Attached files
| file | filename |
|---|---|
| 8-K - FLORHAM CONSULTING CORP | v204773_8k.htm |
| EX-10.5 - FLORHAM CONSULTING CORP | v204773_ex10-5.htm |
| EX-99.1 - FLORHAM CONSULTING CORP | v204773_ex99-1.htm |
| EX-10.8 - FLORHAM CONSULTING CORP | v204773_ex10-8.htm |
| EX-10.1 - FLORHAM CONSULTING CORP | v204773_ex10-1.htm |
| EX-10.7 - FLORHAM CONSULTING CORP | v204773_ex10-7.htm |
| EX-10.4 - FLORHAM CONSULTING CORP | v204773_ex10-4.htm |
| EX-10.2 - FLORHAM CONSULTING CORP | v204773_ex10-2.htm |
| EX-10.9 - FLORHAM CONSULTING CORP | v204773_ex10-9.htm |
| EX-10.3 - FLORHAM CONSULTING CORP | v204773_ex10-3.htm |
| EX-10.10 - FLORHAM CONSULTING CORP | v204773_ex10-10.htm |
NEITHER
THIS WARRANT NOR THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN REGISTERED
OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES REPRESENTED
BY THIS WARRANT MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY SUCH
APPLICABLE STATE SECURITIES LAWS.
THIS
DETACHABLE AND TRANSFERABLE WARRANT (this “Warrant”)
IS BEING ISSUED PURSUANT TO THE TERMS OF A LOAN AGREEMENT DATED AS OF THE DATE
HEREOF (the “Loan
Agreement”), BY AND AMONG OAK TREE EDUCATIONAL PARTNERS, INC. AND ITS
SUBSIDIARIES, AS BORROWERS, AND DEERPATH FUNDING, LP, AS LENDER AND AS AGENT FOR
THE LENDERS
WARRANT
TO PURCHASE
SHARES
OF COMMON STOCK OF
OAK
TREE EDUCATIONAL PARTNERS, INC.
|
No. 2010-03
|
November
30, 2010
|
Expiring
at 5:00 p.m. New York, New York time on November 30, 2020 (the “Expiration
Date”)
THIS
CERTIFIES that, for value received, Deerpath
Funding, LP, a Delaware limited partnership (together
with its successors and assigns, the “Holder”), is entitled to subscribe
for and purchase from Oak
Tree Educational Partners, Inc., a Delaware corporation formerly known as
Florham Consulting Corp. (the “Company”),
Six Hundred Twenty Eight Thousand Eight Hundred Fifty Seven (628,857) fully paid
and non-assessable shares of the Company’s Common Stock, which constitutes 2.50%
of the Company’s aggregate outstanding Equity Securities at the Original Issue
Date, determined on a Fully Diluted Basis in accordance with the Loan Agreement
including the Equity Securities underlying this Warrant and the Deerpath Shares
(as defined below), at a purchase price of $0.50 per share of Common Stock, as
such price may be adjusted from time to time as shall result from the
adjustments specified in this Warrant (the “Exercise
Price”), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth.
ARTICLE
I
DEFINITIONS
1.1 Definitions. Capitalized
terms used but not defined herein shall have the meanings set forth in the Loan
Agreement. As used herein, the following terms shall have the
meanings set forth below.
Applicable
Percentage means, with respect to any holder of any Equity Securities of
the Company, the percentage obtained by dividing (a) the number of such Equity
Securities held by such holder on a Fully Diluted Basis, by (b) the total number
of Equity Securities of the Company on a Fully Diluted Basis.
Board of
Directors means the board of directors of the Company.
Cashless
Exercise means an exchange of this Warrant by Holder for that number of
Equity Securities determined by multiplying the number of Warrant Shares
purchased hereunder by a fraction, the numerator of which shall be the
difference between (x) the Per Share Market Value of the Common Stock on
the date of exercise and (y) the Exercise Price per share for such Warrant
Shares, and the denominator of which shall be the Per Share Market Value of the
Common Stock on the date of exercise.
Certificate of
Incorporation means the Certificate of Incorporation of the Company as in
effect on the Original Issue Date, and as hereafter from time to time amended,
modified, supplemented or restated in accordance with the terms hereof and
thereof and pursuant to applicable law.
Change of Control
has the meaning set forth in the Loan Agreement.
Commission
means the Securities and Exchange Commission or any other federal agency at the
time administering the Securities Act and/or the Exchange Act.
Common
Stock means the Common Stock, $0.0001 par value per share, of the Company
and any other Equity Securities into which such stock may hereafter be
changed.
Company is
defined in the Preamble
hereto, and shall also include any successor thereto with respect to the
obligations hereunder, by merger, consolidation or otherwise.
Convertible
Securities means evidences of indebtedness, units, interests or other
securities which are convertible into or exercisable or exchangeable for, with
or without payment of additional consideration in cash or property into, Equity
Securities, either immediately or upon a specified date or the happening of a
specified event.
Deerpath Shares
has the meaning set forth in the Investor Rights Agreement.
Dilution
Fee has the meaning set forth in Section 4.3(a).
Equity
Securities means any and all of the Company’s shares, interests,
participations or other equivalents of or interests in (however designated)
corporate or capital stock, including, without limitation, shares of Common
Stock, preferred stock or preference stock, and any other equity interests or
equivalents of the Company.
Event of
Noncompliance has the meaning set forth in Section
4.6(a).
2
Excess
Compensation means any compensation or other consideration promised or
paid to any officer, director, employee or holder of Equity Securities of the
Company in connection with a Sale Transaction, including but not limited to any
premium, signing bonus, sales commission, personal goodwill payment,
noncompetition payment, promissory note, distribution, dividend, guaranteed
payment or other similar payment paid or delivered to such officer, director,
employee or holder in connection with the Sale Transaction or at any time within
the year following the closing of such Sale Transaction (other than any
reasonable and customary salary, bonus, fee or other similar compensation
payment for employment, consulting or independent contractor services actually
performed by such Person following the closing of such Sale Transaction pursuant
to a written agreement) that exceeds (in the aggregate with all other
compensation and consideration promised or paid to such Person in connection
with the Sale Transaction and within the year following the closing of such Sale
Transaction) such Person’s Applicable Percentage of the aggregate amount of
compensation and other consideration that is paid ratably to all holders of the
Company’s Equity Securities in connection with such Sale
Transaction.
Exchange
Act means
the Securities Exchange Act of 1934, as amended, and any similar or successor
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time. Reference to a particular
section of the Exchange Act shall include a reference to the comparable section,
if any, of any such similar or successor federal statute.
Exercise
Date has the meaning set forth in Section 2.1(c).
Exercise
Price has the meaning set forth in the Preamble
hereto.
Exercise
Notice has the meaning set forth in Section
2.1(b).
Expiration
Date has the meaning set forth in the Preamble
hereto.
Fully Diluted
Basis means, with respect to the Equity Securities at any time of
determination, the number of Equity Securities that would be issued and
outstanding at such time, assuming that all outstanding options, rights or
warrants to subscribe for Equity Securities and all derivative and Convertible
Securities and all options or rights to acquire Convertible Securities have been
exercised, converted or exchanged, including this Warrant.
Holder has
the meaning set forth in the Preamble
hereto.
Investor Rights
Agreement means that certain Investor Rights Agreement dated the Original
Issue Date, by and among Holder, the Company and the other holders of Equity
Securities of the Company named therein, as amended, modified and supplemented
from time to time.
Lender has
the meaning set forth in the Loan Agreement.
Liquidity
Event has the meaning set forth in the Loan Agreement.
Loan
Agreement has the meaning set forth in the Legend hereto.
Loan
Documents has the meaning set forth in the Loan Agreement.
3
Original Issue
Date means the date of the original issuance of this
Warrant.
Per Share Market
Value means the closing price of a share of Common Stock on
the principal securities exchange (including the Over-the-Counter Bulletin
Board) on which such shares are traded on the day immediately preceding the date
as of which Per Share Market Value is being determined, or on the next preceding
date on which such shares are traded if no shares were traded on such
immediately preceding day, or if the shares are not traded on a securities
exchange, Per Share Market Value shall be deemed to be the average of the high
bid and low asked prices of the shares in the market on which such shares trade
on the day immediately preceding the date as of which Per Share Market Value is
being determined or on the next preceding date on which such high bid and low
asked prices were recorded.
Person
shall be construed as broadly as possible and shall include an individual or
natural person, a partnership (including a limited liability partnership), a
corporation, an association, a joint stock company, a limited liability company,
a trust, a joint venture, an unincorporated organization and a Governmental
Authority (as defined in the Loan Agreement).
Sale Transaction
means the occurrence of any of the following: (a) the sale, transfer,
conveyance or other disposition to any Person, in one or a series of
transactions, of all or substantially all of the assets of the Company or any of
its Subsidiaries, (b) the adoption of a plan relating to the liquidation,
dissolution or winding up of the Company or any of its Subsidiaries, (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) which results in a Person or group of Persons (other than (i) the
Controlling Shareholders, with respect to the Company, or (ii) the Company or
any other Subsidiary, with respect to any Subsidiary of the Company) becoming
the Beneficial Owner of more than fifty percent (50%) of the Voting Interests of
the Company or any of its Subsidiaries, measured by voting power rather than
number of shares; or (d) the consolidation of the Company or any Subsidiary
with, or merger with or into, any Person (other than the Company or any
Subsidiary), or the consolidation of any Person (other than the Company or any
Subsidiary) with, or merger with or into, the Company or any Subsidiary, in any
such event pursuant to a transaction in which any of the outstanding Voting
Interests of the Company or such Subsidiary, as applicable, are converted into
or exchanged for cash, securities or other property, other than any such
transaction where the Voting Interests of the Company or such Subsidiary, as
applicable, outstanding immediately prior to such transaction are converted into
or exchanged for Voting Interests of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Interests of
such surviving or transferee Person immediately after giving effect to such
issuance. For the purposes of this definition of “Sale Transaction”,
(i) any Change of Control of an entity holds Equity Securities of the Company
will be deemed to be a transfer of such Equity Securities of the Company, and
(ii) the definition of “Person” shall include two or more Persons acting as a
partnership, limited partnership, syndicate or other group.
Securities
Act means the Securities Act of 1933, as amended, and any similar or
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such similar or successor federal
statute.
4
Subsidiaries
means any entity of which the Company is the owner, directly or indirectly,
through intermediate entities, of at least fifty percent (50%) of such entity’s
capital stock, membership interests, partnership interests or other equity
interests.
Term Loan
has the meaning set forth in the Loan Agreement.
Trading
Day means
(a) a day on which the Common Stock is traded on the OTC Bulletin Board, the
over-the-counter market as reported by National Quotation Bureau Incorporated
(or any similar organization or agency succeeding its functions of reporting
prices); provided,
however, that in the
event that the Common Stock is not listed or quoted as set forth in (a) hereof,
then Trading Day shall mean (b) any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.
Voting Interests
has the meaning set forth in the Loan Agreement.
Warrant(s)
has the meaning set forth in the Legend hereto and shall include the Warrant
Shares.
Warrant
Office has the meaning set forth in Section 3.1.
Warrant
Shares means the shares of Common Stock and any other Equity Securities
of the Company into which this Warrant may be exercised.
1.2 Accounting Terms and
Determinations. Except
as otherwise may be expressly provided herein, all accounting terms used herein
shall be interpreted, and all financial statements and certificates and reports
as to financial matters required to be delivered to the Holder hereunder shall
be prepared, in accordance with GAAP. All calculations made for the
purposes of determining compliance with the terms of this Warrant shall (except
as otherwise may be expressly provided herein) be made by application of
GAAP.
1.3 Rules of
Construction. The
title of and the section and paragraph headings in this Warrant are for
convenience of reference only and shall not govern or affect the interpretation
of any of the terms or provisions of this Warrant. The use herein of
the masculine, feminine or neuter forms shall also denote the other forms, as in
each case the context may require. Where specific language is used to
clarify by example a general statement contained herein, such specific language
shall not be deemed to modify, limit or restrict in any manner the construction
of the general statement to which it relates. The language used in
this Warrant has been chosen by the parties to express their mutual intent, and
no rule of strict construction shall be applied against any party. In
the case of this Warrant, (a) the meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms; (b) Annex,
Exhibit, Schedule and Section references are to this Warrant unless
otherwise specified; (c) the term “including” is not limiting and means
“including but not limited to”; (d) in the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including”; the words “to” and “until” each mean “to but excluding”, and the
word “through” means “to and including”; (e) unless otherwise expressly provided
in this Warrant, (i) references to agreements and other contractual
instruments (or to specific provisions therein) shall be deemed to include all
subsequent amendments and other modifications thereto, but only to the extent
such amendments and other modifications are not prohibited by the terms of the
Warrant, and (ii) references to any statute or regulation shall be
construed as including all statutory and regulatory provisions amending,
replacing, supplementing or interpreting such statute or regulation; (f) this
Warrant may use several different limitations, tests or measurements to regulate
the same or similar matters, all of which are cumulative and each shall be
performed in accordance with its terms; and (g) this Warrant is the result of
negotiations among and has been reviewed by counsel to the Company and the other
parties thereto and is the product of all parties; accordingly, it shall not be
construed against Holder merely because of Holder’s involvement in its
preparation.
5
1.4 Fiduciary
Duties Pre
or post exercise of this Warrant, Holder is a beneficiary of the fiduciary
duties owed by the Board of Directors to a minority owner of Equity
Securities.
ARTICLE
II
EXERCISE
OF WARRANT
2.1 Method of
Exercise
(a) This
Warrant may be exercised, in whole or in part, by the Holder at any time, and
from time to time, before 5:00 p.m., New York, New York time, on the Expiration
Date.
(b) To
exercise this Warrant, the Holder shall deliver to the Company, at the Warrant
Office designated herein, (i) a written exercise notice in the form
attached as Exhibit A
hereto (the “Exercise
Notice”), stating therein the election of Holder to exercise this Warrant
in the manner provided in the Exercise Notice; (ii) payment in full of the
Exercise Price, as adjusted, if applicable, (A) in cash or by certified
check or wire transfer for all Warrant Shares purchased hereunder,
(B) through a Cashless Exercise (the Exercise Notice shall set forth the
calculation upon which the Cashless Exercise is based) or (C) a combination
of (A) and (B) above; and (iii) this Warrant.
(c) In
the event of any exercise of this Warrant in accordance with and subject to the
terms and conditions hereof, certificates for the Warrant Shares so purchased
shall be dated the date of such exercise (the “Exercise
Date”) and delivered to the Holder’s prime broker as specified in the
Holder’s exercise form within a reasonable time, not exceeding five (5) Trading
Days after such exercise (the “Delivery
Date”) or, at the request of the Holder (provided that a registration
statement under the Securities Act providing for the resale of the Warrant
Shares is then in effect or that the Warrant Shares are otherwise exempt from
registration), issued and delivered to the Depository Trust Company (“DTC”)
account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
System (“DWAC”) when
available, within a reasonable time, not exceeding five (5) Trading Days after
such exercise, and the Holder hereof shall be deemed for all purposes to be the
holder of the Warrant Shares so purchased as of the date of such
exercise. The Holder shall deliver this original Warrant, or an
indemnification reasonably acceptable to the Issuer undertaking with respect to
such Warrant in the case of its loss, theft or destruction, at such time that
this Warrant is fully exercised. With respect to partial exercises of
this Warrant, the Company shall keep written records for the Holder of the
number of Warrant Shares exercised as of each date of exercise and the remaining
number of Warrant Shares issuable upon further exercise of this
Warrant.
6
2.2 Regulatory
Compliance. If
any shares of Common Stock to be reserved for the purpose of exercise of this
Warrant require registration or listing with or approval of any governmental
authority, stock exchange or other regulatory body under any federal or state
law or regulation or otherwise before such shares may be validly issued or
delivered upon conversion, the Company shall, at its sole cost and expense, in
good faith and as expeditiously as possible, endeavor to secure such
registration, listing or approval, as the case may be.
2.3 Expenses and
Taxes. The
Company shall pay all expenses and taxes (including, without limitation, all
documentary, stamp, transfer or other transactional taxes) other than income
taxes attributable to the preparation, issuance or delivery of this Warrant and
of the Warrant Shares.
2.4 Reservation of Equity
Securities. The
Company shall, during the period within which this Warrant may be exercised,
reserve and keep available out of its authorized and unissued Common Stock,
solely for the purpose of effecting the exercise of this Warrant, such number of
shares of Common Stock equal to at least one hundred percent (100%) of the
aggregate number of shares of Common Stock as shall from time to time be
sufficient to effect the exercise of this Warrant.
2.5 Valid
Issuance. All
Equity Securities issued upon exercise of this Warrant will, upon payment of the
Exercise Price and issuance by the Company, be duly authorized, validly and
legally issued, fully paid and nonassessable and free and clear of all taxes,
liens, security interests, charges and other encumbrances or restrictions with
respect to the issuance thereof and, without limiting the generality of the
foregoing, the Company shall take all actions necessary to ensure such result
and shall not take any action which will cause a contrary result.
2.6 Acknowledgment of Rights
Upon Exercise. At
the time of the exercise of this Warrant in accordance with the terms hereof and
upon the written request of the Holder, the Company will acknowledge in writing
its continuing obligation to afford to the Holder all rights provided by the
provisions of this Warrant, unless otherwise
specifically denied herein; provided, however, that if
the Holder shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to the Holder any such
rights.
2.7 No Fractional
Shares. No
fractional shares of Common Stock shall be issued upon exercise of this
Warrant. In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Holder shall round the number of shares to be issued
upon exercise up to the nearest whole number of shares.
ARTICLE
III
TRANSFER
3.1 Warrant
Office. The
Company shall maintain an office for certain purposes specified herein (the
“Warrant
Office”), which office shall be the Company’s principal executive
offices, and may subsequently be such other office of the Company in the
continental United States as to which written notice has previously been given
to the Holder. The Company shall maintain, at the Warrant Office, a
register for this Warrant in which the Company shall record (i) the name and
address of the person in whose name this Warrant has been issued (as well as the
name and address of each permitted assignee of the rights of the registered
owner hereof) and (ii) the number of Warrant Shares issuable upon the exercise
or exchange hereof.
7
3.2 Ownership of
Warrant. The
Company may deem and treat the person in whose name this Warrant is registered
as the Holder and owner hereof until provided with notice to the
contrary. This Warrant may be exercised by an assignee for the
purchase of Warrant Shares without having a new Warrant issued.
3.3 Transferability of
Warrant. Subject
to Section
3.4, this Warrant may be transferred by a Holder, in whole or in part,
without the consent of the Company. If transferred pursuant to this
Section
3.3, this Warrant may be transferred on the books of the Company by the
Holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant at the principal office of the Company, properly endorsed (by the Holder
executing an assignment in the form attached as Exhibit B
hereto) and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. This Warrant is
exchangeable at the principal office of the Company for Warrants to purchase the
same aggregate number of Warrant Shares, each new Warrant to represent the right
to purchase such number of Warrant Shares as the Holder hereof shall designate
at the time of such exchange. All Warrants issued on transfers or
exchanges shall be dated the Original Issue Date and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.
3.4 Compliance with Securities
Laws.
(a) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the Warrant Shares to be issued upon exercise hereof are being acquired solely
for the Holder's own account and not as a nominee for any other party, and for
investment.
(b) Except
as provided in paragraph (c) below, this Warrant and all certificates
representing Warrant Shares issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following form:
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
8
(c) The
Company agrees to reissue this Warrant or certificates representing any of the
Warrant Shares, without the legend set forth above, upon request by Holder at
any time following the date that is six (6) months following the Original Issue
Date. [Whenever a certificate representing the Warrant Shares is
required to be issued to the Holder without a legend, in lieu of delivering
physical certificates representing the Warrant Shares, the Company shall cause
its transfer agent to electronically transmit the Warrant Shares to the Holder
by crediting the account of the Holder or Holder's Prime Broker with DTC through
its DWAC system (to the extent not inconsistent with any provisions of this
Warrant)].
(d) Accredited Investor
Status. At the time of the exercise of this Warrant, the Holder (i) shall
be an “accredited investor” as defined in Regulation D under the Securities Act,
or (ii) shall exercise this Warrant by means of a Cashless Exercise as provided
for in Section
2.1(b).
ARTICLE
IV
COVENANTS
4.1 Notices of Certain
Actions. In
case the Company proposes to (i) pay any dividend or make any distribution
payable in Equity Securities, evidences of indebtedness, cash or other property
or assets to the holders of Equity Securities, (ii) offer to the holders of
Equity Securities rights or warrants to subscribe for or purchase any Equity
Securities or any other rights or options, (iii) effect any reclassification of
the Equity Securities (other than a reclassification involving merely the
subdivision or combination of outstanding Equity Securities), or any capital
reorganization or any consolidation or merger (other than a merger in which no
distribution of securities or other property is to be made to then current
holders of Equity Securities), or any sale, transfer or other disposition of its
property, assets and business as an entirety or substantially as an entirety, or
the liquidation, dissolution or winding up of the Company, (iv) effect a
transaction constituting a Liquidity Event, (v) commence a voluntary (or
becomes subject to an involuntary) dissolution, liquidation or winding up or
(vi) issue any Equity Securities, options or Convertible Securities, then, in
each such case, the Company shall mail (by first class mail, postage prepaid) to
the Holder, notice of such proposed action, which shall specify the material
terms thereof and the date on which the books of the Company shall close, or a
record shall be taken, for determining holders of Equity Securities entitled to
receive such dividends, distributions or issuances of such rights or options, or
the date on which such reclassification, reorganization, consolidation, merger,
sale, transfer, other disposition or transaction constituting a Liquidity Event
or such liquidation, dissolution, winding up shall take place or commence, as
the case may be, and the date as of which it is expected that holders of Equity
Securities of record shall be entitled to receive securities or other property
deliverable upon such action, if any such date is to be fixed. Such
notice shall be mailed in the case of any action covered by clause (i) or (ii) above at least ten (10)
days prior to the record date for determining holders of Equity Securities for
purposes of receiving such payment or offer, and in the case of any action
covered by clause (iii)
through (vi) above at
least ten (10) days prior to the date upon which such action takes place and ten
(10) days prior to any record date to determine holders of Equity Securities
entitled to receive such securities or other property.
9
4.2 No Inconsistent
Agreements. The
Company has not entered into and will not enter into any agreement or similar
arrangements, the performance by the Company, or the terms of which, would in
any manner conflict with, restrict or be inconsistent with the performance by
the Company of its obligations under this Agreement.
4.3 Dilution
Fee.
(a) Until
the earlier to occur of the exercise in full of this Warrant or the Expiration
Date, if any distribution is made on or with respect to the Equity Securities,
the Holder of this Warrant as of the record date established by the Board of
Directors for such distribution on the Equity Securities shall be entitled to
receive a fee (the “Dilution
Fee”) in an amount (whether in the form of cash, notes, securities or
other property) equal to the amount (and in the form) of the distribution that
such Holder would have received had this Warrant been exercised in full as of
the date immediately prior to the record date for such distribution, such
Dilution Fee to be payable on the same payment date established by the Board of
Directors for the payment of such distribution; provided, however, that if the Company
declares and pays a distribution on the Equity Securities consisting in whole or
in part of Common Stock, then no such Dilution Fee shall be payable in respect
of this Warrant on account of the portion of such distribution payable in Common
Stock and in lieu thereof the adjustment in Article V
hereof shall apply. The record date for any such Dilution Fee shall
be the record date for the applicable distribution on the Equity Securities, and
any such Dilution Fee shall be payable to the Persons in whose name this Warrant
is registered at the close of business on the applicable record
date.
(b) No
distribution shall be paid or declared on any Equity Securities (other than
distributions payable in Common Stock for which an adjustment was made pursuant
to Article
V hereof), unless the Dilution Fee, payable in the same consideration and
manner, is simultaneously paid or provided for, as the case may be, in respect
of this Warrant in an amount determined as set forth above. For purposes hereof,
the term “distribution” shall include any pro rata dividend or distribution by
the Company, out of funds of the Company legally available therefor, of cash,
property, securities (including, but not limited to, Convertible Securities,
rights, warrants or options) or other property or assets to the holders of the
Equity Securities, whether or not paid out of capital, surplus or earnings other
than liquidation.
(c) Prior
to making any distribution on or with respect to Equity Securities, the Company
shall take all prior action necessary to authorize the issuance of any
securities payable as the Dilution Fee in respect of this Warrant.
4.4 Personal Gain on Sale
Transaction. Without
the prior written consent of the Holder, neither the Company nor any of its
Subsidiaries or equity holders shall enter into any Sale Transaction if any
Person will receive any Excess Compensation unless, in connection with such Sale
Transaction, proper provisions are made such that the buyer in such Sale
Transaction agrees to pay to Holder an amount equal to the amount of such Excess
Compensation times the Holder’s Applicable Percentage, such amount to be paid on
the same terms and conditions as the Excess Compensation is paid to such other
Persons.
10
4.5 Limitation on Certain
Restrictions. Without
the prior written consent of the Holder, the Company shall not, and the Company
shall not permit or cause any of its Subsidiaries, directly or indirectly, to
create or otherwise cause or suffer to exist or become effective any restriction
or encumbrance on the ability of the Company or such Subsidiary to perform and
comply with their respective obligations under this Warrant.
4.6 Events of Noncompliance and
Remedies.
(a) Events of
Noncompliance. If the Company fails to keep and fully and
promptly perform in all material respects any of the covenants or terms
contained or referenced in this Article IV
within thirty (30) days from the written notice from Holder specifying what
failure has occurred, or requesting that a specified failure be remedied (an
“Event of
Noncompliance”), then Holder shall be entitled to the remedies set forth
in subsection (b)
hereof.
(b) On
the occurrence of an Event of Noncompliance, in addition to any remedies the
Holder may have under applicable law, the Holder may bring any action for
injunctive relief or specific performance of any term or covenant contained
herein, the Company hereby acknowledging that an action for money damages may
not be adequate to protect the interests of the Holder hereunder.
ARTICLE
V
ANTI-DILUTION
AND ADDITIONAL EVENTS
5.1 Adjustment of Exercise
Price. If
the Common Stock as presently constituted shall be changed into or exchanged for
a different number or kind of shares or other securities of the Company or of
another entity (whether by reason of merger, consolidation, recapitalization,
reclassification, split, reverse split, combination of shares, or otherwise) or
if the number of shares of Common Stock shall be increased through the payment
of a share dividend, the Holder shall receive upon exercise of this Warrant, the
number and kind of shares or other securities into which each outstanding share
of Common Stock shall be so changed, or for which each such share of Common
Stock shall be exchanged, or to which each such share of Common Stock shall be
entitled, as the case may be. The Exercise Price and other terms of
this Warrant shall be appropriately amended to reflect the foregoing
events. If there shall be any other change in the number or kind of
the outstanding shares of Common Stock, or of any shares or other securities
into which the Common Stock shall have been changed, or for which the shares of
Common Stock shall have been exchanged, then, if the Board of Directors shall,
in its sole discretion, determine that such change equitably requires an
adjustment in the Exercise Price, such adjustment shall be made in accordance
with that determination. Notice of any adjustment shall be given by
the Company to the Holder.
11
5.2 No
Impairment. The
Company shall not, by amendment of its Certificate of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder, but will at all times in good faith assist in the carrying
out of all the provisions of this Article
V and in the
taking of all such action as may be necessary or appropriate in order to protect
against impairment the right of the Holder to exercise this
Warrant. In the event the Holder shall elect to exercise this
Warrant, in whole or in part, as provided herein, the Company cannot refuse
exercise based on any claim that the Holder or anyone associated or affiliated
with such holder has been engaged in any violation of law, unless the Company
receives (a) an order from the Commission prohibiting exercise of this Warrant
or (b) an injunction from a court, on notice, restraining and/or adjoining
exercise of this Warrant.
5.3 Certificates as to
Adjustments. Upon
the occurrence of each adjustment or readjustment of the Exercise Price or
number of shares of Common Stock for which this Warrant is exercisable pursuant
to this Article V,
the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and readjustment, showing in detail
the facts upon which such adjustment or readjustment is based. The Company
shall, upon written request of the Holder, at any time, furnish or cause to be
furnished to the Holder a like certificate setting forth such adjustments and
readjustments, the Exercise Price in effect at the time, and the number of
shares of Common Stock and the amount, if any, of other securities or property
which at the time would be received upon the exercise of this
Warrant. Notwithstanding the foregoing, the Company shall not be
obligated to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent of such adjusted amount; if the
Company so postpones delivering a certificate, such prior adjustment shall be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Article
V and not
previously made, would result in an adjustment of one percent or
more.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
6.1 Representations and
Warranties by the Company. The
Company hereby represents and warrants to the Holder that the statements in the
following paragraphs of this Section
6.1 are true and correct as of the date hereof.
(a) Organization and Authority.
The Company (i) is a corporation duly organized, validly existing, and in good
standing in the State of Delaware, and (ii) has the corporate power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted.
(b) Company Power. The Company
has all requisite legal and corporate power and authority to execute, issue and
deliver this Warrant, to issue the Warrant Shares issuable upon exercise or
conversion of this Warrant, and to carry out and perform its obligations under
this Warrant and any related agreements.
(c) Authorization;
Enforceability. All corporate action on the part of Company, its
officers, directors and shareholders necessary for the authorization, execution,
delivery and performance of its obligations under this Warrant and for the
authorization, issuance and delivery of this Warrant and the Warrant Shares
issuable upon exercise of this Warrant has been taken and this Warrant
constitutes the legally binding and valid obligation of the Company enforceable
against the Company in accordance with its terms.
12
(d) Valid Issuance of Warrant and
Warrant Securities. This Warrant has been validly issued and
is free of restrictions on transfer other than restrictions on transfer set
forth herein and under applicable state and federal securities laws. The Warrant
Shares issuable upon exercise of this Warrant, when issued, sold and delivered
in accordance with the terms of this Warrant, will be duly and validly issued,
fully paid and nonassessable, and will be free of restrictions on transfer other
than applicable state and federal securities laws. Subject to
applicable restrictions on transfer, the issuance and delivery of this Warrant
and the Warrant Shares issuable upon exercise or conversion of this Warrant are
not subject to any preemptive or other similar rights or any liens or
encumbrances except as specifically set forth in this Warrant. The
offer, sale and issuance of the Warrant Shares, as contemplated by this Warrant,
are exempt from the prospectus and registration requirements of applicable
United States federal and state securities laws, and neither Company nor any
authorized agent acting on its behalf has or will take any action hereafter that
would cause the loss of such exemption.
(e) No Conflict. The execution,
delivery, and performance of this Warrant will not result in (i) any violation
of, be in conflict with, or constitute a default under, with or without the
passage of time or the giving of notice (A) any provision of the Company’s
Certificate of Incorporation or bylaws; (B) any provision of any judgment,
decree, or order to which the Company is a party, by which it is bound, or to
which any of its material assets are subject; (C) any contract, obligation, or
commitment to which the Company is a party or by which it is bound; or (D) any
statute, rule, or governmental regulation applicable to the Company, or (ii) the
creation of any material lien, charge or encumbrance upon any material assets of
the Company.
(f) Warrant
Shares. The Warrant Shares constitute 2.50% of the Company’s
aggregate outstanding Equity Securities at the Original Issue Date, determined
on a Fully Diluted Basis including the Equity Securities underlying this Warrant
and the Deerpath Shares.
ARTICLE
VII
MISCELLANEOUS
7.1 ENTIRE
AGREEMENT AND TERM. THIS WARRANT, THE LOAN
AGREEMENT (INCLUDING BUT NOT LIMITED TO, THE PROVISIONS RELATING TO GOVERNING
LAW, JURY WAIVER, VENUE, SERVICE OF PROCESS AND ARBITRATION) AND ALL LOAN
DOCUMENTS (AS DEFINED IN THE LOAN AGREEMENT) CONTAIN THE ENTIRE AGREEMENT
BETWEEN THE HOLDER HEREOF AND THE COMPANY WITH RESPECT TO THE WARRANT SHARES
PURCHASABLE UPON EXERCISE HEREOF AND THE RELATED TRANSACTIONS AND SUPERSEDE ALL
PRIOR ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT THERETO. ALL RIGHTS
OF HOLDER SET FORTH HEREIN SHALL CONTINUE UNTIL HOLDER NO LONGER OWNS ANY
INTEREST IN THE WARRANT OR WARRANT SHARES.
13
7.2 Waiver and
Amendment. Any
term or provision of this Warrant may be waived at any time by the party which
is entitled to the benefits thereof, and any term or provision of this Warrant
may be amended or supplemented in writing at any time by agreement of the Holder
and the Company. A waiver of any breach or failure to enforce any of
the terms or conditions of this Warrant shall not in any way affect, limit or
waive a party’s rights hereunder at any time to enforce strict compliance
thereafter with every term or condition of this Warrant.
7.3 Severability. In
the event that any one or more of the provisions contained in this Warrant shall
be determined to be invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in any
other respect and the remaining provisions of this Warrant shall not, at the
election of the party for whom the benefit of the provision exists, be in any
way impaired.
7.4 Copy of
Warrant. A
copy of this Warrant shall be filed among the records of the
Company.
7.5 Notice.
(a) Any
notice or other instrument or document required or permitted to be given or
delivered to the Holder shall be in writing and delivered at, or sent by
certified or registered mail or by facsimile to the Holder at, the last address
shown on the books of the Company maintained at the Warrant Office for the
registration of this Warrant or at any more recent address of which the Holder
shall have notified the Company in writing. Any notice or other
document required or permitted to be given or delivered to the Company, other
than such notice or documents required to be delivered to the Warrant Office,
shall be delivered at, or sent by certified or registered mail or by facsimile
to, the Warrant Office.
(b) Failure
to file any notice or to mail any notice, or any defect in any notice, pursuant
to this Section
7.5, shall not
affect the legality or validity of any transaction giving rise
thereto.
7.6 Limitation of
Liability. No
provision hereof, in the absence of affirmative action by the Holder to purchase
Warrant Shares, and no mere enumeration herein of the rights or privileges of
the Holder, shall give rise to any liability of the Holder for the purchase
price of any Warrant Shares or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.
14
7.7 Exchange, Loss, Destruction,
etc. of Warrant. Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
mutilation or destruction of this Warrant, and in the case of any such loss,
theft or destruction upon delivery of an appropriate affidavit in such form as
shall be reasonably satisfactory to the Company and include reasonable
indemnification of the Company, or in the event of such mutilation upon
surrender and cancellation of this Warrant, the Company will make and deliver a
new Warrant of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Section 7.7
in lieu of any Warrant alleged to be lost, destroyed or stolen, or in lieu of
any mutilated Warrant, shall constitute an original contractual obligation on
the part of the Company. This Warrant shall be promptly canceled by
the Company upon the surrender hereof in connection with any exchange or
replacement. The Company shall pay all taxes (other than securities
transfer taxes or income taxes) and all other expenses and charges payable in
connection with the preparation, execution and delivery of Warrants pursuant to
this Section.
7.8 Rights
Offering. If
the Company effects an offering of Equity Securities pro rata among the holders
of its Equity Securities, the Holder shall be entitled, at its option, to elect
to participate in each and every such offering as though this Warrant had been
exercised and the Holder was, at the time of any such rights offering, then a
holder of that number of Equity Securities to which the Holder is then entitled
on the exercise hereof.
[Signatures
appear on following page]
15
IN
WITNESS WHEREOF, the Company has caused this Warrant No. 2010-03 to be signed in
its name.
Dated: November
30, 2010
|
COMPANY:
|
||
|
Oak
Tree Educational Partners, Inc.
|
||
|
a
Delaware corporation
|
||
|
By:
|
/s/ Joseph J. Bianco
|
|
|
Name:
|
Joseph
J. Bianco
|
|
|
Title:
|
Chief
Executive Officer
|
|
Agreed
and Accepted
this
30th
day of November, 2010
|
Deerpath
Funding, LP
|
||
|
a
Delaware limited partnership
|
||
|
By:
|
Deerpath
Funding General Partner, Inc.
|
|
|
its
general partner
|
||
|
By:
|
/s/ James H.
Kirby
|
|
|
Name:
|
James
H. Kirby
|
|
|
Title:
|
President
|
|
[Signature
Page to Warrant]
EXHIBIT
A
EXERCISE
FORM
WARRANT
OAK TREE
EDUCATIONAL PARTNERS, INC.
The
undersigned _______________ (“Holder”), pursuant to
the provisions of the accompanying Warrant, hereby elects to purchase _______
shares of Common Stock of OAK TREE EDUCATIONAL PARTNERS, INC. (the “Company”) covered by
the accompanying Warrant, for an aggregate Exercise Price equal to $__________
(the “Purchase
Price”), and further:
|
o
|
Holder
elects to pay the Purchase Price to the Company in cash by certified or
official bank check (or via wire transfer) to the
Company;
|
|
o
|
Pursuant
to Section
2.1(b) of the Warrant, Holder hereby elects to pay the Purchase
Price in full through a Cashless Exercise (as defined in the Warrant), the
calculation of which is attached hereto as Annex A;
or
|
|
o
|
Pursuant
to Section
2.1(b) of the Warrant, Holder hereby elects to pay (a) a portion of
the Purchase Price in cash by certified or official bank check (or via
wire transfer) to the Company, and (b) the remaining balance of the
Purchase Price through a Cashless Exercise, the calculation of which is
attached hereto as Annex
A.
|
Number of
shares of Common Stock beneficially owned or deemed beneficially owned by the
Holder on the date of Exercise: _________________________
The
undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as
amended.
o
Yes
o No
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
Dated:
_________________
|
Address:
|
|||
EXHIBIT
B
ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the accompanying Warrant and all rights evidenced thereby and
does irrevocably constitute and appoint ___________________, attorney, to
transfer said Warrant on the books of the corporation named
therein.
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
Dated:
_________________
|
Address:
|
|||
PARTIAL
ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ Warrant Shares evidenced by
the accompanying Warrant together with all rights therein, and does irrevocably
constitute and appoint ______________________, attorney, to transfer that part
of said Warrant on the books of the corporation named therein.
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
Dated:
_________________
|
Address:
|
|||
FOR USE
BY THE ISSUER ONLY:
This
Warrant No. ________ canceled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. ________ issued for ____ shares of Common Stock in
the name of _______________.