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Exhibit (1)
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into this
____ day of November, 1999 by and among DONNEBROOKE CORPORATION, a Delaware
corporation, (hereinafter referred to as "Donnebrooke"), HALTER CAPITAL
CORPORATION, a Texas Corporation (hereinafter referred to as "Halter"),
INTERNATIONAL EDUCATION GROUP LLC, a New York limited liability company
(hereinafter referred to as the "Company"), and the members of the Company
(hereinafter referred to as the "Members").
RECITALS:
A. The Members own all of the issued and outstanding capital interest
of the Company.
B. The Company owns all of the capital stock of BARRINGTON UNIVERSITY,
INC., an Alabama corporation ("Barrington-Alabama"), BARRINGTON
UNIVERSITY, INC., a Florida corporation ("Barrington-Florida"), and
SPANISH UNIVERSITY OF AMERICAN FOUNDATION, INC., a Florida
corporation ("Spanish") (Barrington-Alabama, Barrington- Florida
and Spanish are collectively referred to as the "Subsidiaries").
X. Xxxxxx and/or its assignees will be the beneficial owner of
4,450,000 shares of Common Stock of Donnebrooke at the Closing
Date.
D. It is the intention of the parties hereto that: (i) the Members
shall acquire 4,200,000 shares of Donnebrooke from Halter (the
"Halter Shares") as set forth on Exhibit A in consideration for the
payment described below (the "Stock Purchase"); and (ii) the Stock
Purchase shall qualify as a transaction in securities exempt from
registration or qualification under the Securities Act of 1933 and
under the applicable securities laws of the state or jurisdiction
where the Members reside.
E. Donnebrooke will receive from the Company as a capital contribution
all of the issued and outstanding capital stock interests in the
Subsidiaries, making Donnebrooke the owner of all of the capital
stock of the Subsidiaries (the "Subsidiary Stock Interests").
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties hereto
agree as follows:
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SECTION 1. PURCHASE OF SHARES
1.1 STOCK PURCHASE. Halter, the Company and the Members hereby agree
that the Members shall on the Closing Date (as hereinafter defined) purchase
from Halter , the Halter Shares in consideration for $325,000 by wire transfer
or certified check. The number of Halter Shares which each of the Members will
be entitled to receive pursuant to this Purchase Agreement is set forth in
Exhibit A hereto.
1.2 DELIVERY OF SHARES AND SUBSIDIARY STOCK INTERESTS. On the Closing
Date, the Company will assign to Donnebrooke the Subsidiary Stock Interests so
as to make Donnebrooke the sole owner thereof. Simultaneously, Halter will
deliver certificates representing the Halter Shares to the Members.
1.3 INVESTMENT INTENT. The Halter Shares have not been registered under
the Securities Act of 1933, as Amended, and may not be resold unless the Halter
Shares are registered under the Act or an exemption from such registration is
available. The Members represent and warrant that they are acquiring the Halter
Shares for their own account, for investment, and not with a view to the sale or
distribution of the Halter Shares. In addition, the Halter shares shall be
subject to a lock-up for a period of two years from the date of issuance. Each
certificate representing the Halter Shares will have legends thereon
incorporating language as follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"). The shares have been acquired for investment and may
not be sold or transferred in the absence of an effective
Registration Statement for the shares under the Act unless in
the opinion of counsel satisfactory to the Company,
registration is not required under the Act."
"The shares represented by this certificate are subject to a
lock-up restriction which restricts the disposition of such
shares under certain terms and conditions."
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE MEMBERS
The Company and the Members (to the best of their knowledge except with
regard to their respective representations in Sections 2.2, 2.9, 2.14 and 2.15
hereof, as to which the representations are unqualified) hereby represent and
warrant as follows:
2.1 ORGANIZATION AND GOOD STANDING; OWNERSHIP OF SUBSIDIARY STOCK
INTERESTS. Each of the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the state of their respective
jurisdictions of incorporation, and each is entitled to own or lease its
properties and to carry on its business as and in the places where such
properties are
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now owned, leased or operated and such businesses are now conducted. Each of the
Subsidiaries is duly licensed or qualified and in good standing as a foreign
entity where the character of the properties owned by it or the nature of the
business transacted by it make such licenses or qualifications necessary, except
where the failure to do so would not have a material adverse effect on the
business of financial condition of such Subsidiary (a "Company Material Adverse
Effect"). There are no outstanding subscriptions, rights, options, warrants or
other agreements obligating either the Company or the Members to issue, sell or
transfer any equity interest or other securities of the Subsidiaries.
2.2 OWNERSHIP OF SUBSIDIARY STOCK INTERESTS. The Members are the owners
of record and beneficially of all of the capital interest of the Company, all of
which are free and clear of all rights, claims, liens and encumbrances, and have
not been sold, pledged, assigned or otherwise transferred except pursuant to
this Agreement. The Company is the owner of record and beneficially of all of
the capital interests of the Subsidiaries, all of which are free and clear of
all rights, claims, liens and encumbrances, and have not been sold, pledged,
assigned or otherwise transferred except pursuant to this Agreement.
2.3 FINANCIAL STATEMENTS, BOOKS AND RECORDS. There has been previously
delivered to Donnebrooke the unaudited balance sheets of the Subsidiaries as at
July 31, 1999 (the "Balance Sheets"), and the related unaudited statements of
operations for the periods then ended (the "Financial Statements"). The
Financial Statements are true and accurate and fairly represent the financial
position of the Subsidiaries as at such dates and the results of their
operations for the periods then ended, and have been prepared in accordance with
generally accepted accounting principles consistently applied, except for the
omission of footnotes or otherwise as indicated therein.
2.4 NO MATERIAL ADVERSE CHANGES. Since the date of the Balance Sheets
there have not been:
(i) any change which could reasonably be expected to have a
Company Material Adverse Effect.
(ii) any damage, destruction or loss which could reasonably be
expected to have a Company Material Adverse Effect.
(iii) any declaration, setting aside or payment of any
distribution or with respect to any redemption or repurchase of the Company's
capital interests;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by the Subsidiaries of any properties or
assets of the Subsidiaries; or
(v) adoption of any pension, profit sharing, retirement, stock
bonus, stock option or similar plan or arrangement.
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2.5 TAXES. The Company and the Subsidiaries have prepared and filed all
appropriate federal, state and local tax returns for all periods prior to and
through the date hereof for which any such returns have been required to be
filed by it and have paid all taxes shown to be due by said returns or on any
assessments received by them or has made adequate provision for the payment
thereof.
2.6 COMPLIANCE WITH LAWS. The Company and each of the Subsidiaries have
complied with all federal, state, county and local laws, ordinances,
regulations, inspections, orders, judgments, injunctions, awards or decrees
applicable to them or their businesses which, if not complied with could
reasonably be expected to have a Company Material Adverse Effect.
2.7 NO BREACH. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of any operational or organizational
documents of the Company or the Subsidiaries;
(ii) 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 or the Subsidiaries are a party or by or to which they or any
of their assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, the Company or the Subsidiaries, or upon the properties or business of the
Company or the Subsidiaries; or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein, which in the
case of (ii), (iii) and (iv) could reasonably be expected to have a Company
Material Adverse Effect.
2.8 ACTIONS AND PROCEEDINGS. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving the Company or the Subsidiaries. There
is no action, suit or claim or legal, administrative or arbitral proceeding or
(whether or not the defense thereof or liabilities in respect thereof are
covered by insurance) pending or threatened against or involving the Company the
Subsidiaries or any of their properties or assets. There is no fact, event or
circumstances known to the Company and the Members that may give rise to any
suit, action, claim, investigation or proceeding.
2.9 BROKERS OR FINDERS. No broker's or finder's fee will be payable by
the Company or the Subsidiaries in connection with the transactions contemplated
by this Agreement, nor will
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any such fee be incurred as a result of any actions by the Company, the
Subsidiaries or the Members.
2.10 REAL ESTATE. Except as set forth on Schedule 2.10, the
Subsidiaries neither owns real property nor are a party to any leasehold
agreement.
2.11 TANGIBLE ASSETS. The Subsidiaries have full title and interest in
all machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by the Subsidiaries, any related capitalized items
or other tangible property material to the businesses of the Subsidiaries (the
"Tangible Assets"). The Subsidiaries hold all rights, title and interest in all
the Tangible Assets owned by them on the Balance Sheets or acquired by them
after the date of the Balance Sheets, free and clear of all liens, pledges,
mortgages, security interests, conditional sales contracts or any other
encumbrances except as set forth on Schedule 2.11. All of the Tangible Assets
are in good operating condition and repair and are usable in the ordinary course
of business of the Subsidiaries.
2.12 LIABILITIES. The Subsidiaries do not have any direct or indirect
indebtedness, liability, claim, 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, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheets or thereafter incurred in the ordinary course of business. As of
the Closing Date, the Subsidiaries will not have any Liabilities, other than
Liabilities fully and adequately reflected on the Balance Sheets, except for
Liabilities incurred in the ordinary course of business.
2.13 OPERATIONS OF THE SUBSIDIARIES. Except as set forth on Schedule
2.13, from the date of the Balance Sheets and through the Closing Date hereof
the Subsidiaries have not and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any dividend or declared or made any
distribution of any kind to any member or made any direct or indirect
redemption, retirement, purchase or other acquisition of any Subsidiary Stock
Interest or other capital interest;
(iii) made any loan or advance to any shareholder, manager,
officer, director, employee, consultant, agent or other representative or made
any other loan or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or
assumed any indebtedness or liability (whether or not currently due and
payable);
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(v) disposed of any assets of the Subsidiaries except in the
ordinary course of business; or
(vi) materially increased the annual rate of compensation of
any executive employee of the Subsidiaries;
(vii) increased, terminated, amended or otherwise modified any
plan for the benefit of employees of the Subsidiaries;
(viii) issued any equity securities or interest or rights to
acquire such equity securities or interest; or
(ix) except in the ordinary course of business, entered into
or modified any contract, agreement or transaction.
2.14 CAPITALIZATION. Neither the Subsidiaries nor the Members have
granted, issued or agreed to grant, issue or make available any capital
interests, warrants, options, subscription rights or any other commitments of
any character relating to the issued or unissued capital interests of the
Subsidiaries.
2.15 FULL DISCLOSURE. No representation or warranty by the Company, the
Subsidiaries or the Members 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 to Donnebrooke 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 businesses of the Subsidiaries.
2.16 REPRESENTATIONS AND WARRANTIES ON CLOSING DATE. The
representations and warranties contained in this Section 2 shall be true and
complete on the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF DONNEBROOKE AND HALTER
Donnebrooke and Halter (to the best of Halter's knowledge except with
respect to the Halter's representations in Sections 3.2, 3.9, 3.12, 3.15, 3.16
and 3.18, as to which the representations are unqualified) hereby represent and
warrant to the Company and the Members as follows:
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3.1 ORGANIZATION AND GOOD STANDING. Donnebrooke is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is entitled to own or lease its properties and to carry on its
business as and in the places where such properties are now owned, leased, or
operated and such business is now conducted. The authorized capital stock of
Donnebrooke consists of 50,000,000 shares of Common Stock, of which
approximately 6,346,733 shares are presently issued and outstanding giving
effect to the Company's recent three- for-one forward stock split and amendments
to its Articles of Incorporation. Donnebrooke is duly licensed or qualified and
in good standing as a foreign corporation where the character of the properties
owned by Donnebrooke or the nature of the business transacted by it make such
license or qualification necessary, except where the failure to do so would not
have a Material Adverse Effect on the business of financial condition of the
Company. Donnebrooke does not have any subsidiaries.
3.2 THE HALTER SHARES. The Halter Shares to be transferred to the
Members have been duly authorized by all necessary corporate and shareholder
actions and are validly issued, fully paid and non-assessable.
3.3 FINANCIAL STATEMENTS; BOOKS AND RECORDS. There has been previously
delivered to the Company, the audited balance sheet of Donnebrooke as at
December 8, 1998 and the unaudited balance sheet as at September 30, 1999 (the
"Balance Sheet") and the related statements of operations for the periods then
ended (the "Financial Statements"). The Financial Statements are true and
accurate and fairly represent the financial position of the Company as at such
dates and the results of its operations for the periods then ended, and have
been prepared in accordance with generally accepted accounting principles
consistently applied.
3.4 NO MATERIAL ADVERSE CHANGES. Since the date of the Donnebrooke
Balance Sheet and except as otherwise substantially disclosed in Donnebrooke 's
reports or filings made under the Securities Exchange Act of 1934, there has not
been:
(i) any material adverse change in the assets, operations,
condition (financial or otherwise) or prospective business of Donnebrooke ;
(ii) any damage, destruction or loss materially affecting the
assets, prospective business, operations or condition (financial or otherwise)
of Donnebrooke , whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any
dividend or distribution with respect to any redemption or repurchase of
Donnebrooke 's capital stock, except for Donnebrooke 's 3:1 forward stock split
effective in August 1999;
(iv) any sale of an asset (other than in the ordinary course
of business) or any mortgage or pledge by Donnebrooke of any properties or
assets; or
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(v) adoption of any pension, profit sharing, retirement, stock
bonus, stock option or similar plan or arrangement.
3.5 TAXES. Donnebrooke has prepared and filed all appropriate federal,
state and local tax returns for all periods prior to and through the date hereof
for which any such returns have been required to be filed by it and has paid all
taxes shown to be due by said returns or on any assessments received by it or
has made adequate provision for the payment thereof.
3.6 COMPLIANCE WITH LAWS. Donnebrooke has complied with all federal,
state, county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to their businesses,
including Federal and State securities laws, which, if not complied with, would
materially and adversely affect the business of Donnebrooke or the trading
market for the shares of Donnebrooke's Common Stock.
3.7 NO BREACH. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation
or By-Laws of Donnebrooke;
(ii) 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 Donnebrooke is a party or by or to which it or any of its assets or
properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against, or binding
upon, Donnebrooke or Halter or upon the properties or business of Donnebrooke;
or
(iv) violate any statute, law or regulation of any
jurisdiction applicable to the transactions contemplated herein which could have
a material adverse effect on the business or operations of Donnebrooke.
3.8 ACTIONS AND PROCEEDINGS. There is no outstanding order, judgment,
injunction, award or decree of any court, governmental or regulatory body or
arbitration tribunal against or involving Donnebrooke . There is no action, suit
or claim or legal, administrative or arbitral proceeding or (whether or not the
defense thereof or liabilities in respect thereof are covered by insurance)
pending or threatened against or involving Donnebrooke or any of its properties
or assets. There is no fact, event or circumstances that may give rise to any
suit, action, claim, investigation or proceeding.
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3.9 BROKERS OR FINDERS. No broker's or finder's fee will be payable by
Donnebrooke or Halter in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by
Donnebrooke or Halter.
3.10 LIABILITIES. Donnebrooke does not have any direct or indirect
indebtedness, liability, claim, 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, any other governmental
charge or lawsuit (all of the foregoing collectively defined to as
"Liabilities"), which were not fully, fairly and adequately reflected on the
Balance Sheet. As of the Closing Date, Donnebrooke will not have any
Liabilities, other than Liabilities fully and adequately reflected on the
Balance Sheet, except for Liabilities incurred in the ordinary course of
business.
3.11 OPERATIONS OF DONNEBROOKE. Except as set forth on Schedule 3.11
or in Donnebrooke 's reports or filings made under the Securities Exchange Act
of 1934, since the date of the Donnebrooke Balance Sheet and through the Closing
Date hereof, Donnebrooke has not and will not have:
(i) incurred any indebtedness for borrowed money;
(ii) 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
capital stock;
(iii) made any loan or advance to any shareholder, officer,
director, employee, consultant, agent or other representative or made any other
loan or advance otherwise than in the ordinary course of business;
(iv) except in the ordinary course of business, incurred or
assumed any indebtedness or liability (whether or not currently due and
payable);
(v) disposed of any assets of Donnebrooke except in the
ordinary course of business; or
(vi) materially increased the annual level of compensation of
any executive employee of Donnebrooke;
(vii) increased, terminated amended or otherwise modified any
plan for the benefit of employees of Donnebrooke;
(viii) issued any equity securities or rights to acquire such
equity securities; or
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(ix) except in the ordinary course of business, entered into
or modified any contract, agreement or transaction.
3.12 AUTHORITY TO EXECUTE AND PERFORM AGREEMENTS. Donnebrooke and
Halter each has the full legal right and power and all authority and approval
required to enter into, execute and deliver this Agreement and to perform fully
their obligations hereunder. This Agreement has been duly executed and delivered
and is the valid and binding obligation of Donnebrooke and Halter enforceable in
accordance with its terms, except as may be limited by bankruptcy, moratorium,
insolvency or other similar laws generally affecting the enforcement of
creditors' rights. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and the performance by
Donnebrooke and Halter of this Agreement, in accordance with its respective
terms and conditions will not:
(i) require the approval or consent of any governmental or
regulatory body, the stockholders of Donnebrooke or Halter, or the approval or
consent of any other person;
(ii) conflict with or result in any breach or violation of any
of the terms and conditions of, or constitute (or with any notice or lapse of
time or both would constitute) a default under, any order, judgment or decree
applicable to Donnebrooke or Halter, or any instrument, contract or other
agreement to which Donnebrooke or Halter is a party or by or to which
Donnebrooke or Halter is bound or subject; or
(iii) result in the creation of any lien or other encumbrance
on the assets or properties of Donnebrooke or Halter.
3.13 DELIVERY OF PERIODIC REPORTS; COMPLIANCE WITH 1934 ACT.
Donnebrooke has provided the Company and Members with all of its Periodic
Reports filed with the Securities and Exchange Commission since December 31,
1996. Donnebrooke has filed all required Periodic Reports and is in compliance
with its reporting obligations under the Securities Exchange Act of 1934. All
reports filed pursuant to such Act are complete and correct in all material
respects. All material contracts relative to Donnebrooke are included in the
Periodic Reports.
3.14 TANGIBLE ASSETS. Donnebrooke has full title and interest in all
machinery, equipment, furniture, leasehold improvements, fixtures, vehicles,
structures, owned or leased by Donnebrooke any related capitalized items or
other tangible property material to the business of the Company (the "Tangible
Assets"). Donnebrooke holds all rights, title and interest in all the Tangible
Assets owned by it on the Balance Sheet or acquired by it after the date of the
Balance Sheet, free and clear of all liens, pledges, mortgages, security
interests, conditional sales contracts or any other encumbrances except as set
forth on Schedule 2.14. All of the Tangible Assets are in good operating
condition and repair and are usable in the ordinary course of business of the
Company.
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3.15 CAPITALIZATION. The authorized capitalization is as set forth in
Donnebrooke's Form 10-QSB for the quarterly period ended September 30, 1999.
Neither Donnebrooke nor Halter has granted, issued or agreed to grant, issue or
make available any warrants, options, subscription rights or any other
commitments of any character relating to the issued or unissued shares of
capital stock of the Company.
3.16 OWNERSHIP OF HALTER SHARES. Halter is the owner of record and
beneficially of all of the Halter Shares. All of the Halter Shares are free and
clear of all rights, claims, liens and encumbrances, and have not been sold,
pledged, assigned or otherwise transferred except pursuant to this Agreement.
3.17 OTC BULLETIN BOARD. Donnebrooke's Common Stock is included for
trading on the OTC Bulletin Board under the trading symbol "DONB."
3.18 FULL DISCLOSURE. No representation or warranty by Donnebrooke or
Halter in this Agreement or in any document or schedule to be delivered by it
pursuant hereto, and no written statement, certificate or instrument furnished
or to be furnished to the Company or the Members pursuant hereto or in
connection with the 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 Donnebrooke.
3.19 REPRESENTATIONS AND WARRANTIES ON CLOSING DATE. The
representations and warranties contained in this Section 3 shall be true and
complete on the Closing Date with the same force and effect as through such
representations and warranties had been made on and as of the Closing Date.
SECTION 4. COVENANTS OF COMPANY, SUBSIDIARIES AND MEMBERS
The Company, the Subsidiaries and the Members covenant to Donnebrooke
and Halter as follows:
4.1 CONDUCT OF BUSINESS. From the date hereof through the Closing Date,
the Company shall cause the Subsidiaries to conduct their businesses in the
ordinary course and, without the prior written consent of Donnebrooke, shall
ensure that the Subsidiaries do not undertake any of the actions specified in
Section 2.13 hereof.
4.2 PRESERVATION OF BUSINESS. From the date hereof through the Closing
Date, the Company shall cause the Subsidiaries to use their best efforts to
preserve their business organizations intact, keep available the services of
their present employees, consultants and agents, maintain their present
suppliers and customers and preserve their goodwill.
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4.3 LITIGATION. The Company shall promptly notify Donnebrooke of any
lawsuits, claims, proceedings or investigations which after the date hereof are
threatened or commenced against the Company, the Subsidiaries or against any
officer, director, manager, employee, consultant, agent, member or other
representative with respect to the affairs of the Company or the Subsidiaries.
4.4 CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. From the
date hereof through the Closing Date, the Members and the Company shall cause
the Subsidiaries to conduct their business in such a manner so that the
representations and warranties contained in Section 2 shall continue to be true
and correct on and as of the Closing Date and as if made on and as of the
Closing Date, and shall:
(i) promptly give notice to Donnebrooke or any event,
condition or circumstance occurring from the date hereof through the Closing
Date which would render any of the representations or warranties materially
untrue, incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
SECTION 5. COVENANTS OF DONNEBROOKE AND HALTER
Donnebrooke and Halter covenant to the Company and the Members as
follows:
5.1 CONDUCT OF BUSINESS. From the date hereof through the Closing Date,
Donnebrooke shall conduct its business in the ordinary course and, without the
prior written consent of the Company, shall ensure that Donnebrooke does not
undertake any of the actions specified in Section 3.11 hereof.
5.2 PRESERVATION OF BUSINESS. From the date hereof through the Closing
Date, Donnebrooke shall preserve its business organization intact and use its
best efforts to preserve Donnebrooke's goodwill.
5.3 LITIGATION. Donnebrooke and Halter shall promptly notify the
Company in writing of any lawsuits, claims, proceedings or investigations which
after the date hereof are threatened or commenced against Donnebrooke or Halter
or against any officer, director, employee, consultant, agent, or stockholder
with respect to the affairs of Donnebrooke.
5.4 CONTINUED EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. From the
date hereof through the Closing Date, Donnebrooke shall conduct its business in
such a manner so that the representations and warranties contained in Section 3
shall continue to be true and correct on and as of the Closing Date and as if
made on and as of the Closing Date, and shall:
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(i) promptly give notice to the Company of any event,
condition or circumstance occurring from the date hereof through the Closing
Date which would render any of the representations or warranties materially
untrue, incomplete, insufficient or constitute a violation or breach of this
Agreement; and
(ii) supplement the information contained herein in order that
the information contained herein is kept current, complete and accurate in all
material respects.
SECTION 6. COVENANTS
6.1 EXAMINATIONS AND INVESTIGATIONS. Prior to the Closing Date, the
parties acknowledge that they have been entitled, through their employees and
representatives, to make such investigation of the assets, properties, business
and operations, books, records and financial condition of the other as they each
may reasonably require. No investigation by a party hereto shall, however,
diminish or waive in any way any of the representations, warranties, covenants
or agreements of the other party under this Agreement.
6.2 EXPENSES. Each party hereto agrees to pay its own costs and
expenses incurred in negotiating this Agreement and consummating the
transactions described herein.
6.3 FURTHER ASSURANCES. 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.
6.4 CONFIDENTIALITY. In the event the transactions contemplated by this
Agreement are not consummated, each of the parties hereto agree to keep
confidential any information disclosed to each other in connection therewith for
a period of one (1) year from the date hereof; provided, however, such
obligation shall not apply to information which:
(i) at the time of disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge
(except due to the action of the receiving party); or
(iii) the receiving party had within its possession at the
time of disclosure.
6.5 LIMITATION OF SALES BY HALTER. Immediately following the Closing,
Halter will own 100,000 shares of Common Stock of Donnebrooke which are
unrestricted within the meaning of the Act. In addition to any restrictions that
may apply to the disposition of these shares pursuant to Rule 144 and any other
applicable provisions of the Act, Halter agrees that with respect to such
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shares, it will not sell any of such shares during the initial 30-day period
following the Closing Date and, thereafter, it will not sell more than 20,000 of
such shares on a cumulative basis in each 30-day period beginning 30 days
following the Closing Date. Immediately following the Closing, Halter will also
own 150,000 shares of Common Stock of Donnebrooke which are restricted
securities within the meaning of the Act. As to these shares, Halter agrees to
the lock-up of these shares for a period of 18 months from the Closing Date,
which may be extended to 24 months at the request of any underwriters for the
equity securities of Donnebrooke, provided Donnebrooke has received a letter of
intent and commitment for such a public offering within such 18-month period.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATION OF DONNEBROOKE AND HALTER TO
CLOSE
The obligation of Donnebrooke and Halter to enter into and complete the
Closing is subject, at the option of Donnebrooke and Halter, to the fulfillment
on or prior to the Closing Date of the following conditions, any one or more of
which may be waived by Donnebrooke and Halter in writing.
7.1 REPRESENTATIONS AND COVENANTS. The representations and warranties
of the Company, the Subsidiaries and the Members contained in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date. The Company,
the Subsidiaries and the Members shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Company, the Subsidiaries and the
Members on or prior to the Closing Date. The Company and the Members shall have
delivered to Donnebrooke and Halter, if requested, a certificate, dated the
Closing Date, to the foregoing effect.
7.2 GOVERNMENTAL PERMITS AND APPROVALS. Any and all permits and
approvals from any governmental or regulatory body required for the lawful
consummation of the Closing shall have been obtained. The management board or
the Members of the Company shall have approved the transactions contemplated by
this Agreement and the Company shall have delivered to Donnebrooke , if
requested by Donnebrooke or Halter resolutions, certified by the Secretary of
the Company authorizing the transactions contemplated by this Agreement.
7.3 THIRD PARTY CONSENTS. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with the Company
or the Subsidiaries which may be required in connection with the performance by
the Company or the Subsidiaries of their obligations under such contracts or
other agreements after the Closing shall have been obtained.
7.4 SATISFACTORY BUSINESS REVIEW. Donnebrooke and Halter shall each
have satisfied itself, after receipt and consideration of the Schedules and
after Donnebrooke and its representatives have completed the review of the
business of the Company and the Subsidiaries
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contemplated by this Agreement, that none of the information revealed thereby or
in the Financial Statements has resulted in or could reasonably be expected to
have a Company Material Adverse Effect.
7.5 LITIGATION. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or could
reasonably be expected to have a Company Material Adverse Effect.
7.6 CERTIFICATE OF GOOD STANDING. Donnebrooke shall have received, if
requested, certificates of good standing dated at or about the Closing Date to
the effect that the Company and the Subsidiaries are in good standing under the
laws of their jurisdictions of organization.
7.7 SUBSIDIARY STOCK INTERESTS. At the Closing, the Company shall have
transferred the Subsidiary Stock Interests so as to make Donnebrooke the sole
owner thereof.
7.8 OTHER DOCUMENTS. The Company and the Members shall have delivered
such other documents, instruments and certificates, if any, as are required to
be delivered pursuant to the provisions of this Agreement or which may be
reasonably requested in furtherance of the provisions of this Agreement.
SECTION 8. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AND MEMBERS TO
CLOSE
The obligation of the Company and the Members to enter into and
complete the Closing is subject, at the option of the Company and the Members,
to the fulfillment on or prior to the Closing Date of the following conditions,
any one or more of which may be waived in writing by the Company.
8.1 REPRESENTATIONS AND COVENANTS. The representations and warranties
of Donnebrooke and Halter contained in this Agreement shall be true in all
material respects on the Closing Date with the same force and effect as though
made on and as of the Closing Date. Donnebrooke and Halter shall have performed
and complied with all covenants and agreements required by the Agreement to be
performed or complied with by Donnebrooke and Halter on or prior to the Closing
Date. Donnebrooke and Halter shall have delivered to the Company and the
Members, if requested, a certificate, dated the Closing Date and signed by an
executive officer of Donnebrooke and Halter, to the foregoing effect.
8.2 GOVERNMENTAL PERMITS AND APPROVALS; CORPORATE RESOLUTIONS. Any and
all permits and approvals from any governmental or regulatory body required for
the lawful consummation of the Closing shall have been obtained. The Board of
Directors of Donnebrooke and Halter shall have approved the transactions
contemplated by this Agreement, and Donnebrooke and Halter
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shall have delivered to the Company and the Members, if requested, resolutions
by their Board of Directors certified by the Secretary of Donnebrooke and Halter
authorizing the transactions contemplated by this Agreement.
8.3 THIRD PARTY CONSENTS. All consents, permits and approvals from
parties to any contracts, loan agreements or other agreements with Donnebrooke
and Halter which may be required in connection with the performance by
Donnebrooke and Halter of their obligations under such contracts or other
agreements after the Closing shall have been obtained.
8.4 SATISFACTORY BUSINESS REVIEW. The Company and the Members shall
have satisfied themselves, after review of the information provided hereby or in
connection herewith, or following any discussions with management or
representatives of Donnebrooke that none of the information revealed thereby has
resulted in or in the reasonable opinion of the Company may result in a material
adverse change in the assets, properties, business, operations or condition
(financial or otherwise) of Donnebrooke.
8.5 LITIGATION. No action, suit or proceeding shall have been
instituted before any court or governmental or regulatory body or instituted or
threatened by any governmental or regulatory body to restrain, modify or prevent
the carrying out of the transactions contemplated hereby or to seek damages or a
discovery order in connection with such transactions, or which has or may in the
reasonable opinion of the Company, have a materially adverse effect on the
assets, properties, business, operations or condition (financial or otherwise)
of Donnebrooke.
8.6 STOCK CERTIFICATES. At the Closing, the Members shall have
received certificates representing the Halter Shares so as to make the Members
the sole owners of the Halter Shares.
8.7 OTHER DOCUMENTS. Donnebrooke and Halter shall have delivered such
other instruments, documents and certificates, if any, including good standing
certificates, as are required to be delivered pursuant to the provisions of this
Agreement or which may be reasonably requested in furtherance of the provisions
of this Agreement, including the resignations of the officers and directors of
Donnebrooke.
SECTION 9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF DONNEBROOKE AND HALTER
Notwithstanding any right of the Company and the Members fully to
investigate the affairs of Donnebrooke and Halter, the former shall have the
right to rely fully upon the representations, warranties, covenants and
agreements of Donnebrooke and Halter contained in this Agreement or in any
document delivered by Donnebrooke or Halter or any of its 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 Date hereunder for twelve (12)
months following the Closing.
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SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE
SUBSIDIARIES AND THE MEMBERS
Notwithstanding any right of Donnebrooke and Halter fully to
investigate the affairs of the Company and the Subsidiaries, Donnebrooke and
Halter have the right to rely fully upon the representations, warranties,
covenants and agreements of the Company, the Subsidiaries and the Members
contained in this Agreement or in any document delivered to Donnebrooke or
Halter by the latter 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 Date hereunder for twelve (12) months following the
Closing.
SECTION 11. INDEMNIFICATION
11.1 OBLIGATION OF DONNEBROOKE AND HALTER TO INDEMNIFY. Subject to the
limitations on the survival of representations and warranties contained in
Section 9, Donnebrooke and Halter, jointly and severally hereby agree to
indemnify, defend and hold harmless the Company and the Members from and against
any losses, liabilities, damages, deficiencies, costs or expenses (including
interest, penalties and reasonable attorneys' fees and disbursements) (a "Loss")
based upon, arising out of or otherwise due to any inaccuracy in or any breach
of any representation, warranty, covenant or agreement of Donnebrooke and Halter
contained in this Agreement or in any document or other writing delivered
pursuant to this Agreement.
11.2 OBLIGATION OF THE COMPANY AND THE MEMBERS TO INDEMNIFY. Subject to
the limitations on the survival of representations and warranties contained in
Section 10, the Company and the Members severally and not jointly agree to
indemnify, defend and hold harmless Donnebrooke and Halter from and against any
Loss, based upon, arising out of or otherwise due to any inaccuracy in or any
breach of any representation, warranty, covenant or agreement made by any of
them and contained in this Agreement or in any document or other writing
delivered pursuant to this Agreement.
SECTION 12. THE CLOSING
The Closing shall take place not later than 15 days after the date
hereof. At the Closing, the parties shall provide each other with such documents
as may be necessary or appropriate in order to consummate the transactions
contemplated hereby including evidence of due authorization of the Agreement and
the transactions contemplated hereby.
SECTION 13. MISCELLANEOUS
13.1 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 event
constitute waiver as to any future breach whether similar or dissimilar in
nature or as to the exercise of any further right under this Agreement.
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13.2 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.
13.3 ASSIGNMENT. This Agreement is not assignable except by operation
of law.
13.4 NOTICES. Until otherwise specified in writing, the mailing
addresses of both parties of this Agreement shall be as follows:
The Company: INTERNATIONAL EDUCATION GROUP LLC
000 Xxxxxx xx Xxxxxxx'x, Xxxxx 000
Xxx Xxxx, XX 00000
Members: c/o Xxxxxx X. Xxxxxxxxx
000 Xxxxxx xx Xxxxxxx'x, Xxxxx 000
Xxx Xxxx, XX 00000
Donnebrooke: DONNEBROOKE CORPORATION
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Halter: HALTER CAPITAL CORPORATION
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
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.
13.5 GOVERNING LAW. This Agreement shall be construed, and the legal
relations be the parties determined, in accordance with the laws of the State of
Florida, thereby precluding any choice of law rules which may direct the
applicable of the laws of any other jurisdiction.
13.6 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 thereof by the other party.
13.7 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules 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 purchase and issuance of the
Subsidiary Stock Interests and the Halter Shares and related transactions, and
supersede all prior agreements, written or oral, with respect thereto.
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13.8 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.
13.9 SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
13.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by facsimile signatures, 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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
DONNEBROOKE CORPORATION
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
HALTER CAPITAL CORPORATION
By:
----------------------------------
Name:
--------------------------------
Its:
---------------------------------
INTERNATIONAL EDUCATION GROUP LLC
By:
---------------------------------
Name:
-------------------------------
Its: President
MEMBERS:
-------------------------------------
XXXXXX X. XXXXXXXXX
-------------------------------------
XXXXXX X. XXXXXXXXX
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EXHIBIT A
EXCHANGE WITH INTERNATIONAL EDUCATION GROUP LLC
Halter
Name of Shares to be
Members Received
------- ------------
Xxxxxx X. Xxxxxxxxx 2,100,000
Xxxxxx X. Xxxxxxxxx 2,100,000
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SCHEDULE 3.11
None
