EXHIBIT 2.2
INTEREST PURCHASE AGREEMENT
This Interest Purchase Agreement (this "Agreement"), is made and entered
into as of the 16th day of December 2009 by and among Educational Investors,
Inc., a Delaware corporation ("EII"); TD Management, LLC, a Delaware limited
liability company ("TD"); ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual ("Monaco"); and
Florham Consulting Corp., a Delaware corporation ("Florham"). EII, TD, Monaco
and Florham are hereinafter sometimes individually referred to as a "Party" and
collectively referred to as the "Parties."
RECITALS:
A. EII desires to purchase from TD and Monaco all of the outstanding
membership interests of Training Direct LLC, a Connecticut limited liability
company (the "Company").
B. 100% of the issued and outstanding membership interests of the Company
(the "Subject Interests") are owned by TD and Monaco, and each of TD and Monaco
own of record and beneficially 50% of the outstanding Subject Interests.
C. TD and Monaco are willing to sell the Subject Interests to EII upon the
terms and subject to the conditions hereinafter set forth.
D. Upon consummation of the purchase of the Subject Interests, the Company
will become a wholly-owned direct subsidiary of EII.
E. Upon consummation or shortly following the consummation of the Subject
Interests, EII will become a direct wholly-owned subsidiary of Florham upon
consummation of the Reverse Merger (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Affiliate" shall mean any Person who is an "affiliate" as defined in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Articles of Organization" means the Articles of Organization of the
Company, as filed with the Secretary of State of the State of Connecticut,
including all amendments thereto.
"Business Day" shall mean any day, excluding Saturday, Sunday and any other
day on which national banks located in New York, New York shall be closed for
business.
"By-laws" means the By-laws of EII or its successor in interest after the
consummation of the Reverse Merger, including all amendments thereto.
"Certificate of Incorporation" means the Certificate of Incorporation of
Florham (to be renamed Educational Investors Corp., or such other name as shall
be acceptable to EII), after the consummation of the Reverse Merger, as filed
with the Secretary of State of the State of Delaware, including all amendments
thereto.
"Closing Date" shall mean the date upon which the purchase and sale of the
Subject Interests shall be consummated.
"Common Stock" means the shares of common stock of Florham after the
consummation of the Reverse Merger authorized for issuance pursuant to the
Certificate of Incorporation.
"Consulting Agreement" means the Consulting Agreement, dated as of the
Closing Date, between EII and ▇▇▇▇▇▇ ▇▇▇▇▇▇, in the form attached hereto as
Exhibit A, as may be amended, restated, supplemented or modified from time to
time in accordance with the terms therein.
"Discounted VWAP" means seventy percent (70%) of the VWAP of the Common
Stock of Florham, but in any event not less than $0.40 per share.
"Dollar" and "$" means lawful money of the United States of America.
"EII" means Educational Investors, Inc., a Delaware corporation.
"EII Option Holders" means the collective reference to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇.
"EII Stockholders" means the collective reference to Sanjo Squared LLC and
Kinder Investments LP.
"Employment Agreement" means the Employment Agreement, dated as of the
Closing Date, between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇, in the form attached hereto
as Exhibit B, as may be amended, restated, supplemented or modified from time to
time in accordance with the terms therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Florham" means Florham Consulting Corp., a Delaware corporation whose
shares of Common Stock trade on the FINRA Over-the-Counter Bulletin Board.
Florham Warrants" means warrants entitling the holder(s) to purchase an
aggregate of 930,000 shares of Florham Common Stock at an exercise price of
$0.05 per share that are currently issued and outstanding.
"GAAP" means generally accepted accounting principles in the United States
of America as promulgated by the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board or any successor
institutes concerning the treatment of any accounting matter.
"Governmental Authority" means the government of any nation, state, city,
locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Knowledge" means the knowledge after reasonable inquiry.
"Liabilities" means direct or indirect indebtedness, liability, claim
(including, without limitation, any claim by a third party), loss, damage,
deficiency, obligation or responsibility, known or unknown, fixed or unfixed,
liquidated or unliquidated, secured or unsecured, accrued or absolute,
contingent or otherwise, including, without limitation, any liability on account
of Taxes or any governmental charge or lawsuit.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).
"Losses" means all Liabilities, Taxes, Liens, expenses (including
reasonable fees, disbursements and other charges of counsel).
"Material Adverse Effect" with respect to any Person, entity or group of
entities means any event, change or effect that has or would have a materially
adverse effect on the financial condition, business, results of operations or
prospects of such entity or group of entities, taken as a consolidated whole.
"National Securities Exchange means the collective reference to the New
York Stock Exchange, the NYSE Alternext Exchange, the Nasdaq Stock Exchange, the
FINRA OTC Bulletin Board or any other recognized national securities exchange in
the United States.
"Operating Agreement" means the Operating Agreement of the Company that is
or will be in effect as at the Closing Date, and in the form of Exhibit C
annexed hereto and made a part hereof, including all amendments thereto.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Purchase Price" means One Million One Hundred Thousand Dollars
($1,100,000), which shall be payable in accordance with the provisions of
Section 1.3 of this Agreement.
"Requirements of Law" means, as to any Person, any law, ordinance,
regulation, statute, treaty, rule, right, privilege, qualification, license or
franchise or inspection, order, judgment, injunction, award, decree or
determination of an arbitrator or a court or other Governmental Authority or
stock exchange, in each case applicable or binding upon such Person or any of
its or his property or to which such Person or any of its or his property is
subject or pertaining to any or all of the transactions contemplated or referred
to herein.
"Reverse Merger" shall have the meaning described in Section 1.5 of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Sellers" means, collectively, TD and Monaco, and pursuant to Section
1.1(a) ▇▇▇▇▇ ▇▇▇▇▇▇.
"Stock Option Agreements" means the Stock Option Agreements, dated August
20, 2009, between EII and each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇.
"Subsidiary" of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.
"Subject Interests" means 100% of the issued and outstanding membership
interests of the Company.
"Tax" means: (i) any income, alternative or add-on minimum tax, gross
receipts tax, sales tax, use tax, ad valorem tax, transfer tax, franchise tax,
profits tax, license tax, withholding tax, payroll tax, employment tax, excise
tax, severance tax, stamp tax, occupation tax, property tax, environmental or
windfall profit tax, custom, duty or other tax, impost, levy, governmental fee
or other like assessment or charge of any kind whatsoever together with any
interest or any penalty, addition to tax or additional amount imposed with
respect thereto by any Governmental Authority responsible for the imposition of
any such tax (domestic or foreign); (ii) any liability for the payment of any
amounts of the type described in clause (i) above as a result of being a member
of an affiliated, consolidated, combined or unitary group for any taxable
period, and (iii) any liability for the payment of any amounts of the type
described in clauses (i) or (ii) above as a result of any express or implied
obligation to indemnify any other person.
"Tax Return" means any return, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Trading Day" means any day on which the New York Stock Exchange or other
National Securities Exchange on which the Common Stock trades is open for
trading.
"Transaction Documents" means, collectively, this Agreement, the Consulting
Agreement and the Employment Agreement.
"VWAP" means a fraction, the numerator of which is the sum of the product
of (i) the closing trading price for the Common Stock on the applicable National
Securities Exchange for each Trading Day during such twenty day period and (ii)
the volume of the Common Stock on the applicable National Securities Exchange
for each such day, and the denominator of which is the total volume of the
Common Stock on the applicable National Securities Exchange during such twenty
day period, each as reported by Bloomberg Reporting Service or other recognized
stock market price reporting service.
SECTION 1. PURCHASE AND SALE OF THE SUBJECT SHARES
1.1 Sale of the Subject Interests.
(a) Immediately prior to the Closing Date, each of Monaco and TD shall
amend the Operating Agreement to admit ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") as a member and
each of Monaco and TD shall assign five (5%) percent of their individual Subject
Interests to ▇▇▇▇▇▇. Accordingly, as at the Closing Date, (i) Monaco shall own
forty-five percent (45%) of the Subject Interests, TD shall own forty-five
percent (45%) of the Subject Interests and ▇▇▇▇▇▇ shall own ten percent (10%) of
the Subject Interests, and (ii) ▇▇▇▇▇▇ shall be deemed to be one of "Sellers"
pursuant to this Agreement.
(b) On the Closing Date and subject to and upon the terms and conditions of
this Agreement, the Sellers shall sell, assign, transfer and exchange to EII
all, and not less than all, of the Subject Interests, consisting of 100% of the
outstanding membership interests of the Company at the Closing Date.
(c) On the Closing Date, the Sellers shall cause the Operating
Agreement to be amended in order to reflect the admission of EII as the new
sole member of the Company and the withdrawal of the Sellers as members
thereof.
1.2 Payment of Purchase Price. EII shall equally pay to the Sellers (50% to
each of Monaco and TD) the Purchase Price, against delivery of the Subject
Interests, as follows.
(a) $200,000 cash (the "Cash Portion"), which shall be paid by wire
transfer of immediately available funds to bank accounts designated by the
Sellers prior to the Closing Date;
(b) A number of shares of Common Stock of Florham having a deemed
value of $600,000 (the "Acquisition Shares"), with such number of
Acquisition Shares to be determined by dividing $600,000 by the Discounted
VWAP for the twenty (20) Trading Days immediately following the date of
consummation of the Reverse Merger (as defined below), which Acquisition
Shares shall be issued to the Sellers not later than three Business Days
after determination of the Discounted VWAP; and
(c) A number of shares of Common Stock of Florham having a deemed
value of $300,000 (the "Escrow Shares"), with such number of Escrow Shares
to be determined by dividing $300,000 by the Discounted VWAP for the twenty
(20) Trading Days immediately following the date of consummation of the
Reverse Merger (as defined below), which Escrow Shares shall be held in
escrow and released therefrom according to the terms of Section 1.3 below.
1.3 Escrow Shares. 50% of the Escrow Shares shall be released to the Sellers in
the event that the Tier I Options (as such term is defined in the Stock
Option Agreements) become exercisable. The remaining 50% of the Escrow
Shares shall be released to the Sellers in the event that the Tier II
Options (as such term is defined in the Stock Option Agreements) become
exercisable. The release of the Escrow Shares shall occur not later than
three Business Days after the conditions specified in this Section 1.3 have
been met. If the Escrow Shares are not released from escrow by March 31,
2015, then they shall be cancelled and contributed to the Company's
treasury.
1.4 Closing. The closing of the sale and purchase of the Subject Interests (the
"Closing") will take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, at its
office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, within five (5) Business
Days following the delivery of satisfaction or waiver of the conditions
precedent set forth in Section 4 or at such other date as EII and the
Sellers shall agree (the "Closing Date"), but in no event shall the Closing
Date occur later than December 31, 2009, unless such date shall be extended
by mutual agreement of EII and the Sellers. It is anticipated that the
Closing shall take place simultaneous with or promptly following the
closing of the Reverse Merger transaction described in Section 1.5 below.
1.5 Reverse Merger.
(a) Simultaneous with the date of execution of this Agreement, Florham
and the EII Stockholders and EII Optionholders entered into an agreement
and plan of merger in the form of Exhibit D annexed hereto (the "Reverse
Merger Agreement"). Such Reverse Merger Agreement contemplates the merger
of a newly formed Delaware subsidiary of Florham ("Mergerco") with and into
EII, with EII as the surviving corporation of such merger (the "Reverse
Merger").
(b) Upon consummation of the Reverse Merger (i) EII shall become a
wholly-owned subsidiary of Florham, and (ii) the EII Stockholders and EII
Optionholders shall own, in the aggregate, ninety-five (95%) percent of the
fully-diluted Florham Common Stock as at the effective time of the Reverse
Merger (A) after giving effect to the full exercise of the Florham Warrants
and the exercise or conversion into Florham Common Stock of any other
securities of Florham that are then exercisable for or convertible into
Florham Common Stock), but (B) before giving effect to the issuance of the
Acquisition Shares and the Escrow Shares issued to the Sellers pursuant to
this Agreement.
(c) Consummation of the transactions contemplated by the Reverse
Merger Agreement and the Reverse Merger shall occur immediately prior to
the Closing under this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 2.REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLERS AND THE COMPANY.
Each of the Sellers hereby represents and warrants to EII and Florham,
jointly and severally, as follows:
2.1 Representations Concerning the Sellers.
(a) Each Seller has the power to enter into this Agreement and the
Transaction Documents and to perform his or its obligations hereunder and
thereunder. The execution and performance of this Agreement and the
Transaction Documents will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to
which such Seller is a party and will not violate any Requirements or Law
applicable to such Seller or his or its properties. The execution and
performance of this Agreement and the Transaction Documents will not
violate or conflict with any provision of the articles of organization or
operating agreement of TD.
(b) As at the date of this Agreement and the Closing Date, the Sellers
are the record and beneficial owner of all, and not less than all, of the
Subject Interests. The Subject Interests are owned of record and
beneficially by the Sellers free and clear of all Liens, and have not been
sold, pledged, assigned or otherwise transferred except pursuant to this
Agreement. There are no outstanding subscriptions, rights, options,
warrants or other agreements obligating the Company to issue, sell or
transfer any membership interests or other equity securities or any
securities exercisable, convertible or exchangeable into such equity
securities, or any options, warrants or rights with respect to any of the
foregoing, except for the option previously granted by TD to ▇▇▇▇▇ ▇▇▇▇▇▇
to purchase 20% of the Subject Interests currently held by TD, which shall
be cancelled as of the Closing.
(c) This Agreement and the Transaction Documents have been duly
executed and delivered by each Seller, and constitutes the legal, valid and
binding obligations of each Seller, enforceable against such Seller in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or
in equity).
(d) Except for the approval of the Department of Higher Education of
the State of Connecticut (the "Department of Higher Education"), which
approval shall be obtained by Sellers and the Company on or before the
Closing, no approval, consent, compliance, exemption, authorization or
other action by, or notice to, or filing with, any Governmental Authority
or any other Person, and no lapse of a waiting period under a Requirement
of Law, is necessary or required in connection with the execution, delivery
or performance by, or enforcement against, the Sellers of this Agreement
and the Transaction Documents.
2.2 Organization and Good Standing; Authorization. The Company is a limited
liability company duly organized, validly existing and in good standing
under the laws of the State of Connecticut and has all requisite power and
authority to own and operate its property, to lease the property it
operates as lessee and to conduct the business in each case as it is
currently engaged.2.3 The execution, delivery and performance by the
Company of this Agreement and each of the other Transaction Documents and
the transactions contemplated hereby and thereby have been duly authorized
by all necessary corporate action of the Company.
2.3 Consents; Binding Effect.
(a) Except for the approval of the Department of Higher Education,
which approval shall be obtained by the Sellers and the Company on or
before the Closing, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, and no lapse of a waiting
period under a Requirement of Law, is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Company of this Agreement and the other Transaction Documents or the
transactions contemplated hereby and thereby.
(b) This Agreement and each of the other Transaction Documents have
been duly executed and delivered by the Company, and constitute the legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).
2.4 Financial Statements, Books and Records.
(a) Schedule 2.4 consists of the audited financial statements (balance
sheet, income statement, statements of cash flows and owners equity and
notes thereto) of the Company as of December 31, 2007 and December 31, 2008
and for the fiscal years then ended, and the unaudited consolidated balance
sheet and statement of income of the Company for the comparative nine (9)
month periods ended September 30, 2009 and September 30, 2008
(collectively, the "Financial Statements").
(b) To the extent that the above Financial Statements are not audited
by a firm certified by the Public Company Accounting Oversight Board
("PCAOB"), if required by the Securities and Exchange Commission or
applicable rules or regulations under the Securities Act of 1933, as
amended or the Securities and Exchange Act of 1934, as amended, the Company
will have such Financial Statements reaudited by a PCAOB certified firm
prior to the Closing Date.
(c) The Financial Statements fairly represent the financial position
of the Company as at such dates and the results of their operations for the
periods then ended. The Financial Statements were prepared in accordance
with GAAP applied on a consistent basis with prior periods except as
otherwise stated therein.
(d) All accounts, books and ledgers of the Company have been properly
and accurately kept and completed in all material respects on a basis
consistent with those of preceding accounting periods, and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein. The books and records fairly and correctly set out and disclose,
in all material respects, the current financial position and condition of
the Company. All financial transactions involving the Company have been
accurately recorded in the books and records and all such transactions
represent actual, bona fide transactions.
2.5 Subsidiaries, Partnerships, Joint Ventures.
2.6 The Company does not have any Subsidiaries and does not own of record or
beneficially, directly or indirectly, (i) any shares of capital stock or
securities convertible into capital stock of any other corporation or (ii)
any participating interest in any partnership, joint venture, limited
liability company or other non-corporate business enterprise and does not
control, directly or indirectly, any other entity.
2.7 No Material Adverse Changes. Except as otherwise described on Schedule 2.6
hereto, since December 31, 2008 there has not been:
(a) any material adverse change in the financial position of the
Company, except changes arising in the ordinary course of business, which
changes will in no event materially and adversely affect the financial
position of the Company;
(b) any damage, destruction or loss materially affecting the assets,
prospective business, operations or condition (financial or otherwise) of
the Company whether or not covered by insurance;
(c) any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of the membership
interests of the Company;
(d) any sale of an asset (other than in the ordinary course of
business) or any mortgage or pledge by the Company of any properties or
assets; or
(e) any adoption of a pension, profit sharing, retirement, stock
bonus, stock option or similar plan or arrangement.
2.8 Taxes. The Company has timely filed, or has caused to be timely
filed on its behalf, all applicable Tax Returns required to be filed by it,
and all such Tax Returns are true, complete and accurate, except to the
extent any failure to file or any inaccuracies in any filed Tax Returns,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on the Company. All Taxes shown
to be due on such Tax Returns, or otherwise owed, has been timely paid,
except to the extent that any failure to pay, individually or in the
aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect on the Company
2.9 Compliance with Laws. The Company has complied with all Requirements of Law
applicable to it or its business which, if not complied with, would have a
Material Adverse Effect on the Company.
2.10 No Breach. The execution, delivery and performance of this Agreement and
the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby will not:
(a) violate any provision of the Articles of Organization or Operating
Agreement;
(b) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time, or both constitute) a default under any contract or other
agreement to which the Company is a party or by or to which it or any of
its assets or properties may be bound or subject or result in the creation
of any Lien on the assets or properties of the Company; or
(c) violate any Requirements of Law against, or binding upon, the
Company or upon the properties or business of the Company or applicable to
the transactions contemplated herein.
2.11 Actions and Proceedings. The Company is not a party to any material pending
litigation or, to its knowledge, any governmental investigation or
proceeding not reflected in the Financial Statements, and to the Knowledge
of the Sellers, no material litigation, claims, assessments or
non-governmental proceedings is threatened against the Company.
2.12 Agreements. Schedule 2.12 sets forth each material contract or arrangement
to which the Company is a party or by or to which it or its assets,
properties or business are bound or subject. Each such contract or
arrangement: (a) is a valid and binding agreement, (b) is in full force and
effect, and (c) neither the Company nor, to the Knowledge of the Sellers,
any other party thereto is in breach or default (whether with or without
the passage of time or the giving of notice or both) under the terms of any
such contract or arrangement. The Company has not assigned, delegated, or
otherwise transferred any of its rights or obligations with respect to any
such contracts or arrangements, or granted any power of attorney with
respect thereto. The Sellers have given a true and correct fully executed
copy of each material contract or arrangement to EII.
2.13 Real Estate. The Company owns no real property. With respect to any
leasehold agreement entered into by the Company: (a) such agreement is
valid and enforceable by the Company with respect to the other party
thereto, (b) such agreement has not been altered or amended and is in full
force and effect, and (c) all payments required to be made by the Company
have been paid. The Company is not in default in meeting any of its
obligations under such agreement, no event exists which but for the passage
of time or the giving of notice, or both, would constitute a default of the
Company under such agreement no party to such agreement has claimed any
default by the Company or is taking action purportedly based on such a
default.
2.14 Intellectual Property. The Company has or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, licenses and other similar rights (the
"Intellectual Property Rights") that are necessary or material for use in
connection with its businesses and which the failure to so have could,
individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect on the Company. The Company has not received a
written notice that such Intellectual Property Rights used by it violates
or infringes upon the rights of any person. To the knowledge of the
Sellers, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another person of any of such Intellectual
Property Rights.
2.15 Tangible Assets. The Company has full title and interest in all machinery,
equipment, furniture, leasehold improvements, fixtures, projects, owned or
leased by the Company, any related capitalized items or other tangible
property material to the business of the Company (the "Tangible Assets").
the Company holds all right, title and interest in all the Tangible Assets
owned by it as set forth on the Financial Statements or acquired by it
after the date of the Financial Statements free and clear of all Liens. All
of the Tangible Assets are in good operating condition and repair and are
usable in the ordinary course of business of the Company.
2.16 Liabilities. The Company does not have any Liabilities which are not fully,
fairly and adequately reflected on the Financial Statements. As of the
Closing, the Company will not have any Liabilities, other than Liabilities
fully and adequately reflected on the Financial Statements, including (a)
trade payables incurred in the ordinary course of business, (b) up to
$10,000 in a bank credit line secured by Company receivables and other
assets, and (c) a lien on recently acquired Company equipment and furniture
having a purchase price of approximately $60,000.
2.17 Operations of the Company. From December 31, 2008 through the Closing Date,
except as disclosed on Schedule 2.17 or the Financial Statements, the
Company has not and will not have:
(a) declared or paid any dividend or declared or made any distribution
of any kind to any shareholder, or made any direct or indirect redemption,
retirement, purchase or other acquisition of any shares in its membership
interests;
(b) except in the ordinary course of business, incurred or assumed any
indebtedness or liability (whether or not currently due and payable);
(c) disposed of any assets except in the ordinary course of business;
(d) materially increased the annual level of compensation of any
executive employee;
(e) adopted, increased, terminated, amended or otherwise modified any
plan for the benefit of its employees; or
(f) issued any equity securities or rights to acquire such equity
securities.
2.18 Permits. The Company has all material permits, licenses, authorizations,
orders and approvals of, and has made all filings, applications and
registrations with, all Governmental Authorities that are required in order
to permit it to own or lease its properties and to conduct its business as
presently conducted (the "Permits"); all such Permits are in full force and
effect and, to the Knowledge of the Company, no suspension or cancellation
of any such Permit is threatened or will result from the consummation of
the transactions contemplated by this Agreement and the other Transaction
Documents or the transactions contemplated hereby and thereby.
2.19 Employment Matters. The Company has complied in all material respects with
all applicable Requirements of Law relating to employment or labor. No
present or former employee, officer or director of the Company has, or
shall have at the Closing Date, any claim against the Company for any
matter including, without limitation, for wages, salary, vacation,
severance, or sick pay except for the same incurred in the ordinary course
of business for the last payroll period prior to the Closing Date. There is
no: (a) charge or complaint against the Company alleging a violation of any
Requirements of Law relating to employment or labor, including any charge
or complaint filed with the National Labor Relations Board or any
comparable Governmental Authority, (b) pending labor strike, slowdown, work
stoppage or other material labor trouble affecting the Company and there
has not been any of the forgoing during the past three years; material
labor grievance pending against the Company, (c) pending representation
question respecting the employees of the Company, or (d) pending
arbitration proceeding arising out of or under any collective bargaining
agreement to which the Company is a party. In addition, to the Knowledge of
the Sellers: (i) none of the matters specified in clauses (a) through (d)
above is threatened against the Company; (ii) no union organizing
activities have taken place with respect to the Company; and (iii) no basis
exists for which a claim may be made under any collective bargaining
agreement to which the Company is a party. The Company maintains a health
insurance plan, but does not offer or participate in any other employment
benefit plans.
2.20 Insurance. The Company has in effect insurance of the type and amount
customary for the conduct of its business and has paid all insurance policy
premiums due and has otherwise performed all of its obligations under each
insurance policy to which it is a party. Copies of all such insurance
policies have been furnished to EII.
2.21 Brokers or Finders. No broker's or finder's fee will be payable by the
Company in connection with the transactions contemplated by this Agreement.
2.22 Securities Law Matters. The shares of Common Stock to be acquired by the
Sellers are being issued pursuant to an exemption from the registration
requirements of the Securities Act and are being acquired for the account
of the Sellers and with no intention of distributing or reselling such
securities or any part thereof in any transaction that would be in
violation of the registration requirements of the Securities Act and
applicable state securities laws. Each Seller understands that if he or it
should in the future decide to dispose of any of such shares of Common
Stock, he or it may do so only in compliance with the registration
requirements of the Securities Act and applicable state securities laws, as
then in effect. Each Seller agrees to the imprinting, so long as required
by law, of a legend on certificates representing all of its shares of
Common Stock to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS."
2.23 Full Disclosure. No representation or warranty by the Sellers in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to
be furnished by the Sellers pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to
state any fact necessary to make any statement herein or therein not
materially misleading or necessary to a complete and correct presentation
of all material aspects of the business of the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES of EII and FLORHAM
Each of EII and Florham hereby severally (and not jointly and
severally) represent and warrant to the Sellers as follows; it being
expressly understood and agreed that: (i) all representations and
warranties of EII shall, to the extent relevant, apply only to the
capitalization, business, assets, financial conditions and prospects of EII
(and not Florham), and (ii) all representations and warranties of Florham
shall, to the extent relevant, apply only to the capitalization, business,
assets, financial conditions and prospects of Florham (and not EII):
3.1 Organization and Good Standing. Each of EII and Florham are a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to own and
operate its property, to lease the property it operates as lessee and to
conduct the business in each case as it is currently engaged.3.2 The
execution, delivery and performance by each of EII and Florham of this
Agreement and each of the other Transaction Documents and the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of EII and Florham.
3.2 Binding Effect; Consents.
(a) This Agreement and each of the other Transaction Documents have
been duly executed and delivered by EII and Florham, and constitute the
legal, valid and binding obligations of each of EII and Florham,
enforceable against EII and Florham in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of
whether considered in a proceeding at law or in equity).
(b) Except for the approval of the Department of Higher Education
which approval shall be obtained by the Sellers and the Company on or
before the Closing, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any
Governmental Authority or any other Person, and no lapse of a waiting
period under a Requirement of Law, is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, EII
or Florham of this Agreement and the other Transaction Documents or the
transactions contemplated hereby and thereby.
3.3 Capitalization.
(a) As of the date of this Agreement, EII is authorized to issue
20,000,000 shares of common stock. An aggregate of 16,667,000 shares of EII
common stock are issued and outstanding. Except for the Stock Option
Agreements and except as contemplated by this Agreement, there are no
outstanding subscriptions, rights, options, warrants or other agreements
obligating EII to issue, sell or transfer any shares of EII common stock or
other equity securities or any securities exercisable, convertible or
exchangeable into such equity securities, or any options, warrants or
rights for common stock. The record and beneficial owners of the 16,667,000
issued and outstanding shares of EII common stock as of the date hereof are
set forth on Annex A to the Reverse Merger Agreement.
(b) As of the date of this Agreement, Floham is authorized to issue
12,000,000 shares of capital stock, consisting of (i) 2,000,000 shares of
preferred stock, $0.0001 par value per share, none of which are issued and
outstanding, and (ii) 10,000,000 shares of Florham Common Stock, of which
(A) 166,700 shares of Florham Common Stock are currently issued and
outstanding, and (B) the Florham Warrants are currently issued and
outstanding.
3.4 SEC Reports. Florham has timely filed and is current in its filing of all
Form 10-K, Form 10-Q, Form 8-K and other periodic reports (collectively,
the "SEC Reports") it is required to file with the Securities and Exchange
Commission ("SEC") under the Exchange Act. To its Knowledge, none of the
SEC Reports filed by Florham are currently being reviewed by the SEC and
Florham has not received any letter of comments from the SEC that it has
not, as yet, fully responded to.
3.5 Compliance with Laws. Each of EII and Florham has complied with all
Requirements of Law applicable to it or its business which, if not complied
with, would have a Material Adverse Effect on EII or Florham.
3.6 Actions and Proceedings. Neither EII nor Florham is a party to any material
pending litigation or, to its knowledge, any governmental investigation or
proceeding, and to its Knowledge, no material litigation, claims,
assessments or non-governmental proceedings is threatened against it.
3.7 No Breach. The execution, delivery and performance of this Agreement and
the Transaction Documents by EII and Florham and the consummation of the
transactions contemplated hereby and thereby will not:
(a) violate any provision of their respective Certificates of
Incorporation or By-laws;
(b) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time, or both constitute) a default under any contract or other
agreement to which EII or Florham is a party or by or to which it or any of
its assets or properties may be bound or subject or subject or result in
the creation of any Lien on the assets or properties of EII or Florham; or
(c) violate any Requirements of Law against, or binding upon, EII or
Florham or upon their respective properties or business or applicable to
the transactions contemplated herein.
3.8 Issuance of Shares. The Acquisition Shares and Escrow Shares have been duly
authorized by all necessary corporate action on the part of Florham, and,
upon issuance in accordance with the terms hereof, shall be validly issued
and free from all Taxes, Liens and charges with respect to the issue
thereof and the such Acquisition Shares and Escrow Shares shall be fully
paid and nonassessable with the holder being entitled to all rights
accorded to a holder of Common Stock.
3.9 Brokers or Finders. No broker's or finder's fee will be payable by EII or
Florham in connection with the transactions contemplated by this Agreement.
3.10 Full Disclosure. No representation or warranty by EII or Florham in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to
be furnished by EII or Florham pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to
state any fact necessary to make any statement herein or therein not
materially misleading or necessary to complete and correct presentation of
all material aspects of the business of EII or Florham.
3.11 Department of Higher Education Approval. To the best Knowledge of EII and
Florham, there exist no facts or circumstances attributable to either of
EII or Florham, which could reasonably be expected to have a negative
impact on the Sellers' and Company's ability to obtain the requisite
consent from the Department of Higher Education required to enable the
Company to continue its current business and operations following the
Closing.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to the Obligations of the Sellers. All obligations of
the Sellers under this Agreement are subject to the fulfillment, prior to
or as of the Closing Date, as indicated below, of each of the following
conditions, any of which may be waived by the Sellers:
(a) The Secretary of EII shall have delivered to the Sellers a
certificate, duly executed by such Person and certifying, that to the best
of such Person's knowledge and belief, (i) that the attached copies of the
Certificate of Incorporation, the By-laws, and resolutions of the board of
directors of EII approving this Agreement and each of the other Transaction
Documents and the transactions contemplated hereby and thereby, are all
true, complete and correct and remain unamended and in full force and
effect and (ii) as to the incumbency and specimen signature of each officer
of EII executing this Agreement, each other Transaction Document and any
other document delivered in connection herewith on behalf of EII.
(b) The representations and warranties by or on behalf of EII
contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at
and as of Closing Date as though such representations and warranties were
made at and as of such time.
(c) EII shall have performed and complied in all material respects,
with all covenants, agreements, and conditions set forth in, and shall have
executed and delivered all documents required by this Agreement to be
performed or complied with or executed and delivered by it prior to or at
the Closing.
(d) An executive officer of EII shall have delivered to the Sellers a
certificate, duly executed by such Person and certifying, that to the best
of such Person's knowledge and belief, the representations and warranties
of EII set forth in this Agreement are true and correct in all material
respects, and that EII has performed and complied, in all material
respects, with all covenants, agreements and conditions contained herein
required to be performed or complied with by it prior to or at the Closing
Date.
(e) Prior to the Closing, the Sellers and the Company shall have
obtained the written consent of the Department of Higher Education.
(f) EII shall have duly executed and delivered the Employment
Agreement and the Consulting Agreement.
(g) There shall be no pending or threatened litigation which could
call into question the validity of the transactions contemplated by this
Agreement.
(h) EII shall have paid in full the Cash Portion of the Purchase Price
for the Subject Interests.
(i) Florham, EII and the EII Stockholders and EII Optionholders shall
have duly executed the Reverse Merger Agreement and shall have consummated
the Reverse Merger.
(j) EII shall have reimbursed the Sellers in the amount of $2,200,
which represents the $2,000 non-refundable application fee and $200
non-refundable application fee the Sellers previously paid to the Education
Department in connection.
(k) EII shall have submitted a $40,000 Irrevocable Letter of Credit,
issued by a bank with its main office or branch located within the State of
Connecticut, to the Department of Higher Education.
(l) All corporate and other proceedings to be taken by EII and Florham
in connection with the transactions contemplated hereby and all documents
incident thereto shall be reasonably satisfactory in form and substance to
the Sellers and their counsel, and the Sellers and their counsel shall have
received all such counterpart originals or certified or other copies of
such documents as they reasonably may request.(m)
4.2 Conditions Precedent to the Obligations of EII. All obligations of EII and
Florham under this Agreement are subject to the fulfillment, prior to or at
Closing, of each of the following conditions, any of which may be waived by
both EII and Florham:
(a) The Secretary of the Company shall have delivered a certificate,
duly executed by such Person and certifying, that to the best of such
Person's knowledge and belief, (i) that the attached copies of the Articles
of Organization, the Operating Agreement, and resolutions of the managing
members of the Company approving this Agreement and the transactions
contemplated hereby, are all true, complete and correct and remain
unamended and in full force and effect and (ii) as to the incumbency and
specimen signature of each officer of the Company executing this Agreement
and any other document delivered in connection herewith on behalf of the
Company.
(b) The representations and warranties by or on behalf of the Sellers
and the Company contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof shall be true in all
material respects at and as of Closing Date as though such representations
and warranties were made at and as of such time.
(c) The Sellers and the Company shall have performed and complied in
all material respects, with all covenants, agreements, and conditions set
forth in, and shall have executed and delivered all documents required by
this Agreement to be performed or complied with or executed and delivered
by them prior to or at the Closing.
(d) The Sellers and an executive officer of the Company shall have
delivered a certificate, duly executed by such Person and certifying, that
to the best of such Person's knowledge and belief, the representations and
warranties of the Sellers and the Company set forth in this Agreement are
true and correct in all material respects, and that the Sellers and the
Company have performed and complied, in all material respects, with all
covenants, agreements and conditions contained herein required to be
performed or complied with by them prior to or at the Closing Date.
(e) Prior to the Closing, the Sellers and the Company shall have
obtained the written consent of the Department of Higher Education and all
other consents and approvals, if any, required to be obtained from any
other Governmental Authorities and third parties in order to consummate the
transactions contemplated hereby.
(f) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ shall have duly executed and
delivered the Employment Agreement and the Consulting Agreement,
respectively.
(g) The Sellers shall have duly executed and delivered a counterpart
signature page to the Stockholders Agreement of EII.
(h) ▇▇▇▇▇ ▇▇▇▇▇▇ shall have executed and delivered an instrument
terminating his right to receive any of the Subject Interests.
(i) There shall be no pending or threatened litigation which could
call into question the validity of the transactions contemplated by this
Agreement.
(j) Each of Florham and EII shall, in their sole and reasonable
discretion, be satisfied with the results of its business, accounting, tax
and legal due diligence investigation of the Company, including comfort
that the Company's (i) income before taxes for the year ending December 31,
2009 will not be materially less than $140,000 (after giving effect to the
annualized compensation provided in the Consulting Agreement) and (ii)
tangible net worth will not be materially less than $165,000 at Closing.
(k) As of the Closing, the Company will not have any Liabilities,
other than Liabilities fully and adequately reflected on the Financial
Statements, including (a) trade payables incurred in the ordinary course of
business, (b) up to $10,000 in a bank credit line secured by Company
receivables and other assets, and (c) a lien on recently acquired Company
equipment and furniture having a purchase price of approximately $60,000.
(l) The Sellers shall have tendered the Subject Interests to EII.
(m) All conditions to the consummation of the Reverse Merger shall
have been satisfied or waived by the party for whose benefit such condition
was provided.
(n) All corporate and other proceedings to be taken by the Sellers and
the Company in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and substance to
EII and Florham and their respective counsel, and EII, Florham and their
counsel shall have received all such counterpart originals or certified or
other copies of such documents as they reasonably may request.(o)
SECTION 5. COVENANTS
5.1 Exclusivity. In order to induce EII and Florham to incur the effort and
expense of due diligence examinations and analysis, the Company and the
Sellers hereby, jointly and severally, agree that none of them will elicit,
discuss, explore, entertain or consider any possible sale of all or any
part of the Company's securities or assets or any other change in control
of the Company or its assets with any other person, or provide any
information to any other person, other than such ordinary course of such
business operations in circumstances where none of them has any reason to
believe that such information may be used to evaluate a possible purchase
or sale of some or all of the Company's assets or securities.
5.2 Conduct of Business. From the date of this Agreement to the Closing, the
Company shall operate its business in the ordinary course consistent with
past practices and shall use its best efforts to maintain the goodwill of
its employees, customers and other interested parties. Notwithstanding the
above, unless otherwise required by the terms of this Agreement or agreed
to in writing by EII and Florham, the Company shall not (i) make any
distributions to its members, (ii) enter into any agreements or
transactions not in the ordinary course of business, (iii) enter into any
agreements or transactions with any of its employees, officers, directors,
managers, members, affiliates or any related party to any of the foregoing,
or (iv) enter into any agreement or transaction described in Section 2.17
of this Agreement.
5.3 Corporate Examinations and Investigations. The Company and the Sellers will
permit EII, its representatives, accountants and counsel, to conduct an
investigation and evaluation of the Company and, in connection therewith,
will provide such assistance to such Persons as is reasonably requested.
EII and its representatives, subject to the approval of the Company (which
approval shall not be unreasonably withheld), shall be permitted to contact
and communicate with the Company's bankers, accountants, attorneys, key
personnel and other advisors on request. EII will similarly permit the
Company, its representatives, accountants and counsel, to conduct an
investigation and evaluation of EII and, in connection therewith, will
provide such assistance to such Persons as is reasonably requested. The
Company and its representatives, subject to the approval of EII (which
approval shall not be unreasonably withheld), shall be permitted to contact
and communicate with EII's bankers, accountants, attorneys, key personnel
and other advisors on request.
5.4 Change of Ownership; Further Assurances.
(a) The Parties shall execute such documents and other papers and take
such further actions as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby. Each
such Party shall use its best efforts to fulfill or obtain the fulfillment
of the conditions to the Closing, including, without limitation, the
execution and delivery of any documents or other papers, the execution and
delivery of which are necessary or appropriate to the Closing.
(b) Prior to Closing, the Sellers shall notify the Department of
Higher Education and any other relevant Governmental Agencies of the change
in ownership contemplated by this Agreement. The Sellers shall use their
collective best efforts (but without being required to make any personal
expenditures or incur any personal liability) to obtain the consent of the
Department of Higher Education to this Agreement and consummation of the
transactions contemplated hereby and pursuant to the Reverse Merger
Agreement.
(c) The Company shall, at its expense, prepare and deliver the
Financial Statements set forth in Section 2.4 of this Agreement. To the
extent additional financial statements are required in order to effect the
transactions contemplated herein or in connection with the Reverse Merger,
the Company's auditors shall prepare and provide them to EII and Florham at
the Company's expense. In addition, the Company and its counsel shall
assist EII, Florham and their counsel in the preparation of the Form 8-K
and other filings required in connection with the Reverse Merger.
5.5 Confidentiality. Each of the Company, the Sellers, Florham and EII agree
not to make or permit to be made any public disclosure of the existence of
the terms of this Agreement without the prior written consent of the
others, except as otherwise required by Requirements of Law or as advised
by legal counsel, except to their respective advisors and attorneys;
provided, however, such obligation shall not apply to information which:
(a) at the time of the disclosure was public knowledge;
(b) is required to be disclosed publicly pursuant to any applicable
federal or state securities laws;
(c) after the time of disclosure becomes public knowledge (except due
to the action of the receiving party); or
(d) the receiving party had within its possession at the time of
disclosure.
5.6 Expenses. The Company and the Sellers, on the one hand, and EII and
Florham, on the other hand, will bear all of respective costs and expenses
(including, but not limited to, fees and expenses of legal counsel,
accountants, and other representatives and consultants) in connection with
the transactions contemplated hereby
5.7 Post-Closing Covenants. Each of the Parties hereto shall use their best
efforts to comply with the following post-closing covenants:
(a) Board of Managers. On and after the Closing, the Board of Managers
of the Company shall consist of four (4) Persons, being (a) ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, (b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (c) ▇▇▇▇ ▇▇▇▇▇▇, and (d) ▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Board of Managers").
(b) Filings. The Parties shall use all commercially reasonable efforts
promptly to make all filings with the Department of Higher Education and
any and all other educational Governmental Agencies necessary to carry out
the Company's current business and operations and the Sellers and EII shall
cooperate in good faith to share information and documents required to
complete such filings;
(c) Company Employees and Consultants. For a period of not less than
one (1) year following the Closing, to continue to employ all or
substantially all of the Company's employees providing full-time service to
the Company as of the Closing (subject to the Company's continued
satisfaction with the performance of such employees) and permit the Company
to continue to honor the terms of such employees' employment agreement, as
well as any other employee benefit related agreement currently in effect
between such employee and the Company. In addition, in each instance that
the issue of a Company employee's term of service is called into question,
the period of service by such employee with the Company prior to the
Closing shall be credited, to the extent permitted by applicable law and
applicable tax qualification requirements, and subject to any generally
applicable break in service or similar rules. In addition to the foregoing,
the Company shall honor all of the terms and conditions of the Employment
Agreement and Consulting Agreement.
(d) Conduct of Company Business. Subject at all times the right of the
Board of Managers of the Company to manage its business, following the
Closing, EII and Florham shall permit the Company to carry on its business
in the ordinary course consistent with past practice, including the
obligation to maintain:
(i) the current business operations of the Company as an ongoing
business and preserve its goodwill, in accordance with past custom and
practice;
(ii) the Company in good standing with the Department of Higher
Education and other Government Agencies with which the Company currently
maintains such standing;
(iii) marketing and student recruiting efforts in the ordinary course,
consistent with past practice; and
(iv) all school records, continue and perform the obligation of the
Company to teach all students who have not completed their programs, and
continue to issue tuition refunds, all as required under Applicable Laws
and consistent with the Company's past practices.
(e) Organizational Documents. So long as the business and operations
of the Company remain profitable, the organizational documents of the
Company will not be amended or modified in a manner that would materially
change the nature of the business and operations of the Company as
presently conducted.
SECTION 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Notwithstanding any right of either Party to investigate the affairs
of the other Party, each Party has the right to rely fully upon
representations, warranties, covenants and agreements of the other Party
contained in this Agreement or in any document delivered to one by the
other or any of their representatives, in connection with the transactions
contemplated by this Agreement. All such representations, warranties,
covenants and agreements shall survive the execution and delivery hereof
and the closing hereunder for twelve (12) months following the Closing,
except for the representations and warranties of the Sellers set forth in
Section 2.1(a), (b) and (c) of this Agreement, which shall survive
indefinitely.
SECTION 7. INDEMNIFICATION; DISPUTE RESOLUTION; NON-COMPETITION.
7.1 Indemnification by the Sellers.
(a) From and after the Closing, the Sellers shall jointly and
severally indemnify and hold harmless EII, Florham and their directors,
officers, employees, agents, stockholders and Affiliates (collectively, the
"Purchasing Parties") from and against any and all Losses finally awarded
arising out of, resulting from or in any way related to: (i) a breach by
the Sellers or the Company of any of their representations and warranties
contained herein, or (ii) the failure to perform or satisfy, when due, any
of the covenants and agreements made by the Sellers or the Company in this
Agreement or in any other document or certificate delivered by the Sellers
or the Company at the Closing pursuant hereto.
(b) Notwithstanding the foregoing, the indemnification obligations of
the Sellers under Section 7.1(a)(i) above shall not be applicable to Losses
incurred by EII Parties which shall be in excess of the Purchase Price (the
"Indemnity Cap"); provided, that there shall be no Indemnity Cap with
respect to the matters contemplated by Section 7.1(a)(ii) above or for any
breach of the provisions of Section 2.1 (a), (b) or (c) of this Agreement,
and such indemnity obligations shall survive indefinitely. Any payment made
to any Purchasing Party pursuant to the indemnification obligations under
this Section 7.1 shall constitute a reduction in value of the Purchase
Price paid pursuant to this Agreement.
7.2 Indemnification by EII and Florham.
(a) From and after the Closing, EII and Florham shall severally (not
jointly) indemnify and hold harmless the Sellers and their respective
managers, officers, employees, agents, members and Affiliates
(collectively, the "Sellers Parties") from and against any and all Losses
finally awarded arising out of, resulting from or in any way related to:
(i) a breach by EII or Florham, as the case may be, of their several
representations and warranties contained herein, or (ii) the failure to
perform or satisfy, when due, any of the covenants and agreements made by
EII or Florham in this Agreement or in any other document or certificate
delivered by EII or Florham at the Closing pursuant hereto. Notwithstanding
the foregoing, in no event shall EII be liable to indemnify the Sellers
Parties for any representation or warranty of Florham contained in this
Agreement, and in no event shall Florham be liable to indemnify the Sellers
Parties for any representation or warranty of EII contained in this
Agreement
(b) Notwithstanding the foregoing, the indemnification obligations of
EII and Florham under Section 7.2(a)(i) above shall not be applicable to
Losses incurred by the Seller Parties which shall be in excess of the
Purchase Price (the "Indemnity Cap"); provided, that there shall be no
Indemnity Cap with respect to the matters contemplated by Section
7.2(a)(ii) above or for any breach of the provisions of Section 3.1 and
Section 3.2(a) of this Agreement, and such indemnity obligations shall
survive indefinitely. Any payment made to any Seller Party pursuant to the
indemnification obligations under this Section 7.2 shall constitute an
increase in value of the Purchase Price paid pursuant to this Agreement.
(c) In the event that any claim for Losses shall be asserted against
any of the Seller Parties for which EII and/or Florham is liable to
indemnify against pursuant to this Section 7.2, EII and Florham shall have
the sole right to conduct, at its expense, the defense of any and all such
claims with counsel of its choosing, and shall have the sole right to
effect any financial settlement of any such claims for Losses; provided,
however, that if any such settlement would result in any injunction or
restrictions on the Seller Parties, or otherwise require any of the Seller
Parties to pay any ongoing royalties or other payments to any Person, no
such settlement may be effected by EII or Florham without the prior written
consent of the Sellers.
SECTION 8. MISCELLANEOUS
8.1 Waivers. The waiver of a breach of this Agreement or the failure of any
Party hereto to exercise any right under this Agreement shall in no way
constitute waiver as to future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
8.2 Amendment. This Agreement may be amended or modified only by an instrument
of equal formality signed by the Parties or the duly authorized
representatives of the respective Parties.
8.3 Assignment. This Agreement is not assignable except by operation of law.
8.4 Notice. Until otherwise specified in writing, the mailing addresses and fax
numbers of the parties of this Agreement shall be as follows:
To the Sellers or the Company:
Training Direct LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Fax: (203) ________
with a copy to (which shall not constitute notice):
Leser, Hunter, Taubman & Taubman
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇
To EII:
Educational Investors, Inc.
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Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇ ▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇▇.▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇ ▇▇▇▇, LLP
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
To Florham:
Florham Consulting Corp.
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
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Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Any notice or statement given under this Agreement shall be deemed to
have been given if sent by registered mail addressed to the other party at
the address indicated above or at such other address which shall have been
furnished in writing to the addressor.
8.5 Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the State of New York, without regard to the principles of
conflicts of law of any jurisdiction. All actions and proceedings arising
out of or relating to this agreement shall be brought by the parties and
heard and determined only in a federal or state court located in the
Borough of Manhattan in the City and State of New York and the parties
hereto consent to jurisdiction before and waive any objections to the venue
of such federal and New York courts. The parties hereto agree to accept
service of process in connection with any such action or proceeding in any
manner permitted for a notice hereunder.
8.6 Waiver of Jury Trial. Each Party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such Party hereby
irrevocably and unconditionally waives any right such Party may have to a
trial by jury in respect of any litigation directly or indirectly arising
out of or relating to this Agreement, or the transactions contemplated by
this Agreement. Each Party certifies and acknowledges that (a) no
representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
litigation, seek to enforce the foregoing waiver, (b) each Party
understands and has considered the implications of this waiver, (c) each
Party makes this waiver voluntarily, and (d) each Party has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 8.6.
8.7 Publicity. No publicity release or announcement concerning this Agreement
or the transactions contemplated hereby shall be issued by either party
hereto at any time from the signing hereof without advance approval in
writing of the form and substance by the other party.
8.8 Entire Agreement. This Agreement (including the schedules to be attached
hereto) and the collateral agreements executed in connection with the
consummation of the transactions contemplated herein contain the entire
agreement among the parties with respect to the transactions contemplated
hereby, and supersedes all prior agreements, written or oral, with respect
hereof.
8.9 Headings. The headings in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.
8.10 Severability of Provisions. The invalidity or unenforceability of any term,
phrase, clause, paragraph, restriction, covenant, agreement or provision of
this Agreement shall in no way affect the validity or enforcement of any
other provision or any part thereof.
8.11 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed, shall constitute an original copy hereof,
but all of which together shall consider but one and the same document.
8.12 PDF and Facsimile Signatures. This Agreement and the other Transaction
Documents may be executed and delivered with electronic pdf or facsimile
signatures of the respective Parties; each of which shall have the same
validity as original signatures hereto.
8.13 Binding Effect. This Agreement shall be binding upon the parties hereto and
inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
8.14 Press Releases and Filings. The Parties will mutually agree as to the
wording and timing of any informational releases concerning this
transaction prior to and through Closing.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
SELLERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TD MANAGEMENT, LLC
/s/ Aril ▇▇▇▇▇▇
By:______________________________
Name: Aril ▇▇▇▇▇▇
Title:
EII:
EDUCATIONAL INVESTORS, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
FLORHAM:
FLORHAM CONSULTING CORP.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Title: President
ACCEPTED AND AGREED TO:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
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