EXHIBIT 4.4
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
Sylvan Learning Systems, Inc.
and
Goldman Acquisition Corp.
TABLE OF CONTENTS
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Page
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ARTICLE I CONVEYANCE OF ASSETS
Section 1.01 Conveyance of Assets..................................... 1
Section 1.02 No Assumption of Obligations and Liabilities............. 2
Section 1.03 Purchase Price........................................... 2
Section 1.04 Distribution............................................. 2
ARTICLE II REPRESENTATIONS OF GOLDMAN
AND THE GOLDMAN STOCKHOLDERS................................................. 2
Section 2.01 Organization, Valid Authorization and Good Standing....... 2
Section 2.02 Compliance................................................ 3
Section 2.03 Approvals................................................. 3
Section 2.04 Capitalization............................................ 3
Section 2.05 Disclosure................................................ 3
Section 2.06 Title to Goldman Assets................................... 4
Section 2.07 Tax Matters............................................... 4
Section 2.08 Investment Intent......................................... 4
Section 2.09 Legends................................................... 4
ARTICLE III REPRESENTATIONS OF SYLVAN......................................... 5
Section 3.01 Organization, Valid Authorization and Good Standing....... 5
Section 3.02 Compliance................................................ 5
Section 3.03 Approvals................................................. 5
Section 3.04 Capitalization............................................ 6
Section 3.05 Disclosure................................................ 6
Section 3.06 Validity of Exchange Shares............................... 6
Section 3.07 Tax Matters............................................... 6
ARTICLE IV ADDITIONAL AGREEMENTS.............................................. 6
Section 4.01 Current Public Information................................ 6
Section 4.02 Registration Rights....................................... 6
Section 4.03 Sylvan Liabilities........................................ 7
ARTICLE V CLOSING............................................................. 7
Section 5.01 Closing................................................... 7
Section 5.02 Documents to be Delivered by Goldman and the Goldman
Stockholders.............................................. 7
Section 5.03 Documents to be Delivered by Sylvan....................... 8
ARTICLE VI INDEMNIFICATION.................................................... 8
(i)
Section 6.01 Indemnification by Goldman and the Goldman Stockholders... 8
Section 6.02 Indemnification by Sylvan................................. 8
Section 6.03 Notice and Defense........................................ 9
Section 6.04 Survival................................................. 10
ARTICLE VII MISCELLANEOUS.................................................... 10
Section 7.01 Remedies Not Exclusive................................... 10
Section 7.02 Parties Bound............................................ 10
Section 7.03 Notices.................................................. 10
Section 7.04 Choice of Law............................................ 11
Section 7.05 Entire Agreement; Amendments and Waivers................. 11
Section 7.06 Attorneys' Fees.......................................... 12
Section 7.07 Further Assurances....................................... 12
Section 7.08 No Tax Representations................................... 12
Section 7.09 No Rights as Stockholder................................. 12
Section 7.10 Multiple Counterparts.................................... 12
Section 7.11 Headings................................................. 12
Section 7.12 Severability............................................. 12
Section 7.13 Gender and Number........................................ 12
(ii)
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement"), dated as of January
31, 1997, is made by and among Sylvan Learning Systems, Inc., a Maryland
corporation ("Sylvan"), and Goldman Acquisition Corp., an Illinois corporation
("Goldman") (Sylvan and Goldman are individually referred to herein as a "Party"
and collectively referred to herein as the "Parties").
WITNESSETH:
WHEREAS, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustees of the KJT Annuity Trust
U/A/D 12/15/93 and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, (the "Goldman Stockholders") are the sole
stockholders of Goldman.
WHEREAS, Sylvan is engaged in the business of educational services.
WHEREAS, Goldman desires to sell and transfer all of the assets consisting
solely of 634,468 shares of Common Stock of Sylvan, par value $.01 per share,
(the "Sylvan Stock") and those certain liabilities of Goldman specifically
listed on Exhibit A hereto (collectively, the "Goldman Assets") solely in
exchange for 633,382 shares of Common Stock of Sylvan, $.01 par value per share
(the "Exchange Shares"), and Sylvan desires to purchase and acquire the Goldman
Assets, in a transaction that, for Federal income tax purposes, is intended to
qualify as a reorganization under the provisions of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the "Code"), subject to the terms set
forth in this Agreement.
WHEREAS, the Parties desire to effect this Agreement for good business
purposes including, but not limited to (i) eliminating the possibility that two
of Sylvan's executive officers will be forced to sell, transfer, or otherwise
convey a portion of the Sylvan Stock beneficially owned by them through Goldman
since such a sale may subject the Sylvan executive officers to strict liability
under the Securities and Exchange Act of 1934, as amended, and (ii) eliminating
Goldman as a holding company of Sylvan Stock in order to reduce the
administrative costs of the current holding company structure.
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NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
CONVEYANCE OF ASSETS
Section 1.01 Conveyance of Assets. Subject to the terms and conditions
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herein set forth, and in reliance upon the representations and warranties set
forth herein, Goldman agrees to sell, convey, assign, transfer and deliver to
Sylvan, and Sylvan agrees to acquire, the Goldman Assets owned by Goldman as of
the Closing Date.
Section 1.02 No Assumption of Obligations and Liabilities. Sylvan shall
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not assume or be deemed to have assumed and shall not be responsible for any
obligation or liability of Goldman, direct or indirect, known or unknown,
absolute or contingent other than those liabilities specifically set forth on
Exhibit A hereto (the "Goldman Liabilities").
Section 1.03 Purchase Price. As full consideration for the sale, transfer,
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conveyance and delivery of the Goldman Assets, and subject to and in reliance
upon the terms and conditions of this Agreement, Sylvan agrees to issue to
Goldman stock certificates representing that number of Exchange Shares having an
aggregate Fair Market Value on the Closing Date equal to (A) the aggregate Fair
Market Value of the Goldman Assets on the Closing Date minus (B) the Goldman
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Liabilities. The Fair Market Value of each share of the Sylvan Stock and each
share of the Exchange Stock on the Closing Date shall be the average of the per
share closing price of the Common Stock of Sylvan on the Nasdaq Stock Market, as
reported in the Wall Street Journal (Eastern Edition), on each of the fifteen
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business days immediately preceding the Closing Date.
Section 1.04 Distribution. Goldman and the Goldman Stockholders agree that
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Goldman will immediately distribute to the Goldman Stockholders the Exchange
Shares in complete liquidation of Goldman and promptly thereafter dissolve
Goldman as an integral part of the transaction.
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ARTICLE II
REPRESENTATIONS OF GOLDMAN AND
THE GOLDMAN STOCKHOLDERS
Each of the Goldman Stockholders, jointly and severally, and Goldman, jointly
and severally with the Goldman Stockholders, represent and warrant to Sylvan
that:
Section 2.01 Organization, Valid Authorization and Good Standing. Goldman
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is a corporation duly organized, validly existing and in good standing under the
laws of the State of Illinois and is not required to be qualified to do business
in any state or jurisdiction other than the State of Illinois. Goldman does not
have any subsidiaries. Goldman has the power and authority to own all of the
Goldman Assets. Goldman and the Goldman Stockholders have the power and
authority to enter into this Agreement and to carry out their obligations
thereunder. The execution and delivery of this Agreement and related
transaction documents to which any of Goldman and the Goldman Stockholders are
party and the consummation of this Agreement and the transactions contemplated
hereby and thereby have been duly and validly authorized by such party, and no
other corporate or other proceedings on the part of Goldman are necessary to
authorize this Agreement and related transaction documents and the transactions
contemplated thereby. This Agreement has been duly and validly executed and
delivered by each of Goldman and the Goldman Stockholders and constitutes the
valid and binding agreement that is enforceable against each such party in
accordance with its terms.
Section 2.02 Compliance. The execution and delivery of this Agreement and
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related transaction documents and the consummation of the transactions
contemplated thereby by Goldman and the Goldman Stockholders (A) will not
(i) violate any provision of ▇▇▇▇▇▇▇'▇ charter or by-laws, (ii) violate any
provision of, or result in the breach of or entitle any party to accelerate
(whether after the giving of notice or lapse of time or both) any obligation
under any mortgage, lien, lease, contract, license, instrument or any other
agreement to which Goldman or any of the Goldman Stockholders is a party,
(iii) result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any property of Goldman or any of the Goldman
Stockholders, or (iv) violate or conflict with any order award, judgment or
decree or other material restriction or any law, ordinance or regulation to
which Goldman or any of the Goldman Stockholders or property of Goldman or any
of the Goldman Stockholders is subject and (B) do not require the consent or
other authorization of any Party to any lease, lien, contract, license,
instrument or other agreement to which Goldman or any of the Goldman
Stockholders is also party.
Section 2.03 Approvals. To the best of ▇▇▇▇▇▇▇'▇ and the Goldman
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Stockholders' knowledge, no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or other
person is required in connection with the execution and delivery of this
Agreement and related transaction documents by each of Goldman and the Goldman
Stockholders for the consummation by such Party of the transactions contemplated
thereby.
Section 2.04 Capitalization. The entire authorized capital of Goldman
--------------
consists of 1,000 shares of common stock, no par value, of which 100 shares are
issued and outstanding (the
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"Goldman Shares"). The Goldman Stockholders are and on the Closing Date will be
the only record and beneficial owners and holders of the Goldman Shares, free
and clear of all liens, claims or encumbrances of any kind. All of the
outstanding Goldman Shares have been duly authorized and validly issued and are
fully paid and nonassessable. There are no agreements or contracts relating to
the voting, issuance, sale, or transfer of any Goldman Shares or securities
convertible into Goldman Shares, including any shareholders' agreements, voting
agreements or trusts and any agreements relating to the issuance of any options,
warrants puts, or calls.
Section 2.05 Disclosure. No representation, warranty or statement made by
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Goldman or the Goldman Stockholders in this Agreement, or any agreements,
certificates, documents or instruments delivered or to be delivered to Sylvan in
accordance with this Agreement or the related transaction documents contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
Section 2.06 Title to Goldman Assets. Goldman is the owner and has as of
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the date hereof, good and marketable title to the Goldman Assets, free and clear
of any and all liens, charges, pledges, claims, security interests, exceptions
or other encumbrances of any kind.
Section 2.07 Tax Matters. Goldman and each of the Goldman Stockholders
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agree that each shall report the transaction described herein as a tax-free
reorganization pursuant to Section 368(a)(1)(C) of the Code for federal income
tax purposes and that each will take or omit to make any and all actions
required or recommended by its respective counsel to cause the transaction to
qualify as a tax-free reorganization pursuant to Section 368(a)(1)(C) of the
Code for federal income tax purposes.
Section 2.08 Investment Intent. It is understood that the Exchange Shares
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to be delivered to Goldman and distributed to the Goldman Stockholders pursuant
to this Agreement are not being registered, for purposes of the transactions
hereunder, under the Securities Act of 1933, as amended (the "Securities Act")
or any state securities laws, and the Exchange Shares are being delivered
without registration in reliance upon an exemption from the registration
requirements of the Securities Act or any state securities laws. Each of
Goldman and the Goldman Stockholders is acquiring the Purchaser Common Stock
hereunder only for his own account for investment and not with any intention of
making, or with a view to, or for sale in connection with, any distribution
thereof within the meaning of the Securities Act unless such shares first are
registered under the Securities Act.
In connection with the foregoing, each of the Goldman Stockholders hereby
represents and warrants that:
(a) he or she has reviewed, discussed and evaluated the information
delivered under this Agreement and has had the opportunity to ask questions of,
and receive answers from, executive officers of Sylvan concerning the terms and
conditions of this Agreement and to obtain any additional information which he
or she considered necessary to verify the accuracy of the information delivered
hereunder;
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(b) he or she understands that he or she must bear the economic risks
of the investment in the Exchange Shares to be made hereunder for an indefinite
period of time because such stock has not been registered under the Securities
Act and, therefore, may not be sold until such stock subsequently is registered
under the Securities Act or an exemption from registration is available; and
(c) he has sufficient knowledge and experience in financial and
business matters to enable him or her to be capable of evaluating the merits and
the risks of the exchange of the Goldman Assets for the Exchange Shares
contemplated by this Agreement and his or her prospective investment in Sylvan.
Section 2.09 Legends. It is understood and agreed that, to implement the
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requirements of the Securities Act and state securities laws and evidence the
restrictions upon transfer contained in this Agreement, Sylvan will cause a
legend to be conspicuously noted on the certificates representing the Exchange
Shares deliverable hereunder, and that Sylvan will issue stop transfer
instructions to its transfer agent, to the effect that such stock has not been
registered under the Securities Act and that no transfer may take place except
as permitted by Section 5.03 of this Agreement and after delivery of an opinion
of counsel satisfactory to Sylvan to the effect that registration thereof for
the purpose of transfer is not required under the Securities Act or that the
stock proposed to be transferred has been effectively registered for that
purpose under the Securities Act.
ARTICLE III
REPRESENTATIONS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to each of Goldman and the Goldman
Stockholders that:
Section 3.01 Organization, Valid Authorization and Good Standing. Sylvan is
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a corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland. Sylvan is duly qualified to transact business in
the State of Maryland. Sylvan has the power and authority to own all of its
properties and assets and to conduct its business, except where the failure to
have such power and authority would not have a material adverse effect on the
business of Sylvan. Sylvan has the power and authority to enter into this
Agreement and related transaction documents to which it is a party and to carry
out its obligations thereunder. The execution and delivery of the transaction
documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Directors of Sylvan, and no other corporate or other proceedings on the
part of Sylvan is necessary to authorize this Agreement and related transaction
documents and the transactions contemplated hereby and thereby. This Agreement
has been duly and validly executed and delivered by Sylvan and constitutes the
valid and binding agreement of Sylvan enforceable in accordance with its terms.
Section 3.02 Compliance. The execution and delivery of this Agreement and
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related transaction documents and the consummation of the transactions
contemplated thereby by Sylvan (A) will not (i) violate any provision of its
charter or bylaws, (ii) violate any provision of or result in the breach of or
entitle any party to accelerate (whether after the giving of notice or lapse of
time
5
or both) any obligation under any mortgage, lien, lease, contract, license,
instrument or any other agreement to which Sylvan is a party, (iii) result in
the creation or imposition of any lien, charge, pledge, security interest or
other encumbrance upon any property of Sylvan, or (iv) violate or conflict with
any order, award, judgment or decree or other restriction or any law, ordinance
or regulation to which Sylvan is subject and (B) do not require the consent or
other authorization of any party to any lease, lien, contract, license,
instrument or other agreement to which Sylvan is also party.
Section 3.03 Approvals. To the best of Sylvan's knowledge, no consent,
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approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority or other person is required in connection with
the execution and delivery of this Agreement or related transaction documents by
Sylvan or the consummation by Sylvan of the transactions contemplated thereby,
except for any filings and approvals required under the rules and regulations of
the Securities and Exchange Commission, and filings and approvals required by
the Blue Sky laws of the various states.
Section 3.04 Capitalization. The entire authorized capital stock of Sylvan
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as of the date of this Agreement consists of 40 million shares of common stock,
$.01 par value, and 10 million shares of preferred stock, $.01 par value.
Section 3.05 Disclosure. To the best of Sylvan's knowledge, no
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representation, warranty or statement made by Sylvan in this Agreement, or any
agreements, certificates, documents or instruments delivered or to be delivered
to Goldman and the Goldman Stockholders in accordance with this Agreement or the
related transaction documents contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
Section 3.06 Validity of Exchange Shares. The Exchange Shares to be
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delivered by Sylvan hereunder have been duly authorized for issuance and will,
when issued and delivered as provided in this Agreement, be duly and validly
issued, fully paid and non-assessable.
Section 3.07 Tax Matters. Sylvan agrees to (i) report the transaction
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described herein as a tax-free reorganization pursuant to Section 368(a)(1)(C)
of the Code for federal income tax purposes and (ii) take or omit to take any
and all actions required or recommended by its counsel and independent auditors
to cause the transaction to qualify as a tax-free reorganization pursuant to
Section 368(a)(1)(C) of the Code for federal income tax purposes. Sylvan has no
plan or intention to (i) reacquire any of the Exchange Shares or (ii) sell or
otherwise dispose of the Goldman Assets.
ARTICLE IV
ADDITIONAL AGREEMENTS
Section 4.01 Current Public Information. At all times that any Exchange
--------------------------
Shares remain outstanding, Sylvan shall comply with the requirements of Rule 144
under the Securities Act regarding the availability of current public
information to the extent required to enable any holder
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of Exchange Shares to sell such shares without registration under the Securities
Act pursuant to Rule 144.
Section 4.02 Registration Rights. Sylvan shall use its best efforts to file
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within 90 days a registration statement on Form S-3 covering the sale from time
to time of the Exchange Shares by Goldman or the Goldman Stockholders, and shall
use its best efforts to cause the Registration Statement to become effective and
to maintain its effectiveness until the earlier of (i) such time as all of the
Exchange Shares have been sold pursuant thereto and (ii) such time as the
Exchange Shares are eligible for transfer without restriction pursuant to Rule
144(k) under the Securities Act if not held by Sylvan Affiliates. Sylvan will
also furnish to the Goldman Stockholders with respect to the Exchange Shares
registered under the Registration Statement such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act and such other documents as the Goldman Stockholders may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Exchange Shares by the Goldman Stockholders, provided,
however, that the obligation of Sylvan to deliver copies of prospectuses or
preliminary prospectuses to the Goldman Stockholders shall be subject to the
receipt by Sylvan of reasonable assurances from the Goldman Stockholders that
the Goldman Stockholders will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses. Sylvan will file documents required of Sylvan for blue sky
clearance for the Goldman Stockholders to offer and sell the Exchange Shares in
all states reasonably requested, provided, however, that Sylvan shall not be
required to qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so consented. The
Goldman Stockholders have agreed to bear all expenses in connection with the
obligations described in this Section 4.02 and the registration of the Exchange
Shares pursuant to a registration statement, including brokerage commissions,
placement agent fees, underwriting discounts and fees and expenses, if any, of
counsel or other advisers to Sylvan and the Goldman Stockholders only as the
same applies to the registration contemplated by this Section 4.02. Other than
as described in this Section, Sylvan is under no other obligations to (i)
register any of the Exchange Shares on behalf of the Goldman Stockholders under
the Securities Act (ii) conduct, arrange or coordinate any distribution of the
Exchange Shares, (iii) retain any underwriters in connection with the
negotiation and/or distribution of the Exchange Shares or (iv) assist the
Goldman Stockholders in complying with any exemption from registration of the
Exchange Shares under the Securities Act.
Section 4.03 Sylvan Liabilities. Within 30 days following the Closing, the
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Goldman Stockholders, jointly and severally, agree to remit payment by check in
immediatley available funds for the Sylvan Transaction Costs (as defined in
Section 5.03 below) by remitting payment to Sylvan at the address provided in
Section 7.03.
ARTICLE V
CLOSING
Section 5.01 Closing. The Closing will take place at the offices of Piper &
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Marbury, L.L.P., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ on January
31, 1997 ("Closing Date") at 10:00 a.m. (local time) or such other place and
time as the parties may agree upon.
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Section 5.02 Documents to be Delivered by Goldman and the Goldman
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Stockholders. At the Closing, pursuant to this Agreement, Goldman shall
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deliver, or cause to be delivered, to Sylvan the following:
(a) Bills of sale or other instruments that effectuate the transfer of
the Goldman Assets;
(b) Good standing certificate of Goldman issued by the State of
Illinois;
(c) Certified copy of corporate resolutions authorizing the transaction
contemplated by this Agreement; and
(d) Executed direction of Goldman directing distribution of the
Exchange Shares directly to the Goldman Stockholders.
Section 5.03 Documents to be Delivered by Sylvan. At the Closing, pursuant
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to this Agreement, Sylvan shall deliver the following:
(a) One or more stock certificates representing Exchange Shares issued
hereunder;
(b) Good standing certificate of Sylvan issued by the State of
Maryland;
(c) Certified copy of corporate resolutions authorizing the
transactions contemplated by this Agreement; and
(d) An invoice for the costs and expenses incurred by Sylvan in
connection with the negotiation and preparation of this Agreement and related
transaction documents and the consummation of the transactions contemplated
hereby and thereby, in the amounts listed on Exhibit B hereto (the "Sylvan
Transaction Costs").
ARTICLE VI
INDEMNIFICATION
Section 6.01 Indemnification by Goldman and the Goldman Stockholders.
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Goldman and each of the Goldman Stockholders hereby, jointly and severally,
covenant and agree to indemnify and hold harmless Sylvan and each subsidiary,
affiliate, director, officer, agent and representative of Sylvan (the "Sylvan
Affiliates") and each of their respective assigns at all times from and after
the Closing against and in respect of the following:
(a) any liability, loss, damage or expense resulting from any
misrepresentation, breach of representation or warranty or non-fulfillment of
any agreement or covenant on the part of Goldman or the Goldman Stockholders
under this Agreement, or from any inaccuracy or misrepresentation in or omission
from any certificate or other instrument or document furnished or to be
furnished by Goldman or the Goldman Stockholders hereunder; and
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(b) all claims, actions, suits, proceedings, demands, assessments,
judgements, costs, reasonable attorneys' fees and expenses of any nature
incident to any of the matters indemnified against pursuant to this Section
6.01, including, without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of Sylvan hereunder.
Section 6.02 Indemnification by Sylvan. Sylvan hereby covenants and agrees
-------------------------
to indemnify and hold harmless Goldman or the Goldman Stockholders and each
affiliate, director, officer, agent and representative of Goldman or the Goldman
Stockholders (the "Goldman Affiliates") against and in respect of the following:
(a) any liability, loss, damage or expense resulting from any
misrepresentation, breach of representation or warranty or non-fulfillment of
any agreement or covenant on the part of Sylvan under this Agreement, or from
any misrepresentation in or omission from any certificate or other instrument or
document furnished or to be furnished by Sylvan hereunder;
(b) all claims, actions, suits, proceedings, demands, assessments,
judgements, costs, reasonable attorneys' fees and expense of any nature incident
to any of the matters indemnified against pursuant to this Section 6.02,
including without limitation, all such costs and expenses incurred in the
defense thereof or in the enforcement of any rights of ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇
Stockholders hereunder; and
(c) failure to take or omit to take any and all actions required or
recommended by its respective counsel to cause the transaction to qualify as a
tax-free reorganization pursuant to Section 368(a)(1)(C) of the Code for federal
income tax purposes.
Section 6.03 Notice and Defense. If at any time a party entitled to
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indemnification hereunder (the "Indemnitee") shall receive notice of any
asserted liability, damage, loss or expense (together, a "Loss") claimed to give
rise to indemnification hereunder, the Indemnitee shall promptly give notice
thereof ("Claims Notice") to the party obligated to provide indemnification (the
"Indemnitor") of such Loss. The Claims Notice shall set forth a brief
description of the Loss, and, if known, the amount of the Loss that has been or
may be suffered by the Indemnitee. The final determination of a Loss shall be
calculated after the Indemnitee has determined the tax benefit or insurance
recovery related to such Loss, if any. Thereafter, the Indemnitor shall have,
at its election, the right to compromise or defend any such matter at
Indemnitor's sole cost and expense through counsel chosen by the Indemnitor and
approved by the Indemnitee (which approval shall not unreasonably be withheld);
provided, however, that any such compromise or defense shall be conducted in a
manner which is reasonable and not contrary to the Indemnitee's interest and the
Indemnitee shall in all events have a right to veto any such compromise or
defense which is unreasonable or which would jeopardize in any material respect
any assets or business of the Indemnitee or any of its affiliates or increase
the potential liability of, or create a new liability for, the Indemnitee or any
of its affiliates and, provided further that the Indemnitor shall in all events
indemnify the Indemnitee and its affiliates against any damage resulting from
the manner in which such matter is compromised or defended. In the event that
the Indemnitor does so undertake to compromise and defend a claim, the
Indemnitor shall notify the Indemnitee of its intention to do so. Even if the
Indemnitor undertakes to compromise or defend a claim, the Indemnitee shall have
the right to settle any matter for which a claim for indemnification has been
made hereunder upon
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notice to the Indemnitor and by waiving any right against Indemnitor with
respect to such matter. Each party agrees in all cases to cooperate with the
defending party and its counsel in the compromise of or defending of any such
liabilities or claims. In addition, the non-defending party shall at all times
be entitled to monitor such defense through the appointment, at its own costs
and expense, of advisory counsel of its own choosing.
Section 6.04 Survival. The representations, warranties and agreements made
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by the Parties in this Agreement and in any other certificates and documents
delivered at the Closing, including the indemnification rights and obligations
of the Parties set forth in Sections 6.01 and 6.02 hereof, shall survive the
Closing under this Agreement.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Remedies Not Exclusive. No remedy conferred by any of the
----------------------
specific provisions of this Agreement or any other transaction document is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by any party hereto shall not constitute a
waiver of the right to pursue other available remedies.
Section 7.02 Parties Bound. Except to the extent otherwise expressly
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provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder.
Section 7.03 Notices. All notices, reports, records or other communications
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that are required or permitted to be given to the parties under this Agreement
shall be sufficient in all respects if given in writing and delivered in person,
by telecopy, by overnight courier or by registered or certified mail, postage
prepaid, return receipt requested, to the receiving party at the following
address:
If to Sylvan, addressed to:
▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Learning Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇ ▇. ▇▇▇▇, Esq.
Piper & Marbury LLP
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10
If to ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Stockholders, addressed to:
▇▇▇▇▇▇▇ Acquisition Corp.
c/o ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 7.03. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.
Section 7.04 Choice of Law. This Agreement shall be construed, interpreted,
-------------
and the rights of the parties determined in accordance with, the laws of the
State of Maryland except with respect to matters of law concerning the internal
affairs of any corporate or partnership entity which is a party to or the
subject of this Agreement, and as to those matters the law of the state of
incorporation or organization of the respective entity shall govern. The Parties
agree that if a controversy or claim between or among them arises out of or in
relation to this Agreement and results in litigation, the courts of Maryland or
the courts of the United States of America located in Maryland shall have
jurisdiction to hear and decide such matter, and the Parties hereby submit to
jurisdiction to such courts.
11
Section 7.05 Entire Agreement; Amendments and Waivers. This Agreement, the
----------------------------------------
other transaction documents and all schedules hereto and thereto, constitutes
the entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof. No supplement, modification or waiver
of this Agreement shall be binding unless it shall be specifically designated to
be a supplement, modification or waiver of this Agreement and shall be executed
in writing by the Party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
Section 7.06 Attorneys' Fees. Except as otherwise specifically provided
---------------
herein, if any action or proceeding is brought by any party with respect to this
Agreement or the other transaction documents, or with respect to the
interpretation, enforcement or breach hereof, the prevailing party in such
action shall be entitled to an award of all reasonable costs of litigation or
arbitration, including, without limitation, attorneys' fees, to be paid by the
losing party, in such amounts as may be determined by the court having
jurisdiction of such action or proceeding or by the arbitrators deciding such
action or proceeding.
Section 7.07 Further Assurances. From time to time hereafter and without
------------------
further consideration, each of the parties hereto shall execute and deliver such
additional or further instruments of conveyance, assignment and transfer and
take such actions as any of the other parties hereto may reasonably request in
order to more effectively consummate the transactions contemplated by this
Agreement and related transaction documents or as shall be reasonably necessary
or appropriate in connection with the carrying out of the parties' respective
obligations hereunder or the purposes of this Agreement.
Section 7.08 No Tax Representations. Each party acknowledges that it is
----------------------
relying solely on its advisors to determine the tax consequences of the
transactions contemplated hereunder and that no representation or warranty has
been made by any party as to the tax consequences of such transactions.
12
Section 7.09 No Rights as Stockholder. The ▇▇▇▇▇▇▇ Stockholders shall not
------------------------
have any rights as a stockholder with respect to any Exchange Shares until there
have been issued a stock certificate in their names for such shares. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to such date any such stock certificate is
issued.
Section 7.10 Multiple Counterparts. This Agreement may be executed in one
---------------------
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 7.11 Headings. The headings of the several Articles and Sections
--------
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
Section 7.12 Severability. Each article, section, subsection and lesser
------------
section of this Purchase Agreement constitutes a separate and distinct
undertaking, covenants or provision hereof. In the event that any provision of
this Agreement shall finally be determined to be unlawful, such provision shall
be deemed severed from this Agreement, but every other provision of this
Agreement shall remain in full force and effect.
Section 7.13 Gender and Number. Whenever the context of this Agreement
-----------------
requires, the gender of all words herein shall include the masculine, feminine,
and neuter, and the number of all words herein shall include the singular and
plural.
13
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the date set forth below their respective signatures.
SYLVAN LEARNING SYSTEMS, INC. ▇▇▇▇▇▇▇ ACQUISITION CORP.
By: /s/ B. ▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- --------------------
Its: Senior Vice President and CFO Its: President
----------------------------- --------------------
Date: January 31, 1997 Date: January 31, 1997
----------------------------- --------------------
THE ▇▇▇▇▇▇▇ STOCKHOLDERS
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ R. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
---------------------------- ---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ R. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ KJT ANNUITY TRUST U/A/D/12/15/93
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
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