EXHIBIT 2.02
ACQUISITION
AGREEMENT
BY AND AMONG
SYLVAN I B.V.
AND
▇▇▇▇ STREET HOLDINGS B.V.
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT IS DATED THE 26 JANUARY, TWO THOUSAND
BETWEEN
1. SYLVAN I B.V., a private company with limited liability organized under the
laws of the Netherlands, and having its principal office and actual place
of business at Woerden, the Netherlands, hereinafter referred to as the
"SELLER",
and
2. ▇▇▇▇ STREET HOLDINGS B.V., a private company with limited liability
organized under the laws of the Netherlands, and having its principal
office and actual place of business at Amsterdam, the Netherlands,
hereinafter referred to as the "PURCHASER",
Seller and Purchaser being collectively referred to as "PARTIES".
RECITALS
WHEREAS, the Seller together with SLS (as defined below) are engaged in the
world wide business (the "BUSINESS") of exploitation of computer based testing
and assessment centers, with the Seller operating the Business outside of North
and South America;
WHEREAS, the Seller is the beneficial and legal owner of all of the issued and
outstanding shares (the "SHARES") of ▇▇▇▇▇▇ ▇▇ B.V., Sylvan III B.V., Sylvan
B.V. and Sylvan Prometric Ltd., (collectively, the "COMPANIES");
WHEREAS, the Companies own, directly or indirectly, equity interests in certain
other entities listed in Section 8.03 of the Disclosure Schedule (as hereinafter
defined) (collectively, the "SUBSIDIARIES");
WHEREAS, the ultimate parent company of the Seller, Sylvan Learning Systems,
Inc. ("SLS, INC.") and the parent company of Purchaser, The Thomson Corporation
("THOMSON"), are entering into a separate agreement of even date herewith with
respect to the share purchase of the shares in Prometric, Inc. ("PROMETRIC")
(the "STOCK PURCHASE AGREEMENT");
WHEREAS, SLS, Inc. and Thomson entered into a confidentiality and non-disclosure
agreement ("LETTER AGREEMENT") dated October 1, 1999, effective per September
21, regarding a possible business transaction with respect to inter alia, the
sale, assignment, purchase and assumption of certain Assets, Contract, Assumed
Liabilities, as defined hereunder, and Subsidiaries of Seller;
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WHEREAS, the Seller desires to sell and assign to the Purchaser, and the
Purchaser desires to purchase and assume from the Seller, the Assets and the
Shares in the Subsidiaries and the Contracts and Liabilities, in exchange for
the purchase price described herein, upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants and
agreements herein contained, and intending to be legally bound, do hereby agree
as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.01 DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings ascribed
to them below:
"ACTION" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"AFFILIATE" means, with respect to any specified Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with such specified Person.
"AGREEMENT" means this Agreement, including the Disclosure Schedule, all
exhibits hereto and all amendments hereto made in accordance with Section 18.04
of this Agreement.
"APTC" means an Authorized Prometric Testing Center.
"ASSETS" means the Assets of Sylvan I B.V. specified in Section 8.07.
"ASSUMED LIABILITIES" " means the Assumed Liabilities of Sylvan I B.V. specified
in Section 5.01 of this Agreement.
"BALANCE SHEET DATE" means November 30, 1999.
"BANKRUPTCY AND EQUITY EXCEPTIONS" means applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
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"BEST EFFORTS" means commercially reasonable efforts but shall in no event
require the commencement of any litigation, arbitration or other proceeding
against any third party or the payment of any material fees to any third party.
"BUSINESS" has the meaning specified in the recitals to this Agreement.
"BUSINESS DAY" means any weekday on which commercial banks in New York City are
open. Any action, notice or right which is to be exercised or lapses on or by a
given date which is not a Business Day may be taken, given or exercised, and
shall not lapse, until the end of the next Business Day.
"CLAIM" has the meaning specified in Section 15.02 (e) of this Agreement.
"CLAIM NOTICE" has the meaning specified in Section 15.02 (e) of this Agreement.
"CLOSING" has the meaning specified in Section 7.01 of this Agreement.
"CLOSING DATE" has the meaning specified in Section 7.01 of this Agreement.
"COMPANIES" have the meaning specified in the recitals to this Agreement.
"COMPANIES CHARTER DOCUMENTS" means the articles of associations or the by-laws
of the Companies.
"CONTRACTS" means the Contracts of Sylvan I B.V. as specified in 4.01 of the
Disclosure Schedule.
"CONTROL" means, as to any Person, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. The term "Controlled" shall have a
correlative meaning.
"DAMAGES" has the meaning specified in Section 15.02 (c) of this Agreement.
"DEDUCTIBLE" has the meaning specified in Section 15.02 (d) of this Agreement.
"DISCLOSURE SCHEDULE" means each Disclosure Schedule referred to herein and
delivered by the Seller to the Purchaser on the date hereof and attached hereto.
"ENCUMBRANCES" means any lien, security interest, mortgage, pledge,
hypothecation, easement, usufruct or conditional sale or other title retention
agreement.
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"ENVIRONMENTAL LAW" means any Law relating to pollution or protection of the
environment, including the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL LIABILITY" means any claim or demand, order, suit, obligation,
Action, liability, cost (including the cost of any investigation, testing,
compliance or remedial action), damages (consequential or direct), loss or
expense (including reasonable attorneys- and consultants fees and expenses)
arising out of, relating to or resulting from any environmental matter or
condition and related in any way to the Business, the ownership of the Shares or
to this Agreement or its subject matter, in each case whether arising or
incurred before, on or after the Closing Date.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
License and other authorization required under or issued pursuant to any
Environmental Law.
"EXCLUDED LIABILITIES" has the meaning specified in Section 5.03 of this
Agreement.
"FINANCIAL STATEMENTS" means (1) audited balance sheets of the Business as of
December 31, 1997 and December 31, 1998 and the unaudited balance sheet of the
Business as of September 30, 1999, (2) audited statements of operations of the
Business for the periods ended December 31, 1996, December 31, 1997 and December
31, 1998, together with all related notes and schedules thereto, accompanied by
the reports thereon of the Seller's Accountants and the unaudited statement of
operations of the Business for the period ended September 30, 1999, (3) audited
statements of owner's equity of the Business for the periods ended December 31,
1996, December 31, 1997 and December 31, 1998 and the unaudited statement of
owner's equity of the Business for the period ended September 30, 1999 and (4)
audited statements of cash flows of the Business for the periods ended December
31, 1996, December 31, 1997 and December 31, 1998 and the unaudited statement of
cash flows of the Business for the period ended September 30, 1999.
"GAAP" means generally accepted accounting principles applied on a consistent
basis.
"GOVERNMENTAL AUTHORITY" means any local or any foreign government,
governmental, regulatory or administrative authority, agency or commission or
any court, tribunal, or judicial or arbitral body or any arbitrator (including
any private arbitrator).
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"HAZARDOUS MATERIALS" means (a) petroleum, petroleum products, by-products or
breakdown products, radioactive materials, friable asbestos or polychlorinated
biphenyls and (b) any chemical, material or substance defined or regulated as
toxic or as a pollutant, contaminant or waste under any Environmental Law.
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"INDEBTEDNESS" means all obligations which arise from borrowed money or the
deferred purchase price of property or services, including capitalized leases
under generally accepted accounting principles (other than accounts payable
arising in the ordinary course of business).
"INDEMNIFIED PARTY" has the meaning specified in Section 15.02 (e) of this
Agreement.
"INDEMNIFYING PARTY" has the meaning specified in Section 15.02 (e) of this
Agreement.
"INDEPENDENT ACCOUNTING FIRM" means (a) an independent certified accounting firm
in the Netherlands of international recognition mutually acceptable to the
Seller and the Purchaser or (b) if the Seller and the Purchaser are unable to
agree upon such a firm, then each party shall select one such firm and those two
firms shall select a third firm, in which event "Independent Accounting Firm"
shall mean such third firm.
"INTELLECTUAL PROPERTY" means all of the following that are used or held for use
by the Business: (a) Netherlands, international and foreign patents, patent
applications and statutory invention registrations, including reissues,
divisions, continuations, continuations in part, extensions and reexaminations
thereof, all rights therein provided by international treaties or conventions,
and all improvements thereto, b) trademarks, service marks, trade dress, logos,
trade names, corporate names, and other source identifiers (whether or not
registered) including all common law rights, and registrations and applications
for registration thereof, all rights therein provided by international treaties
or conventions, and all reissues, extensions and renewals of any of the
foregoing, (c) copyrightable works, copyrights (whether or not registered) and
registrations and applications for registration thereof, and all rights therein
provided by international treaties or conventions, (d) confidential and
proprietary information, and other trade secrets, (e) Software and Third Party
Software, (f) coded values, formats, data, historical or current databases,
whether or not copyrightable and (g) URLs, Internet web sites or identities.
"INTEREST RATE" means an interest rate per annum equal to the average of the
rates per annum publicly announced by Citibank N.A. or any successor thereto in
New York, New York from time to time as its "base rate," on each day during the
period for which interest is to be paid.
"KNOWLEDGE" means the knowledge of the officers and directors of the subject
entity, and in each case shall mean facts, circumstances or occurrences the
respective individuals actually knew or reasonably should have known given his
or her involvement in the business of the subject entity, and the information
available to such individual.
"LAW" means any local or foreign statute, law, ordinance, regulation, rule,
code, order, other requirement or rule of law.
"LETTER AGREEMENT" has the meaning specified in Section 17.02 of this Agreement.
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"LIABILITIES" means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent, matured or unmatured or determined or
determinable, including, without limitation, those arising under any Law, Action
or Governmental Order and those arising under any contract, License, agreement,
arrangement, commitment or undertaking or otherwise.
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, filings, qualifications, privileges,
franchises and similar consents granted or issued by any Governmental Authority.
"MATERIAL ADVERSE EFFECT" means any circumstance, change in or effect on the
Companies, or the Business that, individually or in the aggregate with any other
circumstances, changes in or effects on the Companies or the Business: (a) is,
or could be, materially adverse to the business, operations, assets or
liabilities (including, without limitation, contingent liabilities), employee
relationships, customer or supplier relationships, business, prospects, results
of operations or the condition (financial or otherwise) of the Companies or the
Business or (b) could materially adversely affect the ability of the Purchaser
to operate or conduct the Business in the manner in which it is currently
operated or conducted.
"MATERIAL CONTRACTS" has the meaning specified in Section 8.14 of this
Agreement.
"MATERIAL LEASE" has the meaning specified in Section 8.10 of this Agreement.
"MATERIAL TANGIBLE PERSONAL PROPERTY" has the meaning specified in Section 8.11
(a) of this Agreement.
"PERSON" means any natural person, company general or limited partnership,
limited liability company, firm, association or other legal entity.
"PROMETRIC STRATEGIC PLAN" means the 1999 Prometric Strategic Reward Incentive
Compensation Plan.
"PURCHASE PRICE" has the meaning specified in Section 6.01 hereof.
"PURCHASER" has the meaning specified in the heading of this Agreement.
"PURCHASER CHARTER DOCUMENTS" means the certificate of incorporation, articles
of association of the Purchaser.
"RECEIVABLES" means any and all accounts receivable, notes and other amounts
receivable from third parties, including, without limitation, customers and
employees, arising from the conduct of the Business before the Closing Date,
whether or not in the ordinary course, together with any unpaid financing
charges accrued thereon.
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"REFERENCE BALANCE SHEET" means the balance sheet (including the related notes
and schedules thereto) of the Business on a combined basis, dated as of November
30, 1999, a copy of which is set forth in Section 8.08 (a)(i) of the Disclosure
Schedule.
"REFERENCE BALANCE SHEET DATE" means November 30, 1999.
"REPRESENTATIVE" means any officer, director, principal, lawyer, partner,
advisor, accountant, employee, consultant or trustee.
"RESTRICTED PERIOD" has the meaning specified in Section 14.02 (a) of this
Agreement.
"SELLER" has the meaning specified in the heading of this Agreement.
"SHARES" has the meaning specified in the recitals to this Agreement.
"SOFTWARE" means all computer software developed or currently being developed by
or on behalf of the Seller or the Subsidiaries for use by the Business,
including source code, object code, comments, user interfaces, menus, buttons
and icons, and all files, data, manuals, design notes and other items and
documentation related thereto or associated therewith.
"STC" means a Sylvan Technology Center.
"STOCK PURCHASE AGREEMENT" has the meaning specified in the recitals to this
Agreement.
"SUBSIDIARIES" has the meaning specified in the recitals to this Agreement.
"TAX RETURN" means all returns, declarations, forms, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"TAXES" means all taxes, charges, fees, imposts, levies or other assessments,
including, without limitation, all net income, franchise, profits, gross
receipts, capital, sales, use, ad valorem, value added, transfer, transfer
gains, inventory, shares, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, real or personal
property, and estimated taxes, water, rent and sewer service charges, customs
duties, fees, assessments and charges of any kind whatsoever, together with any
interest and any penalties, fines, additions to tax or additional amounts
thereon, imposed by any taxing authority (state, local or foreign) and shall
include any transferee liability in respect of Taxes.
"THIRD PARTY SOFTWARE" means, to the extent used or held for use in the
Business, all computer software developed by a third party that was not
developed by or on behalf of the Seller or the Companies (including source code,
object code, comments, user interfaces, menus, buttons and icons and all files,
data, manuals, design notes and other items and documentation related thereto),
but excluding commercially available shrink-wrapped software.
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"THIRD PERSON" has the meaning specified in Section 15.02 (e) of this Agreement.
"YEAR 2000 COMPLIANT" means, with respect to any of the material assets,
services or operations of the Companies and the Business, as demonstrated
through appropriate testing of the same, design and performance capabilities
(including, without limitation, the ability of services and products distributed
by the Companies or the Business to recognize the century and to manage and
manipulate data involving dates, including single century and multi-century
formulas and date values, without resulting in the generation of incorrect
values involving such dates or causing any abnormal endings) such that prior to,
during, and after the calendar year 2000, none of the material assets, services
or operations will, in any material respect, malfunction, produce errors,
premature cancellation or expiration of contractual rights, deletion of data or
invalid or incorrect results, or abnormally cease to function or exhibit any
other problems in connection with (a) the year 2000 (and all subsequent years)
as distinct from 1900's years, and (b) the date February 29, 2000, and all
subsequent leap years.
SECTION 1.02 INTERPRETATION
Unless otherwise indicated in this Agreement:
(a) reference to and the definition of any document (including
this Agreement) shall be deemed a reference to such document
as it may be amended or modified from time to time;
(b) all references to an "Article," "Section," "Schedule" or
"Exhibit" are to an Article or Section hereof or to a Schedule
or an Exhibit attached hereto;
(c) defined terms in the singular shall include the plural and
vice versa, and the masculine, feminine or neuter gender shall
include all genders;
(d) the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of
this Agreement;
(e) in the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and
including" the specified date and the words "to" and "until"
each means "to and including" the later specified date;
(f) periods of days referred to in this Agreement shall be counted
in calendar days unless business days are expressly prescribed
and references in this Agreement to months and years shall be
to calendar months and calendar years unless otherwise
specified;
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(g) the headings in this Agreement are for the purpose of
reference only and do not limit or affect its meaning;
(h) the word "including" when used in this Agreement shall mean
"including, without limitation;" and
(i) in the event of any conflict between this Agreement and the
Stock Purchase Agreement, the Stock Purchase Agreement
controls.
ARTICLE II
PURCHASE AND SALE OF SHARES
SECTION 2.01 PURCHASE OF SHARES
On the terms and subject to the conditions set forth herein, the Seller shall
sell and transfer to the Purchaser, and the Purchaser shall purchase from the
Seller, on the Closing Date, all of the Shares in the Companies as specified in
2.01 in the Disclosure Schedule.
SECTION 2.02 TRANSFER OF SHARES
Parties shall fully cooperate with the transfer of the beneficial and legal
ownership of the Shares as per the Closing Date, including but not limited to
any auditor statements or actions required under the relevant jurisdiction and
applicable law.
SECTION 2.03 RISK AND BENEFITS
All risks and benefits belonging to the Shares are for the account of Purchaser
as from the day of the transfer of the shares.
ARTICLE III
PURCHASE AND SALE OF ASSETS
SECTION 3.01 PURCHASE OF ASSETS
Effective as of the Closing Date and subject to the terms and conditions set
forth in this Agreement, Seller hereby, sells, conveys, assigns, transfers and
delivers the Assets, as forming a going concern, and Purchaser purchases and
shall accept the Assets.
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SECTION 3.02 EXCLUDED ASSETS
The Excluded Assets are not included in the sale of the Assets to Purchaser
hereunder, and are described in Schedule 3.02.
SECTION 3.03 CONSENT THIRD PARTY
To the extent that the sale, conveyance, transfer of assignment of any Asset
requires, the consent of any third party, this Agreement shall not constitute an
agreement to effect the sale, conveyance, transfer or assignment thereof if such
action would constitute a breach thereof or would be ineffective, unless and
until such consent or waiver of such person has been obtained. From the Closing
Date until the date of such sale, conveyance, transfer or assignment is
effective, Seller shall make available to Purchaser the economic and practical
benefits of any such agreement, permit, lease, contract or other document or
instrument.
SECTION 3.04 PAYMENT AFTER CLOSING DATE
If at any time after the Closing Date, Seller shall receive funds, notes or
other property in payment of the Receivables or otherwise, constituting part of
the Business, Seller shall hold such funds, notes or other property in trust for
the benefit of Purchaser, and shall promptly pay, disburse or deliver such funds
as directed by Purchaser.
ARTICLE IV
TRANSFER OF CONTRACTS
SECTION 4.01 TRANSFER OF CONTRACTS
With effect as of the Closing Date, Seller's rights and duties from Contracts as
specified in 4.01 of the Disclosure Schedule, are, to the extent that such
rights and duties relate to the Business and to the time following the Closing
Date, hereby transferred to Purchaser (as between Seller and Purchaser, with
debt-releasing effect for Seller), it being understood that rights and
obligations under long-term agreements that relate to the entire term of such
agreements but that become due only after the Closing Date, such as potential
termination indemnities for agents, shall also be transferred hereby.
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SECTION 4.02 CONSENT THIRD PARTIES
Purchaser shall in respect of the period after the Closing Date carry out and
complete for its own account the Contracts. Insofar as any consents or licenses
to the transfer or assignment of the benefit and burden of the Contracts have
not been obtained on or before the Closing Date, or if such benefit and burden
cannot effectively be so transferred or assigned to Purchaser except with the
consent of or by an agreement with the other party or parties thereto, then
i) Seller shall use its Best Efforts to procure that such other party
or parties shall consent to the Contracts being novated or
assigned in terms reasonably acceptable to the Purchaser; and
ii) unless and until all of the Contracts shall have been so novated
or assigned, Seller shall (so far as it is able) give or procure
the signing to Purchaser effect, from the Closing Date, of the
benefit and burden of the same as if the same had been effectively
novated or assigned to Purchaser
SECTION 4.03 DUTCH EMPLOYMENT CONTRACTS
With effect as of the Closing Date, all Dutch contracts of employment of the
Employees who do not object to such transfer are transferred by operation of law
to Purchaser pursuant to article 663 book 7 Dutch Civil Code. The Parties will
use their best commercial endeavors to ensure that the Employees listed on 4.03
of the Disclosure Schedule will not object to their transfers. Purchaser assumes
all of Seller's obligations and liabilities under the Dutch employment contracts
with the Employees, including; but not limited to all compensation and employee
welfare plans and benefits (other than employee pension benefit plans).
SECTION 4.04 COMPLIANCE
Seller shall forthwith comply with any statutory or other duty to inform to and
consult with representatives of any recognized labor union and the Employees
about the transfer of their employment contracts pursuant to any regulations.
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SECTION 4.05 COMMUNICATION
Parties shall jointly communicate to the Employees notices in such for as may be
agreed to by Parties.
ARTICLE V
ASSIGNMENT AND ASSUMPTION AND EXCLUSION OF LIABILITIES
SECTION 5.01 ASSUMED LIABILITIES
On the terms and subject to the conditions of this Agreement, the Purchaser
shall, on the Closing Date, assume and agree to pay, perform and discharge when
due all Liabilities of the Seller that arise or relate principally to the
Assets, Subsidiaries, Contracts on or prior to the Closing Date and which are
reflected on the Reference Balance Sheet, except for the Excluded Liabilities
(the "ASSUMED LIABILITIES")
SECTION 5.02 NOTIFICATION, CONSENT
The assumption of the Liabilities will only have effect against any creditor
under the Liabilities if such creditor has been notified. Seller hereby
authorizes Purchaser to notify all such Parties on behalf of both Seller and
Purchaser of the aforementioned assumption. Purchaser will obtain the approval
of any creditor to the extent its necessary and that such approval has not been
given prior to the Closing Date. Regardless of whether Purchaser has obtained
any such approval or consent, the assumption of the Liabilities by the Purchaser
will be effective in accordance with the terms and conditions of this Agreement.
As a result thereof, towards third parties, Purchaser shall act as debtor for
its own account.
SECTION 5.03 EXCLUDED LIABILITIES
The Seller shall retain, and shall be responsible for paying, performing and
discharging when due, and the Purchaser shall not assume or have any
responsibility for, all Liabilities of the Seller as of the Closing Date other
than the Assumed Liabilities (the "EXCLUDED LIABILITIES"), including:
(i) all Taxes now or hereafter owed by the Seller, or any Company
of the Seller, or attributable to the Business, relating to
any period, or any portion of any period, ending on or prior
to the Closing Date;
(ii) all Liabilities relating to any litigation or proceeding,
including the litigation identified in Sections 8.12 and 8.16
of the Disclosure Schedule, relating to or attributable to any
period, ending on or prior to the Closing Date;
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(iii) all Liabilities and Damages arising out of any breach or
alleged breach by the Seller, or the Subsidiaries under any
contract, agreement or arrangement related to the Business
prior to the Closing; and
(iv) SLS shall pay all bonuses included in accrued expenses or
accounts payable and payable to employees of the Business
under the Prometric Strategic Plan.
ARTICLE VI
PURCHASE PRICE
SECTION 6.01 PURCHASE PRICE
In consideration of the sale and transfer to Purchaser of the Assets, assignment
of Contracts and Assumed Liabilities, the sale and transfer of the Companies on
the Closing Date, Purchaser shall pay to Seller two hundred fifty two Million
United States Dollars (U.S.$ 252,000,000).
SECTION 6.02 PAYMENT
The Purchaser shall, or shall cause one or more of its Affiliates to, pay the
Purchase Price in cash, through intermediation of a Dutch Civil Law Notary to
the Seller at the Closing, as provided in Section 7.01.
SECTION 6.03 PRICE ADJUSTMENTS
a) The Purchase Price shall be adjusted downward at Closing
in an amount, if any, equal to the Revenue Multiple (as
hereinafter defined) of any Contract listed on Schedule
6.03(a) for which the Seller or the Purchaser does not
receive a consent prior to the Closing permitting such
contract to be assigned as a result of the transactions
contemplated by this Agreement. "REVENUE MULTIPLE" shall
mean, for each such Contract, the amount set forth with
respect to such Contract in Schedule 6.03(a) multiplied by
3.6; provided, however, that if the 1999 revenue of the
Business set forth in the audited financial statements of
the Business is less than $214,000,000, the Revenue
Multiple shall be equal to the amount set forth on
Schedule 6.03(a) multiplied by the quotient of 775,000,000
divided by the 1999 revenue of the Business set forth in
the audited financial statements, rounded to the nearest
tenth.
b) Notwithstanding anything contained in this Agreement, the
Purchase Price shall be adjusted downward for any Contract
listed on Schedule 6.03(a) for which consent to assignment
was obtained but (x) which is terminated within
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six (6) months after the Closing Date by the other party
thereto due to a breach existing on or prior to the
Closing Date on the part of the Seller, the Companies, any
of the Subsidiaries or the Business and (y) such other
party did not continue to do business with the Companies
at substantially the same level as prior to such
termination. The Purchase Price shall be decreased by the
particular contract's Revenue Multiple. The Purchaser
shall give the Seller written notice of any such
termination or rescission within 10 days after such event.
Any amounts due to the Purchaser under this Section
6.03(b) shall be paid by the Seller in cash within 10 days
after the receipt of any such notice.
c) Notwithstanding anything contained in this Agreement, the
Purchase Price shall be adjusted upward for any Contract
listed on Schedule 6.03(a) for which a downward Purchase
Price adjustment was made at the Closing pursuant to
Section 6.03(a) hereof if the other party to such contract
(i) continues for a period of six (6) months after the
Closing to permit any of the Companies to provide
computer-based testing services that are substantially
similar to those that were provided under such contract
prior to the Closing, or (ii) within six (6) months after
the Closing, renews such contract or consents to the
assignment of such contract as a result of the
transactions contemplated by this Agreement. The amount of
any adjustment pursuant to this Section 6.03(c) for any
such contract shall equal the amount of the downward
adjustment made at Closing. The Purchaser shall give the
Seller written notice of any such renewal or consent
within 10 days after such event. Any amounts due to the
Seller under this Section 6.03(c) shall be paid by the
Purchaser in cash within 10 days after such six (6)
months' period after the Closing or in the case of a
renewal or consent to assignment within 10 days after such
renewal or consent to assignment.
ARTICLE VII
CLOSING
SECTION 7.01 CLOSING
Except as hereinafter provided, the closing hereunder (the "CLOSING") shall take
place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, Baltimore, Maryland
at 10:00 a.m., eastern time, on the Business Day that is seven days after the
later to occur of: (a) expiration or termination of all applicable waiting
periods under local, foreign and European legislation; and (b) satisfaction or
waiver of all other conditions to the obligations of the parties set forth in
Article XIII; unless otherwise mutually agreed to in writing by the Seller and
the Purchaser. The date of the Closing is referred to in this Agreement as the
"CLOSING DATE."
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SECTION 7.02 DELIVERIES AT CLOSING
At the Closing, the following actions shall be taken:
(a) The Seller will deliver or cause to be delivered to the Purchaser:
(i) the opinions, certificates, and other items described in
Section 13.01 and such other evidence of the performance of
all of the covenants and the satisfaction of all conditions
required of the Seller by this Agreement as the Purchaser
shall reasonably require;
(ii) the minute books, shareholders registers (to the extent such
exist) of the Companies; and
(iii) a receipt for the Purchase Price.
(b) The Purchaser will deliver or cause to be delivered to the Seller:
(i) the Purchaser Charter Documents, certificates and items
described in Section 13.02 and such other evidence of the
performance of all the covenants and the satisfaction of all
conditions required of the Purchaser by this Agreement and as
the Seller shall reasonably require;
(ii) the Purchase Price, by wire transfer in immediately available
funds to an account or accounts designated at least four
Business Days prior to the Closing Date by the appointed
Civil law Notary in a written notice to the Purchaser;
(iii) the opinions, certificates and other documents required to be
delivered pursuant to Section 13.01.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
REGARDING THE COMPANIES
For the purposes of the representations and warranties contained in this Article
VIII, references to the "Companies" shall be deemed also to refer to the
Subsidiaries. The Seller hereby represent and warrant to the Purchaser as
follows:
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SECTION 8.01 ORGANIZATION; GOOD STANDING
The Companies and Subsidiaries are companies duly incorporated, validly existing
and at the Closing will be in good standing under the laws of its jurisdiction
of incorporation or organization. At the Closing the Companies and Subsidiaries
will be duly qualified in all jurisdictions in which the conduct of the
Companies and Subsidiaries business or activities or its ownership of assets
requires qualification under applicable law, the absence of which would have a
Material Adverse Effect on the Companies and the Subsidiaries.
SECTION 8.02 CAPITALIZATION.
The authorized share capital of the Companies consists of:
(a) ▇▇▇▇▇▇ ▇▇ B.V.: NLG 200,000 of which NLG 40,000 is issued, par value
NLG 1,000 per share.
(b) Sylvan III B.V.: NLG 200,000 of which NLG 40,000 is issued, par value
NLG 1,000 per share.
(c) Sylvan B.V.: NLG 200,000 of which NLG 40,000 is issued, par value NLG
1,000 per share.
(d) Sylvan Prometric Ltd.: GBP 1,000 of which GBP 2 is issued, par value
GBP 1 per share.
At Closing, all of the Shares will be owned by the Seller free and clear of all
Liens except for any Liens arising out of, under or in connection with this
Agreement or by or through the Purchaser. There are no outstanding options,
rights (preemptive or otherwise), warrants, calls, convertible securities or
commitments or any other arrangements to which the Companies are a party
requiring or restricting issuance, sale or transfer of any of the Shares, or
evidencing the right to subscribe for any of the Shares, or giving any person
any rights with respect to the Shares. There are no voting agreements, voting
trusts, other agreements (including cumulative voting rights), commitments or
understandings to which the Seller or any Company is a party with respect to the
Shares. All of the Shares have been duly authorized and validly issued, are
fully paid and non-assessable.
SECTION 8.03 CAPITALIZATION OF SUBSIDIARIES
(a) Except as set forth in Section 8.03 of the Disclosure Schedule, the
Companies do not at the Closing own, of record or beneficially, or
Control directly or indirectly, any shares, securities convertible
into shares or any other equity interest in any company, association
or other business entity, nor are the Companies, directly or
indirectly, a participant in any joint venture, partnership, limited
liability company or other non-corporate entity.
(b) All of the issued and outstanding shares (or other ownership interests
having by their
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terms ordinary voting power) of each Subsidiary (the "SUBSIDIARY
SHARES") are owned of record and beneficially, directly or indirectly,
by the Companies. All of the Subsidiary Shares have been duly
authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of any preemptive rights. There are no
voting trusts, shareholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any
of the Subsidiary Shares.
SECTION 8.04 FINANCIAL INFORMATION
(a) The Companies have delivered to the Purchaser copies of the Financial
Statements. All of the Financial Statements and the Reference Balance
Sheet have been prepared in accordance with GAAP from the books and
records of the Companies and Subsidiaries (except that the unaudited
Financial Statements are subject to normal year-end audit adjustments,
which did not and will not have a Material Adverse Effect on the
Subsidiaries or the Business). All of the Financial Statements and the
Reference Balance Sheet present fairly in all material respects the
financial position, results of operations, changes in owners' equity
and cash flows of the Companies and Subsidiaries and the Business at
the dates and for the periods indicated.
(b) Except as set forth in Section 8.04 (b) of the Disclosure Schedule,
the books of account and other financial records of Prometric, Seller,
the Companies and Subsidiaries: (i) reflect all items of income and
expense and all assets and Liabilities required to be reflected
therein in accordance with GAAP applied on a basis consistent with the
past practices of Prometric, Seller, the Companies and the
Subsidiaries, respectively, and throughout the periods involved (ii)
are in all material respects complete and correct, and do not contain
or reflect any material inaccuracies or discrepancies and (iii) have
been maintained in accordance with good business and accounting
practices.
SECTION 8.05 NO UNDISCLOSED LIABILITIES
Except as set forth in Section 8.05 of the Disclosure Schedule the Companies and
Subsidiaries' assets, tangible and intangible, are owned by the Companies and
Subsidiaries, respectively, free and clear of any Encumbrances. As of the
Balance Sheet Date, the Companies and Subsidiaries did not have any material
outstanding Indebtedness or Liabilities that would be required to be disclosed
on the Reference Balance Sheet (including its footnotes) prepared in accordance
with GAAP if such Indebtedness or Liabilities had been known at the time of the
balance sheet's preparation, which is not shown on the Reference Balance Sheet
or disclosed in the Financial Statements (including the footnotes thereto).
Neither Prometric nor SLS, Inc. Seller has transferred the Companies and
Subsidiaries and, as of the Closing Date, the Companies and Subsidiaries will
not have, any Liabilities other than the Assumed Liabilities.
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SECTION 8.06 RECEIVABLES
Section 8.06 of the Disclosure Schedule is an aged list of the Receivables as of
the Reference Balance Sheet Date showing separately those Receivables that as of
such date had been outstanding (a) for 29 days or less, (b) 30 to 59 days, (c)
60 to 89 days, (d) 90 to 119 days and (e) more than 119 days. Except to the
extent, if any, reserved for on the Reference Balance Sheet or as set forth in
Section 8.06 of the Disclosure Schedule, all Receivables reflected on the
Reference Balance Sheet arose from, and the Receivables existing on the Closing
Date will have arisen from, the sale of services to Persons not affiliated with
the Seller, the Companies or the Subsidiaries and in the ordinary course of the
business consistent with past practice and, except as reserved against on the
Reference Balance Sheet, constitute or will constitute, as the case may be, only
valid, undisputed claims of the Seller, the Companies or the Subsidiaries not
subject to valid claims of set-off or other defenses or counterclaims other than
normal cash discounts accrued in the ordinary course of the business consistent
with past practice. All Receivables reflected on the Reference Balance Sheet or
arising from the date thereof until the Closing (subject to the reserve for bad
debts, if any, reflected on the Reference Balance Sheet) are or will be good and
have been collected or are or will be collectible, without resort to litigation
or extraordinary collection activity, within 90 days of the Closing Date, except
for Receivables related to India or South Africa, which are or will be
collectible within 180 days.
SECTION 8.07 THE ASSETS
Except as set forth in Section 8.07 of the Disclosure Schedule, on the Closing
Date the Companies and the Subsidiaries will own, free and clear of all
Encumbrances, all of the assets, properties and rights of every type and
description, real, personal and mixed, tangible and intangible, that are owned,
leased or licensed by the Seller, the Companies and the Subsidiaries and are
used or held for use in the conduct of the Business as of the date of the
Reference Balance Sheet, including the assets, properties and rights listed in
Sections 8.06, 8.10, 8.11 and 8.19 (a) and (b) the Disclosure Schedule, but
excluding the assets, properties and rights that are or will be, as of the
Closing Date, owned by Prometric, which will be transferred to an Affiliate of
the Purchaser pursuant to the Stock Purchase Agreement, including the items
listed on Schedule 3.01 (the "ASSETS"). Except as set forth in Section 8.07 of
the Disclosure Schedule, the Assets constitute all of the assets, properties and
rights (a) necessary for the continued operation of the Business in the manner
currently conducted or (b) used to produce the revenues reflected in the
Financial Statements.
SECTION 8.08 ABSENCE OF CERTAIN CHANGES OR EVENT.
Since the Balance Sheet Date, except (a) as otherwise set forth in Section 8.08
of the Disclosure Schedule or (b) as otherwise expressly referred to in this
Agreement, the Companies, Subsidiaries and the Seller with respect to the
Business have not:
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(i) changed or amended its articles of association or its
by-laws in any material respect;
(ii) incurred any obligation or liability (fixed or
contingent), except normal trade or business
obligations incurred in the ordinary course of
business, none of which individually or in the
aggregate would have a Material Adverse Effect on the
Companies or the Business;
(iii) discharged or satisfied any material lien, security
interest, charge or other encumbrance or paid any
obligation or liability (fixed or contingent), other
than in the ordinary course of business, consistent
with past practices;
(iv) mortgaged, pledged or subjected to any material lien,
security interest, charge or other encumbrance any of
its assets or properties;
(v) transferred, leased or otherwise disposed of any of
its assets or properties, except for fair
consideration in the ordinary course of business,
consistent with past practices, or acquired any
assets or properties, except in the ordinary course
of business, consistent with past practices;
(vi) declared, set aside or paid any distribution (whether
in cash, shares or property or any combination
thereof) in respect of its shares or equity interests
or redeemed or otherwise acquired any of its shares
or equity interests or split, combined or otherwise
similarly changed its shares or equity interests or
authorized the creation or issuance of or issued or
sold any shares or equity interests or any securities
or obligations convertible into or exchangeable
therefor, or granted any person or entity any right
to acquire any shares or equity interests from any of
the Companies or Subsidiaries or agreed to take any
such action;
(vii) made any investment of a capital nature, whether by
purchase of shares or securities, contributions to
capital, property transfers or otherwise, in any
partnership, corporation, joint venture or other
entity, or entered into any agreement or commitment
to do the same;
(viii) merged with, entered into a consolidation with or
made or committed to any acquisition of the shares or
equity interests of any entity or the operating
assets of any going business, or, other than in the
ordinary course of business, consistent with past
practices, purchased any property or assets;
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(ix) forgiven, released, canceled, compromised or
permitted to lapse any debt or claim other than in
the ordinary course of business, consistent with past
practices or settled or compromised any litigation;
(x) except for wage increases made in the ordinary course
of its business and consistent with past practices,
made or granted any wage or salary increase
applicable to any group or classification of
employees generally, entered into or modified in any
respect any employment contract with, or made any
loan to, or entered into any transaction of any other
nature with, any officer or employee of the Companies
or Subsidiaries or the Business other than travel
advances in the ordinary course of business
consistent with past practice;
(xi) amended, terminated or waived any material right
under any agreement, contract or other written
commitment to which it is party or by which it is
bound or terminated or discontinued any material
client or customer contract, agreement or
arrangement;
(xii) entered into any Material Contract or any transaction
other than on an arm's-length basis or other than in
the ordinary course of business;
(xiii) entered into any letters of intent or commitments to
acquire the business or assets of any other person or
entity or consummated any such acquisitions;
(xiv) suffered any casualty loss or damage (whether or not
such loss or damage shall have been covered by
insurance), which casualty loss or damage would have
a Material Adverse Effect on the Company or the
Business;
(xv) written down or written up (or failed to write down
or write up in accordance with GAAP consistent with
past practice) the value of any inventories or
Receivables or revalued any assets of the Seller, the
Companies, Subsidiaries or the Business other than in
the ordinary course of business consistent with past
practice and in accordance with GAAP;
(xvi) made any change in any method of accounting or
accounting practice or policy used by the Seller, the
Companies, the Subsidiaries or the Business, other
than such changes required by GAAP and disclosed in
Section 8.12 of the Disclosure Schedule;
(xvii) made any material changes in the customary methods of
operations of the Seller, the Companies, the
Subsidiaries or the Business, including, without
limitation, practices and policies relating to
manufacturing, purchasing, marketing, selling and
pricing;
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(xviii) made any express or deemed election, or settled or
compromised any liability with respect to Taxes of
the Seller, any Company any Subsidiary or the
Business;
(xix) failed to pay any creditor any material amount owed
to such creditor when due;
(xx) terminated, discontinued, closed or disposed of any
plant, facility or other business operation, or laid
off any employees (other than layoffs of less than 50
employees in any six-month period in the ordinary
course of the Business consistent with past
practice);
(xxi) except pursuant to a confidentiality agreement (which
shall be enforced by the Seller on behalf of the
Purchaser after the Closing) disclosed any secret or
confidential Intellectual Property (except by way of
issuance of a patent) or permitted to lapse or go
abandoned any Intellectual Property (or any
registration or grant thereof or any application
relating thereto) to which, or under which, the
Seller, any Company, any Subsidiary or the Business
has any right, title, interest or license;
(xxii) failed to maintain the Business, and each Companies
or Subsidiary's plant, property and equipment in good
repair and operating condition, ordinary wear and
tear excepted;
(xxiii) suffered any Material Adverse Effect; or
(xxiv) agreed, whether in writing or otherwise, to take any
of the actions specified in this Section 8.08 or
granted any options to purchase, rights of first
refusal, rights of first offer or any other similar
rights with respect to any of the actions specified
in this Section 8.08, except as expressly
contemplated by this Agreement.
SECTION 8.09 TAXES
(a) All material returns and reports in respect of Taxes required to be
filed with respect to the Seller and or any Company, Subsidiary or the
Business have been timely filed; (ii) all Taxes required to be shown
on such returns and reports or otherwise due have been timely paid;
(iii) all such returns and reports are true, correct and complete in
all material respects; (iv) no adjustment relating to such returns has
been proposed formally or informally by any Tax authority and, to the
knowledge of the Seller, no basis exists for any such adjustment; (v)
there are no pending or, to the knowledge of the Seller, threatened
actions or proceedings for the assessment or collection of Taxes
-21-
against the Seller, any Company or any Subsidiary or (insofar as
either relates to the activities or income of the Seller or any
Company, any Subsidiary or the Business or could result in liability
of the Seller or any Company, any Subsidiary on the basis of joint
and/or several liability) any corporation that was includible in the
filing of a return with the Seller on a consolidated or combined
basis; (vi) there are no Tax liens on any assets of the Seller
(relating solely to the Business) or any Company, any Subsidiary or
the Business; and (vii) neither the Companies nor any of the
Subsidiaries is subject to any accumulated earnings tax, personal
holding company tax or similar tax.
(b) Except as disclosed with reasonable specificity in Section 8.09 of the
Disclosure Schedule: (i) there are no outstanding waivers or
agreements extending the statute of limitations for any period with
respect to any Tax to which the Seller, any Subsidiary or the Business
may be subject; (ii) there are no requests for information currently
outstanding that could affect the Taxes of the Seller, any Company,
Subsidiary or the Business; (iii) neither the Seller, nor any
Subsidiary has any (a) income reportable for a period ending after the
Closing Date but attributable to a transaction (e.g., an installment
sale) occurring in or a change in accounting method made for a period
ending on or prior to the Closing Date which resulted in a deferred
reporting of income from such transaction or from such change in
accounting method or (b) deferred gain or loss arising out of any
intercompany transaction; (iv) neither the Seller nor any Company, any
Subsidiary has requested or received a ruling from any taxing
authority or signed a closing or other agreement with any taxing
authority which could have a Material Adverse Effect on any Company,
any Subsidiary or the Business; (v) there are no proposed
reassessments of any property owned by the Seller or any Subsidiary or
other proposals that could increase the amount of any Tax to which the
Seller, any Company, any Subsidiary or the Business would be subject;
and (iv) no power of attorney that is currently in force has been
granted with respect to any matter relating to Taxes that could affect
any Company or Subsidiary.
(c) (i) Section 8.09 of the Disclosure Schedule lists all material income,
franchise and similar Tax Returns (state, local and foreign) to be
filed with respect to any Company or any Subsidiary for the taxable
period ended on December 31, 1999, indicates the most recent income,
franchise or similar Tax Return for each relevant jurisdiction for
which an audit has been completed or the statute of limitations has
lapsed and indicates all Tax Returns that currently are the subject of
audit; and (ii) the Seller has delivered or made available to the
Purchaser correct and complete copies of all foreign income, franchise
and similar Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by the Seller or any
Company or Subsidiary since January 1, 1995.
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SECTION 8.10 REAL PROPERTY; LEASES OF REAL PROPERTY
The Companies and Subsidiaries are not owning any real property. Schedule 8.10
contains a complete and correct list in all material respects of all leases,
subleases, license agreements or other rights of possession or occupancy of real
property to which the Seller in connection with the Business, any Company or any
Subsidiary is a party pursuant to which the net annual rent payable by any of
the Subsidiaries or the Business currently exceeds U.S.$100,000 (each a
"MATERIAL LEASE") and a list of all current STC and APTC sites. Except as set
forth on Section 8.10 of the Disclosure Schedule, all of the Material Leases are
in full force and effect. Complete and correct copies of each Material Lease
have been furnished or made available to the Purchaser. Except as disclosed on
Section 8.10 of the Disclosure Schedule, no consent is required of any landlord
or other third party to any Material Lease to consummate the transactions
contemplated hereby, and upon consummation of the transactions contemplated
hereby, each Material Lease will continue to entitle the Subsidiaries to the use
and possession of the real property specified in such Material Leases. Except as
set forth in Section 8.10 of the Disclosure Schedule, the Subsidiaries are not
in default in any material respect beyond any applicable notice or grace period
nor has it received written notice of any such default still outstanding on the
date hereof under any such Material Lease, and, on the date hereof, to the
Knowledge of the Companies and Subsidiaries, there exists no uncured material
default thereunder by any third party. The Companies and Subsidiaries are in
peaceful and undisturbed possession of each parcel of real property that it
leases and there are no contractual or legal restrictions that preclude or
restrict the ability to use the premises for the purposes for which they are
currently being used. To the Knowledge of the Seller, the Companies and the
Subsidiaries, all existing water, sewer, steam, gas, electricity, telephone and
other utilities required for the construction, use, occupancy, operation and
maintenance of the real property are adequate for the conduct of the Business as
it has been and currently is conducted. To the Knowledge of the Seller, the
Companies and the Subsidiaries, there are no material latent defects or material
adverse physical conditions affecting the real property or any of the
facilities, buildings, structures, erections, improvements, fixtures, fixed
assets and personality of a permanent nature annexed, affixed or attached to,
located on or forming part of the real property used or held for use in the
Business that reasonably could be expected to have a Material Adverse Effect.
Except as set forth in Section 8.10. of the Disclosure Schedule, neither the
Seller, the Companies nor any Subsidiaries has subleased any parcel or any
portion of any parcel of real property to any other Person, nor has the Seller,
nor any Subsidiary assigned its interest under any lease or sublease listed in
Section 8.10 of the Schedule to any third party. Neither the Seller, the
Companies nor any Subsidiary have received any notice of cancellation or
termination under any of the Material Leases and no lessor has any right of
termination or cancellation under such lease or sublease except in connection
with the default of the Seller, Companies or any Subsidiary thereunder. All
Material Leases are in full force and effect and are enforceable against the
Companies and Subsidiaries and, to the Knowledge of the Seller, against the
other parties thereto in accordance with their terms, subject to the Bankruptcy
and Equity Exceptions. On the Closing Date, the Companies and Subsidiaries will
have the full right to exercise any renewal options contained in
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the Material Leases on the terms and conditions therein and upon due exercise
would be entitled to enjoy the use of each item of leased property for the full
term of such renewal options.
SECTION 8.11 MATERIAL TANGIBLE PERSONAL PROPERTY
(a) Section 8.11 of the Disclosure Schedule lists each material item or
distinct group of machinery, equipment, tools, supplies, furniture,
fixtures, personality, vehicles, rolling stock and other material
tangible personal property (the "MATERIAL TANGIBLE PERSONAL PROPERTY")
used or held for use in the Business.
(b) The Seller has, or has caused to be, delivered or made available to
the Purchaser correct and complete copies of all material leases and
subleases for Material Tangible Personal Property and any and all
material ancillary documents pertaining thereto (including, but not
limited to, all amendments, consents and evidence of commencement
dates and expiration dates). With respect to each of such material
leases and subleases:
(i) such lease or sublease, together with all ancillary documents
delivered pursuant to the first sentence of this Section 8.11,
is legal, valid, binding, enforceable and in full force and
effect and represents the entire agreement between the
respective lessor and lessee with respect to such property;
(ii) except as set forth in Section 8.11 of the Disclosure
Schedule, such lease or sublease will not cease to be legal,
valid, binding, enforceable and in full force and effect on
terms identical to those currently in effect as a result of
the consummation of the transactions contemplated by this
Agreement, nor will the consummation of the transactions
contemplated by this Agreement constitute a breach or default
under such lease or sublease or otherwise give the lessor a
right to terminate such lease or sublease;
(iii) except as otherwise disclosed in Section 8.11 of the
Disclosure Schedule, with respect to each such lease or
sublease: (1) neither the Seller, any Company nor any
Subsidiary has received any notice of cancellation or
termination under such lease or sublease and no lessor has any
right of termination or cancellation under such lease or
sublease except in connection with the default of the Seller
thereunder, (2) neither the Seller, any Company nor any
Subsidiary has received any notice of a breach (3) neither the
Seller, any Company nor any Subsidiary has granted to any
other Person any rights, adverse or otherwise, under such
lease or sublease; and
(iv) none of the Seller, any Company or any Subsidiary nor (to the
best knowledge of the Seller after due inquiry) any other
party to such lease or sublease is in breach or default in any
material respect, and, to the best
-24-
knowledge of the Seller after due inquiry, no event has
occurred that, with notice or lapse of time would constitute
such a breach or default or permit termination, modification
or acceleration under such lease or sublease.
(c) On and after the Closing Date, the Companies and Subsidiaries will
have the full right to exercise any renewal options contained in the
material leases and subleases pertaining to the Material Tangible
Personal Property on the terms and conditions therein and upon due
exercise would be entitled to enjoy the use of each item of leased
Material Tangible Personal Property for the full term of such renewal
options.
SECTION 8.12 PERMITS; COMPLIANCE WITH LAWS
The Companies and Subsidiaries have all material Licenses and governmental
authorizations material to ownership or occupancy of its respective properties
and assets related to the Business and the carrying on of the Business. Except
as set forth in Section 8.12 of the Disclosure Schedule, the Companies, the
Subsidiaries and the Business are and have been operated in compliance in all
material respects with all applicable Laws.
SECTION 8.13 INSURANCE
Section 8.13 of the Disclosure Schedule contains a complete and correct list in
all material respects of all policies of insurance of any kind or nature
covering the Companies, the Subsidiaries or the Business, including, without
limitation, policies of life, fire, theft, employee fidelity and other casualty
and liability insurance, and such policies are in full force and effect.
Complete and correct copies of each such policy have been furnished or made
available to the Purchaser.
SECTION 8.14 SIGNIFICANT CUSTOMERS AND MATERIAL CONTRACTS.
(a) Set forth in Section 8.14 in the Disclosure Schedule is a list of all
significant customers and clients of the Business. A "SIGNIFICANT
CUSTOMER," for purposes of this Section 8.14, means a customer or
client (or person or entity) representing U.S.$ 2.5 million or more of
the annual revenues of the Business in 1999 or forecast for 2000.
Except to the extent set forth in Section 8.14 of the Disclosure
Schedule, to the Knowledge of the Seller, none of the significant
customers of the Business has, within the past 12 months, canceled or
substantially reduced or is currently attempting or threatening to
cancel a contract or substantially reduce prices or utilization of the
services provided by the Business.
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(b) Except as listed in Section 8.14 (b) of the Disclosure Schedule or any
other schedule hereto, the Seller, the Companies nor any Subsidiary in
respect of the Business is a party to any of the following (each a
"MATERIAL CONTRACT"):
(i) any agreement for the purchase of supplies or products
or for the furnishing or receipt by the Business of
services, the performance of which will extend over a
period of more than one year or involve consideration
in excess of U.S.$ 500,000 per year.
(ii) any agreement concerning an acquisition, partnership or
joint venture.
(iii) any agreement under which it has created, incurred,
assumed or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess
of U.S.$ 500,000 or under which there has been imposed
a Security Interest on any of the Subsidiary's assets,
tangible or intangible.
(iv) any material agreement regarding confidentiality or
noncompetition.
(v) any share option, retirement, severance, pension,
bonus, profit-sharing or other material plan for the
benefit of its current or former directors, officers or
employees.
(vi) any collective bargaining agreement.
(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting or other basis
providing annual compensation in excess of U.S.$
150,000 or providing material severance benefits.
(viii) any agreement under which it has advanced or loaned any
amount to any of its directors, officers or employees
outside the ordinary course of business.
(ix) any agreement to provide computer-based testing
services providing for annual payments to the Companies
or Subsidiaries or the Business in excess of U.S.$
500,000 per year or that would require additional
infrastructure and staffing investments in excess of
U.S.$ 500,000.
(x) any other agreement not made in the ordinary course of
business that obligates the Companies or Subsidiaries
or the Business to make payments in excess of U.S.$
500,000 per year.
Complete and correct copies of each Material Contract have been furnished or
made available to the Purchaser. Except as set forth in Section 8.14 of the
Disclosure Schedule each of the
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Companies and Subsidiaries are not in breach or default in any material respect
under any Material Contract. Each Material Contract is in full force and effect
and is enforceable against each of the Companies or Subsidiaries and, to the
Knowledge of the Seller, against the other parties thereto, in accordance with
their terms, subject to the Bankruptcy and Equity Exceptions. Except as set
forth in Schedule 8.14 of the Disclosure Schedule, neither the Companies nor the
Subsidiaries has been notified that any party to any Material Contract intends
to cancel or terminate under any Material Contract.
SECTION 8.15 NONCONTRAVENTION
Except as set forth in Section 8.15 of the Disclosure Schedule hereto and except
for leases or subleases that do not constitute Material Leases or Material
Tangible Personal Property leases and agreements that do not constitute Material
Contracts, neither the execution or delivery of this Agreement by the Seller,
nor the consummation by the Seller of the transactions contemplated hereby, will
(a) violate in any material respect any statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or restriction of any government,
governmental agency, or court to which any of the Companies or Subsidiaries or
the Business is subject, (b) conflict in any material respect with or result in
a material breach of, or give rise to a right of termination of, or accelerate
the performance required by, any terms of any material agreement to which, any
of the Companies or Subsidiaries or the Business is a party, or constitute a
default in any material respect thereunder, (c) result in the creation of any
Encumbrance upon any of the Companies' or Subsidiaries' assets (except
Encumbrances that individually and in the aggregate are not material) or (d)
violate in any material respect any of the provisions of the Companies' or
Subsidiaries' articles of association, or the equivalent documents.
SECTION 8.16 LITIGATION
Except as disclosed in Section 8.16 of the Disclosure Schedule, there is no
action, suit, proceeding or formal governmental inquiry or investigation
pending, or, to the Knowledge of the Seller or any Subsidiary, threatened,
against the Seller or any Subsidiary or affecting any of the assets of the
Division or which seeks to restrain or prohibit or otherwise challenges the
consummation, legality or validity of the transactions contemplated hereby.
Other than in connection with or in compliance with the provisions of any local
merger and acquisition act and except as set forth in Section 8.16 of the
Disclosure Schedule, no consent, approval or authorization of any Governmental
Authority on the part of the Seller or any Company or Subsidiary is required in
connection with the execution and delivery of this Agreement or the consummation
of any of the transactions contemplated hereby, except where the failure to
obtain any such consent, approval or authorization would not have a Material
Adverse Effect.
SECTION 8.17 ENVIRONMENTAL MATTERS.
Except as disclosed in Section 8.17 of the Disclosure Schedule or as would not
reasonably be expected to have a Material Adverse Effect, (a) the operations of
each of the Companies or
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Subsidiaries are in compliance with applicable Environmental Laws. (b) neither
the Companies nor the Subsidiaries are subject to any pending or threatened
judicial or administrative proceeding alleging the violation of any
Environmental Law or (c) neither the Companies nor the Subsidiaries not received
any written notice that it is in violation of any Environmental Law.
SECTION 8.18 EMPLOYEE BENEFITS
(a) Plans and Material Documents. Section 8.18 of the Disclosure Schedule
lists (i) all employee benefit plans and all bonus, share option,
share purchase, deferred compensation, retiree medical or life
insurance, supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, termination, severance
or other contracts or agreements, whether legally enforceable or not,
to which the Seller or any Company or Subsidiary is a party, with
respect to which the Seller or any Company, or Subsidiary has any
obligation or which are maintained, contributed to or sponsored by the
Seller or any Subsidiary for the benefit of any current or former
employee, officer or director of the Seller or any Company, or
Subsidiary, (ii), any contracts, arrangements or understandings
between the Seller or any of its Affiliates and any employee of the
Seller or any Company, or Subsidiary, including, without limitation,
any contracts, arrangements or understandings relating to a sale of
the Seller (collectively, the "PLANS"). Each Plan is in writing and
the Seller has furnished or made available to the Purchaser with a
complete and accurate copy of each Plan and a complete and accurate
copy of each material document prepared in connection with each such
Plan, including, without limitation, (i) a copy of each trust or other
funding arrangement, (ii) each summary plan description and summary of
material modifications, (iii) the most recently prepared actuarial
report and financial statement in connection with each such Plan.
Except as disclosed on Section 8.19 of the Disclosure Schedule, there
are no other employee benefit plans, programs, arrangements or
agreements, whether formal or informal, whether in writing or not, to
which the Seller or any Company or Subsidiary is a party, with respect
to which the Seller or any Company or Subsidiary has any obligation or
which are maintained, contributed to or sponsored by the Seller or any
Subsidiary for the benefit of any current or former employee, officer
or director of the Seller or any Company or Subsidiary. Neither the
Seller nor any Company or Subsidiary has any express or implied
commitment, whether legally enforceable or not, (i) to create, incur
liability with respect to or cause to exist any other employee benefit
plan, program or arrangement, (ii) to enter into any contract or
agreement to provide compensation or benefits to any individual.
(b) Labor Matters. Except as set forth in Section 8.18 of the Disclosure
Schedule, (i) neither the Seller nor any Company or Subsidiary is a
party to any collective bargaining agreement or other labor union
contract applicable to persons employed by the Seller in the Business
or any Company or Subsidiary and to the Knowledge of the Seller, any
Company or Subsidiary currently there are no organizational campaigns,
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petitions or other unionization activities seeking recognition of a
collective bargaining unit which could affect the Seller or any
Company or Subsidiary; (ii) there are no controversies, strikes,
slowdowns or work stoppages pending or, to the best knowledge of the
Seller after due inquiry, threatened between the Seller or any Company
or Subsidiary and any of their respective employees, and neither the
Seller nor any Company or Subsidiary has experienced any such
controversy, strike, slowdown or work stoppage within the past three
years; (iii) neither the Seller nor any Subsidiary has breached or
otherwise failed to comply with the provisions of any collective
bargaining or union contract and there are no grievances outstanding
against the Seller or any Company or Subsidiary under any such
agreement or contract that could have a Material Adverse Effect (iv)
there are no unfair labor practice complaints pending against the
Seller or any Subsidiary before any local labor board or any other
Governmental Authority or any current union representation questions
involving employees of the Seller, any Company or any Subsidiary that
could have a Material Adverse Effect; each of the Seller, the
Companies and each Subsidiary is currently in compliance with all
applicable Laws relating to the employment of labor, including those
related to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by the appropriate
Governmental Authority and has withheld and paid to the appropriate
Governmental Authority or is holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from
employees of the Seller or any Subsidiary and is not liable for any
arrears of wages, taxes, penalties or other sums for failure to comply
with any of the foregoing; (vi) each of the Seller and each Company
and Subsidiary has paid in full to all their respective employees or
adequately accrued for in accordance with GAAP consistently applied
all wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees (vii) there is no
material claim with respect to payment of wages, salary or overtime
pay that has been asserted or is now pending or threatened before any
Governmental Authority with respect to any Persons currently or
formerly employed by the Seller or any Company or Subsidiary; (viii)
neither the Seller or any Company or Subsidiary is a party to, or
otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices;
(ix) there is no material charge or proceeding with respect to a
violation of any occupational safety or health standards that has been
asserted or is now pending or threatened with respect to the Seller or
any Company or Subsidiary; and (x) to the Knowledge of the Seller,
there is no charge of discrimination in employment or employment
practices, for any reason, including, without limitation, age, gender,
race, religion or other legally protected category, which has been
asserted or is now pending or, to the Knowledge of the Seller,
threatened before any Governmental Authority in any jurisdiction in
which the Seller or any Subsidiary has employed or currently employs
any Person.
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(c) Key Employees. Section 8.18 of the Disclosure Schedule lists the name,
place of employment, the current annual salary rates, bonuses,
deferred or contingent compensation, pension, accrued vacation,
"golden parachute" and other like benefits paid or payable (in cash or
otherwise) in 1996, 1997, 1998 and 1999, the date of employment and a
description of position and job function of each current salaried
employee, officer, director, consultant or agent of the Seller or any
Subsidiary whose annual compensation exceeded (or, in 2000, is
expected to exceed) U.S.$ 150,000.
(d) Employee Agreements. Substantially all directors, officers, management
employees, and technical and professional employees of the Seller and
each Company and Subsidiary are under written obligation to the Seller
or the respective Company and Subsidiary to maintain in confidence all
confidential or proprietary information acquired by them in the course
of their employment and to assign to the Seller or the Companies,
Subsidiaries all inventions made by them in connection within the
scope of their employment during such employment and for a reasonable
period thereafter.
SECTION 8.19 INTELLECTUAL PROPERTY; BUSINESS SYSTEMS
(a) Section 8.19 of the Disclosure Schedule contains a complete and
correct list of material Intellectual Property owned or used by the
Business, any registrations and pending applications therefor, and
each license or other agreement relating thereto, including each
patent registration and pending application relating to secure
internet testing services via camera and biometric technologies.
Except as set forth in Section 8.19 of the Disclosure Schedule, all of
the Intellectual Property owned by the Business (i) is owned by the
party shown on such Schedule as owning the same in the case of
material Intellectual Property or (ii) on the Closing Date will be
owned by the Seller, the Companies, one of the Subsidiaries or
Prometric, in each case free and clear of all Encumbrances. Except as
set forth in Section 8.19 of the Disclosure Schedule, there have been
no claims asserted in writing, which are still pending, that any of
the material Intellectual Property owned or used in the Business is
invalid or conflicts with the asserted rights of others.
(b) To the knowledge of the Seller and each Company and Subsidiary, except
as set forth in Section of the Disclosure Schedule, no Person is using
any patents, copyrights, trademarks, service marks, trade names, trade
secrets or similar property that are confusingly similar to the
Intellectual Property or that infringe upon the Intellectual Property
or upon the rights of the Seller or any Subsidiary therein. Except as
disclosed in Section 8.19 of the Disclosure Schedule, neither the
Seller nor any Company and Subsidiary has granted any license or other
right to any other Person with respect to the Intellectual Property.
The consummation of the transactions contemplated by this Agreement
will not result in the termination or impairment of any of the
Intellectual Property subject to the filing of any necessary
assignments with the appropriate Governmental Authority. The
non-competition and confidentiality
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agreements between the Seller and employees involved in the Business
have been or prior to the Closing will be validly assigned to the
Companies and Subsidiaries.
(c) The Seller has (i) initiated a review and assessment of the Business
and operations of each Company and Subsidiary (including those areas
affected by suppliers and vendors) that could reasonably be affected
by the Year 2000 Problem, (ii) developed the plan disclosed to the
Purchaser (the "YEAR 2000 PLAN") to address the Year 2000 Problem, and
(iii) implemented and complied with the Year 2000 Plan in accordance
with the terms thereof. The Year 2000 Plan includes all appropriate,
necessary and timely steps, actions and plans to make the assets and
the businesses and each Company and Subsidiary Year 2000 Compliant in
accordance with the methods and the time frames set forth therein. As
of the date hereof, there are no issues or events that prevent the
Seller and each Company and Subsidiary from fully addressing the Year
2000 Problem consistent with the terms of the Year 2000 Plan.
(d) Except as provided in Section 8.19 of the Disclosure Schedule, the
transactions contemplated by this Agreement will not (i) result in the
infringement or misappropriation by any Subsidiary or the Business of
any Intellectual Property right of any other person or entity, or (ii)
result in a default under or a breach or violation of, or adversely
affect the rights and benefits afforded to any Company or Subsidiary
or the Business by, any licenses, franchises, permits or government
authorizations listed in Section 8.19 of the Disclosure Schedule or
any contracts involving the grant to the Company of any rights
relating to the Intellectual Property of any third party.
(e) The business, test delivery and administrative systems of the
Business, including scheduling and call centers, networks and
communications and the infrastructure and computer environment in
which they run, are sufficient and operate, and will continue to be
sufficient and to operate as of the Closing Date, in a manner such
that the Business can continue to be conducted in all material
respects as it is currently conducted.
SECTION 8.20 BROKERS
Not one of the Subsidiaries have had any dealings with any broker or finder in
connection with the transactions contemplated by this Agreement, except that SLS
has engaged the services and will pay the fees and expenses of Deutsche Banc
Alex. ▇▇▇▇▇.
SECTION 8.21 DISCLOSURE
No representation or warranty by the Seller in this Agreement, and no statement
contained in the schedules or exhibits or in any certificate to be delivered
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact
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necessary, in light of the circumstances under which it was made, in order to
make the statements herein or therein not misleading.
SECTION 8.22 TRANSACTIONS WITH AFFILIATE
Except as disclosed in Section 8.22 of the Disclosure Schedule, (a) the
Companies and Subsidiaries are not a party to any material arrangement with the
Seller or any of its Affiliates and (b) the Seller and its Affiliates do not
provide any material services to the any Company or Subsidiary or the Business.
Neither the Seller nor, to the Knowledge of the Seller or the Companies,
Subsidiaries, any officer or director of the Seller or any of its Affiliates has
any material financial interest in any competitor, customer or client of the
Business or owns, directly or indirectly, in whole or in part, or has any other
interest in any tangible or intangible property used or held for use by the
Business.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
REGARDING SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
SECTION 9.01 ORGANIZATION; GOOD STANDING
The Seller is a private company duly organized, validly existing and in good
standing under the laws of the Netherlands.
SECTION 9.02 AUTHORIZATION OF TRANSACTION
The Seller has full power and authority (corporate or otherwise) to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by the Seller and the consummation by the Seller of the transactions
contemplated hereby have been duly authorized by the board of directors of the
Seller and by all other necessary action on the part of the Seller and its
shareholders. Assuming due authorization, execution and delivery by the Seller,
this Agreement constitutes a legal, valid and binding obligation of the Seller
fully enforceable against the Seller in accordance with its terms, subject to
Bankruptcy and Equity Exceptions.
SECTION 9.03 NONCONTRAVENTION
Neither the execution nor delivery of this Agreement by the Seller, nor the
consummation of the transactions contemplated hereby, will (a) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or restriction of any government, governmental agency, or court to which the
Seller is a party or to which it is bound or subject, or the provisions of the
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Seller articles of association, or (b) except as provided in Section 9.03 of the
Disclosure Schedule, conflict in any material respect with or result in a
material breach of, or give rise to a right of termination of, or accelerate the
performance required by, any terms of any material agreement to which the Seller
is a party, or constitute a default in any material respect thereunder, or
result in the creation of any Encumbrance upon any of its assets (except
Encumbrances that individually and in the aggregate are immaterial).
SECTION 9.04 LITIGATION; CONSENTS
There is no action, suit, proceeding or formal governmental inquiry or
investigation pending, or to the Seller's Knowledge threatened, against the
Seller that seeks to restrain or prohibit or otherwise challenges the
consummation, legality or validity of the transactions contemplated hereby.
Other than in connection with the provisions of any local merger and acquisition
act, no consent, approval or authorization of any Governmental Authority on the
part of the Seller is required in connection with the execution and delivery of
this Agreement or the consummation of any of the transactions contemplated
hereby.
SECTION 9.05 FAIRNESS OPINION
Deutsche Banc Alex. ▇▇▇▇▇ has delivered to the board of directors of SLS, Inc.
its opinion, dated as of the date of this Agreement, that the consideration to
be paid to the Seller in the transaction is fair to the Seller from a financial
point of view.
SECTION 9.06 BROKERS
The Seller has had no dealings with any broker or finder in connection with the
transactions contemplated by this Agreement, except that SLS, Inc. has engaged
the services and will pay the fees and expenses of Deutsche Banc Alex. ▇▇▇▇▇.
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ARTICLE X
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller and the Company as
follows:
SECTION 10.01 ORGANIZATION; GOOD STANDING
The Purchaser is a company duly organized, validly existing and in good standing
under the laws of the Netherlands.
SECTION 10.02 AUTHORIZATION
The Purchaser has the full power and authority (corporate or otherwise) to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby have been duly authorized by the board of
directors of the Purchaser and by all other necessary action on the part of the
Purchaser and its shareholders. This Agreement has been duly executed and
delivered by the Purchaser and constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, subject to the Bankruptcy and Equity Exceptions.
SECTION 10.03 NONCONTRAVENTION.
Neither the execution or delivery of this Agreement by the Purchaser, nor the
consummation of the transactions contemplated hereby, will (a) violate any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or restriction of any government, governmental agency, or court to which the
Purchaser or any of its subsidiaries is a party or to which any of them is bound
or subject, or the provisions of the Purchaser articles of association, or (b)
conflict in any material respect with or result in a material breach of, or give
rise to a right of termination of, or accelerate the performance required by,
any terms of any material agreement to which the Purchaser or any subsidiary is
a party, or constitute a default in any material respect thereunder, or result
in the creation of any Encumbrance upon any of their respective assets (except
Encumbrances that individually and in the aggregate are not material).
SECTION 10.04 LITIGATION; CONSENTS
There is no action, suit, proceeding or formal governmental inquiry or
investigation pending, or to the Purchaser's Knowledge threatened, against the
Purchaser that seeks to restrain or prohibit or otherwise challenges the
consummation, legality or validity of the transactions contemplated hereby.
Other than in connection with the provisions of any local merger and acquisition
act or anti trust act, no consent, approval or authorization of any Governmental
Authority on the part of the Purchaser is required in connection with the
execution and delivery of this Agreement or the consummation of any of the
transactions contemplated hereby.
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SECTION 10.05 INVESTMENT
The Purchaser is acquiring the Shares for its own investment and not with a view
to sale or distribution thereof. The Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the Shares.
Purchaser does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participation in the Shares to such person
or any third person.
SECTION 10.06 FINANCIAL ABILITY.
The Purchaser has sufficient cash, available lines of credit or other sources of
immediately available funds to enable it to make payment of the Purchase Price
and consummate the transactions contemplated hereby.
SECTION 10.7 BROKERS
The Purchaser or Thomson has had no dealings with any broker or finder in
connection with the transactions contemplated by this Agreement, except that the
parent company of Purchaser has engaged the services and will pay the fees and
expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Incorporated.
ARTICLE XI
PRE-CLOSING COVENANTS
The parties hereto agree as follows with regard to the period between the
execution of this Agreement and the Closing:
SECTION 11.01 FILINGS; OTHER ACTIONS
Upon the terms and subject to the conditions contained herein, each of the
parties shall (a) cooperate with one another in determining whether any filings
are required to be made with, or consents or permits are required to be obtained
from, any Governmental Authority in connection with the consummation of the
transactions contemplated hereby and cooperate in making any such filings
promptly and in seeking timely to obtain any such consents and permits, (b) make
their respective filings promptly and any other required or requested
submissions under the any local merger and acquisition and any anti trust act,
furnish to each other party hereto all such information in its possession as may
be necessary for the completion of such filings and submissions to be filed by
the other party, and use its Best Efforts to obtain an early termination of the
applicable waiting period and (c) use its Best Efforts to take any and all other
actions necessary to consummate the transactions provided for in this Agreement.
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SECTION 11.02 ACCESS; COOPERATION
From and after the date hereof and until the Closing Date, the Seller and the
Companies shall, and the Companies shall cause each Subsidiary to, use its Best
Efforts to make available for inspection by the Purchaser or its
Representatives, upon reasonable advance notice, during normal business hours
and in a manner so as not to interfere with normal business operations of the
Seller, the Companies or the Subsidiaries and the Companies corporate or
comparable records, books of account, employee records, contracts and all other
documents reasonably requested by the Purchaser or its Representatives in order
to permit the Purchaser and such Representatives to make reasonable inspection
and examination of the business and affairs of the Business and any Company or
Subsidiary. The Seller and the Companies shall cause the managerial employees of
the Business, the Companies and any Subsidiary to be available upon reasonable
advance notice to answer questions concerning the business and affairs of the
any Company or Subsidiary and to meet with the Purchaser and customers or
supplier of the Business to obtain any necessary consents to assignment, waivers
or amendments under contracts related to the Business. The Seller shall use its
Best Efforts to take any and all corporate action to consummate the transactions
contemplated by this Agreement.
SECTION 11.03 CONDUCT OF BUSINESS PRIOR TO CLOSING DATE.
From the date hereof to the Closing Date, each Company, each Subsidiary and the
Seller shall:
(a) conduct the Business in the ordinary and usual course of business
consistent with past and current practices and shall use their Best
Efforts to maintain and preserve intact their business organizations
and goodwill, to retain the services of their key officers and
employees and to maintain satisfactory relationships with suppliers,
distributors, customers, clients and others having business
relationships with them;
(b) confer on a regular and frequent basis with Representatives of the
Purchaser to report operational matters and the general status of
ongoing operations including profit margins, cost increases and
material adverse trends;
(c) except in connection with the transactions expressly contemplated by
this Agreement, take no action (or fail to take any action) which
would cause or permit their respective representations and warranties
contained in this Agreement to be untrue in any material respect at
the Closing Date;
(d) except as described in Section 11.03 of the Disclosure Schedule, the
Seller covenants and agrees that, prior to the Closing, without the
prior written consent of the Purchaser, neither the Seller, any
Company or Subsidiary nor any other subsidiary of the Seller will do
any of the things enumerated in Section 11.03 (including, without
limitation, clauses (a) through (x) thereof);
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(e) confer with the Purchaser regarding any communication or negotiation
with respect to any disputed material Receivable; and
(f) diligently defend in consultation with the Purchaser the litigation
referred to in Schedule 6.03 (c) hereto; provided, however, that such
litigation shall not be compromised or settled without the Purchaser's
prior written consent, such consent not to be unreasonably withheld or
delayed, it being understood that any such settlement or compromise
shall give a full, complete and unconditional release of any and all
liability and claims against any Company, any Subsidiaries and the
Business.
SECTION 11.04 NOTIFICATION OF DEVELOPMENTS
The Seller shall give prompt notice to the Purchaser of the occurrence or
non-occurrence of any event of which the Seller has Knowledge, the occurrence or
non-occurrence of which would cause any representation or warranty of any of the
Seller, any Company or any Subsidiary contained herein to be untrue or
inaccurate in any material respect at or prior to the Closing. The Purchaser
shall give prompt notice to the Seller of (a) the occurrence or nonoccurrence of
any event of which the Purchaser has Knowledge, the occurrence or non-occurrence
of which would cause any representation or warranty of the Purchaser contained
herein to be untrue or inaccurate in any material respect at or prior to the
Closing, and (b) any material failure of Purchaser to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. The delivery of any notice pursuant to this Section 11.04 shall not
be deemed to (a) modify the representations or warranties hereunder of the party
delivering such notice, (b) modify the conditions set forth in Sections 12.01
and 12.02 or (c) limit or otherwise affect the remedies available hereunder to
the party receiving such notice. Each party also will notify the other in
writing of, and will use its Best Efforts to cure, before the Closing, any
violation or breach, as soon as practical after it becomes known to such party,
of any representation, warranty, covenant or agreement made by such party.
SECTION 11.05 BREAK-UP FEE
In the event that this Agreement is terminated by the Purchaser pursuant to
Section 17.01(b) of this Agreement because (x) of (a) Seller's refusal to
consummate the Closing or (b) Seller's failure to use its Best Efforts to
satisfy the conditions to Closing set forth in Section 13.01 or (y) there is
then pending any Action described in 13.01(f) (or in either case would be so
terminable by Purchaser but for the fact that the Seller shall have terminated
this Agreement pursuant to such Section 17.01(b)), then the Seller shall pay to
the Purchaser a fee equal to 5% of the Purchase Price (the "BREAK-UP FEE"). The
payment of the Break-Up Fee shall be made as reimbursement for expenses incurred
by the Purchaser relating to the transactions contemplated by this Agreement,
and as liquidated damages (it being understood that actual damages would be
difficult, if not impossible to determine with certainty in the event of such
termination), which the Purchaser hereby agrees is reasonable. Any Break-Up Fee
payable by the Seller to the Purchaser pursuant to this Section 11.05 shall be
paid to the Seller within 10 business days after
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written notice by the Purchaser to the Seller that the Break-Up Fee is due and
payable. The payment of the Break-Up Fee provided for in this Section 11.05
shall be the Purchaser's exclusive remedy for the events described in (a) and
(b) above.
SECTION 11.06 AMENDMENT OF SCHEDULE.
Each party hereto, with respect to the representations and warranties of such
party contained in this Agreement, shall have the continuing obligation until
the Closing Date to supplement or amend promptly the Disclosure Schedule with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule.
SECTION 11.07 CERTAIN PAYMENTS.
SLS shall pay all bonuses included in accrued expenses or accounts payable and
payable to employees of the Business under the Prometric Strategic Plan.
SECTION 11.08 DUE DILIGENCE BY PURCHASER.
Purchaser shall perform a legal, tax, operational, commercial and financial due
diligence with respect to the Assets and Subsidiaries it wishes to acquire and
the Contracts and Liabilities it wishes to assume from the Seller.
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ARTICLE XII
TAX MATTERS
SECTION 12.01 INDEMNITY
(a) The Seller and SLS, Inc. shall jointly and severally shall indemnify
and hold harmless the Purchaser against the following Taxes (except to
the extent current taxes on the Closing Balance Sheet have been
specifically reserved for such Taxes) and, except as otherwise
provided in Section 12.04, against any loss, damage, liability or
expense, including reasonable fees for attorneys and other outside
consultants, incurred in contesting or otherwise in connection with
any such Taxes: (i) Taxes imposed on the Seller, any Company, any
Subsidiaries or the Business with respect to taxable periods of such
Person ending on or before the Closing Date; (ii) with respect to
taxable periods beginning before the Closing Date and ending after the
Closing Date, Taxes imposed on the Seller, any Company. any
Subsidiaries or the Business which are allocable, pursuant to Section
12.01 (b), to the portion of such period ending on the Closing Date;
(iii) Taxes imposed on any member of any affiliated group with which
the Seller and the Subsidiaries file, have filed or should have filed
a Tax Return on a consolidated or combined basis for a taxable period
ending on or before the Closing Date; and (iv) Taxes imposed on the
Purchaser as a result of any breach of warranty or misrepresentation
under Section 8.09 of this Agreement. The Purchaser shall be
responsible for Taxes and associated expenses not allocated to the
Seller pursuant to the first sentence hereof.
(b) In the case of Taxes that are payable with respect to a taxable period
that begins before the Closing Date and ends after the Closing Date,
the portion of any such Tax that is allocable to the portion of the
period ending on the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon or related
to income or receipts, or (y) imposed in connection with any
sale or other transfer or assignment of property (real or
personal, tangible or intangible) (other than conveyances
pursuant to this Agreement, as provided under Section 12.07,
deemed equal to the amount which would be payable if the
taxable year ended with the Closing Date; and
(ii) in the case of Taxes imposed on a periodic basis with respect
to the assets of the Seller, the Companies, the Subsidiaries
or the Business or otherwise measured by the level of any
item, deemed to be the amount of such Taxes for the entire
period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding
period) multiplied by a fraction the numerator of which is the
number of calendar days in the period ending on the Closing
Date and the denominator of which is the number of calendar
days in the entire period.
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Section 12.02 TAX RETURNS AND PAYMENTS.
(a) From the date of this Agreement through and after the Closing Date,
the Seller shall prepare and file or otherwise furnish in proper form
to the appropriate Governmental Authority (or cause to be prepared and
filed or so furnished) in a timely manner all Tax Returns relating to
the Seller, the Companies, the Subsidiaries and the Business that are
due on or before or relate to any taxable period ending on or before
the Closing Date (and the Purchaser shall do the same for Tax Returns
relating to the Companies, the Subsidiaries and the Business with
respect to any taxable period ending after the Closing Date). Tax
Returns of the Companies, the Subsidiaries and the Business not yet
filed for any taxable period that begins before the Closing Date shall
be prepared in a manner consistent with past practices employed with
respect to such corporations (except to the extent counsel for the
Seller renders a legal opinion there is no reasonable basis in Law
therefor or that a Tax Return cannot be so prepared and filed without
being subject to penalties). With respect to any Tax Return required
to be filed by the Purchaser or the Seller with respect to the
Companies, the Subsidiaries and the Business and as to which an amount
of Tax is allocable to the other party under Section 12.01 (b), the
filing party shall provide the other party and its authorized
representatives with a copy of such completed Tax Return and a
statement certifying the amount of Tax shown on such Tax Return that
is allocable to such other party pursuant to Section 12.01 (b),
together with appropriate supporting information and schedules at
least 20 Business Days prior to the due date (including any extension
thereof) for the filing of such Tax Return, and such other party and
its authorized representatives shall have the right to review and
comment on such Tax Return and statement prior the filing of such Tax
Return.
(b) The Seller shall pay or cause to be paid when due (including any
extension of time to file) and payable all Taxes with respect to the
Seller, the Companies, the Subsidiaries and the Business for any
taxable period ending on or before the Closing Date to the extent such
Taxes exceed the amount, if any, accrued for such Taxes as current
taxes payable on the Closing Balance Sheet, and the Purchaser shall so
pay or cause to be paid Taxes for the Business for any taxable period
after the Closing Date (subject to its right of indemnification from
the Seller by the date set forth in Section 12.05 for Taxes
attributable to the portion of any Tax period that includes the
Closing Date pursuant to Sections 12.01 (a) and (b).
SECTION 12.03 REFUNDS
Any Tax refund (including any interest with respect thereto) relating to the
Seller, any Company, any Subsidiary or the Business for any taxable period prior
to the Closing Date (except for any refund included on the Reference Balance
Sheet, which shall be the property of the Purchaser, and if paid to the Seller,
shall be paid over promptly to the Purchaser) shall be the property of the
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Seller, and if received by the Purchaser shall be payable promptly to the
Seller. Notwithstanding the foregoing sentence: (a) any Tax refund (or
equivalent benefit to the Seller through a reduction in Tax liability) for a
period before the Closing Date arising out of the carryback of a loss or credit
incurred by the Business in a taxable year ending after the Closing Date shall
be the property of the Purchaser and, if received by the Seller, shall be
payable promptly to the Purchaser; and (b) if, and to the extent that as of such
time, if any, as the Purchaser shall receive a refund that would be the property
of the Seller and payable to the Seller under the foregoing sentence, Taxes have
been asserted in writing that would be required to be indemnified by the Seller
hereunder, all or part of such refund up to an amount equal to 120% of such
asserted Taxes, shall be paid to the Seller.
SECTION 12.04 CONTESTS
(a) After the Closing, the Purchaser shall promptly notify the Seller in
writing of any written notice of a proposed assessment or claim in an
audit or administrative or judicial proceeding of the Purchaser which,
if determined adversely to the taxpayer, would be grounds for
indemnification under this Article XII; provided, however, that a
failure to give such notice will not affect the Purchaser's right to
indemnification under this Agreement except to the extent, if any,
that, but for such failure, the Seller could have avoided all or a
portion of the Tax liability in question.
(b) In the case of an audit or administrative or judicial proceeding that
relates to periods ending on or before the Closing Date, provided that
the Seller acknowledges in writing its responsibility under this
Agreement to hold the Purchaser harmless against the full amount of
any adjustment which may be made as a result of such audit or
proceeding that relates to periods ending on or before the Closing
Date (or, in the case of any taxable year that includes the Closing
Date, against an adjustment allocable under Section 12.01 (b) to the
portion of such year ending on or before the Closing Date), the Seller
shall have the right at its expense to participate in and control the
conduct of such audit or proceeding but only to the extent that such
audit or proceeding relates solely to a potential adjustment for which
the Seller has acknowledged its liability; the Purchaser also may
participate in any such audit or proceeding and, if the Seller does
not assume the defense of any such audit or proceeding, the Purchaser
may defend the same in such manner as it may deem appropriate,
including, but not limited to, settling such audit or proceeding after
giving five days' prior written notice to the Seller setting forth the
terms and conditions of settlement. In the event that issues relating
to a potential adjustment for which the Seller has acknowledged its
liability are required to be dealt with in the same proceeding as
separate issues relating to a potential adjustment for which the
Purchaser would be liable, the Purchaser shall have the right, at its
expense, to control the audit or proceeding with respect to the latter
issues.
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(c) With respect to issues relating to a potential adjustment for which
both the Seller (as evidenced by its acknowledgment under this Section
12.04) and the Purchaser could be liable, (i) each party may
participate in the audit or proceeding, and (ii) the audit or
proceeding shall be controlled by that party which would bear the
burden of the greater portion of the sum of the adjustment and any
corresponding adjustments that may reasonably be anticipated for
future Tax periods. The principle set forth in the preceding sentence
shall govern also for purposes of deciding any issue that must be
decided jointly (in particular, choice of judicial forum) in
situations in which separate issues are otherwise controlled under
this Article XII by the Purchaser and the Seller.
(d) Neither the Purchaser nor the Seller shall enter into any compromise
or agree to settle any claim pursuant to any Tax audit or proceeding
which would adversely affect the other party for such year or a
subsequent year without the written consent of the other party, which
consent may not be unreasonably withheld. The Purchaser and the Seller
agree to cooperate in the defense against or compromise of any claim
in any audit or proceeding.
Section 12.05 TIME OF PAYMENT.
Payment by the Seller of any amounts due under this Article XII in respect of
Taxes shall be made (a) at least three Business Days before the due date of the
applicable estimated or final Tax Return required to be filed by the Purchaser
on which is required to be reported income for a period ending after the Closing
Date for which the Seller is responsible under Sections 12.01 (a) and (b)
without regard to whether the Tax Return shows overall net income or loss for
such period, and (b) within three Business Days following an agreement between
the Seller and the Purchaser that an indemnity amount is payable, an assessment
of a Tax by a taxing authority. If liability under this Article XII is in
respect of costs or expenses other than Taxes, payment by the Seller of any
amounts due under this Article XII shall be made within five Business Days after
the date when the Seller has been notified by the Purchaser that the Seller has
a liability for a determinable amount under this Article XII and is provided
with calculations or other materials supporting such liability.
SECTION 12.06 COOPERATION AND EXCHANGE OF INFORMATION
Upon the terms set forth in Section 11.02, the Seller and the Purchaser shall
cooperate and provide each other with information as either of them reasonably
may request of the other in filing any Tax Return, amended Tax Return or claim
for refund, determining a liability for Taxes or a right to a refund of Taxes,
participating in or conducting any audit or other proceeding in respect of Taxes
or making representations to or furnishing information to parties subsequently
desiring to purchase all or a part of the Business from the Purchaser. Such
cooperation and information shall include providing copies of relevant Tax
Returns or portions thereof, together with accompanying schedules, related work
papers and documents relating to rulings or other determinations by Tax
authorities. The Seller shall make its employees available on a basis
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mutually convenient to both parties to provide explanations of any documents or
information provided hereunder. Each of the Seller and the Purchaser shall
retain all Tax Returns, schedules and work papers, records and other documents
in its possession relating to Tax matters of the Seller and the Company or the
Business for each taxable period first ending after the Closing Date and for all
prior taxable periods until the later of (a) the expiration of the statute of
limitations of the taxable periods to which such Tax Returns and other documents
relate, without regard to extensions except to the extent notified by the other
party in writing of such extensions for the respective Tax periods, or (b) six
years following the due date (without extension) for such Tax Returns. Any
information obtained under this Section 12.06 shall be kept confidential in
accordance with the Letter Agreement except as may be otherwise necessary in
connection with the filing of Tax Returns or claims for refund or in conducting
an audit or other proceeding.
SECTION 12.07 CONVEYANCE TAXES
The Seller shall be liable for and shall hold the Purchaser harmless against any
real property transfer or gains, sales, use, transfer, value added, stock
transfer, and stamp taxes, any transfer, recording, registration, and similar
fees, and any similar Taxes which become payable in connection with the
transactions contemplated by this Agreement. The Seller, after the review and
consent by the Purchaser, shall file such applications and documents as shall
permit any such Tax to be assessed and paid on or prior to the Closing Date in
accordance with any available pre-sale filing procedure. The Purchaser shall
execute and deliver all instruments and certificates necessary to enable the
Seller to comply with the foregoing. The Purchaser shall complete and execute a
resale or other exemption certificate with respect to the inventory items sold
hereunder, and shall provide the Seller with an executed copy thereof.
SECTION 12.08 MISCELLANEOUS
(a) The Seller and the Purchaser shall treat all payments made by
either to or for the benefit of the other (including any payments
to the Seller, any Company or any Subsidiary) under this Article
XII, under other indemnity provisions of this Agreement and for
any misrepresentations or breach of warranties or covenants as
adjustments to the Purchase Price or as capital contributions for
Tax purposes and that such treatment shall govern for purposes
hereof except to the extent that the laws of a particular
jurisdiction provide otherwise, in which case such payments shall
be made in an amount sufficient to indemnify the relevant party on
an after-Tax basis.
(b) Notwithstanding any provision in this Agreement to the contrary,
the obligations of the Seller to indemnify and hold harmless the
Purchaser pursuant to this Article XII, and the representations
and warranties contained in Section 8.09, shall terminate at the
close of business on the 120th day following the expiration of the
applicable statute of limitations with respect to the Tax
liabilities in question (giving effect to any waiver, mitigation
or extension thereof).
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(c) From and after the date of this Agreement, the Seller shall not
without the prior written consent of the Purchaser (which may, in
its sole and absolute discretion, withhold such consent) make, or
cause or permit to be made, any Tax election that would affect the
Business.
(d) For purposes of this Article XII, "the Purchaser" and "the
Seller," respectively, shall include each member of the affiliated
group of corporations of which it is or becomes a member.
(e) The Purchaser shall be entitled to recover professional fees and
related costs that it may reasonably incur to enforce the
provisions of this Article XII.
ARTICLE XIII
CONDITIONS TO OBLIGATION TO CLOSE
SECTION 13.01 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION
The obligation of the Purchaser to consummate the transactions contemplated
hereby is subject to the satisfaction, on or before the Closing Date, of the
following conditions, any of which may be waived by the Purchaser in writing:
(a) Representations and Warranties. Each of the representations and
warranties of the Seller and the Companies contained in Articles
VIII and IX that are qualified as to materiality shall be true and
correct and (ii) that are not qualified as to materiality shall be
true and correct in all material respects, in each case, as of the
Closing Date with the same force and effect as though the same had
been made on and as of the Closing Date, except for those given as
of a particular date, which shall be true and correct in all
material respects as of such date, and except for changes therein
permitted or contemplated hereby.
(b) Covenants. The Seller and the Companies shall have performed and
complied in all material respects with each of the covenants and
provisions in this Agreement required herein to be performed or
complied with by them between the date hereof and the Closing
Date.
(c) Merger and Acquisition and Anti Trust Acts. The waiting period
(and any extension thereof) under any merger and acquisitions and
anti trust Act shall have expired or been terminated and the
parties shall have received all other required authorizations,
consents and approvals of government and governmental agencies.
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(d) Required Consents. Any Company shall have received all necessary
consents for the transfer of the Material Leases in form
reasonably satisfactory to the Purchaser.
(e) Required Deliveries. The Seller shall have made all deliveries and
taken all actions required by Section 7.02 (a).
(f) No Proceeding or Litigation. No Action shall have been commenced
or threatened by or before any Governmental Authority against the
Seller, the Company or the Purchaser, seeking to restrain or
materially and adversely alter the transactions contemplated
hereby which the Purchaser believes, in its reasonable discretion,
is likely to render it impossible or unlawful to consummate the
transactions contemplated by this Agreement or which could have a
Material Adverse Effect or otherwise render inadvisable, in the
Purchaser's reasonable discretion, the consummation of the
transactions contemplated by this Agreement.
(g) Audited Balances. The Purchaser or its parent company shall have
received audited Financial Statements for the Business as of the
year ended December 31, 1999 from the Seller or SLS, Inc.
(h) No Material Adverse Effect. As of the Closing Date, no event or
circumstance shall have occurred with respect to any Company, any
Subsidiary which would constitute a Material Adverse Effect, and
not any Company, nor Subsidiary shall have suffered any material
loss or damages to any of its properties or assets whether or not
covered by insurance, which change, loss or damage materially
affects or impairs the ability of any Company or any Subsidiary to
conduct its business.
(i) Intercompany Transfers. The Seller and the Companies shall have
provided the Purchaser with true, complete and correct copies of
all agreements, documents and instruments relating to the transfer
of the Assets and Assumed Liabilities (but none of the Excluded
Liabilities) of the Business to the Company, all of which shall be
in form and substance satisfactory to the Purchaser.
(j) Works Council. The Purchaser has received approval of the Works
Council, if any.
(k) U.S. Closing. Simultaneously with the Closing hereunder, the
closing of the Stock Purchase Agreement shall occur.
Section 13.02 CONDITIONS PRECEDENT TO SELLER'S AND COMPANY'S OBLIGATION
The obligations of the Seller and the Company to consummate the transactions
contemplated hereby are subject to the satisfaction, on or prior to the Closing
Date, of the following conditions, any of which may be waived by the Seller or
the Company in writing:
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(a) Representations and Warranties. Each of the representations and
warranties of the Purchaser contained in Article X hereof shall be
true and correct in all material respects as of the Closing Date
with the same force and effect as though the same had been made on
and as of the Closing Date, except for those given as of a
particular date, which shall be true and correct in all material
respects as of such date, and except for changes therein permitted
or contemplated hereby.
(b) Covenants. The Purchaser shall have performed and complied in all
material respects with each of the covenants and provisions in
this Agreement required herein to be performed or complied with by
the Purchaser between the date hereof and the Closing Date.
(c) Merger and Acquisition- and Anti Trust Acts. The waiting period
(and any extension thereof) under any merger and acquisitions- and
anti trust Act shall have expired or been terminated and the
parties shall have received all other required authorizations,
consents and approvals of government and governmental agencies.
(d) Required Deliveries. Purchaser shall have made all deliveries and
taken all actions required by Section 7.02 (b) hereof.
(e) Works Council. Both the Seller and the Companies have received all
necessary approvals of any Works Council.
(f) U.S. Closing. Simultaneously with the Closing hereunder, the
closing of the Stock Purchase Agreement shall occur.
ARTICLE XIV
POST-CLOSING COVENANTS
Section 14.01 GENERAL.
In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each of the parties
hereto will take such further action (including the execution and delivery of
such further instruments and documents and making all of its corporate machinery
available to obtain any required consents, approvals, waivers or ratifications
as may be necessary) as any other party reasonably may request, all at the sole
cost and expense of the requesting party, unless the requesting party is
entitled to indemnification therefor under Article XV.
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SECTION 14.02 PROTECTION OF THE BUSINESS
(a) In partial consideration of the payment of the Purchase Price, as
set forth in Section 6.01, the Seller and the Purchaser agree
that, for a period of five (5) years after the Closing (the
"RESTRICTED PERIOD"), the Seller shall not engage, directly or
indirectly, in any capacity, in any business anywhere in the world
that offers secure computer-based testing services to any entity,
person, company or organization (other than the Company or its
Affiliates) or, without the prior written consent of the
Purchaser, directly or indirectly, own an interest in, manage,
operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as a
partner, shareholder, consultant or otherwise, any Person that
competes with the Purchaser, any Company, any Subsidiary or the
Business in offering secure computer-based testing services;
provided, however, that, for the purposes of this Section 14.02
ownership of securities representing less than five (5) percent of
the outstanding voting power of any competitor shall not be deemed
to be in violation of this Section 14.02 so long as the Person
owning such securities has no other connection or relationship
with such competitor. Nothing in this Section 14.02 will prevent
the Seller or its Affiliates (i) from providing, directly or
indirectly, computer-based tests to persons who are provided
educational services by the Seller or any of its Affiliates so
long as such tests are ancillary to such educational services or
to test its current or prospective employees or (ii) from
conducting or engaging in, directly or indirectly, any business
other than computer-based testing regardless of whether such
business is also conducted or engaged in by the Purchaser, Thomson
or their respective Affiliates. For purposes of this Section
14.02(a), "secure" means any computer-based test requiring
proctoring, with proctoring meaning having individuals physically
present to monitor test taking, remote proctoring to monitor test
taking or any other type of monitoring designed to ensure that the
test takers follow guidelines set for the test being taken.
(b) Seller shall not, and will not permit any of its Affiliates to,
directly or indirectly, solicit the employment of, attempt to
employ, or employ any employee of the Business during the period
commencing on the Closing Date and ending eighteen months
thereafter; provided, however, that the forgoing shall not
prohibit Seller from hiring any former employee of the Business
(i) on any unsolicited basis or (ii) as the direct result of a
general solicitation to the public or general advertising;
provided further, that if at any time during the twelve months
following the Closing the Seller proposes to hire a former
non-clerical employee of the Business whose employment by the
Business terminated voluntarily less than 90 days prior to such
date, prior to hiring such individual the Seller will notify the
Purchaser and give the Purchaser a reasonable opportunity to
attempt to rehire such employee. In addition, the Seller and its
Affiliates will not during such eighteen month period, engage or
employ any person acting as a consultant to the Business on the
Closing Date in a manner that
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would interfere with such consultant's ability to continue to
perform services to the Business as required by the Business.
(c) The Restricted Period shall be extended by the length of any
period during which the Seller is in breach of the terms of this
Section 14.02.
(d) The Seller acknowledges that the covenants of the Seller set forth
in paragraphs (a) through (c) of this Section 14.02 are an
essential element of this Agreement and that, but for the
agreement of the Seller to comply with these covenants, the
Purchaser would not have entered into this Agreement. The Seller
acknowledges that this Section 14.02 constitutes an independent
covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement by the
Purchaser. The Seller has independently consulted with its counsel
and after such consultation agrees that the covenants set forth in
this Section 14.02 are reasonable and proper.
(e) The Seller agrees to contract with the Companies for any
proctored, secure computer-based testing Seller may require in the
future, provided that: (i) the Purchaser gives Seller most favored
nation pricing for the type of testing to be delivered by the
Company, and (ii) the Companies are then able to meet the
specifications for such delivery of the tests.
SECTION 14.03 NON-COMPETITION BY PURCHASER AND GUARANTOR.
During the Restricted Period, the Purchaser and Thomson and their Affiliates
shall not provide in any STC any educational services that compete with any of
the educational services generally provided in Sylvan Learning Centers by the
Seller, its Affiliates, franchisees or other operators of Sylvan Learning
Centers; it being understood that this Section 14.03 is not intended to restrict
the Purchaser or Thomson and their Affiliates from conducting any business
activities in any locations other than STCs.
SECTION 14.04 USE OF INTELLECTUAL PROPERTY
(a) Except as set forth in Section 14.04 of the Disclosure Schedule,
from and after the Closing, the Seller shall not use any of the
owned Intellectual Property.
(b) As soon as possible after the Closing the Seller shall remove the
name Prometric, and cause any of its Companies and Subsidiaries
that use such name in their corporate names to amend its Charter
Documents accordingly, to one not using any trademark, service
▇▇▇▇, trade dress, logo, trade name or corporate name contained in
the Intellectual Property or any trademark, servicemark, trade
dress, logo, trade name, or corporate name similar or related
thereto. As promptly as practicable following the Closing, the
Seller shall remove or obliterate any Intellectual Property from
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letterheads and other materials remaining in its possession or
under its control, and the Seller shall not use or put into use
after the Closing any materials that bear any trademark, service
▇▇▇▇, trade dress, logo, trade name or corporate name contained in
the Intellectual Property.
(c) For a period of twelve months after the Closing, the Purchaser
shall have the right to use the Sylvan name in combination with
the name Prometric or as otherwise used by the Business prior to
the Closing. The Purchaser understands and agrees that it is not
acquiring any interest in the name "Sylvan" or any goodwill
associated therewith. The Purchaser shall in no way represent that
it is affiliated with SLS in the use of the Sylvan name as
provided in this Section 14.04. SLS hereby grants the Purchaser a
non-exclusive, royalty-free license to use the Sylvan name for the
twelve months' period herein provided.
ARTICLE XV
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
SECTION 15.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The parties hereto agree that the representations and warranties, and the
covenants and agreements contained in this Agreement or in any certificate,
document or instrument delivered in connection herewith, shall survive the
execution and delivery of this Agreement, and the Closing hereunder, until the
second anniversary thereof; provided, however, that (a) the representations and
warranties dealing with Tax matters shall survive as provided in Article XII (b)
the representations or warranties dealing with environmental matters shall
survive the Closing until the fifth anniversary of the Closing, (c) the
representations and warranties made in Section 8.01, 8.21, 9.01, 9.02, 9.06,
10.01, 10.02 and 10.07 shall survive in full force and effect indefinitely and
(d) the covenants and agreements made in this Agreement that are to be performed
in whole or in part subsequent to the Closing Date and that do not, by their
terms, expire on a date certain, and Articles XV, XVI and XVII of this Agreement
shall survive in full force and effect indefinitely. If written notice of a
claim has been given prior to the expiration of the applicable representations
and warranties by the Purchaser to the Seller, then the relevant representations
and warranties shall survive as to such claim until the claim has been finally
resolved.
SECTION 15.02 INDEMNIFICATION.
(a) By Seller and SLS, Inc. The Seller and SLS, Inc. shall jointly and
severally indemnify and hold the Purchaser, the Companies, the
Subsidiaries and their Affiliates and Representatives harmless
from and against any and all losses, claims, demands, liabilities,
obligations, damages, deficiencies, assessments, judgments,
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payments, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees, any amounts paid in
investigation, defense or settlement of any of the foregoing and
interest) ("DAMAGES") incurred in connection with, arising out of,
resulting from or incident to, (i) any breach of the
representations and warranties of the Seller or the Subsidiaries
set forth in Articles VIII and XI or on the schedules or
certificates delivered in connection herewith, or (ii) any breach
of any covenant or agreement made by the Seller, the Companies or
the Subsidiaries in this Agreement.
(b) By Purchaser. The Purchaser agrees to indemnify and hold the
Seller and its Affiliates and Representatives harmless from and
against any and all Damages incurred in connection with, arising
out of, resulting from or incident to, (i) any breach of the
representations and warranties of the Purchaser set forth in
Article VII or on the schedules or certificates delivered in
connection herewith, (ii) any breach of any covenant or agreement
made by the Purchaser in this Agreement, or (iii) operation of the
business of the Subsidiaries after the Closing Date.
(c) Damages. The term "DAMAGES" as used in this Section 15.02 is not
limited to matters asserted by third parties against any
indemnified party, but includes Damages incurred or sustained by
any indemnified party in the absence of third party claims.
(d) Limitations on Indemnification. The persons or entities
indemnified pursuant to Section 15.02(a) and Section 10.02(a) of
the Stock Purchase Agreement shall not assert any claim other than
a Third Person claim for indemnification hereunder or under
Section 10.02(d) of the Stock Purchase Agreement unless and until,
and solely to the extent that, the aggregate of all such claims
shall exceed U.S.$ 2,000,000 (the "DEDUCTIBLE"), in which event
such indemnification shall be effective with respect to all
Damages, in excess of the Deductible; provided, however, that this
limitation shall not apply to (i) claims of or relating to fraud
or willful misrepresentation or willful misconduct by any party or
(ii) any breach of the representations contained in Sections 8.01,
9.01 and 9.02 hereof or Sections 3.01, 4.01 and 4.02 of the Stock
Purchase Agreement. In addition to the other limitations of this
Section 15.02 (d), the amount of any indemnification under this
Agreement and the Stock Purchase Agreement will be reduced by any
insurance proceeds paid to the indemnifying party as a result of
its Damages. The indemnifying party will be obligated to submit to
its insurance carrier all coverable claims and pursue such claims
against its insurance carrier in good faith. In addition to the
other limitations described in this Section 15.02(d), it is
expressly understood that the obligations of the Seller to pay any
amounts for indemnification under Section 15.02(a) and Section
10.2 of the Stock Purchase Agreement shall not exceed the
"INDEMNIFICATION LIMIT" (as defined herein); provided, however,
that this limitation shall not apply to (i) claims of or relating
to fraud or willful misrepresentation or willful misconduct by any
party, and (ii) any breach of the representations contained in
Sections 8.01, 9.01 and 9.02 hereof and Sections 3.01, 4.01 and
4.02 of the Stock Purchase Agreement. For purposes of
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this Section 15.02 (d), the "INDEMNIFICATION LIMIT" shall be 50%
of the Purchase Price hereunder plus 50% of the Purchase Price
under the Stock Purchase Agreement. No person shall be entitled to
indemnification under this Section 15.02 if and to the extent that
such person's claim for indemnification is directly or indirectly
related to a breach by such person of any representation,
warranty, covenant or other agreement set forth in this Agreement.
(e) Defense of Claims; Third Person Claims.
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(i) If a claim for Damages (a "CLAIM") is to be made by a party
entitled to indemnification hereunder against the
indemnifying party, the party claiming such indemnification
shall give written notice (a "CLAIM NOTICE") to the
indemnifying party as soon as practicable after the party
entitled to indemnification becomes aware of any fact,
condition or event which may give rise to Damages for which
indemnification may be sought under this Section 15.02. Such
Claim Notice shall specify the nature and amount of the Claim
asserted, if actually known to the party entitled to
indemnification hereunder. If any lawsuit or enforcement
action is filed against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to
the indemnifying party as promptly as practicable (and in any
event within 15 days after the service of the citation or
summons). Subject to the limitations of this Section 15.02,
the failure of any indemnified party to give timely notice
hereunder shall not affect rights to indemnification
hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such
notice, if the indemnifying party shall acknowledge in
writing to the indemnified party that the indemnifying party
shall be obligated under the terms of its indemnity hereunder
in connection with such lawsuit or action, then the
indemnifying party shall be entitled, if it so elects at its
own cost and expense, (A) to take control of the defense and
investigation of such lawsuit or action, (B) to employ and
engage attorneys of its own choice, who shall be reasonably
satisfactory to the indemnified party, to handle and defend
the same unless the named parties to such action or
proceeding include both the indemnifying party and the
indemnified party and the indemnified party has been advised
in writing by counsel that there may be one or more legal
defenses available to such indemnified party that are
different from or additional to those available to the
indemnifying party, in which event the indemnified party
shall be entitled, at the indemnifying party's cost and
expense, to separate counsel of its own choosing, and (C) to
compromise or settle such claim, which compromise or
settlement shall be made only with the written consent of the
indemnified party, such consent not to be unreasonably
withheld or delayed; provided, however, that any such
compromise or settlement shall give each Indemnified Party a
full, complete and unconditional release of any and all
liability by all relevant parties relating thereto. If the
indemnifying party fails to assume the defense of such claim
within thirty (30) calendar days after receipt of the Claim
Notice, the indemnified party against which such claim has
been asserted will (upon
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delivering notice to such effect to the indemnifying party)
have the right to undertake, at the indemnifying party's cost
and expense, the defense, compromise or settlement of such
claim on behalf of and for the account and risk of the
indemnifying party; provided, however, that such Claim shall
not be compromised or settled without the written consent of
the indemnifying party, which consent shall not be
unreasonably withheld or delayed. In the event the
indemnified party assumes the defense of the claim, the
indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or
settlement. The indemnifying party shall be liable for any
settlement of any action effected pursuant to and in
accordance with and subject to the limitations of this
Section 15.02 and for any final judgment (subject to any
right of appeal).
(ii) In the event that any action, suit, proceeding or
investigation relating hereto or to the transactions
contemplated by this Agreement is commenced, the parties
hereto agree to reasonably cooperate to defend against and
respond thereto and make available to each other such
personnel, witnesses, books, records, documents or other
information within its control that are reasonably necessary
or appropriate for such defense.
(iii)Promptly after any party hereto (the "INDEMNIFIED PARTY") has
received notice of or has Knowledge of any claim by a person
not a party to this Agreement ("THIRD PERSON"), of the
commencement of any action or proceeding by a Third Person,
the Indemnified Party shall, as a condition precedent to a
claim with respect thereto being made against any party
obligated to provide indemnification pursuant to this Section
15.02 (the "INDEMNIFYING PARTY"), give the Indemnifying Party
written notice of such claim or the commencement of such
action or proceeding as soon as practicable. Such notice
shall state the nature and the basis of such claim and a
reasonable estimate of the amount thereof. Subject to the
limitations of this Section 15.02, the failure of any
Indemnified Party to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the
extent that the Indemnifying Party demonstrates actual damage
caused by such failure. The Indemnifying Party shall have the
right to defend and settle, at its own expense and by its own
counsel who shall be reasonably satisfactory to the
Indemnified Party, any such matter so long as the
Indemnifying Party pursues the same in good faith and
diligently, provided that the Indemnifying Party shall not
settle any proceeding without the written consent of the
Indemnified Party, such consent not to be unreasonably
withheld or delayed; and provided, further, that any such
compromise or settlement shall give each Indemnified Party a
full, complete and unconditional release of any and all
liability by all relevant parties relating thereto. If the
Indemnifying Party undertakes to defend or settle, it shall
promptly notify the Indemnified Party of its intention to do
so, and the Indemnified Party shall reasonably cooperate, at
the
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Indemnifying Party's expense, with the Indemnifying Party and
its counsel in the defense thereof and in any settlement
thereof. If the Indemnifying Party desires to accept a final
and complete settlement of any such Third Person claim that
gives each Indemnified Party a full, complete and
unconditional release of any and all liability by all
relevant parties relating thereto and the Indemnified Party
refuses to consent to such settlement, then the Indemnifying
Party's liability under this Section with respect to such
Third Person claim shall be limited to the amount so offered
in settlement to said Third Person plus all indemnifiable
costs and expenses incurred to date, the Indemnifying Party
shall be relieved of its duty to defend and shall tender the
Third Person claim back to the Indemnified Party, who shall
thereafter, at its own expense, be responsible for the
defense and negotiation of such Third Person claim. If the
Indemnifying Party does not undertake to defend such matter
to which the Indemnified Party is entitled to indemnification
hereunder, or fails diligently to pursue such defense, the
Indemnified Party may undertake such defense through counsel
of its choice, at the cost and expense of the Indemnifying
Party, and the Indemnified Party may settle such matter, and
the Indemnifying Party shall reimburse the Indemnified Party
for the amount paid in such settlement and any other
liabilities or expenses incurred by the Indemnified Party in
connection therewith, provided, however, that under no
circumstances shall the Indemnified Party settle any Third
Person claim without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or
delayed.
(f) Special Indemnification Regarding Excluded Liabilities. The Seller
shall indemnify and hold harmless the Purchaser, the Company and
their Affiliates and Representatives from and against any and all
Excluded Liabilities. Notwithstanding any other provision
contained herein, any amount paid by the Seller pursuant to this
Section 15.02 (f) shall not be subject to the Deductible or
includible in the Indemnification Limit.
(g) Exclusive Remedy. Except as provided in paragraph (i) below, the
rights of indemnification provided to the Purchaser and the Seller
in this Section 15.02 are intended to be the sole remedies of such
parties for any claim by either the Purchaser against the Seller
or by the Seller against the Purchaser, and the parties intend, to
the maximum possible extent, to preclude any other claims, on
whatever cause of action predicated.
(h) Tax Indemnification. Anything in this Article XV to the contrary
notwithstanding, the rights and obligations of the parties with
respect to indemnification for any and all Tax matters shall be
governed by Article XII.
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ARTICLE XVI
FEES AND EXPENSES; INJUNCTIVE RELIEF
SECTION 16.01 FEES AND EXPENSES.
Except as set forth in Section 15.02, all fees, including Broker Fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, whether
or not such transactions are consummated.
SECTION 16.02 INJUNCTIVE RELIEF.
Each party hereto acknowledges that the other parties will be irreparably harmed
and that there will be no adequate remedy at law for any violation by any of
them of any of the covenants or agreements contained in this Agreement,
including, without limitation, the noncompetition agreement contained in Section
14.02 and the indemnities contained in Article XV. It is, accordingly, agreed
that, in addition to any other remedies which may be available upon the breach
of, or to prevent a breach of, any such covenants or agreements, each party
hereto shall have the right to obtain injunctive relief to restrain a breach or
threatened breach of, or otherwise to obtain specific performance of, the other
parties', covenants and agreements contained in this Agreement, in any case
without the necessity of posting a bond or other security.
ARTICLE XVII
TERMINATION
SECTION 17.01 TERMINATION.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated:
(a) At any time on or prior to the Closing Date, by the mutual consent
in writing of the Seller and the Purchaser.
(b) By either the Seller or the Purchaser, if the Closing shall not
have occurred prior to June 30, 2000 unless (i) the parties have
not then received any approvals under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (as
defined in the Stock Purchase Agreement) or any local merger and
acquisition act or (ii) there is then pending any Action described
in Section 13.01(f), in either which case the applicable date
under this Section 17.01 (b) shall be extended to September 30,
2000; provided, however, that the right to terminate this
Agreement under this Section 17.01(b) shall not be available to
any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in,
the failure of the Closing to occur prior to such date.
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(c) The Purchaser may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing Date if (i)
the Seller has breached any representation or warranty or covenant
contained in this Agreement, (ii) such breach, individually or in
the aggregate, has had, or is reasonably likely to have a Material
Adverse Effect on the Company or the Division or is reasonably
likely to prevent or to materially burden or materially impair the
ability of the Purchaser to consummate the transactions
contemplated by this Agreement, or if there has been any failure
on the part of the Seller Company to comply in all material
respects with its obligations hereunder, and (iii) the Purchaser
has notified the Seller of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach.
(d) The Seller may terminate this Agreement by giving written notice
to the Purchaser at any time prior to the Closing Date if (i) the
Purchaser has breached any representation, warranty or covenant
contained in this Agreement, (ii) such breach, individually or in
the aggregate, has had, or is reasonably likely to have, a
Material Adverse Effect on the Purchaser or is reasonably likely
to prevent or to materially burden or materially impair the
ability of the Purchaser to consummate the transactions
contemplated by this Agreement, or if there has been any failure
on the part of the Purchaser to comply in all material respects
with their obligations hereunder, and (iii) the Seller has
notified the Purchaser of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach.
SECTION 17.02 CONSEQUENCES OF TERMINATION
In the event that this Agreement shall be terminated in accordance with this
Article XVII (a) each party shall redeliver all documents, work papers and other
material, and copies thereof, of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same (including, but not limited to, all information
that would be considered "CONFIDENTIAL INFORMATION" under the Letter Agreement
concerning confidentiality by and between the Purchaser and the Seller dated
October 1, 1999, and (b) all further obligations of the parties under this
Agreement shall terminate without further liability of any party to any other
party (except that each party shall remain liable for any willful or intentional
breach of any representation, warranty, covenant or agreement contained herein
or for any breach of the representations contained in Sections 8.01, 9.01 and
9.02 hereof, as to which, in each case, all remedies, including the availability
of specific performance or other injunctive relief, shall remain available);
provided, however, that in the event this Agreement is terminated for any reason
whatsoever, the confidentiality provisions contained in Section 18.01 below and
the confidentiality, non-solicitation and standstill provisions contained in the
Letter Agreement, which by their terms are applicable (including but not limited
to the provision regarding confidentiality), shall continue in full force and
effect as provided therein and shall survive such termination.
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ARTICLE XVIII
MISCELLANEOUS
SECTION 18.01 LETTER AGREEMENT; PRESS RELEASES
a) As amended as of the date hereof, all terms of the Letter Agreement
shall survive both execution of this Agreement and any future
termination of this Agreement. Paragraphs 7(a) and 7(b) of the Letter
Agreement shall be, and hereby are, amended so that the references in
such Paragraphs to "one year" shall mean one year from the date of
Closing under this Agreement.
(b) Both prior to and following Closing, neither the Purchaser nor the
Seller shall make any press release or public announcement in
connection with the transactions contemplated hereby without the prior
written consent of the other parties or, if required by law, without
prior consultation with the other parties.
SECTION 18.02 NO RELIANCE ON OTHER INFORMATION.
Except for the representations and warranties (including the information
contained on the schedules hereto) contained in this Agreement, none of the
parties hereto nor any Representative or Affiliate or other person acting for
any of them makes any other representation or warranty, express or implied.
SECTION 18.03 NOTICES
Any notices or other communications required or permitted hereunder shall be
sufficiently given if in writing and personally delivered or sent by pre-paid
first class mail, overnight courier or facsimile, addressed as follows or to
such other address as the parties shall have given notice of pursuant hereto:
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In the case of the Purchaser:
▇▇▇▇ Street Holdings ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy:
Attention:
With a copy to:
C.O. The Thomson Corporation
Metro Center at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to:
With a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
In the case of the Seller or the Subsidiaries
Sylvan Learning Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: B. ▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
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With a copy to:
Holland & Van Gijzen
Attention: Jan Meijerman, Esq.
Marten ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
FAX: ▇▇-▇▇-▇▇▇ 26 12
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esquire
Fax: ▇▇▇-▇▇▇-▇▇▇▇
All such notices an communications shall be deemed to have been duly given: when
personally delivered; three Business Days after being deposited in the mail, as
aforesaid; next day, if by overnight courier with guaranteed delivery; and when
receipt is acknowledged, if transmitted by facsimile.
SECTION 18.04 ENTIRE AGREEMENT; AMENDMENT; WAIVER
This Agreement together with all exhibits and schedules hereto (including the
Disclosure Schedule as updated pursuant to section 11.06 hereof) represent the
entire understanding and agreement among the parties hereto with respect to the
subject matter hereof and supersedes all prior understandings and agreements,
whether written or oral, except that the provisions contained in the Letter
Agreement which by their terms are applicable (including but not limited to the
provisions regarding confidentiality) shall continue in full force and effect as
provided therein, and can be amended, supplemented or changed, and any provision
hereof can be waived, only by written instrument making specific reference to
this Agreement signed by the party against whom enforcement of any such
amendment, supplement, modification or waiver is sought. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
SECTION 18.05 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement and all rights and obligations hereunder may not be assigned
or transferred without the prior written consent of the
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other parties hereto, except that the Purchaser may assign its rights, but not
its obligations, hereunder to a wholly-owned subsidiary.
SECTION 18.06 SEVERABILITY.
In case any provision of this Agreement shall be invalid, illegal or
unenforceable, it shall, to the extent possible, be modified in such manner as
to be valid, legal and enforceable but so as to most nearly retain the intent of
the parties, and if such modification is not possible, such provision shall be
severed from this Agreement, and in either case the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
SECTION 18.07 CONSTRUCTION.
The parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any provision of this Agreement.
SECTION 18.08 GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with the laws of
the Netherlands. Each of the parties hereto irrevocably consents to the service
of any process, pleading, notices or other papers by the mailing of copies
thereof by registered, certified or first class mail, postage prepaid, to such
party at such party's address set forth herein, or by any other method provided
or permitted under the laws of the Netherlands. Each party irrevocably and
unconditionally agrees and consents that any suit, action or other legal
proceeding arising out of or related to this Agreement shall be brought and
heard in the competent court in the Netherlands, and each party irrevocably
consents to personal jurisdiction in such court. To the extent that the
Purchaser has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the Purchaser hereby irrevocably waives such
immunity in respect of their obligations pursuant to this Agreement.
SECTION 18.09 HEADINGS
The headings contained in this Agreement are for convenience of reference only
and shall in no way be held or deemed to define, limit, describe, explain,
modify, amplify or add to the interpretation, construction or meaning of any
provision or the scope or intent of this Agreement, or in any way effect this
Agreement.
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SECTION 18.10 COUNTERPARTS
This Agreement may be signed in two or more counterparts, all of which, taken
together, shall be deemed to constitute one original Agreement.
SECTION 18.11 NO THIRD-PARTY BENEFICIARIES.
This Agreement shall not confer any rights or remedies upon any person other
than the Seller, the Companies and the Purchaser and their respective successors
and permitted assigns.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the date first above written.
SYLVAN I B.V.
By: /s/ B. ▇▇▇ ▇▇▇▇▇
--------------------------------
Name: B. ▇▇▇ ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
▇▇▇▇ STREET HOLDINGS B.V.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Attorney-in-Fact
for purposes of Sections 12.01 and 15.02 only
SYLVAN LEARNING SYSTEMS, INC.
By: /s/ B. ▇▇▇ ▇▇▇▇▇
--------------------------------
Name: B. ▇▇▇ ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
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