal to 50% of his base salary. For 2009, Mr. Tel will be eligible to receive a total bonus payment of $20,000 in
         respect of the period beginning on the start date of his employment on October 26, 2009 until December 31, 2009. Ms.
         Duquette is eligible to receive reimbursement for certain relocation expenses incurred during the first twelve months of her
         employment, which she must repay to us if her employment is terminated by us for cause or upon her resignation within
         twelve months of her start date (if such termination occurs between twelve and twenty four months of her start date, she will
         repay 50% of such costs). Each of Messrs. Chalmers and Muzzo are eligible to receive an annual performance bonus in an
         amount equal to up to two-thirds of his base salary based on, among other things, performance targets established by the
         board of managers of Archipelago Learning Holdings, LLC. Under the terms of her employment agreement, Ms. Huston is
         eligible to receive a semi-annual performance bonus of up to 50% of her base salary based on performance targets
         established by our board of directors for such semi-annual period; and if such performance targets are exceeded in any such
         period, the maximum bonus she is eligible to receive is 60% of her base salary in a semi-annual period. Each of Messrs.
         McEwen and Walburg under the terms of their new employment agreements are eligible to receive an annual performance
         bonus of up to 50% of his base salary based on performance targets established by our board of directors in any particular
         fiscal year; and if such performance targets are exceeded in any fiscal year the maximum bonus he is eligible to receive is
         60% of his base salary. In addition, Mr. Lowrey was eligible for an additional bonus payment of $55,000 to be paid in 2009
         upon achieving certain objectives between September 29, 2008, the day he commenced his employment with us, and
         December 31, 2008. Mr. Lowrey also received a signing bonus of $150,000, of which $75,000 was paid in the first payroll
         period after his start date and the remainder of which was paid in the first payroll period in January 2009. If Mr. Lowrey‘s
         employment is terminated for any reason prior to September 29, 2009, he is required to repay us the full $150,000. If his
         employment is terminated for any reason on or after September 29, 2009 but on or before September 29, 2010, he is required
         to repay us $75,000 of this signing bonus.

                  The employment agreements for each of Messrs. McEwen, Walburg, Lowrey, Chalmers and Muzzo and Ms.
         Huston provide that they are eligible to participate in our 2007 Equity Compensation Plan. Mr. McEwen received 2,434,335
         Class B shares and 2,434,335 Class C shares and Mr. Walburg received 395,579 Class B Shares and 395,579 Class C shares
         in connection with their employment agreements. Mr. Lowrey received 552,875 Class B shares and 552,875 Class C shares,
         which represented an increase in the amounts set forth in his employment agreement as a result of an updated valuation of
         the shares approved by


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         the board of managers of Archipelago Learning Holdings, LLC. Each of Messrs. Chalmers and Muzzo received 912,876
         Class B shares and 912,876 Class C shares in connection with their employment agreements. In connection with the
         agreements relating to their leave of absence, Messrs. Chalmers and Muzzo each forfeited 273,862 unvested Class B shares
         and retained 639,014 Class B shares and 912,876 Class C shares. For a description of the equity participation shares and
         vesting schedules see ―Certain Relationships and Related Person Transactions — Participation Shares.‖ Mr. Tel‘s and Ms.
         Duquette‘s employment agreements provide that each of them will be eligible to participate in Archipelago Learning, Inc.‘s
         stock option plan upon the completion of the initial public offering at a level consistent with senior management who report
         to the chief executive officer, as determined by the Board of Directors of Archipelago Learning, Inc.

                    Messrs. McEwen, Walburg, Lowrey, Chalmers and Muzzo and Ms. Huston are entitled to certain benefits if their
         employment is terminated or upon other events. See ―— Potential Payments Upon Termination Upon Change in Control.
         Under the terms of their respective employment agreements, Mr. Tel and Ms. Duquette are also entitled to payment upon
         termination of his or her employment. If Mr. Tel or Ms. Duquette is terminated for cause or if he or she terminates his or her
         employment without good reason, he or she will be entitled to receive (i) his or her base salary through the termination date;
         (ii) all benefits that are accrued but unpaid as of the termination date; and (iii) all benefits expressly available upon
         termination of employment in accordance with the plans and programs applicable to him or her. If Mr. Tel or Ms. Duquette
         are terminated without cause or if he or she terminates his or her employment for good reason, he or she would additionally
         be entitled to receive an amount payable equal to his or her base salary during a six-month period commencing on the
         termination date (or during a nine month period for Ms. Duquette in the event she is terminated without cause during the first
         year of her employment) payable in equal installments in accordance with normal payroll practices, and a bonus or a
         pro-rated bonus for the year in which the termination date fell. If Mr. Tel or Ms. Duquette is terminated as a result of the
         expiration of the term of his or her employment or as a result of death or disability, he or she is entitled to receive the same
         payments as he or she would receive if he or she were terminated for cause. The meanings of cause and good reason are
         substantially the same in Mr. Tel‘s and Ms. Duquette‘s employment agreements as in the employment agreements of the
         other executive officers. In addition, in connection with Messrs. Chalmers‘s and Muzzo‘s scheduled leave of absence, each
         of them may be terminated for cause if such leave of absence exceeds 120 days.

         Non-Competition and Non-Solicitation

                  The employment agreements for Messrs. McEwen, Walburg, Lowrey, Chalmers, Muzzo and Tel, Ms. Huston and
         Ms. Duquette contain provisions relating to non-competition and non-solicitation. Pursuant to each of his or her employment
         agreements (including Messrs. McEwen‘s and Walburg‘s new employment agreements), each of Messrs. McEwen and
         Lowrey has agreed not to compete with us or solicit any of our employees for a period following one year of his termination,
         each of Messrs. Walburg and Tel and Ms. Huston has agreed not to compete with us or solicit any of our employees for a
         period following six months of his or her termination, and each of Messrs. Chalmers and Muzzo has agreed not to compete
         with us or solicit any of our employees for a period following two years of his termination. Ms. Duquette has agreed not to
         compete with us or solicit any of our employees for a period following nine months of her termination, if she is terminated
         without cause within the first year of her employment, or a period following six months of her termination thereafter.

         2009 Omnibus Incentive Plan

                   We intend to adopt our 2009 Omnibus Incentive Plan, or the 2009 Plan, in connection with this offering. The 2009
         Plan will become effective prior to the consummation of this offering and a total of 2,198,172 shares of our common stock
         will be reserved for sale. The 2009 Plan provides for grants of nonqualified stock options, incentive stock options, stock
         appreciation rights, restricted stock, other stock-based awards and performance-based compensation. Directors, officers and
         other employees of us and our subsidiaries, as well as other individuals performing services for us, will be eligible for grants
         under the 2009 Plan. The purpose of the 2009 Plan is to provide incentives that will attract, retain and motivate highly
         competent officers, directors, employees and other service providers by providing them with appropriate incentives and
         rewards either through a proprietary interest in our long-term success or compensation based on their performance in
         fulfilling their personal responsibilities. The following is a summary of the material terms


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         of the 2009 Plan, but does not include all of the provisions of the 2009 Plan. For further information about the 2009 Plan, we
         refer you to the complete copy of the 2009 Plan, which we will file as an exhibit to the registration statement of which this
         prospectus is a part.


            Administration

                   The 2009 Plan provides for its administration by the compensation committee of our board of directors or any
         committee designated by our board of directors to administer the 2009 Plan. The committee is empowered to determine the
         form, amount and other terms and conditions of awards, clarify, construe or resolve any ambiguity in any provision of the
         2009 Plan or any award agreement and adopt such rules, forms, instruments and guidelines for administering the 2009 Plan
         as it deems necessary or proper. All actions, interpretations and determinations by the committee or by our board of directors
         are final and binding.


            Shares Available

                  The 2009 Plan makes available an aggregate of 2,198,172 shares of our common stock, subject to adjustments. In
         the event that any outstanding award expires, is forfeited, cancelled or otherwise terminated without the issuance of shares or
         is otherwise settled for cash, shares of our common stock allocable to such award, to the extent of such forfeiture,
         cancellation, expiration, termination or settlement for cash, shall again be available for the purposes of the 2009 Plan. If any
         award is exercised by tendering shares of our common stock to us, either as full or partial payment, in connection with the
         exercise of such award under the 2009 Plan or to satisfy our withholding obligation with respect to an award, only the
         number of shares of our common stock issued net of such shares tendered will be deemed delivered for purposes of
         determining the maximum number of shares of our common stock then available for delivery under the 2009 Plan.


            Eligibility for Participation

                   Members of our board of directors, as well as employees of, and service providers to, us or any of our subsidiaries
         and affiliates are eligible to participate in the 2009 Plan. The selection of participants is within the sole discretion of the
         committee.


            Types of Awards

                   The 2009 Plan provides for the grant of nonqualified stock options, incentive stock options, stock appreciation
         rights, shares of restricted stock, or ―restricted stock,‖ other stock-based awards and performance-based compensation,
         collectively, the ―awards.‖ The committee will, with regard to each award, determine the terms and conditions of the award,
         including the number of shares subject to the award, the vesting terms of the award, and the purchase price for the award.
         Awards may be made in assumption of or in substitution for outstanding awards previously granted by us or our affiliates, or
         a company acquired by us or with which we combine.


            Award Agreement

                  Awards granted under the 2009 Plan shall be evidenced by award agreements (which need not be identical) that
         provide additional terms and conditions associated with such awards, as determined by the committee in its sole discretion;
         provided, however, that in the event of any conflict between the provisions of the 2009 Plan and any such award agreement,
         the provisions of the 2009 Plan shall prevail.


            Options

                  An option granted under the 2009 Plan will permit a participant to purchase from us a stated number of shares at an
         option price established by the committee, subject to the terms and conditions described in the 2009 Plan, and such
         additional terms and conditions, as established by the committee, in its sole discretion, that are consistent with the provisions
         of the 2009 Plan. Options shall be designated as either a nonqualified stock option or an incentive stock option, provided that
         options granted to non-employee directors and other non-employee service providers shall be nonqualified stock options. An
         option granted as an incentive stock option shall, to the extent it fails to qualify as an incentive stock option, be treated as a
         nonqualified option.
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         None of us, including any of our affiliates or the committee, shall be liable to any participant or to any other person if it is
         determined that an option intended to be an incentive stock option does not qualify as an incentive stock option. Each option
         shall conform to the requirements of the 2009 Plan, and may contain such other provisions as the committee shall deem
         advisable.

                  The exercise price of an option granted under the 2009 Plan may not be less than 100% of the fair market value of a
         share of our common stock on the date of grant, provided the exercise price of an incentive stock option granted to a person
         holding greater than 10% of our voting power may not be less than 110% of such fair market value on such date. The
         committee will determine the term of each option at the time of grant in its discretion; however, the term may not exceed ten
         years (or, in the case of an incentive stock option granted to a ten percent stockholder, five years).


            Stock Appreciation Rights

                  A stock appreciation right entitles the holder to receive, upon its exercise, the excess of the fair market value of a
         specified number of shares of our common stock on the date of exercise over the grant price of the stock appreciation right.
         The payment of the value may be in the form of cash, shares of our common stock, other property or any combination
         thereof, as the committee determines in its sole discretion. Subject to the terms of the 2009 Plan and any applicable award
         agreement, the grant price (which shall not be less than 100% of the fair market value of a share of our common stock on the
         date of grant), term, methods of exercise, methods of settlement, and any other terms and conditions of any stock
         appreciation right shall be determined by the committee. The term of a stock appreciation right may not exceed 10 years.


            Restricted Stock

                   An award of restricted stock is a grant of a specified number of shares of our common stock, which are subject to
         forfeiture upon the occurrence of specified events. Each award agreement evidencing a restricted stock grant shall specify
         the period(s) of restriction, the number of shares of restricted stock subject to the award, the performance, employment or
         other conditions (including the termination of a participant‘s service whether due to death, disability or other cause) under
         which the restricted stock may be forfeited to the company and such other provisions as the committee shall determine. The
         committee may require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until
         the restrictions thereon shall have lapsed. Unless otherwise determined by the committee and set forth in the award
         agreement, a participant holding restricted stock will not have the right to vote and will not receive dividends with respect to
         such restricted stock.


            Other Stock-Based Awards

                  The committee, in its sole discretion, may grant awards of shares of our common stock and awards that are valued,
         in whole or in part, by reference to, or are otherwise based on the fair market value of, such shares (the ―other stock-based
         awards‖). Such other stock-based awards shall be in such form, and dependent on such conditions, as the committee shall
         determine, including, without limitation, the right to receive one or more shares of our common stock (or the equivalent cash
         value of such stock) upon the completion of a specified period of service, the occurrence of an event and/or the attainment of
         performance objectives. Subject to the provisions of the 2009 Plan, the committee shall determine to whom and when other
         stock-based awards will be made, the number of shares of our common stock to be awarded under (or otherwise related to)
         such other stock-based awards, whether such other stock-based awards shall be settled in cash, shares of our common stock
         or a combination of cash and such shares, and all other terms and conditions of such awards.


            Performance-Based Compensation

                  To the extent permitted by Section 162(m) of the Internal Revenue Code, or the Code, the committee is authorized
         to design any award so that the amounts or shares payable and distributable thereunder are treated as ―qualified
         performance-based compensation‖ within the meaning of Section 162(m) of the Code.


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         The vesting, crediting and/or payment of performance-based compensation shall be based on the achievement of objective
         performance goals based on one or more of the following measures: (a) consolidated earnings before or after taxes
         (including earnings before interest, taxes, depreciation and amortization); (b) net income; (c) operating income; (d) earnings
         per share; (e) book value per share; (f) return on shareholders‘ equity; (g) expense management; (h) return on investment;
         (i) improvements in capital structure; (j) profitability of an identifiable business unit or product; (k) maintenance or
         improvement of profit margins; (l) stock price; (m) market share; (n) revenues or sales; (o) costs; (p) cash flow; (q) working
         capital; and (r) return on assets. Such measures may be used to measure our performance or the performance of any of our
         business units and may be used to compare our performance against the performance of a group of comparable companies,
         or a published index.


            Transferability

                  Unless otherwise determined by the committee, an award shall not be transferable or assignable by a participant
         except in the event of his or her death (subject to the applicable laws of descent and distribution) and any such purported
         assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against us or any
         of our subsidiaries or affiliates. Any permitted transfer of the awards to heirs or legatees of a participant shall not be
         effective to bind us unless the committee has been furnished with written notice thereof and a copy of such evidence as the
         committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of
         the terms and conditions of the 2009 Plan.


            Stockholder Rights

                  Except as otherwise provided in the applicable award agreement, a participant has no rights as a stockholder with
         respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.


            Adjustment of Awards

                  In the event of any corporate event or transaction such as a merger, consolidation, reorganization, recapitalization,
         separation, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares of our common stock,
         exchange of shares of our common stock, dividend in kind, extraordinary cash dividend, or other like change in capital
         structure (other than normal cash dividends) to our stockholders, or any similar corporate event or transaction, the
         committee, to prevent dilution or enlargement of participants‘ rights under the 2009 Plan, shall substitute or adjust, in its sole
         discretion, the number and kind of shares that may be issued under the 2009 Plan or under particular forms of awards, the
         number and kind of shares subject to outstanding awards, the option price, grant price or purchase price applicable to
         outstanding awards, the annual award limits, and/or other value determinations applicable to the 2009 Plan or outstanding
         awards.

                   Upon the occurrence of a change in control, unless otherwise specifically prohibited under applicable laws or by the
         rules and regulations of any governing governmental agencies or national securities exchanges, or unless the committee shall
         determine otherwise in the award agreement, the committee is authorized (but not obligated) to make adjustments in the
         terms and conditions of outstanding awards, including without limitation the following (or any combination thereof):
         (i) continuation or assumption of such outstanding awards under the 2009 Plan by us (if it is the surviving company or
         corporation) or by the surviving company or corporation or its parent; (ii) substitution by the surviving company or
         corporation or its parent of awards with substantially the same terms for such outstanding awards; (iii) accelerated
         exercisability, vesting and/or lapse of restrictions under all then outstanding awards immediately prior to the occurrence of
         such event; (iv) upon written notice, provide that any outstanding awards must be exercised, to the extent then exercisable,
         within fifteen days immediately prior to the scheduled consummation of the event, or such other period as determined by the
         committee (in either case contingent upon the consummation of the event), and at the end of such period, such awards shall
         terminate to the extent not so exercised within the relevant period; and (v) cancellation of all or any portion of outstanding
         awards for fair value (as determined in the sole discretion of the committee) which, in the case of options and stock
         appreciation rights, may equal the excess, if any, of


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         the value of the consideration to be paid in the change of control transaction to holders of the same number of shares subject
         to such options or stock appreciation rights (or, if no such consideration is paid, fair market value of the shares subject to
         such outstanding awards or portion thereof being canceled) over the aggregate option price or grant price, as applicable, with
         respect to such awards or portion thereof being canceled.


            Amendment and Termination

                 Our board of directors may amend, alter, suspend, discontinue, or terminate the 2009 Plan or any portion thereof or
         any award (or award agreement) thereunder at any time.


            Compliance with Code Section 409A

                  To the extent that the 2009 Plan and/or awards are subject to Section 409A of the U.S. Internal Revenue Code, or
         the Code, the committee may, in its sole discretion and without a participant‘s prior consent, amend the 2009 Plan and/or
         awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and actions
         with retroactive effect) as are necessary or appropriate to (a) exempt the 2009 Plan and/or any award from the application of
         Section 409A of the Code, (b) preserve the intended tax treatment of any such award, or (c) comply with the requirements of
         Section 409A of the Code, Department of Treasury regulations and other interpretive guidance issued thereunder, including
         without limitation any such regulations or other guidance that may be issued after the date of the grant. This plan shall be
         interpreted at all times in such a manner that the terms and provisions of the 2009 Plan and awards are exempt from or
         comply with Section 409A guidance.


         Employee Stock Purchase Plan

                   We intend to adopt our Employee Stock Purchase Plan, or the ESPP, in connection with this offering. The purpose
         of the ESPP is to provide our eligible employees and employees of our subsidiaries with an opportunity to purchase shares of
         our common stock through payroll deductions. The ESPP is designed to provide an incentive to attract, retain and reward
         eligible employees. The ESPP will be generally available to all eligible employees, including our named executive officers,
         under the same offering and eligibility terms, and will not be tied to any performance criteria. The ESPP is not subject to any
         of the provisions of the Employee Retirement Income Security Act of 1974, as amended.

                  The following is a summary of the material terms of the ESPP, but does not include all of the provisions of the
         ESPP. For further information about the ESPP, we refer you to a complete copy of the ESPP, which we will file as an exhibit
         to the registration statement of which this prospectus is a part.


            Administration

                  The ESPP will be administered by the compensation committee of our board of directors or any other committee
         designated by the board to administer the ESPP. The plan administrator will have the authority to construe and interpret the
         terms of the ESPP and the purchase rights granted under it, to determine eligibility to participate and to establish policies and
         procedures for administration of the ESPP. All actions taken and all interpretations and determinations made by the
         administrator are final and binding upon the participants and the Company.


            Shares Subject to the Plan

                 The shares of our common stock issuable under the ESPP may be either newly issued shares or shares we acquire,
         including by purchase on the open market. The number of shares reserved pursuant to the ESPP is 500,000, subject to
         adjustment.

                  If any change is made to the Company‘s outstanding common stock in connection with any merger, consolidation,
         reorganization, recapitalization, stock split, stock dividend, or other like change, the committee shall make appropriate
         adjustments to, without limitation, the number or kind of shares subject to the ESPP and the purchase price of such shares in
         order to prevent dilution or enlargement of participants‘ rights.


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            Eligibility

                   All full-time employees of us or of any subsidiary or any other employees designated by the administrator will be
         eligible to participate in the ESPP, except that an employee may not be granted a right to purchase stock under the ESPP if,
         immediately after the grant, the employee would own stock possessing 5% or more of the total combined voting power or
         value of all classes of our capital stock or of any parent or subsidiary entity.


            Participation

                  Eligible employees who enroll in the ESPP may elect to have between one and ten percent of their eligible
         compensation withheld and accumulated for the purchase of shares at the end of each offering period in which they
         participate, unless otherwise determined by the administrator.

                  Each participant may cancel his or her election to participate in the ESPP by written notice to the committee in such
         form and at such times as the committee may require. Participation shall end automatically upon termination of employment
         for any reason.


            Offerings

                  Shares of our common stock are offered for purchase under the ESPP pursuant to a series of six-month offering
         periods. Unless otherwise determined by the administrator, the offering periods will commence on January 1 and July 1 of
         each year.


            Purchase of Shares

                  Amounts accumulated for each participant will be used to purchase shares of our common stock at the end of each
         offering period at a price equal to 100% of the fair market value on the purchase date.


            Resale Restrictions

                  The ESPP is intended to provide our shares for investment by employees and not for resale. However, we do not
         intend to restrict or influence any participant from selling shares purchased under the ESPP at any time, subject to
         compliance with applicable laws.


            Stockholder Rights

                   No participant will have any rights as a stockholder with respect to the shares covered by his or her purchase right
         until the shares are actually purchased on the participant‘s behalf. No adjustment will be made for dividends, distributions, or
         other rights for which the record date is prior to the date of such purchase.


            Amendment and Termination

                   Our board of directors may amend or terminate the ESPP at any time, provided that no amendment may increase the
         number of shares reserved for purchase without the approval of our stockholders. Upon a termination, shares may be issued
         to participants and any amounts not applied to the purchase of shares shall be refunded to the participants.


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                              CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS


         Archipelago Learning Holdings, LLC Agreement

                   On June 30, 2008, investment funds affiliated with Providence Equity Partners, together with Cameron Chalmers
         and David Muzzo (our founders and vice presidents) MHT-SI, L.P. and Jeanne Bodnar, the founder of TeacherWeb, together
         constituting all of the members of Archipelago Learning Holdings, LLC (formerly known as Study Island Holdings, LLC),
         entered into a second amended and restated limited liability company agreement, or the Archipelago Learning Holdings,
         LLC Agreement, which governs its operations. Prior to the consummation of this offering and in accordance with and as
         contemplated by the limited liability company agreement of Archipelago Learning Holdings, LLC, Archipelago Learning,
         Inc., a newly formed Delaware corporation, will consummate the Corporate Reorganization whereby Archipelago Learning
         Holdings, LLC will become a wholly owned subsidiary of Archipelago Learning, Inc. The Archipelago Learning Holdings,
         LLC Agreement in an amended form will continue to govern the operations of Archipelago Learning Holdings, LLC. See
         ―Corporate Reorganization.‖

                  Archipelago Learning Holdings, LLC created a board of managers of seven persons to manage the company and its
         business affairs. Of the seven managers, four are appointed by Providence Equity Partners, two are our founders, Cameron
         Chalmers and David Muzzo, and one is the current chief executive officer, Tim McEwen.

                  The Archipelago Learning Holdings, LLC Agreement sets forth the rights of the Class A, A-2, B and C shareholders
         and the vesting and forfeiture provisions of the Class B and C shares. Holders of Class A and Class A-2 shares vote as a
         single class, with each holder of Class A or Class A-2 shares entitled to one vote per share that it owns. Holders of Class B
         and Class C shares are not entitled to vote their shares. The Class B shares of Archipelago Learning Holdings, LLC vest
         ratably over five years subject to a participant‘s continued employment by or service to us. The Class C shares are subject to
         performance hurdles and holders of Class C shares are entitled to distributions after holders of Class A and Class A-2 shares
         receive certain threshold multiples of cash-based returns on their respective Class A and Class A-2 shares, subject to such
         Class C share holders‘ continued employment by or service to us. Both of the Class B and Class C shares are granted under
         an equity incentive plan. For a more detailed description of the Class B and Class C shares, see ―— Participation Shares.‖
         The Class A, A-2, B and C shares will be exchanged for shares of the common stock and shares of restricted common stock
         of Archipelago Learning, Inc. in connection with the Corporate Reorganization. See ―Corporate Reorganization.‖

                   Archipelago Learning Holdings, LLC may make distributions to its members in accordance with the terms of the
         Archipelago Learning Holdings, LLC Agreement in the sole discretion of the board of managers. For a description of
         distributions made, see ―— Archipelago Learning Holdings LLC Distributions.‖

                 The Archipelago Learning Holdings, LLC Agreement includes indemnification provisions by Archipelago Learning
         Holdings, LLC in favor of the board of managers, each current and former manager and any of their respective affiliates.


         Archipelago Learning Holdings, LLC Distributions

                   From January 2007 through September 30, 2009, Archipelago Learning Holdings, LLC paid aggregate distributions
         to its equity holders of approximately $76 million, consisting of $74.8 million in the year ended December 31, 2007 and
         $1.3 million in the nine months ended September 30, 2009. These distributions were made in connection with the Providence
         Equity Transactions and to enable equity holders to meet their estimated tax obligations, and they include a $73.2 million
         distribution made in November 2007 with the proceeds of the term loan and cash on hand. See ―Management‘s Discussion
         and Analysis of Financial Condition and Results of Operations.‖ In October 2009, Archipelago Learning Holdings, LLC
         made a special distribution of $8.0 million to its equity holders representing a return on such holders‘ investment, which was
         paid in accordance with the Archipelago Learning Holdings, LLC Agreement. In addition, Archipelago Learning Holdings,
         LLC intends to make distributions of approximately $1.6 million to its equity holders to enable them to meet certain tax
         obligations associated with the sale of TeacherWeb and


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         approximately $0.9 million to its equity holders to enable them to meet their other estimated tax obligations for the period
         from January 1, 2009 to the date of the Corporate Reorganization, which will be based on Archipelago Learning Holdings,
         LLC‘s estimated net taxable income from January 1, 2009 to the date of the Corporate Reorganization. Investors in this
         offering will not receive these distributions.


         Participation Shares

                   In connection with the Providence Equity Transactions, we adopted the 2007 Equity Incentive Plan, under which we
         granted Class B and Class C shares of Archipelago Learning Holdings, LLC to our executive officers and certain of our
         employees as equity incentive compensation. The Class B and Class C shares are awarded under the plan without any
         up-front cost to a participant through a participation agreement. The Class B shares are time-vesting shares that vest ratably
         over five years subject to a participant‘s continued employment by or service to us. The Class C shares are subject to
         performance hurdles and holders of Class C shares are entitled to distributions after holders of Class A and Class A-2 shares
         receive certain threshold multiples of cash-based returns on their respective Class A and Class A-2 shares, subject to such
         Class C share holders‘ continued employment by or service to us. All Class C shares and any unvested Class B shares will be
         forfeited if any participant is no longer our employee. All Class B and Class C shares will be forfeited if the participant‘s
         employment is terminated by us for cause or by the participant without good reason. In addition, all Class B shares and
         Class C shares will be forfeited upon a holder‘s breach of any covenants relating to non-competition, non-solicitation or
         non-disclosure in any agreement. Furthermore, upon the sale of more than 80% of the voting securities of Archipelago
         Learning Holdings, LLC or upon the sale of all or substantially all of the assets of Archipelago Learning Holdings, LLC,
         holders of unvested Class B shares will fully vest to the extent that his or her employment is not terminated prior to such sale
         or his or her employment with us is terminated other than for cause within 60 days prior to the execution of definitive and
         final agreements with respect to such sale.

                 Upon the consummation with this offering and in connection with the Corporate Reorganization, holders of the
         Class B and Class C shares will receive common stock and restricted stock in exchange for their Class B and Class C shares.
         See ―Corporate Reorganization.‖

                  The following table sets forth the number and class of shares of Archipelago Learning Holdings, LLC received by
         each named executive officer as of November 17, 2009 and the number of shares of common stock and restricted common
         stock for which they will exchange their shares of Archipelago Learning Holdings, LLC in connection with the Corporate
         Reorganization:


                                                                                                                          Number of
                                                                                                                           Shares
                                                                                                  Number of Shares
                                                                                                        of               of Restricted
                                                            Class B Shares     Class C Shares      Common Stock         Common Stock


         Tim McEwen                                             2,434,335          2,434,335               153,380            601,778
         Cameron Chalmers                                         639,014            912,876                40,262            199,784
         David Muzzo                                              639,014            912,876                40,262            199,784
         Ray Lowrey                                               552,875            552,875                13,346            137,806
         James Walburg                                            486,867            486,867                27,628            122,545
         Julie Huston                                             182,576            182,576                36,334             19,444

                 As a result of the Corporate Reorganization, we may incur compensation expense related to the exchange of our
         Class B and Class C shares for common stock and restricted common stock. Assuming our shares are offered at $16.00 (the
         midpoint of the price range set forth on the cover of this prospectus), there is no significant expense to be recognized. A
         $1.00 decrease in the offering price would cause us to recognize approximately $2.1 million in expense related to this
         exchange, of which $1.0 million would be recorded upon the Corporate Reorganization and the remaining portion would be
         recorded over the required service or performance periods for the restricted common stock.


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         Stockholders Agreement

                  Upon the completion of this offering, we intend to enter into a stockholders agreement with our existing principal
         stockholders, which include Providence Equity Partners, Cameron Chalmers, David Muzzo, Jeanne Bodnar and MHT-SI,
         L.P. The stockholders agreement will set forth certain terms relating to the rights, including tag along and drag along rights,
         of our principal stockholders and restrictions on transfers of shares of our common stock. The stockholders agreement will
         also provide for customary registration rights, including demand, short-form and piggyback registration rights of the
         common stock they will receive as a result of the Corporate Reorganization.


         Voting Agreement

                   Prior to the completion of this offering, Providence Equity Partners, Cameron Chalmers, David Muzzo and
         MHT-SI, L.P. intend to enter into a voting agreement with respect to the shares of our common stock that they will hold
         upon the completion of this offering. Pursuant to the voting agreement, each of the parties will agree to vote at least 50% of
         his or its shares of common stock for the election of David Phillips, Michael Powell, Peter Wilde, Tim McEwen and Brian
         Hall to our board of directors at any meeting or pursuant to any written consent in which an election of directors is made.
         The voting agreement has a term of six months.


         Restricted Stock

                 Upon the Corporate Reorganization, we intend to issue restricted common stock in exchange for the unvested
         Class B shares and certain of the Class C shares. For more information, see ―Corporate Reorganization.‖


         Corporate Reorganization

                   Prior to this offering, we conducted our business through Archipelago Learning Holdings, LLC and its subsidiaries.
         Prior to the consummation of this offering and in accordance with and as contemplated by the limited liability company
         agreement of Archipelago Learning Holdings, LLC, Archipelago Learning, Inc., a newly formed Delaware corporation, will
         directly and indirectly, acquire all of the equity interests, of Archipelago Learning Holdings, LLC in exchange for shares of
         common stock and shares of restricted stock of Archipelago Learning, Inc. See ―Corporate Reorganization.‖


         MHT-Securities, L.P. Agreements

                  On May 1, 2007, Archipelago Learning, LLC entered into an agreement with MHT Securities, L.P. for the provision
         of financial advice in connection with the identification, evaluation and acquisition of one or more businesses. MHT
         Securities, L.P. is an affiliate of MHT-SI, L.P. one of the shareholders of Archipelago Learning Holdings, LLC. Under the
         terms of the agreement, Archipelago Learning, LLC must pay a transaction fee to MHT Securities, L.P. upon the successful
         consummation of a merger, acquisition, consolidation, divesture or similar transaction with any company initially identified
         and contacted by MHT Securities, L.P. as a potential acquisition for Archipelago Learning, LLC. The amount of this
         transaction fee is dependent upon the size of the acquisition, but in no circumstances less than $250,000. Archipelago
         Learning, LLC is also responsible for reimbursing MHT Securities, L.P. for any reasonable expenses incurred in connection
         with this agreement. During 2008, we paid approximately $277,000 to MHT Securities, L.P., consisting of $250,000 in
         connection with our acquisition of TeacherWeb, and $27,000 in expenses.


         Agreement with CDW Corporation

                  We buy information technology and services from CDW Corporation, a portfolio company of Providence Equity
         Partners, the majority shareholder of Archipelago Learning Holdings, LLC. Although we do not have any long-term
         contracts or purchase agreements outstanding with CDW, we purchased approximately $344,000 and $290,000 of
         information technology and services from CDW in 2008 and the nine months ended September 30, 2009, respectively.


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         Edline Investment

                  In August 2009, in conjunction with Providence Equity Partner‘s acquisition of Edline, a private Chicago-based
         educational technology company, we made a strategic minority investment in Edline. We purchased 285,601 Series A shares
         of Edline for $2.7 million (which reflects a reduction of $0.2 million of transaction fees we received in connection with the
         transactions), representing 6.9% of Edline‘s outstanding Series A shares. In addition, Edline borrowed $2.1 million from us
         pursuant to a five-year promissory note, which bears interest at 9.5% per annum and requires semi-annual interest-only
         payments. Edline provides online Learning Community Management Systems, or LCMS, solutions that help schools
         improve student performance by harnessing the power of parental involvement, supporting teachers, and engaging the
         learning community. Services include web hosting, content management, information portals, tools for classroom
         management, gradebook, notification, student data analytics, virtual storage and related technologies.

                  We believe that we can benefit from strategic opportunities with Edline, as Edline is capitalizing on the same trends
         in the K-12 education market as Study Island: (1) an increased focus on higher academic achievement and (2) increased
         availability and utilization of web-based technologies to enhance and supplement instruction and improve school to home
         communications. Accordingly, there are attractive strategic partnership opportunities between us and Edline, including
         linking Study Island‘s content to Edline‘s school and district LCMS solutions and co-marketing arrangements to capitalize
         on each company‘s customer base and sales force.


         TeacherWeb Sale

                  In November 2009, we completed our sale of the operations of TeacherWeb to Edline for an aggregate purchase
         price of $13 million, consisting of $6.5 million in cash (reduced by approximately $1.5 million of cash remaining on
         TeacherWeb‘s balance sheet), Series A shares of Edline valued at $3.7 million and $2.8 million of five-year debt securities
         that bear interest at 9.5% per annum and require semi-annual interest-only payments. We believe the sale of TeacherWeb,
         coupled with our earlier investment in Edline, will enable us to focus on growing our core business of providing online
         standards-based instruction, practice, assessment and reporting programs through our Study Island and Northstar Learning
         products, while partnering with Edline to integrate Study Island‘s content with Edline‘s community management solutions.
         In addition, we repaid $6.5 million on our term loan in connection with the sale. As a result of the sale, TeacherWeb‘s
         guarantee of our credit facility was released. Also as a result of the sale, we hold 11.2% of Edline‘s outstanding Series A
         shares and $4.9 million of Edline‘s senior debt. Prior to the completion of this offering, Archipelago Learning Holdings,
         LLC intends to make a distribution of $1.6 million to its equity holders to enable them to meet certain tax obligations
         associated with the sale of TeacherWeb.


         Board Compensation

                   Upon consummation of this offering, directors who are our employees or employees of our subsidiaries or
         employees of Providence Equity Partners will receive no compensation for their service as members of either our board of
         directors or board committees. We expect our board of directors to approve a plan for annual compensation for our
         non-employee directors, effective as of the date of the consummation of this offering. The non-employee directors will
         receive an annual retainer of $20,000 and a fee of $1,000 for each meeting they attend. The annual retainer will be payable at
         the director‘s option either 100% in cash or 100% in shares of our common stock. In addition, our non-employee directors
         will receive an annual restricted share award with a grant date fair market value of $25,000, which will vest on the
         first anniversary of the grant date. The non-management chair of the audit committee will receive an additional $10,000 fee
         payable at his or her option either 100% in cash or 100% in shares of our common stock. No separate committee meeting
         fees will be paid.

                  All directors are reimbursed for reasonable travel and lodging expenses incurred by them in connection with
         attending board and committee meetings.


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         Employment Agreements

                  We have entered into employment agreements with each of Messrs. McEwen, Walburg, Lowrey, Chalmers, Muzzo
         and Tel and Ms. Huston and Ms. Duquette. For more information regarding these agreements, see ―Compensation
         Discussion and Analysis — Employment Agreements‖ and ―Compensation Discussion and Analysis — Potential Payments
         Upon Termination or Change of Control.‖


         Indemnification Agreements

                   We intend to enter into indemnification agreements with each of our directors and executive officers. These
         agreements, among other things, require us to indemnify each director and executive officer to the fullest extent permitted by
         Delaware law, including indemnification of expenses such as attorneys‘ fees, judgments, fines and settlement amounts
         incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of
         us, arising out of the person‘s services as a director or executive officer.


         Policies for Approval of Related Person Transactions

                   In connection with this offering, we will adopt a written policy relating to the approval of related person
         transactions. Our audit committee will review and approve or ratify all relationships and related person transactions between
         us and (i) our directors, director nominees, executive officers or their immediate family members, (ii) any 5% record or
         beneficial owner of our common stock or (iii) any immediate family member of any person specified in (i) and (ii) above.
         Our controller will be primarily responsible for the development and implementation of processes and controls to obtain
         information from our directors and executive officers with respect to related party transactions and for determining, based on
         the facts and circumstances, whether we or a related person have a direct or indirect material interest in the transaction.

                  As set forth in the related person transaction policy, in the course of its review and approval or ratification of a
         related party transaction, the committee will consider:

                    •      the nature of the related person‘s interest in the transaction;

                    •      the availability of other sources of comparable products or services;

                    •      the material terms of the transaction, including, without limitation, the amount and type of transaction; and

                    •      the importance of the transaction to us.

                 Any member of the audit committee who is a related person with respect to a transaction under review will not be
         permitted to participate in the discussions or approval or ratification of the transaction. However, such member of the audit
         committee will provide all material information concerning the transaction to the audit committee.


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                                               PRINCIPAL AND SELLING STOCKHOLDERS

                   The following table shows information regarding the beneficial ownership of our common stock (i) immediately
         prior to and (ii) as adjusted to give effect to this offering by:

                    •       each person or group who is known by us to own beneficially more than 5% of our common stock;

                    •       each member of our board of directors and each of our named executive officers;

                    •       all members of our board of directors and our named executive officers as a group; and

                    •       each of the selling stockholders.

                    For more information on selling stockholders, see ―Certain Relationships and Related Person Transactions.‖

                  Beneficial ownership of shares is determined under rules of the SEC and generally includes any shares over which a
         person exercises sole or shared voting or investment power. Except as noted by footnote, and subject to community property
         laws where applicable, we believe based on the information provided to us that the persons and entities named in the table
         below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned
         by them. Percentage of beneficial ownership is based on 21,981,719 shares of common stock outstanding as of
         November 17, 2009 after giving effect to our Corporate Reorganization and assuming an initial public offering price of
         $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus), 25,106,719 shares of common
         stock to be outstanding after the completion of this offering, assuming no exercise of the overallotment option, or
         25,106,719 shares, assuming full exercise of the overallotment option. Unless otherwise indicated, the address for each
         holder listed below is Archipelago Learning, Inc., 3400 Carlisle Street, Suite 345, Dallas, Texas 75204.


                                                                                                                       Shares Beneficially
                                                                                                                          Owned After
                                                                                                                          this Offering
                                                                                                                         Assuming Full
                                                                                                                         Exercise of the
                                         Shares Beneficially Owned                 Shares Beneficially Owned           Option to Purchase
                                            Before this Offering                     After this Offering(1)            Additional Shares
                                    Number        Percentage          Shares        Number                           Number
            Name
            and
            Address                of Shares        of Shares        Offered(2)    of Shares        Percentage       of Shares       Percentage


            Providence Equity
              Partners(3)            15,409,324           70.1 %       2,411,823    12,997,501             51.8 %     12,273,954             48.9 %
            MHT-SI L.P.(4)              911,308            4.1 %         142,635       768,673              3.1 %        725,882              2.9 %
            Tim McEwen                  755,158            3.4 %              —        755,158              3.0 %        755,158              3.0 %
            James Walburg               150,173              *                —        150,173                *          150,173                *
            Ray Lowrey                  151,152              *                —        151,152                *          151,152                *
            Martijn Tel                      —              —                 —             —                —                —                —
            Allison Duquette                 —              —                 —             —                —                —                —
            Julie Huston                 55,778              *                —         55,778                *           55,778                *
            Cameron Chalmers          2,062,663            9.4 %         285,271     1,777,392              7.1 %      1,691,811              6.7 %
            David Muzzo               2,062,663            9.4 %         285,271     1,777,392              7.1 %      1,691,811              6.7 %
            David Phillips(5)                —              —                 —             —                —                —                —
            Michael Powell                   —              —                 —             —                —                —                —
            Peter Wilde(5)                   —              —                 —             —                —                —                —
            Brian Hall                       —              —                 —             —                —                —                —
            All board of
              director
              members and
              named executive
              officers as a
              group
              (12 persons)            5,237,587           23.8 %         570,542      4,667,045            18.6 %      4,495,883             17.9 %
      footnotes on following page



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            * Represents beneficial ownership less than 1% of our outstanding common stock.

           (1) Beneficial ownership does not include any shares that may be purchased in this offering. See ―Underwriting.‖

           (2) Represents the number of shares of common stock of Archipelago Learning, Inc. to be offered after giving effect to the
               Corporate Reorganization. If the underwriters exercise their option to purchase additional shares of our common stock,
               the additional shares sold by the selling stockholders will be allocated pro rata among all the selling stockholders
               based upon the share offered amounts in the preceding table.

           (3) Represents (i) 13,307,369 shares of common stock held by Providence Equity Partners V L.P. (―PEP V‖) and (ii)
               2,101,955 shares of common stock held by Providence Equity Partners V-A, L.P. (―PEP V-A‖) prior to the offering.

              In connection with this offering, PEP V is selling 2,082,831 shares of common stock and PEP V-A is selling 328,992
              shares of common stock. Assuming full exercise of the underwriters‘ option to sell additional shares, PEP V and PEP
              V-A will sell an additional 624,849 and 98,698 shares of common stock, respectively.

                Providence Equity GP V L.P. is the general partner of PEP V and PEP V-A and may be deemed to share beneficial
                ownership of shares owned by PEP V and PEP V-A. Providence Equity GP V L.P. disclaims this beneficial
                ownership, except to the extent of its pecuniary interest therein.

                Providence Equity Partners V L.L.C. is the general partner of Providence Equity GP V L.P. and may be deemed to
                share beneficial ownership of shares owned by Providence Equity GP V L.P., PEP V and PEP V-A. Providence Equity
                Partners V L.L.C. disclaims this beneficial ownership except to the extent of its pecuniary interest therein.
                Messrs. Jonathan Nelson, Glenn Creamer and Paul Salem each are members of Providence Equity Partners V L.L.C.
                and partners of Providence Equity GP L.P. and may be deemed to share beneficial ownership of shares owned by
                Providence Equity Partners V L.L.C., Providence Equity GP V L.P., PEP V and PEP V-A. Each of Messrs. Nelson,
                Creamer and Salem disclaims this beneficial ownership, except to the extent of his pecuniary interest therein.

                The address of Messrs. Nelson, Creamer and Salem and the entities in this footnote is c/o Providence Equity Partners,
                50 Kennedy Plaza, Suite 1801, Providence, Rhode Island, 02903.

           (4) MHT-SI GP, LLC is the general partner of MHT-SI, L.P. and may be deemed to share beneficial ownership of shares
               owned by MHT-SI, L.P. MHT-SI GP, LLC disclaims this beneficial ownership except to the extent of its pecuniary
               interest therein. Messrs. Michael McGill and Shawn D. Terry are the managing partners of MHT-SI GP, LLC and may
               be deemed to share beneficial ownership of shares owned by MHT-SI GP, LLC and MHT-SI, L.P. Messrs. McGill and
               Terry disclaim this beneficial ownership except to the extent of their pecuniary interest therein. The address of
               MHT-SI, GP, LLC, MHT-SI, L.P. and Messrs. McGill and Terry is 2000 McKinney Avenue, Suite 1200, Dallas,
               Texas, 75201.

           (5) Does not include shares held by Providence Equity Partners V L.P. and Providence Equity Partners V-A L.P. By
               virtue of their affiliation with Providence Equity Partners, including as limited partners of Providence Equity GP V
               L.P., Messrs. Wilde and Phillips may be deemed to have or share beneficial ownership of shares held by each of
               Providence Equity Partners V L.P. and Providence Equity Partners V-A, L.P. and their affiliated entities. See footnote
               (3) above. Messrs. Wilde and Phillips disclaim any such beneficial ownership of such shares, except to the extent of
               their pecuniary interest therein. The address of Messrs. Wilde and Phillips is c/o Providence Equity Partners, 50
               Kennedy Plaza, Suite 1801, Providence, Rhode Island, 02903.


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                                                    DESCRIPTION OF CAPITAL STOCK

                   The following is a description of the material terms of our certificate of incorporation and bylaws as they will be in
         effect following the Corporate Reorganization and prior to the consummation of this offering. This summary does not
         purport to be complete and is qualified in its entirety by reference to the actual terms and provisions of our certificate of
         incorporation and bylaws, copies of which will be filed as exhibits to the registration statement of which this prospectus is a
         part.


         Authorized Capitalization

                   Upon the completion of the Corporate Reorganization prior to the consummation of this offering, our authorized
         capital stock will consist of 200,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of
         preferred stock, par value $0.001 per share. Immediately following the completion of this offering, 25,106,719 shares of
         common stock will be outstanding, and there will be no outstanding shares of preferred stock.


         Common Stock

                    The holders of our common stock are entitled to the following rights.


            Voting Rights

                  Each share of common stock entitles the holder to one vote with respect to each matter presented to our
         stockholders on which the holders of common stock are entitled to vote. Our common stock votes as a single class on all
         matters relating to the election and removal of directors on our board of directors and as provided by law, with each share of
         common stock entitling its holder to one vote. Holders of our common stock will not have cumulative voting rights. Except
         in respect of matters relating to the election and removal of directors on our board of directors and as otherwise provided in
         our certificate of incorporation or required by law, all matters to be voted on by our stockholders must be approved by a
         majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. In the case of
         election of directors, all matters to be voted on by our stockholders must be approved by a plurality of the votes entitled to be
         cast by all shares of common stock.

                   Prior to the completion of this offering, Providence Equity Partners, Cameron Chalmers, David Muzzo and
         MHT-SI, L.P. intend to enter into a voting agreement with respect to the shares of our common stock that they will hold
         upon the completion of this offering. Pursuant to the voting agreement, each of the parties will agree to vote at least 50% of
         his or its shares of common stock for the election of David Phillips, Michael Powell, Peter Wilde, Tim McEwen and Brian
         Hall to our board of directors at any meeting or pursuant to any written consent in which an election of directors is made.
         The voting agreement has a term of six months.


            Dividend Rights

                  Holders of common stock will share equally in any dividend declared by our board of directors, subject to any
         preferential rights of the holders of any outstanding preferred stock.


            Liquidation Rights

                   In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our
         common stock would be entitled to share ratably in our assets that are legally available for distribution to stockholders after
         payment of liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled
         to distribution and/or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of
         our preferred stock before we may pay distributions to the holders of our common stock.


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            Other Rights

                  Our stockholders have no subscription, redemption or conversion privileges. Our common stock does not entitle its
         holders to preemptive rights for additional shares and does not have any sinking fund provisions. All holders of our common
         stock are entitled to share equally on a share-for-share basis in any assets available for distribution to common stockholders
         upon our liquidation, dissolution or winding up. All of the outstanding shares of our common stock are, and all shares
         offered by this prospectus will be, when sold, validly issued, fully paid and nonassessable. The rights, preferences and
         privileges of the holders of our common stock are subject to the rights of the holders of shares of any series of preferred
         stock which we may issue. As of the date of this prospectus, there are no outstanding shares of preferred stock.


            Registration Rights

                 Our existing stockholders have certain registration rights with respect to our common stock pursuant to a
         stockholders agreement. For further information regarding this agreement, see ―Certain Relationships and Related Person
         Transactions — Stockholders Agreement.‖


         Preferred Stock

                   Our board of directors is authorized to provide for the issuance of preferred stock in one or more series and to fix
         the preferences, powers and relative, participating, optional or other special rights, and qualifications, limitations or
         restrictions thereof, including the dividend rate, conversion rights, voting rights, redemption rights and liquidation preference
         and to fix the number of shares to be included in any such series without any further vote or action by our stockholders. Any
         preferred stock so issued may rank senior to our common stock with respect to the payment of dividends or amounts upon
         liquidation, dissolution or winding up, or both. In addition, any such shares of preferred stock may have class or series
         voting rights. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of
         our company without further action by the stockholders and may adversely affect the voting and other rights of the holders
         of our common stock. As of the date of this prospectus, there are no outstanding shares of preferred stock.


         Anti-Takeover Effects of the Delaware General Corporate Law and Our Certificate of Incorporation and Bylaws

                  Upon the closing of this offering, our certificate of incorporation and bylaws will contain provisions that may delay,
         defer or discourage another party from acquiring control of us. We expect that these provisions, which are summarized
         below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to
         encourage persons seeking to acquire control of us to first negotiate with our board of directors, which we believe may result
         in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board the
         power to discourage acquisitions that some stockholders may favor.


            Undesignated Preferred Stock

                  The ability to authorize undesignated preferred stock will make it possible for our board of directors to issue
         preferred stock with super voting, special approval, dividend or other rights or preferences on a discriminatory basis that
         could impede the success of any attempt to acquire us. These and other provisions may have the effect of deferring, delaying
         or discouraging hostile takeovers, or changes in control or management of our company.


            Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals

                  Our bylaws provide that special meetings of the stockholders may be called only upon the request of not less than a
         majority of the combined voting power of the voting stock, upon the request of a majority of the board, or upon the request
         of the chief executive officer. Our bylaws prohibit the conduct of any business at a special meeting other than as specified in
         the notice for such meeting. These provisions may have the


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         effect of deferring, delaying or discouraging hostile takeovers, or changes in control or management of our company.

                  Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of
         candidates for election as directors, other than nominations made by or at the direction of the board of directors or a
         committee of the board of directors. In order for any matter to be ―properly brought‖ before a meeting, a stockholder will
         have to comply with advance notice requirements and provide us with certain information. Additionally, vacancies and
         newly created directorships may be filled only by a vote of a majority of the directors then in office, even though less than a
         quorum, and not by the stockholders. Our certificate of incorporation provides that removal of a director without cause
         requires approval by at least 75% of shares of common stock entitled to vote. Our bylaws allow the presiding officer at a
         meeting of the stockholders to adopt rules and regulations for the conduct of meetings which may have the effect of
         precluding the conduct of certain business at a meeting if the rules and regulations are not followed. These provisions may
         also defer, delay or discourage a potential acquirer from conducting a solicitation of proxies to elect the acquirer‘s own slate
         of directors or otherwise attempting to obtain control of our company.


            Stockholder Action by Written Consent

                  Pursuant to Section 228 of the Delaware General Corporation Law, or the DGCL, any action required to be taken at
         any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote if
         a consent or consents in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not
         less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all
         shares of our stock entitled to vote thereon were present and voted, unless the company‘s certificate of incorporation
         provides otherwise. Our certificate of incorporation provides that any action required or permitted to be taken by our
         stockholders may be effected at a duly called annual or special meeting of our stockholders and may not be effected by
         consent in writing by such stockholders, unless such action is recommended by all directors then in office.


            Business Combinations under Delaware Law

                  Our certificate of incorporation expressly states that we have elected not to be governed by Section 203 of the
         DGCL, which prohibits a publicly held Delaware corporation from engaging in a ―business combination‖ with an ―interested
         stockholder‖ for a period of three years after the time the stockholder became an interested stockholder, subject to certain
         exceptions, including if, prior to such time, the board of directors approved the business combination or the transaction
         which resulted in the stockholder becoming an interested stockholder. ―Business combinations‖ include mergers, asset sales
         and other transactions resulting in a financial benefit to the ―interested stockholder.‖ Subject to various exceptions, an
         ―interested stockholder‖ is a person who, together with his or her affiliates and associates, owns, or within three years did
         own, 15% or more of the corporation‘s outstanding voting stock. These restrictions generally prohibit or delay the
         accomplishment of mergers or other takeover or change-in-control attempts that are not approved by a company‘s board of
         directors. Although we have elected to opt out of the statute‘s provisions, we could elect to be subject to Section 203 in the
         future.


            Corporate Opportunities and Transactions with Providence Equity Partners

                    In recognition that officers, directors, agents, stockholders, members or partners of Providence Equity Partners and
         its affiliates or subsidiaries may serve as our directors, officers, employees or agents, and that Providence Equity Partners, its
         affiliates and subsidiaries, or any of their officers, directors, agents, stockholders, members or partners, may acquire interests
         in businesses that directly or indirectly compete with certain portions of our business or are suppliers or clients of ours, our
         certificate of incorporation provides for the allocation of certain corporate opportunities between us and Providence Equity
         Partners. As set forth in our certificate of incorporation, neither Providence Equity Partners nor any of its affiliates or
         subsidiaries, nor any of their officers, directors, agents, stockholders, members or partners have any duty to refrain from
         engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we
         operate. If Providence Equity Partners acquires knowledge of a potential transaction or


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         matter which may be a corporate opportunity for itself and us, we will not have any expectancy in such corporate
         opportunity and Providence Equity Partners will not have any duty to communicate or offer such corporate opportunity to us
         and may pursue or acquire such corporate opportunity for itself or direct such opportunity to another person. In addition, if a
         director, officer, employee or agent of our company who is also a officer, director, agent, stockholder, member or partner of
         Providence Equity Partners or any of its affiliates or subsidiaries acquires knowledge of a potential transaction or matter
         which may be a corporate opportunity for us and Providence Equity Partners, we will not have any expectancy in such
         corporate opportunity unless such corporate opportunity is expressly offered to such person in writing, solely, in his or her
         capacity as a director, officer, employee or agent of our company.


         Listing

                    We intend to apply to have our common stock listed on Nasdaq under the symbol ―ARCL.‖


         Transfer Agent and Registrar

                    The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.


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                                             DESCRIPTION OF MATERIAL INDEBTEDNESS

                  On November 16, 2007, Archipelago Learning, LLC, formerly known as Study Island, LLC, as borrower, and the
         other persons designated as credit parties from time to time, entered into a credit facility providing for a $70.0 million term
         loan and a $10.0 million revolving credit facility with General Electric Capital Corporation, as a lender and as agent for all
         lenders, NewStar Financial, Inc., as syndication agent, the other parties thereto as lenders and GE Capital Markets, Inc. and
         NewStar Financial, Inc., as joint lead arrangers and joint bookrunners. This summary is not a complete description of all of
         the terms of the agreements governing our credit facility. The agreements setting forth the principal terms and conditions of
         our credit facility are filed as exhibits to the registration statement of which this prospectus forms a part.

                  In May 2009 the credit agreement governing the credit facility was amended to permit the creation of AL Midco,
         LLC, or AL Midco, a new wholly owned subsidiary of Archipelago Learning Holdings, LLC, which assumed all of
         Archipelago Learning Holdings, LLC‘s interests in Archipelago Learning, LLC. AL Midco became a guarantor under the
         credit agreement and Archipelago Learning Holdings, LLC was released as guarantor. We further amended the credit
         agreement in November 2009 to permit the sale of TeacherWeb. This amendment modified certain terms of the credit
         agreement, including adding a LIBOR floor of 1.25% to the calculation of our interest rates and reducing the letter of credit
         sublimit available to us under the credit agreement from $2.0 million to $1.0 million. In addition, we repaid an aggregate
         amount of $6.5 million upon the consummation of the sale of TeacherWeb. As a result of the sale, TeacherWeb, Inc. was
         released as a guarantor.


         General

                  Our credit facility consists of a $70.0 million term loan (of which $68.3 million was outstanding as of
         September 30, 2009), which expires in November 2013, and a $10.0 million revolving credit facility, none of which was
         outstanding at September 30, 2009, which expires in November 2013. We repaid $6.5 million of the term loan in November
         2009 in connection with the sale of TeacherWeb.

                    The obligations under the credit facility are guaranteed by AL Midco. The credit facility is secured on a
         first-priority basis by security interests (subject to permitted liens) in substantially all tangible and intangible assets, subject
         to certain exceptions, owned by Archipelago Learning, LLC and AL Midco, including pledges of the stock of Archipelago
         Learning, LLC‘s and AL Midco‘s subsidiaries. In addition, any future domestic subsidiaries of Archipelago Learning, LLC
         and AL Midco will be required (subject to certain exceptions) to guarantee the credit facility and grant liens on substantially
         all of its assets to secure such guarantee.


         Interest and Fees

                   The term loan bears interest at rates based upon either a base rate or LIBOR plus an applicable margin determined
         based on our leverage ratio (3.25% as of September 30, 2009 and December 31, 2008 and 4.00% as of December 31, 2007,
         in each case for a LIBOR-based term loan). Amounts under the revolving credit facility can be borrowed and repaid, from
         time to time, at our option, subject to pro forma compliance with certain financial covenants. We incurred $1.7 million of
         debt financing costs in association with the term loan and revolving credit facility during 2007. In 2008, we received a
         refund of a portion of such costs in the amount of $0.2 million.

                  As of September 30, 2009, $68.3 million of borrowings were outstanding under the term loan and $0 were
         outstanding under the revolving credit facility. As of December 31, 2008, $69.3 million and $0 million of borrowings were
         outstanding under the term loan and the revolving credit facility, respectively. For the year ended December 31, 2008 and for
         the nine months ended September 30, 2009, the weighted average interest rate under the term loan was 7.03% and 3.71%,
         respectively, before giving effect to the interest rate swap. The rate on our interest rate swap is the difference between our
         fixed rate of 4.035% and the floating rate of three-month LIBOR.


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                   In addition to paying interest on outstanding principal under the credit facility, we are also required to pay a
         commitment fee (0.25% as of September 30, 2009) on the average daily unused commitments available to be drawn under
         the revolving credit facility at a rate determined based on our leverage ratio. Our leverage ratio was 2.16 to 1.00 as of
         September 30, 2009. We are also required to pay letter of credit fees, with respect to each letter of credit issued, at a rate per
         annum equal to the applicable margin for LIBOR revolving credit loans on the average daily amount of undrawn letters of
         credit minus the amount of fronting fee referred to below. We are also required to pay fronting fees, with respect to each
         letter of credit issued, at a rate of 0.125% per annum and to pay General Electric Capital Corporation certain administrative
         fees from time to time, in its role as administrative agent. Under certain circumstances, we may be required to reimburse the
         lenders under our credit facility for certain increased fees and expenses caused by a change of law.


         Prepayments

                  We have the right to optionally prepay our borrowings under the term loan or the revolving credit facility, subject to
         the procedures set forth in the credit facility. We may be required to make prepayments on our borrowings under the term
         loan or the revolving credit facility if we receive proceeds as a result of certain asset sales, debt issuances, events of loss or if
         we have excess cash flow (as defined in the credit facility).


         Covenants

                   The credit facility requires us to maintain certain financial ratios, including a leverage ratio (based on the ratio of
         consolidated indebtedness, net of cash and cash equivalents subject to control agreements, to consolidated EBITDA, defined
         in the credit facility as earnings before interest, taxes, depreciation, derivative losses, changes in deferred revenue, stock
         based compensation, certain investments and permitted acquisition expenses, certain permitted payments to Providence
         Equity Partners, unusual non-recurring charges, certain agency fees to the administrative agent and adjustments related to the
         acquisition of TeacherWeb, or Adjusted EBITDA), an interest coverage ratio (based on the ratio of Adjusted EBITDA to
         consolidated interest expense, as defined in the credit facility) and a fixed charge coverage ratio (based on the ratio of
         Adjusted EBITDA to fixed charges, as defined in the credit facility). Based on the formulations set forth in the credit facility,
         as of September 30, 2009, we were required to maintain a maximum leverage ratio of 4.50 to 1.00, a minimum interest
         coverage ratio of 2.10 to 1.00 and a minimum fixed charge coverage ratio of 1.40 to 1.00. As of September 30, 2009, our
         leverage ratio was 2.16 to 1.00, our interest coverage ratio was 8.62 to 1.00 and our fixed charge coverage ratio was 4.91 to
         1.00. The financial ratios we are required to maintain become more restrictive over time.

                   The credit facility also contains certain affirmative and restrictive covenants that, among other things, provide
         limitations on the incurrence of additional indebtedness, liens on property, sale and leaseback transactions, investments,
         loans and advances, merger or consolidation, asset sales, acquisitions, dividends, transactions with affiliates, prepayments of
         any other indebtedness, modifications of our organizational documents and restrictions on our subsidiaries. The credit
         facility contains events of default that are customary for similar facilities and transactions, including a cross-default
         provision with respect to any other indebtedness and an event of default that would be triggered by a change of control, as
         defined in the credit facility, and which is not expected to be triggered by this offering. As of December 31, 2007,
         December 31, 2008 and September 30, 2009, we were in compliance with all covenants.


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                                                   SHARES ELIGIBLE FOR FUTURE SALE

                    Prior to this offering, there was no public market for our common stock.


         Sale of Restricted Securities

                   After this offering, there will be outstanding 25,106,719 shares (assuming no exercise of the underwriters‘ option to
         purchase additional shares), or 25,106,719 shares (assuming full exercise of the underwriters‘ option to purchase additional
         shares), of our common stock. Of these shares, all of the shares sold in this offering will be freely tradable without restriction
         under the Securities Act of 1933, as amended, unless purchased by our ―affiliates‖ as that term is defined in Rule 144 under
         the Securities Act. The remaining shares of common stock that will be outstanding after this offering are ―restricted
         securities‖ within the meaning of Rule 144 under the Securities Act. Restricted securities may be sold in the public market
         only if they are registered under the Securities Act or are sold pursuant to an exemption from registration under Rule 144
         under the Securities Act, which is summarized below. Subject to the lock-up agreements described below, shares held by our
         affiliates that are not restricted securities may be sold subject to compliance with Rule 144 of the Securities Act without
         regard to the prescribed one-year holding period under Rule 144.


         Lock-Up Arrangements

                   In connection with this offering, we and Providence Equity Partners, our employees, certain of our existing
         stockholders, and our directors and executive officers other than Cameron Chalmers and David Muzzo will have entered into
         lock-up agreements described under ―Underwriting‖ that restrict the sale of shares of our common stock for up to 180 days
         after the date of this prospectus. In addition, Cameron Chalmers, David Muzzo and MHT-SI, L.P. will have entered into
         lock-up agreements described under ―Underwriting‖ that restrict the sale of shares of our common stock for up to 300 days
         after the date of this prospectus. After the 180-day lock-up agreements have expired and holding periods have elapsed,
         14,533,262 additional shares will be eligible for sale in the public market, and after the 300-day lock-up agreements have
         expired and holding periods have elapsed, 4,323,457 additional shares will be eligible for sale in the public market. The
         lock-up agreements are subject to extensions under certain circumstances.

                    The restricted periods will be extended if:

                    • during the last 17 days of the applicable restricted period we issue an earnings release or announce material
                      news or a material event; or

                    • prior to the expiration of the applicable restricted period, we announce that we will release earnings results
                      during the 16-day period beginning on the last day of the applicable period, in which case the restrictions
                      described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning
                      on the issuance of the earnings release or the announcement of the material news or material event.

                   Following the lock-up periods set forth in the agreements described above, all of the shares of our common stock
         that are restricted securities or are held by our affiliates as of the date of this prospectus will be eligible for sale in the public
         market in compliance with Rule 144 under the Securities Act.


         Rule 144

                  The shares of our common stock sold in this offering will generally be freely transferable without restriction or
         further registration under the Securities Act, except that any shares of our common stock held by an ―affiliate‖ of ours may
         not be resold publicly except in compliance with the registration requirements of the Securities Act or under an exemption
         under Rule 144 or otherwise. Rule 144 permits our common stock that has been acquired by a person who is an affiliate of
         ours, or has been an affiliate of ours within the past three months, to be sold into the market in an amount that does not
         exceed, during any three-month period, the greater of:

                    •        one percent of the total number of shares of our common stock outstanding; or


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                    •      the average weekly reported trading volume of our common stock for the four calendar weeks prior to the
                           sale.

                 Such sales are also subject to specific manner of sale provisions, a six-month holding period requirement, notice
         requirements and the availability of current public information about us.

                   Rule 144 also provides that a person who is not deemed to have been an affiliate of ours at any time during the three
         months preceding a sale, and who has for at least six months beneficially owned shares of our common stock that are
         restricted securities, will be entitled to freely sell such shares of our common stock subject only to the availability of current
         public information regarding us. A person who is not deemed to have been an affiliate of ours at any time during the three
         months preceding a sale, and who has beneficially owned for at least one year shares of our common stock that are restricted
         securities, will be entitled to freely sell such shares of our common stock under Rule 144 without regard to the current public
         information requirements of Rule 144.


         Equity Incentive Plans

                  We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our
         common stock issued or reserved for issuance under our equity incentive plans, including the equity incentive plan and the
         employee stock purchase plan we intend to adopt in connection with this offering. The first such registration statement is
         expected to be filed soon after the date of this prospectus and will automatically become effective upon filing with the SEC.
         Accordingly, shares registered under such registration statement will be available for sale in the open market, unless such
         shares are subject to vesting restrictions with us or the lock-up restrictions described above.


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                              CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

                   The following is a general discussion of the material U.S. federal income and estate tax consequences of the
         ownership and disposition of common stock that may be relevant to you if you are a non-U.S. Holder (as defined below).
         This discussion is based on current law, which is subject to change, possibly with retroactive effect. This discussion is
         limited to non-U.S. Holders who hold shares of common stock as capital assets within the meaning of the U.S. Internal
         Revenue Code. Moreover, this discussion is for general information only and does not address all the tax consequences that
         may be relevant to you in light of your particular circumstances, nor does it discuss special tax provisions, which may apply
         to you if you relinquished U.S. citizenship or residence.

                  As used in this discussion, the term ―non-U.S. Holder‖ means a beneficial owner of our common stock that is not,
         for U.S. federal income tax purposes:

                    •      an individual who is a citizen or resident of the United States;

                    •      a corporation (or other entity classified as a corporation for these purposes) created or organized in or
                           under the laws of the United States or of any political subdivision of the United States;

                    •      a partnership (including any entity or arrangement classified as a partnership for these purposes);

                    •      an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its
                           source; or

                    •      a trust, if (1) a U.S. court is able to exercise primary supervision over the trust‘s administration and one or
                           more ―United States persons‖ (within the meaning of the U.S. Internal Revenue Code) has the authority to
                           control all of the trust‘s substantial decisions, or (2) the trust has a valid election in effect under applicable
                           U.S. Treasury regulations to be treated as a ―United States person.‖

                  If you are an individual, you may, in many cases, be deemed to be a resident alien, as opposed to a nonresident
         alien, by virtue of being present in the United States for at least 31 days in the calendar year and for an aggregate of at least
         183 days during a three-year period ending in the current calendar year. For these purposes, all the days present in the
         current year, one-third of the days present in the immediately preceding year, and one-sixth of the days present in the second
         preceding year are counted. Resident aliens are subject to U.S. federal income tax as if they were U.S. citizens.

                   If a partnership, including any entity or arrangement treated as a partnership for U.S. federal income tax purposes, is
         a holder of our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the
         partner, the activities of the partnership and certain determinations made at the partner level. A holder that is a partnership,
         and the partners in such partnership, should consult their own tax advisors regarding the tax consequences of the purchase,
         ownership and disposition of our common stock.

               EACH PROSPECTIVE PURCHASER OF COMMON STOCK IS ADVISED TO CONSULT A TAX ADVISOR
         WITH RESPECT TO CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF PURCHASING, OWNING
         AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE
         UNDER THE LAWS OF ANY U.S. STATE, MUNICIPALITY OR OTHER TAXING JURISDICTION, IN LIGHT OF
         THE PROSPECTIVE PURCHASER‘S PARTICULAR CIRCUMSTANCES.


         Dividends

                  We do not anticipate making any distributions on our common stock in the foreseeable future. See ―Dividend
         Policy.‖ If distributions are paid on shares of our common stock, such distributions will constitute dividends for U.S. federal
         income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under
         U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, it will
         constitute a return of capital that reduces, but not below zero, a


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         non-U.S. Holder‘s tax basis in our common stock. Any remainder will constitute gain from the sale or exchange of our
         common stock. If dividends are paid, as a non-U.S. Holder, you will be subject to withholding of U.S. federal income tax at
         a 30% rate, or a lower rate as may be specified by an applicable income tax treaty, on the gross amount of the dividends paid
         to you. To claim the benefit of a lower rate under an income tax treaty, you must properly file with the payor an Internal
         Revenue Service Form W-8BEN, or successor form, claiming an exemption from or reduction in withholding under the
         applicable tax treaty. In addition, where dividends are paid to a non-U.S. Holder that is a partnership or other pass-through
         entity, persons holding an interest in the entity may need to provide certification claiming an exemption or reduction in
         withholding under the applicable treaty.

                  If dividends are considered effectively connected with the conduct of a trade or business by you within the United
         States and, if required by an applicable income tax treaty, are attributable to a U.S. permanent establishment of yours, those
         dividends will be subject to U.S. federal income tax on a net basis at applicable graduated individual or corporate rates but
         will not be subject to withholding tax, provided an Internal Revenue Service Form W-8ECI, or successor form, is filed with
         the payor. If you are a foreign corporation, any effectively connected dividends may, under certain circumstances, be subject
         to an additional ―branch profits tax‖ at a rate of 30% or a lower rate as may be specified by an applicable income tax treaty.

                 You must comply with the certification procedures described above, or, in the case of payments made outside the
         United States with respect to an offshore account, certain documentary evidence procedures, directly or under certain
         circumstances through an intermediary, to obtain the benefits of a reduced rate under an income tax treaty with respect to
         dividends paid with respect to your common stock. In addition, if you are required to provide an Internal Revenue Service
         Form W-8ECI or successor form, as discussed above, you must also provide your tax identification number.

                 If you are eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty, you may obtain a
         refund of any excess amounts withheld by timely filing an appropriate claim for refund with the Internal Revenue Service.


         Gain on Disposition of Common Stock

                 As a non-U.S. Holder, you generally will not be subject to U.S. federal income or withholding tax on any gain
         recognized on a sale or other disposition of common stock unless:

                    •        the gain is considered effectively connected with the conduct of a trade or business by you within the
                             United States and, if required by an applicable income tax treaty, is attributable to a U.S. permanent
                             establishment of yours (in which case the gain will be subject to U.S. federal income tax on a net basis at
                             applicable individual or corporate rates and, if you are a foreign corporation, the gain may, under certain
                             circumstances, be subject to an additional branch profits tax equal to 30% or a lower rate as may be
                             specified by an applicable income tax treaty);

                    •        you are an individual who is present in the United States for 183 or more days in the taxable year of the
                             sale or other disposition and certain other conditions are met (in which case, except as otherwise provided
                             by an applicable income tax treaty, the gain, which may be offset by U.S. source capital losses, generally
                             will be subject to a flat 30% U.S. federal income tax, even though you are not considered a resident alien
                             under the U.S. Internal Revenue Code); or

                    •        we are or become a U.S. real property holding corporation (―USRPHC‖). We believe that we are not
                             currently, and are not likely not to become, a USRPHC. Even if we were to become a USRPHC, gain on
                             the sale or other disposition of common stock by you generally would not be subject to U.S. federal
                             income tax provided:

                         •          the common stock was ―regularly traded on an established securities market‖; and


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                         •        you do not actually or constructively own more than 5% of the common stock during the shorter of
                                  (i) the five-year period ending on the date of such disposition or (ii) the period of time during which
                                  you held such shares.


         Federal Estate Tax

                  Individuals, or an entity the property of which is includable in an individual‘s gross estate for U.S. federal estate tax
         purposes, should note that common stock held at the time of such individual‘s death will be included in such individual‘s
         gross estate for U.S. federal estate tax purposes and may be subject to U.S. federal estate tax, unless an applicable estate tax
         treaty provides otherwise.


         Information Reporting and Backup Withholding Tax

                  We must report annually to the Internal Revenue Service and to each of you the amount of dividends paid to you
         and the tax withheld with respect to those dividends, regardless of whether withholding was required. Copies of the
         information returns reporting those dividends and withholding may also be made available to the tax authorities in the
         country in which you reside under the provisions of an applicable income tax treaty or other applicable agreements.

                  Backup withholding is generally imposed (currently at a 28% rate, which rate currently is scheduled to increase to
         31% for taxable years beginning on or after January 1, 2011) on certain payments to persons that fail to furnish the necessary
         identifying information to the payor. You generally will be subject to backup withholding tax with respect to dividends paid
         on your common stock unless you certify your non-U.S. status. Dividends subject to withholding of U.S. federal income tax
         as described above in ―— Dividends‖ would not be subject to backup withholding.

                   The payment of proceeds of a sale of common stock effected by or through a U.S. office of a broker is subject to
         both backup withholding and information reporting unless you provide the payor with your name and address and you
         certify your non-U.S. status or you otherwise establish an exemption. In general, backup withholding and information
         reporting will not apply to the payment of the proceeds of a sale of common stock by or through a foreign office of a broker.
         If, however, such broker is, for U.S. federal income tax purposes, a U.S. person, a controlled foreign corporation, a foreign
         person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United
         States or a foreign partnership that at any time during its tax year either is engaged in the conduct of a trade or business in
         the United States or has as partners one or more U.S. persons that, in the aggregate, hold more than 50% of the income or
         capital interest in the partnership, backup withholding will not apply but such payments will be subject to information
         reporting, unless such broker has documentary evidence in its records that you are a non-U.S. Holder and certain other
         conditions are met or you otherwise establish an exemption.

                 Any amounts withheld under the backup withholding rules generally will be allowed as a refund or a credit against
         your U.S. federal income tax liability provided the required information is furnished in a timely manner to the Internal
         Revenue Service.


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                                                                UNDERWRITING

                  Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as the representative of each of the underwriters
         named below. Subject to the terms and conditions set forth in a purchase agreement among us, the selling stockholders and
         the underwriters, we and the selling stockholders have agreed to sell to the underwriters, and each of the underwriters has
         agreed, severally and not jointly, to purchase from us and the selling stockholders, the number of shares of common stock set
         forth opposite its name below.


                                                                                                                        Number
                                                      Underwriter                                                       of Shares


         Merrill Lynch, Pierce, Fenner & Smith
                       Incorporated
         William Blair & Company, L.L.C.
         Robert W. Baird & Co. Incorporated
         Piper Jaffray & Co.
         Stifel, Nicolaus & Company, Incorporated
                        Total                                                                                             6,250,000


                   Subject to the terms and conditions set forth in the purchase agreement, the underwriters have agreed, severally and
         not jointly, to purchase all of the shares sold under the purchase agreement if any of these shares are purchased. If an
         underwriter defaults, the purchase agreement provides that the purchase commitments of the nondefaulting underwriters may
         be increased or the purchase agreement may be terminated.

                   We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including
         liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those
         liabilities.

                  The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them,
         subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in
         the purchase agreement, such as the receipt by the underwriters of officer‘s certificates and legal opinions. The underwriters
         reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.


         Commissions and Discounts

                  The representative has advised us and the selling stockholders that the underwriters propose initially to offer the
         shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a
         concession not in excess of $      per share. The underwriters may allow, and the dealers may reallow, a discount not in
         excess of $     per share to other dealers. After the initial offering, the public offering price, concession or any other term of
         the offering may be changed.

                   The following table shows the public offering price, underwriting discount and proceeds before expenses to us and
         the selling stockholders. The information assumes either no exercise or full exercise by the underwriters of their
         overallotment option.


                                                                                   Per Share           Without Option               With Option


         Public offering price                                                     $               $                           $
         Underwriting discount                                                     $               $                           $
         Proceeds, before expenses, to us                                          $               $                           $
         Proceeds, before expenses, to the selling stockholders                    $               $                           $

                    The expenses of the offering, not including the underwriting discount, are estimated at $3.8 million and are payable
         by us.
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         Overallotment Option

                   The selling stockholders have granted an option to the underwriters to purchase up to 937,500 additional shares at
         the public offering price, less the underwriting discount. The underwriters may exercise this option for 30 days from the date
         of this prospectus solely to cover any overallotments. If the underwriters exercise this option, each will be obligated, subject
         to conditions contained in the purchase agreement, to purchase a number of additional shares proportionate to that
         underwriter‘s initial amount reflected in the above table.


         No Sales of Similar Securities

                  We and Providence Equity Partners, our employees, certain of our existing stockholders, and our directors and
         executive officers other than Cameron Chalmers and David Muzzo have agreed not to sell or transfer any common stock or
         securities convertible into, exchangeable for, exercisable for, or repayable with common stock, for up to 180 days after the
         date of this prospectus, and Cameron Chalmers, David Muzzo and MHT-SI, L.P. have agreed not to sell or transfer any
         common stock or securities convertible into, exchangeable for, exercisable for, or repayable with common stock, for up to
         300 days after the date of this prospectus, in each case without first obtaining the written consent of Merrill Lynch, Pierce,
         Fenner & Smith Incorporated. Specifically, we and these other persons have agreed, with certain limited exceptions, not to
         directly or indirectly

                    •       offer, pledge, sell or contract to sell any common stock,

                    •       sell any option or contract to purchase any common stock,

                    •       purchase any option or contract to sell any common stock,

                    •       grant any option, right or warrant for the sale of any common stock,

                    •       lend or otherwise dispose of or transfer any common stock,

                    •       request or demand that we file a registration statement related to the common stock, or

                    •       enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of
                            ownership of any common stock whether any such swap or transaction is to be settled by delivery of shares
                            or other securities, in cash or otherwise.

                  This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable
         for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing
         the agreement or for which the person executing the agreement later acquires the power of disposition. In the event that
         either (x) during the last 17 days of the applicable lock-up period referred to above, we issue an earnings release or material
         news or a material event relating to the Company occurs or (y) prior to the expiration of the applicable lock-up period, we
         announce that we will release earnings results or become aware that material news or a material event will occur during the
         16-day period beginning on the last day of the applicable lock-up period, the restrictions described above shall continue to
         apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the
         material news or material event.


         NASDAQ Stock Market LLC Listing

                    We expect the shares to be approved for listing on Nasdaq, subject to notice of issuance, under the symbol ―ARCL.‖

                 Before this offering, there has been no public market for our common stock. The initial public offering price will be
         determined through negotiations among us, the selling stockholders and the representative. In addition to prevailing market
         conditions, the factors to be considered in determining the initial public offering price are

                    •       the valuation multiples of publicly traded companies that the representative believes to be comparable to
                            us,
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                    •      our financial information,

                    •      the history of, and the prospects for, our company and the industry in which we compete,

                    •      an assessment of our management, its past and present operations, and the prospects for, and timing of, our
                           future revenues,

                    •      the present state of our development, and

                    •      the above factors in relation to market values and various valuation measures of other companies engaged
                           in activities similar to ours.

                   An active trading market for the shares may not develop. It is also possible that after the offering the shares will not
         trade in the public market at or above the initial public offering price.

                  The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they
         exercise discretionary authority.


         Price Stabilization, Short Positions and Penalty Bids

                   Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from
         bidding for and purchasing our common stock. However, the representative may engage in transactions that stabilize the
         price of the common stock, such as bids or purchases to peg, fix or maintain that price.

                   In connection with the offering, the underwriters may purchase and sell our common stock in the open market.
         These transactions may include short sales, purchases on the open market to cover positions created by short sales and
         stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required
         to purchase in the offering. ―Covered‖ short sales are sales made in an amount not greater than the underwriters‘ option to
         purchase additional shares in the offering. The underwriters may close out any covered short position by either exercising
         their overallotment option or purchasing shares in the open market. In determining the source of shares to close out the
         covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the
         open market as compared to the price at which they may purchase shares through the overallotment option. ―Naked‖ short
         sales are sales in excess of the overallotment option. The underwriters must close out any naked short position by purchasing
         shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there
         may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect
         investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of common
         stock made by the underwriters in the open market prior to the completion of the offering.

                   The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the
         underwriters a portion of the underwriting discount received by it because the representative has repurchased shares sold by
         or for the account of such underwriter in stabilizing or short covering transactions.

                   Similar to other purchase transactions, the underwriters‘ purchases to cover the syndicate short sales may have the
         effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price
         of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in
         the open market.

                  Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of
         any effect that the transactions described above may have on the price of our common stock. In addition, neither we nor any
         of the underwriters make any representation that the representative will engage in these transactions or that these
         transactions, once commenced, will not be discontinued without notice.


         Electronic Offer, Sale and Distribution of Shares

                  In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by
         electronic means, such as e-mail. In addition, Merrill Lynch, Pierce, Fenner & Smith
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         Incorporated may facilitate Internet distribution for this offering to certain of its Internet subscription customers. Merrill
         Lynch, Pierce, Fenner & Smith Incorporated may allocate a limited number of shares for sale to its online brokerage
         customers. An electronic prospectus is available on the website maintained by Merrill Lynch, Pierce, Fenner & Smith
         Incorporated. Other than the prospectus in electronic format, the information on the Merrill Lynch, Pierce, Fenner & Smith
         Incorporated website is not part of this prospectus.


         Other Relationships

                  Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking
         and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the
         future receive, customary fees and commissions for these transactions.


         Notice to Prospective Investors in the EEA

                  In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive
         (each, a ―Relevant Member State‖) an offer to the public of any shares which are the subject of the offering contemplated by
         this prospectus may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member
         State of any shares may be made at any time under the following exemptions under the Prospectus Directive, if they have
         been implemented in that Relevant Member State:

                  (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or
         regulated, whose corporate purpose is solely to invest in securities;

                    (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial
         year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown
         in its last annual or consolidated accounts;

                 (c) by the underwriters to fewer than 100 natural or legal persons (other than ―qualified investors‖ as defined in the
         Prospectus Directive) subject to obtaining the prior consent of the representative for any such offer; or

                    (d) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

         provided that no such offer of shares shall result in a requirement for the publication by us or any representative of a
         prospectus pursuant to Article 3 of the Prospectus Directive.

                  Any person making or intending to make any offer of shares within the EEA should only do so in circumstances in
         which no obligation arises for us or any of the underwriters to produce a prospectus for such offer. Neither we nor the
         underwriters have authorized, nor do they authorize, the making of any offer of shares through any financial intermediary,
         other than offers made by the underwriters which constitute the final offering of shares contemplated in this prospectus.

                  For the purposes of this provision, and your representation below, the expression an ―offer to the public‖ in relation
         to any shares in any Relevant Member State means the communication in any form and by any means of sufficient
         information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any
         shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in
         that Relevant Member State and the expression ―Prospectus Directive‖ means Directive 2003/71/EC and includes any
         relevant implementing measure in each Relevant Member State.

                  Each person in a Relevant Member State who receives any communication in respect of, or who acquires any shares
         under, the offer of shares contemplated by this prospectus will be deemed to have represented, warranted and agreed to and
         with us and each underwriter that:

                  (a) it is a ―qualified investor‖ within the meaning of the law in that Relevant Member State implementing
         Article 2(1)(e) of the Prospectus Directive; and


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                  (b) in the case of any shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the
         Prospectus Directive, (i) the shares acquired by it in the offering have not been acquired on behalf of, nor have they been
         acquired with a view to their offer or resale to, persons in any Relevant Member State other than ―qualified investors‖ (as
         defined in the Prospectus Directive), or in circumstances in which the prior consent of the representative has been given to
         the offer or resale; or (ii) where shares have been acquired by it on behalf of persons in any Relevant Member State other
         than qualified investors, the offer of those shares to it is not treated under the Prospectus Directive as having been made to
         such persons.


         Notice to Prospective Investors in Switzerland

                  This document, as well as any other material relating to the shares which are the subject of the offering
         contemplated by this prospectus, do not constitute an issue prospectus pursuant to Article 652a of the Swiss Code of
         Obligations. The shares will not be listed on the SWX Swiss Exchange and, therefore, the documents relating to the shares,
         including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of SWX
         Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SWX Swiss Exchange. The shares
         are being offered in Switzerland by way of a private placement, i.e. to a small number of selected investors only, without any
         public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The
         investors will be individually approached by us from time to time. This document, as well as any other material relating to
         the shares, is personal and confidential and do not constitute an offer to any other person. This document may only be used
         by those investors to whom it has been handed out in connection with the offering described herein and may neither directly
         nor indirectly be distributed or made available to other persons without our express consent. It may not be used in connection
         with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.


         Notice to Prospective Investors in the Dubai International Financial Centre

                  This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial
         Services Authority. This document is intended for distribution only to persons of a type specified in those rules. It must not
         be delivered to, or relied on by, any other person. The Dubai Financial Services Authority has no responsibility for
         reviewing or verifying any documents in connection with exempt offers. The Dubai Financial Services Authority has not
         approved this document nor taken steps to verify the information set out in it, and has no responsibility for it. The shares
         which are the subject of the offering contemplated by this prospectus may be illiquid and/or subject to restrictions on their
         resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not
         understand the contents of this document you should consult an authorised financial adviser.


         Notice to Prospective Investors in Australia

                   This document has not been lodged with the Australian Securities & Investments Commission and is only directed
         to certain categories of exempt persons. Accordingly, if you receive this document in Australia:

                    a. you confirm and warrant that you are either:

                            i. a ―sophisticated investor‖ under section 708(8)(a) or (b) of the Corporations Act 2001 (Cth) of Australia
                    (―Corporations Act‖);

                             ii. a ―sophisticated investor‖ under section 708(8)(c) or (d) of the Corporations Act and that you have
                    provided an accountant‘s certificate to the section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations
                    before the offer has been made;

                             iii. a person associated with the company under section 708(12) of the Corporations Act; or

                             iv. ―professional investor‖ within the meaning of section 708(11)(a) or (b) of the Corporations Act, and to
                    the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person
                    or professional investor under the Corporations Act any offer made to you under this document is void and
                    incapable of acceptance.


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                  b. you warrant and agree that you will not offer any of the shares issued to you pursuant to this document for resale
         in Australia within 12 months of those shares being issued unless any such resale offer is exempt from the requirement to
         issue a disclosure document under section 708 of the Corporations Act.


         Notice to Prospective Investors in Japan

                   The Shares have not been and will not be registered under the Financial Instruments and Exchange Law, as
         amended (the ―FIEL‖). This document is not an offer of securities for sale, directly or indirectly, in Japan or to, or for the
         benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation
         or entity organized under the laws of Japan) or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the
         benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements under the FIEL and
         otherwise in compliance with such law and any other applicable laws, regulations and ministerial guidelines of Japan.


         Notice to Prospective Investors in Hong Kong

                  This prospectus has not been approved by or registered with the Securities and Futures Commission of Hong Kong
         or the Registrar of Companies of Hong Kong. No person may offer or sell in Hong Kong, by means of any document, any
         Shares other than (a) to ―professional investors‖ as defined in the Securities and Futures Ordinance (Cap. 571) of Hong
         Kong and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a
         ―prospectus‖ as defined in the Companies 121 Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the
         public within the meaning of that Ordinance. No person may issue or have in its possession for the purposes of issue,
         whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Shares which is directed at, or
         the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the
         securities laws of Hong Kong) other than with respect to Shares which are or are intended to be disposed of only to persons
         outside Hong Kong or only to ―professional investors‖ as defined in the Securities and Futures Ordinance and any rules
         made under that Ordinance.

                  The contents have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise
         caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain
         independent professional advice.


         Notice to Prospective Investors in Singapore

                  This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore under the
         Securities and Futures Act, Chapter 289 of Singapore (the Securities and Futures Act). Accordingly, the shares may not be
         offered or sold or made the subject of an invitation for subscription or purchase nor may this prospectus or any other
         document or material in connection with the offer or sale or invitation for subscription or purchase of any shares be
         circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor
         pursuant to Section 274 of the Securities and Futures Act, (b) to a relevant person, or any person pursuant to
         Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specified in Section 275 of the
         Securities and Futures Act, or (c) pursuant to, and in accordance with the conditions of, any other applicable provision of the
         Securities and Futures Act.

                 Each of the following relevant persons specified in Section 275 of the Securities and Futures Act who has
         subscribed for or purchased shares, namely a person who is:

                             (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and
                    the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

                            (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and
                    each beneficiary is an accredited investor;


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         should note that shares, debentures and units of shares and debentures of that corporation or the beneficiaries‘ rights and
         interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under
         Section 275 of the Securities and Futures Act except:

                             (a) to an institutional investor under Section 274 of the Securities and Futures Act or to a relevant person,
                    or any person pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions,
                    specified in Section 275 of the Securities and Futures Act;

                            (b) where no consideration is given for the transfer; or

                            (c) by operation of law.


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                                                               LEGAL MATTERS

                  Weil, Gotshal & Manges LLP has passed upon the validity of the common stock offered hereby on behalf of us.
         Certain legal matters will be passed upon on behalf of the underwriters by Fried, Frank, Harris, Shriver & Jacobson LLP,
         New York, New York.


                                                                     EXPERTS

                  The balance sheet of Archipelago Learning, Inc. as of September 30, 2009, included in this prospectus, has been
         audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing
         herein and elsewhere in the registration statement of which this prospectus is a part. Such balance sheet is included in
         reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

                   The financial statements of Archipelago Learning Holdings, LLC as of December 31, 2007 and 2008, and for each
         of the three years in the period ended December 31, 2008, included in this prospectus, have been audited by Deloitte &
         Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein and elsewhere in
         the registration of which this prospectus is a part. Such financial statements are included in reliance upon the report of such
         firm given upon their authority as experts in accounting and auditing.


                                         WHERE YOU CAN FIND ADDITIONAL INFORMATION

                  We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the
         common stock offered hereby. This prospectus does not contain all of the information set forth in the registration statement
         and the exhibits and schedules thereto. For further information with respect to Archipelago Learning, Inc. and the common
         stock offered hereby, you should refer to the registration statement and to the exhibits and schedules filed therewith.
         Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an
         exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by
         reference to the full text of such contract or other document filed as an exhibit to the registration statement. A copy of the
         Archipelago Learning, Inc. registration statement and the exhibits and schedules thereto may be inspected without charge at
         the public reference room maintained by the SEC located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
         Copies of all or any portion of the registration statements and the filings may be obtained from such offices upon payment of
         prescribed fees. The public may obtain information on the operation of the public reference room by calling the SEC at
         1-800-SEC-0330 or (202) 551-8090. The SEC maintains a website at www.sec.gov that contains reports, proxy and
         information statements and other information regarding registrants that file electronically with the SEC.

                    You may obtain a copy of any of our filings, at no cost, by writing or telephoning us at:

                                                            Archipelago Learning, Inc.
                                                           3400 Carlisle Street, Suite 345
                                                                Dallas, TX 75204
                                                                 (800) 419-3191


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                                              INDEX TO FINANCIAL STATEMENTS


                                                                                                                      Page


         Archipelago Learning, Inc.

         Audited Financial Statement
         Report of Independent Registered Public Accounting Firm                                                       F-2
         Balance Sheet as of September 30, 2009                                                                        F-3
         Notes to Balance Sheet                                                                                        F-4

         Archipelago Learning Holdings, LLC

         Audited Consolidated Financial Statements
         Report of Independent Registered Public Accounting Firm                                                       F-5
         Consolidated Balance Sheets as of December 31, 2007 and 2008 and September 30, 2009 (unaudited)               F-6
         Consolidated Statements of Income for the years ended December 31, 2006, 2007 and 2008 and the nine months
           ended September 30, 2008 and 2009 (unaudited)                                                               F-7
         Consolidated Statements of Changes in Members‘ Equity for the years ended December 31, 2006, 2007 and
           2008 and the nine months ended September 30, 2009 (unaudited)                                               F-8
         Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2007 and 2008 and the nine
           months ended September 30, 2008 and 2009 (unaudited)                                                        F-9
         Notes to Consolidated Financial Statements                                                                   F-10


                                                                   F-1
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                             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


         To the Board of Directors and Stockholder of
         Archipelago Learning, Inc.
         Dallas, Texas

                  We have audited the accompanying balance sheet of Archipelago Learning, Inc. (the ―Company‖) as of
         September 30, 2009. This financial statement is the responsibility of the Company‘s management. Our responsibility is to
         express an opinion on this financial statement based on our audit.

                   We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
         (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
         financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to
         perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over
         financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
         of expressing an opinion on the effectiveness of the Company‘s internal control over financial reporting. Accordingly, we
         express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
         in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
         as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
         opinion.

                 In our opinion, such financial statement presents fairly, in all material respects, the financial position of Archipelago
         Learning, Inc. as of September 30, 2009, in conformity with accounting principles generally accepted in the United States of
         America.


         /s/ DELOITTE & TOUCHE LLP

         Dallas, Texas
         October 30, 2009


                                                                       F-2
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                                                  ARCHIPELAGO LEARNING, INC.

                                           BALANCE SHEET AS OF SEPTEMBER 30, 2009


                                                                ASSETS
         Cash                                                                                       $ 1,000

                                                      STOCKHOLDER EQUITY

         Common stock (par value $10.00 per share, 100 shares authorized, issued and outstanding)   $ 1,000




                                                        See notes to balance sheet.


                                                                   F-3
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                                                  ARCHIPELAGO LEARNING, INC.

                                                    NOTES TO BALANCE SHEET
                                                     AS OF SEPTEMBER 30, 2009


         1.     ORGANIZATION

                 Archipelago Learning, Inc. (the ―Company‖) was incorporated as a Delaware corporation on August 4, 2009, and
         has no material assets or any operations.


         2.     BASIS OF PRESENTATION

                  The Company‘s Balance Sheet has been prepared in accordance with U.S. generally accepted accounting principles.
         Separate Statements of Income, Changes in Stockholders‘ Equity and of Cash Flows have not been presented because this
         entity has had no activity.


         3.     STOCKHOLDER EQUITY

                  The Company has been capitalized with the issuance of 100 shares of Common Stock with a par value of $10.00 per
         share for a total of $1,000.


                                                                   F-4
Table of Contents



                             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


         To the Board of Managers and Stockholders of
         Archipelago Learning Holdings, LLC
         Dallas, Texas

                  We have audited the accompanying consolidated balance sheets of Archipelago Learning Holdings, LLC and
         subsidiaries (the ―Company‖) as of December 31, 2008 and 2007, and the related consolidated statements of income,
         changes in members‘ equity and cash flows for each of the three years in the period ended December 31, 2008. These
         financial statements are the responsibility of the Company‘s management. Our responsibility is to express an opinion on
         these financial statements based on our audits.

                   We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
         (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
         financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to
         perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over
         financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose
         of expressing an opinion on the effectiveness of the Company‘s internal control over financial reporting. Accordingly, we
         express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
         in the financial statements, assessing the accounting principles used and significant estimates made by management, as well
         as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
         opinion.

                  In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position
         of Archipelago Learning Holdings, LLC and subsidiaries as of December 31, 2008 and 2007, and the results of its operations
         and its cash flows for each of the three years in the period ended December 31, 2008, in conformity with accounting
         principles generally accepted in the United States of America.


         /s/ DELOITTE & TOUCHE LLP


         Dallas, Texas
         March 24, 2009 (September 2, 2009 as to earnings per share described in Note 2, the fair value of financial instruments
         described in Note 3, the investment described in Note 7, and segment information described in Note 15).


                                                                       F-5
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                                                          ARCHIPELAGO LEARNING HOLDINGS, LLC

                                                                 CONSOLIDATED BALANCE SHEETS


                                                                                                                                                                   Pro Forma
                                                                                                                                              As of                  As of
                                                                                                            As of December 31,           September 30,           September 30,
                                                                                                            2007           2008               2009               2009 (Note 2)
                                                                                                                                           (Unaudited)            (Unaudited)
                                                                                                                         (In thousands, except share data)


                                                                                       ASSETS
         CURRENT ASSETS:
          Cash and cash equivalents                                                                     $    11,060     $    13,144     $          17,111    $            6,591
          Accounts receivable — net of allowance for doubtful accounts                                        3,674           6,093                10,614
          Short-term deferred tax assets                                                                         —               —                     —                  1,082
          Prepaid expenses and other current assets                                                             469             357                 2,087

            Total current assets                                                                             15,203          19,594                29,812
         PROPERTY AND EQUIPMENT — Net                                                                           793           1,782                 2,045
         GOODWILL                                                                                            94,373         103,267               103,267
         INTANGIBLE ASSETS — Net                                                                             15,551          16,106                14,578
         INVESTMENT                                                                                              —               —                  2,734
         NOTE RECEIVABLE                                                                                         —               —                  2,144
         OTHER LONG-TERM ASSETS                                                                               1,671           1,276                 1,123

         TOTAL ASSETS                                                                                   $   127,591     $   142,025     $         155,703



                                                                     LIABILITIES AND MEMBERS’ EQUITY
         CURRENT LIABILITIES:
          Accounts payable — trade                                                                      $        57     $       382     $             249
          Wage and employee-related liabilities                                                               1,640           1,918                 1,474
          Deferred revenue                                                                                   15,819          24,632                31,964
          Other accrued liabilities                                                                             219             192                   476
          Current portion of long-term debt                                                                     700             700                   700
          Interest payable                                                                                      191             210                   131
          Interest rate swap                                                                                    206           1,988                 1,453

            Total current liabilities                                                                        18,832          30,022                36,447
         LONG-TERM DEBT — Net of current portion                                                             69,300          68,600                67,551
         LONG-TERM DEFERRED REVENUE — Net of current portion                                                  1,112           2,290                 4,505
         LONG-TERM DEFERRED TAX LIABILITY                                                                        —              639                   572                 6,028
         OTHER LONG-TERM LIABILITY (NOTE 10)                                                                     —               —                    230

         TOTAL LIABILITIES                                                                                   89,244         101,551               109,305
         COMMITMENTS AND CONTINGENCIES (NOTE 11)
         MEMBERS‘ EQUITY:
           Class A shares (109,545,064 shares authorized, issued and outstanding at December 31, 2007
             and 2008 and September 30, 2009)                                                                34,792          34,792                34,792                    —
           Class A-2 shares (no shares authorized, issued and outstanding at December 31, 2007;
             286,882 shares authorized, issued and outstanding at December 31, 2008 and
             September 30, 2009)                                                                                 —              750                   750                    —
           Class B shares (6,085,837 shares authorized, 5,720,692 shares issued and outstanding at
             December 31, 2007; 6,578,727 shares authorized, 5,355,440 shares issued and outstanding
             at December 31, 2008; 6,578,727 shares authorized, 6,028,727 shares issued and
             outstanding at September 30, 2009                                                                  345             684                   941                    —
           Class C shares (6,085,837 shares authorized, 5,720,692 shares issued and outstanding at
             December 31, 2007; 7,126,451 shares authorized, 5,903,164 shares issued and outstanding
             at December 31, 2008; 7,126,451 shares authorized, 6,576,451 shares issued and
             outstanding at September 30, 2009                                                                  286             302                   343                    —
           Retained earnings                                                                                  2,924           3,946                 9,572                    —

             Total members‘ equity                                                                           38,347          40,474                46,398                    —

         STOCKHOLDERS‘ EQUITY:
           Common stock ($0.001 par value, 200,000,000 shares authorized, 21,981,719 shares issued
             and outstanding)                                                                                    —               —                     —                     22
           Additional paid-in capital                                                                            —               —                     —                 28,804
           Retained earnings                                                                                     —               —                     —                  2,678

             Total stockholders‘ equity                                                                          —               —                     —                 31,504

         TOTAL LIABILITIES AND EQUITY                                                                   $   127,591     $   142,025     $         155,703
See notes to consolidated financial statements.


                     F-6
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                                                 ARCHIPELAGO LEARNING HOLDINGS, LLC

                                                 CONSOLIDATED STATEMENTS OF INCOME


                                                       Twelve Months Ended December 31,                           Nine Months Ended September 30,
                                                 2006                 2007                  2008                      2008                2009
                                             (Predecessor)                                                        (Unaudited)         (Unaudited)
                                                                                                  (Successor)
                                                                    (In thousands, except share and per share data)

         SERVICE REVENUE                 $          10,065      $         18,250     $          32,068        $          22,319      $       32,685
         COST OF REVENUE                               343                   750                 2,178                    1,253               2,723

         GROSS PROFIT                                9,722                17,500                29,890                   21,066              29,962
         OPERATING EXPENSES:
          Sales and marketing                        2,793                 7,669                13,193                    9,516              10,630
          Content development                          712                 1,206                 2,162                    1,496               2,586
          General and administrative                 2,581                 5,010                 6,644                    4,632               7,059

                    Total operating
                      expenses                       6,086                13,885                21,999                   15,644              20,275

         INCOME FROM
           OPERATIONS                                3,636                 3,615                   7,891                  5,422                9,687
         OTHER INCOME
           (EXPENSE):
           Interest expense                             —                   (838 )                 (5,161 )               (3,973 )            (2,092 )
           Interest income                              27                   343                      247                    194                  44
           Derivative loss                              —                   (173 )                 (2,119 )                 (857 )              (415 )

                    Total other income
                      (expense)                         27                  (668 )                 (7,033 )               (4,636 )            (2,463 )

         INCOME BEFORE INCOME
           TAXES                                     3,663                 2,947                     858                    786                7,224
           (Provision) benefit for
             income taxes                               —                    (23 )                   164                      11                (348 )

         NET INCOME                      $           3,663      $          2,924     $             1,022      $             797      $         6,876

         Net income per equity share
           attributable to members‘
           equity:
              Basic and Diluted
                 (NOTE 2)                $           1,832      $           0.03     $               0.01     $             0.01     $          0.06

         Weighted-average equity
          shares and equivalents
          outstanding:
             Basic and Diluted
               (NOTE 2)                                  2          109,545,064           109,545,064               109,545,064          109,545,064

         Unaudited pro forma provision
           for income taxes (NOTE 2)                                                 $             (2,069 )                          $        (2,774 )

         Unaudited pro forma net
           income (loss) (NOTE 2)                                                    $             (1,211 )                          $         4,450

         Unaudited pro forma net
           income (loss) per common
           share (NOTE 2):
             Basic                                                                   $              (0.06 )                          $          0.20
    Diluted                                               $          (0.06 )   $         0.20

Unaudited pro forma
  weighted-average common
  shares and equivalents
  outstanding (NOTE 2):
    Basic                                                      20,587,459          20,587,459

    Diluted                                                    20,587,459          20,587,459


                            See notes to consolidated financial statements.


                                                 F-7
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                                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                               CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY (DEFICIT)


                                                                                                                                                                                       Total
                                            Study Island
                                                LP                                                                                           Class C                              Members’
                                              Partner
                                               Capital            Class A Shares           Class A-2 Shares         Class B Shares            Shares               Retained            Equity
                                              (Deficit)         Units         Value        Units       Value       Units       Value      Units      Value         Earnings           (Deficit)
                                                                                                     (In thousands)


         Predecessor:
         BALANCE — December 31, 2005        $      (2,844 )
           Distributions                           (6,354 )
           Net income                               3,663

         BALANCE — December 31, 2006               (5,535 )
          Distribution                             (1,178 )
          Reorganization due to change in
            ownership                              6,713

         Ending balance — Predecessor       $          —


         Successor:
           Shares issued                                        109,545    $   109,545         —      $    —           —      $    —          —        $    —      $       —      $      109,545
           Distributions                                             —         (74,753 )       —           —           —           —          —             —              —             (74,753 )
           Stock-based compensation                                  —              —          —           —        5,721         345      5,721           286                               631
           Net income                                                —              —          —           —           —           —          —             —          2,924               2,924

         BALANCE — December 31, 2007                            109,545         34,792         —           —        5,721         345      5,721           286         2,924              38,347
          Shares issued                                              —              —         287         750          —           —          —             —             —                  750
          Stock-based compensation                                   —              —          —           —          456         372        456            30            —                  402
          Forfeitures of stock-based
             compensation                                            —                —        —           —         (822 )       (33 )     (274 )         (14 )          —                  (47 )
          Net income                                                 —                —        —           —           —           —          —             —          1,022               1,022

         BALANCE — December 31, 2008                            109,545         34,792        287         750       5,355         684      5,903           302          3,946             40,474
          Distributions                                              —              —          —           —           —           —          —             —          (1,250 )           (1,250 )
          Stock-based compensation                                   —              —          —           —          674         257        673            41             —                 298
          Net income                                                 —              —          —           —           —           —          —             —           6,876              6,876

         BALANCE — September 30, 2009
          (unaudited)                                           109,545    $    34,792        287     $   750       6,029     $   941      6,576       $   343     $   9,572      $       46,398




                                                                See notes to consolidated financial statements.


                                                                                               F-8
Table of Contents




                                                       ARCHIPELAGO LEARNING HOLDINGS, LLC

                                                    CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                                              Nine Months Ended
                                                                          Twelve Months Ended December 31,                      September 30,
                                                                           2006             2007           2008             2008              2009
                                                                       (Predecessor)                                     (Unaudited)      (Unaudited)
                                                                                                                  (Successor)
                                                                                                     (In thousands)

         CASH FLOW FROM OPERATING ACTIVITIES:
          Net income                                               $            3,663     $     2,924     $     1,022     $       797     $      6,876
          Adjustments to reconcile net income to net cash
            provided by operating activities:
            Amortization of debt financing costs                                   —               36             179             130              154
            Depreciation and amortization                                          71           1,670           2,183           1,541            2,314
            Stock-based compensation                                               —              631             355             272              298
            Unrealized gain on investments                                        (21 )            —               —               —                —
            Provision (benefit) for uncollectable accounts
               receivable                                                          —               38              51             (20 )             63
            Unrealized loss (gain) on interest rate swap                           —              205           1,783             635             (535 )
            Deferred income taxes                                                  —               —             (247 )           (74 )           (105 )
            Changes in operating assets and liabilities, net of
               impact of acquisitions:
               Accounts receivable                                             (1,129 )        (1,542 )        (2,270 )        (3,690 )         (4,585 )
               Prepaid expenses and other                                          —             (469 )           176             169             (527 )
               Accounts payable                                                    —               55             276             224             (134 )
               Accrued liabilities                                                428           1,557             252            (338 )           (237 )
               Deferred revenues                                                4,439           7,613           9,791           8,884            9,546
               Other long-term liability                                           —               —               —               —               230

                    Net cash provided by operating activities                   7,451         12,718          13,551            8,530           13,358

         CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of property and equipment                                     (211 )          (498 )        (1,324 )          (757 )         (1,049 )
          Investment in Edline                                                     —               —               —               —            (2,734 )
          Funding of note receivable from Edline                                   —               —               —               —            (2,144 )
          Business acquisition                                                     —          (84,787 )        (9,658 )        (9,658 )             —

                    Net cash used in investing activities                        (211 )       (85,285 )       (10,982 )       (10,415 )         (5,927 )

         CASH FLOWS FROM FINANCING ACTIVITIES:
          Distributions to predecessor                                         (6,354 )          (846 )            —              —                 —
          Proceeds from issuance of shares                                         —           89,545              —              —                 —
          Return of Capital distributions to parent shareholders                   —          (74,753 )            —              —                 —
          Advance to shareholder                                                   —               —               —              —                 —
          Tax distribution to parent shareholders                                  —               —               —              —             (1,250 )
          Cost of debt financing                                                   —           (1,706 )           215            215                —
          Cost of stock offering                                                   —               —               —              —             (1,165 )
          Proceeds from revolver                                                   —               —           10,000         10,000                —
          Payments on revolver                                                     —               —          (10,000 )           —                 —
          Proceeds from term note                                                  —           70,000              —              —                 —
          Payment on term note                                                     —               —             (700 )         (525 )          (1,049 )

                    Net cash (used in) provided by financing
                      activities                                               (6,354 )       82,240             (485 )         9,690           (3,464 )

         NET CHANGE IN CASH AND CASH
          EQUIVALENTS:                                                           886            9,673          2,084           7,805             3,967
          Beginning of period                                                    501            1,387         11,060          11,060            13,144

           End of period                                           $            1,387     $   11,060      $   13,144      $   18,865      $     17,111

         SUPPLEMENTAL DISCLOSURES OF CASH FLOW
           INFORMATION:
           Cash paid for interest                                  $               —      $       612     $     4,992     $     3,771     $      2,004

           Cash paid for income taxes                              $               20     $        —      $        44     $        13     $         47
NON-CASH INVESTING AND FINANCING
 ACTIVITIES
 Accrued purchases of property and equipment             $            —       $      49    $       19    $   22    $   17

  Non-cash distribution to Predecessor (Note 12)         $            —       $     332    $       —     $   —     $   —

  Issuance of shares in business acquisitions (Note 1)   $            —       $   20,000   $       750   $   750   $   —



                                                 See notes to consolidated financial statements.


                                                                      F-9
Table of Contents



                                            ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              FOR THE YEAR ENDED DECEMBER 31, 2006 (PREDECESSOR),
                                  AS OF AND FOR THE YEARS ENDED 2007 AND 2008
                AND AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2009 (SUCCESSOR)


         1.     ORGANIZATION

                  Archipelago Learning Holdings, LLC (the ―Company‖) is a leading subscription-based online education company.
         The Company provides standards-based instruction, practice, assessments and productivity tools that improve the
         performance of educators and students via proprietary web-based platforms. Study Island, our core product line, helps
         students in Kindergarten through 12th grade, or K-12, master grade level academic standards in a fun and engaging manner.
         As of September 30, 2009, Study Island products were utilized by approximately 8.9 million students in 21,000 schools in
         50 states who answered over 2.8 billion practice questions. The Company recently began offering online postsecondary
         programs through their Northstar Learning product line.

                 Archipelago Learning, Inc. was incorporated as a Delaware corporation on August 4, 2009, and will act as a holding
         company for the Company‘s business upon completion of the offering. The Company initially capitalized Archipelago
         Learning, Inc. with $1,000 for 100 shares of Archipelago Learning, Inc. Archipelago Learning, Inc. has no operations.

                 On July 2, 2009, the Company changed its name from ―Study Island Holdings, LLC‖ to ―Archipelago Learning
         Holdings, LLC‖. Study Island Holdings, LLC through July 1, 2009 and Archipelago Learning Holdings, LLC from July 2,
         2009 are referred to herein as ―the Company.‖


              Purchase Transaction

                   On January 10, 2007, substantially all of the assets of Study Island, LP (the ―Predecessor‖), a Texas partnership,
         were sold to a subsidiary of the Company. Periods presented prior to January 10, 2007, represent the operations of the
         Predecessor. The change of ownership was approved by all of the managers of the Company. The transaction was recorded
         as a business combination with the resulting assets acquired and liabilities assumed being recorded at fair value determined
         on the information available and assumptions as to future operations. The partners of the Predecessor retained an 18.2%
         interest in the Company by exchanging $20,000,000 of their interests in the Predecessor for Class A shares in the Company,
         which was valued utilizing the purchase price of the Company.

                 Intangible assets acquired included customer relationships, developed technology, developed program content and
         the Study Island trade name. Customer relationships were valued using projected income streams on the existing customer
         base. Developed technology and program content were valued based on the replacement cost of these assets, less an
         adjustment due to the changing nature of technology and state educational standards. The Study Island trade name was
         valued using a relief from royalty approach.


                                                                     F-10
Table of Contents




                                                ARCHIPELAGO LEARNING HOLDINGS, LLC

                                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                      The purchase price was comprised of the following (in thousands):


         Net cash paid to sellers                                                                                        $    80,226
         Transaction costs                                                                                                     4,560
         Total cash paid                                                                                                      84,786
         Issuance of Class A shares                                                                                           20,000
              Total                                                                                                          104,786
         Assets (liabilities) acquired:
         Accounts receivable                                                                                                   2,319
         Related party receivables                                                                                             4,545
         Accounts payable                                                                                                     (4,565 )
         Deferred revenue                                                                                                     (9,352 )
         Property and equipment                                                                                                  346
         Intangible assets                                                                                                    17,120
              Total                                                                                                           10,413
         Remaining value, recorded to goodwill                                                                           $    94,373


                  Contained within the 2007 consolidated financial statements are nine calendar days of operations and cash flows of
         the Predecessor. Such amounts are not material to the overall 2007 consolidated financial statements taken as a whole.
         Further, the consolidated financial position of the Predecessor immediately prior to the January 10, 2007, transaction was not
         materially different from that of December 31, 2006. Accordingly, the Company has chosen January 1, 2007, as a date of
         convenience in presenting successor operating results and the financial statement information for the period from January 1,
         2007 through January 9, 2007 has not been presented separately. All periods ending prior to January 1, 2007 are referred to
         as ―Predecessor,‖ and all periods including and after such date are referred to as ―Successor.‖


         2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  The accompanying consolidated financial statements include the balances and results of operations of the Company
         and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

                  Unaudited Interim Financial Information — The accompanying unaudited interim consolidated balance sheet as of
         September 30, 2009, the consolidated statements of income and cash flows for the nine months ended September 30, 2008
         and 2009, and the consolidated statement of changes in members‘ equity for the nine months ended September 30, 2009 are
         unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with accounting
         principles generally accepted in the United States. In the opinion of the Company‘s management, the unaudited interim
         consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and
         include all adjustments necessary for the fair presentation of the Company‘s balance sheet as of September 30, 2009,
         statements of income and cash flows for the nine months ended September 30, 2008 and 2009. The results for the nine
         months ended September 30, 2009 are not necessarily indicative of the results to be expected for the year ending
         December 31, 2009. All references to September 30, 2009 or to the nine months ended September 30, 2008 and 2009 in the
         notes to the consolidated financial statements are unaudited.

                  Unaudited Pro Forma Presentation — The pro forma balance sheet data as of September 30, 2009 and pro forma
         income statement data for the year ended December 31, 2008 and the nine months ended September 30, 2009 reflect the
         transactions that will occur in contemplation of the initial public offering,


                                                                        F-11
Table of Contents




                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         including the corporate reorganization, whereby the Company will become a wholly owned subsidiary of Archipelago
         Learning, Inc., distributions to the members of the Company, and reflection of tax expense (benefit) as if the Company were
         a taxable entity during these periods, as if these transactions had occurred on January 1, 2008. The transactions reflected
         include: cash distributions of $8.0 million made on October 16, 2009 and $2.5 million to be made upon the corporate
         reorganization; net short-term deferred tax asset of $1.1 million and net long-term deferred tax liability of $5.5 million, as of
         September 30, 2009 provision for income taxes of $2.1 million and $2.8 million for the year ended December 31, 2008 and
         the nine months ended September 30, 2009, respectively; and the conversion of all outstanding shares of the Company‘s
         Class A, Class A-2, Class B and Class C members‘ equity into an aggregate of 20,587,459 shares of common stock, an
         aggregate of 585,009 shares of restricted common stock subject to time-based vesting and an aggregate of 809,251 shares of
         restricted common stock subject to cash return vesting.

                  Estimates — Management uses estimates and assumptions in preparing financial statements in accordance with
         accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the
         reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported sales and
         expenses. Accordingly, actual results could differ from the estimates that were used. The Company‘s most significant
         estimates and assumptions include those relating to revenue recognition, stock based compensation and valuations of
         goodwill and intangible assets.

                  Revenue Recognition — The Company generates service revenue from: customer subscriptions to standards-based
         instruction, practice, assessments and productivity tools; training fees; and individual buys, which are individual purchases
         for access to a product (one subject in a specific state for a specific grade level). Subscription revenue results from
         subscriptions sold to new and existing customers. For the years 2006, 2007, and 2008, subscription revenue accounted for
         97.3%, 98.0%, and 98.4% of the Company‘s service revenue, respectively. For the nine months ended September 30, 2008
         and 2009 (unaudited), subscription revenue accounted for 98.9% and 98.8% of the Company‘s service revenue, respectively.

                  Service revenue is recognized when all of the following conditions are satisfied: there is persuasive evidence of an
         arrangement, the service has been provided to the customer, the collection of the fees is reasonably assured, and the amount
         of the fees to be paid by the customer is fixed or determinable. The Company‘s arrangements do not contain general rights of
         return.

                  Subscription revenue is recognized ratably over the subscription term beginning on the commencement date of each
         subscription. The traditional subscription term is 12 months, and all subscriptions are on a noncancelable basis. When
         additional months are offered as a promotional incentive, those months are part of the subscription term. As part of their
         subscriptions, customers generally benefit from new features and functionality with each release at no additional cost.

                  Training sessions are offered to the Company‘s customers in conjunction with the subscriptions to train the
         customers on implementing, using, and administering the Study Island programs. Training revenue is recognized ratably
         over the subscription term for the related subscription. Customer support is provided to customers following the sale at no
         additional charge and at a minimal cost per call.

                  The Company defers the total amount of the sale of subscriptions, training, and support as deferred revenue when
         the customer is invoiced and recognizes the revenue on a straight-line basis over the subscription term. The Company does
         not incur significant up-front costs related to providing its products and services and therefore has not deferred any expenses.

                  Cost of Revenue — Cost of revenue consists of the direct and indirect costs to host and make available its products
         and services to our customers. A significant portion of the cost of revenue includes salaries, bonuses, stock-based
         compensation and employee benefit costs and taxes related to engineering personnel who maintain the Company‘s servers
         and technical equipment and work on our web-based hosted platform. The employee benefits costs and taxes are allocated
         based upon a percentage of total compensation expense. Other direct and indirect


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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         costs include recruiting and relocation fees associated with engineering employees, contracted labor, facility costs for the
         Company‘s web platform servers and routers, including backup servers that are maintained in colocation facilities in Dallas,
         Texas, depreciation expense on those servers and routers, network monitoring costs and amortization of Study Island‘s
         technical development intangible assets.

                   Operating Expenses — Operating expenses consist of sales and marketing, content development and general and
         administrative expenses. Sales and marketing expense consists primarily of salaries, commissions, benefits and stock-based
         compensation for sales and marketing personnel for the Company‘s inside and outside sales team, marketing, customer
         service, training and account management. Sales and marketing also includes direct marketing costs, travel and
         entertainment and amortization of customer relationship intangible assets. Content development expense consists primarily
         of salaries, benefits and stock-based compensation for employees who are responsible for writing the questions for the
         Company‘s products and amortization of content intangible asset. General and administrative expense consists primarily of
         salaries, benefits and stock-based compensation for general and administrative employees that includes executives, finance
         and accounting, human resources, customer relations and order management. General and administrative also includes
         accounting and legal professional services fee, rent, insurance, travel and entertainment expense, depreciation and other
         corporate expenses.

                  Software Development Costs — Software development costs are accounted for as software to be sold, leased, or
         otherwise marketed as a separate product or as part of a product or process, whether internally developed or purchased. The
         fair-value of the core web-based delivery technology was recognized as an intangible asset upon the Company‘s acquisition
         and is amortized over 10 years as an intangible asset. The Company is continually improving, upgrading, and enhancing the
         software used to deliver the Company‘s content and, as such, these costs are being expensed as incurred.

                  Content Development Costs — The fair-value of the content existing was recognized as an intangible asset upon
         the Company‘s acquisition and is amortized over 10 years. The Company is continually improving and upgrading the
         content delivered to customers, including planned enhancements and upgrades such as assessment products for teachers,
         embedded professional development, lesson plans and lessons, video content, special needs support, writing utility, digital
         lockers and new and more sophisticated games, as well as tailoring products to new markets. Such costs are expensed as
         incurred.

                  Cash and Cash Equivalents — Cash and cash equivalents include highly liquid short-term investments purchased
         with original maturities of three months or less.

                  Accounts Receivable — Accounts receivable represents amounts billed to customers for service revenue. The
         Company carries its accounts receivable at cost, less an allowance for doubtful accounts, which is based on management‘s
         assessment of the collectability of accounts receivable. The Company extends unsecured credit to its customers in the
         ordinary course of business, but mitigates the associated credit risk by performing ongoing credit evaluations of its
         customers. The vast majority of the Company‘s customers are public schools, which receive their funding from the local,
         state and federal government. The Company evaluates the adequacy of the allowance for doubtful accounts based on a
         specific customer review of the outstanding accounts receivables.


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                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                  The following table summarizes the changes in the Company‘s allowance for doubtful accounts for the respective
         periods (in thousands):

                                                                             Predecessor                             Successor
                                                                            Year Ended                Year Ended                 Year Ended
                                                                            December 31,              December 31,               December 31,
                                                                                2006                      2007                       2008


         Allowance for doubtful accounts:
           Beginning balance                                           $                   —      $                  —       $               38
           Charged to costs and expenses                                                    2                        38                      71
           Deductions — accounts written off                                               (2 )                      —                      (20 )
            Ending balance                                             $                   —      $                  38      $                  89


                    The allowance for doubtful account as of September 30, 2009 (unaudited) is $152,000.

                   Property and Equipment — Property and equipment are recorded at cost, less accumulated depreciation.
         Depreciation on property and equipment is provided in amounts sufficient to relate the cost of the assets to operations over
         their estimated service lives using the straight-line method.


                                                                   Useful
                                                                   Lives


         Furniture and fixtures                                    Seven years
         Office equipment                                          Five years
         Computer equipment                                        Three to five years
         Computer software                                         Three years
         Leasehold improvements                                    Shorter of the estimated useful life or the lease term

                  Major repairs or replacements of property and equipment are capitalized. Maintenance repairs and minor
         replacements are charged to operations as incurred. Equipment retirements are removed from the records at their cost and
         related accumulated depreciation and any resulting gain or loss is included in earnings.

                  Goodwill, Intangible Assets and Long-Lived Assets — Goodwill represents the excess of the cost of an acquisition
         over the fair value of net assets acquired. Goodwill is assessed for impairment at the reporting unit level at least annually or
         more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The goodwill
         impairment test involves a two-step test. The first step of the impairment test requires the identification of the reporting
         units, and comparison of the fair value of each of these reporting units to the respective carrying value. The Company
         currently has two reporting units, which are one level below our operating segment. The fair value of each reporting unit is
         determined based on valuation techniques using the best information that is available, including data from open marketplace
         transactions and discounted cash flow projections. If the carrying value is less than the fair value, no impairment exists and
         the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment
         may exist and the second step must be performed to compute the amount of the impairment. In the second step, the
         impairment is computed by comparing the implied fair value of reporting unit goodwill with the carrying amount of that
         goodwill.

                  Management‘s judgment is a significant factor in determining whether an indicator of impairment has occurred.
         Management relies on estimates in determining the fair value of each reporting unit for step one, which include the following
         factors:

                    • Data from actual open marketplace transactions . The Company may utilize such information if available,
where those transactions may involve assets or equity, to assist management in evaluating goodwill impairment.


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                                               ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)



                    • Anticipated future cash flows and terminal value for each reporting unit. The determination of discontinued cash
                      flows relies on the timing and estimates of future cash flows, including an estimate of terminal value. The
                      projections use management‘s estimates of economic and market conditions over the projected period including
                      growth rates in service revenue, customer attrition and estimates of any expected changes in operating margins.

                    • Selection of an appropriate discount rate. The determination of discontinued cash flows requires the selection
                      of an appropriate discount rate, which is based on a weighted-average cost of capital analysis. The discount rate
                      is affected by changes in short-term interest rates and long-term yield as well as variances in the typical capital
                      structure of marketplace participants.

                  In the impairment test performed in the fourth quarter of 2007, the fair value of the Company‘s Study Island
         reporting unit significantly exceeded the carrying value by a margin in excess of 20%. For the test performed in 2008, the
         fair value of the Study Island unit exceeded the carrying value by an even greater margin. In the 2008 testing for
         TeacherWeb, due to the proximity of the testing to the acquisition date and because there had been no significant changes in
         operations of the reporting unit, the fair value and carrying value remained consistent with the values upon acquisition.
         Based upon the Company‘s results of impairment testing and events that have occurred subsequently, management does not
         believe either of the reporting units to be at risk of failing step one of impairment testing for the foreseeable future.

                  The Company performs impairment tests in the fourth quarter of each year. No goodwill impairment was identified
         for any of the periods presented.

                  Intangible assets and other long-lived assets are reviewed for impairment when events or changes in circumstances
         indicate the carrying amount may not be recoverable. If impairment indicators exist, an assessment of undiscounted future
         cash flows to be generated by such assets is made. If the results of the analysis indicate impairment, the assets are adjusted to
         fair market value. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful
         lives. No impairment loss was identified for intangible or long-lived assets in any of the years presented.

                  Deferred Financing Costs — Deferred financing costs are incurred to obtain long-term financing and are
         amortized using the effective interest method over the term of the related debt. The amortization of deferred financing costs,
         classified in interest expense in the statements of income, was $0, $36,000 and $179,000 for the years ended December 31,
         2006, 2007 and 2008, respectively, and $130,000 and $154,000 for the nine months ended September 30, 2008 and 2009
         (unaudited), respectively.

                  Income Taxes — The Company is treated as a partnership and, is not a taxpaying entity for federal income tax
         purposes. As a result, the Company‘s income is taxed to its members in their individual federal income tax returns. No
         federal income tax expense was recognized in 2006 or 2007. The Company‘s wholly owned subsidiary, TeacherWeb, Inc.
         (―TeacherWeb‖) is a taxpaying entity for federal income tax purposes. A net long-term tax liability of $853,000 was
         recorded when TeacherWeb was acquired in June 2008. As a result of TeacherWeb‘s operations since the acquisition, the
         Company recorded $247,000 of federal and state income tax benefit in 2008. TeacherWeb had approximately $364,000 of
         net operating loss carryforwards for federal and state income tax purposes as of December 31, 2008. The Company is also
         subject to sales, use, franchise and state margin taxes and, as such, has recorded these expenses in the accompanying
         financial statements.

                  Concentrations of Credit Risk — Financial instruments that are subject to concentrations of credit risk are cash and
         cash equivalents and accounts receivable. Management believes its contract acceptance, billing and collection policies are
         adequate to minimize potential credit risk. The Company continuously evaluates the credit worthiness of its customers‘
         financial condition and generally does not require collateral.


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                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                 The Company maintains deposits with major financial institutions which exceed federally insured limits.
         Management periodically assesses the financial condition of the institution and believes that any possible credit risk is
         minimal. The Company has not experienced any loss from such risk.

                  Stock-Based Compensation Expense — The Company recognizes compensation expense based on the grant-date
         fair value of the awards over the required service or performance periods. The estimated fair values of the shares awarded
         were determined using a market approach to develop an overall enterprise value. The market approach the Company utilized
         included the use of pricing multiples derived from transactions of companies within the Company‘s same industry and the
         Company‘s past transactions. The companies selected for comparison are all engaged in a technology-based
         education-related business. The multiples selected were applied to an estimate of the Company‘s future earnings to arrive at
         an estimated enterprise value for its equity. This equity value was then allocated to the different classes of stock using
         discounted cash flows, based on the respective rights of the classes to distributions from future earnings. The share-based
         awards include members‘ interest in Class B and C shares.

                   Accounting for Derivatives and Hedging Activities — The Company‘s overall risk management strategy includes
         utilizing an interest rate swap agreement. The Company managed its exposure to rate variability on the floating interest rate
         paid on its borrowing by entering into an interest rate swap agreement with a notional amount totaling $45,500,000, of which
         $45,500,000 and $40,500,000 remained in effect as of December 31, 2008 and September 30, 2009, respectively. Beginning
         in 2009, the notional amount of the interest rate swap began decreasing in periodic amounts, and will decrease to a notional
         amount of $30,500,000 at the December 2010 termination date. The Company swapped a floating rate payment based on
         three month London InterBank Offered Rate (LIBOR) for a fixed rate of 4.035% in order to minimize the variability in
         expected future cash flows due to interest rate movements on its LIBOR-based variable rate debt.

                 The Company has not designated the swap as a hedge. The fair value of the interest rate swap is recorded in its
         consolidated balance sheet as ―interest rate swap‖ and changes in the fair value of the swap in its consolidated statements of
         income as ―derivative loss.‖

                  Net Income per Share — Basic income per share is computed using net income and the weighted average number
         of shares outstanding. Diluted earnings per share reflect the weighted average number of shares outstanding plus any
         potentially dilutive securities outstanding during the period. Class A, Class A-2, Class B, and Class C shares are entitled to
         earnings based on a priority established in the Company‘s LLC agreement. The Class A shares are entitled to a return of
         capital and a preferred return before any other class of share is entitled to earnings. Class A and Class A-2 shares are entitled
         to 100% of the earnings for the years ended December 31, 2007 and 2008, and the nine months ended September 30, 2009,
         to the extent such shares were issued. For the years ended December 31, 2006, 2007, and 2008, and for the nine months
         ended September 30, 2009, there were no potential dilutive securities to the Class A shares. Prior to the purchase transaction,
         the Predecessor was a limited partnership containing two equal partners and the Predecessor reported earnings per partner by
         dividing net income for the year ended December 31, 2006 by two.


         3.     FAIR VALUE MEASUREMENTS

                  In the first quarter of 2008, the Company adopted the provisions of Financial Accounting Standards Board
         (―FASB‖) Accounting Standards Codification (―ASC‖) Topic 820, Fair Value Measurements and Disclosures (―FASB ASC
         820‖), for financial assets and liabilities. FASB ASC 820 became effective for financial assets and liabilities on January 1,
         2008. FASB ASC 820 defines fair value, thereby eliminating inconsistencies in guidance found in various prior accounting
         pronouncements and increases disclosures surrounding fair value calculations.


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                                               ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                  FASB ASC 820 establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in
         fair value calculations. The three levels of input are defined as follows:

                    •       Level 1 — Unadjusted quoted market prices for identical assets or liabilities in active markets that the
                            Company has the ability to access.

                    •       Level 2 — Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or
                            similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs
                            are observable (interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be
                            corroborated by observable market data.

                    •       Level 3 — Valuations based on models where significant inputs are not observable. The unobservable
                            inputs reflect the Company‘s own assumptions about the assumptions that market participants would use.

                  FASB ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of
         unobservable inputs. If a financial instrument uses inputs that fall in different levels of the hierarchy, the instrument will be
         categorized based upon the lowest level of input that is significant to the fair value calculation.

                  The Company‘s interest rate swap is valued in the market using discounted cash flow techniques. These techniques
         incorporate Level 1 and Level 2 inputs such as interest rates. These market inputs are utilized in the discounted cash flow
         calculation considering the instrument‘s term, notional amount, discount rate, and credit risk. Significant inputs to the
         derivative valuation for interest rate swap are observable in the active markets and are classified as Level 2 in the hierarchy.

                    The following table summarizes assets and liabilities measured at fair value on a recurring basis (in thousands):


                                                                               Level 1            Level 2        Level 3          Total


         As of December 31, 2008
         Assets — cash equivalents                                         $ 12,206                  —             —           $ 12,206
         Liabilities — interest rate swap                                        —              $ 1,988            —           $ 1,988
         As of September 30, 2009 (unaudited)
         Assets — cash equivalents                                         $ 14,218                  —             —           $ 14,218
         Liabilities — interest rate swap                                        —              $ 1,453            —           $ 1,453

                   The fair value of the Company‘s long-term debt is estimated based on the quoted market prices for the same or
         similar issues or on the current rates offered to the Company for debt of the same remaining maturities.

                  The carrying amounts and estimated fair values of the Company‘s financial instruments that are not reflected in the
         financial statements at fair value are as follows (in thousands):


                                                                                                                  September 30, 2009
                                              December 31, 2007                 December 31, 2008                     (Unaudited)
                                          Carrying                          Carrying                           Carrying
                                          Amount           Fair Value       Amount           Fair Value        Amount           Fair Value


         Cost investment                       —                —                —                —           $ 2,734                n/a
         Note receivable                       —                —                —                —           $ 2,144          $ 2,165
         Term loan                       $ 70,000         $ 70,000         $ 69,300         $ 70,047          $ 68,251         $ 67,846


                                                                        F-17
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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                  The cost investment included in the table above is in a company that is not publicly traded and the fair value is not
         readily determinable, however, the Company believes the carrying value approximates or is less than the fair value.


         4.     RECENT ACCOUNTING PRONOUNCEMENTS

                  In December 2007, the FASB amended FASB ASC Topic 805, Business Combinations , (―FASB ASC 805)
         (formerly FASB Statement No. 141(R), Business Combinations ), which establishes principles and requirements for how an
         acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any
         non-controlling interest in the acquiree, and the goodwill acquired in an acquisition. FASB ASC 805 also establishes
         disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. FASB ASC
         805 is effective for acquisitions in fiscal years beginning after December 15, 2008, and early adoption is prohibited. We will
         apply the provisions of this topic to any future acquisitions.

                 In February 2008, the FASB issued an amendment to FASB ASC Topic 820, Fair Value Measurements and
         Disclosures (―FASB ASC 820‖) (formerly FASB Staff Position (―FSP‖) FAS No. 157-2, Effective Date for FASB Statement
         No. 157 ). This amendment permitted the delayed application of FASB ASC 820 for all nonrecurring fair value
         measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The
         adoption did not have a material impact on the Company‘s consolidated financial condition or results of operations or cash
         flows.

                  In March 2008, the FASB issued an amendment to FASB ASC Topic 815, Derivatives and Hedging (―FASB ASC
         815‖) (formerly FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities — an
         amendment of FASB Statement 133 ). FASB ASC 815 requires enhanced disclosures about a company‘s derivative and
         hedging activities. These enhanced disclosures will discuss (a) how and why a company uses derivative instruments, (b) how
         derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged
         items affect a company‘s financial position, results of operations, and cash flows. This amendment is effective for fiscal
         years beginning on or after November 15, 2008, with earlier adoption allowed. The implementation of this amendment did
         not have a material effect on the Company‘s consolidated financial condition or results of operations or cash flows.

                   In April 2008, the FASB issued an amendment to FASB ASC Topic 350, Intangibles — Goodwill and Other
         (―FASB ASC 350‖) (formerly FSP No. 142-3, Determination of the Useful Life of Intangible Assets ). This amendment
         modifies the factors that should be considered in developing renewal or extension assumptions used to determine the useful
         life of a recognized intangible asset under FASB ASC 350. This amendment is effective for fiscal years beginning after
         December 15, 2008. The implementation of this topic did not have a material effect on the Company‘s consolidated financial
         condition or results of operations or cash flows.

                  In April 2009, the FASB issued an amendment to FASB ASC Topic 825, Financial Instruments (―FASB ASC
         825‖) (formerly FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments ). This
         amendment requires disclosures about fair value of financial instruments in interim as well as in annual financial statements.
         This amendment also requires those disclosures in all interim financial statements. This amendment was effective for interim
         and annual periods ending after June 15, 2009. The implementation of this amendment did not have a material effect on the
         Company‘s consolidated financial condition or results of operations or cash flows.

                  In May 2009, the FASB issued an amendment to FASB ASC Topic 855, Subsequent Events (―FASB ASC 855‖)
         (formerly FASB Statement No. 165, Subsequent Events ). FASB ASC 855 provides general standards for the accounting and
         reporting of subsequent events that occur between the balance sheet date and issuance of financial statements. The topic
         requires the issuer to recognize the effects, if material, of


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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         subsequent events in the financial statements if the subsequent event provides additional evidence about conditions that
         existed as of the balance sheet date. The issuer must also disclose the date through which subsequent events have been
         evaluated and the nature of any non-recognized subsequent events. Non-recognized subsequent events include events that
         provide evidence about conditions that did not exist as of the balance sheet date, but which are of such a nature that they
         must be disclosed to keep the financial statements from being misleading. The topic is effective for interim and annual
         periods ending after June 15, 2009. The implementation of this topic did not have a material impact on our financial position,
         results of operations or cash flows.

                  In June 2009, the FASB issued FASB ASC Topic 105, Generally Accepted Accounting Principles (―FASB
         ASC 105‖) (formerly FASB Statement No. 168, The “FASB Accounting Standards Codification” and the Hierarchy of
         Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162 ). FASB ASC 105 provides for the
         FASB Accounting Standards Codification (the ―Codification‖) to become the single official source of authoritative,
         nongovernmental U.S. generally accepted accounting principles (GAAP). FASB ASC 105 is effective for interim and annual
         periods ending after September 15, 2009. This topic has no impact on the Company‘s financial position, results of operations
         or cash flows.


         5.      PROPERTY AND EQUIPMENT

                Property and equipment as of December 31, 2007, 2008 and September 30, 2009, consisted of the following
         (amounts in thousands):


                                                                                                                  As of September 30,
                                                                                    2007         2008                     2009
                                                                                                                      (Unaudited)


         Computer equipment                                                       $ 650        $ 1,534        $                   2,076
         Furniture and fixtures                                                     129            284                              302
         Office equipment                                                             6             13                              168
         Computer software                                                          109            363                              684
         Leasehold improvements                                                      —              47                               60
                                                                                      894         2,241                           3,290
         Accumulated depreciation                                                    (101 )        (459 )                        (1,245 )
         Total                                                                    $ 793        $ 1,782        $                   2,045


                  Depreciation expense was $71,000, $101,000, and $358,000 for the periods ending December 31, 2006, 2007 and
         2008, respectively. For the nine months ended September 30, 2008 and 2009 (unaudited), depreciation expense was
         $226,000 and $786,000, respectively.


         6.      ACQUISITIONS

                 On June 30, 2008, the Company purchased 100% of the capital stock of TeacherWeb. TeacherWeb provides
         web-based templates for educators to quickly and easily create classroom, school and district websites. The transaction was
         recorded as a business combination with the resulting assets acquired and liabilities assumed being recorded at fair value
         determined on the information available and assumptions as to future operations.

                  Intangible assets acquired included customer relationships and trademarks. Customer relationships were valued
         using projected income streams on the existing customer base. Trademarks were valued using a relief from royalty approach.
F-19
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                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                    The purchase price was comprised of the following (in thousands):


         Net cash paid to sellers                                                                                        $    9,408
         Transaction costs                                                                                                      250
         Total cash paid                                                                                                      9,658
         Issuance of Class A-2 shares                                                                                           750
               Total                                                                                                         10,408
         Assets (liabilities) acquired:
           Accounts receivable                                                                                                  199
           Other assets                                                                                                          32
           Accounts payable                                                                                                     (49 )
           Deferred revenue                                                                                                    (199 )
           Net long-term deferred tax liability                                                                                (853 )
           Property and equipment                                                                                                 4
           Intangible assets                                                                                                  2,380
               Total                                                                                                          1,514
         Remaining value, recorded to goodwill                                                                           $    8,894


                  The fair value of the 286,882 Class A-2 shares issued during the third quarter of 2008 in connection with the
         TeacherWeb acquisition was determined based on management‘s estimated average enterprise value of the Company at the
         time of the acquisition and its impact on its existing participation shares distribution thresholds.


         7.     INVESTMENT

                  On August 14, 2009, the Company and two related parties entered into a unit purchase agreement with Edline
         Holdings, Inc. (―Edline‖), a company that offers web-based technological solutions for schools and educators. The Company
         purchased 285,601 Series A shares of Edline for $2.7 million (which reflects a reduction of $0.2 million of transaction fees
         the Company received in connection with the transactions), which represents 6.9% of Edline‘s outstanding Series A shares.
         Edline also borrowed $2.1 million from the Company pursuant to a five-year promissory note, which bears interest at 9.5%
         per annum and requires semi-annual interest-only payments.


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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         8.     INTANGIBLE ASSETS AND GOODWILL

                  The Company has recorded intangible assets in connection with the purchase transaction on January 10, 2007.
         Intangible assets are amortized on a straight-line basis over their estimated useful lives. Intangible assets as of December 31,
         2007, are as follows (dollars in thousands):


                                                                      Amortization         Gross
                                                                        Period            Carrying           Accumulated
                                                                       (Months)           Amount             Amortization       Net


         Finite-lived intangible assets:
           Study Island customer relationships                                  120      $ 13,620        $         (1,325 )   $ 12,295
           Study Island technical development/program
              content                                                           120           2,500                  (244 )      2,256
         Indefinite-lived intangible assets — Study Island trade
           name                                                                               1,000                     —        1,000
         Total intangible assets                                                         $ 17,120        $         (1,569 )   $ 15,551


                Amortization expense for the year ended December 31, 2007, was $1,569,000, of which $82,000, $1,325,000 and
         $162,000 were included in cost of revenue, sales and marketing and content development expense, respectively.

                In addition, the Company has recorded intangible assets in connection with its June 30, 2008, acquisition of
         TeacherWeb. Intangible assets as of December 31, 2008, are as follows (dollars in thousands):


                                                                      Amortization         Gross
                                                                        Period            Carrying           Accumulated
                                                                       (Months)           Amount             Amortization       Net


         Finite-lived intangible assets:
           Study Island customer relationships                                  120      $ 13,620        $         (2,687 )   $ 10,933
           Study Island technical development/program
              content                                                           120           2,500                  (494 )      2,006
           TeacherWeb customer relationships                                     60           2,130                  (213 )      1,917
         Indefinite-lived intangible assets:
           Study Island trade name                                                            1,000                     —        1,000
           TeacherWeb trade name                                                                250                     —          250
         Total intangible assets                                                         $ 19,500        $         (3,394 )   $ 16,106


                Amortization expense for the year ended December 31, 2008 was $1,825,000, of which $84,000, $1,575,000 and
         $166,000 were included in cost of revenue, sales and marketing and content development expense, respectively.


                                                                      F-21
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                                               ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                    Intangible assets as of September 30, 2009 (unaudited), are as follows (dollars in thousands):


                                                                       Amortization           Gross
                                                                         Period              Carrying              Accumulated
                                                                        (Months)             Amount                Amortization               Net


         Finite-lived intangible assets:
           Study Island customer relationships                                   120        $ 13,620           $         (3,709 )         $    9,911
           Study Island technical development/program
              content                                                            120            2,500                        (681 )            1,819
           TeacherWeb customer relationships                                      60            2,130                        (532 )            1,598
         Indefinite-lived intangible assets:
           Study Island trade name                                                              1,000                          —               1,000
           TeacherWeb trade name                                                                  250                          —                 250
         Total intangible assets                                                            $ 19,500           $         (4,922 )         $ 14,578


                  Amortization expense for the nine months ended September 30, 2008 (unaudited) was $1,315,000, of which
         $63,000, $1,128,000 and $124,000 were included in cost of revenue, sales and marketing and content development expense,
         respectively. Amortization expense for the nine months ended September 30, 2009 (unaudited) was $1,528,000, of which
         $63,000, $1,341,000 and $124,000 were included in cost of revenue, sales and marketing and content development expense,
         respectively.

                 The estimated amortization expense for each of the five succeeding years and thereafter is as follows (amounts in
         thousands):


                                                                                                As of                              As of
                                                                                           December 31, 2008                 September 30, 2009
                                                                                                                                (Unaudited)


         2009                                                                          $                 2,038           $                       509
         2010                                                                                            2,038                                 2,038
         2011                                                                                            2,038                                 2,038
         2012                                                                                            2,038                                 2,038
         2013                                                                                            1,825                                 1,825
         Thereafter                                                                                      4,879                                 4,880
                                                                                       $                14,856           $                    13,328


                The weighted-average remaining useful lives of the finite intangibles assets as of December 31, 2008 and
         September 30, 2009 (unaudited) is 8.42 and 7.71 years, respectively.

                    The changes in the carrying amount of goodwill are as follows (amounts in thousands):


         Balance at January 1, 2007                                                                                                   $           —
         Goodwill acquired during year                                                                                                        94,373
         Balance at December 31, 2007                                                                                                         94,373
         Goodwill acquired during year                                                                                                         8,894
         Balance at December 31, 2008                                                                                                 $ 103,267
There was no change in goodwill during the nine months ended September 30, 2009 (unaudited).


                                                F-22
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                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         9.     CREDIT FACILITY

                  On November 16, 2007, the Company entered into an $80,000,000 credit facility with General Electric Capital
         Corporation, as agent, composed of a $70,000,000 term loan and a $10,000,000 revolving credit facility, which expires in
         November 2013. The proceeds of the term loan and $4,929,000 in cash were used to pay a distribution of $73,223,000 to the
         Class A shareholders and debt financing costs of $1,706,000. The term loan bears interest at rates based upon either a base
         rate or LIBOR plus an applicable margin (3.25% as of September 30, 2009 and December 31, 2008, and 4.00% as of
         December 31, 2007, in each case for a LIBOR-based term loan) determined based on the Company‘s leverage ratio.
         Amounts under the revolving credit facility can be borrowed and repaid, from time to time, at the Company‘s option, subject
         to the pro forma compliance with certain financial covenants. Subsequently, the Company received a refund of $215,000 in
         2008 of the amount previously paid.

                  The term loan and revolving credit facility require us to maintain certain financial ratios, including a leverage ratio
         (based on the ratio of consolidated indebtedness, net of cash and cash equivalents, to consolidated EBITDA, defined in the
         credit facility as consolidated net income adjusted by adding back interest expense, taxes, depreciation expenses,
         amortization expenses and certain other non-recurring or otherwise permitted fees and charges), an interest coverage ratio
         (based on the ratio of consolidated EBITDA to consolidated interest expense, as defined in the credit facility) and a fixed
         charge coverage ratio (based on the ratio of consolidated EBITDA to fixed charges).

                   The term loan and the revolving credit facility contain certain affirmative and restrictive covenants that, among
         other things, add limitations for the incurrence of additional indebtedness, liens on property, sale and leaseback transactions,
         investments, loans and advances, merger or consolidation, asset sales, acquisitions, dividends, transactions with affiliates,
         prepayments of any other indebtedness, modifications of our organizational documents and restrictions on our subsidiaries.
         The credit facility contains events of default that are customary for similar facilities and transactions, including a
         cross-default provision with respect to any other indebtedness and an event of default that would be triggered by a change of
         control, as defined in the credit facility, and which is not expected to be triggered by this offering. As of September 30, 2009,
         December 31, 2008 and December 31, 2007, we were in compliance with all covenants. The credit facility is secured on a
         first-priority basis by security interests (subject to permitted liens) in substantially all of the assets of the Company.

                   The Company has the right to optionally prepay its borrowings under the term loan or the revolving credit facility,
         subject to the procedures set forth in the credit facility. The Company may be required to make prepayments on its
         borrowings under the term loan or the revolving credit facility if it receives proceeds as a result of any asset sales, additional
         debt issuances, events of loss or if we have excess cash flow. A mandatory prepayment of the term loan is required within
         five business days after the earlier of the actual or required delivery date of the compliance certificate each fiscal year, in an
         amount equal to (i) 75% of excess cash flows (as defined by the credit agreement) if the leverage ratio as of the last day of
         the fiscal year is greater than 4:00 to 1:0, (ii) 50% of excess cash flows if the leverage ratio as of the last day of the fiscal
         year is less than or equal to 4:00 to 1:0 but greater than 3:25 to 1:0, or (iii) 25% of excess cash flow if the leverage ratio as of
         the last day of the fiscal year is less than or equal to 3.25 to 1.0. No mandatory prepayment is required if the leverage ratio is
         less than or equal to 2.50 to 1.0 on the last day of the fiscal year. No mandatory prepayments were required for the third
         quarter ended September 30, 2009 and the year ended December 31, 2007. The Company did make a mandatory prepayment
         of $524,000 during the second quarter of 2009 related to the excess cash flow generated for the year ended December 31,
         2008.


                                                                        F-23
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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                Principal payments on our term loan due over the next five years and beyond as of December 31, 2008 and
         September 30, 2009, are as follows (in thousands):


         Calendar
         Year                                                             As of December 31, 2008          As of September 30, 2009
                                                                                                                  (unaudited)


            2009                                                      $                        700     $                          175
            2010                                                                               700                                700
            2011                                                                               700                                700
            2012                                                                               700                                700
            2013                                                                            66,500                             65,976
         Total debt                                                                         69,300                             68,251
         Less: current maturities                                                            (700)                              (700)
         Total long-term debt                                         $                     68,600     $                       67,551



         10.        TAXES

                   The Financial Accounting Standards Board issued an amendment to FASB ASC 740, Income Taxes
         (―FASB ASC 740‖) (formerly FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an Interpretation
         of FASB Statement No. 109 ) which clarifies the accounting and disclosure for uncertainty in tax positions, as defined. The
         Company adopted the provisions of FASB ASC 740, as amended, as of January 1, 2007, and has analyzed filing positions in
         all of the federal and state jurisdictions where the Company is required to file income tax returns, as well as all open tax
         years in these jurisdictions. The Company is not a taxpaying entity for federal income tax purposes and in certain state tax
         jurisdictions due to the Company‘s partnership status. As a partnership, income of the Company is taxed to the partners on
         their individual federal income tax returns. The Company‘s policy is to recognize interest accrued related to unrecognized
         tax benefits and penalties as income tax expense.

                 Upon adoption, the Company did not identify uncertain tax positions that resulted in a material effect on the
         Company‘s financial condition, results of operations, or cash flow. The Company did not record a cumulative effect
         adjustment related to the adoption of this amendment. In addition, no material reserves for uncertain income tax positions
         were identified or recorded as of December 31, 2007 and December 31, 2008.

                   In the nine months ended September 30, 2009 (unaudited), the Company recorded $425,000 of unrecognized tax
         benefits, including approximately $7,000 of accrued gross interest expense related to a state tax filing position, of which
         $195,000 is recorded in Other accrued liabilities and $230,000 is recorded in Other long-term liability on the consolidated
         balance sheet as of September 30, 2009. The Company is not currently under examination in any federal or state income tax
         jurisdiction. The Company does not expect that unrecognized tax benefits will significantly change in the following
         12 month period.


         11.        COMMITMENTS AND CONTINGENCIES

                 The Company is obligated, as lessee, under noncancelable operating leases for office space expiring on February 28,
         2010, and May 31, 2012. In addition, the Company is obligated, as lessee, under a noncancelable operating lease for office
         equipment in July 2011. As of December 31, 2008 and September 30,


                                                                     F-24
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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         2009, the future minimum payments required under all operating leases with terms in excess of one year are as follows
         (amounts in thousands):


                                                                                             As of                      As of
                                                                                        December 31, 2008         September 30, 2009
                                                                                                                     (Unaudited)


         2009                                                                       $                  462    $                    145
         2010                                                                                          415                         434
         2011                                                                                          414                         424
         2012                                                                                          176                         176
                                                                                    $                1,467    $                  1,179


                  Rent expense for the years ended December 31, 2006, 2007 and 2008, was $86,000, $248,000, and $424,000,
         respectively. Rent expense was $313,000 and $407,000 for the nine months ended September 30, 2008 and 2009
         (unaudited), respectively.


         12.        MEMBERS’ EQUITY

                  Archipelago Learning Holdings, LLCs‘ capital structure consists of Class A Shares, Class A-2 Shares, Class B
         Shares and Class C Shares. The terms of the shares are governed by the Amended and Restated Limited Liability Company
         (the ―LLC Agreement‖), as amended. On January 10, 2007, 109,545,064 Class A Shares were issued to the Company‘s
         private-equity sponsor and other investors. Class B Shares and Class C Shares are held by employees of the Company.

                   In February 2007 the Board of Managers of Archipelago Learning Holdings, LLC adopted the 2007 Equity
         Compensation Plan (the ―Plan‖). Under the terms of the Plan, eligible participants, as determined by the Board, may receive
         grants of equity interests of the Archipelago Learning Holdings, LLC in the form of Class B Shares and Class C Shares,
         which together are defined as the Participation Shares. The purpose of the Plan is to compensate employees and consultants
         of the Company. Under the terms and provisions of the LLC Agreement the Participation Shares are to be considered profits
         interests in the Company and each holder of a share is considered a member of the Company.

                  Holders of Class B Shares and Class C Shares may not sell, transfer, assign, pledge or otherwise dispose of their
         shares other than as permitted pursuant to the Participation Stock Agreement. In the event of a planned sale of shares by the
         Company‘s private-equity sponsor, holders of vested Participation Shares must participate in the planned sale.

                 A separate capital account must be maintained for each member. No member can be required to pay the Company
         or another member if their capital accounts are negative.


            Distributions

                   All members shall be entitled to receive distributions, including distributions in connection with the liquidation,
         dissolution or winding up of the Company, when and as determined by the Board of Managers. Distributions under the plan
         are determined by the Board and are subject to various thresholds outlined in the LLC Agreement. No holder of a
         Participation Share is eligible to receive distributions under the LLC Agreement until the holders of the Class A and
         Class A-2 Shares have received distributions equal to 100% of their capital contributions and the holders of Class A Shares
         have also received a preferred return of 12% per annum on the Class A capital contributions. Once these distributions have
         been made, the Class A Shareholders and holders of Class A-2 and vested Participant Shares become eligible to receive
         distributions subject to cumulative percent limitations. No distribution can be made on account of a Class B Share that has
         not yet vested. Amounts that would otherwise be paid on account of these shares are credited to the member‘s
F-25
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                                            ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         capital accounts and will be distributed once these shares have vested. The Class C Shares are not entitled to any portion of
         any distributions until the holders of the Class A and Class A-2 Shares have received certain multiples of cash-based returns
         on their respective investment in the Class A and Class A-2 Shares. If any unvested shares are forfeited such amounts will be
         distributed to the Class A and Class A-2 Members, pro rata, in proportion to the number of shares held by Class A and
         Class A-2 Members.


            Voting Rights

                  All holders of Class A and A-2 Shares are entitled to one vote for each Class A and A-2 Shares outstanding and the
         holders of the Participation Shares do not have any voting rights.

                 During 2006, the Predecessor withdrew $6,354,000 from the business as a return of capital, and during 2007
         withdrew $846,000 prior to the change in control to the Successor.

                   During 2007, the Predecessor received a distribution of $1,178,000 representing a return of capital. The Company
         also made a $74,753,000 distribution to Class A members as a return of capital that was primarily funded from the proceeds
         of the term loan. The Company did not make any tax distributions to the members as the Company was in a tax loss position
         for the years ended December 31, 2007 and December 31, 2008. During the nine months ended September 30, 2009
         (unaudited), the Company made a tax distribution of $1,250,000 to its members.

                 During 2007, 5,720,692 Class B and 5,720,692 Class C shares were issued to employees of the Company. During
         2008, 456,336 Class B and Class C shares were issued to employees of the Company. In addition, during 2008, 821,588
         Class B shares and 273,864 Class C shares were forfeited. In January 2009, 673,287 shares of Class B shares and
         673,287 shares of Class C shares were issued to employees of the Company.

                  During 2008, 286,882 of Class A-2 shares were issued for $750,000 in connection with the TeacherWeb, Inc.
         acquisition (see Note 6).


         13.        STOCK-BASED COMPENSATION

                   Awards under the Plan to eligible participants are based upon the terms and conditions determined by the Board as
         set forth by the Board in a grant instrument. These terms may include such factors as the number of shares awarded and the
         dates and events on which any or all of the awards vest or become non-forfeitable.

                   For the awards granted in 2007, 2008 and 2009, each Class B Share vests 20% on each anniversary as specified in
         the Participation Stock Agreement. The Class C shares are subject to performance hurdles and holders of Class C shares are
         entitled to distributions after holders of Class A and Class A-2 shares receive certain threshold multiples of cash-based
         returns on their respective Class A and Class A-2 shares, subject to such Class C share holders‘ continued employment by or
         service to the Company. For each Class B Share granted to a participant, the participant also received one Class C Share.

                  All Class C shares and any unvested Class B shares will be forfeited if any participant is no longer an employee of
         the Company. All Class B and Class C shares will be forfeited if the participant‘s employment is terminated by the Company
         for cause or by the participant without good reason.

                 The assumptions used in calculating the fair value of equity-based payment awards represent management‘s best
         estimates. As with all estimates, these estimates involve inherent uncertainties and the application of management judgment.

                  The Company recognizes compensation expense for the grant-date fair value of the awards over the service period
         of the awards, which is generally the vesting period. The Company did not apply a forfeiture rate to the Class B shares as
         these awards are only granted to a few key executives. The grant-date fair value for the Class C Shares was $0.05, $0.07 and
         $0.06 for the grants in 2007, 2008 and 2009, respectively.
F-26
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                                             ARCHIPELAGO LEARNING HOLDINGS, LLC

                              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


                  The following table presents the status of the Company‘s unvested Class B Participation Shares for the periods
         indicated (shares in thousands):


                                                                                                                                         Weighted-
                                                                                                                                          Average
                                                                                                                                         Grant-Date
         Unvested
         Shares                                                                                                   Shares                 Fair Value


         Unvested — December 31, 2006                                                                                   —                            —
           Granted                                                                                                   5,721           $             0.31
           Vested                                                                                                       —                            —
           Forfeited                                                                                                    —                            —
         Unvested — December 31, 2007                                                                                5,721                         0.31
           Granted                                                                                                     456                         0.29
           Vested                                                                                                   (1,089 )                       0.31
           Forfeited                                                                                                  (822 )                       0.31
         Unvested — December 31, 2008                                                                                4,266           $             0.31
           Granted                                                                                                     673                         0.26
           Vested                                                                                                   (1,180 )                       0.31
           Forfeited                                                                                                    —                            —
         Unvested — September 30, 2009 (unaudited)                                                                   3,759           $             0.30


                  The following table sets forth the stock-based compensation expense included in the related statements of income
         line items (in thousands):

                                              Year Ended            Year Ended          Year Ended       Nine Months Ended           Nine Months Ended
                                           December 31, 2006     December 31, 2007   December 31, 2008   September 30, 2008           September 30, 2009
                                                                                                                          (Unaudited)
                                             (Predecessor)                               (Successor)



         Cost of revenue                 $                   —   $            17     $               7   $               6          $                62
         Sales and marketing                                 —                81                    32                  27                           38
         General and administrative                          —               513                   298                 225                          187
         Content development                                 —                20                    18                  14                           11
         Total                           $                   —   $           631     $             355   $             272          $               298


                  As of December 31, 2007 and 2008 and September 30, 2009 (unaudited), there was approximately $1,428,000,
         $967,000 and $886,000, respectively of unrecognized stock-based compensation expense related to unvested Participation
         Shares that is expected to be recognized over a weighted average period of 4.03, 3.18 and 2.72 years, respectively.


         14.        EMPLOYEE BENEFIT PLANS

                   The Company provides a 401(k) defined contribution retirement plan for all eligible employees who meet certain
         eligibility requirements, including performing three months of service. The Company matches 100% up to 3% of employee
         contributions, plus 50% of the amount of the participant‘s deferred compensation that exceeds 3% of the participant‘s
         compensation, but not in excess of 5% of the participant‘s compensation.
         Participants are 100% vested in the portion of the plan representing employee and employer safe harbor match
contributions. Other employer-match contributions vest over five years. For the years ended December 31, 2006, 2007, and
2008, the Company made contributions of $56,000, $114,000, and $238,000, respectively, under this plan. For the nine
months ended September 30, 2008 and 2009 (unaudited), the Company made contributions of $163,000 and $288,000,
respectively, under this plan.


                                                          F-27
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                                              ARCHIPELAGO LEARNING HOLDINGS, LLC

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


         15.        SEGMENT INFORMATION

                  The Company operates as one operating segment as the principal business activity relates to providing
         subscription-based online educational services. The chief operating decision maker, the Chief Executive Officer, evaluates
         the performance of the Company based upon consolidated results of operations.


         16.        RELATED-PARTY TRANSACTIONS

                 The Company has made the following payments to certain related parties who are significant shareholders or
         businesses that are controlled by significant shareholders as follows (in thousands):


                                                  2006            2007          2008        September 30, 2008           September 30, 2009
                                              (Predecessor)                                     (Successor)
                                                                                                             (Unaudited)


         Management or advisory
           services                                           —     —           $ 342   $                     74      $                       8
         Purchases of property and
           equipment                                          —     —           $ 344   $                      1      $                  290


         17.        SUBSEQUENT EVENTS (Unaudited)

                  On October 16, 2009, the Company made a special distribution of $8.0 million to its equity holders representing a
         return on such holders‘ investment in the Company, which was paid in accordance with the terms of the Company‘s LLC
         Agreement.

                  In November 2009, the Company completed the sale of the operations of TeacherWeb to Edline for an aggregate
         purchase price of $13 million, consisting of $6.5 million in cash (reduced by approximately $1.5 million of cash remaining
         on TeacherWeb‘s balance sheet), Series A shares of Edline valued at $3.7 million and $2.8 million of five-year debt
         securities that bear interest at 9.5% per annum and require semi-annual interest-only payments. In addition, the Company
         intends to make an approximately $1.6 million distribution to its equity holders upon the Corporate Reorganization to enable
         them to meet certain tax obligations associated with the TeacherWeb sale. As a result of the sale, the Company holds 11.2%
         of Edline‘s outstanding Series A shares and $4.9 million of Edline‘s senior debt.

                  The Company amended the credit agreement governing the term loan and the revolving credit facility in November
         2009 to permit the sale of TeacherWeb. This amendment further modified certain terms of the credit agreement, including
         adding a LIBOR floor of 1.25% to the calculation of the Company‘s interest rates and reducing the letter of credit sublimit
         available to the Company under the credit agreement from $2.0 million to $1.0 million. In addition, the Company repaid an
         aggregate amount of $6.5 million upon the consummation of the sale of TeacherWeb.

                  The Company intends to grant stock options for 561,755 shares of its common stock to employees at the time of this
         offering, at an exercise price equal to the initial public offering price. The fair value of these awards is estimated to be
         approximately $4.5 million, which will be recognized in operating expense over the four-year vesting period of the options.

                     The Company has considered subsequent events through November 16, 2009 related to these financial statements.

                                                                     ******


                                                                         F-28
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Archipelago Learning is a leading subscription-base online education company. We provide standards-based instruction, practice, assessments andreporting tools that improve the performance od educators and students vis proprietry web-based platforms.
Archipelago Learning is headquartered in Dellas, Texas.
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              Through and including          , 2009 (the 25 th day after the date of this prospectus), all dealers effecting transactions in
           these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to
           the dealers‘ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or
           subscriptions.



                                                            6,250,000 Shares




                                                Archipelago Learning, Inc.

                                                               Common Stock




                                                                  PROSPECTUS




                                                         BofA Merrill Lynch

                                                   William Blair & Company

                                                      Robert W. Baird & Co.

                                                               Piper Jaffray

                                                              Stifel Nicolaus

                                                                        , 2009
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                                                                     PART II

                                           INFORMATION NOT REQUIRED IN PROSPECTUS


         ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.


                 The expenses, other than underwriting commissions, expected to be incurred by Archipelago Learning, Inc. (the
         ―Registrant‖) in connection with the issuance and distribution of the securities being registered under this Registration
         Statement are estimated to be as follows:


         Securities and Exchange Commission Registration Fee                                                              $       6,818
         Financial Industry Regulatory Authority, Inc. Filing Fee                                                                12,719
         Nasdaq Listing Fee                                                                                                     100,000
         Printing and Engraving                                                                                                 200,000
         Legal Fees and Expenses                                                                                              1,400,000
         Accounting Fees and Expenses                                                                                           900,000
         Transfer Agent and Registrar Fees                                                                                        3,500
         Miscellaneous                                                                                                        1,176,963
            Total                                                                                                         $   3,800,000



         ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.


                  Section 145 of the Delaware General Corporation Law, or DGCL, provides that a corporation may indemnify any
         person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or
         proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation
         by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the
         request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or
         other enterprise, against expenses (including attorneys‘ fees)), judgments, fines and amounts paid in settlement actually and
         reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he
         reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
         or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 further provides that a corporation
         similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a
         party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its
         favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at
         the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust
         or other enterprise, against expenses (including attorney‘s fees) actually and reasonably incurred in connection with the
         defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not
         opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim,
         issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent
         that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon
         application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly
         and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall
         deem proper.

                  The Registrant‘s Bylaws authorize the indemnification of our officers and directors, consistent with Section 145 of
         the Delaware General Corporation Law, as amended. The Registrant intends to enter into indemnification agreements with
         each of its directors and executive officers. These agreements, among other things, will require the Registrant to indemnify
         each director and executive officer to the fullest extent permitted by Delaware law, including indemnification of expenses
         such as attorneys‘ fees, judgments, fines and settlement amounts incurred by the director or executive officer in any action or
         proceeding, including any action or proceeding by or in right of us, arising out of the person‘s services as a director or
         executive officer.
II-1
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                  Reference is made to Section 102(b)(7) of the Delaware General Corporation Law, or DGCL, which enables a
         corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a
         director for violations of the director‘s fiduciary duty, except (i) for any breach of the director‘s duty of loyalty to the
         corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a
         knowing violation of law, (iii) pursuant to Section 174 of the DGCL, which provides for liability of directors for unlawful
         payments of dividends of unlawful stock purchase or redemptions or (iv) for any transaction from which a director derived
         an improper personal benefit.

                   Reference is also made to Section 145 of the DGCL, which provides that a corporation may indemnify any person,
         including an officer or director, who is, or is threatened to be made, party to any threatened, pending or completed legal
         action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of
         such corporation, by reason of the fact that such person was an officer, director, employee or agent of such corporation or is
         or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or
         enterprise. The indemnity may include expenses (including attorneys‘ fees), judgments, fines and amounts paid in settlement
         actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer,
         director, employee or agent acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the
         corporation‘s best interest and, for criminal proceedings, had no reasonable cause to believe that his conduct was unlawful.
         A Delaware corporation may indemnify any officer or director in an action by or in the right of the corporation under the
         same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to
         be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action
         referred to above, the corporation must indemnify him against the expenses that such officer or director actually and
         reasonably incurred.

                  The Registrant expects to maintain standard policies of insurance that provide coverage (i) to its directors and
         officers against loss rising from claims made by reason of breach of duty or other wrongful act and (ii) to the Registrant with
         respect to indemnification payments that it may make to such directors and officers.

                 The proposed form of Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement provides for
         indemnification to the Registrant‘s directors and officers by the underwriters against certain liabilities.


         ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.


                  On August 4, 2009, Archipelago Learning, Inc., a Delaware corporation was formed. Archipelago Learning
         Holdings, LLC purchased 100 shares of common stock of Archipelago Learning, Inc. for $1,000 in a transaction exempt
         from registration pursuant to Section 4(2) of the Securities Act of 1933, as it was a transaction by an issuer that did not
         involve a public offering of securities.

                   In connection with the corporate reorganization to be completed prior to the consummation of this offering, and in
         accordance with the limited liability company agreement of Archipelago Learning Holdings, LLC, the holders of shares of
         Archipelago Learning Holdings, LLC, and certain of their affiliates, will enter into the following transactions as a result of
         which they will receive shares of Archipelago Learning, Inc.‘s common stock, par value $0.001 per share. The issuance of
         the shares of common stock of Archipelago Learning, Inc. in the corporate reorganization will be exempt from the
         registration requirements of the Securities Act pursuant to Section 4(2) thereof, as it will be a transaction by the issuer not
         involving a public offering of securities. The following share numbers of Archipelago Learning, Inc.‘s common stock are
         based upon an assumed initial public offering price of $16.00 per share:

                  (1) The direct or indirect holders of 98,012,441 Class A shares and 286,882 Class A-2 shares of Archipelago
         Learning Holdings, LLC (other than Providence Equity Partners V-A Study Island L.L.C. and its subsidiaries) will, directly
         or indirectly, contribute all such Class A and Class A-2 shares of Archipelago Learning Holdings, LLC held by such parties
         to Archipelago Learning, Inc. in exchange for an aggregate of 17,955,030 shares of common stock, par value $0.001 per
         share.


                                                                        II-2
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                 (2) Providence Equity Partners V-A Study Island L.L.C., which will not have any assets other than 11,532,623
         Class A shares of Archipelago Learning Holdings, LLC, will merge with and into Archipelago Learning, Inc. and as a result
         of such merger, the members of Providence Equity Partners V-A Study Island L.L.C. will receive an aggregate of
         2,101,955 shares of Archipelago Learning, Inc.‘s common stock, par value $0.001 per share.

                 (3) The officers, directors and employees who hold an aggregate of 2,161,484 vested Class B shares of Archipelago
         Learning Holdings, LLC will contribute their vested Class B shares of Archipelago Learning Holdings, LLC to Archipelago
         Learning, Inc. in exchange for an aggregate of 335,542 shares of common stock, par value $0.001 per share.

                 (4) The officers, directors and employees who hold an aggregate of 3,867,243 unvested Class B shares of
         Archipelago Learning Holdings, LLC will contribute their unvested Class B shares of Archipelago Learning Holdings, LLC
         to Archipelago Learning, Inc. in exchange for an aggregate of 585,009 shares of restricted common stock, par value $0.001.

                 (5) The officers, directors and employees (other than the chief executive officer, chief financial officer, chief
         technology officer and co-founders) who hold an aggregate of 1,276,622 Class C shares of Archipelago Learning Holdings,
         LLC will contribute such Class C shares to Archipelago Learning, Inc. in exchange for an aggregate of 194,932 shares of
         common stock, par value $0.001 per share.

                 (6) The chief executive officer, chief financial officer, chief technology officer and co-founders will contribute their
         aggregate amount of 5,299,829 Class C shares of Archipelago Learning Holdings, LLC to Archipelago Learning, Inc. in
         exchange for an aggregate of 809,251 shares of restricted common stock, par value $0.001 per share.


                                                                       II-3
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         ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.


                    (a) Exhibits


            Exhibit
            Numbe                                                    Description of
              r                                                        Exhibits


               1 .1*     Form of Underwriting Agreement.
               3 .1      Form of Certificate of Incorporation of Archipelago Learning, Inc.
               3 .2      Form of Bylaws of Archipelago Learning, Inc.
               3 .3†     Second Amended and Restated Limited Liability Company Agreement of Study Island Holdings, LLC.
               4 .1      Form of Common Stock Certificate.
               4 .2      Form of Stockholders Agreement.
               4 .3      Reserved.
               4 .4†     Form of Time Vesting Restricted Stock Award Agreement.
               4 .5†     Form of Cash Return Vesting Restricted Stock Award Agreement.
               4 .6†     Form of Cash Return Vesting Restricted Stock Unit Award Agreement.
               4 .7†     Form of Equity Value Vesting Restricted Stock Unit Award Agreement.
               5 .1      Opinion of Weil, Gotshal & Manges LLP.
              10 .1†     2007 Equity Compensation Plan.
              10 .2†     Form of Participation Share Agreement.
              10 .3      Form of Indemnification Agreement between Archipelago Holdings, Inc. and each of its directors and
                         executive officers.
              10 .4†     Form of Archipelago Learning, Inc. 2009 Omnibus Incentive Plan.
              10 .5†     Employment Agreement, dated as of January 10, 2007, between Study Island, LLC and Cameron Chalmers.
              10 .6†     First Amendment to Employment Agreement, dated as of November 21, 2008, between Study Island, LLC
                         and Cameron Chalmers.
              10 .7†     Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                         and Cameron Chalmers.
              10 .8†     Employment Agreement, dated as of January 10, 2007, between Study Island, LLC and David Muzzo.
              10 .9†     First Amendment to Employment Agreement, dated as of November 21, 2008, between Study Island, LLC
                         and David Muzzo.
              10 .10†    Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                         and David Muzzo.
              10 .11†    Employment Agreement, dated as of January 28, 2007, between Study Island, LLC and Timothy McEwen.
              10 .12†    First Amendment to Employment Agreement, dated as of March 16, 2007, between Study Island, LLC and
                         Timothy McEwen.
              10 .13†    Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                         and Timothy McEwen.
              10 .14†    Employment Agreement, dated as of August 31, 2009, between Archipelago Learning, LLC and Timothy
                         McEwen.
              10 .15†    Employment Agreement, dated as of May 22, 2007, between Study Island, LLC and James Walburg.
              10 .16†    First Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                         and James Walburg.
              10 .17†    Employment Agreement, dated as of August 31, 2009, between Archipelago Learning, LLC and James
                         Walburg.
              10 .18†    Employment Agreement, dated as of August 28, 2009, between Archipelago Learning, LLC and Julie
                         Huston.
              10 .19†    Employment Agreement, dated as of September 15, 2008, between Study Island, LLC and Ray Lowrey.
              10 .20†    First Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                         and Ray Lowrey.


                                                                  II-4
Table of Contents




            Exhibit
            Numbe                                                       Description of
              r                                                           Exhibits


              10 .21†   Credit Agreement, dated as of November 16, 2007, by and among Study Island, LLC, the other persons
                        designated as credit parties from time to time, General Electric Capital Corporation, as a lender and as agent
                        for all lenders, NewStar Financial, Inc., as syndication agent, the other parties thereto as lenders and GE
                        Capital Markets, Inc. and NewStar Financial, Inc., as joint lead arrangers and joint bookrunners.
              10 .22†   Amendment No. 1 to Credit Agreement, dated as of May 21, 2008.
              10 .23†   Amendment No. 2 to Credit Agreement, dated as of February 18, 2009.
              10 .24†   Amendment No. 3 to Credit Agreement, dated as of April 30, 2009.
              10 .25†   Amendment No. 4 to Credit Agreement, dated as of May 15, 2009.
              10 .26†   Amendment No. 5 to Credit Agreement, dated as of September 2, 2009.
              10 .27†   Guaranty and Security Agreement, dated as of November 16, 2007, by and among Study Island, LLC,
                        General Electric Capital Corporation and the other grantors party thereto.
              10 .28†   Office Building Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .29†   First Amendment to Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .30†   Second Amendment to Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .31†   Office Building Lease, dated as of January 12, 2007, by and between Turtle Creek Limon, LP and Study
                        Island, LLC.
              10 .32†   First Amendment to Lease, dated as of January 17, 2008 by and between Turtle Creek Limon, LP and Study
                        Island LLC.
              10 .33†   Second Amendment to Lease, dated as of September 30, 2008 by and between Turtle Creek Limon, LP and
                        Study Island LLC.
              10 .34†   Employment Agreement, dated as of October 12, 2009, between Archipelago Learning, LLC and Martijn
                        Tel.
              10 .35†   Third Amendment to Lease, dated as of October 23, 2009, by and between Turtle Creek Limon, LP and
                        Archipelago Learning, LLC.
              10 .36    Archipelago Learning, Inc. Employee Stock Purchase Plan.
              10 .37†   Amendment No. 6 to Credit Agreement, dated as of November 2, 2009.
              10 .38†   First Amendment to Employment Agreement, between Archipelago Learning, LLC and Julie Huston.
              10 .39†   Employment Agreement, dated as of November 9, 2009, between Archipelago Learning, LLC and Allison
                        Duquette.
              10 .40    Voting Agreement, among Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-S1 L.P.
              10 .41    Form of Nonqualified Stock Option Award Agreement.
              10 .42    Transfer and Contribution Agreement.
              10 .43    Assignment and Merger Agreement.
              10 .44    Certificate of Merger.
              11 .1     Statement re computation of per share earnings (incorporated by reference to Notes to the Consolidated
                        Financial Statements included in Part I of this Registration Statement).
              21 .1†    List of Subsidiaries of Archipelago Learning, Inc.
              23 .1     Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm relating to Archipelago
                        Learning, Inc.
              23 .2     Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, relating to Archipelago
                        Learning Holdings, LLC.
              23 .3     Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as Exhibit 5.1 hereto).
              23 .4     Consent of Waterview Advisers.
              24 .1†    Power of Attorney.
              99 .1†    Consent of Outsell, Inc.
              99 .2†    Consent of Brian H. Hall (included as Exhibit 23.4 in the Registration Statement on Form S-1 of Archipelago
                        Learning, Inc. filed on November 2, 2009).

          * To be filed by amendment.

          † Previously filed.

                                                                     II-5
Table of Contents




                    (b) Financial Statement Schedules

         ITEM 17. UNDERTAKINGS.


                 The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the
         underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to
         permit prompt delivery to each purchaser.

                   Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors,
         officers and controlling persons of the registrant pursuant to the provisions referenced in Item 14 of this registration
         statement, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such
         indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a
         claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
         director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted
         by such director, officer or controlling person in connection with the securities being registered hereunder, the registrant
         will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
         jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and
         will be governed by the final adjudication of such issue.

                    The undersigned registrant hereby undertakes that:

                   (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the
         form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of
         prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
         part of this registration statement as of the time it was declared effective.

                   (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment
         that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered
         therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


                                                                         II-6
Table of Contents



                                                                 SIGNATURES

                  Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment no. 4 to
         the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State
         of Texas, on the 17th day of November, 2009.



                                                                        ARCHIPELAGO LEARNING, INC.




                                                                       By: /s/ Tim McEwen
                                                                           Name: Tim McEwen
                                                                           Title:   President and Chief Executive Officer


                                                          POWER OF ATTORNEY

                 Pursuant to the requirements of the Securities Act of 1933, this amendment no. 4 to the registration statement has
         been signed by the following persons in the capacities indicated on the 17th day of November, 2009.


                                      Signature                                                            Title



                                 /s/ Tim McEwen                                     President, Chief Executive Officer and Director
                                   Tim McEwen                                                (Principal Executive Officer)

                                /s/ James Walburg                                     Executive Vice President, Chief Financial
                                  James Walburg                                                  Officer and Secretary
                                                                                     (Principal Financial and Accounting Officer)

                                       *                                                      Vice President and Director
                                Cameron Chalmers

                                        *                                                     Vice President and Director
                                   David Muzzo

                                        *                                                               Director
                                  David Phillips

                                        *                                                               Director
                                  Michael Powell

                                         *                                                              Chairman
                                    Peter Wilde

           *By:     /s/ James Walburg
                                 James Walburg
                                 Attorney-in-fact
Table of Contents

                                                         EXHIBIT INDEX


            Exhibit
            Numbe                                                   Description of
              r                                                       Exhibits


               1 .1*    Form of Underwriting Agreement.
               3 .1     Form of Certificate of Incorporation of Archipelago Learning, Inc.
               3 .2     Form of Bylaws of Archipelago Learning, Inc.
               3 .3†    Second Amended and Restated Limited Liability Company Agreement of Study Island Holdings, LLC.
               4 .1     Form of Common Stock Certificate.
               4 .2     Form of Stockholders Agreement.
               4 .3     Reserved.
               4 .4†    Form of Time Vesting Restricted Stock Award Agreement.
               4 .5†    Form of Cash Return Vesting Restricted Stock Award Agreement.
               4 .6†    Form of Cash Return Vesting Restricted Stock Unit Award Agreement.
               4 .7†    Form of Equity Value Vesting Restricted Stock Unit Award Agreement.
               5 .1     Opinion of Weil, Gotshal & Manges LLP.
              10 .1†    2007 Equity Compensation Plan.
              10 .2†    Form of Participation Share Agreement.
              10 .3     Form of Indemnification Agreement between Archipelago Holdings, Inc. and each of its directors and
                        executive officers.
              10 .4†    Form of Archipelago Learning, Inc. 2009 Omnibus Incentive Plan.
              10 .5†    Employment Agreement, dated as of January 10, 2007, between Study Island, LLC and Cameron Chalmers.
              10 .6†    First Amendment to Employment Agreement, dated as of November 21, 2008, between Study Island, LLC
                        and Cameron Chalmers.
              10 .7†    Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                        and Cameron Chalmers.
              10 .8†    Employment Agreement, dated as of January 10, 2007, between Study Island, LLC and David Muzzo.
              10 .9†    First Amendment to Employment Agreement, dated as of November 21, 2008, between Study Island, LLC
                        and David Muzzo.
              10 .10†   Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                        and David Muzzo.
              10 .11†   Employment Agreement, dated as of January 28, 2007, between Study Island, LLC and Timothy McEwen.
              10 .12†   First Amendment to Employment Agreement, dated as of March 16, 2007, between Study Island, LLC and
                        Timothy McEwen.
              10 .13†   Second Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                        and Timothy McEwen.
              10 .14†   Employment Agreement, dated as of August 31, 2009, between Archipelago Learning, LLC and Timothy
                        McEwen.
              10 .15†   Employment Agreement, dated as of May 22, 2007, between Study Island, LLC and James Walburg.
              10 .16†   First Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                        and James Walburg.
              10 .17†   Employment Agreement, dated as of August 31, 2009, between Archipelago Learning, LLC and James
                        Walburg.
              10 .18†   Employment Agreement, dated as of August 28, 2009, between Archipelago Learning, LLC and Julie
                        Huston.
              10 .19†   Employment Agreement, dated as of September 15, 2008, between Study Island, LLC and Ray Lowrey.
              10 .20†   First Amendment to Employment Agreement, dated as of December 31, 2008, between Study Island, LLC
                        and Ray Lowrey.
Table of Contents




            Exhibit
            Numbe                                                       Description of
              r                                                           Exhibits


              10 .21†   Credit Agreement, dated as of November 16, 2007, by and among Study Island, LLC, the other persons
                        designated as credit parties from time to time, General Electric Capital Corporation, as a lender and as agent
                        for all lenders, NewStar Financial, Inc., as syndication agent, the other parties thereto as lenders and GE
                        Capital Markets, Inc. and NewStar Financial, Inc., as joint lead arrangers and joint bookrunners.
              10 .22†   Amendment No. 1 to Credit Agreement, dated as of May 21, 2008.
              10 .23†   Amendment No. 2 to Credit Agreement, dated as of February 18, 2009.
              10 .24†   Amendment No. 3 to Credit Agreement, dated as of April 30, 2009.
              10 .25†   Amendment No. 4 to Credit Agreement, dated as of May 15, 2009.
              10 .26†   Amendment No. 5 to Credit Agreement, dated as of September 2, 2009.
              10 .27†   Guaranty and Security Agreement, dated as of November 16, 2007, by and among Study Island, LLC,
                        General Electric Capital Corporation and the other grantors party thereto.
              10 .28†   Office Building Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .29†   First Amendment to Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .30†   Second Amendment to Lease, by and between 3400 Carlisle, Ltd. and Study Island, LLC.
              10 .31†   Office Building Lease, dated as of January 12, 2007, by and between Turtle Creek Limon, LP and Study
                        Island, LLC.
              10 .32†   First Amendment to Lease dated, as of January 17, 2008 by and between Turtle Creek Limon, LP and Study
                        Island LLC.
              10 .33†   Second Amendment to Lease dated, as of September 30, 2008 by and between Turtle Creek Limon, LP and
                        Study Island LLC.
              10 .34†   Employment Agreement, dated as of October 12, 2009, between Archipelago Learning, LLC and Martijn
                        Tel.
              10 .35†   Third Amendment to Lease, dated as of October 23, 2009, by and between Turtle Creek Limon, LP and
                        Archipelago Learning, LLC.
              10 .36    Archipelago Learning, Inc. Employee Stock Purchase Plan.
              10 .37†   Amendment No. 6 to Credit Agreement, dated as of November 2, 2009.
              10 .38†   First Amendment to Employment Agreement, between Archipelago Learning, LLC and Julie Huston.
              10 .39†   Employment Agreement, dated as of November 9, 2009, between Archipelago Learning, LLC and Allison
                        Duquette.
              10 .40    Voting Agreement, among Providence Equity Partners, Cameron Chalmers, David Muzzo and MHT-S1 L.P.
              10 .41    Form of Nonqualified Stock Option Award Agreement.
              10 .42    Transfer and Contribution Agreement.
              10 .43    Assignment and Merger Agreement.
              10 .44    Certificate of Merger.
              11 .1     Statement re computation of per share earnings (incorporated by reference to Notes to the Consolidated
                        Financial Statements included in Part I of this Registration Statement).
              21 .1†    List of Subsidiaries of Archipelago Learning, Inc.
              23 .1     Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, relating to Archipelago
                        Learning, Inc.
              23 .2     Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm, relating to Archipelago
                        Learning Holdings, LLC.
              23 .3     Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as Exhibit 5.1 hereto).
              23 .4     Consent of Waterview Advisers.
              24 .1†    Power of Attorney.
              99 .1†    Consent of Outsell, Inc.
              99 .2†    Consent of Brian H. Hall (included as Exhibit 23.4 in the Registration Statement on Form S-1 of Archipelago
                        Learning, Inc. filed on November 2, 2009).

          * To be filed by amendment.

          † Previously filed.
                                                                                                                                      Exhibit 3.1


                                                         AMENDED AND RESTATED


                                                  CERTIFICATE OF INCORPORATION OF


                                                      ARCHIPELAGO LEARNING, INC.
Archipelago Learning, Inc. (the ―Corporation‖), a corporation organized and existing under and by virtue of the General Corporate Law of the
State of Delaware (the ―DGCL‖) hereby certifies as follows:
         A. The Corporation‘s original Certificate of Incorporation was filed with the Secretary of Sate of the State of Delaware on the 4th
day of August, 2009.
       B. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Section 241 and 245 of the
DGCL, and restates, integrates and further amends the provisions of the Corporation‘s Certificate of Incorporation.
         C.   The text of the Certificate of Incorporation is amended and restated in its entirety to read as set forth as follows:
         FIRST: The name of the Corporation is: Archipelago Learning, Inc.
         SECOND: The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711
Centerville Road, Suite 400, Wilmington, County of New Castle, State of Delaware, 19808. The name of the registered agent of the
Corporation in the State of Delaware at such address is Corporation Service Company.
         THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the
DGCL.
         FOURTH: (a) The total number of shares of all classes of stock which the Corporation shall have authority to issue is Two Hundred
Ten Million (210,000,000) shares, consisting of (a) Two Hundred Million (200,000,000) shares of Common Stock, par value $0.001 per share
(―Common Stock‖) and (b) Ten Million (10,000,000) shares of one or more series of Preferred Stock, par value $0.001 per share (―Preferred
Stock‖).
         (b) Except as otherwise provided by law, the shares of stock of the Corporation, regardless of class, may be issued by the Corporation
from time to time in such amounts, for such consideration and for such corporate purposes as the Board of Directors of the Corporation (the
―Board of Directors‖) may from time to time determine.
          (c) Shares of Preferred Stock may be issued from time to time in one or more series of any number of shares as may be determined
from time to time by the Board of Directors, provided that the aggregate number of shares issued and not cancelled of any and all such series
shall not exceed the total number of shares of Preferred Stock authorized by this Certificate of Incorporation. Each series of Preferred
Stock shall be distinctly designated. The voting powers, if any, of each such series and the preferences and relative, participating, optional and
other special rights of each such series and the qualifications, limitations and restrictions thereof, if any, may differ from those of any and all
other series at any time outstanding; and the Board of Directors is hereby expressly granted authority to fix, in the resolution or resolutions
providing for the issue of a particular series of Preferred Stock, the voting powers, if any, of each such series and the designations, preferences
and relative, participating, optional and other special rights of each such series and the qualifications, limitations and restrictions thereof to the
full extent now or hereafter permitted by this Certificate of Incorporation and the laws of the State of Delaware. Shares of Preferred Stock,
regardless of series, that are converted into other securities or other consideration or otherwise acquired by the Corporation shall be retired and
cancelled, and the Corporation shall take all such actions as are necessary to cause such shares to have the status of authorized but unissued
shares of Preferred Stock, without designation as to series, and the Company shall have the right to reissue such shares.
          (d) Subject to the provisions of applicable law or of the Bylaws of the Corporation with respect to the closing of the transfer books or
the fixing of a record date for the determination of stockholders entitled to vote, and except as otherwise provided by law or by the resolution or
resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall exclusively
possess the voting power for the election of directors and for all other purposes, each holder of record of shares of Common Stock being
entitled to one vote for each share of Common Stock standing in such holder‘s name on the books of the Corporation. Shares of capital stock of
the Corporation shall not be entitled to cumulative voting.
           (e) Notwithstanding any other provisions of this Certificate of Incorporation or the Bylaws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this Certificate of Incorporation or the Bylaws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed from office for cause or without cause by the affirmative vote of the holders
of outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as
one class) cast a meeting of the stockholders called for that purpose, the notice for which states that the purpose or one of the purposes of the
meeting is the removal of such director, and constituting at least a majority of such shares entitled to vote if such removal is for cause, or at
least 75% of such shares entitled to vote if such removal is without cause. Notwithstanding the foregoing, and except as otherwise required by
law, whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a class, to elect one or more
directors of the Corporation, the provisions of paragraph (e) of this Article shall not apply with respect to the director or directors elected by
such holders of Preferred Stock. For purposes of this Article Fourth, ―cause‖ shall mean, with respect to any director, (i) the willful failure by
such director to perform, or the gross negligence of such director in performing, the duties of a director, (ii) the engaging by such director in
willful or serious misconduct that is injurious to the Corporation or (iii) the conviction of such director of, or the entering by such director of a
plea of nolo contendere to, a crime that constitutes a felony.

                                                                           2
          FIFTH: In furtherance and not in limitation of the powers conferred by law, subject to any limitations contained elsewhere in this
Certificate of Incorporation, Bylaws of the Corporation may be adopted, amended or repealed by a majority of the Board of Directors of the
Corporation, but any Bylaws adopted by the Board of Directors may be amended or repealed by the stockholders entitled to vote thereon.
Election of directors need not be conducted by written ballot.
          SIXTH: (a) The number of directors of the Corporation shall be fixed from time to time exclusively by the Board of Directors
pursuant to resolution adopted by a majority of the directors then in office; provided, however, that the number of directors shall not be less
than three (3) nor more than eleven (11).
          (b) Any vacancies in the Board of Directors for any reason, and any directorships resulting from any increase in the number of
directors, may be filled only by the Board of Directors (and not by the stockholders), acting by the affirmative vote of a majority of the
remaining directors, although less than a quorum, or by a sole remaining director. Any directors so chosen shall hold office until the next
election of the class for which such directors shall have been chosen and until their successors shall be elected and shall qualify. No decrease in
the number of directors shall shorten the term of any incumbent director.
           (c) Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock shall have the right,
voting separately by class or series, to elect one or more directors at an annual or special meeting of stockholders, the election, terms of office,
filling of vacancies, removal of directors and other features of the directorships shall be governed by the terms of this Certificate of
Incorporation or in any resolution or resolutions adopted by the Board of Directors providing for the issuance of any class or series of Preferred
Stock.
          (d) Advance notice of nominations for the election of directors, other than by the Board of Directors or a duly authorized committee
thereof or any authorized officer of the Corporation to whom the Board of Directors or such committee shall have delegated such authority, and
information concerning nominees, shall be given in the manner provided in the Bylaws of the Corporation.
           SEVENTH: A director of the Corporation shall not be personally liable either to the Corporation or to any stockholder for monetary
damages for breach of fiduciary duty as a director, except (i) for any breach of the director‘s duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions which are not in good faith or which involve intentional misconduct or knowing violation of law,
(iii) for any matter in respect of which such director shall be liable under Section 174 of the DGCL or any amendment thereto or successor
provision thereto, or (iv) for any transaction from which the director shall have derived an improper personal benefit. Neither amendment nor
repeal of this Article SEVENTH nor the adoption of any provision of the Certificate of Incorporation of the Corporation inconsistent with this
Article SEVENTH shall eliminate or reduce the effect of this paragraph in respect of any matter occurring, or any cause of action, suit or claim
that, but for this Article SEVENTH, would accrue or arise, prior to

                                                                          3
such amendment, repeal or adoption of an inconsistent provision. If the DGCL is amended to eliminate or further limit the liability of directors,
then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest
extent permitted by the DGCL.
         EIGHTH. Any action required or permitted to be taken by the stockholders of the Corporation may only be effected at a duly called
annual or special meeting of the stockholders of the Corporation, and may not be effected by the stockholders in writing in lieu of such a
meeting, unless such action by written consent of stockholders is unanimously recommended by the directors of the Corporation then in office.
         NINTH. The Corporation shall not be governed by Section 203 of the DGCL (―Section 203‖), and the restrictions contained in
Section 203 shall not apply to the Corporation.
           TENTH. To the fullest extent permitted by Section 122(17) of the DGCL and except as may be otherwise expressly agreed in writing
by the Corporation and Providence Equity Partners V L.P. and its affiliates (collectively, ―PEP‖), the Corporation, on behalf of itself and its
subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in,
business opportunities, which are from time to time presented to PEP or any of its officers, directors, agents, stockholders, members, partners,
affiliates and subsidiaries (other than the Corporation and its subsidiaries), even if the opportunity is one that the Corporation or its subsidiaries
might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and no such person shall
be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of
the fact that such person pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present
such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries unless, in the case of any
such person who is a director or officer of the Corporation, such business opportunity is expressly offered to such director or officer in writing
solely in his or her capacity as a director or officer of the Corporation. Any person purchasing or otherwise acquiring any interest in any shares
of stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article TENTH. Neither the alteration,
amendment or repeal of this Article TENTH, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this
Article TENTH, shall eliminate or reduce the effect of this Article TENTH in respect of any business opportunity first identified or any other
matter occurring, or any cause of action, suit or claim that, but for this Article TENTH, would accrue or arise, prior to such alteration,
amendment, repeal or adoption.

                                                                            4
            IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate, hereby declaring and certifying that
this is its act and deed and the facts herein stated are true, and accordingly have hereunto set its hand this [ ]th day of November, 2009.

                                                              ARCHIPELAGO LEARNING, INC.

                                                              By:
                                                              Name:
                                                              Title:



                              [SIGNATURE PAGE TO ARCHIPELAGO LEARNING, INC. A&R CHARTER]
                                                                                                                                         Exhibit 3.2


                                                  AMENDED AND RESTATED BYLAWS OF
                                                     ARCHIPELAGO LEARNING, INC.
                                                         (a Delaware corporation)


                                                        As effective on November , 2009


                                                                   PREAMBLE
   These Bylaws are subject to, and governed by, the General Corporation Law of the State of Delaware (the ―DGCL‖) and the certificate of
incorporation of Archipelago Learning, Inc., a Delaware corporation (the ―Corporation‖), then in effect (the ―Certificate of Incorporation‖). In
the event of a direct conflict between the provisions of these Bylaws and the mandatory provisions of the DGCL or the provisions of the
Certificate of Incorporation, such provisions of the DGCL or the Certificate of Incorporation, as the case may be, will be controlling.


                                                                    ARTICLE I


                                                                      Offices
   SECTION 1. Registered Office . The registered office of the Corporation shall be fixed in the Corporation‘s certificate of incorporation, as
the same may be amended and/or restated from time to time (as so amended and/or restated, the ―Certificate of Incorporation‖).
   SECTION 2. Other Offices . The Corporation‘s Board of Directors (the ―Board of Directors‖) may at any time establish other offices at any
place or places where the Corporation is qualified to do business or as the business of the Corporation may require.


                                                                   ARTICLE II


                                                             Meetings of Stockholders
    SECTION 1. Annual Meetings . The annual meeting of stockholders for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held each year at such place, date and time, within or without the State of Delaware,
as the Board of Directors shall determine.
   SECTION 2. Special Meetings . Special meetings of stockholders for the transaction of such business as may properly come before the
meeting may be held only upon call by the Board of Directors, the Chief Executive Officer or by stockholders holding together at least a
majority of all the shares of the Corporation entitled to vote at the meeting, and shall be held at such place, date and time, within or without the
State of Delaware, as may be specified by such body or person or persons in such call. Whenever the directors shall fail to fix such place, the
meeting shall be held at the principal executive office of the Corporation.
   SECTION 3. Notice of Meetings . Written notice of all meetings of the stockholders, stating the place (if any), date and hour of the meeting,
the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such
meeting, and the place within the city or other municipality or community at which the list of stockholders may be examined, shall be mailed or
delivered to each stockholder not less than 10 nor more than 60 days prior to the meeting. Notice of any special meeting shall state in general
terms the purpose or purposes for which the meeting is to be held. Only business within the purpose or purposes described in the notice may be
conducted at a special meeting of stockholders.
   SECTION 4. Postponement and Cancellation of Meeting . Any previously scheduled annual or special meeting of the stockholders may be
postponed, and any previously scheduled annual or special meeting of the stockholders called by the Board of Directors may be canceled, by
resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of stockholders.
   SECTION 5. Stockholder Lists . The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days
before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and
showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.
   The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this
section or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
   SECTION 6. Quorum . Except as otherwise provided by law or the Certificate of Incorporation, a quorum for the transaction of business at
any meeting of stockholders shall consist of the holders of record of a majority of the issued and outstanding shares of the capital stock of the
Corporation entitled to vote at the meeting, present in person or by proxy. If there be no such quorum, the holders of a majority of such shares
so present or represented may adjourn the meeting from time to time, without further notice, until a quorum shall have been obtained. When a
quorum is once present it is not broken by the subsequent withdrawal of any stockholder.
   SECTION 7. Organization . Meetings of stockholders shall be presided over by the Chairman, if any, or if none or in the Chairman‘s
absence the Vice Chairman, if any, or if none or in the Vice Chairman‘s absence the President, if any, or if none or in the President‘s absence a
Vice President, or, if none of the foregoing is present, by a chairman to be chosen by the stockholders entitled to vote who are present in person
or by proxy at the meeting. The Secretary of the Corporation, or in the Secretary‘s absence an Assistant

                                                                         2
Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present, the presiding officer of the
meeting shall appoint any person present to act as secretary of the meeting. The Board of Directors may adopt before a meeting such rules for
the conduct of the meeting, including an agenda and limitations on the number of speakers and the time which any speaker may address the
meeting, as the Board of Directors determines to be necessary or appropriate for the orderly and efficient conduct of the meeting. Subject to
any rules for the conduct of the meeting adopted by the Board of Directors, the person presiding at the meeting may also adopt, before or at the
meeting, rules for the conduct of the meeting.
   SECTION 8. Voting; Proxies; Required Votes; Action by Written Consent .
   (a)   General . At each meeting of stockholders, every stockholder shall be entitled to vote in person or by proxy appointed by instrument
         in writing, subscribed by such stockholder or by such stockholder‘s duly authorized attorney-in-fact (but no such proxy shall be voted
         or acted upon after three years from its date, unless the proxy provides for a longer period), and, unless the Certificate of
         Incorporation provides otherwise, shall have one vote for each share of stock entitled to vote registered in the name of such
         stockholder on the books of the Corporation on the applicable record date fixed pursuant to these Bylaws.

   (b)   Director Elections . At all elections of directors the voting may but need not be conducted by written ballot. A nominee for director
         shall be elected to the Board of Directors if the votes cast for such nominee‘s election exceed the votes cast (which includes votes
         withheld) against such nominee‘s election; provided, however , that directors shall be elected by a plurality of the votes to be cast at
         any meeting of stockholders for which the election of directors is ―contested‖ by one or more stockholders. For purposes of this
         Section 8(b), an election of directors is ―contested‖ if (i) the Secretary of the Corporation receives a notice that a stockholder has
         nominated a person for election to the Board of Directors in compliance with the advance notice requirements for stockholder
         nominees for director set forth in Article II, Section 10 of these Bylaws and (ii) such nomination has not been withdrawn by such
         stockholder on or prior to the day next preceding the date the Corporation first furnishes its notice of meeting for such meeting to the
         stockholders. The election of directors at such meeting of stockholders shall for all purposes remain ―contested‖ under this Section
         8(b) (and the plurality voting rule shall continue to apply) even if the stockholder nominating such director candidate withdraws the
         nomination of such candidate on any date after the Corporation first furnishes its notice of meeting to stockholders but before the date
         the meeting is held.

   (c)   All Other Matters . Except as otherwise required by law or the Certificate of Incorporation, any other action of the stockholders shall
         be authorized by the vote of the majority of the shares present in person or represented by

                                                                          3
         proxy at the meeting and entitled to vote on the subject matter. Where a separate vote by a class or classes, present in person or
         represented by proxy, shall constitute a quorum entitled to vote on that matter, the affirmative vote of the majority of shares of such
         class or classes present in person or represented by proxy at the meeting shall be the act of such class, unless otherwise provided in
         the Certificate of Incorporation.

   (d)   Actions by Written Consent . Any action required or permitted to be taken by the stockholders of the Corporation may only be
         effected at a duly called annual or special meeting of the stockholders of the Corporation, and may not be effected by the stockholders
         in writing in lieu of such a meeting, unless such action by written consent of stockholders is unanimously recommended by the
         directors of the Corporation then in office.
    SECTION 9. Advance Notification of Business to be Transacted at Meetings of Stockholders . To be properly brought before the annual or
any special meeting of the stockholders, any business to be transacted at an annual or special meeting of stockholders must be either
(a) specified in the notice of meeting (or any supplement or amendment thereto) given by or at the direction of the Board of Directors (or any
duly authorized committee thereof), (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any
duly authorized committee thereof), or (c) otherwise properly brought before the meeting by any stockholder of the Corporation (i) who is a
stockholder of record on the date of the giving of the notice provided for in this Section 9 and on the record date for the determination of
stockholders entitled to notice of and to vote at the meeting and (ii) who complies with the advance notice procedures set forth in this Section 9.
Except for proposals properly made in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the ―Exchange
Act‖), and included in the Corporation‘s notice of meeting, the foregoing clause (c) shall be the exclusive means for a stockholder to propose
business to be brought before an annual meeting of stockholders. Stockholders seeking to nominate persons for election to the Board of
Directors must comply with Section 10, and this Section 9 shall not be applicable to nominations.
    In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder‘s
written notice must to the Secretary of the Corporation be delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the date of the
immediately preceding year‘s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more than
thirty (30) days prior to or delayed by more than sixty (60) days after the anniversary of the preceding year‘s annual meeting, to be timely,
notice by the stockholder must be so received not later than the close of business on the tenth (10th) day following the day on which notice of
the date of the annual meeting was mailed or public disclosure of the date of the annual meeting is first given or made (which for this purpose
shall include any and all filings of the

                                                                         4
Corporation made on the EDGAR system of the U.S. Securities and Exchange Commission (―SEC‖) or any similar public database maintained
by the SEC), whichever first occurs.
    To be in proper written form, a stockholder‘s notice to the Secretary of the Corporation must set forth as to each matter such stockholder
proposes to bring before a meeting: (i) a brief description of the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting; (ii) the name and record address of such stockholder proposing such business and the beneficial
owner, if any, on whose behalf the proposal is made; (iii) the class or series and number of shares of capital stock of the Corporation that are,
directly or indirectly, owned beneficially or of record by such stockholder; (iv) any derivative positions held or beneficially held, directly or
indirectly, by such stockholder; (v) whether and the extent to which any hedging or other transaction or series of transactions has been entered
into by or on behalf of such stockholder, or any other agreement, arrangement or understanding (including any short position or any borrowing
or lending of shares) has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to
increase or decrease the voting power of, such stockholder with respect to any share of stock of the Corporation; (vi) a description of all
arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the
proposal of such business by such stockholder and any material interest of such stockholder in such business; (vii) any proxy, contract,
arrangement, understanding or relationship pursuant to which such stockholder has or shares a right to vote any shares of any security of the
Corporation; (viii) any direct or indirect interest of such stockholder in any contract with the Corporation, any affiliate of the Corporation or
any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or
consulting agreement); (ix) any pending or threatened litigation in which such stockholder is a party or material participant involving the
Corporation or any of its officers or directors, or any affiliate of the Corporation; (x) any material transaction occurring during the prior twelve
months between such stockholder, on the one hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the
Corporation, on the other hand; (xi) a representation that such stockholder intends to appear in person or by proxy at the meeting to bring such
business before the meeting; and (xii) any other information relating to such stockholder that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations of proxies or consents by such stockholder in support of the
business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act, and the rules and regulations promulgated
thereunder.
   This Section 9 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than
any proposal made pursuant to Rule 14a-8 under the Exchange Act. Notwithstanding the foregoing provisions of this section, a stockholder
shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended (the ―Exchange Act‖) and the rules and
regulations thereunder with respect to the matters set forth in this Section 9. Nothing in this Section 9

                                                                          5
shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation‘s proxy statement pursuant to
Rule 14a-8 under the Exchange Act.
    Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at the annual or any special meeting of the
stockholders except business brought before the meeting in accordance with the procedures set forth in this Section 9; provided , however ,
that, once business has been properly brought before the meeting in accordance with such procedures, nothing in this Section 9 shall be deemed
to preclude discussion by any stockholder of any such business. The officer of the Corporation presiding at the meeting shall, if the facts
warrant, determine and declare to the meeting that the business was not properly brought before the meeting in accordance with the provisions
of this Section 9, and if such officer shall so determine, such officer shall so declare to the meeting that any such business not properly brought
before the meeting shall not be transacted.
   SECTION 10. Advance Notification of Nominations for Directors . Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation
with respect to the rights, if any, of the holders of shares of preferred stock of the Corporation to nominate and elect a specified number of
directors in certain circumstances. All nominations of persons for election to the Board of Directors shall be made at any annual meeting of the
stockholders, or at any special meeting of the stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of
Directors (or any duly authorized committee thereof), or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section 10 and on the record date for the determination of stockholders entitled to notice of
and to vote at such meeting and (ii) who complies with the advance notice procedures set forth in this Section 10. The foregoing clause (b) shall
be the exclusive means for a stockholder to make any nomination of a person or persons for election to the Board of Directors at an annual
meeting or special meeting.
   In addition to any other applicable requirements, for a director nomination to be properly made by a stockholder, such stockholder must
have given timely notice thereof in proper written form to the Secretary of the Corporation. To be timely, a stockholder‘s written notice to the
Secretary of the Corporation must be delivered to or mailed and received at the principal executive offices of the Corporation, in the case of:
(x) an annual meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the date of
the immediately preceding year‘s annual meeting of stockholders; provided, however, that if the date of the annual meeting is advanced more
than thirty (30) days prior to or delayed by more than sixty (60) days after the anniversary of the preceding year‘s annual meeting, to be timely,
notice by the stockholder must be so received not later than the close of business on the tenth (10th) day following the day on which notice of
the date of the annual meeting was mailed or public disclosure of the date of the annual meeting is first given or made (which for this purpose
shall include any and all filings of the Corporation made on the EDGAR system of the SEC or any similar public database maintained by the
SEC), whichever first occurs; and (y) a special meeting of the

                                                                         6
stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which
notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting is first given or made (which for this
purpose shall include any and all filings of the corporation made on the EDGAR system of the SEC or any similar public database maintained
by the SEC).
   To be in proper written form, a stockholder‘s notice to the Secretary of the Corporation must set forth:
   (a)   as to each person whom the stockholder proposes to nominate for election as a director: (i) the name, age, business address and
         residence address of the person; (ii) the principal occupation or employment of the person; (iii) the class or series and number of
         shares of capital stock of the corporation that are, directly or indirectly, owned beneficially or of record by the person, if any; (iv) any
         derivative positions held or beneficially held, directly or indirectly, by such stockholder; (v) whether and the extent to which any
         hedging or other transaction or series of transactions has been entered into by or on behalf of the stockholder, or any other agreement,
         arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the effect or intent
         of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of,
         such stockholder with respect to any share of stock of the Corporation; (vi) a statement whether such person, if elected, intends to
         tender, promptly following such person‘s election or reelection, an irrevocable resignation effective upon such person‘s failure to
         receive the required vote for re-election at the next meeting at which such person would face re-election and upon acceptance of such
         resignation by the Board of Directors, in accordance with the Corporation‘s Corporate Governance Guidelines; (vii) any direct or
         indirect voting commitments or other arrangements of such person with respect to their actions as a director; and (viii) any other
         information relating to the person that would be required to be disclosed in a proxy statement or other filings of the proposing
         stockholder required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the
         Exchange Act, and the rules and regulations promulgated thereunder; and

   (b)   as to the stockholder giving the notice: (i) the name and record address of such stockholder proposing such nomination and the
         beneficial owner, if any, on whose behalf the nomination is made; (ii) the class or series and number of shares of capital stock of the
         Corporation which are, directly or indirectly, owned beneficially or of record by such stockholder; (iii) a description of all direct and
         indirect compensation and other material monetary agreements, arrangements or understandings during the past three years, and any
         other material relationships, between such stockholder and each proposed nominee, including, without limitation, all information that
         would be required to be disclosed pursuant to Item 404 under Regulation S-

                                                                          7
         K if such stockholder were the ―registrant‖ for purposes of such rule and the proposed nominee were a director or executive officer of
         such registrant; (iv) any derivative positions held or beneficially held, directly or indirectly, by such stockholder; (v) whether and the
         extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other
         agreement, arrangement or understanding (including any short position or any borrowing or lending of shares) has been made, the
         effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting
         power of, such stockholder with respect to any share of stock of the Corporation; (v) a representation that such stockholder intends to
         appear in person or by proxy at the meeting to nominate the persons named in its notice; and (vii) any other information relating to
         such stockholder that would be required to be disclosed in a proxy statement or other filings of the proposing stockholder required to
         be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules
         and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being
         named or referred to as a nominee and to serve as a director if elected. The Corporation may require any proposed nominee to furnish
         such other information (which may include attending meetings to discuss the furnished information) as may reasonably be required by
         the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation.
  Notwithstanding the foregoing provisions of this section, a stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to matters set forth in this Section 10.
    Notwithstanding anything in these Bylaws to the contrary, no person shall be eligible for election as a director of the Corporation unless
nominated in accordance with the procedures set forth in this Section 10. The officer of the Corporation presiding at the meeting shall, if the
facts warrant, determine and declare to the meeting that the nomination was not made in accordance with the provisions of this Section 10, and
if such officer shall also determine, such officer shall so declare to the meeting that any such defective nomination shall be disregarded.
    SECTION 11. Inspectors . The Board of Directors, in advance of any meeting, may, but need not, appoint one or more inspectors of election
to act at the meeting or any adjournment thereof. If an inspector or inspectors are not so appointed, the person presiding at the meeting may, but
need not, appoint one or more inspectors. In case any person who may be appointed as an inspector fails to appear or act, the vacancy may be
filled by appointment made by the directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, if any,
before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The inspectors, if any, shall determine the number of shares of stock outstanding
and the voting

                                                                          8
power of each, the shares of stock represented at the meeting, the existence of a quorum, and the validity and effect of proxies, and shall
receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the person presiding at the meeting, the inspector or inspectors, if any, shall make a report in writing of any
challenge, question or matter determined by such inspector or inspectors and execute a certificate of any fact found by such inspector or
inspectors.


                                                                    ARTICLE III


                                                                 Board of Directors
  SECTION 1. General Powers . The business, property and affairs of the Corporation shall be managed by, or under the direction of, the
Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the
Certificate of Incorporation required to be exercised or done by the stockholders.
   SECTION 2. Qualification; Number; Term; Remuneration .
   (a)   Each director shall be at least eighteen (18) years of age. A director need not be a stockholder, a citizen of the United States, or a
         resident of the State of Delaware. The number of directors constituting the entire Board shall at all times be not less than three (3) nor
         more than eleven (11), the exact number of which shall be fixed from time to time by action of the Board of Directors, one of whom
         may be selected by the Board of Directors to be its Chairman. The use of the phrase ―entire Board‖ herein refers to the total number
         of directors which the Corporation would have if there were no vacancies.

   (b)   Directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and
         newly created directorships, shall hold office until the annual meeting of stockholders of the year in which such director‘s term
         expires and until their successors are elected and qualified or until their earlier resignation or removal. No decrease in the number of
         directors shall shorten the term of any incumbent director.

   (c)   Directors may be reimbursed or paid in advance their expenses, if any, of attendance at each meeting of the Board of Directors and
         may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall
         preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or
         standing committees may be allowed like compensation for attending committee meetings.

                                                                           9
   SECTION 3. Quorum and Manner of Voting . Except as otherwise provided by law, a majority of the entire Board then in office shall
constitute a quorum. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting from time to time to
another time and place without notice. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.
  SECTION 4. Places of Meetings . Meetings of the Board of Directors may be held at any place within or without the State of Delaware, as
may from time to time be fixed by resolution of the Board of Directors, or as may be specified in the notice of meeting.
   SECTION 5. Annual Meeting . Following the annual meeting of stockholders, the newly elected Board of Directors shall meet for the
purpose of the election of officers and the transaction of such other business as may properly come before the meeting. Such meeting may be
held without notice immediately after the annual meeting of stockholders at the same place at which such stockholders‘ meeting is held.
   SECTION 6. Regular Meetings . Regular meetings of the Board of Directors shall be held at such times and places as the Board of Directors
shall from time to time by resolution determine. Notice need not be given of regular meetings of the Board of Directors held at times and places
fixed by resolution of the Board of Directors.
   SECTION 7. Special Meetings . Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board,
President or by a majority of the directors then in office.
   SECTION 8. Notice of Meetings . A notice of the place, date and time and the purpose or purposes of each meeting of the Board of
Directors shall be given to each director by mailing the same at least two days before the special meeting, or by telephoning or emailing the
same or by delivering the same personally not later than the day before the day of the meeting.
    SECTION 9. Organization . At all meetings of the Board of Directors, the Chairman, if any, or if none or in the Chairman‘s absence or
inability to act, the President, or in the President‘s absence or inability to act any Vice President who is a member of the Board of Directors, or
in such Vice President‘s absence or inability to act as chairman chosen by the directors, shall preside. The Secretary of the Corporation shall act
as secretary at all meetings of the Board of Directors when present, and, in the Secretary‘s absence, the presiding officer may appoint any
person to act as secretary of the meeting.
   SECTION 10. Resignation . Any director may resign at any time upon written notice to the Corporation and such resignation shall take
effect upon receipt thereof by the President or Secretary, unless otherwise specified in the letter of resignation.
   SECTION 11. Removal .

                                                                        10
   (a)   Notwithstanding any other provisions of the Certificate of Incorporation or these Bylaws (and notwithstanding the fact that some
         lesser percentage may be specified by law, the Certificate of Incorporation or the Bylaws of the Corporation), any director or the
         entire Board of Directors of the Corporation may be removed from office for cause by the affirmative vote of the holders of a majority
         of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this
         purpose as one class) cast at a meeting of the stockholders called for that purpose, the notice for which states that the purpose or one
         of the purposes of the meeting is the removal of such director. For purposes of this Section 11, ―cause‖ shall mean, with respect to any
         director, (i) the willful failure by such director to perform, or the gross negligence of such director in performing, the duties of a
         director, (ii) the engaging by such director in willful or serious misconduct that is injurious to the Corporation or (iii) the conviction of
         such director of, or the entering by such director of a plea of nolo contendere to, a crime that constitutes a felony.

   (b)   Any director may be removed from office without cause only by the affirmative vote of at least 75% of the outstanding shares of
         stock entitled to vote in an election of directors.

   (c)   Notwithstanding the foregoing, and except as otherwise required by law, whenever the holders of any one or more series of the
         Corporation‘s preferred stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, the
         provisions (a) and (b) of this Section 12 shall not apply with respect to the director or directors elected by such holders of preferred
         stock.
   SECTION 12. Vacancies . Vacancies on the Board of Directors for any reason, whether caused by resignation, death, disqualification,
removal, an increase in the authorized number of directors or otherwise, may be filled only by the Board of Directors (and not by the
stockholders) by the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director.
   SECTION 13. Attendance by Telephone . Unless otherwise restricted by the Certificate of Incorporation, members of the Board of
Directors, or of any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee,
by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in person at the meeting.
   SECTION 14. Action by Written Consent . Any action required or permitted to be taken at any meeting of the Board of Directors may be
taken without a meeting if all the

                                                                         11
directors consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.


                                                                  ARTICLE IV


                                                                   Committees
    SECTION 1. Appointment; Limitations . From time to time the Board of Directors by a resolution adopted by a majority of the entire Board
may appoint any committee or committees for any purpose or purposes, to the extent lawful, which shall have powers as shall be determined
and specified by the Board of Directors in the resolution of appointment. No Committee of the Board shall take any action to amend the
Certificate of Incorporation or these Bylaws, adopt any agreement to merge or consolidate the Corporation, declare any dividend or recommend
to the stockholders a sale, lease or exchange of all or substantially all of the assets and property of the Corporation, a dissolution of the
Corporation or a revocation of a dissolution of the Corporation. No Committee of the Board shall take any action which is required in these
Bylaws, in the Certificate of Incorporation or by statute to be taken by a vote of a specified proportion of the whole Board of Directors.
   SECTION 2. Procedures, Quorum and Manner of Acting . Each committee shall fix its own rules of procedure, and shall meet where and as
provided by such rules or by resolution of the Board of Directors. Except as otherwise provided by law, the presence of a majority of the then
appointed members of a committee shall constitute a quorum for the transaction of business by that committee, and in every case where a
quorum is present the affirmative vote of a majority of the members of the committee present shall be the act of the committee. Each committee
shall keep minutes of its proceedings, and actions taken by a committee shall be reported to the Board of Directors.
   SECTION 3. Action by Written Consent . Any action required or permitted to be taken at any meeting of any committee of the Board of
Directors may be taken without a meeting if all the members of the committee consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the committee.
   SECTION 4. Term; Termination . In the event any person shall cease to be a director of the Corporation, such person shall simultaneously
therewith cease to be a member of any committee appointed by the Board of Directors.


                                                                   ARTICLE V


                                                                     Officers
   SECTION 1. Election and Qualifications . The Board of Directors shall elect the officers of the Corporation, which shall include a President
and a Secretary, and may include, by election or appointment, a Chief Executive Officer, one or more Vice

                                                                        12
Presidents (any one or more of whom may be given an additional designation of rank or function), a Treasurer and such Assistant Secretaries,
such Assistant Treasurers and such other officers as the Board may from time to time deem proper. Each officer shall have such powers and
duties as may be prescribed by these Bylaws and as may be assigned by the Board of Directors or the President. Any two or more offices may
be held by the same person unless specifically prohibited therefrom by law.
   SECTION 2. Term of Office and Remuneration . The term of office of all officers shall be one year and until their respective successors
have been elected and qualified, but any officer may be removed from office, either with or without cause, at any time by the Board of
Directors. Any vacancy in any office arising from any cause may be filled for the unexpired portion of the term by the Board of Directors. The
remuneration of all officers of the Corporation may be fixed by the Board of Directors or in such manner as the Board of Directors shall
provide.
   SECTION 3. Resignation; Removal . Any officer may resign at any time upon written notice to the Corporation and such resignation shall
take effect upon receipt thereof by the President or Secretary, unless otherwise specified in the resignation. Any officer shall be subject to
removal, with or without cause, at any time by vote of a majority of the entire Board of Directors, and any officer appointed by an executive
officer or by a committee may be removed either with or without cause by the officer or committee who appointed him or her or by the
Chairman or President.
   SECTION 4. Chairman of the Board . The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the Board of
Directors and shall have such other powers and duties as may from time to time be assigned by the Board of Directors.
   SECTION 5. President and Chief Executive Officer . The President shall be the chief executive officer of the Corporation, and shall have
such duties as customarily pertain to that office. The President shall have general management and supervision of the property, business and
affairs of the Corporation and over its other officers; may appoint and remove assistant officers and other agents and employees, other than
officers referred to in Section 1 of this Article V; may execute and deliver in the name of the Corporation powers of attorney, contracts, bonds
and other obligations and instruments; and shall have such other powers and authority as from time to time may be assigned by the Board of
Directors.
   SECTION 6. Vice President . A Vice President may execute and deliver in the name of the Corporation contracts and other obligations and
instruments pertaining to the regular course of the duties of said office, and shall have such other authority as from time to time may be
assigned by the Board of Directors or the President.
   SECTION 7. Treasurer . The Treasurer shall in general have all duties incident to the position of Treasurer and such other duties as may be
assigned by the Board of Directors or the President.

                                                                        13
   SECTION 8. Secretary . The Secretary shall in general have all the duties incident to the office of Secretary and such other duties as may be
assigned by the Board of Directors or the President.
   SECTION 9. Assistant Officers . Any assistant officer shall have such powers and duties of the officer such assistant officer assists as such
officer or the Board of Directors shall from time to time prescribe.
   SECTION 10. Other Officers . The President or Board of Directors may appoint other officers and agents for any Group, Division or
Department into which this Corporation may be divided by the Board of Directors, with titles as the President or Board of Directors may from
time to time deem appropriate. All such officers and agents shall receive such compensation, have such tenure and exercise such authority as
the President or Board of Directors may specify. All appointments made by the President hereunder and all the terms and conditions thereof
must be reported to the Board of Directors.


                                                                  ARTICLE VI


                                                Indemnification of Directors, Officers and Others
    SECTION 1. Indemnification of Directors, Officer and Others . (a) Each person who is or is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a ―proceeding‖), by
reason of the fact that such person is or was a director or officer of the Corporation or, while serving as such director or officer, is or was
serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust
or other enterprise, including, without limitation, service with respect to employee benefit plans (an ―Other Entity‖), shall be indemnified and
held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law (the ―DGCL‖), as the same exists
or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys‘ fees, judgments, fines, and amounts paid in settlement) actually and reasonably incurred by such person
in connection therewith if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best
interests of the Corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe the person‘s conduct was
unlawful, and such indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to
the benefit of such person‘s heirs, executors and administrators; provided , however , that, except as provided in the third paragraph hereof, the
Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person
only if such proceeding (or part thereof) was

                                                                         14
authorized by the Board of Directors. The Corporation may enter into agreements with any such person for the purpose of providing for such
indemnification.
    SECTION 2. Reimbursement and Advancement of Expenses . The Corporation shall, from time to time, reimburse or advance to any
current or former director or officer the funds necessary for payment of expenses (including attorney‘s fees and disbursements) actually and
reasonably incurred by such person in investigating, responding to, defending or testifying in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative in nature, to which such person becomes or is threatened to be made a
party by reason of the fact that such person is or was, or is alleged to have been, a director or officer of the Corporation, or is or was, or is
alleged to have been, serving at the request of the Corporation as a director or officer or in any other fiduciary capacity of or for any Other
Entity; provided , however , that the Corporation may pay such expenses in advance of the final disposition of such action, suit or proceeding
only upon receipt of an undertaking, if such undertaking is required by the DGCL, by or on behalf of such person to repay such amount if it
shall ultimately be determined by final judicial decision that such person is not entitled to be indemnified by the Corporation against such
expenses. Expenses may be similarly advanced or reimbursed to persons who are and were not directors or officers of the Corporation in
respect of their service to the Corporation or to any Other Entity at the request of the Corporation to the extent the Board of Directors at any
time determines that such persons should be so entitled to advancement or reimbursement of such expenses, and the Corporation may enter into
agreements with such persons for the purpose of providing such advances or reimbursement.
   SECTION 3. Insurance . The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.
    SECTION 4. Preservation of Other Rights . The right to indemnification and the payment of expenses incurred in defending a proceeding in
advance of its final disposition conferred in this Article VI shall not be exclusive of, and the Corporation is authorized to honor or provide, any
other right that any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise, which other right may provide indemnification and advancement in excess of the
indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the Corporation, its stockholders and others.
   SECTION 5. Survival .
   (a)   The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article VI
         shall continue as to a person who has ceased to be a director or officer of the Corporation

                                                                          15
         and shall inure to the benefit of such person‘s heirs, executors and administrators.

   (b)   The provisions of this Article VI shall be a contract between the Corporation, on the one hand, and each person who was a director
         and officer at any time while this Article VI is in effect and any other person indemnified hereunder, on the other hand, pursuant to
         which the Corporation and each such person intend to be legally bound. Any repeal or modification of the provisions of this
         Article VI shall not adversely affect any right or protection of any director, officer, employee or agent of the Corporation existing at
         the time of such repeal or modification, regardless of whether a claim arising out of such action, omission or state of facts is asserted
         before or after such repeal or amendment.
   SECTION 6. Enforceability of Right to Indemnification . The rights to indemnification and reimbursement or advancement of expenses
provided by, or granted pursuant to, this Article VI shall be enforceable by any person entitled to such indemnification or reimbursement or
advancement of expenses in any court of competent jurisdiction. If a claim under Sections 1 and 2 of this Article VI is not paid in full by the
Corporation within thirty (30) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim. The burden of proving that such indemnification or reimbursement or
advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such
indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation
(including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or
reimbursement or advancement of expenses shall constitute a defense to the action or create a presumption that such person is not so entitled.
Such a person shall also be indemnified by the Corporation against any expenses reasonably incurred in connection with successfully
establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part.


                                                                  ARTICLE VII


                                                               Books and Records
   SECTION 1. Location . The books and records of the Corporation may be kept at such place or places within or outside the State of
Delaware as the Board of Directors or the respective officers in charge thereof may from time to time determine. The record books containing
the names and addresses of all stockholders, the number and class of shares of stock held by each and the dates when they respectively became
the owners of record thereof shall be kept by the Secretary as prescribed in the Bylaws and by such officer or agent as shall be designated by
the Board of Directors.

                                                                        16
   SECTION 2. Addresses of Stockholders . Notices of meetings and all other corporate notices may be delivered personally or mailed to each
stockholder at the stockholder‘s address as it appears on the records of the Corporation.
   SECTION 3. Fixing Date for Determination of Stockholders of Record .
   (a)   In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any
         adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the
         resolution fixing the record date is adopted by the Board of Directors and which record date shall not be more than 60 nor less than
         10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining
         stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the
         day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting
         is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any
         adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

   (b)   Provided that the Board of Directors has authorized stockholder action by written consent under Article II, Section 8(d) hereof, in
         order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the
         Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record
         date is adopted by the Board of Directors and which date shall not be more than 10 days after the date upon which the resolution
         fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date
         for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board
         of Directors is required, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken
         is delivered to the Corporation by delivery to its registered office in this State, its principal place of business, or an officer or agent of
         the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the
         Corporation‘s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been
         fixed by the Board of Directors and prior action by the Board of Directors is required by this chapter, the record date for determining
         stockholders entitled to consent to corporate action in writing without a

                                                                          17
         meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.
   (c)   In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or
         allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or
         for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date
         upon which the resolution fixing the record date is adopted by the Board of Directors and which record date shall be not more than
         60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at
         the close of business on the day on which the Board of Directors adopts the resolution relating thereto.


                                                                   ARTICLE VIII


                                                          Certificates Representing Stock
   SECTION 1. Certificates; Signatures; Rules and Regulations . There may be issued to each holder of fully paid shares of capital stock of the
Corporation a certificate or certificates for such shares; however, the Corporation may issue uncertificated shares of its capital stock. Every
holder of capital stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate,
signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, or the President or Vice President,
and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, representing the number of shares
registered in certificate form. Any and all signatures on any such certificate may be facsimiles. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at
the date of issue. The name of the holder of record of the shares represented thereby, with the number of such shares and the date of issue, shall
be entered on the books of the Corporation. The Board of Directors may appoint one or more transfer agents for the Corporation‘s capital stock
and may make, or authorize such agent or agents to make, all such rules and regulations as are expedient governing the issue, transfer and
registration of shares of the capital stock of the Corporation and any certificates representing such shares.
    SECTION 2. Transfers of Stock . The capital stock of the Corporation shall be transferred only upon the books of the Corporation either
(a) if such shares are certificated, by the surrender to the Corporation or its transfer agent of the old stock certificate therefor properly endorsed
or accompanied by a written assignment or power of attorney properly executed, with transfer stamps (if necessary) affixed, or (b) if such
shares are uncertificated, upon proper instructions from the holder thereof or such holder‘s attorney

                                                                          18
lawfully constituted in writing, in each case with such proof of the authenticity of signature as the Corporation or its transfer agent may
reasonably require. Prior to due presentment for registration of transfer of a security (whether certificated or uncertificated), the Corporation
shall treat the registered owner of such security as the person exclusively entitled to vote, receive notifications and dividends, and otherwise to
exercise all the rights and powers of such security.
    SECTION 3. Fractional Shares . The Corporation may, but shall not be required to, issue certificates for fractions of a share where necessary
to effect authorized transactions, or the Corporation may pay in cash the fair value of fractions of a share as of the time when those entitled to
receive such fractions are determined, or it may issue scrip in registered or bearer form over the manual or facsimile signature of an officer of
the Corporation or of its agent, exchangeable as therein provided for full shares, but such scrip shall not entitle the holder to any rights of a
stockholder except as therein provided.
   SECTION 4. Lost, Stolen or Destroyed Certificates . The Corporation may issue a new certificate of stock in place of any certificate,
theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Board of Directors may require the owner of any lost, stolen or
destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that
may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate.


                                                                   ARTICLE IX


                                                                    Dividends
   Subject always to the provisions of law and the Certificate of Incorporation, the Board of Directors shall have full power to determine
whether any, and, if any, what part of any, funds legally available for the payment of dividends shall be declared as dividends and paid to
stockholders; the division of the whole or any part of such funds of the Corporation shall rest wholly within the lawful discretion of the Board
of Directors, and it shall not be required at any time, against such discretion, to divide or pay any part of such funds among or to the
stockholders as dividends or otherwise; and before payment of any dividend, there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other
purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.


                                                                   ARTICLE X

                                                                         19
                                                                   Ratification
   Any transaction, questioned in any lawsuit on the ground of lack of authority, defective or irregular execution, adverse interest of director,
officer or stockholder, non-disclosure, miscomputation, or the application of improper principles or practices of accounting, may be ratified
before or after judgment, by the Board of Directors or by the stockholders, and if so ratified shall have the same force and effect as if the
questioned transaction had been originally duly authorized. Such ratification shall be binding upon the Corporation and its stockholders and
shall constitute a bar to any claim or execution of any judgment in respect of such questioned transaction.


                                                                  ARTICLE XI


                                                                  Corporate Seal
    The corporate seal shall have inscribed thereon the name of the Corporation and the year of its incorporation, and shall be in such form and
contain such other words and/or figures as the Board of Directors shall determine. The corporate seal may be used by printing, engraving,
lithographing, stamping or otherwise making, placing or affixing, or causing to be printed, engraved, lithographed, stamped or otherwise made,
placed or affixed, upon any paper or document, by any process whatsoever, an impression, facsimile or other reproduction of said corporate
seal.


                                                                  ARTICLE XII


                                                                   Fiscal Year
  The fiscal year of the Corporation shall be fixed, and shall be subject to change, by the Board of Directors. Unless otherwise fixed by the
Board of Directors, the fiscal year of the Corporation shall be the calendar year.


                                                                 ARTICLE XIII


                                                                Waiver of Notice
   Whenever notice is required to be given by these Bylaws or by the Certificate of Incorporation or by law, a written waiver thereof, signed by
the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice.


                                                                 ARTICLE XIV


                                                     Bank Accounts, Drafts, Contracts, Etc.

                                                                         20
   SECTION 1. Bank Accounts and Drafts . In addition to such bank accounts as may be authorized by the Board of Directors, the primary
financial officer or any person designated by said primary financial officer, whether or not an employee of the Corporation, may authorize such
bank accounts to be opened or maintained in the name and on behalf of the Corporation as he may deem necessary or appropriate, payments
from such bank accounts to be made upon and according to the check of the Corporation in accordance with the written instructions of said
primary financial officer, or other person so designated by such primary financial officer.
   SECTION 2. Contracts . The Board of Directors may authorize any person or persons, in the name and on behalf of the Corporation, to enter
into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be
general or confined to specific instances.
    SECTION 3. Proxies; Powers of Attorney; Other Instruments . The Chairman, the President or any other person designated by either of
them shall have the power and authority to execute and deliver proxies, powers of attorney and other instruments on behalf of the Corporation
in connection with the rights and powers incident to the ownership of stock by the Corporation. The Chairman, the President or any other
person authorized by proxy or power of attorney executed and delivered by either of them on behalf of the Corporation may attend and vote at
any meeting of stockholders of any company in which the Corporation may hold stock, and may exercise on behalf of the Corporation any and
all of the rights and powers incident to the ownership of such stock at any such meeting, or otherwise as specified in the proxy or power of
attorney so authorizing any such person. The Board of Directors, from time to time, may confer like powers upon any other person.
    SECTION 4. Financial Reports . The Board of Directors may appoint the primary financial officer or other fiscal officer or any other officer
to cause to be prepared and furnished to stockholders entitled thereto any special financial notice and/or financial statement, as the case may be,
which may be required by any provision of law.


                                                                  ARTICLE XV


                                                                  Amendments
   The Board of Directors shall have power to adopt, amend or repeal Bylaws. Bylaws adopted by the Board of Directors may be repealed or
changed, and new Bylaws made, by the stockholders, and the stockholders may prescribe that any Bylaw made by them shall not be altered,
amended or repealed by the Board of Directors.


                                                                 ARTICLE XVI


                                                                  Miscellaneous

                                                                        21
   When used in these Bylaws and when permitted by applicable law, the terms ―written‖ and ―in writing‖ shall include any ―electronic
transmission,‖ as defined in Section 232(c) of the DGCL, including without limitation any telegram, cablegram, facsimile transmission and
communication by electronic mail, and ―address‖ shall include the recipient‘s electronic address for such purposes.

                                                                      22
                                                                                                                                   Exhibit 4.1

COMMON STOCK                                                                                                             COMMON STOCK


                                                  ARCHIPELAGO LEARNING, INC.
                                                                                           CUSIP 03956P 102
                                                                                 SEE REVERSE FOR CERTAIN DEFINITIONS

THIS CERTIFIES THAT
Is the record holder of
FULLY PAID AND NON-assessable shares of common stock, $0.001 PAR VALUE PER SHARE, OF
                                                   ARCHIPELAGO LEARNING, INC.
Transferable on the books of the Corporation by the person or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal
of the Corporation and the facsimile signatures of its duly authorized officers.
Dated:

                                                                                COUNTERSIGNED AND REGISTERED:


         President and Chief Executive Officer

                                                                                American Stock Transfer and Trust Company, LLC
                                                                 [SEAL]         TRANSFER AGENT AND REGISTRAR.
                                                                                By:


 Executive Vice President, Chief Financial Officer and                                         AUTHORIZED SIGNATURE
                      Secretary
                                                     ARCHIPELAGO LEARNING, INC.
    The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as though they were written out
in full according to applicable laws or regulations:



TEN COM        —     as tenants in common
TEN ENT        —     as tenants by the entireties
JT TEN         —     as joint tenants with right of
                     survivorship and not as tenants in
                     common

UNIF GIFT MIN                                   Custodian
ACT —
                            (Cust)                                  (Minor)
                                 under Uniform Gifts to Minors Act


                                                (State)

UNIF TRF MIN                             Custodian (until age
ACT —
                                                          )
                            (Cust)                                  (Minor)

                                 under Uniform Gifts to Minors Act


                                                (State)




                                     Additional abbreviations may also be used though not in the above list.

                                                                         2
   For Value Received,                                            hereby sell(s), assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER
IDENTIFYING
NUMBER OF ASSIGNEE




                  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)




Of the ___ Stock represented by the within Certificate, and do(es) hereby irrevocably constitute and appoint


Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Date



                                                                                               Signature


                                        NOTICE:        THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND
                                                       WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE
                                                       CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR
                                                       ENLARGEMENT OR ANY CHANGE WHATSOEVER.
Signature(s) Guaranteed:


SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.

                                                                        3
                                       Exhibit 4.2


     STOCKHOLDERS AGREEMENT
              by and among
    ARCHIPELAGO LEARNING, INC.,
PROVIDENCE EQUITY PARTNERS V L.P.,
PROVIDENCE EQUITY PARTNERS V-A L.P.,
        CAMERON CHALMERS,
            DAVID MUZZO,
              MHT-SI, L.P.,
                   and
           JEANNE BODNAR
      Dated as of November [ ], 2009
                                                        TABLE OF CONTENTS

                                                                            Page
ARTICLE I. EFFECTIVENESS; DEFINITIONS                                         1

  Section 1.1. Effectiveness                                                  1

  Section 1.2. Definitions                                                    1

  Section 1.3. Other Interpretive Provisions.                                 6

ARTICLE II. REPRESENTATIONS AND WARRANTIES                                    6

  Section 2.1. Existence; Authority; Enforceability                           6

  Section 2.2. Absence of Conflicts                                           6

  Section 2.3. Consents                                                       7

ARTICLE III. TRANSFERS OF SHARES                                              7

  Section 3.1. Limitations on Transfer of Shares                              7

  Section 3.2. Tag Along Rights                                               8

  Section 3.3. Drag Along Rights                                              9

  Section 3.4. Rights and Obligations of Transferees                         10

ARTICLE IV. REGISTRATION RIGHTS                                              11

  Section 4.1. Demand Registration                                           11

  Section 4.2. Piggyback Registrations                                       12

  Section 4.3. Underwriting Requirements                                     12

  Section 4.4. Obligations of the Company                                    14

  Section 4.5. Furnish Information                                           15

  Section 4.6. Expenses of Registration                                      15

  Section 4.7. Delay of Registration                                         15

  Section 4.8. Indemnification                                               16

  Section 4.9. Reports Under Exchange Act                                    18

  Section 4.10. Limitations on Subsequent Registration Rights                18

  Section 4.11. ―Market Stand-off‖ Agreement                                 19

  Section 4.12. Termination of Registration Rights                           20
ARTICLE V. GENERAL PROVISIONS                   20

 Section 5.1. Waiver by Stockholders            20

 Section 5.2. Assignment; Benefit               20

 Section 5.3. Freedom to Pursue Opportunities   20
                                                  Page
Section 5.4. Termination                           21

Section 5.5. Severability                          21

Section 5.6. Entire Agreement                      21

Section 5.7. Amendment                             21

Section 5.8. Waiver                                21

Section 5.9. Counterparts                          21

Section 5.10. Notices                              21

Section 5.11. Governing Law                        22

Section 5.12. Jurisdiction                         22

Section 5.13. Waiver of Jury Trial                 22

Section 5.14. Specific Performance                 23

Section 5.15. Securities Filings                   23

Section 5.16. No Third Party Beneficiaries         23


                                             ii
    THIS STOCKHOLDERS AGREEMENT (as it may be amended from time to time in accordance with the terms hereof, this ― Agreement
‖), dated as of November [ ], 2009, is made by and among Providence Equity Partners V L.P. (― PEP V ‖), Providence Equity Partners V-A
L.P. (― PEP V-A ‖, and together with PEP V, the ― Providence Stockholders ‖), Cameron Chalmers and David Muzzo (each a ― Founder
Stockholder ‖ and collectively, the ― Founder Stockholders ‖), MHT-SI, L.P. (― MHT ‖) and Jeanne Bodnar (― Bodnar ‖, and together with the
Providence Stockholders, the Founder Stockholders and MHT, the ― Stockholders ‖), and Archipelago Learning, Inc., a Delaware corporation
(the ― Company ‖).


                                                                   RECITALS
   WHEREAS, the Company is proposing to sell Common Stock (as defined below) to the public in an initial public offering (the ― IPO ‖);
   WHEREAS, immediately after the completion of the Company‘s IPO, it is expected that the Stockholders will own approximately [ • ]% of
the outstanding Common Stock (or [ • ]% of the outstanding Common Stock if the underwriters exercise their option to purchase additional
Common Stock from the Company); and
   WHEREAS, subject to the terms and conditions herein, the Stockholders and the Company desire to enter into this Agreement to provide for
the management of the Company and to set forth certain rights and obligations of the Stockholders upon the consummation of the IPO.
   NOW, THEREFORE, in consideration of the foregoing and the mutual promises, covenants and agreements of the parties hereto, and for
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


                                                                   ARTICLE I.
                                                       EFFECTIVENESS; DEFINITIONS
  Section 1.1. Effectiveness . This Agreement shall become effective simultaneous with, and subject to, the listing of Common Stock on The
Nasdaq Stock Market in connection with the completion of the IPO. In no event shall this Agreement become effective prior to the listing of
Common Stock on The Nasdaq Stock Market.
   Section 1.2. Definitions . As used in this Agreement, the following terms shall have the following meanings:
   ― Affiliate ‖ means (i) with respect to any Person, any other Person who directly or indirectly controls such first Person or is controlled by
said Person or is under common control with said Person where ―control‖ means power and ability to direct, directly or indirectly, or share
equally in or cause the direction of, the management and/or policies of a Person, whether through ownership of voting shares or other
equivalent interests of the controlled Person, by contract (including proxy) or otherwise, or (ii) with respect to any individual, the spouse,
parent, sibling, child, step-child, grandchild, niece or nephew of such Person, or the spouse thereof and any trust, limited liability company,
limited partnership, private foundation or other estate

                                                                         1
planning vehicle for such Person or for the benefit of any of the foregoing or other Persons pursuant to the laws of descent and distribution.
   ― Affiliated Director ‖ means any director affiliated with the Providence Parties.
   ― Affiliated Officer ‖ means an officer of the Company affiliated with the Providence Parties.
   ― Affiliated Party ‖ has the meaning set forth in Section 5.3 .
   ― Agreement ‖ has the meaning set forth in the preamble.
   ― Bodnar ‖ has the meaning set forth in the preamble.
   ― Business Day ‖ means any day other than a Saturday, Sunday or day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to close.
    ― Change of Control ‖ means consummation of (a) any transaction or series of related transactions, whether or not the Company is a party
thereto, in which, after giving effect to such transaction or transactions, shares of Common Stock representing in excess of fifty percent (50%)
of the voting power of the Company are owned directly, or indirectly through one or more entities, by any ―person‖ or ―group‖ (as such terms
are used in Section 13(d) of the Exchange Act) by Persons other than the Providence Parties (or their Permitted Transferees), or (b) a sale, lease
or other disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis (including securities of
the Company‘s directly or indirectly owned Subsidiaries).
   ― Code ‖ means the Internal Revenue Code of 1986, as amended.
   ― Common Stock ‖ means shares of common stock of the Company, par value $0.001 per share.
   ― Company ‖ has the meaning set forth in the preamble.
   ― Damages ‖ means any loss, damage, or liability (joint or several) to which a party hereto may become subject under the Securities Act, the
Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including
any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged
omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any
violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state
securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.
   ― Demand Notice ‖ has the meaning set forth in Section 4.1(a) .

                                                                          2
   ― Demand Registration ‖ has the meaning set forth in Section 4.1(a) .
   ― Drag-Along Buyer ‖ has the meaning set forth in Section 3.3(a) .
   ― Drag-Along Election ‖ has the meaning set forth in Section 3.3(a) .
   ― Drag-Along Notice ‖ has the meaning set forth in Section 3.3(a) .
   ― Drag-Along Stockholders ‖ has the meaning set forth in Section 3.3(a) .
   ― Escrow Agent ‖ has the meaning set forth in Section 3.3(e) .
   ― Excluded Registration ‖ means (i) a registration on a Form S-4; (ii) a registration on a Form S-8; (iii) a registration relating to an SEC
Rule 145 transaction; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of
debt securities that are also being registered.
   ― Exchange Act ‖ means the Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations
promulgated thereunder, all as the same shall be in effect from time to time.
  ― Form S-1 ‖ means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities
Act subsequently adopted by the SEC.
  ― Form S-2 ‖ means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities
Act subsequently adopted by the SEC.
   ― Form S-3 ‖ means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company
with the SEC.
  ― Form S-4 ‖ means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities
Act subsequently adopted by the SEC.
  ― Form S-8 ‖ means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities
Act subsequently adopted by the SEC.
   ― Founder Stockholders ‖ has the meaning set forth in the preamble.
   ― Governing Documents ‖ means the amended and restated articles of incorporation of the Company, as amended or modified from time to
time, and the amended and restated by-laws of the Company, as amended or modified from time to time.
   ― Immediate Family Member ‖ means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to
herein.

                                                                          3
   ― Initial Post-IPO Share Ownership ‖ means, with respect to the Providence Parties, [ • ] Common Stock, as adjusted pursuant to any stock
splits, dividends, recapitalizations or other similar events.
   ― Initiating Stockholders ‖ means, collectively, Stockholders who properly initiate a registration request under this Agreement.
   ― IPO ‖ has the meaning set forth in the recitals.
   ― IPO Date ‖ means that date the Common Stock is first listed on The Nasdaq Stock Market.
   ― MHT ‖ has the meaning set forth in the preamble.
   ― PEP V ‖ has the meaning set forth in the preamble.
   ― PEP V-A ‖ has the meaning set forth in the preamble.
   ― Permitted Transferee ‖ means in the case of a Stockholder that is a natural person: (a) such Stockholder‘s spouse, children (including
legally adopted children and stepchildren), spouses of children, grandchildren, spouses of grandchildren, parents or siblings; (b) a trust for the
benefit of the Stockholder and/or any of the Persons described in clause (a); (c) a corporation, limited partnership or limited liability company
whose sole shareholders, partners or members, as the case may be, are the Stockholder and/or any of the Persons described in clause (a) or
clause (b); or (d) any successor by death or divorce; provided , that in any of clauses (a), (b) (other than in the case of a Transfer of Common
Stock to any such trust that is, as of the date of such Transfer, a Stockholder, or a Stockholder otherwise retains exclusive power to exercise all
rights on behalf of such trust under this Agreement) or (c), the Stockholder transferring such Common Stock retains exclusive power to
exercise all rights under this Agreement and retains a proxy to vote the Common Stock Transferred.
   ― Person ‖ means an individual, partnership, limited liability company, corporation, trust, association, estate, unincorporated organization or
a government or any agency or political subdivision thereof.
   ― Proposed Transfer ‖ has the meaning set forth in Section 3.2(a) .
   ― Proposed Transferee ‖ has the meaning set forth in Section 3.2(a) .
   ― Providence Parties ‖ means the Providence Stockholders and any of their Affiliates to whom Common Stock is Transferred after the date
hereof.
   ― Registrable Securities ‖ means all shares of Common Stock held by any Stockholder whether now owned or hereinafter acquired.
  ― Registration Statement ‖ means any registration statement of the Company filed with, or to be filed with, the Securities and Exchange
Commission under the rules and regulations promulgated under the Securities Act, including any related prospectus, amendments and

                                                                           4
supplement to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in
such registration statement other than a registration statement (and related prospectus) filed on Form S-8.
    ― Rule 144 Transfer ‖ means a Transfer pursuant to a bona fide sale pursuant to a brokers‘ transaction directly with a market maker or
riskless principal transaction in each case in accordance with SEC Rule 144 (including, without limitation, block trades).
   ― SEC ‖ means the Securities and Exchange Commission.
   ― SEC Rule 144 ‖ means Rule 144 promulgated by the SEC under the Securities Act.
   ― SEC Rule 145 ‖ means Rule 145 promulgated by the SEC under the Securities Act.
   ― Securities Act ‖ means the United States Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations
promulgated thereunder, all as the same shall be in effect from time to time.
   ― Selling Expenses ‖ means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable
Securities, and fees and disbursements of counsel for any Stockholder, except for the fees and disbursements of the Selling Stockholder
Counsel borne and paid by the Company as provided in Section 4.6 .
   ― Selling Stockholder Counsel ‖ has the meaning set forth in Section 4.6 .
   ― Selling Stockholders ‖ has the meaning set forth in Section 3.3(a) .
   ― Short-Form Registration ‖ has the meaning set forth in Section 4.1(b) .
   ― Stockholders ‖ has the meaning set forth in the preamble.
   ― Subsidiary ‖ means, with respect to any specified Person, any other Person in which such specified Person, directly or indirectly through
one or more Affiliates or otherwise, beneficially owns at least fifty percent (50%) of either the ownership interest (determined by equity or
economic interests) in, or the voting control of, such other Person.
   ― Tagging Stockholder ‖ has the meaning set forth in Section 3.2(a) .
   ― Transfer ‖ means, with respect to any Common Stock a direct or indirect transfer, sale, exchange, assignment, pledge, hypothecation or
other encumbrance or other disposition of such Common Stock, including the grant of an option or other right, whether directly or indirectly,
whether voluntarily, involuntarily or by operation of law; and ― Transferred ,‖ ― Transferee ,‖ and ― Transferability ‖ shall each have a
correlative meaning. Transfer shall not include any transfers of limited partnership interests in any of the Providence Parties.
   ― Transferring Stockholder ‖ has the meaning set forth in Section 3.2(a) .
   ― Valid Business Reason ‖ has the meaning set forth in Section 4.1(c) .

                                                                            5
   ― Voting Agreement ‖ means that certain Voting Agreement dated as of November ___, 2009, by and among PEP V, PEP V-A, the Founder
Stockholders and MHT.
   Section 1.3. Other Interpretive Provisions .
      (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
     (b) The words ― hereof ,‖ ― herein ,‖ ― hereunder ‖ and similar words refer to this Agreement as a whole and not to any particular
  provision of this Agreement; and any subsection and Section references are to this Agreement unless otherwise specified.
      (c) The term ― including ‖ is not limiting and means ― including without limitation .‖
    (d) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this
  Agreement.
      (e) Whenever the context requires, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms.


                                                                   ARTICLE II.
                                                  REPRESENTATIONS AND WARRANTIES
   Each of the parties to this Agreement hereby represents and warrants to each other party to this Agreement that as of the date such party
executes this Agreement:
   Section 2.1. Existence; Authority; Enforceability . Such party has the power and authority to enter into this Agreement and to carry out its
obligations hereunder. Such party, if not an individual, is duly organized and validly existing under the laws of its jurisdiction of organization,
and the execution of this Agreement, and the consummation of the transactions contemplated herein, have been authorized by all necessary
action, and no other act or proceeding on its part is necessary to authorize the execution of this Agreement or the consummation of any of the
transactions contemplated hereby. This Agreement has been duly executed by it and constitutes its legal, valid and binding obligations,
enforceable against it in accordance with its terms.
    Section 2.2. Absence of Conflicts . The execution and delivery by such party of this Agreement and the performance of its obligations
hereunder does not and will not (a) conflict with, or result in the breach of any provision of the constitutive documents of such party; (b) result
in any violation, breach, conflict, default or event of default (or an event which with notice, lapse of time, or both, would constitute a default or
event of default), or give rise to any right of acceleration or termination or any additional payment obligation, under the terms of any contract,
agreement or permit to which such party is a party or by which such party‘s assets or operations are bound or affected; or (c) violate any law
applicable to such party.

                                                                          6
   Section 2.3. Consents . Other than any consents which have already been obtained, no consent, waiver, approval, authorization, exemption,
registration, license or declaration is required to be made or obtained by such party in connection with (a) the execution, delivery or
performance of this Agreement or (b) the consummation of any of the transactions contemplated herein.


                                                                   ARTICLE III.
                                                           TRANSFERS OF SHARES
   Section 3.1. Limitations on Transfer of Shares.
       (a) Each Stockholder understands and agrees that the Common Stock held by such Stockholder on the date hereof have not been
registered under the Securities Act and are restricted securities under the Securities Act. No Stockholder shall be entitled to Transfer any of its
Common Stock at any time during the term hereof if such Transfer would:
        (i) violate the Securities Act, or any state (or other jurisdiction) securities or ―Blue Sky‖ laws applicable to the Company or the
     applicable Transfer of Common Stock;
        (ii) cause the Company to become subject to the registration requirements of the U.S. Investment Company Act of 1940, as amended
     from time to time; or
        (iii) be a ―prohibited transaction‖ under ERISA or the Code or cause all or any portion of the assets of the Company to constitute ―plan
     assets‖ under ERISA or Section 4975 of the Code.
      (b) In the event of a purported Transfer by a Stockholder of any Common Stock in violation of the provisions of this Agreement, such
purported Transfer will be void and of no effect, and the Company will not give effect to such Transfer.
      (c) Each certificate evidencing the Common Stock shall bear the following restrictive legend, either as an endorsement or on the face
thereof:
     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
     SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION AND MAY
     NOT BE SOLD OR TRANSFERRED OTHER THAN IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE
     SECURITIES ACT OF 1933, AS AMENDED (OR OTHER APPLICABLE LAW), OR AN EXEMPTION THEREFROM.
     (d) In the event that the restrictive legend set forth in Section 3.1(c) has ceased to be applicable, or upon request by a Stockholder
proposing to Transfer Common Stock

                                                                          7
pursuant to any Transfer permitted under this Agreement, the Company shall provide such Stockholder, or its Transferees, at their request,
without any expense to such Persons (other than applicable transfer taxes and similar governmental charges, if any), with new certificates for
such securities not bearing the legend with respect to which the restriction has ceased and terminated.
   Section 3.2. Tag Along Rights .
        (a) In the case of a proposed Transfer (a ― Proposed Transfer ‖) by any Stockholder (such transferor, a ― Transferring Stockholder ‖) to a
proposed Transferee (a ― Proposed Transferee ‖) of Common Stock owned by such Transferring Stockholder, other than a Transfer (i) to the
Company, (ii) to a Permitted Transferee, (iii) pursuant to an underwritten registered public offering, (iv) pursuant to a Rule 144 Transfer,
(v) pursuant to the exercise of registration rights under Article IV, (vi) in order to comply with Section 3.3 as a Drag-Along Stockholder or
(viii) pursuant to a distribution made by a Providence Party to its partners or members, each other Stockholder who exercises its rights under
this Section 3.2(a) (a ― Tagging Stockholder ‖) shall have the right to require the Transferring Stockholder to cause the Proposed Transferee to
purchase from such Tagging Stockholder up to a number of its Common Stock equal to the product of (A) (x) the total number of Common
Stock held by the Tagging Stockholder divided by (y) the total number of Common Stock held by all Stockholders participating in such
Transfer (including the Transferring Stockholder and all other Tagging Stockholders) and (B) the aggregate number of Common Stock
proposed to be Transferred to the Proposed Transferee.
       (b) The Transferring Stockholder shall give notice to each other Stockholder of a Proposed Transfer not later than ten (10) Business Days
prior to the closing of the Proposed Transfer, setting forth the number of Common Stock proposed to be so Transferred, the name and address
of the Proposed Transferee, the proposed amount and form of consideration (and, if such consideration consists in part or in whole of property
other than cash, the Transferring Stockholder shall provide such information, to the extent reasonably available to the Transferring Stockholder,
relating to such non-cash consideration as the other Stockholders may reasonably request in order to evaluate such non-cash consideration), and
other terms and conditions of payment offered by the Proposed Transferee. The Transferring Stockholder shall deliver or cause to be delivered
to each Tagging Stockholder copies of all transaction documents relating to the Proposed Transfer as the same become available. The tag-along
rights provided by this Section 3.2 must be exercised by a Stockholder within five (5) Business Days following receipt of the notice required by
the first sentence of this Section 3.2(b) , by delivery of a written notice to the Transferring Stockholder indicating its desire to exercise its rights
and specifying the number of Common Stock it desires to Transfer.
      (c) Any Transfer of Common Stock by a Tagging Stockholder to a Proposed Transferee pursuant to this Section 3.2 shall be on the same
terms and conditions (including, without limitation, price, time of payment and form of consideration) as to be paid to the Transferring
Stockholder; provided that in order to be entitled to exercise its tag along right pursuant to this Section 3.2 , each Tagging Stockholder must
agree to make to the Proposed Transferee representations, warranties, covenants, indemnities and agreements the same mutatis mutandis as
those made by the Transferring Stockholder in connection with the Proposed Transfer (other than any non-competition or similar agreements or
covenants that would bind the

                                                                           8
Tagging Stockholder or its Affiliates), and agree to the same conditions to the Proposed Transfer as the Transferring Stockholder agrees, it
being understood that all such representations, warranties, covenants, indemnities and agreements shall be made by the Transferring
Stockholder and each Tagging Stockholder severally and not jointly and that, except with respect to individual representations, warranties,
covenants, indemnities and other agreements of the Tagging Stockholder as to the unencumbered title to its Common Stock and the power,
authority and legal right to Transfer such Common Stock, the aggregate amount of the liability of the Tagging Stockholder shall not exceed the
lesser of (i) such Tagging Stockholder‘s pro rata portion of any such liability to be determined in accordance with such Tagging Stockholder‘s
portion of the total number of Common Stock included in such Transfer or (ii) the proceeds to such Tagging Stockholder in connection with
such Transfer. Each Tagging Stockholder shall be responsible for its proportionate share of the costs of the Proposed Transfer to the extent not
paid or reimbursed by the Proposed Transferee or the Company.
   Section 3.3. Drag Along Rights .
      (a) If Stockholders holding, in the aggregate, greater than fifty percent (50%) of the Common Stock owned by the Stockholders from
time to time (the ― Selling Stockholders ‖) agree to enter into a bona fide sale transaction which would result in the Transfer of more than fifty
percent (50%) of the aggregate Common Stock (including any Common Stock held by other holders of Common Stock, including any
Drag-Along Stockholders) to one or more third parties that is not a Permitted Transferee or Affiliate of any Selling Stockholder (the ―
Drag-Along Buyer ‖), the Selling Stockholders may deliver written notice (a ― Drag-Along Notice ‖) to each other Stockholder (the ―
Drag-Along Stockholders ‖), indicating that such Selling Stockholders wish to exercise their rights under this Section 3.3 with respect to such
Transfer (a ― Drag-Along Election ‖), and setting forth the name and address of the Drag-Along Buyer, the number of Common Stock proposed
to be Transferred, the proposed amount and form of the consideration, and all other known material terms and conditions offered by the
Drag-Along Buyer.
       (b) Upon delivery of a Drag-Along Notice, each Drag-Along Stockholder shall be required to Transfer that percentage of its Common
Stock equal to the percentage of the Common Stock held by the Selling Stockholders which are being Transferred to the Drag-Along Buyer,
upon the same terms and conditions (including, without limitation, as to price, time of payment and form of consideration) as agreed by the
Selling Stockholders and the Drag-Along Buyer, and shall make to the Drag-Along Buyer representations and warranties as to the
unencumbered title to its Common Stock and the power, authority and legal right to Transfer such Common Stock, it being understood that
such representations and warranties shall be made by each Selling Stockholder and each Drag-Along Stockholder severally and not jointly and
that, the aggregate amount of the liability of the Drag-Along Stockholder shall not exceed the lesser of (i) such Drag-Along Stockholder‘s pro
rata portion of any such liability, to be determined in accordance with such Drag-Along Stockholder‘s portion of the total number of Common
Stock included in such Transfer or (ii) the proceeds to such Drag-Along Stockholder in connection with such Transfer.
     (c) In the event that any such Transfer is structured as a merger, consolidation, or similar business combination, each Drag-Along
Stockholder agrees to (i) vote all of the Common Stock held by such Drag-Along Stockholder in favor of the transaction, (ii)

                                                                         9
take such other reasonably necessary action as may be required to effect such transaction and (iii) take all action reasonably necessary to waive
any dissenters, appraisal or other similar rights with respect thereto.
       (d) Solely for purposes of Section 3.3(c)(i) and in order to secure the performance of each Stockholder‘s obligations under
Section 3.3(c)(i) , each Stockholder hereby irrevocably appoints each Selling Stockholder the attorney-in-fact and proxy of such Stockholder
(with full power of substitution) to vote or provide a written consent with respect to its Common Stock as described in this paragraph if, and
only in the event that, such Stockholder fails to vote or provide a written consent with respect to its Common Stock in accordance with the
terms of Section 3.3(c)(i) within three (3) days of a request for such vote or written consent. Each Stockholder intends this proxy to be, and it
shall be, irrevocable and coupled with an interest, and each Stockholder will take such further action and execute such other instruments as may
be necessary to effectuate the intent of this proxy and hereby revoke any proxy previously granted by it with respect to the matters set forth in
Section 3.3(c)(i) with respect to the Common Stock owned by such Stockholder. Notwithstanding the foregoing, the conditional proxy granted
by this Section 3.3(d) shall be deemed to be revoked upon the termination of this Agreement in accordance with its terms.
       (e) If any Drag-Along Stockholder fails to deliver to the Drag-Along Buyer the certificate or certificates evidencing Common Stock to be
sold pursuant to this Section 3.3 , the Selling Stockholders may, at their option, in addition to all other remedies they may have, deposit the
purchase price (including any promissory note constituting all or any portion thereof) for such Common Stock with any national bank or trust
company having combined capital, surplus and undivided profits in excess of $100 million (the ― Escrow Agent ‖), and the Company shall
cancel on its books the certificate or certificates representing such Common Stock and thereupon all of such Drag-Along Stockholder‘s rights
in and to such Common Stock shall terminate. Thereafter, upon delivery to the Company by such Drag-Along Stockholder of the certificate or
certificates evidencing such Common Stock (duly endorsed, or with stock powers duly endorsed, for transfer, with signature guaranteed, free
and clear of any liens or encumbrances, and with any stock transfer tax stamps affixed), the Selling Stockholders shall instruct the Escrow
Agent to deliver the purchase price (without any interest from the date of the closing to the date of such delivery, any such interest to accrue to
the Company) to such Drag-Along Stockholder.
   Section 3.4. Rights and Obligations of Transferees .
       (a) Any Transfer of Common Stock, which Transfer is otherwise in compliance herewith, shall be permitted hereunder only if such
Transferee agrees in writing that it shall, upon such Transfer, assume with respect to such Common Stock the transferor‘s obligations under this
Agreement and become a party to this Agreement for such purpose, and any other agreement or instrument executed and delivered by such
transferor in respect of the Common Stock.
        (b) Notwithstanding the foregoing, Section 3.4(a) shall not apply to any Transfer completed pursuant to (i) a Transfer to the Company,
(ii) a Transfer in order to comply

                                                                        10
with Section 3.3 as a Drag-Along Stockholder, (iii) a Registration Statement, (iv) an underwritten registered public offering or (v) a Rule 144
Transfer.


                                                                  ARTICLE IV.
                                                           REGISTRATION RIGHTS
   Section 4.1. Demand Registration .
      (a) Form S-1 Demand . If at any time after the expiration of the initial lockup period following the Company‘s IPO, the Company
receives a request from any of the Providence Parties that the Company file a Form S-1 registration statement (the registration so requested, a ―
Demand Registration ‖), then the Company shall (i) within ten (10) days after the date such request is given, give notice thereof (the ― Demand
Notice ‖) to all Stockholders other than the Initiating Stockholders; and (ii) as soon as practicable, and in any event within sixty (60) days after
the date such request is given by the Initiating Stockholders, file a Form S-1 registration statement under the Securities Act covering all
Registrable Securities that the Initiating Stockholders requested to be registered and any additional Registrable Securities requested to be
included in such registration by any other Stockholders, as specified by notice given by each such Stockholder to the Company within twenty
(20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Section 4.1(c) , Section 4.1(d) and Section 4.3 .
      (b) Form S-3 Demand . If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from
any of the Providence Parties or either of the Founder Stockholders that the Company file a Form S-3 registration statement with respect to
outstanding Registrable Securities of such Stockholders having an anticipated aggregate offering price, net of Selling Expenses, of at least one
million dollars ($1,000,000) (the registration so requested, a ― Short-Form Registration ‖), then the Company shall (i) within ten (10) days after
the date such request is given, give a Demand Notice to all Stockholders other than the Initiating Stockholders; and (ii) as soon as practicable,
and in any event within forty-five (45) days after the date such request is given by the Initiating Stockholders, file a Form S-3 registration
statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Stockholders,
as specified by notice given by each such Stockholder to the Company within twenty (20) days of the date the Demand Notice is given, and in
each case, subject to the limitations of Section 4.1(c) , Section 4.1(d) and Section 4.3 .
      (c) Notwithstanding the foregoing obligations, if the Company furnishes to the Initiating Stockholders a certificate signed by the
Company‘s chief executive officer stating that in the good faith judgment of the Company‘s Board of Directors it would be detrimental to the
Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration
statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition,
corporate reorganization, or other similar transaction involving the Company; or (ii) render the Company unable to comply with requirements
under the Securities Act or Exchange Act (each of clauses (i) and (ii), a ― Valid Business Reason ‖), then the Company shall have the right to
defer

                                                                         11
taking action with respect to such filing until five (5) days after such Valid Business Reason no longer exists, but in no event for more than one
hundred twenty (120) days after the request of the Initiating Stockholders is given; provided , that the Company may not invoke this right more
than once in any twelve (12) month period; and provided further that the Company shall not register any securities for its own account or that
of any other stockholder during such period of postponement other than an Excluded Registration.
       (d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 4.1(a) (i) during the
period that is sixty (60) days before the Company‘s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty
(180) days after the effective date of, a Company-initiated registration, provided , that the Company is actively employing in good faith
commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Initiating Stockholders propose to
dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to
Section 4.1(b) . The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 4.1(b)
(i) during the period that is thirty (30) days before the Company‘s good faith estimate of the date of filing of, and ending on a date that is ninety
(90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith
commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two
(2) Short-Form Registrations pursuant to Section 4.1(b) within the twelve (12) month period immediately preceding the date of such request. A
registration shall not be counted as ―effected‖ for purposes of this Section 4.1(d) until such time as the applicable registration statement has
been declared effective by the SEC.
   Section 4.2. Piggyback Registrations . If the Company proposes to register (including, for this purpose, a registration effected by the
Company for any Stockholders) any of its Common Stock under the Securities Act in connection with the public offering of such securities
solely for cash (other than in an Excluded Registration) the Company shall, at such time, promptly give each Stockholder notice of such
registration. Upon the request of each Stockholder given within twenty (20) days after such notice is given by the Company (such notice, a ―
Piggyback Notice ‖), the Company shall, subject to the provisions of Section 4.3 , cause to be registered all of the Registrable Securities that
each such Stockholder has requested to be included in such registration. There is no limitation on the number of such piggyback registrations
pursuant to the preceding sentence which the Company is obligated to effect. In accordance with the provisions of this Article IV, the Company
shall have the right to terminate or withdraw any registration initiated by it under this Section 4.2 before the effective date of such registration,
whether or not any Stockholder has elected to include Registrable Securities in such registration. The expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 4.6 . No registration under this Section 4.2 shall relieve the Company of its
obligation to effect Demand Registrations under Section 4.1(a) or Short-Form Registrations under Section 4.1(b) .
   Section 4.3. Underwriting Requirements.
     (a) If, pursuant to Section 4.1 , the Initiating Stockholders intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so

                                                                         12
advise the Company as a part of their request made pursuant to Section 4.1 , and the Company shall include such information in the Demand
Notice. The underwriter(s) will be selected by the Initiating Stockholders, subject only to the reasonable approval of the Company. In such
event, the right of any Stockholder to include such Stockholder‘s Registrable Securities in such registration shall be conditioned upon such
Stockholder‘s participation in such underwriting and the inclusion of such Stockholder‘s Registrable Securities in the underwriting to the extent
provided herein. All Stockholders proposing to distribute their securities through such underwriting shall (together with the Company as
provided in Section 4.4(e) ) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Section 4.3 , if the managing underwriter advises the Initiating Stockholders in writing that
marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Stockholders shall so advise all
Stockholders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may
be included in the underwriting shall be allocated among such Stockholders of Registrable Securities, including the Initiating Stockholders, in
proportion (as nearly as practicable) to the number of Registrable Securities owned by each Stockholder or in such other proportion as shall
mutually be agreed to by all such selling Stockholders; provided , that the number of Registrable Securities held by the Stockholders to be
included in such underwriting shall not be reduced unless all other Common Stock are first entirely excluded from the underwriting.
       (b) In connection with any offering involving an underwriting of shares of the Company‘s capital stock pursuant to Section 4.2 , the
Company shall not be required to include any of the Stockholders‘ Registrable Securities in such underwriting unless the Stockholders accept
the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in
their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including
Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the
Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall
be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters in their sole
discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities
requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated
among the selling Stockholders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling
Stockholder or in such other proportions as shall mutually be agreed to by all such selling Stockholders. Notwithstanding the foregoing, in no
event shall the number of Registrable Securities included in the offering be reduced unless all other Common Stock (other than Common Stock
to be sold by the Company) are first entirely excluded from the offering. For purposes of the provision in this Section 4.3(b) concerning
apportionment, for any selling Stockholder that is a partnership, limited liability company, or corporation, the partners, members, retired
partners, retired members, stockholders, and Affiliates of such Stockholder, or the estates and Immediate Family Members of any such
partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a
single ―selling Stockholder,‖ and any pro rata reduction with respect to such ―selling

                                                                         13
Stockholders shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such ―selling Stockholder,‖
as defined in this sentence.
      (c) For purposes of Section 4.1 , a registration shall not be counted as ―effected‖ if, as a result of an exercise of the underwriter‘s cutback
provisions in Section 4.3(a) , fewer than fifty percent (50%) of the total number of Registrable Securities that Stockholders have requested to be
included in such registration statement are actually included.
   Section 4.4. Obligations of the Company. Whenever required under this Article IV to effect the registration of any Registrable Securities,
the Company shall:
       (a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective and, upon the request of the Stockholders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier,
until the distribution contemplated in the registration statement has been completed; provided , that (i) such one hundred twenty (120) day
period shall be extended for a period of time equal to the period the Stockholder refrains, at the request of an underwriter of Common Stock (or
other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable
Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such
one hundred twenty (120) day period shall be extended for up to ninety (90) days, if necessary, to keep the registration statement effective until
all such Registrable Securities are sold;
       (b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in
connection with such registration statement as expeditiously as reasonably possible, as may be necessary to comply with the Securities Act in
order to enable the disposition of all securities covered by such registration statement;
      (c) furnish to the selling Stockholders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the
Securities Act, and such other documents as the Stockholders may reasonably request in order to facilitate their disposition of their Registrable
Securities;
      (d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Stockholders; provided , that the Company shall
not be required to qualify to do business or subject itself to taxation in any such states or jurisdictions or to file a general consent to service of
process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required
by the Securities Act;
      (e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and
customary form, with the underwriter(s) of such offering;

                                                                          14
      (f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a
national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by
the Company are then listed;
     (g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP
number for all such Registrable Securities, in each case not later than the effective date of such registration;
      (h) promptly make available for inspection by the selling Stockholders, any underwriter(s) participating in any disposition pursuant to
such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling
Stockholders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company‘s officers,
directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney,
accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to
conduct appropriate due diligence in connection therewith;
      (i) notify each selling Stockholder, promptly after the Company receives notice thereof, of the time when such registration statement has
been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and
    (j) after such registration statement becomes effective, promptly notify each selling Stockholder of any request by the SEC that the
Company amend or supplement such registration statement or prospectus.
   Section 4.5. Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this
Article IV with respect to the Registrable Securities of any selling Stockholder that such Stockholder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably
required to effect the registration of such Stockholder‘s Registrable Securities.
    Section 4.6. Expenses of Registration . All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or
qualifications pursuant to Article IV, including all registration, filing, and qualification fees; printers‘ and accounting fees; fees and
disbursements of counsel for the Company; and the reasonable fees and disbursements of one (1) counsel for the selling Stockholders (― Selling
Stockholder Counsel ‖), shall be borne and paid by the Company. All Selling Expenses relating to Registrable Securities registered pursuant to
this Article IV shall be borne and paid by the Stockholders pro rata on the basis of the number of Registrable Securities registered on their
behalf.
    Section 4.7. Delay of Registration . No Stockholder shall have any right to obtain or seek an injunction restraining or otherwise delaying any
registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of
this Article IV.

                                                                         15
   Section 4.8. Indemnification . If any Registrable Securities are included in a registration statement under this Article IV:
       (a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Stockholder, and the partners, members,
officers, directors, and stockholders of each such Stockholder; legal counsel and accountants for each such Stockholder; any underwriter (as
defined in the Securities Act) for each such Stockholder; and each Person, if any, who controls such Stockholder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Stockholder, underwriter,
controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or
defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , that the indemnity agreement
contained in this Section 4.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to
the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information
furnished by or on behalf of any such Stockholder, underwriter, controlling Person, or other aforementioned Person expressly for use in
connection with such registration including without limitation the information set forth on the Principal and Selling Stockholder table with
respect to such Stockholder.
       (b) To the extent permitted by law, each selling Stockholder, severally and not jointly, will indemnify and hold harmless the Company,
and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within
the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other
Stockholder selling securities in such registration statement, and any controlling Person of any such underwriter or other Stockholder, against
any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and
in conformity with written information furnished by or on behalf of such selling Stockholder expressly for use in connection with such
registration; and each such selling Stockholder will pay to the Company and each other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such
expenses are incurred; provided , that the indemnity agreement contained in this Section 4.8(b) shall not apply to amounts paid in settlement of
any such claim or proceeding if such settlement is effected without the consent of the Stockholder, which consent shall not be unreasonably
withheld; and provided further that in no event shall the aggregate amounts payable by any Stockholder by way of indemnity or contribution
under Sections 4.8(b) and 4.8(d) exceed the proceeds from the offering received by such Stockholder (net of any Selling Expenses paid by such
Stockholder), except in the case of fraud or willful misconduct by such Stockholder.
       (c) Promptly after receipt by an indemnified party under this Section 4.8 of notice of the commencement of any action (including any
governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 4.8 , give the indemnifying party notice of the commencement thereof. The
indemnifying party shall have the

                                                                         16
right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to
which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided , that an indemnified
party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 4.8 , to the
extent that such failure materially prejudices the indemnifying party‘s ability to defend such action. The failure to give notice to the
indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 4.8 .
       (d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party
otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 4.8 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 4.8 provides for
indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which
indemnification is provided under this Section 4.8 , then, and in each such case, such parties will contribute to the aggregate losses, claims,
damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the
relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that
resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of
the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly
untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying
party or by the indemnified party and the parties‘ relative intent, knowledge, access to information, and opportunity to correct or prevent such
statement or omission; provided , that, in any such case, (x) no Stockholder will be required to contribute any amount in excess of the proceeds
received from such Registrable Securities offered and sold by such Stockholder pursuant to such registration statement, and (y) no Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Stockholder‘s liability pursuant to
this Section 4.8(d) , when combined with the amounts paid or payable by such Stockholder pursuant to Section 4.8(b) , exceed the proceeds
from the offering received by such Stockholder (net of any Selling Expenses paid by such Stockholder), except in the case of willful
misconduct or fraud by such Stockholder.
     (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting
agreement entered into in

                                                                         17
connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement
shall control.
       (f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the
obligations of the Company and Stockholders under this Section 4.8 shall survive the completion of any offering of Registrable Securities in a
registration under this Article IV, and otherwise shall survive the termination of this Agreement.
   Section 4.9. Reports Under Exchange Act . With a view to making available to the Stockholders the benefits of SEC Rule 144 and any other
rule or regulation of the SEC that may at any time permit a Stockholder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company shall:
         (a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all
times;
      (b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and
      (c) furnish to any Stockholder, so long as the Stockholder owns any Registrable Securities, forthwith upon request (i) to the extent
accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety
(90) days after the date of this Agreement), the Securities Act, and the Exchange Act (at any time after the Company has become subject to
such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the
Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed
by the Company, only to the extent not otherwise publicly available or provided to all stockholders generally; and (iii) such other information
as may be reasonably requested in availing any Stockholder of any rule or regulation of the SEC that permits the selling of any such securities
without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to
Form S-3 (at any time after the Company so qualifies to use such form).
   Section 4.10. Limitations on Subsequent Registration Rights . From and after the date of this Agreement, the Company shall not, without the
prior written consent of the Providence Parties, enter into any agreement with any holder or prospective holder of any securities of the
Company that would allow such holder or prospective holder (i) to include such securities in any registration unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such
securities will not reduce the number of the Registrable Securities of the Stockholders that are included or (ii) to initiate a demand for
registration of any Common Stock held by such holder or prospective holder.

                                                                         18
    Section 4.11. ―Market Stand-off‖ Agreement . Each Stockholder hereby severally and not jointly agrees with the Company, and not with or
for the benefit of any other Stockholder, that for so long as such Stockholder owns at least 2% of the aggregate shares of the Common Stock
issued and outstanding, that if and when requested by an underwriter in connection with any registration by the Company of shares of its
Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1 or Form S-3 (whether for its
own account or for any of its stockholders), such Stockholder will deliver a customary lock-up agreement containing terms consistent with the
following: that such Stockholder will not, without the prior written consent of the managing underwriter, during the period commencing on the
date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the
Securities Act on a registration statement on Form S-1 or Form S-3 (whether for its own account or for any of its stockholders), and ending on
the date specified by the Company and the managing underwriter (such period not to exceed (x) one hundred eighty (180) from the date of this
Agreement, which period may be extended upon the request of the managing underwriter, to the extent required by any FINRA or NASD rules,
for an additional period of up to seventeen (17) days if the Company issues or proposes to issue an earnings or other public release within
seventeen (17) days of the expiration of the 180-day lockup period, or (y) ninety (90) days in the case of any registration after the date of this
Agreement, which period may be extended upon the request of the managing underwriter, to the extent required by any FINRA or NASD rules,
for an additional period of up to seventeen (17) days if the Company issues or proposes to issue an earnings or other public release within
seventeen (17) days of the expiration of the 90-day lockup period): (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to
purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common
Stock (whether such shares or any such securities are then owned by the Stockholder or are thereafter acquired) or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any
such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The
foregoing provisions of this Section 4.11 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and
shall be applicable to the Stockholders only if all officers and directors are subject to the same restrictions and the Company causes all
stockholders individually owning more than two percent (2%) of the Company‘s outstanding Common Stock to enter into a similar agreement.
The underwriters in connection with such registration are intended third-party beneficiaries of this Section 4.11 and shall have the right, power,
and authority to enforce the provisions hereof as though they were a party hereto. Each Stockholder further agrees to execute such agreements
as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 4.11 or that are
necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the
Company or the underwriters shall apply pro rata to all Stockholders subject to such agreements, based on the number of shares subject to such
agreements. The provisions of this Section 4.11 , if enforced by the Company, may only be enforced by action of the independent directors of
the Board of Directors of the Company.

                                                                         19
    Section 4.12. Termination of Registration Rights . The right of any Stockholder to request registration or inclusion of Registrable Securities
in any registration pursuant to Section 4.1 or Section 4.2 shall terminate upon the fifth anniversary of the date of this Agreement.


                                                                   ARTICLE V.
                                                            GENERAL PROVISIONS
    Section 5.1. Waiver by Stockholders . The rights and obligations contained in this Agreement are in addition to the relevant provisions of
the Governing Documents in force from time to time and shall be construed to comply with such provisions. To the extent that this Agreement
is determined to be in contravention of the Governing Documents, this Agreement shall constitute a waiver by each Stockholder, to the fullest
extent permissible under applicable laws, of any right such Stockholder may have pursuant to the Governing Documents that is inconsistent
with this Agreement.
    Section 5.2. Assignment; Benefit . This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective
transferees, successors and assigns; provided , that no right or obligation under this Agreement may be assigned without the prior written
consent of the other parties hereto except as expressly provided herein (including in connection with a Transfer of Registrable Securities in
accordance herewith); provided , however , the rights of any Providence Stockholder pursuant to Article IV shall be automatically assigned,
without the need for any prior consent, with respect to any Registrable Security that is Transferred if (x) the Company is, within a reasonable
time after such Transfer, furnished with written notice of the name and address of such Transferee and the Registrable Securities with respect to
which such rights are being Transferred; and (y) such Transferee agrees in a written instrument delivered to the Company to be bound by and
subject to the terms and conditions of Article IV. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided herein. Any assignment of rights or obligations in violation of this Section 5.2 shall be null and
void.
    Section 5.3. Freedom to Pursue Opportunities . The parties expressly acknowledge and agree that to the fullest extent permitted by
applicable law, the Company, on behalf of itself and its Subsidiaries, renounces any interest or expectancy of the Company and its Subsidiaries
in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to any Stockholder, Affiliated
Director or Affiliated Officer of the Company or any of their respective officers, directors, agents, Stockholders, members, partners, Affiliates
and Subsidiaries (other than the Company and its Subsidiaries) (each a ― Affiliated Party ‖), even if the opportunity is one that the Company or
its Subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so and such
Person shall have no duty to communicate or offer such business opportunity to the Company and, to the fullest extent permitted by applicable
law, shall not be liable to the Company or any of its Subsidiaries or Stockholders for breach of any fiduciary or other duty, as a director or
officer or otherwise, by reason of the fact that such Person pursues or acquires such business opportunity, directs such business opportunity to
another Person or fails to present such business opportunity,

                                                                         20
or information regarding such business opportunity, to the Company or its Subsidiaries unless, in the case of any such Person who is a director
or officer of the Company, such business opportunity (x) is expressly offered to such director or officer in writing solely in his or her capacity
as a director or officer of the Company and (y) is not separately offered to a Affiliated Party by a party other than such director or officer.
   Section 5.4. Termination . Article IV of this Agreement shall terminate as set forth in such Article. The remainder of this Agreement shall
automatically terminate on the seven (7) month anniversary of the date of this Agreement, provided that Section 5.3 shall survive such
termination until the Providence Parties and their Permitted Transferees cease to own any Common Stock and there are no Affiliated Directors
or Affiliated Officers of the Company.
   Section 5.5. Severability . In the event that any provision of this Agreement shall be invalid, illegal or unenforceable such provision shall be
construed by limiting it so as to be valid, legal and enforceable to the maximum extent provided by law and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
   Section 5.6. Entire Agreement . This Agreement, the Voting Agreement and the Governing Documents constitute the entire agreement
among the parties hereto with respect to the subject matter hereof, and supersedes any prior agreement or understanding among them with
respect to the matters referred to herein. There are no representations, warranties, promises, inducements, covenants or undertakings relating to
Common Stock, other than those expressly set forth or referred to herein, in the Voting Agreement or in the Governing Documents.
   Section 5.7. Amendment . This Agreement may not be amended, modified, supplemented or waived except by the unanimous written
approval of the Stockholders.
   Section 5.8. Waiver . No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is expressly made
in writing and executed and delivered by the party against whom such waiver is claimed. Waiver by any party hereto of any breach or default
by any other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between
the parties hereto or from any failure by any party to assert its or his or her rights hereunder on any occasion or series of occasions.
   Section 5.9. Counterparts . This Agreement may be executed in any number of separate counterparts each of which when so executed shall
be deemed to be an original and all of which together shall constitute one and the same agreement.
   Section 5.10. Notices . Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections
and other communications authorized or required to be given pursuant to this Agreement shall be in writing and shall be given, made or
delivered (and shall be deemed to have been duly given, made or delivered upon receipt) by personal hand-delivery, by facsimile transmission,
by electronic mail, by mailing the same in a sealed envelope, registered first-class mail, postage prepaid, return receipt requested, or by air
courier guaranteeing overnight delivery, addressed to the Stockholder at the address set

                                                                         21
forth in the records of the Company or at such other address as such Stockholder shall have furnished to the Company in writing as the address
to which notice are to be sent hereunder.
   If to Company, to:
        Archipelago Learning, Inc.
        3400 Carlisle Street, Suite 345
        Dallas, Texas 75204
         Attention:    Tim McEwen
        Telephone: (800) 419-3191
        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, 34 th Floor
        Boston, Massachusetts 02110
         Attention:    Kevin J. Sullivan
        Telephone: (617) 772-8348
        Facsimile: (617) 772-8333
        Email:       kevin.sullivan@weil.com
  Section 5.11. Governing Law . THIS AGREEMENT AND ANY CLAIM OR DISPUTE ARISING OUT OF OR RELATED TO THIS
AGREEMENT (WHETHER IN CONTRACT, TORT OR OTHERWISE) OR THE SUBJECT MATTER HEREOF SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS LAW.
  Section 5.12. Jurisdiction . ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS
AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK IN THE BOROUGH OF
MANHATTAN OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION
OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO
ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.
  Section 5.13. Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED,
EACH STOCKHOLDER WAIVES, AND COVENANTS THAT SUCH PARTY WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR
PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR IN ANY WAY CONNECTED WITH
THE DEALINGS OF ANY STOCKHOLDER OR THE COMPANY IN CONNECTION

                                                                      22
WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN
CONTRACT, TORT OR OTHERWISE. The Company or any Stockholder may file an original counterpart or a copy of this Section 5.13 with
any court as written evidence of the consent of the Stockholders to the waiver of their rights to trial by jury.
   Section 5.14. Specific Performance . It is hereby agreed and acknowledged that it will be impossible to measure the money damages that
would be suffered if the parties fail to comply with any of the obligations herein imposed on them by this Agreement and that, in the event of
any such failure, an aggrieved party will be irreparably damaged and will not have an adequate remedy at law. Any such party shall, therefore,
be entitled (in addition to any other remedy to which such party may be entitled at law or in equity) to injunctive relief, including specific
performance, to enforce such obligations, without the posting of any bond, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law.
   Section 5.15. Securities Filings . To the extent required by law or requested by the Providence Parties, the Stockholders will cooperate with
each other, and as reasonably necessary with the Company, with respect to any filings that may be required to be made jointly under the
Securities Act or the Exchange Act. In addition, each of the Stockholders will consult with the Providence Parties, and as reasonably necessary
with the Company, prior to making any filings under the Securities Act or the Exchange Act in advance of making any such filings in order to
provide the Providence Parties sufficient and appropriate time to discuss any such proposed filings with such Stockholder.
   Section 5.16. No Third Party Beneficiaries . Except as otherwise provided herein, this Agreement is not intended to confer upon any Person,
except for the parties hereto, any rights or remedies hereunder.


                                                  [remainder of page intentionally left blank]

                                                                       23
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first above written.

                                                       ARCHIPELAGO LEARNING, INC.

                                                       By:
                                                       Name:
                                                       Title:

                                                       PROVIDENCE EQUITY PARTNERS V L.P.

                                                       By:      Providence Equity Partners 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 L.P.

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

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

                                                       By:
                                                       Name:
                                                       Title:

                                           [Signature Pages to Stockholders Agreement]
          Cameron Chalmers

          David Muzzo

          MHT-SI, L.P.

          By:    MHT-SI GP, LLC,
                 Its General Partner

          By:
                 Name:      Shawn D. Terry
                 Title:     Manager

          Jeanne Bodnar

[Signature Pages to Stockholders Agreement]
                                                                                                                                         Exhibit 5.1

                                     Weil, Gotshal & Manges llp                                                                 AUSTIN
                           767 FIFTH AVENUE • NEW YORK, NY 10153-0119                                                           BEIJING
                                           (212) 310-8000                                                                       BOSTON
                                        FAX: (212) 310-8007                                                                   BUDAPEST
                                                                                                                                DALLAS
                                                                                                                                 DUBAI
                                                                                                                             FRANKFURT
                                                                                                                             HONG KONG
                                                                                                                               HOUSTON
                                                                                                                               LONDON
                                                                                                                                 MIAMI
                                                                                                                                MUNICH
                                                                                                                                 PARIS
                                             November 17, 2009                                                                  PRAGUE
                                                                                                                             PROVIDENCE
                                                                                                                              SHANGHAI
                                                                                                                           SILICON VALLEY
                                                                                                                               WARSAW
                                                                                                                          WASHINGTON, D.C.
Archipelago Learning, Inc.
3400 Carlisle Street, Suite 345
Dallas, TX 75204

Ladies and Gentlemen:
    We have acted as counsel to Archipelago Learning, Inc., a Delaware corporation (the ―Company‖), in connection with the preparation and
filing with the Securities and Exchange Commission of the Company‘s Registration Statement on Form S-1, File No. 333-161717 (as amended,
and including any subsequent registration statement on Form S-1 filed pursuant to Rule 462(b), the ―Registration Statement‖), under the
Securities Act of 1933, as amended (the ―Act‖), relating to the registration of (i) the offer, issuance and sale by the Company of up to 3,125,000
shares of common stock, par value $0.001 per share (the ―Common Stock‖), of the Company (together with any additional shares that may be
sold by the Company pursuant to Rule 462(b) under the Act or a re-allocation of the Shares (as defined below) between the Company Shares
and the Selling Stockholder Shares (as defined below), the ―Company Shares‖) and (ii) the sale by the parties listed as selling stockholders (the
―Selling Stockholders‖) in the Registration Statement of an aggregate of up to 4,062,500 shares of Common Stock (together with any additional
shares of Common Stock that may be sold by the Selling Stockholders pursuant to Rule 462(b) under the Act or a re-allocation of the Shares
(as defined below) between the Company Shares and the Selling Stockholder Shares (as defined below), the ―Selling Stockholder Shares,‖ and
collectively with the Company Shares, the ―Shares‖). The Shares are to be sold by the Company and the Selling Stockholders pursuant to an
underwriting agreement among the Company, the Selling Stockholders and the Underwriters named therein (the ―Underwriting Agreement‖),
the form of which has been filed as Exhibit 1.1 to the Registration Statement.
   In so acting, we have examined originals or copies (certified or otherwise identified to our satisfaction) of (i) the form of the Certificate of
Incorporation of the Company to be filed with the Secretary of State of the State of Delaware prior to the
consummation of the initial public offering contemplated by the Registration Statement, filed as Exhibit 3.1 to the Registration Statement;
(ii) the form of the Bylaws of the Company to be effective prior to the consummation of the initial public offering contemplated by the
Registration Statement, filed as Exhibit 3.2 to the Registration Statement; (iii) the Registration Statement; (iv) the prospectus contained within
the Registration Statement; (v) the form of the Underwriting Agreement; (vi) the form of Common Stock Certificate of the Company and
(vii) such corporate records, agreements, documents and other instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinion hereinafter set forth.
    In such examination, we have assumed the Certificate of Incorporation that will be filed with the Secretary of State of the State of Delaware
will be substantially identical to the form of the Certificate of Incorporation of the Company reviewed by us, the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies, and the authenticity of the originals of such latter documents. As to
all questions of fact material to this opinion that have not been independently established, we have relied upon certificates or comparable
documents of officers and representatives of the Company.
   Based on the foregoing, and subject to the qualifications stated herein, we are of the opinion that (i) the Company Shares, when issued and
sold as contemplated in the Registration Statement, and upon payment and delivery in accordance with the Underwriting Agreement, will be
validly issued, fully paid and non-assessable and (ii) the Selling Stockholder Shares, when sold as contemplated in the Registration Statement,
and upon payment and delivery in accordance with the Underwriting Agreement, will be validly issued, fully paid and non-assessable.
   The opinion expressed herein is limited to the corporate laws of the State of Delaware (including the statutory provisions, all applicable
provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing) and we express no opinion as to the effect
on the matters covered by this letter of the laws of any other jurisdiction.
   We hereby consent to the filing of this letter as an exhibit to the Registration Statement and to the reference to our firm under the caption
―Legal Matters‖ in the prospectus which is a part of the Registration Statement. This opinion and consent may be incorporated by reference in a
subsequent registration statement on Form S-1 filed pursuant to Rule 462(b) under the Act with respect to the Shares.
                                                                         Very truly yours,
                                                                         /s/ WEIL, GOTSHAL & MANGES LLP
                                                                                                                                     Exhibit 10.3


                                                         INDEMNITY AGREEMENT
      This Indemnity Agreement (― Agreement ‖) is made as of [                   ] by and between Archipelago Learning, Inc. a Delaware
corporation (the ― Company ‖), and [            ] (― Indemnitee ‖).


                                                                   RECITALS
      WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors, officers or in other
capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims
and actions against them arising out of their service to and activities on behalf of the corporation.
       WHEREAS, the Board of Directors of the Company (the ― Board ‖) has determined that, in order to attract and retain qualified
individuals, the Company will maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and
its subsidiaries from certain liabilities. The Certificate of Incorporation (the ― Charter ‖) of the Company and the Bylaws (the ― Bylaws ‖) of the
Company provide for indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification
pursuant to the Delaware General Corporation Law (― DGCL ‖). The Charter, Bylaws and the DGCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the
Company and members of the board of directors, officers and other persons with respect to indemnification.
      WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining
such persons.
       WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best
interests of the Company‘s stockholders and that the Company should act to assure such persons that there will be increased certainty of such
protection in the future.
       WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance
expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company
free from undue concern that they will not be so indemnified.
      WHEREAS, this Agreement is a supplement to and in furtherance of the Charter and Bylaws and any resolutions adopted pursuant
thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby
covenant and agree as follows:
   1. Services to the Company . Indemnitee will serve as a director and/or officer of the Company or Enterprise for so long as Indemnitee is
duly elected or appointed or until Indemnitee tenders his resignation or is terminated.
   2. Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
     (a) ―Corporate Status‖ describes the status of a person who is or was a director, officer, trustee, partner, managing member, fiduciary,
employee or agent of the Company or of any other Enterprise which such person is or was serving at the request of the Company.
     (b) ―Disinterested Director‖ shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
       (c) ―Enterprise‖ shall mean the Company, any Subsidiary of the Company and any other corporation, limited liability company,
partnership, limited partnership, limited liability partnership, joint venture, trust, employee benefit plan or other Enterprise of which Indemnitee
is or was serving at the request of the Company as a director, officer, employee, trustee, partner, managing member, fiduciary, employee or
agent.
      (d) ―Exchange Act‖ shall mean the Securities Exchange Act of 1934, as amended.
      (e) ―Expenses‖ shall include attorneys‘ fees and costs, retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or
expenses in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation, the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal
bond or its equivalent.
       (f) ―Independent Counsel‖ shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party
(other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification
agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the
term ―Independent Counsel‖ shall not include any person who, under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee‘s rights under this
Agreement.
      (g) ―Person‖ shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall
exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii)

                                                                          2
any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of
stock of the Company.
       (h) The term ―Proceeding‖ shall include any threatened, pending or completed action, suit, claim, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right
of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative
nature, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any inaction on his part while acting as director or officer of the Company,
or by reason of the fact that he is or was serving at the request of the Company as a director, officer, trustee, general partner, managing
member, fiduciary, employee or agent of any other Enterprise, in each case whether or not serving in such capacity at the time any liability or
expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.
      (i) ―Subsidiary‖ shall mean, in respect of any Person, any corporation, association, limited liability company, partnership or other
business entity of which more than 50% of the total voting power of shares of capital stock or other interests (including partnership or
membership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
      (j) References to ―fines‖ shall include any excise tax assessed with respect to any employee benefit plan; references to ―serving at the
request of the Company‖ shall include any service as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of the
Company or which imposes duties on, or involves services by, such director, officer, trustee, partner, managing member, fiduciary, employee
or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in
a manner ―not opposed to the best interests of the Company‖ as such terms are referred to in this Agreement and used in the DGCL.
   3. Indemnity in Third-Party Proceedings. The Company shall indemnify and hold harmless Indemnitee in accordance with the
provisions of this Section 3 if Indemnitee is made, or is threatened to be made, a party to or a participant in (as a witness or otherwise) any
Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3 ,
Indemnitee shall be indemnified against all Expenses, judgments, liabilities, fines, penalties and amounts paid in settlement (including, without
limitation, all interest, assessments and other charges paid or payable in connection with or in respect of any of the foregoing) (collectively, ―
Losses ‖) actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any action, discovery
event, claim, issue or matter therein or related thereto, if Indemnitee acted in good faith, for a purpose which he reasonably believed to be in or
not opposed to the best interests of the Company and, in the case of a criminal Proceeding, in addition, had no reasonable cause to believe that
his or her conduct was unlawful.

                                                                         3
    4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify and hold harmless Indemnitee in
accordance with the provisions of this Section 4 if Indemnitee was, is, or is threatened to be made, a party to or a participant (as a witness or
otherwise) in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4 , Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim,
issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of
the Company. If applicable law so requires, no indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue
or matter as to which Indemnitee shall have been finally adjudged by a court in a non-appealable decision to be liable to the Company, unless
and only to the extent that any court in which the Proceeding was brought or the Delaware Court (as defined below) shall determine upon
application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled
to indemnification.
   5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in
defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify and hold harmless Indemnitee against all
Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall
indemnify and hold harmless Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify
and hold harmless Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue,
or matter on which the Indemnitee was successful. For purposes of this Section 5 and without limitation, the termination of any claim, issue or
matter in such a Proceeding by withdrawal or dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
   6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is,
by reason of his or her Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which
Indemnitee is not a party, he shall be indemnified and held harmless against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith.
   7. Additional Indemnification.
       (a) Notwithstanding any limitation in Sections 3 , 4 or 5 hereof, the Company shall indemnify Indemnitee to the fullest extent permitted
by law if Indemnitee is made, or is threatened to be made, a party to any Proceeding (including a Proceeding by or in the right of the Company
to procure a judgment in its favor) against all Losses actually and reasonably incurred by Indemnitee in connection with the Proceeding. No
indemnification shall be made under this Section 7(a) on account of Indemnitee‘s conduct which constitutes a breach of Indemnitee‘s duty of
loyalty to the Company or its stockholders or is an act or omission not in good faith or which involves intentional misconduct or a knowing
violation of the law.

                                                                           4
      (b) For purposes of Section 7(a) hereof, the meaning of the phrase ― to the fullest extent permitted by law ‖ shall include, but not be
limited to:
         i. to the fullest extent authorized or permitted by the provisions of the DGCL as in effect as of the date of this Agreement that
authorize or contemplate indemnification by agreement; and
       ii. to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this
Agreement that increase the extent to which a corporation may indemnify its officers and directors.
   8. Contribution in the Event of Joint Liability.
       (a) Whether or not any of the indemnification and hold harmless rights provided in Sections 3 , 4 , 5 and 7 hereof are available in respect
of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay,
in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such
payment, and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not
enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding)
unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
       (b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason,
Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly
liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses (including
attorneys‘ fees), judgments, fines and amounts paid in settlement actually incurred and paid or payable by Indemnitee in proportion to the
relative benefits received by the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable
with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from
which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to
conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company
other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on
the other hand, in connection with the events that resulted in such expenses, judgments, fines or amounts paid in settlement, as well as any
other equitable considerations. The relative fault of the Company and all officers, directors or employees of the Company other than
Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other
hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit
or advantage, the degree to which their liability is primary or secondary, and the degree to which their conduct is active or passive.
     (c) The Company hereby agrees to fully indemnify and hold harmless Indemnitee from any claims for contribution which may be
brought by officers, directors or employees of the Company other than Indemnitee who may be jointly liable with Indemnitee.

                                                                         5
   9. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any
indemnity payment in connection with any claim made against Indemnitee:
      (a) for which payment actually has been received by or on behalf of Indemnitee under any insurance policy or other indemnity provision,
except with respect to any excess beyond the amount actually received under any insurance policy or other indemnity provision; or
      (b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company
within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; or
      (c) except as otherwise provided in Sections 14(d)-(e) hereof, in connection with any Proceeding (or any part of any Proceeding) initiated
by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers,
employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the
Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or
      (d) to the extent such payment would violate Section 402 of the Sarbanes-Oxley Act of 2002.
   10. Advances of Expenses; Defense of Claim.
       (a) Notwithstanding any provision of this Agreement to the contrary, the Company shall advance the Expenses incurred by or on behalf
of Indemnitee to the fullest extent permitted by law in connection with any Proceeding within ten (10) business days after the receipt by the
Company of a statement or statements (including, at the request of the Company, reasonable detail underlying the expenses for which payment
is requested) requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be
unsecured, interest free and shall be made without regard to Indemnitee‘s ability to repay the Expenses and without regard to Indemnitee‘s
ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses
incurred pursuing a Proceeding to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall qualify for advances solely upon the execution and delivery to the Company
of an undertaking providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is
not entitled to be indemnified by the Company. This Section 10(a) shall not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 9 hereof.
      (b) The Company will be entitled to participate in the Proceeding at its own cost and expense.
      (c) In the event the Company shall be obligated under this Section 10 hereof to pay the Expenses of any Proceeding against Indemnitee,
the Company, if appropriate, shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee, which

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approval shall not be unreasonably withheld, upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently paid or incurred by Indemnitee with respect to the same Proceeding,
provided that (a) Indemnitee shall have the right to employ his counsel in any such Proceeding at Indemnitee‘s expense; and (b) the fees and
expenses of Indemnitee‘s counsel shall be at the expense of the Company if (1) the employment of counsel by Indemnitee has been authorized
by the Company, (2) (i) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company (or any other
person or persons included in a joint defense) and Indemnitee in the conduct of any such defense or (ii) representation by such counsel retained
by the Company would be precluded under the applicable standards of professional conduct, or (3) the Company shall not, in fact, have
employed counsel to assume the defense of such Proceeding. The Company shall not be entitled to assume the defense of any Proceeding
brought by or on behalf of the Company or as to which Indemnitee shall have reasonably made the conclusion provided for in (2) above.
   11. Procedure for Notification and Application for Indemnification.
      (a) Indemnitee agrees to notify promptly the Company in writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of
Expenses covered under this Agreement. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation
which it may have to the Indemnitee under this Agreement or otherwise unless the Company is materially prejudiced by such failure.
      (b) Indemnitee shall thereafter deliver to the Company a written application to indemnify and hold harmless Indemnitee in accordance
with this Agreement. Such application(s) may be delivered from time to time and at such time(s) as reasonably appropriate. Following such a
written application for indemnification by Indemnitee, the Indemnitee‘s entitlement to indemnification shall be determined according to
Section 12(a) hereof.
   12. Procedure Upon Application for Indemnification.
       (a) Upon written request by Indemnitee for indemnification pursuant to Section 11(b) hereof, a determination, if required by applicable
law, with respect to Indemnitee‘s entitlement thereto shall be made in the specific case by one of the following methods, which shall be at the
election of Indemnitee: (i) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board; (ii) by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (iii) by the stockholders of the Company. If it is
so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) business days after such
determination. Indemnitee shall reasonably cooperate with the person, persons or entity making such determination with respect to
Indemnitee‘s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any
documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any costs or expenses (including attorneys‘ fees and disbursements) incurred by Indemnitee in
so cooperating with the person,

                                                                        7
persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee‘s entitlement to
indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
       (b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a)
hereof, the Independent Counsel shall be selected as provided in this Section 12(b) . The Independent Counsel shall be selected by Indemnitee
(unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected. If the Independent Counsel is selected by the Board, the Company shall give written
notice to Indemnitee advising him of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the
case may be, may, within ten (10) business days after such written notice of selection shall have been received, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection; provided , however , that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of ―Independent Counsel‖ as defined in Section 2 hereof, and
the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected
shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is
without merit. If, within twenty (20) business days after submission by Indemnitee of a written request for indemnification pursuant to
Section 11(b) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the
Delaware Court (as defined below) for resolution of any objection which shall have been made by the Company or Indemnitee to the other‘s
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Delaware Court, and the
person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a)
hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional
conduct then prevailing).
      (c) The Company agrees to pay the reasonable fees and expenses of Independent Counsel and to fully indemnify and hold harmless such
Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
   13. Presumptions and Effect of Certain Proceedings.
      (a) Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not
met the applicable standard of conduct.

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       (b) If the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is
entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the
requisite determination of entitlement to indemnification shall be made in accordance with Section 14 ; provided , however , that such thirty
(30) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the
determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of
documentation and/or information relating thereto or for compliance with applicable advance notice provisions or delivery of meeting materials
in connection with any stockholder or board meeting.
      (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right
of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was not unlawful.
   14. Remedies of Indemnitee.
       (a) In the event that (i) a determination is made pursuant to Section 12 hereof that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 12(a) of this Agreement within thirty (30) days after receipt by the Company of the
request for indemnification (as such time period may extended in accordance with Section 13(b) ), (iv) payment of indemnification is not made
pursuant to Section 5 , 6 or the last sentence of Section 12(a) hereof within ten (10) business days after receipt by the Company of a written
request therefor, or (v) payment of indemnification pursuant to Section 3 , Section 4 or Section 7 hereof is not made within ten (10) business
days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the
Delaware Court (as defined below) to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Except as set forth herein, the provisions of Delaware law (without regard to its conflict of laws rules) shall apply to any such
arbitration. The Company shall not oppose Indemnitee‘s right to seek any such adjudication or award in arbitration.
       (b) If a determination shall have been made pursuant to Section 12(a) hereof that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on
the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 14 , Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 10
hereof until a final determination is made with respect to Indemnitee‘s entitlement to indemnification (as to which all rights of appeal have
been exhausted or lapsed).

                                                                          9
       (c) If a determination shall have been made pursuant to Section 12(a) hereof that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14 , absent (i) a
misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee‘s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
      (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that
the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any
such arbitrator that the Company is bound by all the provisions of this Agreement.
       (e) The Company shall indemnify and hold harmless Indemnitee to the fullest extent permitted by law against all Expenses and, if
requested by Indemnitee, shall (within ten (10) business days after the Company‘s receipt of such written request) advance such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any judicial proceeding or arbitration brought by Indemnitee (i) to enforce his
rights under, or to recover damages for breach of, this Agreement or any other indemnification, advancement or contribution agreement or
provision of the Company‘s Charter or Bylaws now or hereafter in effect; or (ii) for recovery or advances under any insurance policy
maintained by any person for the benefit of Indemnitee, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance, contribution or insurance recovery, as the case may be.
   15. Non-exclusivity; Survival of Rights; Subrogation.
       (a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the Charter, Bylaws, any agreement, a vote of
stockholders of the Company or a resolution of the Board, or otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by
statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Charter,
Bylaws or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy
shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.
       (b) The Company or its Subsidiaries shall be primarily liable for all indemnification, reimbursements, advancements or similar payments
(the ― Indemnity Obligations ‖) afforded to Indemnitee acting on behalf or at the request of the Company or any of its Subsidiaries, whether the
Indemnity Obligations are created by law, organizational or constituent documents, contract (including this Agreement) or otherwise.
Notwithstanding the fact that such Indemnitee‘s employer, other than the Company (such persons, together with its

                                                                        10
and their heirs, successors and assigns, the ― Employer Parties ‖), may have concurrent liability to Indemnitee with respect to the Indemnity
Obligations, the Company hereby agrees that in no event shall the Company or any of its Subsidiaries have any right or claim against any of the
Employer Parties for contribution or have rights of subrogation against any Employer Parties through Indemnitee for any payment made by the
Company or any of its Subsidiaries with respect to any Indemnity Obligation. In addition, the Company hereby agrees that in the event that any
Employer Parties pay or advance to Indemnitee any amount with respect to an Indemnity Obligation, the Company will, or will cause its
Subsidiaries to, as applicable, promptly reimburse such Employer Parties for such payment or advance upon request.
      (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights.
      (d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which
advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
     (e) The Company‘s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the
Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by
any amount Indemnitee has actually received as indemnification or advancement of expenses from such Enterprise.
   16. Settlement .
      (a) Notwithstanding anything in this Agreement to the contrary, the Company shall have no obligation to indemnify Indemnitee under
this Agreement for any amounts paid in settlement of any Proceeding effected without the Company‘s prior written consent.
       (b) The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (1) includes an admission of fault of Indemnitee, any non-monetary remedy affecting or
obligation of Indemnitee, or monetary loss for which Indemnitee is not wholly indemnified hereunder or (2) with respect to any Proceeding
with respect to which Indemnitee may be or is made a party, witness or participant or may be or is otherwise entitled to seek indemnification
hereunder, does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding,
which release shall be in form and substance reasonably satisfactory to Indemnitee. Neither the Company nor Indemnitee shall unreasonably
withhold its consent to any proposed settlement under this Section 16 .
   17. Insurance. The Company shall obtain and maintain a policy or policies of director‘s and officer‘s liability insurance customary for
similarly situated companies in a sufficient amount as determined by the Board, with reputable insurance companies providing the Indemnitee,
other officers of the Company and members of the Board with coverage for losses

                                                                       11
from wrongful acts, and to ensure the Company‘s performance of its indemnification obligations under this Agreement. In all policies of
director and officer liability insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee at least the same
rights and benefits as are accorded to the most favorably insured of the Company‘s officers and directors. Notwithstanding anything to the
contrary in this Agreement, the Company shall not indemnify the Indemnitee to the extent the Indemnitee is actually reimbursed from the
proceeds of insurance, and in the event the Company makes any indemnification payments to the Indemnitee and the Indemnitee is
subsequently reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund such indemnification payments to the Company
to the extent of such insurance reimbursement.
   18. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) six (6) years after the date that
Indemnitee shall have ceased to serve as a director or officer of the Company or as a director, officer, trustee, partner, managing member,
fiduciary, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise which
Indemnitee served at the request of the Company; or (b) one (1) year after the final termination of any Proceeding (including any rights of
appeal thereto) then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Section 14 hereof re