EXHIBIT 10.11
TESTING CENTER MANAGEMENT AND CBT SERVICES AGREEMENT
This Testing Center Management and CBT Services Agreement (this
"Agreement") is made as of May 1, 1997 (the "Effective Date"), and is by and
between SYLVAN LEARNING SYSTEMS, INC. ("Sylvan"), a Maryland Corporation, and
CALIBER LEARNING NETWORK, INC. ("Caliber"), a Maryland corporation.
RECITALS
1. Sylvan utilizes, and owns and operates, a series of locations across the
United States (the "Testing Centers") at which computer-based testing
services are delivered to individuals on behalf of various testing clients
of Sylvan; and
2. Caliber is establishing a network of distance learning centers, in which
testing services utilizing the Sylvan Prometric computer-based testing
system will also be offered and provided; and
3. Caliber desires to assume control of a certain group of Sylvan's locations
for the expansion and establishment of the Caliber network; and
4. In connection with the foregoing, Sylvan and Caliber have agreed that
Caliber will manage the Testing Centers and in connection therewith will
assume certain obligations assets related to the Testing Centers, and
desire to set forth in writing the terms and conditions of their
understanding and agreements.
TERMS AND CONDITIONS
In consideration of the mutual covenants and conditions set forth in this
Agreement and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, Sylvan and Caliber agree as follows:
1.0 MANAGEMENT OF TESTING CENTERS
1.01 From May 1, 1997 (the Effective Date) through and until December 31,
2000, (the "Management Period") Caliber shall assume, pursuant to the
provisions of this Agreement, management and responsibility for all
obligations and operations of the Testing Centers listed on Exhibit A
of this Agreement, including without limitation delivering CBT
services on behalf of Sylvan and its clients in accordance with the
terms of the Agency and Licensing Agreement for Operation of a Sylvan
Technology Center "Services Agreement"(as shown as Exhibit B of this
Agreement), staffing the Testing Centers with adequate qualified
personnel and assuming and satisfying all costs and expenses incurred
as a result of the Testing Centers' operations after the Effective
Date. The costs and expenses incurred as a result of the Testing
Centers operations shall include but are not limited to leases and
other occupancy costs, utilities,
salaries, data communications, and, in the case of former NASD
centers, all operation costs billed to Sylvan by NASD and paid by
Sylvan pursuant to the Asset Transfer and Management Agreement between
Sylvan and NASD.
1.02 Under this Agreement, Caliber agrees that it will perform as an
independent contractor, and not an agent or employee of Sylvan.
A. Caliber and its personnel (including without limitation personnel
hired by Sylvan under this Agreement), in performance of this
Agreement, are acting as independent contractors and not as employees
of Sylvan. Caliber shall, at its sole cost and expense, for the term
of this Agreement provide all insurance coverage required by
applicable laws, regulations, or employment agreements, including,
without limitation, medical and workers' compensation.
B. Caliber represents and warrants that neither Caliber nor Caliber's
personnel (including without limitation personnel hired by Caliber
under this Agreement) or any individual associated with or performing
services for Caliber shall be an employee of Sylvan for any purpose
whatsoever. Caliber shall be responsible for the payment of all
unemployment, social security and other payroll taxes of all
individuals who are engaged in the performance of the services. If, at
any time, any liability is asserted against Sylvan for unemployment,
social security or any other payroll tax related to Caliber or
Caliber's personnel or any individual or subcontractors associated
with Caliber, then Caliber shall indemnify and hold harmless Sylvan
from any such liability, including, without limitation, any such
taxes, any interest or penalties related thereto, and reasonable
attorney's fees and costs.
1.03 As consideration for all of the services to be performed by Caliber
in its operation of the Testing Centers during the Management Period,
Sylvan shall pay to Caliber the STC commissions monthly (the
"Management Fees"), for the Management Period. The Management Fees
shall be paid in accordance with the terms of the Services Agreement,
provided that Sylvan may deduct as a credit against such Management
Fees an amount equal to any Assumed Direct Cost (as defined below)
that has been paid by Sylvan and by any fees due Sylvan for providing
interim accounting services for Caliber Sylvan shall provide such
interim accounting services for Caliber at no cost through December
31, 1997. Commencing with January 1, 1998, the parties will review
the interim accounting services to be provided by Sylvan to Caliber
and agree on fees for those services at that time.
As additional consideration for all of the services to be
performed by Caliber in its operation of the Testing Centers during
the Management Period, Caliber shall receive fifty (50%) percent of
the profits Sylvan receives from its fingerprint testing services
business with Identix Corporation.
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For purposes of this Agreement and except as otherwise expressly
provided herein, the term "Assumed Direct Cost" shall mean any cost,
rental charge or expense arising from the operation, maintenance and
staffing of the Testing Centers during the Management Period, which
cost or expense is assumed by Caliber from Sylvan under this
Agreement, or is of a nature incurred by Sylvan in the operation,
maintenance and staffing of the Testing Centers after the Effective
Date, and includes all costs contemplated by Section 1.01 above.
1.04 During the period commencing with the Effective Date and ending
December 31, 1997, Sylvan will, at Caliber's request, not deduct
credits as described in Section 1.03 above from the Management Fees.
Caliber may defer payment to Sylvan for those credits not deducted
from the Management Fees until December 31, 1997. Those credits not
deducted shall be paid in full, together with four (4%) percent
interest within forty-five (45) days of the end of the deferral period
ending December 31, 1997. After the period ending December 31, 1997,
any credits not deducted from the Management Fees shall be paid by
Caliber to Sylvan on a monthly basis. Following the Management
Period, Caliber shall reimburse Sylvan for any credits attributable to
payments by Sylvan under Section 1.03 but not previously deducted as
credits from the Management Fees pursuant to Section 1.03 and not
otherwise paid by Caliber to Sylvan. Any such reimbursement shall be
paid within forty-five (45) days following presentation by Sylvan to
Caliber of documentation reflecting the amount of any such amounts
paid by Sylvan and the fact of such payment by Sylvan.
1.05 Following the Management Period, Caliber may, but need not, continue
to operate any Testing Center as it determines to be appropriate,
subject to the requirements of the Services Agreement. Certain of the
Testing Centers may be closed (or converted to other, non-STC uses) in
accordance with the schedule of Permitted First Closing Dates shown in
Exhibit A.
1.06 From time to time it may become necessary for Sylvan to open STC's in
locations where no franchisees are available or where franchisees are
unable or unwilling to locate or expand to meet testing demand. In
those circumstances, if Caliber has a Caliber Learning Center located
or plans to locate a Caliber Learning Center in the geographical
region where the STC needs to be located, Sylvan may request and
Caliber shall use reasonable efforts to establish an STC in that
location. The ownership, operation, and management of the STC shall
be subject to the terms of this Agreement. In the event an STC is
established pursuant to this Section 1.06, Sylvan and Caliber shall
negotiate in good faith for an equitable sharing of any additional
costs expended by Caliber to establish and operate the STC.
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2.0 TRANSFER OF TESTING CENTER LEASES AND LEASEHOLD
IMPROVEMENTS
2.01 From time to time on or after the Effective Date and on or before the
end of the Management Period, Sylvan shall assign to Caliber and
Caliber shall assume from Sylvan, on the terms and conditions set
forth in this Agreement, all of Sylvan's right, title, interest and
obligations as lessee or tenant under the leases shown on the attached
Exhibit A, together with all rights in and to any security deposits
held by landlords under said leases and any leasehold improvements.
Such assignment and assumption shall be effected on a date specified
by Sylvan to occur within ninety (90) days after the Effective Date;
provided, however, that notwithstanding anything to the contrary
herein:
(i) if a lease requires the landlord's consent to an assignment
thereof, Caliber shall use all reasonable efforts to obtain such
consent and Sylvan may delay assigning such lease until such consent
is obtained,
(ii) if and to the extent that a landlord does not consent to the
assignment to Caliber of any lease and does not elect to terminate the
lease, Sylvan agrees to sublet the premises to Caliber on
substantially the same terms and conditions contained in the affected
lease for a term through the end of the Management Period and for such
longer period as Caliber and Sylvan may agree,
(iii) if Sylvan believes that a landlord may elect to terminate a
lease pursuant to the terms thereof instead of consenting to the
assignment to Caliber of such lease, Sylvan shall notify Caliber of
such and may delay attempting to assign such lease to Caliber until a
date not later than the last day of the Management Period,
(iv) Sylvan shall not be obligated to ensure that any of the leases
listed on Exhibit A is assignable and any lease terminated by a
landlord, whether upon notice of Sylvan's assignment of or intent to
assign such lease, or otherwise, shall not be subject to assignment
and assumption under this Agreement, and
(v) Certain of the Testing Centers (as indicated by an asterisk on
Exhibit A) are subject to the prior right of the National Association
of Securities Dealers, Inc. ("NASD") to have assigned to it the leases
for same, and the rights to occupy same to the exclusion of Sylvan and
its assigns, under certain conditions, and upon notice per the terms
of that certain CBT Services Master Agreement dated March 1, 1996, to
which reference is made and of which Caliber acknowledges having been
provided a copy. In certain cases the lease for a former NASD site has
not been assigned to Sylvan but Sylvan is subletting the site. Sylvan
will sublet under like terms to
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Caliber and Caliber shall pay to Sylvan such lease costs as are
assumed by Sylvan for these sites.
2.02 Caliber shall bear and be responsible for all transfer, sales,
recording and filing taxes or fees resulting from the transfer of any
lease hereunder, which amounts are Caliber's sole responsibility.
3.0 USE OF TESTING CENTER ASSETS
3.01 On the Closing Date (as defined in Section 4.01), Sylvan shall provide
and extend to Caliber the exclusive use of the following:
(a) All of the furniture, fixtures, supplies, equipment and other
tangible assets owned by Sylvan that are used or held for use
solely in connection with the operation of the Testing Centers,
shown on the attached Exhibit D, together with all sundry items
of a like character which, although not described on Exhibit D,
are owned by Sylvan and situated on or about the various premises
described in Exhibit A. Collectively, the items described in
this paragraph (a) are referred to as the "Center Assets."
3.02 Nothing in this Agreement shall obligate Sylvan to transfer any
accounts receivable arising with respect to the operation of the
Testing Centers. Nothing in this Agreement shall obligate Caliber to
assume any accounts payable or liabilities, determined in accordance
with generally accepted accounting principles, arising with respect to
the Testing Centers prior to the Effective Date.
3.03 Upon Caliber's cessation of operating an STC in any of the Testing
Center sites, all physical property and equipment in such site that is
owned by Sylvan shall be packed and shipped by Caliber, at Caliber's
expense, to such location(s) as directed by Sylvan.
4.0 CLOSING
4.01 The closing of the transactions contemplated by Section 3 of this
Agreement (the "Closing") shall take place at the offices of Sylvan,
0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, on a date (the
"Closing Date") to be agreed to by the parties, which shall be within
ninety (90) days after the Effective Date, provided that either party
may by advance notice to the other party unilaterally extend the
Closing Date by up to thirty (30) days and the Closing Date and
Closing may occur at such other place and date as the parties may
mutually agree to in writing.
4.02 At the Closing, Sylvan shall execute and/or deliver to Caliber:
(a) Original or photocopies of all books, records, files, documents,
and papers, including commercial vendor contracts and all records
of the accounts used in the operation of or relating exclusively
to the
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operation or management of the Testing Centers and Center Assets,
provided, however, that the transfer of such books and records
shall be extended to the date on which interim accounts services
are last provided by Sylvan;
(b) Any and all other documents, instruments or agreements reasonably
necessary to fulfill the purposes of this Agreement.
4.03 At the Closing Caliber shall execute and/or deliver to Sylvan:
(a) Assumption agreements relating to the leases assumed by Caliber
pursuant to Section 2.0 of this Agreement;
(b) Any and all other documents, instruments or agreements reasonably
necessary to fulfill the purposes of this Agreement.
5.0 SYLVAN EMPLOYEES
5.01 A complete list of all employees involved in or having duties
associated with the Testing Centers (the "Center Employees"), their
current salary/wage level, date of hire, date of birth, credited years
of service, and position is shown on Exhibit E attached hereto.
Caliber agrees to extend offers to employ as of May 1, 1997 (the
"Transition Date"), or as soon as practicable thereafter, each of the
Center Employees actively employed in a Testing Center immediately
prior to the Transition Date (including Center Employees on leave of
absence or receiving short-term disability or workers compensation)
and to employ as of the Transition Date each Center Employee accepting
such offer.
(a) In every case, an offer of employment shall be on terms that
provide the same salary or wage rate (calculated on an hourly
basis for nonexempt employees), a similar position,
responsibility and employment status (i.e., part or full-time) as
held by the Center Employee immediately prior to the Transition
Date. Every Center Employee accepting employment with Caliber
shall receive and be entitled to benefits at least comparable to
those enjoyed by similarly situated employees of Caliber.
(b) Caliber agrees to permit every Center Employee on leave of
absence who accepts employment with Caliber to continue such
leave on the same terms and conditions, including benefits, as
provided by Sylvan.
(c) The employee incentive plan currently operated by Sylvan for the
benefit of the Center Employees shall not be modified or
terminated by Caliber, but shall be maintained and observed by
Caliber at least through December 31, 1997.
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5.02 Every Center Employee accepting employment with Caliber will, for
purposes of any eligibility, vesting or waiting period under any
health, 401k, vacation, severance or other benefit plan, be credited
for the same periods of service credited by Sylvan prior to the
Transition Date.
5.03 Except as expressly provided in this Article 5, nothing in this
Agreement, whether express or implied, shall confer upon any Center
Employee any rights or remedies, including any right to employment, or
continued employment for any specified period, of any nature or kind
whatsoever under or by reason of this Agreement.
5.04 Caliber shall be solely responsible for, and hereby agrees to hold
Sylvan harmless against, any COBRA obligations or liabilities relating
to Center Employees who accept employment with Caliber, or relating to
the qualified beneficiaries of such employees.
6.0 REPRESENTATIONS AND WARRANTIES OF CALIBER
Caliber hereby represents and warrants to Sylvan that:
6.01 Caliber is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has the corporate
power to carry on its business as it is now being conducted and to
perform the actions contemplated hereby. Neither the execution and
delivery of this Agreement nor the carrying out of the transactions
contemplated hereby will result in any violation of, or be in conflict
with, Caliber's Charter or By-Laws.
6.02 No litigation, actions or proceedings, legal, equitable,
administrative, through arbitration or otherwise, including but not
limited to lawsuits, claims or disputes with employees, clients and
vendors, etc., are pending or, to the best of Caliber's knowledge,
threatened as of the date this Agreement is executed by Caliber that
might affect the Testing Centers or the consummation of the
transactions described in this Agreement.
6.03 To the best of Caliber's knowledge, neither the execution and delivery
of this Agreement nor the carrying out of the transactions
contemplated hereby will result in any violation, termination or
modification of; or be in conflict with any terms of any contract,
instrument or other agreement to which Caliber is a party or by which
it or any of its properties is bound or affected, or any law, rule,
regulation, license, permit, judgment, decree or order applicable to
Caliber or by which any of its properties or assets are bound or
affected, or result in any breach of or constitute a default (or with
notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or
cancellation, or result in the creation of any lien, charge or
encumbrance upon any of its properties or assets, except where such
event or occurrence would not, singly or in the aggregate, have a
material adverse affect on Caliber.
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6.04 Caliber has taken no action which would give rise to a valid claim
against any party hereto for a brokerage commission, finder's fee,
counseling or advisory fee, or like payment.
6.05 The execution, delivery and performance of this Agreement by Caliber
has been duly authorized by its Board of Directors, and this Agreement
is a valid, legally binding and enforceable obligation of Caliber.
7.0 REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx hereby represents and warrants to Caliber that:
7.01 Sylvan is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has the
corporate power and authority to carry on its business as it is now
being conducted and to perform the actions contemplated hereby.
Neither the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereby will result in any
violation of; or be in conflict with, Sylvan's Articles of
Incorporation or By-Laws.
7.02 To the best of Sylvan's knowledge, Sylvan possesses sufficient title
to all of the Center Assets to use the Center Assets as they are being
used immediately prior to the Effective Date.
7.03 With the exception of 1) the ACT litigation described on Exhibit C
attached to this Agreement, and 2) the rights of NASD referred to in
Section 2.01(v) hereof, no litigation, actions or proceedings, legal,
equitable, administrative, through arbitration or otherwise, including
but not limited to lawsuits, claims or disputes with employees,
clients and vendors, etc., are pending or, to the best of Sylvan's
knowledge, threatened as of the date this Agreement is executed by
Sylvan that might affect the Testing Centers, the assets being
purchased, or the consummation of the transactions described in this
Agreement.
7.04 To the best of Sylvan's knowledge, all of the assets which constitute
furniture, fixtures, supplies, equipment and other tangible assets
sold pursuant to this Agreement are as of the Effective Date in good
condition, except for those the absence of which is not material to
the operation of the Testing Centers.
7.05 To the best of Sylvan's knowledge, Sylvan has fulfilled all of its
obligations under and has complied in all material respects with all
state and federal laws, rules and regulations applicable to the
operation of the Testing Centers, except for any failure which would
not have a material adverse effect on the operation of the Testing
Centers.
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7.06 To the best of Sylvan's knowledge, neither the execution and delivery
of this Agreement nor the carrying out of the transactions
contemplated hereby will result in any violation, termination or
modification of, or be in conflict with any terms of any contract,
instrument or other agreement to which Sylvan is a party or by which
it or any of its properties is bound or affected, or any law, rule,
regulation, license, permit, judgment, decree or order applicable to
Sylvan or by which any of its properties or assets are bound or
affected, or result in any breach of or constitute a default (or with
notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or
cancellation, or result in the creation of any lien, charge or
encumbrance upon any of its properties or assets, except where such
event or occurrence would not, singly or in the aggregate, have a
material adverse effect on Sylvan.
7.07 Sylvan has taken no action which would give rise to a valid claim
against any party hereto for a brokerage commission, finder's fee,
counseling or advisory fee, or like payment.
7.08 The execution, delivery and performance of this Agreement by Sylvan
has been duly authorized by its Board of Directors, and this Agreement
is a valid, legally binding and enforceable obligation of Sylvan.
8.0 COVENANTS AND AGREEMENTS OF SYLVAN AND CALIBER
8.01 Sylvan hereby covenants and agrees with Sylvan as follows:
(a) Any accounts payable accruing as a result of the operation of the
Testing Centers before the Effective Date shall remain the
responsibility of Sylvan and shall be paid by Sylvan promptly as
they become due and payable.
(b) Prior to the Closing Date and upon reasonable notice, Sylvan
shall make available to Caliber and its authorized agents and
accountants at reasonable times and under reasonable
circumstances the following items with respect to the Testing
Centers: assets, properties, business and financial records,
working papers, files, and memoranda of its public accountants or
auditors, including, without limitation, vendor contracts with
and records of the accounts of vendors used in the operation of
or relating to the Testing Centers, for the purposes of
inspecting, examining and copying the same, as is deemed
necessary or desirable by Caliber.
(c) Sylvan shall use all reasonable efforts to preserve intact the
Centers' organization and personnel and to keep available all of
its employees, agents, independent contractors, and consultants
through the Closing Date.
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(d) Sylvan shall use all reasonable efforts to preserve intact the
goodwill of all commercial vendors and others with respect to the
Testing Centers through the Closing Date;
(e) Sylvan shall keep in force through the Closing Date all policies
of insurance covering the Testing Centers and its properties and
assets;
(f) Sylvan shall use reasonable efforts to maintain through the
Closing Date the furniture, fixtures, supplies, equipment and
other tangible assets to be used by Caliber pursuant to this
Agreement in the same condition as they are on the Effective
Date, ordinary wear and tear excepted.
(g) Sylvan shall use all reasonable efforts to cooperate in obtaining
all consents and satisfying all conditions to be obtained or
satisfied on or before the Closing Date.
8.02 Caliber hereby covenants and agrees with Sylvan as follows:
(a) Any accounts payable accruing as a result of the operation of the
Testing Centers on or after the Effective Date shall be the
responsibility of Caliber and shall be paid by Caliber promptly
as they become due and payable.
(b) After the Effective Date and upon reasonable notice, Caliber
shall make available to Sylvan and its authorized agents and
accountants at reasonable times and under reasonable
circumstances any books or records relating to the pre-Effective
Date operation of the Testing Centers.
(c) Caliber is to be responsible for all liabilities associated with
the operation of the Testing Centers, including, without
limitation, lease payments, withholding taxes, social security
taxes, unemployment contributions, salaries, and purchases,
incurred after the Effective Date, and Caliber specifically
agrees to assume such liabilities as of the Effective Date.
(d) Caliber shall use all reasonable efforts to cooperate in
obtaining all consents and satisfying all conditions to be
obtained or satisfied on or before the Closing Date.
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9.0 NONASSUMPTION OF LIABILITIES
9.01 Unless otherwise expressly provided for in this Agreement, the
liabilities and obligations incurred by Sylvan prior to the Effective
Date are not assumed by Caliber but continue as liabilities and
obligations of Sylvan and shall be solely paid by Sylvan. In the event
Caliber is presented with a xxxx or invoice addressed to it but
relating to operation of the Testing Centers before the Effective
Date, Caliber shall forward such to Sylvan and Sylvan shall pay such
within fifteen days after the latter of its due date and the date it
is forwarded by Caliber, together with any applicable interest or
penalties. If Sylvan disputes any obligation or amount reflected on a
xxxx or invoice it shall deliver notice of such to the payee within
such fifteen day period and provide a copy of such notice to Caliber,
in which case Caliber shall be indemnified by Sylvan against any
liability for such amount pursuant to Section 10. In the event that
Sylvan neither pays nor delivers notice of dispute of such obligation
or amount within such period of time, Caliber may pay such amount and
shall be entitled to reimbursement of such amount from Sylvan, and
Caliber shall have the right to offset any such amount actually paid
by Caliber against any payment owed to Sylvan by Caliber.
9.02 Unless otherwise expressly provided for in this Agreement, the
liabilities and obligations incurred in the operation of the Testing
Centers after the Effective Date shall not be the responsibility of
Sylvan but shall be liabilities and obligations of Caliber and shall
be solely paid by Caliber. In the event Sylvan is presented with a
xxxx or invoice addressed to it but relating to operation of the
Testing Centers on or after the Effective Date, Sylvan shall forward
such to Caliber and Caliber shall pay such within fifteen days after
the latter of its due date and the date it is forwarded by Sylvan,
together with any applicable interest or penalties, except that Sylvan
may pay directly any such xxxx or invoice arising under any agreement
or commitment that has not been signed or transferred to Caliber
hereunder at the time such liability accrued and, unless Sylvan and
Caliber agree otherwise, Sylvan shall be entitled to credit such
amount against any Management Fees thereafter payable under this
Agreement or, after the expiration of the Management Period, against
any amounts payable under the Services Agreement. If Caliber
disputes any obligation or amount reflected on a xxxx or invoice
forwarded to it by Sylvan, it shall deliver notice of such to the
payee within such fifteen day period and provide a copy of such notice
to Sylvan, in which case Sylvan shall be indemnified by Caliber
against any liability for such amount pursuant to Section 10. In the
event that Caliber neither pays nor delivers notice of dispute of such
obligation or amount within such period of time, Sylvan may pay such
amount and shall be entitled to reimbursement of such amount from
Caliber, and Sylvan shall have the right to offset any such amount
actually paid by Sylvan against any payment owed to Caliber by Sylvan.
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9.03 Unless otherwise expressly provided for in this Agreement, any xxxx
or invoice relating to liabilities or obligations incurred with
respect to the Testing Centers over a period of time that begins
prior to the Effective Date and ends after the Effective Date (a
"Straddle Period"), regardless of whether paid before or after the
Effective Date, shall be allocated between Sylvan and Caliber as
follows: (i) Sylvan shall be responsible for that portion of the
amount determined by multiplying the amount of the liability or
obligation by a fraction, the numerator of which shall be the number
of days from the beginning of the Straddle Period until the day
before the Effective Date and the denominator of which shall be the
total number of days in the Straddle Period, and (ii) Caliber shall
be responsible for that portion of the amount determined by
multiplying the amount of the liability or obligation by a fraction,
the numerator of which shall be the number of days from the
Effective Date until the end of the Straddle Period and the
denominator of which shall be the total number of days in the
Straddle Period.
10.0 INDEMNIFICATION
10.01 From and after the Effective Date, Caliber shall indemnify, defend
and hold Sylvan, its officers, directors, employees, agents and
permitted assigns and the property of Sylvan free and harmless from
any and all claims, losses, damages, injuries, and liabilities
arising from or in connection with:
(a) any misrepresentation, breach of representation or warranty or
breach or non- fulfillment of any agreement or covenant on the
part of Caliber 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 Caliber
hereunder; and
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(b) the operation of the Testing Centers or the ownership, control,
or management of any assets or properties of the Testing
Centers by Caliber after the Effective Date.
10.02 From and after the Effective Date, Sylvan shall indemnify, defend
and hold Caliber, its officers, directors, employees, agents and
permitted assigns and the property of Caliber free and harmless from
any and all claims, losses, damages, injuries, and liabilities
arising from or in connection with:
(a) any misrepresentation, breach of representation or warranty or
breach or non-fulfillment of any agreement or covenant on the
part of Sylvan 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 Sylvan
hereunder; and
(b) the operation of the Testing Centers or the ownership, control,
or management of any assets or properties of the Testing
Centers by Sylvan prior to the Effective Date.
10.03 The party claiming indemnification under this Section shall promptly
notify (and, in the case of any action, suit, arbitration, or
judicial or administrative proceeding, shall so notify no later than
fifteen (15) days after the party claiming indemnification has
received notice thereof or has been served with a complaint or other
process) the other party when it has knowledge of circumstances or
the occurrence of any events which are likely to result in an
indemnification obligation under this Agreement or when any action,
suit, arbitration, or judicial or administrative proceeding is
pending or threatened that is covered by this Agreement.
The indemnifying party shall defend the party to be indemnified
through counsel reasonably satisfactory to the party to be
indemnified. Sylvan, as the party to be indemnified, shall have the
right of prior approval over any settlement if such settlement might
directly or indirectly affect, in a materially detrimental way,
Sylvan.
The party claiming indemnification shall cooperate with the other
party in the defense of any such suit or proceeding, and the other
party shall reimburse the party claiming indemnification for its
expenses with respect thereto, including counsel of its choice. Such
cooperation shall include, but not be limited to, the making of
statements and affidavits, attendance at hearings and trials,
production of documents, assistance in securing and giving evidence
and obtaining the attendance of witnesses, provided, however, that
in no event shall either party be required to waive attorney-client
or other applicable privileges.
Failure by the party claiming indemnification to promptly notify the
other party within the time period set forth in the first paragraph
of this Section shall not invalidate any claim or right for
indemnification, unless such failure has a material adverse affect
on the settlement, defense, or compromise of the matter that is the
subject of the claim for indemnification. In addition, the party
claiming indemnification shall be responsible for any claims or
losses which could have been avoided or mitigated by prompt notice
as required by this subsection.
11.0 GENERAL AND ADMINISTRATIVE PROVISIONS
11.01 Parties Bound. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective heirs,
executors, administrators, legal representatives, successors and
assigns.
11.02 Assignment. Neither party may assign this Agreement, or any part
thereof, without the prior written approval of the other party,
which approval shall
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not be unreasonably withheld. Any such request for approval of a
proposed assignment shall be accompanied by a copy of the proposed
contract between the party and the proposed assigned subcontractor.
Caliber may, upon reasonable prior notice to Sylvan, but without the
necessity of Sylvan's consent, assign its rights and obligations
under this Agreement to a parent or wholly owned subsidiary pursuant
to any internal reorganization not involving a change of control or
ownership of Caliber. Any other assignment by Caliber may be made
only with the prior consent and approval of Sylvan. Sylvan may, upon
reasonable prior notice to Caliber, but without the necessity of
Caliber's consent, assign this Agreement and its rights and
obligations hereunder to an entity controlling, controlled by or
under common control with Sylvan. Any other assignment by Sylvan may
be made only with the prior consent and approval of Caliber.
11.03 Maryland Law. This Agreement shall be subject to, governed by and
construed in accordance with the laws (except for the choice of law
provisions) of the State of Maryland. Any and all obligations or
payments are due and payable in the City of Baltimore, Maryland.
11.04 Severability. If any provision of this Agreement should, for any
reason, be held violative of any applicable law, and so much of this
Agreement be held unenforceable, then the invalidity of such a
specific provision of this Agreement shall not be held to invalidate
any other provisions of this Agreement, which other provisions shall
remain in full force and effect unless removal of the invalid
provisions destroys the legitimate purposes of this Agreement, in
which event this Agreement shall be canceled.
11.05 Entire Agreement. This Agreement and the Services Agreement,
together with all other documents, instruments or agreements
executed or delivered in connection herewith or therewith,
collectively represent the entire understanding of the parties
hereto with respect to the subject matter hereof. There are no oral
agreements, understandings, or representations made by any party to
this Agreement that are outside of this Agreement and the Services
Agreement and are not expressly stated herein or therein.
Capitalized terms not defined herein shall have the meaning set
forth in the Services Agreement.
11.06 Notices. Any notices or other communications required or which may
be given by either party to the other party under this Agreement,
shall be in writing and may be sent by Fax, however the original
shall be sent either by overnight courier, with a verified receipt,
or by registered or certified mall, postage prepaid and addressed to
and at the address stated below or to such other address as the
parties shall subsequently designate to each other by notice given
in accordance with this Section. Such notice shall be deemed to be
sufficiently given on the earlier of the date when the original is
received by the receiving party and the date that is three (3)
business days after the original is sent or mailed.
14
FOR SYLVAN: SYLVAN LEARNING SYSTEMS, INC.
Attention: B. Xxx XxXxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
FOR CALIBER: CALIBER LEARNING NETWORK, INC.
Attention: Xxxxxxxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
A party may change the address for notice by giving notice of such
change to the other party in writing.
11.07 Amendments & Waivers. This Agreement may be amended only in
writing by the mutual consent of all of the parties hereto. No waiver
of any provision of this Agreement shall arise from any action or
inaction of any party, except an instrument in writing expressly
waiving the provision executed by the party entitled to the benefit
of the provision.
11.08 Survival. All representations, warranties, covenants, and
agreements of the parties contained in this Agreement or contained in
any writing delivered pursuant to this Agreement shall survive the
Closing.
11.09 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall pay the fees and expenses incurred by
it in connection with the transactions contemplated by this
Agreement. if any action is brought for breach of this Agreement or
to enforce any provision of this Agreement, the prevailing party
shall be entitled to recover court costs and reasonable attorney's
fees.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
15
IN WITNESS WHEREOF, the parties hereunder have executed this Agreement as
of the day and year first above written.
"CALIBER" "SYLVAN"
CALIBER LEARNING NETWORK, INC. SYLVAN LEARNING SYSTEMS, INC.
BY: _______________________________ BY: _______________________________
16
AMENDMENT NO. 1 TO
TESTING CENTER MANAGEMENT AND CBT SERVICES AGREEMENT
BETWEEN
SYLVAN LEARNING SYSTEMS, INC.
AND
CALIBER LEARNING NETWORK, INC.
This Amendment No. 1 (this "Amendment") to the Testing Center Management
and CBT Services Agreement (the "Agreement") is made and entered into effective
as of May 2, 1997, by and between SYLVAN LEARNING SYSTEMS, INC. ("Sylvan"), a
Maryland corporation, and CALIBER LEARNING NETWORK, INC. ("Caliber"), a Maryland
corporation.
RECITALS
1. The parties entered into the Agreement on May 1, 1997.
2. This Amendment is entered into to correct certain errors and to clarify
certain obligations of the parties.
TERMS AND CONDITIONS
In consideration of the mutual covenants set forth in the Agreement and this
Amendment, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sylvan and Caliber amend the
Agreement as follows:
1.0 COMPENSATION
The first sentence of Paragraph 1.03 of the Agreement is hereby deleted and the
following is substituted therefor:
"1.03 As consideration for all of the services to be performed by Caliber in
its operation of the Testing Centers during the Management Period, Sylvan
shall pay the following fees to Caliber (the "Management Fees"), during
the following periods:
*
*
----------
* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
*
2.0 TESTING CENTER SITES
Section 2.0 of the Agreement is hereby deleted in its entirety and the following
is substituted therefor:
"2.0 MANAGEMENT AND USE OF TESTING CENTER LEASEHOLDS
Sylvan represents and warrants that it has obtained any and all landlord
consents required under the leases covering the Testing Centers (the
"Leases") in order for Caliber lawfully to manage and use the leased
premises covered thereby. Caliber shall use and manage the Testing Centers
subject to the terms of this Agreement and the terms of the Leases.
Caliber assumes and agrees to perform and comply with all of the
agreements, covenants and obligations of Sylvan as tenant under the Leases,
the terms and conditions of which being hereby incorporated by reference
herein as if set forth in full; provided, however, that nothing in this
Section 2.0 shall be deemed to constitute any Testing Center landlord a
third party beneficiary of Caliber's covenants hereunder and no such
landlord shall have any right or power to enforce against Caliber any
obligations of Sylvan under any Lease."
3.0 COVERED TESTING CENTERS
Exhibit A to the Agreement is hereby deleted in its entirety and replaced by the
---------
substitute Exhibit A attached hereto. For all purposes of the Agreement, the
---------
term "Testing Centers" means those Testing Centers listed on the substitute
Exhibit A attached to this Amendment.
---------
4.0 GENERAL
This Amendment constitutes all of the amendments to the Agreement intended by
the parties. Except as modified hereby, all of the other contractual
obligations of the parties under the Agreement shall remain in full force and
effect. In the event of any conflict between the terms of this Amendment and
the terms of the Agreement or any Exhibit thereto, the terms of this Amendment
shall prevail.
-------------
* Text omitted pursuant to a request for confidential treatment and filed
separately with the Securities and Exchange Commission.
2
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and
year first above written.
SYLVAN LEARNING SYSTEMS, INC.
By:_______________________________
Name:_____________________________
Title:______________________________
CALIBER LEARNING NETWORK, INC.
By:_______________________________
Name:_____________________________
Title:______________________________
3
EXHIBIT A
TEST CENTERS & PERMITTED FIRST CLOSING DATES
# CITY SEATS PERMITTED FIRST CLOSING DATES
SITES: 0000 Xxxxxxxxx, XX 5 N/A#
5202 Dover, DE 5 N/A#
0000 Xxxxxx Xxxxx[Xxxxxx], XX 28 N/A#
5209 Williston, VT 5 N/A#
0000 Xxxxxx Xxxx, XX 00 X/X#
0000 Xxxxxxxxxx, XX 15 N/A#
5230 Chicago, IL 12 N/A#
0000 Xxxxx Xxxxx, XX 15 N/A#
0000 Xxxxxx, XX 28 N/A#
5237 Morgantown, WV 7 N/A#
5241 Bloomington [Normal], IL 8 N/A#
0000 Xxxxxxx, XX 8 N/A#
5244 Toledo, OH 11 N/A#
5249 Scranton, PA 9 N/A#
5804 *Atlanta, GA 15 N/A
5807 *Chicago, IL 25 N/A
5811 *Dallas, TX 21 N/A
5812 *Denver, CO 15 N/A
5815 *Glendale [LA], CA 24 N/A
5823 Melville [Long Island], NY 21 N/A#
5832 *NY [Midtown], NY 50 N/A
5833 *NY [Whitehall], NY 50 N/A
5836 *Maitland [Orlando], NY 15 N/A
5849 *San Francisco, CA 26 N/A
5855 *Waltham [Boston], MA 23 N/A
5856 NY [Penn Plaza], NY 44 N/A#
5858 Union [Newark], NJ 22 N/A#
CLOSING SITES:
0000 Xxxxxxxxxxx, XX 4 When alternate sites are operating
0000 Xxxxxxx, XX 15 When alternate sites are operating
0000 Xxxxxxxxx, XX 12 When alternate sites are operating
5831 Norwalk, CT 11 When alternate sites are operating
0000 Xxxxx'x Xxxxxx, XX 15 9/1/97
Other sites in the 52xx series are not included in this list because they are
currently operated by 3rd parties or inside ETS FSOs [Field Service Offices].
. * These sites are designated NASD "Flagship" sites and operate per the
"Flagship" guidelines in the NASD Agreement.
. # These sites have no planned closing date however they could be closed
if a franchise operated STC opened in this market
