Exhibit 4.4
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), effective as of
February 28, 1998 but dated this 31st day of March, 1998, by and among SYLVAN
LEARNING SYSTEMS, INC., a Maryland corporation (the "Purchaser"), 7 Shorelake
Enterprises, Inc., a Texas corporation (the "Company"), and A. Xxxxxx Xxxxxxx,
Xx., Xxxxx X. Xxxxxxx and Xxxx Xxxxxxx Xxxxxx , the sole stockholders of the
Company (the "Stockholder," whether one or more).
W I T N E S S E T H:
- - - - - - - - - -
The Stockholder owns all the issued and outstanding capital stock of the
Company. The Purchaser and the Stockholder wish to enter into an agreement for
the acquisition of the Company by the Purchaser through a merger of the Company
into the Purchaser in a transaction qualifying as a tax-free reorganization
under Section 368(a)(1)(A) of the Code (the "Merger"). The parties agree and
acknowledge that for accounting purposes, the Merger is to be treated as a
pooling-of-interests. The Purchaser, the Company and the Stockholder wish to
enter into a definitive agreement setting forth the terms and conditions of the
Merger.
Accordingly, in consideration of the foregoing and of the covenants,
agreements, representations and warranties hereinafter contained, the Purchaser,
the Company and the Stockholder hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser hereby
represents and warrants to the Company and the Stockholder as follows:
1.1 Organization and Standing. The Purchaser 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 own or hold under lease the properties and assets it now owns
or holds under lease. Copies of the Charter and By-Laws of the Purchaser have
been delivered to the Company, and such copies are complete and correct and in
full force and effect on the date of this Agreement. The Purchaser has at all
times in the past operated and used its assets in material compliance with, and
currently is not in violation of, and has obtained all material licenses and
permits required by, any law, rule or regulation.
1.2 Financial Statements. The Purchaser has delivered to the Company
--------------------
copies of the Purchaser's audited consolidated financial statements for the
fiscal years ended December 31, 1996 and 1997. These financial statements are
true and complete in all material respects, have been prepared in accordance
with generally accepted accounting principles ("GAAP") consistently followed
throughout the periods covered by such statements (except as may be stated in
the explanatory notes to such statements), and present fairly the consolidated
financial position and results of operations of the Purchaser at the dates of
such statements and for the periods covered thereby. The Purchaser also has
delivered to the Company copies of its Quarterly Report on Form 10-Q for the
third quarter ended September 30, 1997, and all other reports or documents
required to be filed with the Securities and Exchange Commission pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the filing of such Quarterly Report on Form 10-Q and
prior to the date of this Agreement. The reports to the Securities and Exchange
Commission delivered to the Company and the Stockholders do not contain any
misstatements of material facts or omit any statements necessary to make the
statements contained therein not correct.
1.3 No Conflict With Other Documents. Neither the execution and
--------------------------------
delivery of this Agreement nor the carrying out of the transactions contemplated
hereby will result in any violation, termination
1
or modification of, or be in conflict with, the Purchaser's Charter or By-Laws,
or, any terms of any contract, instrument or other agreement to which the
Purchaser 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 the Purchaser 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 on the Purchaser.
1.4 Brokers and Advisors. The Purchaser 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.
1.5 Authority. The execution, delivery and performance of this
---------
Agreement by the Purchaser have been duly authorized by its Board of Directors,
and this Agreement is a valid, legally binding and enforceable obligation of the
Purchaser. Upon the satisfaction of all conditions contained herein and the
filing of Articles of Merger with the Maryland State Department of Assessments
and Taxation and the Texas Secretary of State, this Agreement will result in
the valid, legally binding and enforceable statutory merger of the Company and
the Purchaser.
1.6 Validity of Common Stock. The shares of Purchaser's Common Stock
------------------------
to be issued and delivered by the Purchaser in connection with the Merger 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.
1.7 Tax-Free Reorganization. The Purchaser is not aware of any
-----------------------
events or conditions relating to the Purchaser which would preclude the Company
or the Stockholder from treating the Merger as a tax-free reorganization under
Section 368(a)(1)(A) of the Code.
1.8 Registration Statement on Form S-3. As of the date hereof, the
----------------------------------
Purchaser is aware of no events, actions or conditions which would prevent the
Purchaser from being able to comply with the provisions of Section 11.1(a) of
this Agreement, and will use its best efforts to continue to be eligible to
comply with the provisions of Section 11.1(a).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER.
The Company and the Stockholder hereby jointly and severally represent and
warrant to the Purchaser as follows:
2.1 Authorized and Issued Shares. The Company's entire authorized
----------------------------
capital stock consists of 10,000 shares of Common Stock, $1.00 par value per
share (the "Company Common Stock"), of which 2,500 shares are issued and
outstanding. No shares of Company Common Stock are held in the Company's
treasury and no shares are reserved for issuance. All outstanding shares of
Company Common Stock have been duly authorized and are validly issued and are
fully paid and non-assessable and are owned by the Stockholder. The Company is
not a party to or bound by any options, calls, contracts, preemptive rights or
commitments of any character relating to any issued or unissued capital stock,
or any other equity security issued or to be issued by the Company.
2.2 Organization. The Company is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of Texas, and
has the corporate power and authority to carry on its business as it is now
being conducted and to own or hold under lease the properties or assets it now
owns or
2
holds under lease and to perform the actions contemplated hereby. Complete and
accurate copies of the current Charter, By-Laws, minute books and stock transfer
books of the Company have been provided to the Purchaser, and such copies are
complete and correct and in full force and effect. The Company does not own or
have any direct or indirect interest in any other corporation, firm,
partnership, joint venture enterprise or other business entity.
2.3 Transactions with Affiliates. Except as set forth in Section 2.3
----------------------------
of the disclosure schedule delivered to the Purchaser pursuant to this Agreement
(the "Disclosure Schedule") or in the Company Financial Statements (as
hereinafter defined), the Company is not a party to any contract, agreement or
other arrangement with any current or former officer, director or stockholder or
any affiliate of any such persons. Each transaction required to be listed on
the Disclosure Schedule is on terms no less favorable than terms available from
unrelated parties.
2.4 Financial Statements. The Company has provided to the Purchaser
--------------------
the unaudited financial statements for the fiscal years of the Company ended on
January 31, 1997, and January 31, 1998, which January 31, 1998 financial
statement shall be restated on an accrual basis and audited as soon as
practicable after the execution of this Agreement (collectively, the "Company
Financial Statements"). As of the Closing Date, the Company Financial
Statements will be complete and correct, prepared on a consistent basis
throughout the periods covered thereby and will present fairly and accurately
the financial position and results of operations of the Company as of and for
the periods indicated. There are no material liabilities or obligations of the
Company, whether contingent or absolute, as of the dates of such statements,
including liability for taxes of any type, which in accordance with GAAP
consistently applied should have been shown or provided for in the Company
Financial Statements and are not so shown or provided for. Since January 31,
1998, there has been no material adverse change in the condition (financial or
otherwise), assets, liabilities, earnings, net worth, financial position,
business, operations, properties or prospects of the Company except as shown on
Schedule 2.4 of Disclosure Schedule. The Company's accounts receivable arose,
and all accounts receivable that will be outstanding as of the Closing Date
shall have arisen, from bona fide transactions in the ordinary course of
---- ----
business and will be collectible by the Company in full, less applicable
reserves shown in the Company Financial Statements, in the ordinary course of
business within ninety days of the Closing Date, and there are no offsets or
claims related to such accounts receivable.
2.5 Taxes. The Company and the Stockholder have properly prepared
-----
and filed all federal, state and other tax returns required to be filed in
connection with the operations of the Company. True and complete copies of all
federal and state income tax returns for the Company and the Stockholder for
each of the years ended January 31, 1997 through January 31, 1998 have been
delivered or made available to the Purchaser on or prior to the date hereof and
copies of other returns will be made available upon request. Except as set
forth on Section 2.5 of the Disclosure Schedule or in the Company Financial
Statements, neither the Company nor the Stockholder has any liability for any
federal, state, county, local or other taxes whatsoever that arose or otherwise
was incurred on or before the date of the balance sheet for Fiscal Year Ending
January 31, 1998 included in the Company Financial Statements. No proposed
taxes, additions to tax, interest or penalties have been asserted or are pending
against the Company or the Stockholder with respect to periods ending on or
before Closing, and no such matters are under discussion with the applicable
authorities. There are no agreements, waivers, or other arrangements providing
for extensions of time with respect to the assessment or collection of any
unpaid tax against the Company or the Stockholder. The Company and the
Stockholder have withheld or otherwise collected all taxes or amounts it or he
was required to withhold or collect under any applicable federal, state or local
law, including, without limitation, any amounts required to be withheld or
collected with respect to employee state and federal income tax withholding,
social security, unemployment compensation, sales or use taxes or workmen's
compensation, and all such amounts have been timely remitted to the proper
authorities.
3
2.6 Agreements. Section 2.6 of the Disclosure Schedule identifies
----------
each of the following agreements, contracts, documents and other items (whether
written or oral) as to which the Company is a party or otherwise is bound (and
all such contracts, or summaries thereof, have been made available to the
Purchaser): (i) all documents relating to indebtedness for money borrowed or
collateral therefor, including guarantees; (ii) all agreements or plans relating
to employment, compensation of or benefits for officers or employees of the
Company; (iii) all contracts for the purchase of materials, supplies, services,
merchandise or equipment involving consideration of more than $2,000 or
involving purchases in excess of normal operating requirements; (iv) any
contract, agreement, or instrument not entered into in the ordinary course of
the business of the Company on a basis consistent with past practice; (v) any
contract containing restrictions on the Company's operations or its ability to
compete in any geographic region or in any line of business; (vi) any lease of
real property and all personal property leases calling for annual lease payments
in excess of $2,000; and (vii) each and every other contract which is material
to the financial condition, earnings, operation or business of the Company.
Each of the contracts and agreements so listed (collectively, the "Contracts")
is a valid and existing contract or agreement in full force and effect and there
exists no default by the Company thereunder. None of the Contracts will be
violated or breached and no default or right of termination or modification
shall arise thereunder as a result of the consummation of the transactions
contemplated by this Agreement.
2.7 Property. Section 2.7 of the Disclosure Schedule sets forth a
--------
schedule (the "Property Schedule") of (i) all real property owned or leased by
the Company (the "Real Property"), (ii) all individual items of tangible
personal property and assets (other than inventory) of the Company having a fair
market value in excess of $2,000, and (iii) all patents, trademarks, trade
names, service marks, trade secrets, copyrights, franchise rights or
applications therefor which are held, used, prepared in connection with or
otherwise related to the conduct of the business of the Company. Except as set
forth in the Property Schedule, the Company has good and marketable title to all
of such property and assets owned by it, free of any pledge, mortgage, lien,
lease, security agreement, encumbrance, charge or claim of any nature
whatsoever. The machinery and equipment of the Company are, in all material
respects, in good operating condition and repair, ordinary wear and tear
excepted. To the Company's knowledge, the Company is not infringing on any
patent, trademark, trade name, service xxxx, trade secret or copyright of
another entity and has received no notice or claim of any such infringement.
2.8 Legal Proceedings, Etc. Except as set forth in Section 2.8 of
-----------------------
the Disclosure Schedule, there are no legal, administrative, arbitration, or
other proceedings or governmental investigations pending or, to the best of the
Company's and the Stockholder's knowledge, threatened against the Company, the
Stockholder or the respective properties or assets of the Company and the
Stockholder.
2.9 Compliance; Licenses. The Company has at all times in the past
--------------------
operated and used its assets in material compliance with, and currently is not
in violation of, and has obtained all material licenses and permits required by,
any law, rule or regulation. Section 2.9 of the Disclosure Schedule contains a
true and complete list of all material licenses, permits, approvals, franchises
and other authorizations as are necessary in order to enable the Company to own
and conduct its business.
2.10 Bank Accounts, etc. Section 2.10 of the Disclosure Schedule
------------------
sets forth a true and complete list of all bank accounts, safe deposit boxes and
lock boxes of the Company including, with respect to each such account and lock
box identification of all authorized signatories.
2.11 Insurance. Section 2.11 of the Disclosure Schedule sets forth a
---------
summary of all general liability, product liability, fire, casualty, motor
vehicle and other insurance currently maintained by or on behalf of the Company.
All requirements and provisions thereof are being complied with. True and
correct copies of all insurance policies relating to such coverage have been
provided by the Company to the Purchaser. No notice of cancellation has been
given to or received by the Company with respect to any of its insurance
4
policies, and no such policies are subject to any retroactive rate or audit
adjustments or coinsurance arrangements.
2.12 Employee Plans. Except as set forth in Section 2.12 of the
--------------
Disclosure Schedule, the Company does not maintain, sponsor or contribute to any
plans in effect for pension, profit-sharing, deferred compensation, severance
pay, bonuses, stock options, stock purchases, or any other retirement or
deferred benefit, or for any health, accident or other welfare plan, or any
other employee or retired employee benefits or incentive plan, program,
contract, understanding or arrangement in which any employee, former employee,
retired employee, or beneficiary of any of these, of the Company is entitled to
participate. The plans, programs, contracts, understandings and arrangements
listed on the Disclosure Schedule pursuant to this Section 2.12 are hereinafter
referred to as the "Employee Plans." The Company has supplied the Purchaser
with complete and accurate copies of each such Employee Plan. Each Employee
Plan has been operated according to its terms in compliance with all applicable
laws.
2.13 Recent Operations; Employee Matters. Since January 31, 1998,
-----------------------------------
(i) the Company has operated its business substantially as it was operated
immediately prior to said date and only in the ordinary course, and the Company
and the Stockholder have used their best efforts to preserve intact the
Company's business relationships, (ii) there have been no bonuses paid to or
increases in the compensation of officers or employees, except as set forth in
Section 2.13(ii) of the Disclosure Schedule, and (iii) except as set forth in
Section 2.13(iii) of the Disclosure Schedule, the Company has not declared or
paid any dividend or made any other distribution with respect to its capital
stock.
2.14 Stockholder Distributions. No dividends or distributions were
-------------------------
declared and/or paid to the Stockholder (whether in cash or other assets) after
January 31, 1998 through the date hereof (the "1998 Period").
2.15 Environmental Matters. To the best of Company's knowledge, no
---------------------
storage tanks, underground or otherwise, are now located on any properties
occupied by the Company, the Company has complied in all material respects with
all environmental laws relating to its operations or properties occupied by it
and there are no asbestos containing materials located on properties occupied by
the Company. The Company has not received any notice, demand, suit or
information request pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") or any comparable state law, nor does
it have knowledge of any other party's receipt of same relating to any
properties occupied by the Company.
2.16 Disclosure. The Company and the Stockholder have disclosed to
----------
the Purchaser all facts material to the assets, business, operations, financial
condition and prospects of the Company. All agreements, schedules, exhibits,
documents, certificates, reports or statements furnished or to be furnished to
the Purchaser by or on behalf of the Company in connection with this Agreement
or the transactions contemplated hereby are true, complete and accurate in all
material respects, and no such items contain any untrue statement of a material
fact or omit a material fact necessary in order to make the statements contained
herein and therein not misleading.
2.17 No Conflict With Other Documents. Neither the execution and
--------------------------------
delivery of this Agreement, nor the carrying out of any of the transactions
contemplated hereby, will result in any violation, termination or modification
of, or be in conflict with, the Company's Articles of Incorporation or By-Laws,
any terms of any contract, instrument or other agreement to which the Company 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
the Company 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
5
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 the Company.
2.18 Brokers and Advisors. The Company 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.
2.19 Authority. The execution, delivery and performance of this
---------
Agreement by the Company have been duly authorized by the sole Director and the
Stockholder, and this Agreement is a valid and legally binding and enforceable
obligation of the Company. Upon the satisfaction of all conditions contained
herein and the filing of the Articles of Merger with the Maryland State
Department of Assessments and Taxation and the Texas Secretary of State, this
Agreement will, to the Stockholder's best knowledge, result in the valid,
legally binding and enforceable statutory merger of the Company and the
Purchaser.
3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Company Common Stock. Such Stockholder has good and
---------------------------------
marketable title to the number of issued and outstanding shares of Company
Common Stock set forth opposite his or her name on Section 3.1 of the Disclosure
Schedule, free and clear of any pledges, liens, restrictions, claims or
encumbrances of any kind. Such Stockholder is not a party to or bound by any
options, calls, contracts, or commitments of any character relating to any
issued or unissued stock or any other equity security issued or to be issued by
the Company.
3.2 No Conflicts. Neither the execution and delivery of this
------------
Agreement nor the carrying out of the transactions contemplated hereby, will
result in any breach of or constitute a default (or with notice or lapse of time
or both would become a default), or give to others any rights, under the terms
of any contract, instrument or other agreement to which such Stockholder is a
party or is otherwise bound, or any judgment, decree or order applicable to such
Stockholder.
3.3 Binding Effect. This Agreement is a valid and legally binding
--------------
and enforceable obligation of the Stockholder, subject to applicable bankruptcy,
moratorium and other laws affecting the rights of creditors generally.
3.4 Litigation. There is no litigation, proceeding or governmental
----------
investigation pending as to which Stockholder has been served with process or
summons, or to the best of Stockholder's knowledge, threatened or in prospect
against or relating to such Stockholder or the shares of Company Common Stock
owned by him or her or the transactions contemplated by this Agreement.
3.5 Brokers and Advisors. Such Stockholder 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.
3.6 Investment Intent. It is understood that the shares of Purchaser
-----------------
Common Stock to be delivered to the Owner 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 shares are being delivered without registration in
reliance upon an exemption from the registration requirements of the Securities
Act or any state securities laws. The Owner is acquiring the Purchaser Common
Stock hereunder only for his own account and not with any intention of making,
or with a view to, or for sale in
6
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 Stockholder hereby
represents and warrants that:
(a) such Stockholder has reviewed, discussed and evaluated the
information delivered under Section 1.2 and has had the opportunity to ask
questions of, and receive answers from, executive officers of the Purchaser
concerning the terms and conditions of this Agreement and to obtain any
additional information which such Stockholder considered necessary to verify the
accuracy of the information delivered under Section 1.2;
(b) such Stockholder understands that he or she must bear the
economic risks of the investment in Purchaser Common Stock 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) such Stockholder has sufficient knowledge and experience in
financial and business matters to enable such Stockholder to be capable of
evaluating the merits and the risks of the exchange of the Company Common Stock
for the Purchaser Common Stock contemplated by this Agreement and such
Stockholder's prospective investment in the Purchaser.
3.7 Legends. It is understood and agreed that, to implement the
-------
requirements of the Securities Act and state securities laws and evidence the
restrictions upon transfer contained in this Agreement, the Purchaser will cause
a legend to be conspicuously noted on the certificates representing the
Purchaser Common Stock deliverable hereunder, and that the Purchaser 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 11 of this Agreement and after delivery of
an opinion of Purchaser's counsel 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.
3.8 No Agreements with Respect to Purchaser Common Stock. Except for
----------------------------------------------------
this Agreement, Stockholder has not entered into any agreement or understanding
with anyone for the sale, at Stockholder's option or otherwise, of any of the
Purchaser Common Stock to be delivered hereunder to Stockholder at the Closing.
4. COVENANTS OF THE PURCHASER. The Purchaser covenants to the Company and
the Stockholder that, except as otherwise consented to in writing by the Company
after the date of this Agreement:
4.1 Stock Reservation. Between the date hereof and the Closing Date,
-----------------
the Purchaser will keep available and reserve a sufficient number of shares of
Purchaser Common Stock for issuance and delivery to the Stockholder as
contemplated in this Agreement.
4.2 Cause Conditions to be Satisfied. The Purchaser will use its
--------------------------------
best efforts to cause all of the conditions described in Sections 8 of this
Agreement to be satisfied (to the extent such matters reasonably are within its
control).
4.3 Registration Statement on Form S-3. The Purchaser will use its
----------------------------------
best efforts to meet the requirements for eligibility set forth in paragraph A.
of the General Instructions to Form S-3, as promulgated by the U.S. Securities
and Exchange Commission in fulfilling its obligations under Section 11 hereof.
7
4.4 Consents. The Purchaser agrees to take all necessary corporate
--------
or other action and to use best efforts to obtain all consents and approvals
required for consummation of the transactions contemplated by this Agreement.
4.5 Tax-Free Reorganization. The Purchaser recognizes that the
-----------------------
Company and the Stockholder desire to treat the Merger as a tax-free
reorganization under Section 368(a)(1)(A) of the Code and will use its best
efforts to cooperate with the Company and the Stockholder in this regard. The
Purchaser will take no actions which would disqualify the transaction from being
treated as a pooling of interests under applicable accounting rules and the
Code.
5. COVENANTS OF THE COMPANY AND THE STOCKHOLDER. The Company and the
Stockholder jointly and severally covenant to the Purchaser that, except as
otherwise consented to in writing by the Purchaser after the date of this
Agreement:
5.1 Conduct of Business. After the date hereof and through the date
-------------------
of the Closing, with respect to the Company (a) its business will be conducted
only in the ordinary course; (b) it will terminate each of its Employee Plans
and will not enter into, adopt or amend any employee benefit plan, agreement or
arrangement, enter into or amend any employment contracts, or increase the
salaries or compensation of its officers or employees, other than ordinary
increases in salaries in accordance with past practices; (c) it shall pay in
full all liabilities outstanding on the date hereof except for (i) those
balances owed to the holders of the Company's notes and other liabilities as
shown in Section 5.1(c) of the Disclosure Schedule, and (ii) accrued employee
compensation, leave and benefits and the taxes thereon as shown in Section 5.1
(c) of the Disclosure Schedule; and (d) it shall not incur any additional
liability for borrowed money, or encumber any of its assets; (e) all outstanding
loans payable by the Company to the Stockholder or receivable by the Company
from the Stockholder or any employee shall be repaid in full by the appropriate
party; (f) its current assets at all times will exceed all of its liabilities;
(g) except as shown in Sec 5.1(g) of the Disclosure Schedule, all trade
payables and liabilities and obligations payable in installments shall be
current; (h) it will use its best efforts to preserve its business organization
intact, to keep available the service of its officers and employees and to
preserve the goodwill of suppliers, customers and others doing business with it;
(i) it will not enter into any agreement for the purchase, sale or other
disposition, or purchase, sell or dispose of, any equipment, supplies,
inventory, investments or other assets (other than sales of inventory and
purchases of materials and supplies in the ordinary course of business and in
accordance with past practices); (j) it will not compromise or write off any
material account receivable other than by collection of the full recorded amount
thereof; (k) no change shall be made in its Charter or By-Laws; (l) no change
shall be made in the number of shares or terms of its authorized, issued or
outstanding capital stock, nor shall it enter into or grant any options, calls,
contracts or commitments of any character relating to any issued or unissued
capital stock; (m) no dividend or other distribution or payment shall be
declared or paid in respect of its capital stock; and (n) no bonus or additional
compensation in excess of normal salary shall be paid to or declared for the
benefit of any Stockholder.
5.2 Consents. The Company and the Stockholder agree to take all
--------
necessary corporate or other action and to use their best efforts to obtain all
consents and approvals required for consummation of the transactions
contemplated by this Agreement.
5.3 Audited Financial Statements. The Stockholder will cause the
----------------------------
Company to deliver to Purchaser the Company's audited financial statements for
the year ended January 31, 1998 as soon as practicable after the execution of
this Agreement. Said statements shall be prepared to reflect the business
operations of the Company on an accrual basis in accordance with GAAP.
8
5.4 Cause Conditions to Be Satisfied. The Company and the
--------------------------------
Stockholder will use their best efforts to cause all of the conditions described
in Sections 7 and 8 of this Agreement to be satisfied (to the extent such
matters reasonably are within their control).
5.5 Tax-Free Reorganization. The Company and the Stockholder
-----------------------
recognize that the Purchaser desires to treat the Merger as a tax-free
reorganization under Section 368(a)(1)(A) of the Code and will use best efforts
to cooperate with the Purchaser in this regard. The Company and the Stockholder
will take no actions which would disqualify the transaction from being treated
as a pooling of interests under applicable accounting rules and the Code.
6. MERGER OF PURCHASER AND THE COMPANY. Subject to the terms and
conditions of this Agreement, the Purchaser and the Company agree to effect the
following transactions at the Closing:
6.1 Conditions. The Purchaser and the Company will deliver to the
----------
other appropriate evidence of the satisfaction of the conditions to their
respective obligations hereunder.
6.2 Merger. At the Closing, the Company will be merged with and into
------
the Purchaser pursuant to the provisions and with the effect provided in the
general corporation laws of the States of Maryland and Texas. The parties shall
prepare and execute appropriate merger documents under the corporate laws of
Maryland and Texas, containing the terms provided in this Agreement, including a
Certificate and Articles of Merger which shall be filed with the Maryland State
Department of Assessments and Taxation and with the Texas Secretary of State on
the Effective Closing Date, or immediately thereafter. The Purchaser shall be
the surviving corporation in the Merger.
6.3 Conversion Amount; Conversion of the Company Shares. As a result
---------------------------------------------------
of the Merger and without any action by the holders thereof, all of the shares
of Company Common Stock issued and outstanding immediately prior to the Merger
and all rights in respect thereof, shall be converted into that number shares of
Purchaser Common Stock having a market value of $973,925 (the "Conversion
Amount"). As a result of such conversion, the Stockholder will receive the
number of shares of Purchaser Common Stock to be issued pursuant to the Merger,
rounded to the nearest whole share. In order to effect such conversion, (i)
the Stockholder will deliver to the Purchaser at the Closing certificates in due
and proper form representing the shares of Company Common Stock owned by such
Stockholder, duly endorsed or accompanied by duly executed stock powers, with
signatures guaranteed by a commercial bank or a member of the National
Association of Securities Dealers, Inc., and (ii) the Purchaser shall deliver to
the Stockholder a certificate, in due and proper form, representing the number
of shares of Purchaser Common Stock to which such Stockholder is entitled. Each
share of Purchaser Common Stock issued pursuant to the Merger shall be fully
paid and non-assessable. For purposes of the foregoing, the market value of the
Purchaser Common Stock shall equal the average of the closing prices reported in
the Wall Street Journal for each of the fifteen (15) trading days ended and
including Friday, March 27, 1998.
6.4. Closing. The closing (the "Closing") of the transactions
-------
contemplated by this Agreement shall take place at the offices of the Company,
in Houston, Texas, beginning at 1:00 p.m. on March 31, 1998, or at such other
time and place as may be agreed upon in writing by the Purchaser and the
Stockholder (the "Closing Date"). The closing shall be effective as of the
close of business on March 31, 1998 (the "Effective Closing Date").
7. CONDITIONS TO THE PURCHASER'S OBLIGATIONS. Unless waived by the
Purchaser in writing in its sole discretion, all obligations of the Purchaser
under this Agreement are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions:
9
7.1 Approvals of Governmental Authorities. All governmental
-------------------------------------
approvals necessary or advisable in the reasonable opinion of the Purchaser's
counsel to consummate the transactions contemplated by this Agreement shall have
been received and shall not contain any provision which, in the reasonable
judgment of the Purchaser, is unduly burdensome.
7.2 No Adverse Proceedings or Events. No suit, action or other
--------------------------------
proceeding against the Company or the Purchaser, or their respective officers or
directors, or either of the Stockholder, shall be threatened or pending before
any court or governmental agency in which it will be, or it is, sought to
restrain or prohibit any of the transactions contemplated by this Agreement or
to obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
7.3 Consents and Actions; Contracts. All requisite consents of any
-------------------------------
third parties and other actions which the Company has covenanted to use its best
efforts to obtain and take under Section 5.2 hereof shall have been obtained and
completed. All material contracts and agreements of the Company, including,
without limitation, all contracts and agreements listed on Section 2.6 of the
Disclosure Schedule, shall be in full force and effect and shall not be affected
by the consummation of the transactions contemplated hereby.
7.4 Other Evidence. The Purchaser shall have received from the
--------------
Company and the Stockholder such further certificates and documents evidencing
due action in accordance with this Agreement, including certified copies of
proceedings of the Board of Directors and stockholders of the Company, as the
Purchaser reasonably shall request.
7.5 Employment Agreement. The Purchaser and A. Xxxxxx Xxxxxxx, Xx.
--------------------
shall have entered into an Employment Agreement in substantially the form of
Exhibit A attached hereto.
7.6 Current Financial Statements and Projections. The Stockholder
--------------------------------------------
shall have provided, or caused the Company to have provided to Purchaser the
audited financial statements of the Company for fiscal year ended January 31,
1998, showing an EBIT of at least $180,000 for such year, as well as a
projection of revenues and expenses for calendar year 1998, which projection
reflects net income of at least $200,000 for such year. Such audited financial
statements shall be prepared on an accrual basis, in accordance with GAAP.
"EBIT" means the Company's net revenues minus all of its expense items including
any extraordinary and non-recurring items and depreciation and amortization, but
excluding interest and taxes. For the 1998 projection, EBIT shall be calculated
in the same manner as "profits subject to bonus" under paragraph 2.02 of the
Employment Agreement attached hereto as Exhibit A.
7.7 Purchase of Other Houston Centers. The obligation of Purchaser
---------------------------------
to close and deliver to Stockholder the Purchaser Common Stock is conditioned on
Purchaser closing on the purchase of at least seven (7) of the following nine
(9) Sylvan Learning Centers #311, 314, 315, 316, 323, 326, 327, 347 and 351 on
or before March 31, 1998, and prior to the closing of this transaction. At the
present time, Purchaser has non-binding letters of agreement to purchase all of
said centers by March 31, 1998.
7.8 Resignation of Officers and Directors. Each and every officer
-------------------------------------
and director of the Company shall have resigned from any and all positions with
the Company as director, officer or employee effective as of immediately prior
to the Effective Closing Date.
8. CONDITIONS TO THE COMPANY'S AND THE STOCKHOLDER'S OBLIGATIONS. Unless
waived by the Company and the Stockholder, all obligations of the Company and
the Stockholder under this Agreement are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
10
8.1 No Adverse Proceedings or Events. No suit, action or other
--------------------------------
proceeding against the Company or the Purchaser, or their respective officers or
directors, or the Stockholder, shall be threatened or pending before any court
or governmental agency in which it will be, or it is, sought to restrain or
prohibit or to obtain damages or other relief in connection with this Agreement
or the transactions contemplated hereby.
8.2 Consents and Actions. All requisite consents of any third
--------------------
parties and other actions which the Purchaser has covenanted to use its best
efforts to obtain and take under Section 4.4 of this Agreement shall have been
obtained and completed.
8.3 Other Evidence. The Company and the Stockholder shall have
--------------
received from the Purchaser such further certificates and documents evidencing
due action in accordance with this Agreement, including certified copies of
proceedings of the Board of Directors of the Purchaser, as the Company and the
Stockholder reasonably shall request.
9. INDEMNIFICATION.
9.1. Indemnification by the Stockholder. The Stockholder hereby
----------------------------------
covenants and agrees to indemnify and hold harmless the Purchaser and its
respective successors and assigns, at all times from and after the date of
Effective Closing Date against and in respect of the following:
(i) any damage or loss resulting from any misrepresentation,
breach of representation or warranty or breach or non-fulfillment of any
agreement or covenant on the part of the Company or the Stockholder 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 the Company or the Stockholder hereunder;
(ii) any liabilities or obligations of the Company or the
Stockholder for federal, state or local income tax or, to the extent not
accrued or reflected in the Financial Statements, any personal property,
FICA, withholding, excise, unemployment, sales or franchise taxes arising
from operations of the Company prior to the Effective Closing Date except
as shown in Schedule 5.1(c) and 5.1(g) of the Disclosure Schedule.
(iii) all claims, actions, suits, proceedings, demands,
assessments, judgments, costs, reasonable attorneys' fees and expenses of
any nature incident to any of the matters indemnified against pursuant to
this Section 9.1, including, without limitation, all such costs and
expenses incurred in the defense thereof or in the enforcement of any
rights of the Purchaser hereunder.
9.2. Notice and Defense. The Purchaser shall promptly notify the
------------------
Stockholder of any asserted liability, damage, loss or expense claimed to give
rise to indemnification hereunder and the Stockholder shall have an initial
right to defend, compromise and settle such matter provided that the Purchaser
is fully protected from any liability, loss damage, cost or expense in
connection therewith. Within ten (10) days of receipt of such notice,
Stockholder shall respond in writing as to whether Stockholder will engage
counsel at Stockholder's expense to defend the claim. If Stockholder does not
respond, or affirmatively declines to defend the claim or disputes its
obligation to indemnify, the Purchaser shall then have, at its election, the
right to compromise or defend any such matter at the Stockholder's sole cost and
expense through counsel chosen by the Purchaser and reasonably acceptable to the
Stockholder; provided, however, that any such compromise or defense shall be
conducted in a manner which is reasonable and the Stockholder shall in all
events have a right to veto any such compromise or defense which might increase
the potential liability of, or create a new liability for, the Stockholder
(other than under Section 9.1). Each party agrees in all cases to cooperate
with the defending party
11
and its or his 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 or his own cost and
expense, of advisory counsel of its own choosing. As to any claim paid by the
Purchaser for which the Stockholder has indemnity liability under this Section
9, and which the Stockholder does not reimburse Purchaser within five (5) days
following demand for reimbursement by Purchaser, Purchaser may, in addition to
any other remedies, (if such Stockholder is then an employee of Purchaser)
offset the amount of the Stockholder's liability on the claim paid against any
compensation payable to the Stockholder. The Stockholder may tender shares of
the Purchaser's Common Stock to Purchaser as a manner of paying an indemnity
liability, receiving credit for the market value thereof, market value being
calculated using the average of the closing prices reported in the Wall Street
Journal for each of the fifteen (15) trading days ending on the day before
delivery of the shares.
9.3. Indemnification by the Purchaser. From and after the Closing
--------------------------------
Date, the Purchaser hereby covenants and agrees to indemnify and hold harmless
the Stockholder against and in respect of the following:
(i) any liability, loss, damage or expense resulting from any
misrepresentation, breach of warranty or non-fulfillment of any agreement or
covenant on the part of Purchaser under this Agreement, or from any
misrepresentation in or omission from any certificate or other instrument or
document furnished or to be furnished by the Purchaser hereunder; and
(ii) any claims, actions, suits, or proceedings based upon or
arising out of the operation of the assets or business herein conveyed from and
after the date of Closing; and
(iii) 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 9.3, including without limitation, all such costs and expenses incurred
in the defense thereof or in the enforcement of any rights of the Stockholder
hereunder.
The Stockholder shall notify the Purchaser of any asserted liability,
damage, loss or expense claimed to give rise to indemnification hereunder and
thereafter the Purchaser shall have the right to defend, compromise and settle
such matter provided that the Stockholder is fully protected from any cost or
expense in connection therewith.
10. SURVIVAL; LIMITATIONS.
10.1 Survival. The representations, warranties and agreements made
--------
by the parties in this Agreement and in any other certificates and documents
delivered in connection herewith, including the indemnification obligations of
the Stockholder and Purchaser set forth in Section 9 hereof, shall survive the
Closing under this Agreement regardless of any investigation made by the party
making claim hereunder, except that, subject to the provisions of the next
sentence, neither the Purchaser, on the one hand, nor the Stockholder, on the
other, shall have any liability with respect to any matter if notice of a claim
has not been provided on or prior to March 31, 2000. Notwithstanding the
foregoing, (i) any indemnification obligations of the Stockholder relating to
federal, state or local tax matters shall continue in full force and effect
without limitation until expiration of the statute of limitations applicable to
such tax or environmental matters, (ii) the representation and warranty
contained in Sections 2.1, 2.2 or 3.1 and any indemnification obligations of the
Stockholder in connection therewith shall continue in full force and effect
without any limitation, (iii) any claims, actions or suits the Purchaser, on the
one hand, or the Company or the Stockholder, on the other hand, may have which
arises from any fraud or willful misconduct on the part of the Stockholder or
the Company, or any representative
12
of either, on the one hand, and the Purchaser or any representative of it, on
the other hand, shall continue in full force and effect without limitation until
expiration of the statute of limitations applicable thereto.
10.2 Limitations. No indemnified party shall be entitled to
-----------
indemnification hereunder until such time as a single loss or an aggregate of
several losses equals Eighteen Thousand Dollars ($18,000), at which time such
indemnified party shall be entitled to indemnification for all losses sustained,
incurred, paid or required to be paid by such indemnified party in excess of the
$18,000; and in no event shall any party to this Agreement be entitled to
indemnification for a single loss or an aggregate of several losses which
exceeds $973,925.
11. REGISTRATION RIGHTS.
11.1 Registration Procedures and Expenses. So long as the
------------------------------------
Stockholder has not initiated the termination of his employment with the
Purchaser pursuant to Section 4.01 of the Employment Agreement between the
Stockholder and the Purchaser dated as of the date hereof, Purchaser shall:
(a) as soon as practicable after the closing date but in no
event later than ninety (90) days after the closing date, prepare and file with
the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 which meets the requirements of Rule 415 promulgated under
the Securities Act (a "Shelf Registration Statement") covering the sale by the
Stockholder from time to time of one half of the shares of the Purchaser Common
Stock received by the Stockholder in the Merger, and as soon as practicable
after the first anniversary of the closing date, but in no event later than
ninety (90) days after the first anniversary of the closing date, a Shelf
Registration Statement covering the sale by the Stockholder from time to time of
the remaining shares of Purchaser Common Stock. The foregoing notwithstanding,
Purchaser shall have no obligation to file a Shelf Registration Statement or to
maintain the effectiveness of any previously filed Shelf Registration Statement
if the sale of the Purchaser Common Stock pursuant to exemption from
registration under Rule 144 is available to the Stockholder. Further, the
Purchaser may extend its obligation to file a registration statement if the
Purchaser advises the Stockholder that there is a pending, but unannounced
transaction or development which Purchaser determines is not then appropriate
for disclosure, and that registration of the Purchaser Common Stock would
require such disclosure.
(b) use its best efforts, subject to receipt of necessary
information from the Stockholder, to cause each of the Shelf Registration
Statements to become effective;
(c) prepare and file with the Commission such amendments and
supplements to the Shelf Registration Statements and the prospectus used in
connection therewith as may be necessary to keep the Shelf Registration
Statements effective until the earlier of the date on which the Purchaser Common
Stock registered by such Shelf Registration Statement has been sold, or one year
from the date of the initial filing thereof;
(d) during the period referred to in (c) above, prepare and
promptly file with the Commission, and promptly notify the Stockholder of the
filing of, such amendment or supplement to each such Shelf Registration
Statement and the prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to the Purchaser Common
Stock is required to be delivered under the Securities Act, any event has
occurred the result of which is that any such prospectus then in effect would
include or incorporate an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading in
light of the circumstances in which they were made;
(e) advise the Stockholder, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of any of such Shelf Registration
Statements or the initiation or threatening of any proceeding for that purpose
and
13
promptly use its diligent best efforts to prevent the issuance of any stop order
and to obtain its withdrawal if such stop order should be issued;
(f) furnish to the Stockholder with respect to the Purchaser
Common Stock registered under any of the Shelf Registration Statements such
number of copies of prospectuses and preliminary prospectuses in conformity with
the requirements of the Securities Act and such other documents as the
Stockholder may reasonably request (but in no event more than 100 copies), in
order to facilitate the public sale or other disposition of all or any of the
registered Purchaser Common Stock by the Stockholder; provided, however, that
-------- -------
the obligation of Purchaser to deliver copies of prospectuses or preliminary
prospectuses to the Stockholder shall be subject to the receipt by Purchaser of
reasonable assurances from the Stockholder that the Stockholder 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;
(g) file documents required of Purchaser for normal blue sky
clearance in states reasonably specified in writing by the Stockholder,
provided, however, that Purchaser 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; and
(h) bear all expenses in connection with the procedures in
paragraphs (a) through (g) of this Section 11.1 and the registration of the
Purchaser Common Stock pursuant to each of the Shelf Registration Statements,
other than fees and expenses, if any, of counsel or other advisers to the
Stockholder.
11.2 Engagement of Underwriters. The parties hereto agree that the
--------------------------
Purchaser shall have no obligation to (i) conduct, arrange or coordinate any
distribution or sales activities on behalf of the Stockholder with respect to
the Purchaser Common Stock other than as set forth in Section 11.1 above or (ii)
retain any underwriter(s) in connection with the registration and/or
distribution of the Purchaser Common Stock pursuant to this Section 11. The
Stockholder agrees that any underwriter(s) or counsel engaged in connection with
the registration or distribution of the Purchaser Common Stock required to be
registered pursuant to this Section 11 will be retained by and at the sole
expense of the Stockholder and agrees further that any discounts or commissions
payable to such underwriter(s) shall also be an expense solely of the
Stockholder. In the event the Stockholder engages one or more underwriters
pursuant to this Section 11.2, the Stockholder shall enter into an underwriting
agreement with the managing or lead managing underwriter in the form customarily
used by such underwriter with such changes thereto as the parties thereto shall
agree; and, further, shall provide to such underwriter any documents or other
information as is necessary, in the underwriter's reasonable opinion, to
facilitate the effectiveness of the Shelf Registration Statement and the
completion of the distribution of the Purchaser Common Stock so registered.
11.3 Indemnification with respect to Shelf Registration Statements.
-------------------------------------------------------------
Purchaser hereby agrees to indemnify the Stockholder against liability arising
out of or based upon any untrue statement or alleged untrue statement of
material fact in any of the Shelf Registration Statements filed by Purchaser
pursuant hereto, or the omission or alleged omission to state or incorporate by
reference in such Shelf Registration Statements any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, other than any such statement included or incorporated by reference
in, or omitted from, such Shelf Registration Statements by Purchaser in reliance
upon and in conformity with written information furnished to Purchaser
specifically for use therein by or on behalf of the Stockholder. The
Stockholder hereby agrees to indemnify Purchaser against liability arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact included or incorporated by reference in the Shelf Registration Statements
or the omission or alleged omission to state or incorporate by reference therein
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading, if such statement or omission was made by
14
Purchaser in reliance upon and in conformity with written information furnished
to Purchaser for use or incorporation by reference in such Shelf Registration
Statements.
12. CONFIDENTIALITY. After the date hereof, the Stockholder will hold in
confidence and not reveal to any third parties any knowledge or information of a
confidential nature with respect to the business, products, know-how and methods
of operation of the Company, and will not disclose, publish or make use of the
same, provided, however, that the foregoing shall not be applicable to any
disclosure or use of confidential information or knowledge that can be
demonstrated to have (i) been publicly known prior to the date of this
Agreement, (ii) become well known by publication or otherwise not due to the
unauthorized act or omission on the part of the Stockholder, or (iii) been
supplied to the Stockholder by a third party without violation of the rights of
the Company or the Purchaser or any other party. The parties agree that the
remedy at law for any breach by the Stockholder of this Section 12 shall be
inadequate and that the aggrieved party shall be entitled to injunctive relief
in addition to any other remedy.
13. EXPENSES. Each party to this Agreement shall pay all of its expenses
relating hereto, including legal and accounting fees and disbursements of its
counsel, accountants and financial advisors, whether or not the transactions
hereunder are consummated. If said transactions are consummated, it is
expressly understood that the Stockholder will bear, and will not cause the
Company to pay, any legal fees or other expenses incurred by Company in
connection with the transactions contemplated by this agreement, as well as the
cost of furnishing the audited and reviewed Company Financial Statements
referred to in Section 2.4; provided, however, that in the event of any
litigation between the parties hereto relating to or arising from this
Agreement, the prevailing party in such litigation shall be entitled to payment
by the non-prevailing party of all reasonable attorney's fees and costs.
14. NOTICES. Except as otherwise provided herein, all notices, requests,
demands and other communications under or in connection with this Agreement
shall be in writing, and, (a) if to the Purchaser, shall be addressed to:
O. Xxxxxx Xxxxx General Counsel
Sylvan Learning Systems, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Xx., Esquire
Piper & Marbury
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
(b) if to the Company or the Stockholder, shall be addressed to:
A. Xxxxxx Xxxxxxx, Xx.
0 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
with a copy to:
Xxxxxx Xxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
00
Xxxxxxx, Xxxxxxx 00000
All such notices, requests, demands or communications shall be mailed
postage prepaid, certified mail, return receipt requested, or by overnight
delivery or delivered personally, and shall be sufficient and effective when
delivered to or received at the address so specified. Any party may change the
address at which it is to receive notice by like written notice to the other.
15. ENTIRE AGREEMENT. This Agreement (including the exhibits hereto and
the lists, schedules and documents delivered pursuant hereto, which are a part
hereof) is intended by the parties to and does constitute the entire agreement
of the parties with respect to the transactions contemplated by this Agreement.
This Agreement supersedes any and all prior understandings, written or oral,
between the parties, and this Agreement may be amended, modified, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the amendment, modification, waiver, discharge or
termination is sought.
16. GENERAL. The paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns, but nothing herein, express or implied, is
intended to or shall confer any rights, remedies or benefits upon any person
other than the parties hereto. This Agreement may not be assigned by any party
hereto. This Agreement shall be construed in accordance with and governed by
the laws of the State of Maryland.
16
IN WITNESS WHEREOF, the Purchaser, the Company and the Stockholder
have caused this Agreement to be duly executed and their respective seals to be
hereunto affixed as of the date first above written.
WITNESS: SYLVAN LEARNING SYSTEMS, INC.
__________________________ By:
Name: O. Xxxxxx Xxxxx, Vice President
WITNESS: 7 SHORELAKE ENTERPRISES, INC.
__________________________ By:
Name: A. Xxxxxx Xxxxxxx, Xx., President
WITNESS: STOCKHOLDERS:
__________________________
A. Xxxxxx Xxxxxxx, Xx.
WITNESS:
__________________________
Xxxx Xxxxxxx Matzel
WITNESS:
__________________________
Xxxxx X. Xxxxxxx, by her agent and
Attorney-in-fact, A. Xxxxxx Xxxxxxx, Xx.
17
