EXHIBIT 2
AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT (this "Amendment")
is made and entered into as of June 30, 2003, by and among Educate Operating
Company, LLC, a Delaware limited liability company ("Purchaser"), Apollo
Sylvan, LLC, a Delaware limited liability company ("Apollo Sylvan"), Apollo
Xxxxxx XX, LLC, a Delaware limited liability company ("Apollo Xxxxxx XX" and
together with Apollo Sylvan, "Parent"), Educate, Inc., a Delaware corporation
("Holdings"), Sylvan Learning Systems, Inc., a Maryland corporation
("Sylvan"), Sylvan Ventures, L.L.C., a Delaware limited liability company
("Ventures" and, together with Sylvan, the "Sellers"), and Apollo Management
IV, L.P., a Delaware limited partnership ("Apollo IV"). Capitalized terms used
in this Amendment and not otherwise defined herein shall have the meanings
ascribed thereto in that certain Asset Purchase Agreement, dated as of March
10, 2003, by and among Purchaser, Parent, Holdings, Sellers and Apollo IV (the
"Agreement").
WHEREAS, Purchaser, Parent, Holdings, Sellers, and Apollo IV desire
to amend the Agreement on the terms set forth in this Amendment; and
WHEREAS, in accordance with Section 11.2 of the Agreement, Purchaser,
Parent, Holdings, Sellers, and Apollo IV have agreed to amend certain
provisions of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
AMENDMENTS
1. Amendment to First Recital of the Agreement. The first recital of
the Agreement is hereby amended and restated in its entirety as follows:
WHEREAS, Sylvan desires to sell and Parent, Holdings and
Purchaser desire to purchase the assets composing Sylvan's K-12
educational business, including the assets owned by Educate Group,
LLC, a Delaware limited liability company ("Educate Group"), SLC
California, LLC, a Delaware limited liability company ("SLC
California") and the German Subsidiaries (collectively, the "K-12
Business");
2. Amendment to Section 1.1 of the Agreement. Section 1.1 of the
Agreement is hereby amended to add the words ", Annex B and Annex C" after the
words "Annex A" and before the word "hereto" in the last sentence thereof.
3. Amendment to Section 2.2 of the Agreement.
(a) Section 2.2(u) shall be amended by deleting the word "and" at the
end of such section.
(b) Section 2.2(v) shall be amended by deleting the period at the end
of such section and replacing it with "; and".
(c) A new Section 2.2(w) shall be added which shall read as follows:
"(w) an executed Contribution Agreement in the form
attached hereto as Exhibit P."
4. Amendment to Section 3.5(iii) of the Agreement. Section 3.5(iii)
of the Agreement is hereby amended to add the words ", except for Educate
Group and SLC California," before the words "is duly qualified" at the
beginning thereof.
5. Amendment to Section 3.13 of the Agreement. Section 3.13 of the
Agreement is hereby amended to add the words ", Annex B and Annex C" after the
words "Annex A" and before the word "hereto" in the last sentence thereof.
6. Amendment to Section 5.8 of the Agreement. Section 5.8 of the
Agreement is hereby amended to add the words ", the Contribution Agreement"
after the words "this Agreement" and before the words "or any of the other
Transactions" in the last sentence thereof.
7. Amendment to Section 6.2(d) of the Agreement. Section 6.2(d) of
the Agreement is hereby amended by deleting it in its entirety and
substituting in lieu therefor the following:
"(d) Contribution Agreement. Sylvan, Educate Group and
SLC California shall have executed the Contribution Agreement."
8. Amendment to Section 9.1 of the Agreement. Section 9.1 of the
Agreement is hereby amended by adding a new subsection (e) which shall read as
follows:
"(e) Notwithstanding anything to the contrary in any
assignment from Sylvan to a Purchaser Indemnified Person with
respect to a Lease of Leased Real Property in which the
effective date of the Purchaser Indemnified Person's assumption
of obligations thereunder includes matters arising prior to the
Closing Date, the parties hereby acknowledge and agree that (1)
such Purchaser Indemnified Person is only responsible for the
obligations of the tenant under such Lease to the extent
arising from and after the Closing Date and (2) any Purchaser
Losses with respect to action or inaction of Sylvan arising
prior to the Closing Date constitute Purchaser Losses governed
by the terms, conditions and limitations of this Article IX."
9. Amendment to Section 10.1 of the Agreement.
(a) Section 10.1 of the Agreement is hereby amended by inserting the
following definitions in the appropriate alphabetical order as follows:
"California Tangible Target Assets" shall mean all of
the tangible property and personal assets used in the Sylvan
Learning Centers division of the K-12 Business of every kind,
nature and description, located in the state of California,
which is owned or leased by SLC California for the purpose of
conducting, or used in, the Sylvan Learning Centers division of
the K-12 Business. SLC California Tangible Target Assets shall
include, without limitation, the assets identified on Annex C.
"Contribution Agreement" shall mean that certain
Contribution Agreement, by and among Sylvan, Educate Group and
SLC California, whereby Sylvan will contribute (i) all of the
California Tangible Target Assets to SLC California and (ii)
all of the Non-California Tangible Target Assets to Educate
Group, in the form attached as Exhibit P hereto.
"Educate Group" shall have the meaning set forth in the
recitals.
"Non-California Tangible Target Assets" shall mean all
of the tangible property and personal assets used in the Sylvan
Learning Centers division of the K-12 Business of every kind,
nature and description, located outside of the state of
California, and all of the tangible property and personal
assets used in the Sylvan Education Solutions division of the
K-12 Business of every kind, nature and description, wherever
situated, which is owned or leased by Educate Group for the
purpose of conducting, or used in, the Sylvan Learning Centers
division and the Sylvan Education Solutions division of the
K-12 Business. Non-California Tangible Target Assets shall
include, without limitation, the assets identified on Annex B.
"SLC California" shall have the meaning set forth in the
recitals.
"Sylvan Intangible Target Assets" shall mean all of the
Intellectual Property held or owned by Sylvan in connection
with the K-12 Business. Sylvan Intangible Target Assets shall
include, without limitation, the assets identified on Annex A.
"Sylvan Tangible Target Assets" shall mean the
California Tangible Target Assets and the Non-California
Tangible Target Assets.
(b) The definition of "Sylvan Target Assets" in Section 10.1 of the
Agreement is hereby amended and restated in its entirety to read as follows:
"Sylvan Target Assets" shall mean the Sylvan Tangible
Target Assets and the Sylvan Intangible Target Assets,
including all the issued and outstanding equity interests of
the Target Subsidiaries held by Sylvan and all of Sylvan's
Tuition Portfolio Assets, but does not include any Excluded
Sylvan Assets.
(c) The definition of "Target Subsidiary" in Section 10.1 of the
Agreement is hereby amended and restated in its entirety to read as follows:
"Target Subsidiary" shall mean the German Subsidiaries,
Educate Group, SLC California, Connections Academy and eSylvan.
10. Amendment to Exhibits to the Agreement.
(a) Exhibit A to the Agreement shall be deleted in its entirety and
replaced with Exhibit A attached hereto.
(b) Exhibit C to the Agreement shall be deleted in its entirety and
replaced with Exhibit B attached hereto.
(c) The Exhibits to the Agreement are hereby supplemented by adding
Exhibit C attached hereto as Exhibit P to the Agreement.
11. Amendment to Annexes to the Agreement.
(a) Annex A to the Agreement shall be deleted in its entirety and
replaced with Exhibit D attached hereto.
(b) The Annexes to the Agreement are hereby supplemented by adding
Exhibits E and F attached hereto as Annexes B and C to the Agreement.
ARTICLE II
WAIVER
Subject to the terms and conditions hereof, each of Purchaser, Parent
and Holdings hereby waive Section 5.8 of the Agreement solely to permit Sylvan
to contribute the Sylvan Tangible Targets Assets to Educate Group and SLC
California pursuant to the terms of the Contribution Agreement and to permit
any other transactions contemplated by the Contribution Agreement.
ARTICLE III
MISCELLANEOUS
1. Effect of Amendment. Except as set forth in this Amendment, the
provisions of the Agreement shall remain in full force and effect and all
references in the Agreement shall be deemed to refer to and mean the
Agreement, as amended by this Amendment.
2. Entire Agreement. The Agreement, as amended by this Amendment, and
the Confidentiality Agreement (as such term is defined in the Agreement) (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof and (b) are not intended to confer upon any
Person (as such term is defined in the Agreement) other than the parties
hereto and thereto any rights or remedies hereunder.
3. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York, including,
without limitation, Section 5-1401 of the New York General Obligations Laws.
4. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument. Each party hereto shall
become bound by this Amendment immediately upon affixing its signature hereto.
5. Headings. The headings of the sections and paragraphs of this
Amendment have been inserted for convenience of reference only and do not
constitute a part of this Amendment.
6. Severability. If any provision of this Amendment shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
7. Further Assurances. The parties hereto shall execute such other
documents and take such further actions as may be required or useful to carry
out the purposes hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment No. 1 to be executed and delivered by its duly authorized officer as
of the date first above written.
EDUCATE, INC.
By: /s/ Xxxxx Xxxxx
-----------------------------
Name: Xxxxx Xxxxx
Title: Vice President
EDUCATE OPERATING COMPANY, LLC
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: Vice President
APOLLO SYLVAN, LLC
By: /s/ Xxxxx Xxxxx
---------------------------
Name: Xxxxx Xxxxx
Title: Vice President
APOLLO XXXXXX XX, LLC
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
SYLVAN LEARNING SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
and Chief Financial Officer
SYLVAN VENTURES, LLC
By: /s/ B. Xxx XxXxx
-----------------------------
Name: B. Xxx XxXxx
Title: Chief Financial Officer
APOLLO MANAGEMENT IV, L.P.
a Delaware limited partnership,
By: AIF IV Management, Inc.
a Delaware corporation,
its General Partner
By: /s/ Xxxxxxxx Xxxx
--------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
SYLVAN LEARNING SYSTEMS, INC.
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This Assignment and Assumption Agreement (this "Assignment") is
made as of June 30, 2003, by and between Educate Operating Company, LLC, a
Delaware limited liability company ("Assignee"), and Sylvan Learning
Systems, Inc., a Maryland corporation ("Assignor"), pursuant to an Asset
Purchase Agreement, dated as of March 10, 2003, by and among Assignee,
Apollo Sylvan, LLC, a Delaware limited liability company, Apollo Xxxxxx XX,
LLC, a Delaware limited liability company, Educate, Inc., a Delaware
corporation, Sylvan Ventures, L.L.C., a Delaware limited liability company,
and Assignor, as amended by Amendment No. 1 thereto, dated as of June 30,
2003 (the "Asset Purchase Agreement"). Capitalized terms used, but not
otherwise defined herein, shall have the meaning ascribed to them in the
Asset Purchase Agreement.
Pursuant to the Asset Purchase Agreement, Assignor has agreed to
sell, and Assignee has agreed to purchase, the assets comprising Assignor's
K-12 Business, including the assets owned by any Target Subsidiary. In
consideration of the sale by Assignor to Assignee of the K-12 Business and
pursuant to the terms and conditions of the Asset Purchase Agreement, the
parties hereby agree as follows:
(1) Assignor hereby unconditionally and irrevocably transfers and
assigns all of the rights and benefits under the Leases, contracts and
agreements used in the K-12 Business, whether owned by Assignor or any
Target Subsidiary, including, but not limited to, those identified on
Annexes B and C of the Asset Purchase Agreement, and all of the intangible
rights and assets of Assignor of every kind, nature and description,
including going concern value, goodwill and Intellectual Property, held or
owned by Sylvan in connection with the K-12 Business, including, without
limitation, the going concern value, goodwill and Intellectual Property set
forth on Annex A of the Asset Purchase Agreement, but excluding any Excluded
Sylvan Assets.
(2) Assignee hereby accepts the foregoing assignment and assumes
the Assumed Liabilities.
(3) This assumption by Assignee of certain obligations of Assignor
shall not be construed to defeat, impair or limit in any way any rights or
remedies of Assignee to contest or dispute the validity or amount thereof.
Nothing contained in this instrument shall require Assignee to pay, perform
or discharge any liability, debt or obligation so long as Assignee in good
faith contests or causes to be contested the amount or validity thereof.
(4) Nothing in this Assignment, express or implied, is intended or
shall be construed to confer upon, or give to, any person, firm or
corporation other than Assignor and its successors and assigns, any remedy
or claim under or by reason of this instrument or any terms, covenants or
condition hereof, and all the terms, covenants and conditions, promises and
agreements in this instrument contained shall be for the sole and exclusive
benefit of Assignor and its successors and assigns.
(5) This Assignment shall take effect as of the Closing.
(6) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York including, without
limitation, Section 5-1401 of the New York General Obligations Law.
For the consideration aforesaid, Assignee, for itself and its
successors and assigns, has covenanted, and by this Assignment does
covenant, with Assignor, its successors and assigns, that Assignee and its
successors and assigns, will do, execute and deliver, or will cause to be
done, executed and delivered, all such further acts and instruments which
Assignor may reasonably request in order to more fully effectuate the
assumption of liabilities provided for in this Assignment.
IN WITNESS WHEREOF, this Assignment has been duly executed and
delivered by the duly authorized officers of Assignor and Assignee as of the
date first written above.
ASSIGNOR
Sylvan Learning Systems, Inc.
By:
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President and Chief
Financial Officer
ASSIGNEE
Educate Operating Company, LLC
By:
-------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
EXHIBIT B
XXXX OF SALE FOR SYLVAN INTANGIBLE TARGET ASSETS
------------------------------------------------
SYLVAN LEARNING SYSTEMS, INC.
XXXX OF SALE
------------
This Xxxx of Sale ("Xxxx of Sale") is made, executed and delivered
as of June 30, 2003, by Sylvan Learning Systems, Inc., a Maryland
corporation (herein called the "Grantor"), to Educate Operating Company,
LLC, a Delaware limited liability company (herein called the "Grantee").
Capitalized terms used and not defined in this Xxxx of Sale have the
meanings set forth or referred to in an Asset Purchase Agreement, dated as
of March 10, 2003, by and among Grantee, Educate, Inc., a Delaware
corporation, Apollo Sylvan, LLC, a Delaware limited liability company,
Apollo Xxxxxx XX, LLC, a Delaware limited liability company, Grantor and
Sylvan Ventures, L.L.C., a Delaware limited liability company, as amended by
Amendment No. 1 thereto, dated as of June 30, 2003 (the "Asset Purchase
Agreement").
W I T N E S S E T H :
WHEREAS, the Asset Purchase Agreement provides for, among other
things, the transfer and sale by Grantor to Grantee of all of the assets
composing the K-12 Business, subject to the terms and conditions provided in
the Asset Purchase Agreement; and
WHEREAS, all of the terms and conditions precedent provided in the
Asset Purchase Agreement have been met and performed by the respective
parties thereto, and the parties now desire to carry out, in part, the
intent and purpose of the Asset Purchase Agreement by Grantor's execution
and delivery to Grantee of this instrument evidencing the vesting in Grantee
of all of the properties, assets, rights, goodwill and business of Grantor
hereinafter described.
NOW, THEREFORE, in consideration of the premises and of other
valuable consideration to Grantor in hand paid by Grantee, at or before the
execution and delivery hereof, the receipt and sufficiency of which by
Grantor is hereby acknowledged, Grantor has conveyed, granted, bargained,
sold, transferred, set over, assigned, alienated, remised, released,
delivered and confirmed; and by this Xxxx of Sale does convey, grant,
bargain, sell, transfer, set over, assign, alien, remise, release, deliver
and confirm unto Grantee, its successors and assigns forever, all of the
property, assets, goodwill and business as a going concern of every kind,
nature and description, real, personal or mixed, tangible or intangible,
wherever situated, which is owned or leased by Grantor for the purpose of
conducting, or used in, the K-12 Business including, without limitation, all
the issued and outstanding equity interests of the Target Subsidiaries owned
by Grantor, all of Grantor's Tuition Portfolio Assets and the assets
identified on the Annexes to the Asset Purchase Agreement as Sylvan
Intangible Target Assets, but does not include any Excluded Sylvan Assets.
Grantor hereby covenants that, from time to time after the delivery
of this instrument, at Grantee's request and without further consideration,
Grantor will do, execute, acknowledge, and deliver, or will cause to be
done, executed, acknowledged and delivered, all and every such further acts,
deeds, conveyances, transfers, assignments, powers of attorney and
assurances as reasonably may be required more effectively to convey,
transfer to and vest in Grantee, and to put Grantee in possession of, any of
the Sylvan Target Assets.
Grantor further covenants that the agreements herein contained
shall be binding upon its successors and assigns and shall inure to the
benefit of, and be enforceable by, the respective successors and assigns of
Grantee.
This Xxxx of Sale shall be governed by and construed in accordance
with the internal laws of the State of New York including, without
limitation, Section 5-1401 of the New York General Obligations Law.
IN WITNESS WHEREOF, as of the date first written above, this Xxxx
of Sale has been duly executed and delivered by the duly authorized officer
of Grantor and acknowledged and accepted by the duly authorized officer of
Grantee.
Delivered by: GRANTOR
Sylvan Learning Systems, Inc.
By:
-------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Acknowledged and accepted by: GRANTEE
Educate Operating Company, LLC
By:
-------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
EXHIBIT C
CONTRIBUTION AGREEMENT
----------------------
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is made and entered
into as of June 30, 2003, among Sylvan Learning Systems, Inc., a Maryland
corporation ("Sylvan"), Educate Group, LLC, a Delaware limited liability
company ("Educate Group"), and SLC California, LLC, a Delaware limited
liability company ("SLC California"). Reference is made to that certain
Asset Purchase Agreement, dated as of March 10, 2003, by and among Educate
Operating Company, LLC, a Delaware limited liability company, Apollo Sylvan,
LLC, a Delaware limited liability company, Apollo Xxxxxx XX, LLC, a Delaware
limited liability company, Educate, Inc., a Delaware corporation, Sylvan
Ventures, L.L.C., a Delaware limited liability company, Sylvan, and Apollo
Management IV, L.P., a Delaware limited partnership, as amended by Amendment
No. 1 thereto, dated as of June 30, 2003 (the "Asset Purchase Agreement").
WITNESSETH
WHEREAS, pursuant to the terms and conditions set forth herein,
Sylvan desires to contribute, assign, transfer, convey and deliver to SLC
California all of the tangible property and personal assets used in the
Sylvan Learning Centers division of Sylvan's K-12 business of every kind,
nature and description, located in the state of California, which is owned
or leased by Sylvan for the purpose of conducting, or used in, the Sylvan
Learning Centers division of Sylvan's K-12 business, including, without
limitation, the assets identified on Exhibit A hereto (the "California
Assets"), and SLC California desires to acquire and accept the California
Assets from Sylvan; and
WHEREAS, pursuant to the terms and conditions set forth herein,
Sylvan desires to contribute, assign, transfer, convey and deliver to
Educate Group (i) all of the tangible property and personal assets used in
the Sylvan Learning Centers division of Sylvan's K-12 business of every
kind, nature and description, located outside of the state of California,
which is owned or leased by Sylvan for the purpose of conducting, or used
in, the Sylvan Learning Centers division of Sylvan's K-12 business and (ii)
all of the tangible property and personal assets used in the Sylvan
Education Solutions division of Sylvan's K-12 business of every kind, nature
and description, wherever situated, which is owned or leased by Sylvan for
the purpose of conducting, or used in, the Sylvan Education Solutions
division of Sylvan's K-12 business, including, without limitation, the
assets identified on Exhibit B hereto (the "Non-California Assets" and
together with the California Assets, the "Assets"), and Educate Group
desires to acquire and accept the Non-California Assets from Sylvan.
NOW, THEREFORE, in consideration of the foregoing and the covenants
of the parties set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
subject to the terms set forth herein, the parties hereby agree as follows:
1. The Contribution.
(a) Subject to the terms and conditions of this Agreement, Sylvan
hereby contributes, assigns, transfers, conveys and delivers to SLC
California the California Assets, free and clear of any and all
encumbrances, liens, charges, security interests, options, claims,
mortgages, pledges, proxies, voting trusts or agreements, obligations,
understandings or arrangements or other restrictions on title or transfer of
any nature whatsoever ("Encumbrances"), except for the Encumbrances
specifically to be assumed by SLC California pursuant to Exhibit A hereto.
Sylvan and SLC California shall execute and deliver all such documents and
instruments as may be necessary in order to effect the contribution,
assignment, transfer, conveyance and delivery to SLC California of the
California Assets pursuant to this Section 1(a). SLC California hereby
acknowledges receipt of the California Assets.
(b) Subject to the terms and conditions of this Agreement, Sylvan
hereby contributes, assigns, transfers, conveys and delivers to Educate
Group the Non-California Assets, free and clear of any and all Encumbrances,
except for the Encumbrances specifically to be assumed by Educate Group
pursuant to Exhibit B hereto. Sylvan and Educate Group shall execute and
deliver all such documents and instruments as may be necessary in order to
effect the contribution, assignment, transfer, conveyance and delivery to
Educate Group of the Non-California Assets pursuant to this Section 1(b).
Educate Group hereby acknowledges receipt of the Non-California Assets.
2. Miscellaneous.
(a) Binding Effect; Benefits. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended or shall be construed to give any person
other than the parties to this Agreement and their respective successors or
permitted assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.
(b) Waiver. Any term of this Agreement may be waived at any time by
the party hereto that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by
or on behalf of the party hereto waiving such term. The failure of any party
hereto to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
(c) Amendment and Modification. This Agreement may be amended,
modified and supplemented in any and all respects, but only by a written
instrument signed by all of the parties hereto expressly stating that such
instrument is intended to amend, modify or supplement this Agreement.
(d) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties and their respective
successors and assigns.
(e) Termination. This Agreement may be terminated by the mutual
written consent of all of the parties hereto.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(h) Entire Agreement; No Third Party Beneficiaries. This Agreement
(i) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer any rights or
remedies upon any person other than the parties hereto.
(i) Severability. Any term or provision of this Agreement that is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that
the court making such determination shall have the power to reduce the
scope, duration, area or applicability of the term or provision, to delete
specific words or phrases, or to replace any invalid, void or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of
the date first above written.
SYLVAN LEARNING SYSTEMS, INC.
By:
--------------------------------------
Name:
Title:
EDUCATE GROUP, LLC
By: ---------------------------------
Name:
Title:
SLC CALIFORNIA, LLC
By: ---------------------------------
Name:
Title:
EXHIBIT D
SYLVAN INTANGIBLE TARGET ASSETS AND ENCUMBRANCES
------------------------------------------------
1. Intellectual Property:
a. Patents listed in Part 3.23(a)(i) of the Disclosure Schedule.
b. Trademarks listed in Part 3.23(a)(iii) of the Disclosure Schedule.
c. Domain Names listed in Part 3.23(a)(iii) of the Disclosur Schedule.
d. Copyrights listed in Part 3.23(a)(iv) of the Disclosure Schedule.
e. Software - including development software listed in Part 3.23(a)(v)
of the Disclosure Schedule.
2. Assumed Contracts (see attached list).
3. SES Contracts (see attached list).
4. SLC Franchise Contracts (hard copy of list of contracts have been
provided under separate cover).
5. Leases to Properties listed in Part 3.14(a)(i)-(vi) of the Disclosure
Schedule.
6. All Goodwill related to the K-12 Business.
ENCUMBRANCES TO ASSETS
1. NationsBank, N.A. holds a security interest in the trademarks
listed below pursuant to a Security Agreement recorded on June 12,
1996. A release of the security interests will be provided by date
of closing.
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| Serial No. Reg. No. Xxxx
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| ---------- ------- -----------------------------------------
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| 73-453587 1303186 SYLVAN LEARNING CENTER
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| 73-495514 1331327 oooooooooo
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| 73-496345 1330154 SYLVAN LEARNING CENTER
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| 73-578943 1410891 SYLVAN
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| 73-578945 1407999 JUMP START
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| 73-631346 1572468 oooooooooo
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| 73-745303 1532383 SYLVAN CLEAR WRITING
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| 73-759922 1567595 HELPING KIDS DO BETTER
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| 74-047824 1666123 SYLVAN LEARNING CENTERS
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| 74-155572 oooooooooo
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| 74-155607 1786045 SYLVAN LEARNING SYSTEMS
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| 74-155608 SYLVAN LEARNING CENTERS
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| 74-252356 1812607 SYLVAN STUDY POWER
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| 74-260047 1748959 SYLVAN TECHNOLOGY CENTERS
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| 74-260049 1747505 SYLVAN TECHNOLOGY CENTER
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| 74-282984 VOICES FROM THE CLASSROOM
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| 74-420753 1835776 SYLVAN AT WORK
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EXHIBIT E
NON-CALIFORNIA TANGIBLE TARGET ASSETS AND ENCUMBRANCES
------------------------------------------------------
1. Balance Sheet Assets (see Part 3.7 of the Disclosure Schedule), excluding
such assets within the State of California.
2. Addition to Annex B and C - Educate Inc 5-31-03 Asset Detail, excluding
such assets within the State of California.
3. Furniture - All furniture on the attached list or located at 0000
Xxxxxxxxx Xxxxxx used, on and as of the Closing Date, by the employees of
Sylvan primarily in the Targeted Businesses, or otherwise necessary to the
conduct of the Targeted Business by Purchaser and its Affiliates.
4. Leasehold Improvements - Fleet Street - All tenant improvements located
within the space subleased by the Purchaser pursuant to the Sublease for
0000 Xxxxx Xxxxxx.
ENCUMBRANCES TO ASSETS - The following encumbrances to the extent they are
not located in the state of California:
1. Pursuant to the Settlement Agreement (the "Agreement") entered into
June 29, 2001 between WRC media, Inc. and it's affiliates
(collectively "WRC Affiliates") and Sylvan Learning Systems, Inc.
("Sylvan"), Sylvan is committed to make two remaining payments of
$135,714 and $135,716 on March 31, 2003 and June 30, 2003, into the
Cash Account established under the settlement terms. Sylvan made
the March 31, 2003 payment and Educate, Inc. will make the June 30,
2003 payment. Effective upon the Closing Date, Educate, Inc. shall
assume all rights and obligations under the terms of the Agreement,
including, but not limited to the terms of the Minimum Purchase
Agreement appended to the Agreement.
2. Purchase of Fair Oaks, CA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Xxxxx X. and Xxxxxx X. Xxxxx dated July 1,
2002, Sylvan owes a third and final payment in the amount of
$212,500 which is due July 1, 2003. In a simultaneous transaction,
Sylvan sold this center to MLS Education, Inc., which owes Sylvan
the amount of $212,500 on July 1, 2003.
3. Purchase of Chelmsford, MA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Chelmsford Sylvan Learning Center, Inc. dated
January 8, 2003, Sylvan owes $306,653.13, payable in monthly
installments due on the first of each month in the amount of
$8,518.14. To date, two payments totaling $17,036.28 have been
made, leaving a balance due of $289,616.85, payable by January 1,
2006. In connection with this transaction, the parties entered into
a Security Agreement, pursuant to which seller has a security
interest in all equipment, machinery, fixtures, inventory and
accounts receivable of the Chelmsford Center business.
4. Purchase of Vista, CA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Xxxxx Xxxxx dated September 30, 2002, Sylvan
owes a principal amount of $300,000, plus interest at the rate of
7% per annum, payable in monthly installments of $3,483.26 due on
the last day of each month. To date five payments totaling
$17,416.30 have been made. Final payment is due September 30, 2012.
In connection with this transaction, the parties entered into a
Security Agreement, pursuant to which seller has a security
interest in all furniture, fixtures, and equipment used in
connection with the Vista Center business, including the franchise
agreement and territory.
5. Purchase of Merrimack, NH Sylvan Learning Center - Pursuant to an
Acquisition Agreement for the Purchase of Certain Assets of
Operating Sylvan Learning Center from Maine Educational Learning
Systems, Inc., expected to close June 19, 2003, Sylvan owes a
principal amount of $275,000.00, plus interest at Prime Rate
(adjusted quarterly), payable in monthly principal installments of
$4,583.34 plus accrued unpaid interest due on the same day of each
month through June 2008. In connection with this transaction, the
parties entered into a Security Agreement, pursuant to which seller
has a security interest in all property and general intangibles
(including all payment intangibles) that are part of the "Business"
as defined in the Agreement.
6. Purchase of South Portland, ME and Augusta, ME Sylvan Learning
Centers - Pursuant to an Acquisition Agreement for the Purchase of
Certain Assets of Operating Sylvan Learning Center from Maine
Educational Learning Systems, Inc., expected to close June 19,
2003, Sylvan owes a principal amount of $375,000.00, plus interest
at Prime Rate (adjusted quarterly), payable in monthly principal
installments of $3,750.00 plus accrued unpaid interest due on the
same day of each month through June 2008. In connection with this
transaction, the parties entered into a Security Agreement,
pursuant to which seller has a security interest in letter of
credit rights for a letter of credit to be issued by Educate, Inc.
Sylvan anticipates closing the sale of these centers to MW
Educational Services, Inc., which will make a Promissory Note to
Sylvan in the principal amount of $375,000.00 plus interest with a
maturity date of July 15, 2008. Principal amounts are estimates
subject to adjustment at closing.
7. In connection with the above transaction, Sylvan has made a
Guaranty of Lease for the Sylvan Learning Center premises at 00
Xxxxxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxxx. The lease and the Guaranty
expire on January 7, 2005.
EXHIBIT F
CALIFORNIA TANGIBLE TARGET ASSETS AND ENCUMBRANCES
--------------------------------------------------
1. Balance Sheet Assets (see Part 3.7 of the Disclosure Schedule)
located within the State of California.
2. Addition to Annex B and C - Educate Inc 5-31-03 Asset Detail
located within the State of California.
ENCUMBRANCES TO ASSETS - The following encumbrances to the extent they are
located in the state of California:
1. Pursuant to the Settlement Agreement (the "Agreement") entered into
June 29, 2001 between WRC media, Inc. and it's affiliates
(collectively "WRC Affiliates") and Sylvan Learning Systems, Inc.
("Sylvan"), Sylvan is committed to make two remaining payments of
$135,714 and $135,716 on March 31, 2003 and June 30, 2003, into the
Cash Account established under the settlement terms. Sylvan made
the March 31, 2003 payment and Educate, Inc. will make the June 30,
2003 payment. Effective upon the Closing Date, Educate, Inc. shall
assume all rights and obligations under the terms of the Agreement,
including, but not limited to the terms of the Minimum Purchase
Agreement appended to the Agreement.
2. Purchase of Fair Oaks, CA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Xxxxx X. and Xxxxxx X. Xxxxx dated July 1,
2002, Sylvan owes a third and final payment in the amount of
$212,500 which is due July 1, 2003. In a simultaneous transaction,
Sylvan sold this center to MLS Education, Inc., which owes Sylvan
the amount of $212,500 on July 1, 2003.
3. Purchase of Chelmsford, MA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Chelmsford Sylvan Learning Center, Inc. dated
January 8, 2003, Sylvan owes $306,653.13, payable in monthly
installments due on the first of each month in the amount of
$8,518.14. To date, two payments totaling $17,036.28 have been
made, leaving a balance due of $289,616.85, payable by January 1,
2006. In connection with this transaction, the parties entered into
a Security Agreement, pursuant to which seller has a security
interest in all equipment, machinery, fixtures, inventory and
accounts receivable of the Chelmsford Center business.
4. Purchase of Vista, CA Sylvan Learning Center -- Pursuant to an
Agreement for Purchase of Territory and Assets of Operating Sylvan
Learning Center from Xxxxx Xxxxx dated September 30, 2002, Sylvan
owes a principal amount of $300,000, plus interest at the rate of
7% per annum, payable in monthly installments of $3,483.26 due on
the last day of each month. To date five payments totaling
$17,416.30 have been made. Final payment is due September 30, 2012.
In connection with this transaction, the parties entered into a
Security Agreement, pursuant to which seller has a security
interest in all furniture, fixtures, and equipment used in
connection with the Vista Center business, including the franchise
agreement and territory.
5. Purchase of Merrimack, NH Sylvan Learning Center - Pursuant to an
Acquisition Agreement for the Purchase of Certain Assets of
Operating Sylvan Learning Center from Maine Educational Learning
Systems, Inc., expected to close June 19, 2003, Sylvan owes a
principal amount of $275,000.00, plus interest at Prime Rate
(adjusted quarterly), payable in monthly principal installments of
$4,583.34 plus accrued unpaid interest due on the same day of each
month through June 2008. In connection with this transaction, the
parties entered into a Security Agreement, pursuant to which seller
has a security interest in all property and general intangibles
(including all payment intangibles) that are part of the "Business"
as defined in the Agreement.
6. Purchase of South Portland, ME and Augusta, ME Sylvan Learning
Centers - Pursuant to an Acquisition Agreement for the Purchase of
Certain Assets of Operating Sylvan Learning Center from Maine
Educational Learning Systems, Inc., expected to close June 19,
2003, Sylvan owes a principal amount of $375,000.00, plus interest
at Prime Rate (adjusted quarterly), payable in monthly principal
installments of $3,750.00 plus accrued unpaid interest due on the
same day of each month through June 2008. In connection with this
transaction, the parties entered into a Security Agreement,
pursuant to which seller has a security interest in letter of
credit rights for a letter of credit to be issued by Educate, Inc.
Sylvan anticipates closing the sale of these centers to MW
Educational Services, Inc., which will make a Promissory Note to
Sylvan in the principal amount of $375,000.00 plus interest with a
maturity date of July 15, 2008. Principal amounts are estimates
subject to adjustment at closing.
7. In connection with the above transaction, Sylvan has made a
Guaranty of Lease for the Sylvan Learning Center premises at 00
Xxxxxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxxx. The lease and the Guaranty
expire on January 7, 2005.