Exhibit 10.14
SHARE EXCHANGE
AGREEMENT
THIS SHARE EXCHANGE AGREEMENT is
made and entered into as of the day of
April, 2009, by and among Home School, Inc. (“HSI”),
the stockholders of HSI (the “Sellers”), and Narayan
Capital Corp. (“NCC”).
W I T N E S S E T H
:
WHEREAS, The Sellers collectively
own 100% of the issued and outstanding common stock of HSI as set
forth on Exhibit A attached hereto;
WHEREAS, NCC is registered pursuant
to Section 12(g) of the Exchange Act and subject to the
reporting requirements of Section 13 of the Exchange Act;
and
WHEREAS, NCC desires to reorganize
itself by causing it to issue to the Sellers
shares of NCC’s common stock thereby
diluting the existing shareholders’ interest in NCC to 1.5%
in exchange for the Sellers’ transfer of their 100% ownership
interest in HSI to NCC, thereby making HSI a wholly owned
subsidiary of NCC, and by changing the name of NCC to “Home
School Holdings, Inc.”
NOW, THEREFORE, in consideration of
the mutual promises and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
the parties acknowledge, the parties hereby agree as
follows:
ARTICLE I
PRELIMINARY
MATTERS
Section 1.01. Recitals .
The parties acknowledge that the recitals set forth above in the
preamble are correct, and are, by this reference, incorporated
herein and are made a part of this Agreement.
Section 1.02. Exhibits and
Schedules . Exhibits (which are documents to be executed and
delivered at the Closing by the party identified therein or in the
provision requiring such delivery) and Schedules (which are
attachments setting forth information about a party identified
therein or in the provision requiring such attachment) referred to
herein and annexed hereto are, by this reference, incorporated
herein and made a part of this Agreement, as if set forth fully
herein.
Section 1.03. Use of words
and phrases . The words “herein,”
“hereby,” “hereunder,”
“hereof,” “hereinafter” and any other
equivalent words refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision hereof. The words,
terms and phrases defined herein and any pronoun used herein shall
include the singular, plural and all genders. The word
“and” shall be construed as a coordinating conjunction
unless the context clearly indicates that it should be construed as
a copulative conjunction.
Section 1.04. Accounting
terms . All accounting terms not otherwise defined herein shall
have the meanings assigned to them under generally accepted
accounting principles.
Section 1.05. Calculation of
time lapse or passage; Action required on holidays . When a
provision of this Agreement requires or provides for the
calculation of the lapse or
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passage of a time period, such period shall be
calculated by treating the day on which the event which starts the
lapse or passage occurs as zero; provided, that this provision
shall not apply to any provision which specifies a certain day for
action or payment, e.g. the first day of each calendar month.
Unless otherwise provided, the term “month” shall mean
the actual calendar month indicated and the term “year”
shall mean a period of 365 days. If any day on which action is
required to be taken or payment is required to be made under this
Agreement is not a Business Day (Business Day being a day on which
national banks are open for business where the actor or payor is
located), then such action or payment shall be taken or made on the
next succeeding Business Day.
Section 1.06. Use of titles,
headings and captions . The titles, headings and captions of
articles, sections, paragraphs and other subdivisions contained
herein are for the purpose of convenience only and are not intended
to define or limit the contents of said articles, sections,
paragraphs and other subdivisions.
ARTICLE II
TERMS OF THE
TRANSACTION
Section 2.01. Share Exchange
transaction .
(a) On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, NCC
shall issue to the Sellers as set forth on Exhibit A
attached hereto
( ) fully paid and non-assessable shares of
common stock of NCC representing 98.5% of the issued and
outstanding shares of common stock of NCC, including any of
HSI’s option and warrant holders and holders of convertible
debt, in exchange for 100% of HSI’s issued and outstanding
shares of capital stock, consisting of 289,599,665
shares of common stock, 73,949,760
shares subject to the stock options and
warrants and _22,402,121 shares subject to
convertible debt (the “Share Exchange”). On the Closing
Date, NCC file amended and restated articles of incorporation and
adopt amended and restated bylaws in the forms attached hereto as
Exhibit B and the name of NCC shall be changed to
“Home School Holdings, Inc.”
(b) On the Closing Date, the
Existing Shareholders shall own [[ 1.5% ]]
( ) shares of common stock of NCC
representing 1.5% of the issued and outstanding shares of common
stock of NCC on a fully-diluted basis, including without
limitation, any shares issuable to option and warrant holders and
holders of convertible debt or other convertible securities of
NCC.
(c) On the Closing Date, HSI shall
pay Fifty Thousand Dollars ($50,000) to the Existing Shareholders
as purchase price consideration for the Share Exchange (the
“Cash Payment”).
(d) On the Closing Date, HSI shall
be acquired and shall become a wholly owned subsidiary of NCC and
all liabilities and obligations of NCC in existence on the Closing
Date shall be paid in full.
Section 2.02 Exchange of
Stock Certificates .
(a) The identity and address of the
stock transfer agent (the “Exchange Agent”) will be
disclosed at a reasonable time after the Closing Date.
(b) NCC will, promptly after the
Closing Date, issue and deliver to the
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Exchange Agent the share certificates
representing shares of NCC’s Common Stock (each a “New
Certificate”).
(c) The Exchange Agent, upon
receiving the items specified in subsection (b) hereof, shall
promptly mail to each holder of one or more certificates formerly
representing HSI Common Stock a notice notifying such holder to
surrender his, her or its certificate or certificates to the
Exchange Agent for exchange. Such notice shall be mailed to holders
by regular mail at their addresses on the records of
HSI.
(d) Upon receipt from a former
shareholder of HSI of certificates representing shares of
HSI’s Common Stock, the Exchange Agent shall forward to such
former shareholder of HSI (i) a New Certificate representing
his, her or its shares of Public Company Common Stock, and
(ii) dividends, if any, declared thereon subsequent to the
Effective Date (without interest).
(e) If any New Certificate is to be
issued in a name other than that in which the certificate formerly
representing HSI’s Common Stock (an “Old
Certificate”) and surrendered for exchange was issued, the
Old Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and the person requesting
such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of the New Certificate in
any name other than that of the registered holder of the Old
Certificate surrendered, or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not
payable.
(f) In the event that any Old
Certificates have not been surrendered for exchange in accordance
with this Agreement on or before the second anniversary of the
Closing Date, NCC may at any time thereafter, with or without
notice to the holders of record of such Old Certificates, sell for
the accounts of any or all of such holders any or all of the shares
of HSI’s Common Stock which such holders are entitled to
receive under this Section (the “Unclaimed Shares”).
Any such sale may be made by public or private sale or in such
manner and at such times as NCC shall determine. NCC shall not be
obligated to make any sale of Unclaimed Shares if it shall
determine not to do so, even if notice of sale of the Unclaimed
Shares has been given. The net proceeds of any such sale of
Unclaimed Shares shall be held for holders of the unsurrendered Old
Certificates, whose unclaimed shares have been sold, to be paid to
them upon surrender of the Old Certificates. From and after any
such sale, the sole right of the holders of the unsurrendered Old
Certificates whose Unclaimed Shares have been sold shall be the
right to collect the net sale proceeds held by NCC for their
respective accounts, and such holders shall not be entitled to
receive any interest on such net sale proceeds held by
NCC.
(g) If any Old Certificates are not
surrendered prior to the date on which such certificates would
otherwise escheat to or become the property of any governmental
unit or agency, the unclaimed items shall, to the extent permitted
by abandoned property and any other applicable law, become the
property of NCC (and to the extent not in its possession shall be
paid over to it), free and clear of all claims or interest of any
person previously entitled to such claims. Notwithstanding the
foregoing, neither NCC nor its agents or any other person shall be
liable to any former holder of HSI’s Common Stock
for
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any property delivered to a public official
pursuant to applicable abandoned property, escheat or similar
laws.
(h) All cash and shares of NCC
issued in accordance with the terms hereof shall be deemed to have
been issued in full satisfaction of all rights pertaining to such
shares of HSI’s Common Stock and there shall be no further
registration of transfers on the records of NCC of shares of
HSI’s Common Stock that were outstanding immediately prior to
the Closing Date. If, after the Closing Date, Old Certificates are
presented to NCC for any reason, they shall be canceled and
exchanged as provided in this Section.
(i) In the event that any Old
Certificates shall have been lost, stolen or destroyed, NCC shall
issue in exchange for such lost, stolen or destroyed Old
Certificates, upon the making of an affidavit of that fact by the
holder thereof, the cash and/or certificates representing the
shares of NCC’s Common Stock that the shares of HSI were
converted into and any dividends or distributions payable pursuant
thereto; provided, however, that, as a condition precedent to the
issuance of such cash and certificates representing shares of
HSI’s Common Stock and other distributions, the owner of such
lost, stolen or destroyed Old Certificates shall indemnify NCC
against any claim that may be made against NCC with respect to the
Old Certificates alleged to have been lost, stolen or
destroyed.
Section 2.03. Federal income
tax treatment . It is the mutual expectation of the parties
that the Share Exchange will qualify as a tax-free reorganization
under section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”), and that the business combination
contemplated hereby be accounted for as a reverse acquisition under
the purchase method for business combinations. The combination of
the two companies is recorded as a recapitalization of HSI,
pursuant to which HSI is treated as the continuing
entity.
Section 2.04. Transaction
costs. Each party shall pay all costs and expenses which it
incurs in connection with this Agreement and the transactions
contemplated hereby.
Section 2.05. Press
releases . No party will issue a press release regarding the
subject matter of this Agreement and the transaction contemplated
hereby, either before or after closing, without the prior approval
thereof by the other party and its counsel.
ARTICLE III
CLOSING OF THE
TRANSACTION
Section 3.01. Location, date
and time of the Closing . The Closing of the transaction
contemplated by this Agreement shall take place on [[ on or
before May 7, 2009 ]] , at 10:00 a.m. Chicago, Illinois
time ("Closing Date”). The Closing shall take place at a
location agreed to by the parties. The acts and deliveries which
occur on the Closing Date for the purpose of consummating the
transactions contemplated by this Agreement and the event itself
are referred to herein as the “Closing”.
Section 3.02. NCC’s
deliveries at the Closing . At the Closing, NCC will deliver to
HSI:
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(a)
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Certificate of
good standing of NCC;
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(b)
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Officer’s
and Secretary’s and Certificates of NCC in the form set forth
in Exhibits “A” and “B”,
respectively;
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(c)
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An action by
written consent of NCC’s board of directors approving the
Share Exchange;
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(d)
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A resignation
from each and every member of NCC’s board of directors,
officers and employees, together with cancellation of any and all
employment and compensation agreements with the consent of the
employee; and
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(e)
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Articles of
Share Exchange.
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Section 3.03. HSI’s
deliveries at the Closing . At the Closing, HSI will deliver to
the stockholders of NCC:
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(a)
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Certificate of
good standing of HSI;
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(b)
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Officers’
and Secretary’s Certificates of HSI in the form set forth in
Exhibits “A” and “B”,
respectively;
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(c)
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An action by
written consent of HSI’s board of directors approving the
Share Exchange; and
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(d)
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Articles of
Share Exchange.
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(e)
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The Cash
Payment by certified check or wire transfer in immediately
available funds.
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Section 3.04. Closing
Memorandum and receipts . As evidence that all parties deem the
Closing to have been completed and the transactions contemplated by
this Agreement to have been consummated, the parties jointly will
execute and deliver a Closing Memorandum, in the form of Exhibit
“C”, acknowledging such completion and
consummation.
Section 3.05. Waiver of
conditions . Notwithstanding Section 11.03, any condition
to the Closing which is to the benefit of any party and which is
not satisfied prior to or at the Closing, excluding nevertheless
any provision of this Agreement which by its terms is to be
performed in the future, will be deemed to be waived by the
benefited party or otherwise satisfied and waived by virtue of that
party executing the Closing Memorandum, except to the extent any
such unsatisfied or unperformed condition is expressly preserved by
listing it in the Closing Memorandum for satisfaction or
performance after the Closing.
Section 3.06. Further
assurances. At any time and from time to time after the
Closing, at the reasonable request of any party and without further
consideration, the other party shall execute and deliver such other
instruments and documents reasonably desirable or necessary to
complete and confirm the transactions contemplated by this
Agreement.
Section 3.07. Conditions
precedent to HSI’s obligation to Close . All obligations
of NCC hereunder are subject, at the option of HSI, to the
fulfillment of each of the following conditions at or prior to the
Closing, and NCC shall exert commercially reasonable efforts to
cause each such condition to be so fulfilled:
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(a) All representations and
warranties of NCC contained herein and in any document delivered
pursuant hereto shall be true and correct in all material respects
when made and shall be deemed to have been made again and given at
and as of the date of the Closing of the transactions contemplated
by this Agreement, and shall then be true and correct in all
material respects, except for changes in the ordinary course of
business after the date hereof in conformity with the
representations, covenants and agreements contained
herein.
(b) All covenants, agreements and
obligations required by the terms of this Agreement to be performed
by NCC at or before the Closing shall have been duly and properly
performed in all material respects to HSI’s reasonable
satisfaction.
(c) Since the date of this Agreement
there shall not have occurred any material adverse change in
NCC’s operating or financial condition, prospects (financial
or otherwise), business, properties or assets which may cause a
reasonable investor to make a different investment decision
regarding an investment in NCC.
(d) All documents required to be
delivered to HSI at or prior to the Closing shall have been so
delivered.
(e) The transaction contemplated by
this Agreement shall have been approved in writing by NCC’s
board of directors.
(f) NCC shall have not suffered or
incurred a material damage, destruction or loss not fully covered
by insurance and which has a materially adverse affect on its
business and operations.
(g) HSI shall have received a
certificate of good standing for NCC.
(h) HSI shall have received audited
financial statements of NCC at and for the years ended
December 31, 2007 and 2008, prepared in accordance with
generally accepted accounting principles.
Section 3.08. Conditions
precedent to NCC’s obligation to Close . All obligations
of NCC at the Closing are subject, at the option of NCC, to the
fulfillment of each of the following conditions at or prior to the
Closing, and HSI shall exert commercially reasonable efforts to
cause each such conditions to be so fulfilled.
(a) All representations and
warranties of HSI contained herein or in any document delivered
pursuant hereto shall be true and correct in all material respects
when made and as of the Closing.
(b) All covenants, agreements and
obligations required by the terms of this Agreement to be performed
by HSI at or before the Closing shall have been duly and properly
performed in all material respects to NCC’s reasonable
satisfaction.
(c) All documents required to be
delivered to NCC at or prior to the Closing shall have been so
delivered.
(d) The transactions contemplated by
this Agreement shall have been approved in writing by HSI’s
board of directors.
(e) NCC shall have received a
certificate of good standing for HSI.
(f) NCC shall have received audited
financial statements of HSI for the years ended December 31,
2007 and 2008 and pro forma combined consolidated
financial
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statements of HSI and NCC for the year ended
December 31, 2008 prepared in accordance with generally
accepted accounting principles.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARTIES
Section 4.01.
Representations and warranties of NCC . NCC (as used in the
following representations and warranties with respect to status or
condition, “NCC” includes every subsidiary of NCC, all
of which are identified in Schedule A) represents and warrants to
HSI, as follows:
(a) NCC and each subsidiary is a
duly organized and an existing entity in good standing under the
laws of its state of incorporation and has full corporate power to
execute, deliver and perform this Agreement.
(b) NCC and each subsidiary is
qualified to do business and in good standing in each state and
jurisdiction in which the nature of its activities and ownership of
property require it to be qualified as a foreign
corporation.
(c) All information set forth in
registrations and reports filed by NCC pursuant to
§§12(g) and 13 under the Exchange Act contain accurate
and complete material information as required by such registrations
and reports as of the date of such information reflected therein,
except as amended or modified in writing delivered by NCC to HSI;
and, all the information NCC has filed through the SEC’s
EDGAR website http://www.sec.gov relating to NCC was, to the best
knowledge of NCC, on the date reflected in each such item of
information accurate in all material respects and, to the best
knowledge of NCC, such information at the date hereof taken as a
whole provides full and fair disclosure of all material information
relating to NCC and does not, to the best knowledge of NCC, omit to
state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(d) This Agreement has been duly and
validly authorized, executed and delivered by NCC and constitutes
the legal, valid and binding obligation of NCC enforceable against
it, in accordance with its terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization and other laws of, relating
to or affecting stockholders and creditors rights generally and to
general equitable principles.
(e) To the best knowledge of NCC,
the execution of this Agreement and consummation of the
transactions contemplated hereby does not conflict with and will
not result in any adverse consequences to or material breach of any
agreement (financing or otherwise), mortgage, instrument, judgment,
decree, law or governmental regulation, license, permit or
authorization by NCC or in the loss, forfeiture or waiver of any
rights, license, authorization or franchise owned by NCC, from
which NCC benefits or which is desirable in the conduct of
NCC’s business.
(f) To the best knowledge of NCC,
except for such actions as may have been taken and the filing of
the “Super 8-K, including the audited HSI consolidated
financial statements for the years ended December 31, 2007 and
December 31, 2008 and the pro forma combined consolidated
financial statements of NCC and HSI for the year ended
December 31, 2008, no further action by or before any
governmental body or authority of the United States of America or
any state or subdivision thereof or any self-regulatory body to
which NCC is subject is required in connection with the execution
and delivery of this Agreement by NCC and the consummation of the
transactions contemplated hereby.
(g) NCC has not conducted any
business activity since inception.
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(h) Neither NCC nor any of its
employees, to NCC best knowledge, has since inception given or
agreed to give any gift or similar benefit valued at more than $20
annually to any customer, supplier, governmental employee or other
person who is or may be or have been in a position to help or
hinder NCC’s business, or a gift or similar benefit in any
amount or value which might subject NCC to damage or penalty in
civil, criminal or governmental litigation or
proceedings.
(i) NCC’s audited financial
statements delivered to HSI have been prepared in accordance with
generally accepted accounting principles consistently applied and
maintained throughout the periods indicated, fairly pre