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SHARE EXCHANGE AGREEMENT

Stock Conversion Exchange Agreement

SHARE EXCHANGE AGREEMENT | Document Parties: HOME SCHOOL HOLDINGS, INC. | Home School, Inc | Narayan Capital Corp You are currently viewing:
This Stock Conversion Exchange Agreement involves

HOME SCHOOL HOLDINGS, INC. | Home School, Inc | Narayan Capital Corp

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Title: SHARE EXCHANGE AGREEMENT
Date: 7/31/2009

SHARE EXCHANGE AGREEMENT, Parties: home school holdings  inc. , home school  inc , narayan capital corp
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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:

 

 

(a)

Certificate of good standing of NCC;

 

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(b)

Officer’s and Secretary’s and Certificates of NCC in the form set forth in Exhibits “A” and “B”, respectively;

 

 

(c)

An action by written consent of NCC’s board of directors approving the Share Exchange;

 

 

(d)

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

 

 

(e)

Articles of Share Exchange.

Section 3.03. HSI’s deliveries at the Closing . At the Closing, HSI will deliver to the stockholders of NCC:

 

 

(a)

Certificate of good standing of HSI;

 

 

(b)

Officers’ and Secretary’s Certificates of HSI in the form set forth in Exhibits “A” and “B”, respectively;

 

 

(c)

An action by written consent of HSI’s board of directors approving the Share Exchange; and

 

 

(d)

Articles of Share Exchange.

 

 

(e)

The Cash Payment by certified check or wire transfer in immediately available funds.

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


 
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