Membership Interests Purchase Agreement, dated as of April 12, 2019, by and among Adtalem Global Education Inc., OCL Financial Services LLC, a Delaware limited liability company and OCL Professional Education, Inc., a Delaware corporation

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”), dated effective as of April 12, 2019, is by and among ADTALEM GLOBAL EDUCATION INC., a Delaware corporation (“Buyer”), OCL FINANCIAL SERVICES LLC, a Delaware limited liability company (the “Company”), and OCL PROFESSIONAL EDUCATION, INC., a Delaware corporation (“Seller”).  Certain capitalized terms used herein but not otherwise defined shall have the meanings set forth in Section 1.

A.            Seller is the owner (beneficially and of record) of 100% of the outstanding membership interests of the Company (the “Membership Interests”).

B.            Buyer desires to acquire, and Seller desire to sell to Buyer, 100% of the Membership Interests.

In consideration of the foregoing recitals and the mutual representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows:

Section 1.      Defined Terms.  In addition to the terms defined elsewhere in this Agreement, the following terms have the following meanings:

(i)            “Accounting Principles” means the Company’s same accounting practices, policies, conventions, methodologies and procedures which were used by the Company in preparing the Financial Statements and in calculating the Net Working Capital Target and as reflected in the Example NWC Calculation, as well as all other elements of the Closing Estimates as set forth in Exhibit B.  In the event of an inconsistency or disagreement between the practices, policies, conventions, methodologies and procedures used in calculating the Net Working Capital Target versus those used in the Example NWC Calculation, the practices, policies, conventions, methodologies and procedures used in connection with the preparation of the Example NWC Calculation shall control.

(ii)            “Affiliate” shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person; including any partnership or joint venture in which such Person (either alone, or through or together with any other Subsidiaries) has, directly or indirectly, an equity interest of 50% or more.  For purposes of this definition, “control” (including the terms “controlled by” and “under common control with”) shall mean the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of equity interests or as trustee or executor, by contract or credit arrangement or otherwise.

(iii)            “Business” shall mean the offering of education and compliance solutions courses in the field of financial services.

(iv)            “Business Day” shall mean any day other than a Saturday, Sunday, federal or New York state holiday or other day on which banks are generally not open for business in New York, New York.

(v)            “Cash” means all cash and cash equivalent items of the Company, determined in accordance with the Accounting Principles, including checking account balances, credit card clearing accounts, bank account balances (including deposited but uncleared checks, subject to collection on or before the delivery of the Final Closing Statement) and certificates of deposit, minus outstanding but uncleared checks, drafts and wires issued prior to such time.  Any asset included in the Final Cash Amount shall not be reflected in the calculation of Final Closing Net Working Capital.  The amount for the tail policy shall be included in Cash if such amount is paid by the Company prior to the Effective Time, subject to Section 6(i).

(vi)            “CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq., as amended.

(vii)            “Claim” shall mean any claim, demand, cause of action, investigation, inquiry, suit, action, notice of violation or legal, administrative, arbitrative or other proceeding.

(viii)            “Closing” shall mean the consummation of the transactions contemplated by this Agreement.

(ix)            “Code” shall mean the Internal Revenue Code of 1986, as amended, and the regulations, rulings, and forms issued thereunder.

(x)            “Company Intellectual Property” shall mean all Intellectual Property owned or purported to be owned by the Company.

(xi)            “Company Software” means software owned or purported to be owned by the Company.

(xii)            “Company Source Code” means the human-readable source code of the Company Software.

(xiii)            “Contract” shall mean any agreement, contract, debenture, note, bond, mortgage, indenture, deed of trust, lease, license, commitment or other instrument or agreement or any other legally binding obligation of a Person.

(xiv)            “Debt-Like Items” means the items set forth on Schedule 1(a) under the heading Debt-Like Items.

(xv)            “Effective Time” means 11:59 p.m. Eastern Daylight Time on the Closing Date.

(xvi)            “Employee Benefit Plan” shall mean any Pension Plan, Welfare Plan or Fringe Benefit Plan, whether qualified or non-qualified.

(xvii)            “Encumbrance” shall mean any lien, pledge, security interest, option, right of first refusal, easement, mortgage, charge, indenture, deed of trust, option, right of way, covenant, condition or restriction on the use of real property, encroachment or any other encumbrance on the use of real or personal property, any conditional, installment or contingent sale or other title retention agreement or lease in the nature thereof.

(xviii)            “Environmental Laws” shall mean all applicable Laws, Orders, Permits, binding determinations, and decisions or remediation and risk standards of any Governmental Authority, relative to or that govern or purport to govern air quality, soil quality, water quality, sub-slab and indoor contaminant air vapors, wetlands, natural resources, solid waste, hazardous waste, hazardous or toxic substances, pollution or the protection of employee health and safety, public health, human health or the environment in effect on the date hereof, including, but not limited to, CERCLA, the Hazardous Materials Transportation Act (49 U.S.C. § 1801), the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.), the Safe Drinking Water Act (42 U.S.C. § 300f, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901, et seq.), the Clean Air Act (42 U.S.C. § 7401, et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601, et seq.), and the Federal Insecticide, Fungicide, and the Rodenticide Act (7 U.S.C. § 136, et seq.), as each of these Laws have been amended from time to time.

(xix)            “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations and forms promulgated thereunder.

(xx)            “Example NWC Calculation” means the example calculation of Net Working Capital as of January 31, 2019 and February 28, 2019 attached as Exhibit B, which Exhibit B shall also include the example calculation of the estimated amount of each of Debt-Like Items, Cash, Indebtedness and Seller Transaction Expenses, in each case as of such date.

(xxi)            “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(xxii)            “Excluded Taxes” means any (a) Taxes of the Company (or any predecessor thereof) and any other Taxes attributable to the Business, in each case, for all Pre-Closing Tax Periods (including the portion of all Straddle Periods treated as ending on the Closing Date), (b) Taxes required to be paid by any of Buyer, the Company or any of their Affiliates as a result of any breach by Seller of any covenant in this Agreement, and (c) 50% of any Transfer Taxes (as defined in Section 7(d)) in excess of $100,000.

(xxiii)            “Final Deficiency” means the amount, if any, by which the Final Seller Closing Payment exceeds the Estimated Seller Closing Payment.

(xxiv)            “Final Excess” means the amount, if any, by which the Final Seller Closing Payment is less than the Estimated Seller Closing Payment.

(xxv)            “Final Seller Closing Payment” means the calculation contemplated by Section 2(d)(iii), except that the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Closing Net Working Capital shall be substituted in the place of the Estimated Cash Amount, the Estimated Indebtedness Amount, the Estimated Debt-Like Items Amount, the Estimated Seller Transaction Expenses Amount, and the Estimated Closing Net Working Capital (each as finally determined under Section 2(e)), respectively.

(xxvi)             “Foreign Competition Laws” means any non-U.S. Laws or Orders issued by non-U.S. Governmental Authorities that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.

(xxvii)         “Fringe Benefit Plan” shall mean any benefit plan, program or agreement under Code Sections 125, 127, 129, 132, or 137 and any bonus, incentive compensation, deferred compensation, restricted stock, stock option, other stock-based incentive, retention, severance pay, sick leave, vacation pay, tuition expense, dependent care assistance, cafeteria plan, salary continuation, bonus plan, employment or other service related change in control benefit, and any other compensation payment or employment benefit or plan, program, or agreement which is not within the meaning of a Pension Plan or Welfare Plan.  The term “Fringe Benefit Plan” shall also include any such terminated benefit plan, program or agreement previously maintained, sponsored or contributed to by the Company which, as of the date of this Agreement, has not distributed all of its assets or satisfied all of its Liabilities.

(xxviii)          “Governmental Authority” shall mean any federal, state, county, municipal, foreign, international or other governmental department, commission, board, tribunal, court, bureau, agency or instrumentality, or any arbitration panel or alternative dispute resolution body.

(xxix)            “Hazardous Substance” shall mean hazardous substances as that term is defined in CERCLA, or any solid waste, hazardous waste and any other individual, class or mixture of pollutants, contaminants, toxins, chemicals, substances, wastes or materials in their solid, liquid or gaseous phase, defined, listed, designated, regulated, classified or identified as such under any Environmental Law.

(xxx)               “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the regulations promulgated thereunder, in each case, as amended from time to time.

(xxxii)                          “Intellectual Property” shall mean all of the rights arising from or in respect of the following: (a) patents, patent applications (and any renewals, reissues, reexaminations, extensions, continuations, continuations-in-part, divisions and substitutions relating to any patents and patent applications); (b) trademarks, service marks, trade names, trade dress, brand names, designs, logos, other indicia of source or origin, and all applications, registrations, and renewals in connection therewith, and all goodwill associated with any of the foregoing; (c) Internet domain names, web sites, and URLs, and all applications, registrations, and renewals in connection therewith; (d) copyrights, and all applications, registrations, and renewals in connection therewith (including moral and non-economic rights of authors or creators); (e) all trade secrets, inventions, technology, formulas, know-how, Confidential Information, computer software programs and applications, data, tangible and intangible proprietary information or materials; and (f) other proprietary rights relating to any of the foregoing (including remedies against infringements thereof and rights of protection of interest therein under the laws of all jurisdictions).

(xxxiii)                          “IRS” shall mean the United States Internal Revenue Service.

(xxxiv)                          “Knowledge” shall mean, with respect to the Company, the actual knowledge of a particular fact or other matter after due inquiry by Brett Shively, Todd Premo, Thomas Katsahnias and Jamie Bruss.

(xxxv)                             “Laws” shall mean all laws, statutes, ordinances, codes, rules, regulations, judgments, decrees and Orders of Governmental Authorities.

(xxxvi)                          “Liability” shall mean any obligation, indebtedness, expense, guaranty, or other liability of any kind, whether known or unknown, direct or indirect, accrued or unaccrued, absolute or contingent, disputed or undisputed.

(xxxvii)                          “LMS Platform” means that certain proprietary software product of the Company known as its overall “Learning Management System” platform, or “LMS,” as embodied in, to the extent applicable, computer software, programs, data and databases in any form, including source code, object code, operating systems and specifications, database management code, firmware, utilities, interfaces, menus, images, icons, fonts and software engines, software implementations of algorithms, models, methodologies, APIs, software development kits, and all related documentation, developer notes, comments and annotations.

(xxxviii)                          “Losses” means the amount of any and all losses, damages, obligations, Liabilities, Claims, awards, assessments, amounts paid in settlement, Orders, Taxes, fines, penalties, costs and expenses (including reasonable legal costs and expenses); provided, that Losses will not include special, punitive or exemplary damages, unless paid to an unaffiliated third party pursuant to a final, binding, and non-appealable judgment).

(xxxix)                          “Material Adverse Effect” means any change, event, development or occurrence, individually or with all other changes, events, developments or occurrences, that has had or would reasonably be expected to have a material adverse effect on the business, assets, results of operations or financial condition of the Company, provided, however, none of the changes, events, developments or occurrences to the extent arising out of, resulting from or attributable to the following shall be taken into account in determining whether there has been a Material Adverse Effect: (a) changes in conditions in the United States’ financial markets or the world economy generally and which changes, in each case, do not have a disproportionately adverse effect on the Company, relative to the Company’s industry peers in the United States; (b) changes in general legal, regulatory, political, economic or business conditions or changes in established accounting principles that, in each case, do not have a disproportionate impact on the Company, relative to the Company’s industry peers in the United States; (c) acts of God or any hostilities, acts of war, sabotage, terrorism or military actions, or any escalation or worsening of any such hostilities; (d) the execution, announcement or pendency of the transactions contemplated by this Agreement; (e) compliance with the terms of, or the taking of any action required by, this Agreement; (f) the taking of any action, or failing to take any action, at the written request of Buyer, or the taking of any action by Buyer; or (g) any failure by the Company to meet financial forecasts, projections or estimates (provided, that clause (g) shall not prevent a determination that any change, event or occurrence underlying any such failure has resulted in a Material Adverse Effect to the extent such change, event or occurrence is not otherwise excluded from this definition of “Material Adverse Effect”).

(xl)            “Net Working Capital” shall mean, as of a specified date, the aggregate amount of only those specific current asset accounts of the Company that are included in the Example NWC Calculation set forth on Exhibit B, minus the aggregate amount of only those specific current liability accounts of the Company that are included in the Example NWC Calculation set forth on Exhibit B, in each case calculated solely in accordance with the Accounting Principles.  In no event will Net Working Capital include any portion of any Indebtedness, Debt-Like Items, Seller Transaction Expenses or any Cash.  For the avoidance of doubt, reserve amounts related to current assets will not be subject to change by differences in judgment exercised by the Buyer.

(xli)            “Net Working Capital Target” shall mean negative $2,250,000.

(xlii)            “Order” shall mean any order, writ, injunction, judgment, plan, stipulation or decree of any Governmental Authority.

(xliii)            “Ordinary Course of Business” means the conduct of the Business in a manner substantially consistent with the past custom and practice of the Company.

(xliv)            “Open Source Materials” shall mean all software or other material that is distributed as “free software”, “open source software” or under a similar licensing or distribution model, including without limitation the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD Licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL), the Sun Industry Standards License (SISL) and the Apache License.

(xlv)            “Organizational Documents” shall mean: (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate or articles of limited partnership of a limited partnership; (d) the limited liability partnership agreement and the certificate or articles of limited liability partnership of a limited liability partnership; (e) the operating agreement or limited liability company agreement and the articles of organization or certificate of formation of a limited liability company; (f) any charter or similar document adopted or filed in connection with the creation, formation or organization of a Person; and (g) any amendment to any of the foregoing.

(xlvi)            “Party” or “Parties” means Buyer, Seller and the Company, as the case may be.

(xlvii)            “Pension Plan” shall mean each “employee pension benefit plan” as defined in Section 3(2) of ERISA.  The term “Pension Plan” includes an “employee pension benefit plan” which is subject to an exemption under ERISA.  The term “Pension Plan” shall also include any terminated “employee pension benefit plan” previously maintained, sponsored, or contributed to by the Company which, as of the date hereof, has not distributed all of its assets in full satisfaction of accrued benefits or satisfied all of its Liabilities.

(xlviii)            “Permitted Encumbrances” shall mean (a) statutory and contractual landlord liens incurred in the Ordinary Course of Business, (b) pledges or deposits made to secure payment by the Company of worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits or to participate in any fund in connection with worker’s compensation or unemployment insurance, in each case incurred in the Ordinary Course of Business consistent with past practice, (c) liens for Taxes not yet due and payable, (d) liens arising from municipal and zoning ordinances and easements for public utilities, none of which interfere with the conduct of the Business by the Company as currently conducted, or adversely affect the marketability of the assets of the Company, in any material respect, (e) statutory mechanic’s liens and materialmen’s liens for services or materials and similar statutory liens for amounts not due and payable incident to construction and maintenance of real property or (f) operating lease notice filings.

(xlix)            “Person” shall mean an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Authority (or any department, agency or political subdivision thereof).

(l)            “Pre-Closing Tax Period” means (a) any taxable period that ends on or before the Closing Date or (b) the portion of any Straddle Period ending on the Closing Date.

(li)            “Pre-Closing Taxes” means Taxes of the Company for the Pre-Closing Tax Period.  Pre-Closing Taxes shall not include any Tax Liabilities included in the calculation of the Final Closing Net Working Capital.

(lii)            “Registered Company Intellectual Property” shall mean all Company Intellectual Property that is the subject of a registration or application with any Governmental Authority or internet domain name registrar.

(liii)            “Reorganization” has the meaning set forth in the Separation and Conduct Agreement, other than with regard to matters that do not affect the Company.

(liv)            “Restriction Period” means the period from the Closing Date until the second anniversary of the Closing Date.

(lv)            “Seller Tax Matter” means (a) extending or waiving the applicable statute of limitations with respect to a Tax of the Company for a Pre-Closing Tax Period; (b) filing any ruling request with any Governmental Authority that affects Taxes of the Company for a Pre-Closing Tax Period; (c) making or revoking any election of the Company for a Pre-Closing Tax Period or (d) initiating or participating in any voluntary disclosure program with any Governmental Authority regarding any Tax (or potential Taxes) or Tax Returns of the Company for a Pre-Closing Tax Period.

(lvi)            “Seller Transaction Expenses” shall mean any obligation of Seller, the Company or any of their respective Affiliates incurred at or prior to Closing (even if billed or invoiced after the Closing) to the extent related to or arising from the negotiation, preparation or consummation of this Agreement or the transactions contemplated by this Agreement, including, but not limited to any investment banking fees, financial advisory fees, brokerage fees, commissions, finder’s fees, attorneys’ fees and expenses, accountants’ fees and expenses, any severance obligation, retention bonus, “stay” bonus, sale bonus or similar amount payable to any employee of, or other service provider to, the Company, in any case, that is triggered in whole or in part as a result of or in connection with the transactions contemplated by this Agreement (including the employer portion of any employment, payroll, social security, unemployment, withholding, or similar Taxes associated therewith) or similar fees incurred by the Company or Seller arising in connection with this Agreement, the Reorganization or the transactions contemplated by this Agreement.

(lvii)            “Separation and Conduct Agreement” means that certain Separation and Conduct Agreement, dated January 31, 2019 by and among the Company, Relias, LLC, OnCourse Learning Corporation and OCL Real Estate LLC, as amended by the Amendment Number 1 to the Separation and Conduct Agreement dated April 3, 2019, including all schedules and exhibits thereto.

(lviii)            “Straddle Period” shall mean any Tax period beginning on or before and ending after the Closing Date.

(lix)            “Subsidiary” shall mean with respect to any Person, (a) any corporation at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by such Person or by one or more of its subsidiaries, (b) any general partnership, joint venture, limited liability company, statutory trust, or other entity, at least a majority of the outstanding partnership, membership, or other similar equity interests of which shall at the time be owned by such Person, or by one or more of its subsidiaries, and (c) any limited partnership of which such Person or any of its subsidiaries is a general partner.  For the purposes of this definition, “voting stock” means shares, interests, participations, or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations, or other equivalents having such power only by reason of the occurrence of a contingency.

(lx)            “Tax” or “Taxes” shall mean (a) any and all taxes, charges, fees, levies or other assessments, including income, gross receipts, value added, excise, real or personal property, sales, withholding, social security, retirement, unemployment, occupation, use, net worth, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the IRS or any other taxing authority (whether domestic or foreign including any state, county, local or foreign government or any subdivision or taxing agency thereof (including a United States possession)), whether computed on a separate, consolidated, unitary, combined or any other basis; and such term shall include any interest whether paid or received, fines, penalties or additional amounts imposed by the IRS or any other taxing authority attributable to, or imposed upon, or with respect to, any such taxes, charges, fees, levies or other assessments, (b) any Liability for the payment of any amounts of the type described in clause (a) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any Pre-Closing Tax Period, and (c) any Liability for the payment of any amounts of the type described in clause (a) or (b) of this sentence as a result of being a transferee of or successor to any person.

(lxi)            “Tax Returns” shall mean any return (including any information return), report, statement, schedule, notice, form, or other document or information, including any amendments thereto, filed with or submitted to, or required to be filed with or submitted to, the IRS or any other taxing authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any legal requirement relating to any Tax.

(lxii)            “Threatened” shall mean that a demand or statement has been made in writing, or any written notice has been given, that would lead a reasonable Person to conclude that such a claim is likely to be asserted.

(lxiii)            “Undisclosed Liability” means a Liability of the Company related to the period prior to the Closing Date, which would have been accounted for in a financial statement of a similarly sized company that conducts a business similar to the Business, provided, that any item set forth in the Disclosure Schedule that constitutes or could constitute a Liability because it is reasonably apparent on the face of such disclosure shall not constitute (in whole or in part) an Undisclosed Liability.

(lxiv)            “Welfare Plan” shall mean each “employee welfare plan” as defined in ERISA Section 3(1), including medical reimbursement benefits provided under a Fringe Benefit Plan subject to Code Section 125 and health reimbursement arrangements.  The term “Welfare Plan” includes an “employee welfare plan” which is subject to an exemption under ERISA.  The term “Welfare Plan” shall include any terminated “employee welfare plan” previously maintained, sponsored, or contributed to by the Company which, as of the date hereof, has not distributed all of its assets or satisfied all of its Liabilities.

Each of the following terms is defined in the Section of this Agreement set forth opposite such term:

Section 2.                      Purchase and Sale.

(a)        Purchase and Sale of Membership Interests.  In accordance with, and subject to, the provisions of this Agreement, at the Closing Buyer shall purchase from Seller, and Seller shall sell to Buyer, the Membership Interests, free and clear of all Encumbrances (other than Encumbrances under federal and state securities laws).

(b)       Consideration.  Upon the terms and subject to the conditions of this Agreement, in consideration of the transaction set forth in Section 2(a), the consideration to be paid by Buyer to Seller (the “Membership Interest Purchase Price”) shall be equal to One Hundred Twenty-One Million Dollars ($121,000,000), plus (i) the Final Cash Amount; minus (ii) the Final Indebtedness Amount, subject to the treatment of Indebtedness on Schedule 1(a); minus (iii) the Final Debt-Like Items Amount, minus (iv) the Final Seller Transaction Expenses Amount; plus (v) the amount, if any, up to One Million Dollars ($1,000,000) (such amount, the “Upper Adjustment Cap”), by which the Final Closing Net Working Capital exceeds the sum of (1) the Net Working Capital Target, plus (2) Five-Hundred Thousand Dollars ($500,000) ((1) plus (2), the “Upper Collar Limit”), if applicable; or minus (vi) the amount, if any, up to Two Million Dollars ($2,000,000) (such amount, the “Lower Adjustment Cap”), by which the Final Closing Net Working Capital is less than the difference of ((1) the Net Working Capital Target minus (2) Five-Hundred Thousand Dollars ($500,000) ((1) minus (2), the “Lower Collar Limit”)), if applicable.

(c)        Closing Estimates.  No later than five (5) Business Days prior to the Closing Date, Seller shall deliver to Buyer (the “Closing Estimates”) calculations of (i) the estimated Net Working Capital as of the Effective Time on the Closing Date (the “Estimated Closing Net Working Capital”), (ii) the estimated amount of Debt-Like Items as of the Effective Time on the Closing Date (the “Estimated Debt-Like Items Amount”), (iii) the estimated amount of Cash as of the Effective Time on the Closing Date (the “Estimated Cash Amount”), (iv) the estimated amount of Indebtedness as of immediately prior to the Closing based on the Payoff Letters or other loan satisfaction documents if Payoff Letters are not available (the “Estimated Indebtedness Amount”), and (v) the estimated amount of Seller Transaction Expenses that will remain unpaid as of the Closing (the “Estimated Seller Transaction Expenses Amount”). Seller shall also deliver to Buyer all reasonable supporting documentation to support Seller’s calculation of the Estimated Closing Net Working Capital, the Estimated Debt-Like Items Amount, the Estimated Cash Amount, Estimated Indebtedness Amount, the Estimated Seller Transaction Expenses Amount and the Estimated Seller Closing Payment.

(d)         Closing; Closing Payments.  No later than five (5) Business Days prior to the Closing Date, Seller shall deliver to Buyer a funds flow memorandum, containing the amounts to be paid at Closing and wire transfer instructions with respect to the accounts to which payments to be made at Closing (the “Funds Flow Memorandum”).  The Closing shall take place via the remote exchange of signature pages as promptly as practicable (but in no event later than the fifth (5^th) Business Day) after the date of the satisfaction or due waiver of all of the conditions set forth in Section 8 (excluding the delivery of any documents deliverable at the Closing), or such other place or date as may be mutually agreed by the Parties.  The date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.  The Closing shall be deemed to be effective as of the Effective Time.  At the Closing:

(i)            Buyer shall pay or otherwise discharge, on behalf of the Company as part of the Estimated Seller Closing Payment, such amounts necessary to discharge all Indebtedness included in Estimated Indebtedness Amount in accordance with the Funds Flow Memorandum.  The Parties acknowledge and agree that Buyer is paying the Indebtedness directly only as an administrative convenience for the Company and Seller.

(ii)            Buyer shall pay, on behalf of the Company as part of the Estimated Seller Closing Payment, all Seller Transaction Expenses included in the Estimated Seller Transaction Expenses Amount in accordance with the Funds Flow Memorandum.  The Parties acknowledge and agree that Buyer is paying the Seller Transaction Expenses directly only as an administrative convenience for the Company and Seller.

(iii)            Buyer shall pay Seller, in accordance with the Funds Flow Memorandum, an aggregate amount equal to One Hundred Twenty-One Million Dollars ($121,000,000), plus (a) the Estimated Cash Amount; minus (b) the Estimated Indebtedness Amount, subject to the treatment of Indebtedness on Schedule 1(a); minus, (c) the Estimated Debt-Like Items Amount; minus (d) the Estimated Seller Transaction Expenses Amount; plus (e) the amount, if any, subject to the Upper Adjustment Cap, by which the Estimated Closing Net Working Capital is greater than the Upper Collar Limit, minus (f) the amount, if any, subject to the Lower Adjustment Cap, by which the Estimated Closing Net Working Capital is less than the Lower Collar Limit (collectively, the “Estimated Seller Closing Payment”).

(iv)            All cash payments will be made by wire transfer of immediately available funds on the Closing Date pursuant to the wire transfer instructions set forth in the Funds Flow Memorandum.

(e)            Post-Closing Confirmation of Purchase Price.

Debt-Like Items, Seller Transaction Expenses, Net Working Capital and the related Final Seller Closing Payment is to measure changes in the amounts of Cash, Indebtedness, Debt-Like Items, Seller Transaction Expenses and Net Working Capital (taking into consideration the Upper Collar Limit, the Lower Collar Limit, the Upper Adjustment Cap and the Lower Adjustment Cap) between the date on which Seller delivers its estimates thereof in accordance with Section 2(c) and the actual amount thereof as of the Closing Date, in each case in accordance with the Accounting Principles, and in undertaking such processes, the Parties shall not introduce different judgments, accounting methods, policies, principles, practices, procedures, classifications or estimation methodologies for the purpose of determining the amounts of Cash, Indebtedness, Debt-Like Items, Seller Transaction Expenses and Net Working Capital under this paragraph from those used in the Accounting Principles or reference definitions.  Without limiting the foregoing, the Final Closing Net Working Capital and the Final Cash Amount shall not contain any categories or types of assets or liabilities or other accounts, reserves or line items not reflected in the calculations of the Estimated Closing Net Working Capital or the Estimated Cash Amount, respectively, or included in the Accounting Principles.  If Buyer fails to deliver the Final Closing Statement within sixty (60) days following the Closing, then the Closing Estimates shall be final, not subject to further adjustment and shall be binding for all purposes (including calculating the Membership Interest Purchase Price).

engage in telephone calls or meetings with the Independent Accountant unless the other Party is provided with reasonable advance notice of the call or meeting and an opportunity to participate.  Within thirty (30) calendar days after submission to the Independent Accountant for resolution, Buyer and Seller shall each indicate in writing their position on each disputed matter and each such Party’s determination of the amount of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment.  The Independent Accountant’s determination shall be based solely on the definitions and other applicable provisions of this Agreement and/or presentations consisting of (i) a single written presentation submitted by each of the Buyer and Seller in accordance with the preceding sentence (which the Independent Account shall be instructed to distribute to the Buyer and Seller upon receipt of both such presentations) and (ii) a single written response submitted by each of the Buyer and Seller to each such presentation and any interrogatories of the Independent Accountant (which the Independent Accountant shall be instructed to distribute to Buyer and Seller upon receipt of such responses).  The Parties shall instruct the Independent Accountant to make a written determination on each disputed matter (and no other matters) no later than sixty (60) calendar days after submission to the Independent Accountant for resolution and such determination will be conclusive and binding upon the Parties with respect to each disputed matter, absent fraud or manifest error.  The Independent Accountant shall, by applying the Accounting Principles and the principles set forth in this Agreement (including the requirements of Section 2(e)(i)), only decide the specific items under dispute by the Parties and its decision for each disputed item must be within the range of values assigned to each such item by Buyer (in Buyer’s calculation of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, or the Final Seller Closing Payment) or Seller (in the Dispute Notice).  The proposed Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment will be revised as appropriate to reflect the resolution of any such claims pursuant to this Section 2(e)(ii).  The fees and expenses of the Independent Accountant incurred in the resolution of such dispute shall be borne by Buyer and Seller in such proportion as is appropriate to reflect the relative benefits received by Buyer and Seller from the resolution of the dispute, which proportionate allocation shall be determined by the Independent Accountant at the time the determination of the Independent Accountant is rendered on the merits.  For example, if Seller challenges the calculation of the Final Closing Net Working Capital by an amount of $100,000, but the Independent Accountant determines that Seller has a valid claim for only $40,000 (i.e., Seller prevails as to 40% of its claim), then Buyer shall bear 40% of the fees and expenses of the Independent Accountant and Seller shall bear the other 60% of such fees and expenses.  Each of the Parties agrees to use its commercially reasonable efforts to cooperate with the Independent Accountant (including by executing a customary engagement letter reasonably acceptable to it) and to cause the Independent Accountant to resolve any such dispute as soon as practicable after the commencement of the Independent Accountant’s engagement.

(iii)            Buyer will provide Seller with reasonable access to the books and records used in the preparation of the calculations of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment and shall make its (and the Company’s) financial staff and accountants (subject to the execution of customary work paper access letters if requested) reasonably available to Seller and its accountants and other representatives and to the Independent Accountant upon reasonable notice and during normal business hours during (a) the review by Seller of the calculations of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment, (b) the Discussion Period and (c) the resolution by Buyer and Seller or the Independent Accountant of any objections thereto.

(f)        Adjustment Payment.  After the determination of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment (each as finally determined under Section 2(e)):

(i)            If there is a Final Deficiency then, no later than five (5) Business Days after the determination of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses Amount, and the Final Seller Closing Payment in accordance with Section 2(e), Buyer shall promptly pay to Seller the amount of the Final Deficiency by wire transfer of immediately available funds to the account designated by Seller.

(ii)            If there is a Final Excess, then, no later than five (5) Business Days after the determination of the Final Closing Net Working Capital, the Final Cash Amount, the Final Indebtedness Amount, the Final Debt-Like Items Amount, the Final Seller Transaction Expenses, and the Final Seller Closing Payment in accordance with Section 2(e), Seller shall pay to Buyer the amount of the Final Excess by wire transfer of immediately available funds to the account or accounts designated by Buyer.

(iii)            If the Final Seller Transaction Expenses Amount or the Final Indebtedness Amount is greater than the Estimated Seller Transaction Expenses Amount or the Estimated Indebtedness Amount, as applicable, Buyer shall pay such excess to the applicable vendors who are owed the additional Seller Transaction Expenses or Indebtedness so long as such amounts were taken into account in calculating the adjustment payment reflecting either the Final Deficiency or the Final Excess.

(g)        Withholding.  Buyer will be entitled to deduct and withhold from any amount payable pursuant to this Agreement such amounts as Buyer (or any Affiliate thereof) shall determine in good faith they are required to deduct and withhold with respect to the making of such payment under the Code or any other provision of applicable Laws; provided, however, that prior to making any such deduction or withholding on any amount to be paid to Seller, Buyer shall use commercially reasonable efforts to notify Seller of its intent to make such deduction or withholding at least five (5) Business Days prior to payment and shall reasonably cooperate with Seller to avoid (or minimize) such deduction or withholding.  To the extent that amounts are so deducted or withheld by Buyer, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and withholding were made.

Section 3.       Representations and Warranties Regarding the Company. As of the date hereof and as of the Closing Date, except as set forth in the Disclosure Schedule (as described in Section 12(a) below), the Company represents and warrants to Buyer that:

(a)         Organization and Qualification; Enforceability.  The Company is an entity duly organized, validly existing and in good standing under the Laws of the State of Delaware.  The Company has all requisite power and authority to own, operate and lease its properties, to carry on its business as and where it is currently being conducted.  The Company is legally qualified to transact business as a foreign entity and is in good standing in each of the jurisdictions in which its business or property is located such as to require that it be thus qualified, except for such jurisdictions where the failure to so qualify or be in good standing would not have a Material Adverse Effect.  This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other Parties hereto, constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by the Company pursuant hereto, assuming the due authorization, execution and delivery by the other Parties thereto, will constitute, valid and binding agreements of the Company, enforceable in accordance with their respective terms, subject to the Bankruptcy and Equity Exception.

(b)        Capitalization.  All of the issued and outstanding membership interests or other equity interests of the Company are listed on Exhibit A.  All of such membership interests or other equity interests were duly authorized and validly issued, are fully paid and nonassessable and are owned (beneficially and of record) as set forth on Exhibit A.  Each equity interest was duly authorized by all necessary limited liability company action, as applicable, including approval by the Company’s managers and any required member approval by the necessary number of votes or written consents.  Except as set forth on Exhibit A, there are no other equity interests in the Company outstanding, and there are no options, warrants, restricted equity, equity appreciation rights, subscriptions, puts, calls, purchase rights, preemptive rights, convertible instruments, exchange rights or other rights, agreements, arrangements, or commitments of any character relating to the issued or unissued membership interests or other equity interests of the Company or obligating the Company to issue, deliver, transfer or sell any membership interests or other equity interests in, the Company.  There are no obligations, contingent or otherwise, of the Company to repurchase, redeem, or otherwise acquire any membership interests or other equity interests of the Company or to provide funds to or make any investment (in the form of a loan, capital contribution, or otherwise) in any other entity. The Company does not own any Subsidiary and does not own nor does it have any right to acquire, directly or indirectly, any capital stock of, or other equity interests in, any Person.

(c)         No Conflict; Required Filings and Consents.  Except as set forth on Schedule 3(c), neither the execution and delivery of this Agreement nor the consummation by Seller or the Company of the transactions contemplated hereby (i) will violate any Law or any Order, in each case applicable to the Company or by which any of its properties are bound or affected, (ii) will require any authorization, consent, approval, exemption or other action by or notice to any Governmental Authority, except for filings under the HSR Act and applicable Foreign Competition Laws and except for those consents, approvals, authorizations, permits, filings or notifications, the failure to be made or obtained would not reasonably be expected to have a Material Adverse Effect, or (iii) will violate or conflict with, or constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of or require consent under any term or provision (a) of the Organizational Documents of the Company or (b) of any Material Contract.

(d)        Financial Statements.  The Company has delivered or made available to Buyer copies of the following financial statements prepared by the Company’s management (the “Financial Statements”):

(i)            an unaudited carve-out balance sheet of the Company as of January 31, 2019 (the “Opening Balance Sheet”); and

(ii)      an unaudited balance sheet of the Company as of February 28, 2019 and the related unaudited statement of income for the one-month period ended February 28, 2019 (the “Interim Financial Statement Date”).

The Financial Statements were prepared in accordance with the Accounting Principles and fairly present in all material respects the financial condition of the Company as of such dates, however, the Financial Statements do not have footnote disclosures, normal recurring year-end adjustments nor reclassifications, and the Financial Statements do not have a statement of cash flows or a statement of members’ equity.  The Example NWC Calculation has been prepared by the Company in good faith based on the books and records of the Company and Seller and, to the Knowledge of the Company, such Example NWC Calculation does not exclude any material current assets or material current liabilities of the Company.

(e)                 Specified Representations.

(i)            The Company owns or otherwise possesses (or shall be assigned pursuant to the Separation and Conduct Agreement) sufficient, valid and enforceable rights (and if such rights are licensed, such rights are pursuant to a written Contract) to (a) all course materials used by the Company in the conduct of its Business as presently conducted and (b) the LMS Platform as it is presently constituted.  The Company’s use of the course materials and the LMS Platform in the conduct of its Business as currently conducted does not and will not infringe, misappropriate or otherwise violate any Intellectual Property of any Person;

(ii)            All of the rights to the written customer Contracts of the Company have been assigned to the Company (or shall be assigned pursuant to the Separation and Conduct Agreement) or are otherwise owned by the Company; and

(iii)            The Company has no Undisclosed Liabilities (individually or in the aggregate) in excess of Five Million Dollars ($5,000,000).

(f)                 Compliance; Permits.

(i)            Compliance.  Except as set forth on Schedule 3(f)(i), to the Knowledge of the Company, the Company is in compliance in all material respects with all applicable Laws and Orders.  The Company has not received any written notice from any Governmental Authority or other Person with respect to the operation of the Business or the ownership or use of any of its assets claiming any violation or alleged violation of any Law or Order that remain open or pending that would be material to the Company or the Business, nor has the Company paid any material fines or penalties as the result of any such written notice since the Interim Financial Statement Date.

(ii)            Permits.  To the Knowledge of the Company, the Company has or is in the process of obtaining since its formation all licenses, permits, approvals, registrations, certifications, consents and listings (collectively, the “Permits”) of all Governmental Authorities required for the conduct of the Business and the ownership, leasing and operation of their property and assets.  All Permits that the Company has or is in the process of obtaining are set forth on Schedule 3(f)(ii).

(g)       Absence of Certain Changes or Events.  Since the date of the Opening Balance Sheet, other than pursuant to the Reorganization or as set forth on Schedule 3(p), the Company has conducted the Business only in the Ordinary Course of Business, and there has been no Material Adverse Effect.  Without limiting the generality of the foregoing, since the Interim Financial Statement Date, the Company has not:

(i)            incurred or assumed any Indebtedness (whether directly or by way of guarantee or otherwise), other than draws on established lines of credit;

(ii)            issued, sold, distributed or disposed of any membership interests, notes or other securities, or committed itself to do so;

(iii)            placed or permitted any Encumbrance, other than a Permitted Encumbrance, on any of its assets, tangible or intangible;

(iv)            suffered any material Losses, damage or destruction, whether covered by insurance or not, relating to or affecting the Business or the assets of the Company;

(v)            terminated, amended or instituted any Company Plan;

(vi)            changed its credit or accounting policies or practices, except as required by applicable Laws or as necessary in connection with being a company in its initial phases and first year of accounting;

(vii)            entered into any merger, consolidation, recapitalization or other business combination or reorganization with a non-Affiliate (except with respect to the transactions contemplated herein);

(viii)            entered into any settlement, or offer or proposal to settle, (a) any material Claim involving or against the Company, (b) any Claim that relates to the transactions contemplated hereby;

(ix)            amended its Organizational Documents;

(x)            except as set forth in Schedule 3(g)(x), made any payment of or increase in any bonuses, salaries, or other compensation to any member, manager, officer, or (except in the Ordinary Course of Business and in accordance with plans existing as of the Interim Financial Statement Sheet Date) employee or entry into any employment, severance, or similar Contract with any member, manager, officer or employee;

(xi)            accelerated, amended, terminated, or cancelled or had terminated or cancelled any Material Contract, or canceled, modified or waived any material debts or Claims held by it or waived any rights material to the Business;

(xii)            (a) except as to initial Tax Returns filed or to be filed by the Company in its first year of existence,  (1) made, changed or rescinded any election relating to Taxes, (2) adopted or changed any annual Tax accounting period or any method of Tax accounting, or (3) made any change to any of its methods of reporting income or deductions for Tax purposes; (b) settled or compromised or agreed to comprise any legal proceeding relating to Taxes or consented to any extension or waiver of the statute of limitations thereof; (c) obtained or applied for any Tax refund or ruling, entered into any closing agreement relating to Taxes or taken any affirmative action to surrender any right to claim a Tax refund, offset or other reduction in Liability relating to Taxes; or (d) filed any amended Tax Returns; or

(xiii)            entered into any agreement or commitment (whether written or oral) to do any of the foregoing.

(h)         Litigation and Proceedings.  Except as set forth on Schedule 3(h), there are no pending Claims or, to the Company’s Knowledge, Threatened Claims against the Company concerning a violation of any Law, its operations or the Business.

(i)         Real Property.  The Company does not own any real property.  Schedule 3(i) sets forth a true and complete list and description of all real property and interests leased by the Company (the “Leased Real Property”).  Except as set forth on Schedule 3(i), there are no leases, subleases, Contracts, options or enforceable rights or obligations relating to or affecting the Leased Real Property to which the Company is a party.  The Company is not currently in default of or violation of any of the terms of any lease or Contract to which the Company is a party with respect to the Leased Real Property.  No Person, other than the Company, has any right or option to acquire or lease any portion of such interest in the Leased Real Property.  The Company has a valid and enforceable leasehold interest under each lease relating to the Leased Real Property, subject to the Bankruptcy and Equity Exception, and the Company has not received any written notice of any default (including written notice of any accrued default that is subject only to a notice or cure period) by the Company under any of the leases relating to the Leased Real Property, and to the Knowledge of the Company, no other party is in default thereof, and no party to any of the leases relating to the Leased Real Property has exercised any termination rights with respect thereto.  Seller has delivered to Buyer true, correct and complete copies of all leases relating to the Leased Real Property, together with all amendments, modifications or supplements, if any, thereto.

(j)        Material Contracts.  Schedule 3(j) lists each of the following Contracts of the Company (including any amendments, supplements, modifications or renewals of such Contracts, collectively, such contracts being a “Material Contract” and, collectively, as the “Material Contracts”):

(i)            any Contract with any Major Customer or Major Supplier as to which there is a remaining non-contingent payment or delivery obligation that exceeds $150,000;

(ii)            any representative, broker or sales agency Contract involving in any one case payments of more than $100,000 for 2019;

(iii)            any lease with respect to real property;

(iv)            any lease with respect to personal property under which the Company is either lessor or lessee, involving annual rental payments in excess of $100,000;

(v)            any note, debenture, bond, conditional sale agreement, equipment trust agreement, letter of credit agreement, loan agreement or other Contract or commitment for the borrowing or lending of money (including loans to or from officers, managers, directors, shareholders or members, or any member of their immediate families), agreement or arrangement for a line of credit or guarantee, pledge or undertaking of the Indebtedness of any other Person;

(vi)            other than the Separation and Conduct Agreement, any Contract relating to any joint venture, partnership or other arrangement (however named) involving a sharing of the profits, Losses, costs or Liabilities of the Company with any other Person;

(vii)            any Contract containing covenants or conditions that purport to restrict the business activity of the Company, or limit the freedom of the Company to engage in any line of business or to compete with any third party;

(viii)            any Contract relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise) pursuant to which the Company has any current or future rights or obligations;

(ix)            any collective bargaining agreement or other similar Contract with any labor union or works council;

(x)            any license agreement, other than off-the-shelf, commercially available, non-customized third-party Software, that is material to the Business;

(xi)            any Contract (other than standard confidentiality, non-compete or non-solicitation agreements) with any manager, officer or employee of Company, provided that, with regard to offer letters, employment agreements and amendments thereto, only with regard to employees with an annual salary of $150,000 or greater, unless such employee is an officer or manager;

(xii)            any Contract with any member, Affiliate or Related Person of the Company that will continue in effect after the Closing;

(iv)            With respect to each Company Plan, and solely with respect to employees of the Company, each Benefit Plan, as applicable: (a) other than routine claims for benefits being reviewed pursuant to the applicable Employee Benefit Plan’s or Company Plan’s internal claim and approval process, all payments, benefits, premiums and other amounts due from or with respect to the Company Plan and, Employee Benefit Plan have been timely made or accrued as a liability in the Final Closing Net Working Capital; (b) to the Company’s Knowledge, the Company has in all material respects complied with, and the Company Plan conforms in all material respects to, all applicable Laws; (c) to the Company’s Knowledge, the Company Plan has been administered in accordance with its material terms; (d) all reports and information relating to the Company Plan required to be filed with any Governmental Authority or provided to participants or their beneficiaries have been timely filed (subject to the receipt of extensions to file) or disclosed and, when filed or disclosed, were true, correct and complete in all material respects; (e) each Company Plan that is intended to qualify under Section 401 of the Code has received a favorable determination letter from the IRS (or a favorable opinion letter or advisory letter in connection with a prototype or volume submitter plan, respectively)  to the effect that such plan is qualified under Section 401(a) of the Code and that, its related trust is exempt from taxation under Section 501(a) of the Code, and, to the Company’s Knowledge, nothing has occurred since the date of such letter that has or is reasonably likely to adversely affect such qualification or exemption; and (f) there is no Claim pending (other than routine claims for benefits being reviewed pursuant to the applicable Company Plan’s internal claim and approval process) or, to the Company’s Knowledge, Threatened with respect to the Company Plan or against the assets of the Company Plan and there is no governmental audit in process or pending with respect to any such Company Plan.

(v)            Except as expressly required under Sections 601 through 609 of ERISA or similar state insurance law, no Company Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees, directors or independent contractors of the Company beyond their retirement or other termination of service, and the Company does not have any obligation to provide or contribute toward the cost of such coverage or benefits.

(vi)            Except as set forth on Schedule 3(k)(vi), the consummation of the transactions contemplated hereby, either singly or in conjunction with any other event, will not (a) entitle any current or former employee, director, manager or independent contractor of the Company (or dependents of such Persons) to severance pay, unemployment compensation or any other payment or benefit (other than as mandated under COBRA or similar state law), except as expressly set forth in this Agreement, or (b) accelerate the time of payment or vesting or increase the amount of compensation due to any current or former employee, director or independent contractor of the Company (or dependents of such Persons).

(vii)            No amount that could be received (whether in cash, property, the vesting of property or otherwise) as a result of or in connection with the consummation of the transactions contemplated by this Agreement (either alone or in combination with any other event) by any employee, officer, director or other service provider of the Company or any of its Subsidiaries who is a “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).

(viii)            The Company is not a party to and does not have any obligation under any Employee Benefit Plan to compensate any Person for excise Taxes payable pursuant to Section 4999 of the Code or for additional Taxes payable pursuant to Section 409A of the Code.

(ix)            Following the Closing, the Company shall not have any Liability with respect to any Employee Benefit Plan that is not a Company Plan.

(l)          Title to Assets; Restructuring.

(i)            The Company has good and valid title to, or, in the case of leased or subleased assets, a valid and binding leasehold interest in, all of its assets, including, subject to the terms of the Separation and Conduct Agreement, those assets defined as the Assigned FS Assets in that certain Contribution, Assignment and Assumption Agreement dated as of January 31, 2019, by and between OnCourse Learning Corporation and the Company, as amended, free and clear of all Encumbrances other than Permitted Encumbrances.

(ii)            Other than as set forth on Schedule 3(l)(ii), effective as of the date of this Agreement, the Reorganization is complete, except as and may be rectified through the Separation and Conduct Agreement.

(m)              Compliance with Environmental Laws.

(i)            The Company is in compliance in all material respects with all Environmental Laws.

(ii)            The Company has not received any written notice from a Governmental Authority that alleges that the Company is not in compliance with any Environmental Laws.

(iii)            There is no Claim pending or, to the Company’s Knowledge, Threatened against the Company relating in any way to any Environmental Laws.

(v)            The Company has not received any letter or written request for information under CERCLA or any similar Laws, and, to the Company’s Knowledge, none of the operations of the Company is the subject of any investigation by a Governmental Authority evaluating whether any remedial action is needed to respond to an actual or threatened discharge, spill or release of any Hazardous Substance at any property owned or leased by the Company, or at any other location to which the Company has transported, or arranged for the transportation of, any Hazardous Substance.

(n)         Taxes. Except as set forth on Schedule 3(n):

(i)            All Tax Returns required to be filed (determined with regard to any timely extensions) by or on behalf of the Company have been duly filed in a timely manner with the appropriate taxing authorities.  Each such Tax Return is true, correct, and complete in all material respects, and all Taxes due and owing by or with respect to the Company (whether or not shown on any Tax Returns) have been timely paid.  There are no extensions of time to file any Tax Returns that are pending, and there are no agreements or waivers extending the statutory period of limitation applicable to any Taxes of the Company for any open period.

(ii)            All Taxes required to be withheld by the Company have been withheld and have been duly and timely paid to the proper taxing authority.  There are no Encumbrances for Taxes (other than Permitted Encumbrances) on any of the assets of the Company.  No deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Company.

(iii)            The Company is not a party to or bound by any Tax indemnity, Tax sharing or Tax allocation agreement.

(iv)            The Company is not nor has been a party to any “reportable transaction,” as defined in Section 6707(a) of the Code and Treas. Reg. §1.6011-4(b) or any similar provision of state, local or foreign Tax Law.

(v)            No foreign, federal, state, or local Tax audits or administrative or judicial Tax proceedings are pending, being conducted or, to the Company’s Knowledge, Threatened with respect to the Company.

(vi)            The Company is not, and has not been, a “United States real property holding company” within the meaning of Section 897 of the Code within the period specified in that section.

(vii)            The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (a) installment sale or open transaction disposition made on or prior to the Closing Date, (b) prepaid amount received or deferred revenue accrued on or prior to the Closing Date, (c) change in a method of accounting, including pursuant to Section 481 of the Code, for a taxable period (or portion thereof) beginning on or before the Closing Date, (d) “closing agreement” described in Section 7121 of the Code (or any similar agreement) executed on or before the Closing Date, or (e) corresponding or similar item under any provision of state, local or non-U.S. Tax Law.

(viii)            At all times since its formation, the Company has been treated as an entity that is disregarded as separate from its owner for U.S. federal, state and local income Tax purposes.

(ix)            The Company does not have any Liability for the Taxes of any other Person under Treasury Regulations Section 1.1502-6 or any similar provision of applicable Law, or for the Taxes of any other Person as a transferee or successor, as a result of any contractual obligation or otherwise.

(o)         Insurance.  Schedule 3(o) sets forth a complete and accurate list and description of all policies of insurance presently in effect with respect to the Company, the Business or the Company’s respective assets, or of which the Company is the owner or the beneficiary, or under which the Company is an insured or loss payee.  Schedule 3(o) also includes the carrier, the description of coverage, the limits of coverage, retention or deductible amounts, amount of annual premiums, date of expiration and date through which premiums have been paid with respect to each insurance policy listed on such Schedule, and any pending claims in excess of $100,000.  Subject to expirations and renewals of insurance policies in the Ordinary Course of Business, all such policies are in full force and effect, all premiums with respect thereto covering all periods up to and including the date as of which this representation is being made have been paid (other than retrospective premiums which may be payable with respect to workers’ compensation insurance policies), and no written notice of cancellation or termination has been received with respect to any such policy.

(p)        Related Party Transactions.  Except as set forth on Schedule 3(p), and other than with regard to the Transition Services Agreement, dated January 31, 2019 between the Company and OCL Real Estate LLC, as amended, and the Transition Services Agreement, dated January 31, 2019 between the Company and Relias LLC, as amended, no director, officer, employee, Affiliate or “associate” or members of any of their “immediate family” (as such terms are respectively defined in Rule 12b-2 and Rule 16a-1 of the Exchange Act) of the Company, Seller or any of its other Affiliates (each of the foregoing, a “Related Person”), other than in his or her capacity as a director, officer or employee of the Company, has any material interest in or other material business relationship or arrangement with any Person that (i) does business with the Company in connection with the operation of the Business, (ii) is engaged, directly or indirectly, in the conduct of the Business or (iii) owns any material property, asset or right that is used by the Company.  All obligations of any Related Person to the Company, and all obligations of the Company to any Related Person, are described on Schedule 3(p), other than compensation and benefits paid to employees of the Company in the Ordinary Course of Business consistent with past practice.

(q)                Labor Matters.

(i)            Schedule 3(q)(i) contains a list of all Persons who were employees of the Company as of March 31, 2019, including any employee who is on a leave of absence of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (a) name; (b) title or position (including whether full or part time); (c) hire date; (d) current annual base compensation rate; (e) commission, bonus or other incentive-based compensation; (f) a description of the fringe benefits provided to each such individual as of the date hereof; (g) overtime exemption status; (h) classification as employee, independent contractor or consultant; (i) whether such employee is on a leave of absence and, if so, the type of leave of absence and the date such employee’s expected return to work and (j) a summary of all commitments by the Company to increase the compensation or to modify the terms or conditions of employment of any such employee.

(ii)            To the Knowledge of the Company, no Person who is an employee, independent contractor or consultant of the Company is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, non-competition, or proprietary rights agreement that could reasonably be expected to (a) prohibit the performance by such Person of his/her duties for or on behalf of Buyer or the Company or (b) adversely affect the ability of Buyer or the Company to conduct its primary business.

(iii)            The Company is not a party to any collective bargaining agreement and there is no labor strike, slowdown, work stoppage or lockout actually pending or, to the Knowledge of the Company, Threatened, with respect to any Person who is an employee, independent contractor or consultant of the Company.  Moreover, the Company has not agreed to recognize any union or other collective bargaining representative, there has been no demand made or Threatened for recognition by any labor union and, to the Knowledge of the Company, there has been no petition filed or Threatened to be filed for an election respecting such recognition of a labor union with respect to any Person who is an employee, independent contractor or consultant of the Company.  There have been no efforts, to the Knowledge of the Company, by any labor union seeking to organize any Person who is an employee, independent contractor or consultant of the Company.

(iv)            The Company has not engaged in any unfair labor practice, and there is no complaint for unfair labor practice against the Company pending or to the Knowledge of the Company, Threatened before the National Labor Relations Board or any comparable Governmental Authority.

(v)            The Company has, in all material respects, complied with applicable Laws relating to the employment of labor, including without limitation any provisions thereof relating to (A) wages, overtime, hours, bonuses, commissions, meal or rest periods, termination pay, vacation pay, sick pay, employee benefits, and/or the payment and/or accrual of the same; (B) unlawful, wrongful or retaliatory or discriminatory employment or labor practices of any kind; (C) occupational safety and health standards; or (D) workers’ compensation, disability, leaves of absence, unemployment compensation, whistleblower and/or other Laws.

(vi)            There are no Claims, complaints, audits or other similar disputes of any kind relating to the employment of labor or termination of employment relating to Persons who are employees, independent contractors or consultants of the Company against the Company or to the Knowledge of the Company, threatened before any Governmental Authority.

(r)         Brokers.  Except for Macquarie Capital (USA), Inc. (the fees of which will be paid by Seller or, if paid by the Company will constitute Seller Transaction Expenses), no broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or the Company.

(s)                  Intellectual Property.

(i)            Except as set forth on Schedule 3(s), the Company exclusively owns all right, title and interest in and to the Company Intellectual Property, free and clear of all Encumbrances.  Except as set forth on Schedule 3(s), the Company owns or otherwise possesses sufficient, valid and enforceable rights, pursuant to a written Contract, to all Intellectual Property that is used in the operation of the Company’s Business as currently conducted.

(ii)            The Company is not, nor will be as a result of the execution and delivery of this Agreement, in violation in any material respect of any Contract pursuant to which the Company is authorized to use any material third party Intellectual Property. The Company is not bound to any Contract that will cause, as a result of this Agreement or the consummation of the transaction contemplated hereby (a) the Company granting to any Person, or to the Knowledge of the Company, Buyer or any Affiliate of Buyer granting to any Person, any right to or with respect to any Company Intellectual Property or any Intellectual Property of Buyer, which grant did not exist prior to the Closing, (b) the Company being obligated to pay any royalties or other amounts to any Person in excess of those payable in the absence of this Agreement or the transaction contemplated hereby, or (c) the alteration, encumbrance, impairment, forfeiture or termination of, or give rise to a right of forfeiture or termination of, any Company Intellectual Property.

(iii)            To the Company’s Knowledge, no Person has since the inception of the Company infringed upon, misappropriated or otherwise violated any Intellectual Property of the Company.

(iv)            To the Company’s Knowledge, the operation of the Company’s Business as currently conducted and as presently proposed to be conducted (including the design, development, use, practice, import, export, manufacture, license, sale, offer for sale, supply or other disposition of the Company’s products and services, including the Company Software) does not and will not infringe, misappropriate or otherwise violate any  Intellectual Property of any Person.  To the Company’s Knowledge, there exists no reasonable basis for any claim of such infringement, misappropriation or other material violation of any third party Intellectual Property.  To the Company’s Knowledge, the Company has not received from any third party, any written notice that the Company has infringed upon, misappropriated or otherwise violated any third-party Intellectual Property, and Seller has not received such notice with respect to the Company’s Business.

(v)            No Company Intellectual Property is or has been judicially determined to be invalid or unenforceable. (No judicial, regulatory or administrative proceeding is currently pending or, to the Company’s Knowledge, Threatened which challenges the validity or enforceability of any Company Intellectual Property.

(t)         Major Customers. Schedule 3(t) sets forth to the Company’s Knowledge having used commercially reasonable efforts to compile such list, (i) the top ten mortgage and top ten TTS customers of the Company or its predecessor-in-interest for the fiscal year ended December 31, 2018 (determined on the basis of the total dollar amount of transactions recorded in the Company’s operational systems), and (ii) the top ten GRC customers of the Company or its predecessor-in- interest for the fiscal year ended December 31, 2018 (determined on the basis of invoiced amount) ((i) and (ii) together, the “Major Customers”), showing dollar amounts of transactions recorded (or invoiced) for each such customer during such period. No Major Customer has provided written notice to the Company that it will not continue to be a customer of the Company after the Closing at substantially the same level of purchases made during the periods noted above in this Section  3(t) and the Company has no Knowledge of any facts or circumstances that would prevent the Company from being able to continue to provide the same level and type of service and products going forward.

(u)         Major Suppliers. Schedule 3(u) sets forth, to the Company’s Knowledge having used commercially reasonable efforts to compile such list, the top ten suppliers to the Company or its predecessor-in-interest (“Major Suppliers”) for the fiscal year ended December 31, 2018 (determined on the basis of the total dollar amount of purchases made by the Company) showing the dollar amount of purchases from each such supplier by the Company or its predecessor-in- interest during such period. No supplier described on Schedule 3(u) has provided written notice to the Company that it will not continue to be a supplier to the Company after the Closing on substantially the same terms.

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY EXPRESSLY SET FORTH IN THIS Section 3 AND THE REPRESENTATIONS AND WARRANTIES OF THE SELLER EXPRESSLY SET FORTH IN Section 4 NEITHER THE COMPANY, THE SELLER NOR ANY OF THEIR RESPECTIVE AFFILIATES, REPRESENTATIVES OR ADVISORS MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE COMPANY, THE SELLER, THE BUSINESS OR ANY OF THEIR RESPECTIVE ASSETS, LIABILITIES OR OPERATIONS.

Section 4.            Representations and Warranties Regarding Seller. As of the date hereof and as of the Closing Date, except as set forth in the applicable Schedule of the Disclosure Schedule (as described in Section 12(a) below), Seller represents and warrants to Buyer as follows:

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER EXPRESSLY SET FORTH IN THIS SECTION 4 AND THE REPRESENTATIONS AND WARRANTIES OF THE COMPANY EXPRESSLY SET FORTH IN SECTION 3 NEITHER THE SELLER, THE COMPANY NOR ANY OF THEIR RESPECTIVE AFFILIATES, REPRESENTATIVES OR ADVISORS MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF THE SELLER, THE COMPANY, THE BUSINESS OR ANY OF THEIR RESPECTIVE ASSETS, LIABILITIES OR OPERATIONS.

Section 5.            Representations and Warranties Regarding Buyer. Buyer represents and warrants to Seller as of the date hereof that:

Notwithstanding the foregoing, nothing in this Section 5(g) shall limit or abrogate the representations and warranties set forth in Section 3 and Section 4 (in each case, as modified by the Disclosure Schedule) of this Agreement or Buyer’s right to rely thereon.

Section 6.            Covenants and Agreements of the Parties.

Section 7.            Covenants Regarding Tax Matters.

Section 8.            Conditions Precedent to Closing.

Section 9.            Closing Deliveries.

Section 10.          Survival; Indemnification.

Section 11.          Termination.

Section 12.          Miscellaneous.

 

or to such other Person or address as any Party shall have specified by notice in writing to the other Parties. If personally delivered, such communication shall be deemed delivered upon actual receipt; if sent by email, such communication shall be deemed delivered the day of the transmission or, if the transmission is not made on a Business Day before 5:00 p.m. (Eastern Time) at the place of receipt, the first Business Day after transmission (and sender shall bear the burden of proof of delivery); if sent by U.S. mail, such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal; and if sent by overnight courier, such communication shall be deemed delivered upon receipt.