<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 19, 1996
DeVRY INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-12751 36-3150143
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
One Tower Lane
Oakbrook Terrace, Illinois 60181
(Address of principal executive offices) (Zip Code)
(708) 571-7700
(Registrant's telephone number, including area code)
Exhibit Index located on Page 6 Total Number of Pages is 63
<PAGE>2
DEVRY INC.
FORM 8-K INDEX
Page No.
--------
ITEM 2. Acquisition of Assets
Description of acquisition of substantially all of
the assets of the Becker CPA Review Business. 3
ITEM 7. Financial Statements and Exhibits
Financial Statements Index 4
SIGNATURES 5
EXHIBIT INDEX 6
EXHIBITS 7 - 63
<PAGE>3
ITEM 2 - ACQUISITION OF ASSETS
- ------------------------------
On June 19, 1996, the Company acquired the Becker CPA Review business for
cash. The purchase price of $18,421,000 for substantially all of the tangible
operating assets and trademarks related to the business is subject to final
adjustment upon completion of the financial audit for their fiscal 1996 and
the determination of the Book Value Adjustment as specified in the purchase
agreement. These assets were acquired from Newton D. Becker, the Newton D. and
Rochelle F. Becker Foundation, and other individuals. The assets were acquired
by Becker CPA Review, Inc., which is a wholly owned newly formed subsidiary
of DeVry Inc. Also purchased were certain copyrights, other intellectual
property and publicity rights for a price of $17,935,000. These assets were
acquired from Newton D. Becker and the Newton D. and Rochelle F. Becker
Foundation by the Becker/DeVry Educational Development Corp., which is a
wholly owned newly formed subsidiary of DeVry Inc. Funding for the purchases
was obtained under the Company's recently amended revolving credit line from a
group of banks.
The description of the purchase contained herein is qualified in its entirety by
reference to the Agreement Regarding Purchase of Partnership Interests and the
Intellectual Property Purchase Agreement which are attached hereto as Exhibit 2
and incorporated herein by reference.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
- -------------------------------------------
The following documents are filed as part of this report:
(a) Financial Statements of Business Acquired
The required audited financial statements for the Becker CPA Review
Business are not yet available. These financial statements will be filed
with the Securities and Exchange Commission (SEC) as soon as practicable
on an amended Form 8-K as required.
(b) Pro Forma Financial Information
The required pro forma combined financial statements are not yet available
These pro forma combined financial statements will be filed with the SEC
as soon as practicable on an amended Form 8-K as required.
(c) Exhibits
A complete listing of required exhibits is included on page 6 of this
report. The schedules and other attachments to the required exhibits have
been omitted from this filing.
<PAGE>5
Signatures
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: July 2, 1996 /s/Ronald L. Taylor
Ronald L. Taylor
President and Chief Operating Officer
DATE: July 2, 1996 /s/Norman M. Levine
Norman M. Levine
Vice President Finance, Controller,
Chief Financial and Accounting Officer
<PAGE>6
EXHIBIT INDEX
Sequentially
Numbered
Exhibit # Item Page
- --------- --------------------------- ------------
2 Plan of Acquisition
Agreement Regarding Purchase
of Partnership Interests 7 - 47
Intellectual Property Purchase
Agreement 48 - 53
Guarantee 54 - 61
99 Press Release 62 - 63
<PAGE>7
AGREEMENT REGARDING PURCHASE OF
PARTNERSHIP INTERESTS
This AGREEMENT REGARDING PURCHASE OF PARTNERSHIP INTERESTS (the
"Agreement") is made and entered into as of this 19th day of June, 1996, by
and between Newton D. Becker ("Becker"), The Becker CPA Review Course of
California, a California corporation ("Becker Corporation"), The Newton D.
and Rochelle F. Becker Foundation, a California nonprofit public benefit
corporation ("Becker Foundation"), David E. Becker, Laura Ford Mintzer and
Daniel J. Becker, (each of the above a "Seller" and collectively, "Sellers"),
The Becker CPA Review Course Ltd., a California limited partnership ("Becker
Partnership"), and DeVRY CPA Review, Inc. ("Buyer").
Buyer is a newly formed, wholly owned subsidiary of DeVRY Inc., a Delaware
corporation ("DeVRY"). Buyer wishes to purchase the Partnership Interests
owned by Sellers, and Sellers are willing to sell their Partnership Interests
on the terms and conditions set forth herein. IP Buyer is entering into an
agreement of even date herewith to purchase from Becker and Becker Foundation
certain intellectual property related to the Business. DeVRY is guaranteeing
the obligations of Buyer hereunder pursuant to the Guarantee.
NOW, THEREFORE, based on the above premises and in consideration of the
mutual covenants and agreements contained herein, the parties agree as follows
(certain definitions of capitalized terms are set forth in Schedule 0):
1. Agreement to Purchase and Sell.
1.1 Acquisition. On the terms and subject to the conditions of this
Agreement, Sellers agree to sell to Buyer, and Buyer agrees to purchase from
Sellers, on the Closing Date, the Partnership Interests set forth on
Schedule 1.1 hereto, in exchange for the payment of the Purchase Price.
1.2 Closing. The closing (the "Closing") of the Transactions will take
place at the offices of Irell & Manella LLP, 333 South Hope Street, Suite
3300, Los Angeles, California 90071, on June 19, 1996, or at such other date,
time and place as may be mutually agreed upon in writing by the parties (the
"Closing Date").
1.3 Transfer of Partnership Interests. At the Closing, each Seller will
deliver and transfer to Buyer all of Seller's right, title and interests in
the Partnership Interest set forth next to Seller's name on Schedule 1.1,
free and clear of any Liens, adverse claims or security interests. As a
result of such transfers, the Partnership Intellectual Property (including
without limitation the Software and the Trademarks and related goodwill)
owned by Becker Partnership will be conveyed to Buyer.
1.4 Determination of Tentative Purchase Price. Prior to the Closing,
Becker Partnership shall cause to be prepared and delivered to Buyer an
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estimate of the Net Book Value, setting forth Becker Partnership's reasonable
and good faith determination of the Tentative Purchase Price, which the
parties believe in good faith will be as set forth on Schedule 1.4. Becker
Partnership will discuss any objections made by Buyer to the Tentative
Purchase Price, and shall make any reasonable modifications thereto. The
"Tentative Purchase Price" payable at Closing shall be $18,685,000 minus
the Book Value Adjustment Amount on Schedule 1.4.
1.5 Payment of Tentative Purchase Price. At Closing, Buyer will pay to
Sellers an amount equal to the Tentative Purchase Price. All payments to
Sellers will be made by federal reserve wire transfer to a bank account
designated in writing by Sellers. Sellers hereby release Buyer from any
responsibility for, or liability associated with, the allocation of the
Tentative Purchase Price or Purchase Price among the Sellers.
1.6 Assumption and Payment of Obligations. At and after the Closing,
Buyer will perform, pay or otherwise satisfy in accordance with their terms
as and when due, the Assumed Obligations of Becker Partnership other than
Excluded Obligations. Buyer agrees to indemnify and hold harmless Sellers
from and against any Losses incurred by Sellers or any member of the Becker
Group at any time after the Closing with respect to claims based on the
Assumed Obligations, but not the Excluded Obligations. Each member of the
Becker Group agrees to indemnify and hold harmless Buyer from and against
any Losses incurred by Buyer at any time after the Closing with respect to
claims based on the Excluded Obligations. However, this Section 1.6 shall
not be construed to expand or increase the rights or remedies of any third
party against Buyer or Sellers with respect to such obligations.
1.7 Allocation of Purchase Price. Schedule 1.7 hereto sets forth an
allocation of the Purchase Price among the Acquired Assets, the Assumed
Obligations and the Intellectual Property, which is based on an appraisal
conducted by Price Waterhouse LLP on behalf of Buyer, and Buyers and Sellers
shall file, and Buyer shall cause IP Buyer to file, all federal and state
income tax returns (including without limitation Internal Revenue Service
Form 8594) consistent with such allocation.
1.8 Sales and Use Tax. Buyer and Sellers shall cooperate, and Buyer
shall cause IP Buyer to cooperate with Sellers, in preparing and filing
use and sales tax returns relating to, and Sellers shall pay any sales or
use tax due with regard to, the Transactions.
1.9 Net Book Value. No later than July 15, 1996, Becker Corporation, on
behalf of Sellers, with the full cooperation of Buyer's employees and full
access to the books and records of Becker Partnership, shall cause to be
prepared and delivered to Buyer a determination of the Net Book Value, by
Price Waterhouse LLP based upon the audited financial statements of Becker
Corporation and Becker Partnership as of April 30, 1996 as prepared by
Price Waterhouse LLP. Buyer shall have up to 90 days thereafter to review
such determination on its behalf to ensure that it has been prepared
consistent with the definition of Net Book Value set forth in Schedule 0
hereof. If Buyer believes that any material aspect of such determination
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has not been prepared appropriately Buyer shall, not later than the end of
such 90-day period, contact Becker Corporation, acting on behalf, and at
the expense, of Sellers to attempt to resolve the matter. If they are
unable to resolve the matter within 45 days from the date that Becker
Corporation is first contacted, Becker Corporation and Buyer shall request
an accounting firm jointly designated by Buyer and Becker Corporation to
determine the matter subject to disagreement, and the determination so made
shall be final and binding on all parties. The fees of the designated
accounting firm shall be borne equally by each party. Newton D. Becker
shall, on behalf of Sellers, promptly pay Buyer the amount (if any) by
which the Tentative Purchase Price exceeds the Purchase Price (as defined
below) or Buyer shall promptly pay to Sellers the amount (if any) by which
the Purchase Price exceeds the Tentative Purchase Price. The "Purchase
Price" is equal to $18,685,000 plus (i) if the Net Book Value as determined
pursuant to this Section 1.9 exceeds $1,275,000, the amount by which such Net
Book Value exceeds $1,250,000, minus (ii) if the Net Book Value is less
than $1,225,000 the amount by which such Net Book Value is less than
$1,250,000.
2. Representation and Warranties of Sellers.
As an inducement for Buyer to enter into this Agreement, each Seller
severally represents and warrants to Buyer that each of the following
statements is true and correct as of the date hereof.
2.1 Ownership. Such Seller is the owner, free and clear of any and all
Liens, of the Partnership Interest described in Schedule 1.1 hereto, and the
Partnership Interest described in Schedule 1.1 hereto constitute the entire
Partnership Interest beneficially owned or held by such Seller and no other
person or entity has any Lien, right, title or interest in or to such
Partnership Interest.
2.2 Agreements Authorized. Such Seller has full power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement, the Related Agreements to which such Seller is a party and to
consummate the Transactions. The execution and delivery of this Agreement
and the Related Agreements by such Seller, the performance by such Seller of
its obligations hereunder and thereunder and the consummation of the
Transactions have been duly and validly authorized by all necessary action
on the part of such Seller. This Agreement and the Related Agreements
to which such Seller is a party have each been duly executed and delivered
by such Seller and constitute the legal, valid and binding agreement of such
Seller, enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforceability of creditors' rights generally, general
equitable principles and the discretion of courts in granting equitable
remedies.
2.3 Absence of Restriction and Conflicts. The execution, delivery and
performance of this Agreement and the Related Agreements to which such
Seller is a party, the consummation of the transactions contemplated by this
Agreement and the Related Agreements and the fulfillment of and compliance
with the terms and conditions of this Agreement and the Related Agreements,
do not and will not, with the passing of time or the giving of notice or
<PAGE>10
both, violate or conflict with, constitute a breach of or default under,
result in the loss of any benefit under, or permit the acceleration of any
obligation under, (i) any term or provision of the trust agreement,
partnership agreement or other constituent documentation of such Seller that
is not a natural person, (ii) any Order to which such Seller is a party or
by which such Seller, or any of its properties is bound, or (iii) any
statute, law, regulation or rule of law applicable to such Seller. Except
as set forth on Schedule 2.3, no consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency or
public or regulatory unit, agency, body or authority with respect to such
Seller is required in connection with the execution, delivery or performance
of this Agreement, the Related Agreements or the consummation of the
Transactions.
2.4 Brokers. Such Seller has not employed any broker or finder in
connection with the transactions contemplated hereby, other than M. Kane &
Company, Inc., whose fees and expenses are the sole obligation of Sellers,
and neither Buyer nor any Affiliate of Buyer has or shall have any
liability or otherwise suffer or incur any loss as a result of or in
connection with any brokerage or finder's fee or other commission of any
Person retained by such Seller in connection with any of the transactions
contemplated by this Agreement.
3. Representations and Warranties of Becker Group.
As an inducement for Buyer to enter into this Agreement, each member of
the Becker Group jointly and severally represents and warrants that, except
as set forth in the Schedules hereto, each of the following statements is
true and correct as of the date hereof:
3.1 Existence and Rights. Becker Corporation (i) is a corporation duly
organized and validly existing in good standing under the laws of the State
of California without limit as to the duration of its existence, (ii) has
the corporate power and adequate authority, rights and franchises to own its
properties and to carry on its business as now conducted and to make and
carry out the Transactions, and (iii) is a corporation duly organized and
validly existing in good standing as a foreign corporation authorized to do
business in each jurisdiction where the nature of the business transacted by
it requires such licensing or qualification, except, with respect to part
(iii) hereof, where the failure to be so organized, existing or authorized
is not reasonably expected to have a Material Adverse Effect.
3.2 Existence and Rights. Becker Partnership (i) is a limited
partnership duly organized and validly existing in good standing under the
laws of the State of California, (ii) has the power and adequate authority,
rights and franchises to own its properties and to carry on its business as
now conducted, and (iii) is duly organized and validly existing in good
standing as a foreign partnership authorized to do business in each
jurisdiction where the nature of the business transacted by it requires such
licensing or qualification except, with respect to part (iii) hereof, as set
forth on Schedule 3.2 or where the failure to be so organized, existing or
authorized is not reasonably expected to have a Material Adverse Effect.
<PAGE>11
3.3 Subsidiaries. Becker CPA Review, Inc., a Delaware corporation (the
"Subsidiary") (i) is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware without limitation as
to duration of existence, (ii) has the corporate power and adequate
authority, rights and franchises to own its properties and carry on its
business as now conducted and to make and carry out the Transactions, and
(iii) is a corporation duly organized and validly existing in good standing
as a foreign corporation authorized to do business in each jurisdiction
where the nature of the business transacted by it requires such licensing
or qualification except, with respect to part (iii) hereof, where the
failure to be so organized, existing or authorized is not reasonably
expected to have a Material Adverse Effect. The outstanding shares of
capital stock of the Subsidiary are duly authorized, validly issued and
outstanding, fully paid and non-assessable, and at the Closing Date, will be
exclusively owned by Becker Partnership.
3.4 Ownership of Partnership Interests. Becker Corporation has provided
Buyer with a copy of the currently effective agreement of limited partnership
of Becker Partnership. Schedule 1.1 correctly sets forth the name of each
partner in Becker Partnership and the Percentage Interest of each partner
therein and no other Person has a partnership interest in Becker Partnership.
3.5 Due Authorization; No Conflict. Each member of the Becker Group has
full power and authority to enter into this Agreement and to carry out the
Related Agreements and Transactions, and this Agreement and such Related
Agreements each have been duly and validly executed and delivered by them,
and constitute the legal, valid and binding obligation of them, enforceable
in accordance with their respective terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws from time to time in effect which affect creditors' rights
generally, and by legal and equitable limitations on the availability of
specific remedies. The execution, delivery and performance of this
Agreement, the Related Agreements and the Transactions do not, on the date
hereof, (i) violate any Permit or Order which may be applicable to the Becker
Group or to any of the Acquired Assets, the Assumed Obligations or the
Business; (ii) violate any Regulation binding on any of the Becker Group,
any of the Acquired Assets, the Assumed Obligations or the Business; (iii)
violate any provision of the agreement of limited partnership of Becker
Partnership or the articles of incorporation or bylaws of Becker Corporation
or the Subsidiary; or (iv) violate or conflict with, or result in a breach
of, or constitute a default (or an event which, with or without notice or
lapse of time or both, would constitute a default) under, or permit
cancellation of, or result in the creation of any Lien upon the Acquired
Assets under any of the terms, conditions or provisions of any Contract,
Order or Permit to which any of the Becker Group is a party, or by which it
or any of the Acquired Assets or the Assumed Obligations are bound except
for violations, conflicts, defaults or other similar occurrence that are not
reasonably expected to have a Material Adverse Effect.
3.6 Permits; Compliance with Law. Each member of the Becker Group holds
the Permits described on Schedule 3.6, and no other material Permits are
currently necessary for the lawful operation of the Business. Each member
<PAGE>12
of the Becker Group has complied with, and is not in default under or in
violation of, any Permit, Regulation or Order to which the Business,
Acquired Assets and Assumed Obligations are subject, or under which any of
them have rights including state educational licensing, professional
practice and licensing boards, truth-in-lending, consumer protection and
other Regulations, which violation is reasonably expected to have a Material
Adverse Effect.
3.7 Contingencies. Except as disclosed in Schedule 3.7, there are no
proceedings, suits, litigation, arbitration, or hearings pending or, to the
knowledge of any member of the Becker Group, Claims threatened, against or
affecting any member of the Becker Group, the Business, the Acquired Assets
or the Assumed Obligations, or any officers, directors, employees, partners
or the stockholders thereof in their capacity as such, or relating to the
Transactions which, in each case might reasonably be expected to have a
Material Adverse Effect. Except as disclosed herein or in an Exhibit or
Schedule hereto, no member of the Becker Group is subject to any Order
which might reasonably be expected to have a Material Adverse Effect. No
member of the Becker Group is in default with respect to any Order
applicable to it and related to the Business in a manner which is reasonably
be expected to have a Material Adverse Effect.
3.8 Financial Condition. The combined balance sheet of the Becker
Corporation and the Becker Partnership as of April 30, 1995, the related
combined profit and loss statement for the period ended on that date
(collectively, the "Financial Statements"), attached as Schedule 3.8, are
true and correct in all material regards as of the date thereof, and the
Financial Statements fairly present the combined financial condition of
Becker Partnership and Becker Corporation as at the date thereof and the
results of the combined operations of the Becker Partnership and the Becker
Corporation for the period covered thereby, and have been prepared in
accordance with generally accepted accounting principles on a basis
consistently applied during the period, and the Financial Statements,
including the notes thereto, make full and adequate disclosure of, and
provision for, all material obligations and liabilities of the Becker Group
related to the Acquired Assets, the Assumed Obligations and the Business as
of the date thereof, to the extent required by GAAP.
3.9 No Subsequent Changes. Except as a result of the Transactions or as
set forth in Schedule 3.9, since the date of the Financial Statements, there
has not been (i) any material adverse change in the Business, (ii) any
material loss or damage (whether or not covered by insurance) to any of the
Acquired Assets, which materially affects or impairs the ability of any of
the Becker Group to conduct the Business, (iii) any Contract or other
transaction entered into by any of the Becker Group relating to, or otherwise
affecting in any way, the Business or the operation thereof, other than in
the ordinary course of business or where the events involved are not
reasonably expected to have a Material Adverse Effect, (iv) any sale or
transfer of the Acquired Assets, or any cancellation of any debts or claims
of any member of the Becker Group, except in the ordinary course of business
or where the events involved are not reasonably expected to have a Material
Adverse Effect, (v) any changes in the terms of any instruments, accounts,
notes, Contracts, or Assumed Obligations, except in the ordinary course of
business or where the events involved are not reasonably expected to have a
<PAGE>13
Material Adverse Effect, (vi) any changes in the accounting systems,
policies or practices of any member of the Becker Group, (vii) any waiver
by any member of the Becker Group of any rights which have any value, except
in the ordinary course of business or where the events involved are not
reasonably expected to have a Material Adverse Effect, or (viii) any
transactions with any affiliates of any member of the Becker Group, except
in the ordinary course of business or where the events involved are not
reasonably expected to have a Material Adverse Effect. Since April 30, 1996,
except for matters relating to the Transactions, the Business has been
conducted only in the ordinary course and as contemplated by Section 5.2 and
there has not been any material change in the affairs of any member of the
Becker Group or the Business which has not been fully disclosed in writing
to Buyer.
3.10 Title to and Condition of Assets. Each member of the Becker Group
has good title to, is the lawful owner of, and has the full right to sell,
convey, transfer, assign and deliver its Acquired Assets free and clear of
any Lien, except as disclosed on Schedule 3.10 hereto and except for
(i) Liens securing obligations set forth in the Financial Statements,
(ii) Liens securing taxes which are not delinquent or are being contested
in good faith, (iii) Liens arising as a result of purchase or sales orders,
in the ordinary course of business consistent with past practice and
(iv) any defects in title or Liens that are not reasonably expected to have
a Material Adverse Effect. The Becker Corporation has conveyed its Acquired
Assets to the Becker Partnership and Subsidiary by deeds, bill of sale,
certificates of title and instruments of assignment and transfer effective
to vest in the Becker Partnership and Subsidiary, and the Becker Partnership
and Subsidiary will have, good title to all of the Acquired Assets, free
and clear of all Liens other than those disclosed on Schedule 3.10 or
described in parts (i) through (iv) of the first sentence of this
Section 3.10.
3.11 Assets Sufficient for Conduct of Business. The Acquired Assets,
Intellectual Property and Assumed Obligations include sufficient assets and
liabilities necessary for the conduct of the Business as presently conducted
and as presently proposed to be conducted and none of the Excluded Assets or
Excluded Obligations are necessary for such conduct of the Business.
3.12 Real Property Leases. Schedule 3.12 sets forth all material
interests in real property held by members of the Becker Group, including
all leases of real property (the "Real Property Leases") used in connection
with the Business. Except as disclosed on Schedule 3.12, the buildings,
facilities, installations, fixtures and other structures or improvements
subject to the Real Property Leases have been well-maintained and are in
good operating condition and repair (with the exception of normal wear and
tear), free, to the knowledge of the Becker Group, from defects other than
such defects as do not interfere with the continued use thereof in the
conduct of normal operations. The members of the Becker Group have delivered
to Buyer true, correct and complete copies of all written Real Property
Leases.
3.13 Material Contracts. Schedule 3.13 correctly sets forth in all
material respects the existence of all Material Contracts of any member of
the Becker Group now in effect. "Material Contracts" are (a) Contracts
affecting ownership of, title to, or any material interest in real estate;
<PAGE>14
(b) bonuses, incentive compensation, pension, group insurance, employee
welfare plans, retirement, deferred compensation, profit sharing, incentive
compensation, bonus, stock purchase, stock option, welfare, hospitalization
or insurance plan or any vacation pay or severance pay plans or any other
employee benefit arrangement for its officers, employees, consultants or
agents generally whether pursuant to a Contract, together with the most
recent annual report (if any) completed with respect to each such plan or
arrangement; (c) collective bargaining agreements or other Contracts with
any labor unions or other employee representatives or groups of employees;
(d) any Contract or purchase order with any person or entity known by Becker
Corporation to be affiliated with or controlled by (or with power to
control) any officer, director, key employee or stockholder; (e) written
employment Contracts with individual employees extending for a period of
more than six months from the date hereof or providing for earlier
termination only upon the payment of a penalty or the equivalent thereof; (f)
Contracts providing for payments based upon the overall sales, purchases or
profits of any member of the Becker Group; (g) Contracts which involve future
payments, performance of services or delivery of goods and/or materials, to
or by any member of the Becker Group of an aggregate amount or value
reasonably expected to be in excess of $25,000; (h) any commitment or
arrangement pursuant to which any member of the Becker Group has made or will
make loans or advances, or has or will have incurred debts or become a
guarantor or surety or pledged its credit on or otherwise become responsible
with respect to any undertaking of another, including loans to officers,
employees and independent contractors (except for the negotiation or
collection of negotiable instruments in transactions in the ordinary course
of business and employee advances in the ordinary course of business);
(i) any indentures, credit agreements, loan agreements, notes, mortgages,
security agreements, or material leases of personal property and agreements
for financing involving more than $25,000; (j) any Contract involving any
restrictions on the geographical area of operations or scope or type of
business of any member of the Becker Group; (k) all Contracts relating to
franchise arrangements; (l) any power of attorney or agency agreement with
any party pursuant to which such party is granted the authority to act for
or on behalf of any member of the Becker Group; and (m) all other material
contracts not made in the ordinary course of business which are to be
performed at or after the date of this Agreement. Except (i) as disclosed
in this Agreement, the Related Agreements or the Schedules and Exhibits
hereto or (ii) for matters not reasonably expected to have a Material
Adverse Effect, each of the Material Contracts disclosed on Schedule 3.13
(a) has been duly authorized, executed and delivered by the parties thereto,
(b) remains in full force and effect to the extent of its terms, (c) is
binding on the parties thereto in accordance with and to the extent of its
terms and applicable laws and (d) is not subject to, and no member of the
Becker Group has received any written notice threatening or declaring,
termination as a result of any existing uncured breach or default by any
member of the Becker Group or, in the case of any notice, alleged uncured
breach or default by any member of the Becker Group, and to the knowledge
of the Becker Group, no other party is in default thereunder in any material
respect.
3.14 Infringements. Schedule 3.14 is an accurate and complete list of all
of the material Partnership Intellectual Property currently used in the
<PAGE>15
operation of the Business. All material Partnership Intellectual Property
is exclusively owned by Becker Partnership free and clear of all encumbrances
or has been duly licensed for use except as set forth in Schedule 3.14.
Except as set forth on Schedule 3.14, none of the Intellectual Property has
been or is the subject of any pending adverse Claim, or to the knowledge of
the Becker Group, any threatened Claim of infringement except for Claims
which are not reasonably expected to have a Material Adverse Effect. The
use of the Intellectual Property in the operation of the Business does not
infringe any intellectual property rights of another Person, except for
claims which are not reasonably expected to have a Material Adverse Effect,
and the Becker Foundation and the Becker Group have not received any notice
contesting its right to use, or asserting infringement with respect to, any
Intellectual Property now used by it in connection with the Business or the
operation thereof. Except as set forth on Schedule 3.14, the Becker
Foundation and the Becker Group have not granted any license in respect of
any Intellectual Property. Except as set forth in Schedule 3.14, in the
reasonable opinion of the Becker Group: Becker, the Becker Foundation and
the Becker Group own or possess all material rights for the life of the
legal protection available in and to all Intellectual Property necessary to
conduct the Business as presently conducted. No member of the Becker Group
is infringing on any trademark, trade name, copyright or license in the
operations of the Business, and they do not know of any third party who has
asserted any infringement claim, except in each case of matters which are
not reasonably expected to have a Material Adverse Effect.
3.15 Insurance. Each member of the Becker Group has been insured with
respect to risks normally insured against, and in amounts normally carried
by, companies similarly situated and engaged in similar businesses. Each
member of the Becker Group currently has paid up insurance, including, but
not limited to, employee health and accident insurance, and worker's
compensation insurance, as described on Schedule 3.15. Schedule 3.15
contains a list of each insurance policy currently providing coverage for the
assets of each member of the Becker Group or the Business.
3.16 Labor Controversies. To the knowledge of the Becker Group, (i) no
concerted work stoppage or other labor dispute in respect of any member of
the Becker Group is pending or threatened, and (ii) no application for
certification of a collective bargaining agent is pending or threatened.
Each member of the Becker Group is in compliance in all material respects
with all laws relating to the employment and safety of labor, including
provisions relating to wages, hours, benefits and collective bargaining and
the occupational safety and health acts, laws and regulations. No member
of the Becker Group is liable for any arrears (except for the current pay
period and accrued vacation) in wages or any taxes or penalties for failure
to comply with any of the foregoing.
3.17 Commissions. The Sellers and not the members of the Becker Group are
responsible for the fees owed with respect to the Transactions to the person
set forth in Schedule 3.17. Except as set forth in that Schedule, no member
of the Becker Group nor any of its officers, directors, agents or employees
have employed or incurred any liability to any broker, finder or agent for
any brokerage fees, finder's fees, commissions or other similar amounts with
respect to the Transactions, and agrees to hold Buyer harmless from and
<PAGE>16
against Losses incurred by reason of any contrary assertions.
3.18 ERISA. Except as set forth on Schedule 3.18, the Becker Group does
not have any liability with respect to any "employee benefit plan" (as such
term is defined in section 3(3) of ERISA) or any material employee benefit
or fringe benefit arrangement which does not constitute an employee benefit
plan or any employment agreement. No member of the Becker Group has any
liability with respect to a "multiemployer plan" (as defined in section 3(37)
of ERISA). A true and correct copy of each of the plans, arrangements and
agreements listed on Schedule 3.18 (referred to hereinafter as "Employee
Benefit Plans"), and all contracts relating thereto, or to the funding
thereof, each as in effect on the date hereof, has been supplied to the
Buyer. A true and correct copy of the most recent annual report, actuarial
report, accountant's opinion of the plan's financial statements, summary plan
description and Internal Revenue Service determination letter with respect to
each Employee Benefit Plan, to the extent applicable, and a current schedule
of assets (and the fair market value thereof assuming liquidation of any
asset which is not readily tradable) held with respect to any funded Employee
Benefit Plan has been supplied to the Buyer, and there have been no material
changes in the financial condition in the respective plans from that stated
in the annual reports and actuarial reports supplied. As to all Employee
Benefit Plans: (i) each Employee Benefit Plan complies and has been
administered in form and in operation in all material respects with all
applicable requirements of law, and no event has occurred which will or could
cause any such plan to fail to comply with such requirements and no notice
has been issued by any governmental authority questioning or challenging such
compliance; (ii) there have been no "prohibited transactions" (as described
in section 406 of ERISA or section 4975 of the Code) with respect to any
Employee Benefit Plan and none of the Becker Group has engaged in any
prohibited transaction; (iii) there have been no acts or omissions by any
member of the Becker Group which have given rise to or may give rise
to fines, penalties, taxes or related charges under section 502 of ERISA or
Chapters 43, 47 or 68 of the Code for which any member of the Becker Group
may be liable; (iv) none of the payments contemplated by the Employee Benefit
Plans would, in the aggregate, constitute excess parachute payments (as
defined in section 280G of the Code (without regard to subsection (b)(4)
thereof)); (v) there are no actions, suits or claims (other than routine
claims for benefits) pending or threatened involving any Employee Benefit
Plan or the assets thereof and no facts exist which could give rise to
any such actions, suits or claims (other than routine claims for benefits);
(vi) there has been no reportable event (as described in section 4043 of
ERISA with respect to any Employee Benefit Plan that is subject to Title IV
of ERISA and if any such plan were terminated immediately after the Closing,
there would be no unfunded liabilities with respect to the plan, its
participants or beneficiaries or the Pension Benefit Guaranty Corporation
that are not indemnified hereunder by Becker; (vii) no member of the Becker
Group has any liability for providing, under any Employee Benefit Plan or
otherwise, any post-retirement medical or life insurance benefits, other than
statutory liability for providing group health plan continuation coverage
under Part 6 of Title I of ERISA and section 4980B of the Code; and (viii)
there has been no act or omission that would impair the ability of any member
<PAGE>17
of the Becker Group (or any successor thereto) to unilaterally amend or
terminate any Employee Benefit Plan.
3.19 Taxes. (a) All federal, and all material state, local and foreign
Tax returns required to be filed by or with respect to any member of the
Becker Group through the Closing Date have been or will be accurately
prepared in all material respects, and have been or will be duly and timely
filed, and all material Taxes (including Taxes withheld from employees'
salaries and all other withholding Taxes and obligations and all deposits
required to be made by or with respect to any member of the Becker Group with
respect to such withholding Taxes or otherwise), interest, penalties,
assessments and/or deficiencies due with respect to any taxable period or
partial taxable period of any member of the Becker Group (including the
taxable year of any member of the Becker Group beginning on May 1, 1996)
ending on or before the Closing Date have been or will be timely paid, or to
the extent not due and payable as of the Closing Date, adequate provision for
the payment thereof has been or will be made on the financial statements or
the books of account of any member of the Becker Group.
(b) Except as set forth in Schedule 3.19 attached hereto, with respect to
each taxable period of any member of the Becker Group ending prior to the date
hereof either (i) such taxable period has been audited by any Taxing Authority,
and any such audit has been completed without the issuance of any notice of
deficiency or similar notice of additional liability or (ii) the time for
assessing or collecting income tax with respect to each such taxable period has
closed and such taxable period is not subject to review by any Taxing
Authority, or (iii) such taxable period has not been, and is not currently
being, audited.
(c) No member of the Becker Group is obligated to make, and as a result of
any event connected with the transactions contemplated by this Agreement, will
not become obligated to make, any "excess parachute payment" within the meaning
of Section 280G of the Code, determined without regard to subsection (b)(4)
thereof.
3.20 Certain Business Relationships With Sellers. Other than as set forth
on Schedule 3.20, none of the Sellers (including, for purposes of this Section
3.20, Newton D. Becker) or their Affiliates have been involved in any material
business arrangement or relationship with any member of the Becker Group since
April 30, 1996, and none of the Sellers or their family members own any
material property or right, tangible or intangible, which is used in the
business of any member of the Becker Group or has any Contract with any member
of the Becker Group.
3.21 Bank Accounts. Schedule 3.21 sets forth a true, complete and correct
list of each bank, deposit, lockbox or cash collection, management or other
account, of any of the Becker Group in respect of the Business, including the
title and number of the account and the financial or other institution at which
such account is located.
3.22 List of Employees and Independent Contractors. Schedule 3.22 hereto
sets forth a list, which Becker Group reasonably believes is accurate in all
<PAGE>18
material respects as of December 31, 1995, of the employees and contractors of
Becker Group as of December 31, 1995, and their gross compensation for the 1995
calendar year.
3.23 Accuracy of Statements. To the knowledge of the Becker Group, neither
this Agreement, the Related Agreements nor any Schedule thereto to be furnished
by or on behalf of any of the Becker Group to Buyer in connection with this
Agreement or the Related Agreements will contain any untrue statement of a
material fact regarding any of the Becker Group, the Acquired Assets or the
Business or omits or will omit to state a material fact necessary to make the
statements regarding any of the Becker Group, the Acquired Assets or the
Business contained herein or therein, in light of the circumstances in which
they are made, not misleading.
3.24 No Other Assets Used in Business. Except for certain machinery and
office equipment located in Becker's home office, the Acquired Assets, Assumed
Obligations and the Intellectual Property, there are no material assets,
contracts, rights, interests or intangibles related to or used in connection
with the Business, whether owned by Becker or otherwise. Following the
Closing, except for certain machinery and office equipment located in Becker's
home office, Becker will not have any interest in any material assets,
contracts, rights, interests or intangibles related to or used in connection
with the Business.
None of the representations and warranties made by the Becker Group in this
Article 3 shall be considered to be made by Becker Foundation either in its own
name or as the sole general partner of the Becker Partnership.
4. Representations and Warranties of Buyer.
As an inducement for the Sellers to enter into this Agreement, Buyer hereby
represents and warrants that each of the following statements is true and
correct as of the date hereof:
4.1 Existence and Rights. Each of Buyer and IP Buyer (i) is a corporation
duly organized and validly existing in good standing under the laws of
Delaware, without limit as to the duration of existence, and (ii) has the
corporate power and adequate authority, rights and franchises to own its
properties and to carry on its business as now conducted and to make and carry
out the Transactions, and (iii) is duly organized and validly existing in good
standing as a foreign corporation authorized to do business in each
jurisdiction where the nature of the business transacted by it requires such
licensing or qualification except, with respect to part (iii) hereof, where the
failure to be so organized, existing or authorized is not reasonably expected
to have a Material Adverse Effect. DeVRY (i) is a corporation duly organized
and validly existing in good standing under the laws of Delaware, without limit
as to the duration of existence, (ii) has the corporate power and adequate
authority, rights and franchises to own its properties and to carry on its
business as now conducted and to make and carry out the Transactions, and (iii)
<PAGE>19
is duly organized and validly existing in good standing as a foreign
corporation authorized to do business in each jurisdiction where the nature of
the business transacted by it requires such licensing or qualification except,
with respect to part (iii) hereof, where the failure to be so organized,
existing or authorized is not reasonably expected to have a Material Adverse
Effect.
4.2 Due Authorization; No Conflict. Each of DeVRY, Buyer and IP Buyer has
full power and authority to enter into this Agreement and to carry out the
Related Agreements and Transactions, and this Agreement and such Related
Agreements to which it is a party each have been duly and validly executed and
delivered by it, and constitute the legal, valid and binding obligation of it,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect which affect
creditors' rights generally, and by legal and equitable limitations on the
availability of specific remedies. The execution, delivery and performance of
this Agreement, the Related Agreements and the Transactions do not, on the date
hereof, (i) violate any Permit or Order which may be applicable to DeVRY, Buyer
or IP Buyer; (ii) violate any Regulation binding on DeVRY, Buyer or IP Buyer,
except to the extent the Transactions contemplated by this Agreement require
advance notice, registration or filing with state educational licensing or
other similar state Regulatory Authorities; or (iii) violate any provision of
the articles of incorporation or bylaws of DeVRY, Buyer or IP Buyer. Except as
set forth on Schedule 4.2 and except to the extent the Transactions
contemplated by this Agreement require advance notice, registration or filing
with state educational licensing or other similar state Regulatory Authorities,
no consent, approval, order or authorization of, or registration, declaration
or filing with, any governmental agency or public or regulatory unit, agency,
body or authority with respect to DeVRY, Buyer or IP Buyer, is required in
connection with the execution, delivery or performance of this Agreement, the
Related Agreements or the consummation of the Transactions.
4.3 Commissions. Buyer agrees that it is responsible for any fees owed with
respect to the Transactions to the person set forth on Schedule 4.3. Except as
set forth in that Schedule, Buyer represents and warrants that neither it, IP
Buyer, DeVRY nor any of their officers, directors, agents or employees have
employed or incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts with respect to the
Transactions, and agrees to hold Sellers and the Becker Group harmless from and
against Losses incurred by reason of any contrary assertions.
4.4 Accuracy of Statements. To the knowledge of the Buyer, neither this
Agreement, the Related Agreements nor any Schedule to be furnished by or on
behalf of the Buyer, IP Buyer or DeVRY to Becker Group in connection with this
Agreement or the Related Agreements contains or will contain any untrue
statement of a material fact regarding Buyer, IP Buyer or DeVRY or omits or
will omit to state a material fact necessary to make the statements regarding
Buyer, IP Buyer or DeVRY contained herein or therein, in light of the
circumstances in which they are made, not misleading.
<PAGE>20
5. Covenants of the Sellers and Becker Group
As an inducement for Buyer to enter into this Agreement, the parties
described in each paragraph of this Article 5 hereby covenant that, they will
abide by the covenants and promises applicable to them set forth in such
paragraph:
5.1 Implementing Agreement. Each Seller and member of the Becker Group
agrees that from the date hereof to the Closing Date, they will take all action
required of them to fulfill their obligations under the terms of this Agreement
and the Related Agreements and the Transactions.
5.2 Conduct of Business Prior to Closing. Each Seller and member of the
Becker Group agrees that from and after April 30, 1996, and until the Closing
Date, no payments will be made with respect to any Excluded Obligations,
including payments under the Royalty Agreement, and no distributions, dividends
and payments will be made to Becker, other than any payments to Becker under
arrangements comparable to the Employment Agreement contemplated hereby and
generally complying with this Agreement. During this time, the Business shall
be operated only in the ordinary course and each member of the Becker Group
shall use all reasonable efforts to ensure that the goodwill of their
suppliers, customers, distributors, employees and others having business
relations with them is retained, and shall use all reasonable efforts to ensure
that their policies of insurance are maintained in full force and effect and
all material notices are given and material claims are presented under all such
policies in a due and timely fashion.
5.3 Material Contracts. Except as contemplated herein or in the Related
Agreements, until the Closing Date, without the prior consent of Buyer, not to
be unreasonably withheld, no member of the Becker Group shall enter into any
contract or agreement or materially amend any Material Contract other than in
the ordinary course of business and in accordance with past custom and
practice, except that Becker Partnership may proceed with the acquisition of a
software development computer for the approximate amount of $10,000 and may
expend approximately $20,000 on software consulting services.
5.4 No Sale of Interests. Except as contemplated herein or in the Related
Agreements, Becker Partnership shall not issue or sell, agree to issue or sell
or authorize the issuance or sale of any interests in Becker Partnership or
other securities exchangeable for or convertible into interests in Becker
Partnership or grant any warrants, options, rights, calls or other commitments
of any nature to acquire any interests in Becker Partnership.
5.5 Representations True. Until the Closing, each of the Becker Group will
use all reasonable efforts to prevent the occurrence of any event which would
cause any of its representations and warranties set forth in this Agreement not
to be true and correct in any material respect. The members of the Becker
Group will promptly inform Buyer upon discovery that any of the representations
or warranties contained in Article 3 herein ceases to be true or correct in any
material respect.
<PAGE>21
5.6 Access. Until (a) the Closing or (b) the termination of this Agreement
under Section 9.1, and subject to Section 11.1, each member of the Becker Group
will (i) permit DeVRY and its authorized representatives, consultants and
independent contractors to have access at reasonable times to all plant,
properties, assets, faculty, key employees, current employees' records (subject
to any restrictions imposed under privacy or other laws), contracts, and
accounting books and records and documents of each member of the Becker Group,
(ii) furnish to DeVRY or its authorized representatives, consultants and
independent contractors such other information with respect to the business or
properties of each member of the Becker Group as DeVRY may from time to time
reasonably request, (iii) otherwise reasonably cooperate in the examination or
audit of the Becker Group by DeVRY and (iv) confer with DeVRY to keep it
informed with respect to operational matters of a material nature and to report
on the general status of the Business.
5.7 Permits. Becker Partnership will make reasonable efforts to make or
cause to be made all filings with governmental bodies and other regulatory
authorities, and use all reasonable efforts to obtain all material Permits,
approvals, authorizations and consents of all third parties, in each case as
are requested by Buyer for the Becker Group to consummate the Transactions and
for Buyer to acquire the Acquired Assets, Assumed Obligations and Business. As
soon as practical following receipt of any written request from Buyer, Becker
Corporation will furnish to Buyer all information which is in the possession of
any member of the Becker Group and not otherwise available to Buyer which Buyer
may reasonably deem necessary in connection with any such filing to be made by
Buyer (or an appropriate parent company of Buyer).
5.8 Closing Agreements. Becker Corporation will use all reasonable efforts
to have the parties to the Closing Agreements execute and deliver such
agreements prior to or at the Closing.
5.9 Legal Opinion. Becker Corporation will use all reasonable efforts to
cause Irell & Manella LLP, counsel for the Becker Group, to render an opinion,
dated as of the Closing Date, in substantially the form attached hereto as
Exhibit C except for immaterial deviations.
5.10 Acquisition Proposals. Until (a) the Closing or (b) the termination of
this Agreement under Section 9.1, no Seller or member of the Becker Group will
conduct, and each Seller and member of the Becker Group will terminate, any
activities, discussions or negotiations with any parties conducted heretofore
with respect to any proposal with respect to a merger, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets of, or any equity interest in, any member of the Becker Group (an
"Acquisition Proposal") or engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal. Until (a) the Closing
or (b) the termination of this Agreement under Section 9.1, Becker Corporation
will notify Buyer immediately if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations or
<PAGE>22
discussions are sought to be initiated or continued with any member of the
Becker Group. This Section 5.10 shall not apply to the Transactions.
5.11 Defined Benefit Plan. Becker will undertake, at his sole expense, to
terminate the defined benefit plan maintained for employees of the Becker Group
(the "Pension Plan"), in a standard termination in conformity with the
provisions of Section 4041 of ERISA, and Becker Partnership will adopt a
resolution providing for such termination at or prior to the Closing. In
addition, Becker Partnership will take action at the Closing to cause accruals
under the Pension Plan to be frozen as soon as practicable following the
Closing. Any cost associated with the maintenance of the Pension Plan,
including any contributions that may be required, shall be the sole
responsibility of Becker. If the Pension Plan is insufficiently funded, Becker
will provide sufficient funds to ensure a standard termination of the Pension
Plan. Buyer without expense to it will take any action necessary to effectuate
the termination, at the direction of Becker. If the assets held pursuant to
the Pension Plan exceed the amount required to accomplish a standard
termination, Becker may, at his discretion, determine to increase benefits to
the extent legally possible in order to absorb a portion of the overfunding,
and Buyer will cooperate and take such action as may be required to accomplish
such benefit increases, at Becker's direction. If the standard termination
results in reversion paid to Buyer after the Closing, Buyer will pay all state,
local, and federal income and excise taxes attributable to such reversion out
of the proceeds thereof, and shall thereafter contribute to the Becker
Foundation an amount equal to the difference between (i) the aggregate amount
of the reversion received by it, and (ii) the net amount of all such taxes
actually paid by it, after taking into account the "tax benefit" attributable
to the payment of any state or local taxes which result in a deduction for
federal income tax purposes. Becker will indemnify and hold harmless Buyer and
DeVRY against any losses in respect of such termination, and the Transactions
contemplated by this Section 5.11.
5.12 Distribution and Condition of Assets and Obligations. At or before the
Closing, Becker Partnership shall, to the extent practicable, cause to be
distributed to its partners, or sell or otherwise dispose of any Excluded
Assets (other than any assets, interests or rights relating to the Becker
Partnership defined benefit plan). Not later than the Closing, Becker
Corporation shall (i) contribute to Becker Partnership all of its assets and
liabilities other than Excluded Assets and Excluded Obligations, and (ii) cause
all of the issued and outstanding capital stock of the Subsidiary to be
contributed to the Partnership.
5.13 Books and Records. Each member of the Becker Group agrees that from
April 30, 1996, to the Closing Date, it shall maintain its books, accounts and
records in the usual, regular and ordinary manner, and on a basis consistent
with the Financial Statements and past practices.
5.14 Dividends, Loans and Advances. Each member of the Becker Group agrees
from April 30, 1996 until the Closing Date, it shall not have declared, paid or
set aside for payment any dividend or other distribution in respect of its
capital stock, nor shall it, directly or indirectly, have redeemed, purchased
<PAGE>23
or otherwise acquired any shares of its capital stock, except as permitted
hereunder or as specifically set forth in Schedule 5.14. Except as set forth
on Schedule 3.20, no member of the Becker Group will make any loan or advance
to any stockholder, partner, employee, independent contractor or their
affiliates except to non-affiliates in the ordinary course of business.
5.15 Compensation. Until (x) the Closing, or (y) the termination of this
Agreement under Section 9.1, other than in the ordinary course of business, (a)
no increase or other material change shall be made in the compensation
arrangements for any officer, director, employee, stockholder, consultant,
independent contractor or agent of any member of the Becker Group employed at
or in connection with the business or operation of the Business from that in
effect as of April 30, 1996, (b) no bonuses shall accrue or be declared or
compensation paid for services rendered during the fiscal year ending April 30,
1996, except to the extent the payment of such bonuses would not result in a
failure to comply with the closing conditions described in Section 7.7, and (c)
no pension or profit sharing plan, or any other employee benefit arrangement,
shall be in effect, except as listed on Schedule 3.18.
5.16 Preservation of Acquired Assets. Except in the usual and ordinary
course of business, no member of the Becker Group shall sell or dispose of, or
agree to sell or dispose of, any material Acquired Assets, or take any action
which permits the creation of any Lien which materially and adversely affects
the aggregate value of the Acquired Assets.
5.17 Maintenance of Insurance. Each member of the Becker Group shall
continue to carry its existing insurance until the Closing Date, shall not take
any action to terminate such insurance, and shall use reasonable efforts not to
allow any breach of such insurance policies or agreements to occur or exist.
5.18 No Default. The members of the Becker Group shall use reasonable
efforts to avoid committing any act or omitting to commit any act, which will
cause a material breach of any of the Assumed Obligations or any other
Contract, the breach of which would have a Material Adverse Effect.
5.19 No Termination of Obligations by Subsequent Incapacity, etc. Each
Seller specifically agrees that the obligations of such Seller hereunder shall
not be terminated by operation of law, whether by the death or incapacity of
any individual Seller.
5.20 Compliance with Laws. Each member of the Becker Group shall use
reasonable efforts to comply with all Regulations, Permits and Orders
applicable to the Business, the Acquired Assets and the Assumed Obligations, or
as may be required to consummate the Transactions, except where any such
failure to comply would not have a Material Adverse Effect.
5.21 Reasonable Efforts. Each member of the Becker Group and the Sellers
will use their reasonable efforts to bring about the Transactions.
<PAGE>24
5.22 Borrowing. Until (a) the Closing, or (b) the termination of this
Agreement under Section 9.1, without the consent of Buyer not to be withheld
unreasonably, no member of the Becker Group shall incur, assume or guarantee
any Indebtedness or become subject to any Guarantee not reflected on the
Financial Statements except in the ordinary course of business or for purposes
of consummation of the Transactions.
5.23 Notice of Developments. Until (a) the Closing, or (b) the termination
of this Agreement under Section 9.1, the Sellers will give prompt written
notice to Buyer of any material development known to them affecting the assets,
liabilities, business, financial condition, operations, results of operations,
or future prospects of the Becker Group taken as a whole. The Sellers will
promptly provide written notice to Buyer of any material development affecting
the ability of the Becker Group and the Sellers to consummate the Transactions.
No disclosure pursuant to this Section 5.23, however, shall be deemed to amend
or supplement the Schedules hereto or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
5.24 Employee Loans. After the Closing, Becker shall indemnify and hold
harmless Buyer with respect to any employee loan made by Becker Group prior to
the Closing that is not paid off in full pursuant to its terms after the
Closing.
5.25 Newton Becker Limited. Becker shall cause to be transferred to Buyer,
at or as soon as practicable following, the Closing, one share of stock of
Newton Becker Limited and one share of stock of Becker C.P.A. Review Ltd., an
Israeli corporation.
5.26 Kaplan Agreement. At the Closing, Becker shall cause to be transferred
to Buyer any rights (if any) under the right of first refusal agreement with
Stanley H. Kaplan.
6. Covenants of Buyer.
6.1 Representations True. Until the Closing Date, Buyer will use, and will
cause DeVRY and IP Buyer to use, all reasonable efforts to prevent the
occurrence of any event which would cause any of its representations and
warranties set forth in this Agreement or the Related Agreements not to be true
and correct in any material respect. Buyer will promptly inform Becker
Corporation promptly upon discovery that any representations or warranties made
by it or by IP Buyer ceases to be true or correct in any material respect.
6.2 Permits. Buyer will make, and will cause DeVRY and IP Buyer to make,
all filings with governmental bodies and other regulatory authorities, and use
all reasonable efforts to obtain all permits, approvals, authorizations and
consents of all third parties, necessary to consummate the Transactions and for
Buyer to acquire the Acquired Assets, Assumed Obligations and Business, except
to the extent the Transactions require advance notice, registration or filing
with state licensing or similar state regulatory authorities. As soon as
practical following receipt of any written request from Becker Corporation or
the other Sellers, Buyer will furnish to Sellers all information which is in
<PAGE>25
DeVRY's possession and not otherwise available to Sellers which Sellers may
reasonably deem necessary in connection with any such filing to be made by any
of the Becker Group or Sellers.
6.3 Closing Agreements. Buyer will use, and will cause DeVRY and IP Buyer
to use, all reasonable efforts to have the parties to the Closing Agreements
execute and deliver such agreements prior to or at the Closing.
6.4 Legal Opinion. Buyer will use all reasonable efforts to cause Mayer,
Brown & Platt, counsel for Buyer and DeVRY, to render an opinion, dated as of
the Closing Date, in substantially the form attached hereto as Exhibit D,
except for immaterial deviations.
6.5 Implementing Agreement. Buyer agrees that from the date hereof to the
Closing Date, it will take, and will cause DeVRY and IP Buyer to take, all
action required of them to fulfill its obligations under the terms of this
Agreement and the Related Agreements and the Transactions.
6.6 Reasonable Efforts. Buyer will use, and will cause DeVRY and IP Buyer
to use, reasonable efforts to bring about the Transactions.
6.7 Filing of Income Tax Returns. The current taxable year of Becker
Partnership (the "Pre-Closing Short Year") shall terminate as of the close of
business on the Closing Date. For purposes of properly allocating income, gain,
loss and deduction of Becker Partnership to its Pre-Closing Short Year, the
books of Becker Partnership shall be closed as of the close of business on the
Closing Date. The taxable income or loss of Becker Partnership for its
Pre-Closing Short Year, determined as set forth in the preceding sentence,
shall be reported on IRS Form 1065 and the equivalent form for each state in
which Becker Partnership is required to file an income tax return for the
Pre-Closing Short Year, and the taxable income or loss of Becker Partnership
(or its successor in interest) for periods beginning after the Closing Date
shall be included in the consolidated Federal income tax return of the
affiliated group of corporations of which Buyer is a Member. For the
Pre-Closing Short Year, DeVRY shall prepare or provide for the preparation of,
consistent with the year ended April 30, 1996, the Federal income tax return of
Becker Partnership and the state income tax return for each state for which
Becker Partnership has previously filed income tax returns. At least 30 days
prior to the due date(s) of any income tax returns for the Pre-Closing Short
Year of Becker Partnership, Becker Corporation shall be provided with a draft
of each such tax return, which shall be complete in all material respects and
each such tax return shall be prepared in a manner consistent with prior
practice. The Becker Corporation shall make such changes as it deems
appropriate, timely file such return and promptly send DeVRY a copy. If Buyer
requests, the Becker Corporation agrees to cooperate with Buyer in causing an
election to be made in such return under Section 754 of the Code with respect
to Becker Partnership.
6.8 Excluded Assets. Following the Closing, Buyer agrees to transfer to
Becker all Excluded Assets not distributed prior to Closing; provided, however,
the Pension Plan assets shall be dealt with in the manner set forth in Section
5.11.
<PAGE>26
6.9 Compliance with Laws. Buyer, IP Buyer and DeVRY shall use reasonable
efforts to comply with all Regulations, Permits and Orders applicable to the
Business, the Acquired Assets and the Assumed Obligations, or as may be
required to consummate the Transactions, except where any such failure to
comply would not have a Material Adverse Effect and except to the extent the
Transactions require advance notice, registration or filing with state
licensing or similar state regulatory authorities.
7. Conditions Precedent to Obligations of Buyer.
The obligations of Buyer to consummate this Agreement and the Transactions
are subject to the fulfillment, prior to or as of the Closing Date, of the
following conditions, each of which may be waived by Buyer in writing:
7.1 Representations and Warranties. The representations and warranties of
each Seller and member of the Becker Group contained herein shall be true in
all material respects on and as of the date of this Agreement, and shall also
be true in all material respects (except for such changes as are contemplated
by the terms of this Agreement) on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date.
7.2 Covenants. Each Seller and member of the Becker Group shall, in all
material respects, have performed all of its respective obligations and
agreements and complied with all of its respective covenants contained in this
Agreement to be performed and complied with by it on or prior to the Closing
Date; and the Sellers and the Becker Group shall have delivered to Buyer a
certificate dated as of the Closing Date, of a duly authorized officer of each
of the Becker Group, certifying as to compliance with Section 7.1 and this
Section 7.2.
7.3 No Injunction or Litigation. No action or proceeding by any Authority
shall have been instituted or threatened which would enjoin, restrain or
prohibit, or might result in substantial Losses in respect of, this Agreement
or the complete consummation of the Transactions, including, among other
things, the integration of the operation of the Business with those of Buyer
and its Affiliates and which would make it reasonably inadvisable to consummate
such Transactions, and no court order shall have been entered in any action or
proceeding instituted by any party which enjoins, restrains or prohibits this
Agreement or the complete consummation of the Transactions as contemplated by
this Agreement including, among other things, the integration of the operation
of the Business with those of Buyer and its Affiliates.
7.4 Closing Agreements. The Closing Agreements shall have been executed and
delivered by all parties thereto, and the transactions contemplated by the
Intellectual Property Agreement shall have closed, unless the failure to do so
is a result of a breach by Buyer, IP Buyer or DeVRY.
7.5 Closing Documents. Buyer shall have received, in form and substance
reasonably satisfactory to its counsel, each and every closing document
required to be delivered to it as set forth in this Agreement.
<PAGE>27
7.6 No Material Adverse Change. Neither the Business nor the Acquired
Assets nor Assumed Obligations shall have been materially and adversely
affected since the date hereof as of the Closing Date in any way and no event
shall have occurred since the date hereof which is reasonably expected to have
a Material Adverse Effect. Buyer shall have received a certificate, dated the
Closing Date, by a duly authorized officer of each member of the Becker Group,
certifying as to compliance with this Section 7.6.
7.7 Draft Financial Statements. Buyer shall have received from Becker
Corporation a draft combined unaudited balance sheet and income statement for
the Business at, and for the year ended, April 30, 1996, which shall be
prepared in accordance with generally accepted accounting principles (but
without the footnotes required by generally accepted accounting principles) on
the basis of accounting principles generally consistent with those employed in
the preparation of the Financial Statements at, and for the year ended, April
30, 1995, and shall reflect (i) net sales in respect of the Business of at
least $19,600,000, and (ii) income before royalties and taxes on income in
respect of the Business of at least $4,100,000. Buyer shall have received a
certificate, dated the Closing Date, by a duly authorized officer of Becker
Corporation, certifying as to compliance with this Section 7.7 and with Section
7.11.
7.8 Legal Opinion. Buyer shall have received the legal opinion referred to
in Section 5.9.
7.9 Termination of Agreements. The Royalty Agreement will have been
terminated by the parties as of April 30, 1996, and will no longer be in full
force and effect. The Old Employment Agreement shall have been terminated.
7.10 Consents. The consents and contracts set forth on Schedule 7.10 shall
have been executed by the parties listed on such Schedule 7.10.
7.11 There will be no Indebtedness with respect to the Business (other than
the Assumed Indebtedness, Indebtedness incurred with the consent of Buyer or
Indebtedness incurred in the ordinary course of business or for the purpose of
consummating the Transactions).
7.12 [Intentionally Omitted].
7.13 Bank Accounts. Becker Corporation will have made arrangements
reasonably satisfactory to Buyer to transfer to Becker Partnership all of
Becker Corporation's accounts (including deposits therein at Closing (not
including the Purchase Price) and thereafter in respect of the Business)
described in Schedule 3.21.
7.14 Other Documents. Each Seller and member of the Becker Group will
furnish Buyer with such other and further documents and certificates including
certificates of the corporate officers and others as Buyer shall reasonably
request to evidence compliance with the conditions set forth in this Agreement.
<PAGE>28
7.15 Legal Opinion. Buyer shall have received a legal opinion from
Michaels, Wishner & Bonner, P.C., in substantially the form attached hereto as
Exhibit E, except for immaterial deviations.
8. Conditions Precedent to Obligations of Sellers.
The obligations of Sellers to consummate this Agreement and the Transactions
are subject to the fulfillment, prior to or at the Closing Date, of the
following conditions, each of which may be waived by Sellers in writing:
8.1 Representations and Warranties. The representations and warranties of
Buyer contained herein shall be true in all material respects on and as of the
date of this Agreement, and shall also be true in all material respects (except
for such changes as are contemplated by the terms of this Agreement) on and as
of the Closing Date with the same force and effect as though made on and as of
the Closing Date.
8.2 Covenants. Buyer and DeVRY shall, in all material respects, have
performed all of its respective obligations and agreements and complied with
all of its respective covenants contained in this Agreement to be performed and
complied with by it on or prior to the Closing Date; and Buyer shall have
delivered to Sellers a certificate dated as of the Closing Date, of the
President of each of Buyer and DeVRY, certifying as to compliance with Section
8.1 and this Section 8.2.
8.3 No Injunction or Litigation. No action or proceeding by any Authority
shall have been instituted or threatened which would enjoin, restrain or
prohibit, or might result in substantial Losses in respect of, this Agreement
or the complete consummation of the Transactions, and which would make it
reasonably inadvisable to consummate such Transactions, and no court order
shall have been entered in any action or proceeding instituted by any party
which enjoins, restrains or prohibits this Agreement or the complete
consummation of the Transactions.
8.4 Consents Obtained. Each party shall have obtained all of the material
consents and approvals required for the execution, delivery and performance of
this Agreement and the Related Agreements by such party, unless the failure to
obtain such consents or approvals is a result of a breach by the Sellers.
8.5 Closing Agreements. The Closing Agreements shall have been executed and
delivered by all parties thereto, and the transactions contemplated by the
Intellectual Property Agreement shall have closed, unless the failure to do so
is a result of a breach by Sellers or Becker or the members of the Becker Group
which are signatories thereto.
8.6 Tentative Purchase Price. The Tentative Purchase Price shall have been
delivered as required by Section 1.5.
8.7 Closing Documents. Sellers shall have received, in form and substance
reasonably satisfactory to their counsel, each and every closing document
required to be delivered to it as set forth in this Agreement.
<PAGE>29
8.8 Legal Opinion. Sellers shall have received the legal opinion referred
to in Section 6.4.
8.9 Other Documents. Buyer will furnish Sellers and each member of the
Becker Group with such other and further documents and certificates including
certificates of the corporate officers and others as Sellers and the Becker
Group shall reasonably request to evidence compliance with the conditions set
forth in this Agreement.
9. Termination.
9.1 Grounds for Termination. This Agreement and the Intellectual Property
Agreement may be terminated: (i) at any time prior to the Closing Date by
either Buyer or Sellers if there has been a material breach of the
representations, warranties or covenants of the other party or its Affiliates
set forth herein or in the Related Agreements, (ii) by Buyer if the conditions
stated in Article 7 hereof and, in Article 6 of the Intellectual Property
Agreement cannot be or have not been satisfied in all material respects on or
before June 17, 1996, (iii) by Sellers if the conditions stated in Article 8
hereof and in Article 7 of the Intellectual Property Agreement cannot be or
have not been satisfied in all material respects by June 17, 1996, or (iv) at
any time prior to June 17, 1996 by mutual written agreement of Buyer and Becker
Corporation. Before termination under this Agreement and the Intellectual
Property Agreement each party will provide the other with a reasonable
opportunity for curing any breach or failure of condition, based on the nature
of the breach, the possibility for cure, and the effect of delay on the party
seeking termination.
9.2 Effect of Termination. If this Agreement and the Intellectual Property
Agreement are terminated as provided in Section 9.1, all obligations of the
parties hereunder and thereunder will terminate without liability of any party
to any other party, except (i) that the obligations set forth in Sections 3.17,
4.3, 11.1, 11.2, 12.2, 12.6 and 12.8 hereof will survive any such termination,
and (ii) for liability for Losses caused by a material breach.
9.3 Rights to Proceed. Subject to Section 9.1, if any of the conditions
specified in Article 7 hereof or in Article 6 of the Intellectual Property
Agreement has not been satisfied, Buyer will have the right to proceed with the
Transactions without waiving any of its rights hereunder and thereunder; and if
any of the conditions specified in Article 8 hereof or in Article 7 of the
Intellectual Property Agreement has not been satisfied, Sellers will have the
right to proceed with the Transactions without waiving any of its rights
hereunder and thereunder.
<PAGE>30
10. Indemnification.
10.1 Sole Remedy For Breach After Closing. Notwithstanding anything to the
contrary herein (other than Section 12.8 hereof) or in any of the Related
Agreements, any Contract or instrument contemplated hereby or thereby, any
document relating hereto or thereto or contained in any Exhibit to this
Agreement or any Related Agreement, after the Closing, claims based on or
related to the breach of, or claims for indemnification under the Transaction
Documents, are subject to, and may be brought only in accordance with, the
provisions of this Article 10. The "Transaction Documents" means this
Agreement, any Related Agreement (other than the Employment Agreement), any
Contract or instrument contemplated hereby or thereby, any document relating
hereto or thereto or contained in any Exhibit to this Agreement or any Related
Agreement (other than the Employment Agreement).
10.2 Survival. All of the terms and conditions of this Agreement, together
with the warranties, representations, agreements and covenants contained in any
Transaction Documents, shall survive the execution of this Agreement and the
Closing, notwithstanding any investigation heretofore or hereafter made by or
on behalf of any party hereto, and shall survive and continue until, and all
claims with respect thereto shall be made prior to, the end of 18 months from
the Closing Date, except for (i) the representations, warranties and covenants
set forth in Article 1 of the Intellectual Property Agreement, and Article 1,
Sections 3.18, 3.19, 5.11, 6.7 and 6.8 hereof and the indemnities and
agreements related to said Sections and Articles and to Tax matters generally
and based on the Excluded Assets or Excluded Obligations, which shall survive
until, and all claims with respect thereto shall be made prior to 90 days
after, the expiration of the applicable statute of limitations, (ii)
representations, warranties and related indemnities for which an
indemnification claim shall be pending as of the end of the applicable period
referred to above, in which event such indemnities shall survive with respect
to such indemnification claim until the final disposition thereof, and (iii)
representations, warranties and indemnities relating to title and/or ownership
of the Acquired Assets and those representations and warranties set forth in
Article 2 and Sections 3.1(i) and (ii), 3.2(i) and (ii), 4.1(i) and (ii), and
4.2, which will survive indefinitely.
10.3 Indemnification by Sellers and the Becker Group. Each Seller
severally agrees to indemnify Buyer and each of its affiliates, and their
respective officers, directors, employees, stockholders, representatives and
agents, against, and agrees to hold it and them harmless from, any and all
Losses incurred or suffered by Buyer or any of its Affiliates (or any
combination thereof) arising out of any material breach of or any inaccuracy in
any representation or warranty made by such Seller pursuant to Sections 2.1,
2.2 and 2.3 hereof, and any breach of or failure by such Seller to perform any
covenant or obligation of such Seller set out in Sections 1.1, 1.3 and 11.1
hereof or Article 1 of the Intellectual Property Agreement. Except as provided
in the preceding sentence, after the Closing, Becker Foundation (in its own
capacity, in its capacity as general partner of Becker Partnership, or in any
other capacity), David E. Becker, Laura Ford Mintzer and David J. Becker shall
not be liable to Buyer or IP Buyer for any claims based on or related to the
breach of, or claims for indemnification under, the Transaction Documents.
<PAGE>31
Becker agrees to indemnify Buyer and each of its affiliates, and their
respective officers, directors, employees, stockholders, representatives and
agents, against, and agrees to hold it and them harmless from, any and all
Losses incurred or suffered by Buyer or any of its Affiliates (or any
combination thereof) arising out of any of the following: (a) any material
breach of or any inaccuracy in any representation or warranty made by any
Seller or any member of the Becker Group pursuant to any Transaction Document,
and any breach of or failure by any Seller or any member of the Becker Group to
perform any covenant or obligation of such member set out in any Transaction
Document (excluding any representation, warranty, covenant or obligation
referred to in the first sentence of this Section 10.3); (b) any Excluded
Obligations; and (c) all assessments, judgements, costs and reasonable legal
and other expenses arising from, or in connection with, any investigation,
action, suit, proceeding or other Claim incident to any of the foregoing.
Becker Foundation shall not be liable to third parties and Authorities arising
out of Claims, actions or omissions by the Becker Partnership or any other
Seller. Becker Foundation shall, within five business days after receipt of
any notice by a third party or an authority of any alleged claim, tax audit or
other proceeding for the assessment of any Tax, liability or obligation, send a
notice to the Buyer and Becker (or Becker Corporation) who shall then assume
the obligation in accordance with this Agreement, including all costs and
expenses of defense, as if the third party claim, action or omission was
asserted against the Buyer and/or Becker or Becker Corporation; provided,
however, solely as between Becker and Becker Corporation, in the case of Claims
against Becker Foundation in respect of Excluded Obligations, Becker shall
cause Becker Corporation to assume such Claims. However, this Section 10.3
shall not be construed to expand or increase the rights or remedies of any
third party against Buyer, Becker Group or Sellers.
10.4 Indemnification by Buyer. Buyer and IP Buyer agree to jointly and
severally indemnify Sellers and the Becker Group and each of their affiliates,
and their respective officers, directors, employees, stockholders,
representatives and agents, against, and agrees to hold it and them harmless
from, any and all Losses incurred or suffered by Sellers, the Becker Group or
any of their Affiliates (or any combination thereof) arising out of any breach
of or any inaccuracy in any representation or warranty made by Buyer or IP
Buyer pursuant to, and any breach of or failure by Buyer or IP Buyer to perform
any covenant or obligation of Buyer or IP Buyer set out in, any Transaction
Document including the failure to pay, perform or discharge when due all
Assumed Obligations, and all assessments, judgements, costs and reasonable
legal and other expenses arising from, or in connection with, any
investigation, action, suit, proceeding or other Claim incident to any of the
foregoing.
10.5 Indemnity Limits.
(a) Indemnification claims shall be reduced, by and to the extent, that an
Indemnitee shall actually receive proceeds under insurance policies, risk
sharing pools, or similar arrangements specifically as a result of, and in
compensation for, the subject matter of an indemnification claim by such
Indemnitee.
<PAGE>32
(b) Buyer will not be entitled to indemnification with respect to any breach
or misrepresentation until such time as its respective aggregate right to such
indemnification, taking into account and aggregating all such breaches or
misrepresentations, exceeds $150,000 after which, Buyer or Sellers and the
Becker Group will be entitled to such indemnification in excess of such
$150,000 threshold, and provided that with regard to indemnification of either
Buyer or Sellers with respect to those representations, warranties and
covenants listed in Section 10.2(iii), set forth in Article 1, Sections 3.19,
5.11, 5.14, 5.24, 6.7 and 6.8, or relating to the Excluded Assets or Excluded
Obligations, the party seeking indemnification will be entitled to
indemnification without regard to the $150,000 threshold.
(c) Each party hereto shall have the right to offset indemnification amounts
due it pursuant to this Agreement by another party hereto against payments due
to such other party pursuant to this Agreement, the Related Agreements or any
other Contracts with or amounts due to such other party.
(d) In no event shall the aggregate of all amounts payable by either party
for claims described in Section 10.1 exceed the amount of $5,000,000, except
with regard to claims under Sections 3.18, 3.19, 5.11, 6.7 and 6.8 and claims
based on breaches of Article 1, or based on or relating to the Excluded Assets
or Excluded Obligations.
10.6 Third-Party Claims. The following procedures shall be applicable with
respect to indemnification relating to or arising out of Claims, actions or
omissions by Authorities, or other third parties. Promptly after receipt by
the party seeking indemnification hereunder (hereinafter the "Indemnitee") of
notice of the commencement of any (a) tax audit or proceeding for the
assessment of any Tax by any Taxing Authority or any other proceeding likely to
result in the imposition of a liability or obligation for Taxes or (b) any
action or the assertion of any Claim, liability or obligation by an Authority
or a third party (whether by legal process or otherwise) the Indemnitee will,
if a claim thereon is to be made against the Indemnitor, notify the Indemnitor
in writing of the commencement or assertion thereof and give the Indemnitor a
copy of such claim, process and all legal pleadings and other written evidence
thereof. The Indemnitor shall have, in all instances the right to participate
in the defense of such action with counsel of reputable standing. The
Indemnitor shall have the right to assume the defense of such action unless the
Indemnitee provides written notice that, in the reasonable judgment of the
Indemnitee, such action is reasonably likely to result in liabilities which
would not be fully indemnified hereunder and the amount of liabilities that
would not be fully indemnified hereunder are reasonably expected to be
disproportionate to the amount of liabilities that would be indemnified
hereunder, in which case the Indemnitee's fees and expenses (including fees and
expenses of counsel) shall be borne by the Indemnitee. Otherwise, the
Indemnitor shall have 10 days, after receipt of notice of such claim, process,
legal proceeding and other written notice, to assume defense thereof. If the
Indemnitor does assume such defense, it will, within such 10 days, so notify
the Indemnitee. If the Indemnitor does not assume such defense and so notify
the Indemnitee, then the Indemnitee shall assume such defense as provided in
this Section 10.6, and the Indemnitee's fees and expenses (including fees and
expenses of counsel) in connection with such defense will be borne by the
<PAGE>33
Indemnitor. In any case, the Indemnitor and Indemnitee shall cooperate and
assist each other in such defense, and shall make available to the other all
records, documents and information (written or otherwise) relevant to such
defense. If the Indemnitee shall be required by judgment or a settlement
agreement to pay any amount in respect of any obligation or liability against
which the Indemnitor has agreed to indemnify the Indemnitee under this
Agreement, the Indemnitor shall, subject to the limitations of this Article 10,
promptly reimburse the Indemnitee in an amount equal to the amount of such
payment plus (unless Indemnitee is responsible pursuant to this Section 10.6
for its own expenses in connection with such liability), all reasonable
expenses (including legal fees and expenses) incurred by such Indemnitee in
connection with such obligation or liability. Prior to paying any claim
against which an Indemnitor is, or may be, obligated under this Agreement to
indemnify an Indemnitee, the Indemnitee must first supply the Indemnitor with a
copy of a final court judgment or decree, or evidence of assessment of Taxes or
a similar final action by a Taxing Authority, holding the Indemnitee liable on
such Claim or failing such judgment or decree, or with respect to any
settlement, must first receive the written approval of the terms and conditions
of such settlement from the Indemnitor. An Indemnitor or Indemnitee shall have
the authority to settle or compromise any Claim for which it has assumed the
defense pursuant to this Section 10.6; provided that an Indemnitor shall not
settle or compromise any such Claim if such settlement or compromise would
result in an Order, injunction or other equitable remedy in respect of the
Indemnitee or its business, or would result in liabilities which, taken
together with other existing claims under this Article 10, would not be fully
indemnified hereunder, in each case, without the prior written consent of the
Indemnitee, which consent will not be unreasonably withheld; provided, further,
if Indemnitee assumes the defense of a Claim pursuant to this Section 10.6
based on its reasonable expectation that the amount of liabilities arising out
of such Claim that would not be fully indemnified under this Article 10 exceed
the amounts that would be so indemnified, Indemnitee shall not settle or
compromise such Claim without the prior written consent of Indemnitor, which
shall not be unreasonably withheld. An Indemnitee shall have the right to
employ its own counsel in any case, but the fees and expenses of such counsel
shall be at the expense of the Indemnitee, unless in the case of an action or
Claim of which the Indemnitor has the right to assume the defense, (x) the
Indemnitor shall not have assumed the defense of such action or Claim pursuant
to this Section 10.6, or (y) the interests of the Indemnitee and the Indemnitor
in the action conflict in such a manner and to such an extent as to require,
consistent with applicable standards of professional responsibility, the
retention of separate counsel for the Indemnitee, in any of which events such
fees and expenses of not more than one additional counsel for the indemnified
parties shall be borne by the Indemnitor.
10.7 Determination of Indemnification Amount. In the event that any
Indemnitee believes that it is entitled to claim indemnification from an
Indemnitor under this Article 10, the Indemnitee shall notify the Indemnitor of
such claim, the amount or estimated amount thereof and the basis for such claim
(which will be described in reasonable detail). The Indemnitor and Indemnitee
will proceed, in good faith, and using reasonable efforts, to agree on the
amount of such indemnification claim. If they are unable to agree on the
<PAGE>34
amount of such indemnification claim within 30 days after such notice, and in
the reasonable good faith judgment of the Indemnitee, the amount of such claim
is less than $1,000,000, such claim shall be settled by arbitration in Los
Angeles, California before a board of three arbitrators, one selected by each
party, and the third by the two persons so selected, all in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
then in effect, and subject to the choice of law set forth in Section 12.6.
The notice of intent to arbitrate shall name one arbitrator, and the party(ies)
receiving the notice shall name the second arbitrator within 15 days or the
moving party may select the second arbitrator from a list supplied by the AAA,
with each arbitrator to be a person experienced in matters involving the sale
of businesses. In the event that these two arbitrators cannot agree upon a
third arbitrator within fifteen (15) days, then the third arbitrator shall be
selected within five (5) days thereafter from the list provided by the AAA with
the parties striking names in order with the party striking first to be
determined by the flip of a coin. The parties hereby (i) consent to the in
personam jurisdiction of the courts of the State of California for purposes of
confirming any such award and entering judgment thereon and (ii) agree to use
their best efforts to keep all matters relating to any arbitration hereunder
confidential. In any arbitration proceedings hereunder, all testimony of
witnesses shall be taken under oath. Each party agrees that, except for claims
which exceed $1,000,000 in amount (in the reasonable good faith judgment of
Indemnitee) and except as provided in Section 12.9, the arbitration provisions
of this Agreement are its exclusive remedy and expressly waives any right to
seek redress in another forum. Each party shall bear the fees of the
arbitrator appointed by it, and the fees of the neutral arbitrators shall be
borne equally by each party during the arbitration, but the fees of all
arbitrators shall be borne by the losing party. Any arbitration shall be
commenced within sixty (60) days, and completed within one hundred twenty (120)
days, of the appointment of the arbitrators. The determination of the amount
of any indemnification claim pursuant to this Section 10.7 will be final,
binding and conclusive, and the Indemnitee, upon final determination of the
amount of the indemnification claim will be paid, by the Indemnitor, within 10
days of such final determination, the full amount, in cash, of such
indemnification claim, as finally determined. In addition, if the Indemnitor
does not pay in full the indemnification claim, within 10 days, as aforesaid,
the amount of the indemnification claim, as finally determined, will be
increased with interest at 7% per annum, compounded annually until paid in full.
11. Other Covenants.
11.1 Confidentiality Obligations. Each party hereto shall maintain, and
Buyer agrees to cause DeVRY and its Affiliates to maintain, the confidential
nature of, and not disclose to any third party without prior written consent,
(a) any confidential information learned about the other or its Affiliates in
the course of the Transactions, or (b) the terms of this Agreement and the
Related Agreements, unless and to the extent necessary to carry out the
Transactions. At the termination of this Agreement, Sellers and Buyer agree,
and Buyer agrees to cause DeVRY and its Affiliates, and Becker Corporation
agrees to cause the Becker Group and its Affiliates, to return any and all
materials containing any confidential information. These restrictions on use
and obligations of confidentiality will not apply to any information (i) to the
extent the receiving party is required to disclose such information under court
or governmental order, or (ii) then in the public domain or readily available
<PAGE>35
from public sources by acts not attributable to such party, provided in each
case that the other party is provided a reasonable prior opportunity to object
to any use or disclosure. If the Closing occurs, Buyer and its Affiliates
shall be released from any obligations under this Section 11.1 with regard to
the assets and liabilities and the prior financial history of Becker Group
except (i) that this release will not affect the obligations with regard to the
Transactions and (ii) Buyer will use, and will cause its Affiliates to use, all
reasonable efforts to protect the reasonable privacy interests of the
shareholders and principals of the Becker Group.
11.2 Announcements. Buyer and Becker Partnership agree, and Buyer will cause
DeVRY and its Affiliates, not to make, nor cause to be made, any news releases
or other public announcements pertaining to the Transactions without first
consulting the other party and attempting to formulate a mutually satisfactory
arrangement for such disclosure, and in any case will not make an announcement
thereafter without the consent of the other (not to be unreasonably withheld)
except to the extent required by applicable law.
11.3 Employment. Buyer will offer continued employment immediately following
the Closing to all of the employees and contractors of Becker Group (other than
Philip Brodax) immediately prior to the Closing at the same position with not
less than the same compensation level for a period of not less than sixty (60)
days and will assume all obligations of the Becker Group with regard to such
employees and contractors, including without limitation credit for and payment
of all accrued vacation benefits; provided, however, nothing in this Section
11.3 shall (i) create any third-party beneficiary or other rights in employees
or contractors of the Becker Group, (ii) alter the contractual or other rights
and obligations, or limitations thereof, of employees or contractors of the
Becker Group.
11.4 Change of Name. Promptly following the Closing, Becker Corporation
shall change its name to a name which is not confusingly similar to Becker CPA
Review Course in the reasonable opinion of Buyer and shall thereafter have no
further rights to use a name containing the words "CPA Review Course."
11.5 Cooperation.
11.5.1 Additional Acts. Each party hereto agrees, both before and
after the Closing, to execute any and all further documents and writings and
perform such other reasonable actions which may be or become necessary or
expedient to effectuate and carry out the Transactions (which shall not include
any obligation to make payments).
11.5.2 Cooperation Regarding Financial Matters. From and after the
Closing, Buyer agrees that it will provide without charge the representatives
of Becker Partnership and Becker Corporation and their current officers and
shareholders with such access to the business records and other information
under DeVRY's control regarding the Becker Group and the Business as may be
<PAGE>36
reasonably necessary for such persons for use in relation to the preparation
and review of the Net Book Value or any tax filings, audits or similar matters.
12. Miscellaneous.
12.1 Modifications. This Agreement may not be amended, altered or modified
except by a writing signed by the parties.
12.2 Expenses. Except as set forth in Article 10, the parties hereto will
each pay all of their own expenses incurred in connection with the
authorization, preparation, execution and performance of this Agreement, the
Related Agreements, and the Transactions, including, without limitation, all
fees and expenses of their respective agents, representatives, counsel and
accountants provided, however that all expenses of the Sellers and the Becker
Group shall be paid by the Sellers and not by the Becker Partnership.
12.3 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy will be cumulative and will be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or otherwise. The election of any one or more remedies will not
constitute a waiver of the right to pursue other available remedies.
12.4 Notices. All notices under this Agreement and the Intellectual
Property Agreement will be in writing and will be delivered by personal service
or telegram, telecopy or certified mail (if such service is not available, then
by first class mail), postage prepaid, to such address as may be designated
from time to time by the relevant party, and which will initially be as set
forth below. Any notice sent by certified mail will be deemed to have been
given three (3) days after the date on which it is mailed. All other notices
will be deemed given when received. No objection may be made to the manner of
delivery of any notice actually received in writing by an authorized agent of a
party. Notices will be addressed as follows or to such other address as the
party to whom the same is directed will have specified in conformity with the
foregoing:
(i) If to Buyer or IP Buyer:
DeVRY CPA Review, Inc.
c/o DeVRY, Inc.
One Tower Lane
Oakbrook Terrace, Illinois 60181
Fax: (708) 574-1903
Attention: Ronald Taylor
<PAGE>37
with a copy given in like manner to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Fax: (212) 262-1910
Attention: James B. Carlson, Esq.
(ii) If to the Becker Group or Sellers (other than Becker Foundation):
The Becker CPA Review Course Ltd.
15760 Ventura Boulevard
Suite 1101
Encino, California 91436
Fax: (818) 377-3654
Attention: Newton D. Becker
Alan Antonino
Bradley Gordon
with a copy given in like manner to:
Irell & Manella LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Fax: (310) 203-7199
Attention: Theodore E. Guth, Esq.
(iii) If to Becker Foundation:
The Newton D. and Rochelle F. Becker Foundation
6505 Wilshire Boulevard
Suite 1200
Los Angeles, CA 90048
Fax: (213) 655-0431
Attention: Marvin I. Schotland
with a copy given in a like manner to:
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
6th Floor
Los Angeles, CA 90024
Fax: (310)443-8680
Attention: Martin S. Appel, Esq.
<PAGE>38
12.5 Successors and Assigns. Except as provided herein to the contrary,
this Agreement will be binding upon and inure to the benefit of the parties,
their respective successors and permitted assigns. The rights and obligations
of the parties hereunder may not be assigned prior to the Closing Date.
12.6 Governing Law; Jurisdiction. This Agreement and the Transaction
Documents have been negotiated and entered into in the State of California,
concern a California business and all questions with respect to the Agreement
and the Transaction Documents and the rights and liabilities of the parties
will be governed by the laws of that state, regardless of the choice of laws
provisions of California or any other jurisdiction. Any and all disputes
between the parties which may arise pursuant to this Agreement and the
Transaction Documents that are not subject to arbitration under Section 10.7
will be heard and determined before an appropriate federal or state court
located in Los Angeles, California. The parties hereto acknowledge that such
court has the jurisdiction to interpret and enforce the provisions of this
Agreement and the Transaction Documents and the parties waive any and all
objections that they may have as to jurisdiction or venue in any of the above
courts.
12.7 Waivers Strictly Construed. With regard to any power, remedy or right
provided herein or otherwise available to any party hereunder (i) no waiver or
extension of time will be effective unless expressly contained in a writing
signed by the waiving party; and (ii) no alteration, modification or impairment
will be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
12.8 Injunction. Becker Partnership and Sellers, on the one hand, and
Buyer (on behalf of itself and its Affiliates), on the other, acknowledge that
the remedy at law for any breach, or threatened breach, of any of the
provisions of Sections 11.1, 11.4 or 11.5 will be inadequate and, accordingly,
each covenants and agrees that the other will, in addition to any other rights
or remedies that it may have and regardless of whether such other rights or
remedies have been previously exercised, be entitled to such equitable and
injunctive relief as may be available from any appropriate court referred to in
Section 12.6.
12.9 Rules of Construction.
12.9.1 Headings. The Article and Section headings in this Agreement
are inserted only as a matter of convenience, and in no way define, limit, or
extend or interpret the scope of this Agreement or of any particular Article or
Section.
12.9.2 Tense and Case. Throughout this Agreement, as the context may
require, references to any word used in one tense or case shall include all
other appropriate tenses or cases, and the term "including" means "including
but not limited to."
12.9.3 Severability. The validity, legality or enforceability of the
remainder of this Agreement will not be affected even if one or more of the
provisions of this Agreement will be held to be invalid, illegal or
unenforceable in any respect.
<PAGE>39
12.9.4 Knowledge. Whenever a representation or warranty is stated to
be based on the knowledge of a party, such phrase refers to whether any of such
party's Senior Management, has actual knowledge, or reason to know, of the
matters involved.
12.10 Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to this Agreement to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Any reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise. Disclosure of an item on one Schedule
shall constitute disclosure on any other Schedule when the nature of such item
is reasonably apparent. The parties hereto intend that each representation,
warranty, and covenant contained herein shall have independent significance.
If any party hereto has breached any representation, warranty, or covenant
contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which such party has not
breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty, or covenant.
12.11 Entire Understanding. This Agreement sets forth the entire agreement
and understanding of the parties hereto in respect to the Transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is not intended to
confer upon any other person any rights or remedies hereunder. There have been
no representations or statements, oral or written, that have been relied on by
any party hereto, except those expressly set forth in this Agreement.
12.12 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
<PAGE>40
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
SELLERS
/s/David E. Becker
David E. Becker
/s/Daniel J. Becker
Daniel J. Becker
/s/Laura Ford Mintzer
Laura Ford Mintzer
/s/Newton D. Becker
Newton D. Becker
The Becker CPA Review
Course of California
By:/s/Newton D. Becker
Its: President
The Becker CPA Review
Course Ltd.
By: The Newton D. and Rochelle
F. Becker Foundation,
Its general partner
By:/s/Marvin I. Schotland
Its: Secretary
BUYER
DeVRY CPA Review, Inc.
By: /s/Norman M. Levine
Its: Treasurer
<PAGE>41
[Second Signature Page to Purchase Agreement]
SELLERS (continued)
The Newton D. and Rochelle F. Becker
Foundation, a California nonprofit public
benefit corporation
By: /s/Marvin I. Schotland
Marvin I. Schotland
Its: Secretary
<PAGE>42
LIST OF EXHIBITS
Exhibit A Employment Agreement
Exhibit B Assignment and Assumption Agreement
Exhibit C Legal Opinion of Irell & Manella LLP
Exhibit D Legal Opinion of Mayer, Brown & Platt
Exhibit E Legal Opinion of Michaels, Wishner & Bonner, P.C.
<PAGE>43
SCHEDULE O
DEFINITIONS
"Acquired Assets" shall mean all of the assets of the Becker Group excluding
the Excluded Assets and the Intellectual Property.
"Assumed Obligations" shall mean all of the obligations of the Becker Group
excluding the Excluded Obligations.
"Affiliate" shall mean any person which, directly or indirectly through one
or more intermediaries, controls, is controlled by, or is in common control
with, a specified person.
"Authority" means any governmental, regulatory or administrative body,
agency, subdivision or authority, any court or judicial authority, any public,
professional, regulatory or licensing authority, whether national, Federal,
state or local, or any Person lawfully empowered by any of the foregoing to
enforce or seek compliance with any Regulation.
"Becker Group" means Becker Partnership, Becker Corporation and Subsidiary.
"Becker Partnership" means The Becker CPA Review Course Ltd., a California
limited partnership.
"Business" means the combined business of the members of the Becker Group,
consisting of the provision of instructional services and materials to students
preparing to take the CPA and CMA exams, and represented by the Acquired Assets
and the Assumed Obligations, and including the Intellectual Property.
"Claim" means any claim, lawsuit, demand, suit, hearing, governmental
investigation, notice of a violation, litigation, proceeding, arbitration, or
other dispute, whether civil, criminal, administrative or otherwise.
"Closing" and "Closing Date" shall have the meanings set forth in Section 1.2.
"Closing Agreements" means the Employment Agreement, and with respect to
Buyer and each Seller, an Assignment and Assumption Agreement in the form
attached as Exhibit B, each as appropriately completed and the Assignment of
Copyrights (Exhibit A to the Intellectual Property Agreement) and the
Assignment of Trade Secrets and Publicity Rights (Exhibit B to the Intellectual
Property Agreement).
"Code" shall mean the United States Internal Revenue Code of 1986, as amended.
"Contract" means any agreement, contract, commitment, or other binding
arrangement or understanding, whether written or oral.
<PAGE>44
"DeVRY" means DeVRY, Inc., a Delaware corporation.
"Employment Agreement" shall mean that certain agreement dated as of the
Closing Date between Buyer and Newton D. Becker in substantially the respective
form attached hereto as Exhibit A.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" shall mean (i) prepaid expenses as of the Closing which
will provide no benefit to Buyer following the Closing, (ii) any amounts owed
by Newton Becker or his family members to Becker Partnership or Becker
Corporation, (iii) any assets, interests or rights relating to the Becker
Partnership defined benefit plan, (iv) any deferred income taxes, (v) the Real
Properties or other assets based on or relating thereto, (vi) life insurance
policies maintained for the benefit of Newton Becker, (vii) assets based on or
related to any Excluded Obligations and (viii) any rights and claims relating
to the foregoing.
"Excluded Obligations" shall mean any obligations or liabilities (i) relating
to lobbying organizations, political action committees or similar
organizations, (ii) in respect of Philip Brodax, (iii) based on the Real Estate
and Other Excluded Assets and their transfer or disposition prior to the
Closing, (iv) relating to any life insurance policies maintained for the
benefit of Mr. Becker and/or his family (v) payables or amounts owed to Newton
Becker or his family by any member of the Becker Group, (vi) relating to the
defined benefit plan maintained by the Becker Group, including without
limitation all fees, expenses and liabilities relating to the termination
thereof, (vii) except to the extent fully accrued as liabilities on the audited
balance sheets used to determine the Net Book Value or arising after April 30,
1996 in the ordinary course of business, any compensation or benefits to
independent contractors, consultants, employees and other service providers to
the Becker Group, and (viii) the Royalty Agreement.
"Guarantee" means that certain Guarantee between DeVRY and Sellers, of even
date herewith.
"HSR" shall mean the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended.
"Indebtedness" with respect to any Person means any obligation of such Person
for borrowed money, and in any event shall include (i) any obligation incurred
for all or any part of the purchase price of property or other assets or for
the cost of property or other assets constructed or of improvements thereto,
other than accounts payable included in current liabilities and incurred in
respect of property purchased in the ordinary course of business, (ii) the face
amount of all letters of credit issued for the account of such Person, (iii)
obligations relating to borrowed money (whether or not such Person has assumed
or become liable for the payment of such obligation) secured by Liens and (iv)
capitalized lease obligations.
<PAGE>45
"Indemnitee" shall mean, with respect to any alleged Loss, the party seeking
indemnity hereunder.
"Indemnitor" shall mean, with respect to any alleged Loss, the party from
whom indemnify is being sought hereunder.
"Intellectual Property" shall mean any patents, inventions (whether
patentable or unpatentable), trade secrets, know-how, methods of doing
business, confidential information, trademarks and associated goodwill, designs
and drawings, service marks, logos, tradenames, copyrights, rights of
publicity, mask works and registrations and applications for each of the
foregoing, and computer software programs, computer databases and related
documentation and materials relating to or used in connection with the Business
or the business proposed to be conducted by any of the Becker Group.
"Intellectual Property Agreement" shall mean that certain Intellectual
Property Purchase Agreement of even date herewith between IP Buyer, Newton D.
Becker and the Becker Foundation.
"IP Buyer" means DeVRY Educational Development Corp.
"Lien" means any security interest, lien, charge, mortgage, deed, assignment,
pledge, hypothecation, encumbrance, easement, or restriction of another Person
of any kind or nature.
"Losses" shall mean any and all costs and expenses (including, without
limitation, attorneys' fees and court costs incident to any suit, action,
investigation or other proceeding), damages and losses, net of any tax
adjustments, settlements, reductions or other effects which actually result
from the Loss and its payment by any Indemnitor.
"Material Adverse Effect" means any circumstances, developments, occurrences,
state of facts or matters which have, or would reasonably be expected to have,
a material adverse effect on the operations, assets, condition (financial or
otherwise), results, or prospects of the Business. For the purposes of this
Agreement (other than Section 3.9 and Section 9.1), references to "Material" or
"Material Adverse Effect" means a liquidated cost exceeding $25,000 for any
individual matter or a contingent cost reasonably expected to exceed $25,000
for any individual matter, in each case assuming that Buyer acts to minimize
the costs involved.
"Net Book Value" shall mean the net combined book value of Becker Partnership
and Becker Corporation including the amount of full, year-end reserves and
accruals each as determined as of April 30, 1996 in accordance with GAAP,
excluding any values attributable to the Excluded Obligation and the Excluded
Assets; provided, however, Net Book Value shall be increased by any amounts
contributed to the Becker Group after April 30, 1996 and any amounts paid to
the Becker Group by Becker or his Affiliates after April 30, 1996 in respect of
amounts owed by Newton Becker or his Affiliates.
<PAGE>46
"Old Employment Agreement" means the employment agreements between Newton
Becker, on the one hand, and any member of the Becker Group, on the other,
including such agreements referred in the Schedules hereto.
"Order" means any decree, order, injunction, rule, judgment, consent of or by
any Authority.
"Partnership Intellectual Property" means the Trademarks and associated
goodwill, the Software and all other Intellectual Property (other than the
Copyrights, Publicity Rights and Other Intellectual Property (each as defined
in the Intellectual Property Agreement)).
"Partnership Interest" means a partnership interest in the Becker Partnership.
"Percentage Interest" means, for each Seller, the percentage interest shown
on Schedule 1.1.
"Permits" means any licenses, permits, variances, interim permits, permit
applications, approvals or other authorizations under any Regulation applicable
to the Business, including, without limitation, all licenses issued by state
education departments or professional licensing boards.
"Person" means any corporation, partnership, joint venture, organization,
entity, Authority or natural person.
"Real Properties" means the real property owned by the Becker Corporation
located at 1029 South Bixel Street (Assessor's ID #: Map 51, Book 38, page
007, parcel 013) and 1025 South Bixel Street, Los Angeles, California
(Assessor's ID #: Map 51, Book 38, page 007, parcel 010), together with all
fixtures, improvements, and furniture located thereon or related thereto.
"Regulation" means any law, statute, regulation, ruling, rule, Order or
Permit, of, administered or enforced by or on behalf of any Authority, and the
certificate of incorporation and by-laws of any of the Becker Group.
"Related Agreements" shall mean the Intellectual Property Agreement, the
Guarantee, and the Closing Agreements.
"Royalty Agreement" shall mean that certain agreement between Newton D.
Becker and Becker Partnership which was terminated as of April 30, 1996.
"Senior Management" shall mean, with respect to Becker Group, Newton D.
Becker, Alan Antonino - Controller, Ramin Nadaf, MIS Manager, and the National
Area Lead Instructors: Steve Goldstein, Willard Boone and Edward Pope, Jr.
"Software" means the computer software set forth on Schedule 3.14.
"Taxes" shall mean all taxes, charges, fees, duties, levies or other
assessments, including, without limitation, income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
<PAGE>47
intangible), sales, use, franchise, excise, value added, license, payroll,
unemployment, environmental, customs duties, capital stock, disability, stamp,
leasing, lease, user, transfer, fuel, excess profits, occupational and interest
equalization, windfall profits, severance and employees' income withholding and
Social Security taxes imposed by the United States or any foreign country or by
any state, municipality, subdivision or instrumentality of the United States or
of any foreign country or by any other tax Authority, including all applicable
penalties and interest, and such term shall include any interest, penalties or
additions to tax attributable to such Taxes.
"Taxing Authority" means any Authority empowered to administer or collect
Taxes.
"Tentative Purchase Price" is defined in Section 1.5.
"Trademarks" means the trademarks, servicemarks, tradenames and service names
including those set forth on Schedule 3.14.
"Transactions" shall mean the transactions contemplated by this Agreement and
the Related Agreements.
<PAGE>48
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
This Intellectual Property Purchase Agreement ("Agreement"), dated as of
June 19, 1996, by and between Newton D. Becker ("Becker"), The Newton D.
and Rochelle F. Becker Foundation, a California nonprofit public benefit
corporation ("Becker Foundation") (each a "Seller" and collectively,
"Sellers") and DeVRY Educational Development Corp., a Delaware corporation
("Buyer");
WHEREAS, Sellers are, among others, parties to that certain Agreement
Regarding Purchase of Partnership Interests of even date herewith, which
provides in part for the sale of a business ("Purchase Agreement");
WHEREAS, Buyer is newly formed, wholly owned subsidiary of DeVRY, Inc. a
Delaware corporation, and Buyer wishes to own all rights in the Copyrights,
Other Intellectual Property and Publicity Rights, as defined in this Agreement
and owned by Sellers;
WHEREAS, Sellers are willing, upon payment of the IP Purchase Price (as
defined herein) and subject to the terms and conditions herein set forth, to
transfer and assign all of their rights in the Copyrights, Other Intellectual
Property and Publicity Rights to Buyer;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Agreement to Purchase and Sell.
1.1 Acquisition. On the terms and subject to the conditions of this
Agreement, Sellers agree to sell to Buyer, and Buyer agrees to purchase from
Sellers, on the Closing Date, the Copyrights, the Other Intellectual Property
and the Publicity Rights, in exchange for the payment of the IP Purchase Price.
1.2 Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement will take place at the offices of Irell &
Manella LLP, 333 South Hope Street, Suite 3300, Los Angeles, California 90071,
on June 19, 1996, or at such other date, time and place as may be mutually
agreed upon in writing by the parties (the "Closing Date").
1.3 Transfer of Copyrights, Other Intellectual Property, and Publicity
Rights. At the Closing, Becker Foundation will deliver and transfer to Buyer
all of Becker Foundation's right, title and interests in the Copyrights and
Other Intellectual Property, and Becker will deliver and transfer to Buyer all
<PAGE>49
of Becker's right, title and interests in the Other Intellectual Property and
Publicity Rights. Becker and Becker Foundation shall take all actions
reasonably necessary to vest all such rights in Buyer and to assist in
enforcing such rights, including executing all documents necessary for the
recordation of ownership of any registrations of the Copyrights for and any
trademarks in the name of Buyer with the U.S. Copyright Office and in the U.S.
Patent and Trademark Office, respectively, provided that Buyer pays for
Sellers' reasonable cost in doing so.
1.4 Payment of IP Purchase Price. At Closing, Buyer will pay to Sellers
an amount equal to $17,935,000 (the "IP Purchase Price"), of which $500,000
will be paid to Becker Foundation in respect of the Copyrights, $11,332,750 will
be paid to Becker Foundation in respect of its interest in the Other
Intellectual Property, $6,092,250 will be paid to Becker in respect of his
interest in the Other Intellectual Property, and $10,000 will be paid to Becker
in respect of his interest in the Publicity Rights. All payments to Sellers
will be made by federal reserve wire transfer to a bank account designated in
writing by Sellers.
1.5 Copying of Materials Constituting Other Intellectual Property. At the
Closing, Becker and Becker Foundation shall cause the materials described on
Schedule 2.3 hereto (the "Materials") to be delivered to Buyer by shipping the
Materials to the offices of Price Waterhouse LLP (acting as agent for Buyer)
in Portland, Oregon. Buyer shall cause Price Waterhouse LLP to make, and Buyer
shall retain, one copy of the Materials, and Buyer shall then immediately cause
Price Waterhouse LLP to destroy the Materials delivered by Becker and Becker
Foundation. Buyer shall cause Price Waterhouse LLP to provide a certificate
to Buyer, Becker and Becker Foundation certifying as to the destruction of the
Materials. The provisions of this section 1.5 shall not affect the obligations
with respect to sales and use tax set forth in Section 1.8 of the Purchase
Agreement.
1.6 As soon as practicable following the Closing, Becker shall cause to
be transferred to Buyer all of the shares of stock (except one) of Newton
Becker Limited, a Hong Kong corporation and all of the shares of stock (except
one) of Becker C.P.A. Review Ltd., an Israeli Corporation.
2. Definitions.
2.1 Any capitalized terms used herein that are not defined herein shall
have the meanings given in the Purchase Agreement.
2.2 "Copyrights" shall mean any and all copyrights, materials subject to
copyright protection, and registrations and applications therefor, and
related documentation and materials relating to or used in connection with the
Business or the business proposed to be conducted by the Becker Group,
including all rights to apply for registration or other protection, including
renewals and extensions, to all rights to print, publish, reproduce, prepare
derivative works, distribute copies of works embodying such copyrights by sale,
to rent, lease, lend or transfer ownership, to publicly perform and to publicly
display.
<PAGE>50
such works in all countries of the world, including the United States of
America and all of its Territories and in any rights and causes of action for
copyright infringement, royalties and proceeds heretofore accrued.
2.3 "Other Intellectual Property" shall mean any patents, inventions
(whether patentable or unpatentable), trade secrets and know-how, including
methods of doing business and confidential information, and registrations and
applications for each of the foregoing, relating to teaching methods and
methods of designing and updating lectures and instructional materials used in
connection with the Business or the business proposed to be conducted by any of
the Becker Group, including all rights to apply for registration or other
protection, including renewals and extensions, if applicable, and any rights
and causes of action for infringement of such rights, royalties and proceeds
heretofore accrued, including the materials referenced on Schedule 2.3 hereto.
2.4 "Publicity Rights" shall mean the right of publicity to be used in
connection with a CPA review course, in the name of "Newton D. Becker",
"Becker", "Becker CPA Review" or any other name, slogan, title or design or any
reference or attribute of Becker which has been previously used in conducting
the Business, including the exclusive right to use the name and likeness of
Newton D. Becker in the operation of the Business.
3. Schedule of Copyrights.
Attached as Schedule 3 hereto is a complete schedule of all material
Copyrights currently used in the Business, which lists the title and brief
description of the work and any applicable federal registration number.
4. Representation and Warranties.
4.1 Becker represents and warrants that:
4.1.1 he is the sole owner of all right, title and interest in
and to the Publicity Rights; and
4.1.2 he owns an undivided interest of 35% in the Other
Intellectual Property;
such rights are subsisting and are not invalid or
unenforceable in whole or in part, and are free and clear
of all encumbrances or licenses for use, except as set
forth on Schedule 3.
4.2 Becker represents and warrants that:
4.2.1 Becker Foundation is the sole owner of all right, title and
interest in and to the Copyrights; and
<APGE>51
4.2.2 Becker Foundation owns an undivided interest of 65% in the
Other Intellectual Property;
such rights are subsisting and are not invalid or
unenforceable in whole or in part, and are free and clear of
all encumbrances or licenses for use, except as set forth on
Schedule 3.
4.3 Becker represents and warrants that, except as set forth on
Schedule 3, none of the Copyrights, Other Intellectual Property or
Publicity Rights (collectively, "Intellectual Property") have been or
is the subject of any pending adverse Claim or, to the knowledge of
Becker, the subject of any threatened Claim of infringement except
for Claims which are not reasonably expected to have a Material
Adverse Effect. The use of Intellectual Property does not infringe
any intellectual property rights of another Person, except for claims
which are not reasonably expected to have a Material Adverse Effect,
and Becker and Becker Foundation have not received any notice
contesting their right to use, or asserting infringement with respect
to, any Intellectual Property. Except as set forth on Schedule 3,
Becker and Becker Foundation have not granted any license in respect
of any Intellectual Property.
4.4 Each Seller represents and warrants that it has the full right, power
and authority to grant all the right, title and interest herein
agreed to be granted.
5. Indemnification.
Subject to the limitations and restrictions contained in the Purchase
Agreement, (i) Becker shall indemnify Buyer from and against any and all
liabilities, claims, causes of action, suits, damages and expenses, including
reasonable attorney fees and expenses, arising out of a breach by Becker or
Becker Foundation of this Agreement, (ii) Becker shall indemnify Buyer from and
against any and all liabilities, claims, causes of action, suits, damages and
expenses, including reasonable attorney fees and expenses, arising out of any
infringement, injury or claims of ownership with respect to Intellectual
Property based on acts or events occurring before the Closing Date, and (iii)
this indemnification provision shall survive the termination of this
Agreement. Notwithstanding the foregoing, except for the matters described in
part (ii) of this paragraph, Becker shall not indemnify Buyer from and against
any liabilities, claims, causes of action, suits, damages and expenses,
including reasonable attorney fees and expenses, which are not reasonably
expected to have a Material Adverse Effect.
6. Conditions Precedent to Obligations of Buyer.
The obligations of Buyer to consummate this Agreement are subject to the
fulfillment, prior to or at the Closing, of the following conditions, each of
which may be waived by Buyer in writing:
<PAGE>52
6.1 Closing of Purchase Agreement. The Transactions (other than those
contemplated herein) shall have closed unless the failure to do so is a result
of a breach by Buyer or its Affiliates.
6.2 Delivery of Assignments. Becker Foundation shall have executed and
delivered the Assignment of Copyrights in substantially the form attached
hereto as Exhibit A, and Sellers shall have executed and delivered the
Assignment of Trade Secrets and Publicity Rights in substantially the form
attached hereto as Exhibit B.
7. Conditions Precedent to Obligations of Sellers.
The obligations of Sellers to consummate this Agreement are subject to the
fulfillment, prior to or at the Closing, of the following conditions, each of
which may be waived by Sellers in writing:
7.1 Closing of Purchase Agreement. The Transactions (other than those
contemplated herein) shall have closed unless the failure to do so is a result
of a breach by Sellers or their Affiliates.
7.2 IP Purchase Price. The IP Purchase Price shall have been delivered
as required by Section 1.4.
8. Miscellaneous.
8.1 Termination. This Agreement may be terminated as set forth in
Section 9 of the Purchase Agreement.
8.2 Modifications. This Agreement may not be amended, altered or
modified except by a writing signed by the parties.
8.3 Confidentiality Obligation. Each party hereto shall be bound by the
restrictions on use and obligations of confidentiality set forth in Section
11.1 of the Purchase Agreement, and any breach or threatened breach of such
section may be enforced by injunction as set forth in Section 12.8 of the
Purchase Agreement.
8.4 Cooperation. Each party hereto agrees, both before and after the
Closing, to execute any and all further documents and writings and perform such
other reasonable actions which may be or become necessary or expedient to
effectuate and carry out the transactions contemplated by this Agreement (which
shall not include any obligation to make payments).
8.5 Successors and Assigns. Except as provided herein to the contrary,
this Agreement will be binding upon and inure to the benefit of the parties,
their respective successors and permitted assigns. The rights and obligations
of the parties hereunder may not be assigned prior to the Closing Date.
<PAGE>53
8.6 Governing Law. This Agreement has been negotiated and entered into
in the State of California, and all questions with respect to the Agreement and
the rights and liabilities of the parties will be governed by the laws of that
state, regardless of the choice of laws provisions of California or any other
jurisdiction.
8.7 Entire Understanding. This Agreement sets forth the entire agreement
and understanding of the parties hereto in respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof and is not intended to
confer upon any other person any rights or remedies hereunder. There have been
no representations or statements, oral or written, that have been relied on by
any party hereto, except those expressly set forth in this Agreement.
8.8 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
SELLERS
/s/Newton D. Becker
Newton D. Becker
The Newton D. and Rochelle F. Becker
Foundation
By:/s/Marvin I. Schotland
Its: Secretary
BUYER
DeVRY Educational Development Corp.
By:/s/Norman M. Levine
Its: Treasurer
<PAGE>54
GUARANTEE
THIS GUARANTEE (the "Guarantee") is made and entered into as of June 19,
1996 by and between DeVRY, Inc., a Delaware corporation, ("Guarantor") and The
Becker CPA Review Course of California, a California corporation, ("Becker
Corporation"), the Becker CPA Review Course Ltd., a California limited
partnership ("Becker Partnership"), Newton D. and Rochelle F. Becker
Foundation, a California nonprofit public benefit corporation ("Becker
Foundation"), David E. Becker, Laura Ford Mintzer, Newton D. Becker and Daniel
J. Becker (each of the foregoing a "Seller" and collectively, "Sellers") with
reference to the following facts:
RECITALS
A. DeVRY CPA Review, Inc., a newly formed Delaware corporation,
("Buyer") and Sellers are entering into that certain Agreement Regarding
Purchase of Partnership Interests of even date herewith (the "Purchase
Agreement"), pursuant to which Buyer has agreed to purchase certain Partnership
Interests as defined in the Purchase Agreement) of Becker Partnership.
B. DeVRY Educational Development Corp., a newly formed Delaware
corporation, ("IP Buyer") and Becker and Becker Foundation are entering into
that certain Intellectual Property Purchase Agreement of even date herewith
pursuant to which IP Buyer has agreed to purchase certain intellectual
property.
C. Guarantor controls, directly or indirectly, Buyer and IP Buyer (each a
"Successor" and collectively, "Successors") and will benefit from the
transactions contemplated by the Purchase Agreement.
D. In consideration of Sellers entering into the Purchase Agreement,
Guarantor has agreed, at the request of Successors, to guarantee the
obligations of Successors under the Purchase Agreement and the Related
Agreements (as defined in the Purchase Agreement).
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Continuing Guarantee. In the event that a Successor fails to pay,
perform, satisfy or discharge each and every one of its obligations and
liabilities when and as such obligations and liabilities shall become due in
accordance with the terms of the Purchase Agreement or any of the Related
Agreements, including any applicable cure periods (collectively, the
"Obligations"), Guarantor fully, irrevocably and unconditionally guarantees and
promises to cause any Obligation not paid, performed, satisfied or discharged,
to be paid, performed, satisfied or discharged strictly in accordance with the
terms of such agreement, regardless of any law, regulation or order now or
<PAGE>55
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Sellers with respect thereto.
2. Guarantor's Obligations Unconditional. The obligations of Guarantor
hereunder are independent of the Obligations, and separate action or actions
may be brought or prosecuted against Guarantor whether action is brought
against a Successor or whether a Successor is joined in any such action or
actions. Guarantor agrees that this is a guarantee of payment and not of
collection and that its obligations hereunder shall be unconditional, absolute
and irrevocable and, without limiting the generality of the foregoing, shall not
be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any Obligation, by operation of law or otherwise;
(b) any modification, waiver or amendment of any provision of, or
supplement or consent to, the Purchase Agreement or the Related Agreements or
any act or omission to act hereunder or thereunder;
(c) any change in the existence, structure or ownership of a
Successor (whether or not consented to by Sellers), or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting Successor or
its assets or any resulting release or discharge of any obligation of
Successor;
(d) the validity, regularity or enforceability of the Purchase
Agreement or the Related Agreements (as against a Successor), or the absence of
any action to enforce the same, or any provision of applicable law or
regulation purporting to prohibit the discharge by a Successor of any
Obligation;
(e) the obtaining of any judgment against a Successor or any action
to enforce the same; or
(f) any other act or omission to act or delay of any kind by any
other person or entity or any other circumstance whatsoever which might, but
for the provisions of this Section 2, constitute a legal or equitable discharge
of Guarantor's obligations hereunder.
3. Discharge Only Upon Satisfaction in Full; Reinstatement in Certain
Circumstances. Guarantor's obligations hereunder shall remain in full force
and effect until all Obligations shall have been paid, performed, discharged
and satisfied in full. If, at any time, whether before or after the discharge
of all Obligations, any payment of any amount paid or payable by a Successor
under the Purchase Agreement or the Related Agreements is rescinded or must be
otherwise restored or returned, upon the insolvency, bankruptcy or
reorganization of a Successor, or otherwise, Guarantor's obligations hereunder
with respect to such payment shall be reinstated as though such payment had
been due but not made at such time.
<PAGE>56
4. Waiver of Guarantor. Guarantor hereby waives:
(a) notice of acceptance of this Guarantee and (except for notices
expressly required under the Obligations or hereunder), of the nonperformance by
Successor, diligence, promptness, presentment, protest, dishonor, demand for
payment and notice of nonpayment or failure to perform on the part of a
Successor, filing of claims with a court in the event of insolvency or
bankruptcy of a Successor, and all other notices whatsoever;
(b) any right or requirement that Sellers or any other person or
entity proceed first against, or exhaust any right or take any action against,
any other person or entity;
(c) any defense arising by reason of any claim or defense based upon
an election of remedies by Sellers or any other person or entity which in any
manner impairs, reduces, releases or otherwise adversely affects its
subrogation or reimbursement rights or other rights to proceed against a
Successor or any person or entity; and
(d) any duty on the part of Sellers or any other person or entity to
disclose to Guarantor any matter, fact or thing relating to the business,
operations or condition of a Successor, its assets, or any matter contemplated
by the Purchase Agreement or the Related Agreements now known or hereafter
known by any other person or entity.
Guarantor covenants that this Guarantee will not be discharged except by
complete performance of the Obligations. Without limiting the generality of
the foregoing, Guarantor waives any and all benefits under California Civil
Code Sections 2809, 2810, 2815, 2819, 2825, 2845, 2849 and 2850.
5. Financial Condition of Successors. Guarantor represents to Sellers
that it is now and will be completely familiar with the prospects, business,
operations and condition (financial and otherwise) of each Successor.
6. Notices. All notices under this Guarantee will be in writing and
will be delivered by personal service or telegram, telecopy or certified mail
(if such service is not available, then by first class mail), postage prepaid,
to such address as may be designated from time to time by the relevant party,
and which will initially be as set forth below. Any notice sent by certified
mail will be deemed to have been given three (3) days after the date on which
it is mailed. All other notices will be deemed given when received. No
objection may be made to the manner of delivery of any notice actually received
in writing by an authorized agent of a party. Notices will be addressed
as follows or to such other address as the party to whom the same is directed
will have specified in conformity with the foregoing:
<PAGE>57
(i) If to Sellers:
The Becker CPA Review Course of California
15760 Ventura Boulevard
Suite 1101
Encino, California 91436
Fax: (818) 377-3654
Attn: Newton D. Becker
With a copy given in like manner to:
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
Fax: (310) 203-7199
Attn: Theodore E. Guth, Esq.
(ii) If to Guarantor:
DeVRY, Inc.
One Tower Lane
Oakbrook Terrace, Illinois 60181
Fax: (708) 574-1903
Attn: Ronald Taylor
With a copy given in like manner to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019-5820
Fax: (212) 262-1910
Attn: James B. Carlson, Esq.
7. Governing Law; Jurisdiction. This Guarantee has been negotiated and
entered into in the State of California, concerns a California business and all
questions with respect to the Guarantee and the rights and liabilities of the
parties will be governed by the laws of that state, regardless of the choice
of law provisions of California or any other jurisdiction. Except as provided
in Section 11 below, any and all disputes between the parties which may arise
pursuant to this Guarantee will be heard and determined before an appropriate
federal or state court located in Los Angeles, California. The parties hereto
acknowledge that such court has the jurisdiction to interpret and enforce the
provisions of this Guarantee and the parties waive any and all objections that
they may have as to jurisdiction or venue in any of the above courts.
8. Waivers Strictly Construed. With regard to any power, remedy or right
provided herein or otherwise available to any party hereunder (i) no waiver or
extension of time will be effective unless expressly contained in a writing
<PAGE>58
signed by the waiving party; and (ii) no alteration, modification or impairment
will be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
9. Complete Agreement; Modifications. This Guarantee and any documents
referred to herein or executed contemporaneously herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Guarantee may not be amended, altered or modified except by a
writing signed by the parties.
10. Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Guarantee is intended to be exclusive of any other remedy,
and each and every remedy will be cumulative and will be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or otherwise. The election of any one or more remedies will not
constitute a waiver of the right to pursue other available remedies.
11. Arbitration of Disputes. Except for actions seeking injunctive relief
and actions where the amount of damages or monetary relief exceeds $1,000,000
(in the reasonable good faith belief of the claimant), which may be brought in
any forum described in section 7, any claim arising out of or relating to this
Guarantee, including without limitation its validity, interpretation,
enforceability or breach, which is not settled by agreement between the
parties, shall be settled by arbitration in Los Angeles, California before a
board of three arbitrators, one selected by each party, and the third by the two
persons so selected, all in accordance with the Commercial Arbitration Rules of
the American Arbitration Association ("AAA") then in effect. The notice of
intent to arbitrate shall name one arbitrator, and the party(ies) receiving the
notice shall name the second arbitrator within 15 days or the moving party may
select the second arbitrator from a list supplied by the AAA, with each
arbitrator to be a person experienced in matters involving the sale of
businesses. In the event that these two arbitrators cannot agree upon a third
arbitrator within fifteen (15) days, then the third arbitrator shall be selected
within five (5) days thereafter from the list provided by the AAA with the
parties striking names in order with the party striking first to be determined
by the flip of a coin. The parties hereby (i) consent to the in personam
jurisdiction of the courts of the State of California for purposes of confirming
any such award and entering judgment thereon and (ii) agree to use their best
efforts to keep all matters relating to any arbitration hereunder confidential.
In any arbitration proceedings hereunder, all testimony of witnesses shall be
taken under oath. Each party agrees that the arbitration provisions of this
Guarantee are its exclusive remedy and expressly waives any right to seek
redress in another forum. Each party shall bear the fees of the arbitrator
appointed by it, and the fees of the neutral arbitrators shall be borne equally
by each party during the arbitration, but the fees of all arbitrators shall be
borne by the losing party. Any arbitration shall be commenced within sixty (60)
days, and completed within one hundred twenty (120) days, of the appointment of
the arbitrators.
<PAGE>59
12. Restrictions on Subrogation. Until the Obligations are fully
discharged, Guarantor shall have no right (whether by subrogation or otherwise)
to enforce any remedy that Sellers now or hereafter have against a Successor or
any other party with respect to such Obligations.
13. No Lien or Security Interest. This Guarantee is not secured and does
not create a lien upon or a security interest in any property or assets of
Guarantor or obligate Guarantor to grant a security interest to Sellers in any
of its property or assets.
14. Counterparts. This Guarantee may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
15. Agreement Negotiated. The parties hereto are sophisticated and have
been represented by lawyers throughout this transaction who have carefully
negotiated the provisions hereof. As a consequence, the parties do not believe
that the presumptions of California Civil Code Section 1654 relating to the
interpretation of contracts against the drafter of any particular clause should
be applied in this case and therefore waive its effects.
16. Capitalized Terms. Any capitalized terms that are not defined herein
shall have the meanings set forth in the Purchase Agreement.
<PAGE>60
[Signature Page to Guarantee]
IN WITNESS WHEREOF, the parties have executed this Guarantee as of the
date first written above.
DeVRY, Inc.
By: \s\ Norman M. Levine
Its: V.P. of Finance and
Treasurer
The Becker CPA Review Course Ltd.
By its general partner, Newton D. and
Rochelle F. Becker Foundation
By: \s\Marvin I. Schotland
Its: Secretary
Newton D. and Rochelle F. Becker
Foundation
By: \s\Marvin I. Schotland
Its: Secretary
The Becker CPA Review Course of
California
By: \s\Newton D. Becker
Its: President
\s\David E. Becker
David E. Becker
\s\Laura Ford Mintzer
Laura Ford Mintzer
\s\Daniel J. Becker
Daniel J. Becker
<PAGE>61
[Signature Page to Guarantee-continued]
\s\Newton D. Becker
Newton D. Becker
<PAGE>62
News Release
Contact: Diane Salucci or Release immediately
Cathy Klepack June 19, 1996
800/225-8000, ext. 4148
DeVry Acquires Becker CPA Review
OAKBROOK TERRACE, Ill. -- DeVry Inc. (NYSE: DV), a national system of
career-oriented, higher-education institutes, has acquired the Becker CPA
Review business for cash.
Becker CPA Review, headquartered in Los Angeles, is the leading
international training firm preparing students to take the nationally
administered and centrally graded Certified Public Accountant (CPA) exam.
The company also offers Certified Management Accountant (CMA) review courses.
"We were first attracted to Becker because of the high quality of its
educational programs and its other similarities to DeVry Institutes and Keller
Graduate School of Management," said Dennis J. Keller, chairman and chief
executive officer, DeVry Inc. "Becker's outstanding reputation and its
international network fit well with our long-range growth strategy."
"DeVry Institutes' accounting program will benefit from Becker's CPA
training expertise," said Ronald L. Taylor, president, DeVry Inc., "while
Keller Graduate School's focus on educating adult students will blend well with
Becker's emphasis on preparing college graduates from numerous locations around
the world to take the CPA exam."
- more -
<PAGE>63
DeVry acquires Becker CPA Review, add one
"We are pleased to join forces with DeVry," said Newton D. Becker, chief
executive officer and president, Becker CPA Review. "With DeVry's leadership
and resources, we believe this alliance will propel us into the 21st century
as the premiere provider of career-focused educational and training services."
Becker CPA Review was founded in 1957 by Newton D. Becker. Currently,
there are 135 school locations in the United States as well as eight
international locations in the Middle East, Pacific Rim and Canada.
Historically, Becker students' pass rates on the CPA exam are approximately
double the national average pass rate, as published by the National Association
of State Boards of Accountancy. More than one-third of all students passing
the CPA exam in the United States are Becker CPA Review alumni.
DeVry Inc., which owns and operates DeVry Institutes, Keller Graduate
School of Management and Corporate Educational Services, is one of the largest
publicly owned, degree-granting, higher-education companies in North America.
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