<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 14, 1996
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
SYLVAN LEARNING SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-1492296
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
9135 GUILFORD ROAD
COLUMBIA, MARYLAND 21046
(410) 880-0889
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DOUGLAS L. BECKER
PRESIDENT, CO-CHIEF EXECUTIVE OFFICER AND SECRETARY
SYLVAN LEARNING SYSTEMS, INC.
9135 GUILFORD ROAD
COLUMBIA, MARYLAND 21046
(410) 880-0889
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO
THE AGENT FOR SERVICE, SHOULD BE SENT TO:
RICHARD C. TILGHMAN, JR.
JILL CANTOR NORD, ESQ.
PIPER & MARBURY
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(410) 539-2530
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED PURSUANT
TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE
CHECK THE FOLLOWING BOX: [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A
DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933,OTHER THAN SECURITIES OFFERED IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX: [ ] _________________________
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING: [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C) UNDER
THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING: [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX: [ ]
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
TITLE OF PROPOSED MAXIMUM
SHARES AGGREGATE AMOUNT OF
TO BE REGISTERED OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK, $.01 PAR VALUE $17,196,501 $5,930
===============================================================================
</TABLE>
(1) PURSUANT TO RULE 457(C), THE PROPOSED MAXIMUM OFFERING PRICE PER SHARE,
PROPOSED MAXIMUM AGGREGATE OFFERING PRICE AND REGISTRATION FEE ARE BASED
UPON THE AVERAGE OF THE HIGH AND LOW PRICES OF REGISTRANT'S COMMON STOCK ON
NOVEMBER 7, 1996 AS REPORTED IN THE WALL STREET JOURNAL (EASTERN EDITION),
AS ADJUSTED FOR THE 3-FOR-2 STOCK SPLIT EFFECTED AT THE CLOSE OF BUSINESS ON
THAT DATE.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION
NOVEMBER 14, 1996
PROSPECTUS
544,486 SHARES
SYLVAN LEARNING SYSTEMS, INC.
COMMON STOCK
___________
The shares of Common Stock of Sylvan Learning Systems, Inc. (the "Company")
covered by this Prospectus are outstanding shares which may be offered and sold
from time to time by the stockholder named herein. See "Selling Stockholder."
The Company will not receive any proceeds from the sale of the shares by the
Selling Stockholder.
The Common Stock is quoted on the Nasdaq National Market under the symbol
"SLVN." On November 8, 1996 the last sale price for the Common Stock as
reported on the Nasdaq National Market was $31.00 per share.
The Selling Stockholder named herein or any transferees or other successors
in interest, directly or through dealers or underwriters to be designated, may
sell the Common Stock from time to time in a single block to a broker-dealer
acting as principal, in one or more transactions on the Nasdaq National Market
or in the over-the-counter market and in negotiated transactions, on terms to be
determined at the time of sale. To the extent required, the specific Common
Stock to be sold, the respective purchase prices and public offering prices, the
names of any such agent, dealer or underwriter, and any applicable commissions
or discounts with respect to a particular offer will be set forth in any
accompanying Prospectus Supplement or, if appropriate, a post-effective
amendment to the Registration Statement of which this Prospectus is a part. See
"Plan of Distribution." By agreement, the Company will pay all the expenses of
the registration of the Common Stock by the Selling Stockholders other than
underwriting discounts and commissions and transfer taxes, if any. Such expenses
to be borne by the Company are estimated at $ .
The Selling Stockholders and any broker-dealers, agents or underwriters that
participate with the Selling Stockholders in the distribution of the Common
Stock may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "1933 Act"), and any commissions received by them
and any profit on the resale of the Common Stock purchased by them may be deemed
underwriting commissions or discounts under the 1933 Act.
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________
The date of this Prospectus is November , 1996.
- --------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- --------------------------------------------------------------------------------
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company with the Commission, including the reports and
other information incorporated by reference into this Prospectus, can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its
regional offices located at 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at rates prescribed by the Commission or from the
Commission's Internet web site at http:\\www.sec.gov. The Common Stock of the
Company is quoted on the Nasdaq National Market. Reports, proxy statements and
other information concerning the Company can be inspected at the offices of the
Nasdaq Stock Market, 1735 K Street, Washington, D.C. 20006. This Prospectus
does not contain all the information set forth in the Registration Statement of
which this Prospectus is a part and exhibits relating thereto which the Company
has filed with the Commission. Copies of the information and exhibits are on
file at the offices of the Commission and may be obtained, upon payment of the
fees prescribed by the Commission, may be examined without charge at the offices
of the Commission or through the Commission's Internet web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No. 0-
22844) pursuant to the 1934 Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1995 and Quarterly Reports on Form 10-Q for each of the quarters ended March 31,
1996, June 30, 1996, and September 30, 1996.
2. The Company's Current Report on Form 8-K dated September 27, 1996,
relating to the Company's declaration of a three-for-two stock split in the form
of a stock dividend and the adoption of a Shareholder Rights Plan.
3. The Company's Registration Statement on Form 8-A, filed on October 29,
1996, registering the Preferred Share Purchase Rights to be distributed in
connection with the Company's Shareholder Rights Plan.
4. The description of Common Stock contained in Item 4 of the Company's
Registration Statement on Form 8-A, filed with the Commission under the 1934
Act; and
5. All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date of filing of the
Registration Statement of which this Prospectus is a part and prior to the
termination of the offering made hereby.
The Company will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon the request of any such person, a copy of any or
all of the documents which have been incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for such documents
should be directed to Sylvan Learning Systems, Inc., 9135 Guilford Road,
Columbia, Maryland 21046, Attention: Chief Financial Officer, telephone:
(410)880-0889.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
-2-
<PAGE>
THE COMPANY
Sylvan Learning Systems, Inc. (the "Company" or "Sylvan") is a leading
international private provider of educational and computer-based testing
services. The Company delivers a broad array of supplemental and remedial
educational services and computer-based testing through three principal
divisions. Through its Core Educational Services division, the Company designs
and delivers individualized tutorial services to school-age children through its
608 franchised and Company-owned Sylvan Learning Centers in 50 states, five
Canadian provinces, and Hong Kong. The Company's Testing Services division
administers computer-based tests for major corporations, professional
associations and government agencies through its network of centers ("Technology
Centers"), which are located throughout the world. In addition, the Company's
Contract Educational Services division offers educational services to public and
non-public school districts receiving funding under federal and state programs
and provides contract educational and training services on-site to employees of
large corporations. In 1995, total system-wide revenues were approximately
$194.1 million, composed of $132.1 million from core educational services
($115.3 million from franchised Learning Centers and $16.8 million from Company-
owned Learning Centers, product sales and franchise sales fees), $34.6 million
from testing services and $27.4 million from contract educational services.
Sylvan has developed a proprietary program that enables professionals
throughout the Sylvan Learning Center network to deliver consistent, high
quality, individualized tutoring. During the 15 years of Sylvan Learning Center
operations, more than 600,000 students have completed the Sylvan tutorial
program. From the end of 1991, during which year the current management of the
Company assumed control, through 1995, average monthly royalties from franchised
Learning Centers grew approximately 65%, primarily because of a wider array of
services offered and increased student enrollment.
Sylvan began providing computer-based testing services in 1992. The
Company's testing services revenues grew from $3.6 million in 1993 to $34.6
million in 1995. With its acquisition of Drake Prometric, L.P. in December
1995, Sylvan has established a worldwide network of computer-based testing
centers and has the current capacity to deliver more than 1.6 million computer-
based tests annually through 1,218 Technology Centers. The Company serves as
the exclusive commercial provider of computer-based standardized tests currently
administered by Educational Testing Service ("ETS"), the leading educational
testing organization in the United States. ETS develops and administers more
than 9.5 million tests annually. The Company currently offers the Graduate
Record Exam ("GRE"), the registered and practical nurses licensing exam
("NCLEX") and the National Teachers Exam (the "PRAXIS" series). Sylvan expects
to begin offering the computer-based version of the Graduate Management
Admissions Test ("GMAT"), the graduate business school entrance examination, in
October 1997. In addition, the Company entered into a ten-year contract with
ETS to develop test sites and provide computer-based testing internationally,
and initial testing under this contract began in early 1995. ETS has stated its
intention to make computer-based testing available through Sylvan in 170
countries by 1997. The Company also offers computer-based tests for
organizations licensing or certifying pilots, airplane mechanics, life insurance
agents and pathology laboratory technicians and recently began offering
computer-based tests for Novell certification.
Sylvan offers its educational services under contract to public and non-
public school districts receiving funds under federal and state educational
programs. The Company's revenues from contract educational services grew from
$13.6 million to $27.4, or 102%, from 1994 to 1995. The Title I program,
administered by the U.S. Department of Education, allocated approximately $6.6
billion during the 1995-96 school year to local school districts through state
governments to provide supplemental and remedial educational services to
academically and economically disadvantaged students attending public and non-
public schools. As of December 31, 1995, the Company had contracts to provide
remedial educational services to an aggregate of 52 public schools located in
Baltimore and other Maryland school districts, the District of Columbia, Ohio,
Pennsylvania, Texas, Florida, Minnesota, Delaware, New Jersey and, pursuant to a
contract executed in July 1995, Chicago, Illinois. In addition, Sylvan offers
its contract educational services to adults in the corporate workplace through
its PACE subsidiary and its Sylvan-At-Work program.
-3-
<PAGE>
The Company's principal executive offices are located at 9135 Guilford Road,
Columbia, Maryland 21046, telephone (410) 880-0889; and, as of November 22,
1996, will be located at 1000 Lancaster Street, Baltimore, Maryland 21231, (410)
843-8000.
USE OF PROCEEDS
All of the proceeds from the sale of the shares of the Company's Common Stock
offered hereby will be received by the Selling Stockholder. The Company will
receive none of the proceeds from the sale of the shares of Common Stock.
SELLING STOCKHOLDER
The following table sets forth information regarding the beneficial ownership
of the Company's Common Stock by the Selling Stockholder prior to this offering,
the maximum number of shares of Common Stock to be sold by JLC Learning
Corporation (the "Selling Stockholder") hereby, and the beneficial ownership of
the Company's Common Stock by the Selling Stockholder after this offering,
assuming that all shares of Common Stock offered hereby are sold.
<TABLE>
<CAPTION>
Shares Beneficially
Owned Prior to Share to Shares Beneficially
Offering Be Sole In Owned After Offering
---------------------- This ---------------------
Name and Address of Selling Stockholder Number Percent Offering Number Percent
- --------------------------------------- -------- ------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
JLC Learning Corporation 544,486 2.3% 544,486 -- --
9920 Pacific Heights Boulevard,
San Diego, California 92121
</TABLE>
The Selling Stockholder acquired its shares of Common Stock pursuant to a
Securities Purchase Agreement (the "JLC Agreement"), dated as of November 1,
1996 by and among the Company, the Selling Stockholder, JLC Holdings, Inc.
("Holdings") and Software Systems Corp. Pursuant to the JLC Agreement, the
Company purchased 20,600 shares of Series A Preferred Stock of the Selling
Stockholder and a warrant exercisable for shares of Common Stock of Holdings and
was assigned by the Selling Stockholder all of the shares of Preferred Stock of
Academic Systems Corporation owned by the Selling Stockholder (collectively, the
"JLC Securities") at an aggregate purchase price of $20,600,000. The purchase
price was paid $5,000,000 in cash and 544,486 shares of Common Stock. The
number of shares of Common Stock issued to the Selling Stockholder pursuant to
the JLC Agreement (the "Shares") represents that number of shares of Common
Stock needed to generate net proceeds of $15,600,000 to the Selling Stockholder,
after payment by the Selling Stockholder of sales commissions. The Company
agreed to file a Registration Statement covering all of the Shares as soon as
practicable after consummation of its purchase of the JLC Securities. No
officer, director, employee or affiliate of the Selling Stockholder is employed
by or an affiliate of the Company.
PLAN OF DISTRIBUTION
The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "SLVN." The Common Stock offered hereby will be sold by the Selling
Stockholder acting as principal for its own account and the Company will not
receive any of the proceeds from the sale by the Selling Stockholder of the
Common Stock offered hereby. Any or all of the shares of Common Stock may be
sold from time to time (i) to or through underwriters or dealers, (ii) directly
to one or more other purchasers, (iii) through agents on a best-efforts basis,
or (iv) through a combination of any such methods of sale.
The shares of the Common Stock offered hereby may be sold from time to time
by the Selling Stockholder, or by transferees or other successors in interest.
Such sales may be made in the over-the-counter market, or otherwise at prices
and at terms then prevailing or at prices related to the then current market
price, or in negotiated transactions. Any or all of the shares of Common Stock
offered hereby may be sold by one or more of the following:P (a) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal and
resale by such broker or dealer for its account pursuant to this Prospectus;
(c) an exchange distribution in accordance with the rules of such exchange; and
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Stockholder may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from Selling
Stockholder in amounts to be negotiated prior to the sale. In addition, any
securities covered by this Prospectus which qualify for sale pursuant to Rule
144 may be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Stockholder and any such underwriters, dealers or agents that
participate in the distribution of the Common Stock may be deemed to be
underwriters within the meaning of the 1933 Act, and any profit on the sale of
the Common Stock by them and any discounts, commissions or concessions received
by them may be deemed to be underwriting discounts and commissions under the
1933 Act. The Commons Stock may be sold from time to time in one or more
transactions at a fixed offering price, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the Selling Stockholder and underwriters or dealers. Brokers or
dealers acting in connection with the sale of Common Stock contemplated by this
Prospectus may receive fees or commissions in connection therewith.
At the time a particular offer of Common Stock is made, to the extent
required, a supplement to this Prospectus will be distributed which will
identify and set forth the aggregate number of shares of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, the purchase price paid by any underwriter for
Common Stock purchased from the Selling Stockholder, any discounts, commissions
and other items constituting compensation from the Selling Stockholder and/or
the Company and any discounts, commissions or concessions allowed or reallowed
or paid to dealers, including the proposed selling price to the public. Such
supplement to this Prospectus and, if necessary, a post-effective amendment to
the Registration Statement of which this Prospectus is a part, will be filed
with the Commission to reflect the disclosure of additional information with
respect to the distribution of the Common Stock.
-4-
<PAGE>
The Selling Stockholder will pay all applicable stock transfer taxes,
transfer fees and commissions or discounts. The Company has agreed to bear the
cost of preparing the Registration Statement of which this Prospectus is a part
and all filing fees and legal and accounting expenses in connection with
registration of the shares of Common Stock offered hereby under federal and
state securities laws. The Company has agreed to indemnify the Selling
Stockholder and certain other persons against certain liabilities, inclding
liabilities arising under the 1933 Act.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Piper & Marbury L.L.P., Baltimore, Maryland.
EXPERTS
The consolidated financial statements and schedule of Sylvan Learning
Systems, Inc. appearing in the Annual Report of Sylvan Learning Systems, Inc.
(Form 10-K) for the year ended December 31, 1995 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements have been incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
-5-
<PAGE>
=========================================================================
No person has been authorized by the Company to give any information
or to make any representations other than those contained in this Prospectus
in connection with the offer contained in this Prospectus, and if given or
made, such information or representations may not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities in any
jurisdiction in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so,
or to any person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall
create an implication that there has been no change in the affairs of the
Company since the date hereof.
_____________________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information .................................... 2
Incorporation of Certain Documents by Reference .......... 2
The Company .............................................. 3
Use of Proceeds .......................................... 4
Selling Stockholder ...................................... 4
Plan of Distribution ..................................... 4
Legal Matters ............................................ 5
Experts .................................................. 5
</TABLE>
544,486 SHARES
SYLVAN LEARNING
SYSTEMS, INC.
COMMON STOCK
PROSPECTUS
NOVEMBER , 1996
================================================================================
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with this
Registration Statement. The Company will pay all expenses of the offering. All
of such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission.
<TABLE>
<S> <C>
Filing Fee-Securities and Exchange Commission.. $ 5,930.00
Nasdaq Listing Fees............................ 10,889.72
Fees and Expenses of Counsel................... 5,000.00
Miscellaneous Expenses......................... 4,180.28
----------
TOTAL $26,000.00
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter provides that, to the fullest extent that
limitations on the liability of directors and officers are permitted by the
Maryland General Corporation Law, no director or officer of the Company shall
have any liability to the Company or its stockholders for monetary damages. The
Maryland General Corporation Law provides that a corporation's charter may
include a provision which restricts or limits the liability of its directors or
officers to the corporation or its stockholders for money damages except: (1) to
the extent that it is provided that the person actually received an improper
benefit or profit in money, property or services, for the amount of the benefit
or profit in money, property or services actually received, or (2) to the extent
that a judgment or other final adjudication adverse to the person is entered in
a proceeding based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding. The Company's
Charter and By-laws provide that the Company shall indemnify and advance
expenses to its currently acting and its former directors to the fullest extent
permitted by the Maryland General Corporation Law and that the Company shall
indemnify and advance expenses to its officers to the same extent as its
directors and to such further extent as is consistent with law.
The Charter and By-laws provides that the Company will indemnify its
directors and officers and may indemnify employees or agents of the Company to
the fullest extent permitted by law against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Company. In addition, the Company's Charter provides that its
directors and officers will not be liable to stockholders for money damages,
except in limited instances. However, nothing in the Charter or By-laws of the
Company protects or indemnifies a director, officer, employee or agent against
any liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. To the extent that a director has been
successful in defense of any proceeding, the Maryland General Corporation Law
provides that he shall be indemnified against reasonable expenses incurred in
connection therewith.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
3.1 Articles of Amendment and Restatement*
3.2 Articles Supplementary for Series A Junior Participating Preferred
Stock
3.2 Amended and Restated By-Laws*
4.1 Specimen Stock Certificate*
4.2 Stockholders' Agreement dated as of January 26, 1993 by and among
the Registrant, Certain Stockholders and the Investors named
therein.*
4.3 Securities Purchase Agreement dated as of November 1, 1996 by and
among the Registrant, JLC Learning Corporation, JLC Holdings, Inc.
Software Systems Corp.**
5.1 Opinion of Piper & Marbury L.L.P. regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
</TABLE>
- ---------------
* Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-69558), filed on September 28, 1993.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suite or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and
II-2
<PAGE>
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs in contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in the
registration statement.
(2) That for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement or Amendment to be signed on its behalf by the undersigned, thereunto
duly authorized, in Columbia, Maryland, on this 13th day of November, 1996.
SYLVAN LEARNING SYSTEMS, INC.
By /s/ R. Christopher Hoehn-Saric
-------------------------------
R. Christopher Hoehn-Saric, Chairman
of the Board and Co-Chief Executive
Officer
Know all men by these presents, that each person whose signature appears
below constitutes and appoints R. Christopher Hoehn-Saric and Douglas L. Becker
(with full power to each of them to act alone) as his true and lawful attorney-
in-fact and agent, with full power of substitution, for him and in his name,
place and stead in any and all capacities to sign any or all amendments or post-
effective amendments to this Registration Statement, including post-effective
amendments filed pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, and to file the same with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, to sign any
and all applications, registration statements, notices or other document
necessary or advisable to comply with the applicable state securities laws, and
to file the same, together with all other documents in connection therewith,
with the appropriate state securities authorities, granting unto said attorneys-
in-fact and agents or any of them, or their or his substitute or substitutes,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, thereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- -----
<S> <C> <C>
Co-Chief Executive Officer and
Chairman of the Board of
/s/ R. Christopher Hoehn-Saric Directors November 13, 1996
- ------------------------------ (Principal Executive Officer)
R. Christopher Hoehn-Saric
Co-Chief Executive Officer
/s/ Douglas L. Becker President, Secretary and November 13, 1996
- ------------------------------ Director
Douglas L. Becker
Chief Financial Officer
/s/ B. Lee McGee (Principal Financial and November 13, 1996
- ------------------------------ Accounting Officer)
B. Lee McGee
/s/ Donald V. Berlanti Director November 13, 1996
- ------------------------------
Donald V. Berlanti
Director November , 1996
- ------------------------------
R. William Pollock
Director November , 1996
- ------------------------------
Patrick A. Hopf
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ J. Phillip Samper Director November 13, 1996
- --------------------------
J. Phillip Samper
/s/ Nancy A. Cole Director November 13, 1996
- --------------------------
Nancy A. Cole
/s/ James H. McGuire Director November 13, 1996
- --------------------------
James H. McGuire
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<C> <S> <C>
3.1 Articles of Amendment and Restatement*
3.2 Articles Supplementary for Series A
Junior Participating Preferred Stock
3.3 Amended and Restated By-Laws*
4.1 Specimen Stock Certificate*
4.2 Stockholders' Agreement dated as of
January 26, 1993 by and among the
Registrant, Certain Stockholders and
the Investors named therein.*
4.3 Securities Purchase Agreement dated as
of November 1, 1996 by and among the
Registrant, JLC Learning Corporation,
JLC Holdings, Inc. and Software
Systems Corp.**
5.1 Opinion of Piper & Marbury L.L.P.
regarding the legality of the
securities being registered.
23.1 Consent of Ernst & Young LLP.
---------------------------------------
</TABLE>
* Incorporated by reference from the Registrant's Registration
Statement on Form S-1 (No. 33-69558), filed on September 28, 1993.
** To be filed by amendment.
II-6
<PAGE>
EXHIBIT 3.2
ARTICLES SUPPLEMENTARY
Series A Junior Participating Preferred Stock
---------------------------------------------
OF
SYLVAN LEARNING SYSTEMS, INC.
(filed with the Maryland State Department of Assessments and
Taxation on October 29, 1996)
SYLVAN LEARNING SYSTEMS, INC., a Maryland corporation, having its
principal office in Howard County, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Article SIXTH of the Charter of the Corporation, the Board
of Directors has duly divided and classified 250,000 shares of the Preferred
Stock of the Corporation into a series designated "Series A Junior Participating
Preferred Stock" and has provided for the issuance of such series.
SECOND: The terms of the Series A Junior Participating Preferred Stock
as set by the Board of Directors are as follows:
1. Designation and Amount. The shares of such series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall
initially be 250,000, subject to increase or decrease by action of the Board of
Directors effectuated by further Articles Supplementary.
2. Dividends and Distributions.
---------------------------
(i) The holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of
a share of Series A Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) Five Dollars ($5.00) or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares
of Common Stock of the Corporation or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise, declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time after the date hereof declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number
-1-
<PAGE>
of shares of Common Stock that were outstanding immediately prior to
such event.
(ii) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in subparagraph (i) of this
paragraph 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of Five Dollars ($5.00) per share on
the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of
Series A Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Preferred Stock
-------------
shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at
any time after the date hereof declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
(iii) Except as set forth herein, holders of Series A
Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote
with holders of Common Stock and any other capital stock of the
Corporation having general voting rights as set forth herein) for taking
any corporate action.
(iv) At such time as quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
paragraph 2 of this Section are in arrears for six consecutive quarters,
the holders of the Series A Preferred Stock may, by affirmative vote of
a majority thereof, remove
-2-
<PAGE>
two members of the Class of the Board of Directors whose term expires at
the next annual meeting of shareholders of the Corporation and elect
their replacements, which replacements shall serve as members of the
Board of Directors until (x) all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full and (y) their successors
shall have been elected by the affirmative vote of the holders of the
Common Stock and Series A Preferred Stock, voting together as a single
class, and shall have qualified.
4. Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
paragraph 2 of this Section are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(a) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(b) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all
such shares are then entitled;
(c) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(d) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
subparagraph (i) of this paragraph 4, purchase or otherwise acquire such
shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred Stock purchased
-----------------
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be classified again and reissued as part of a new
series or class of Preferred Stock to be created by the Board of Directors
pursuant to its power contained in the Charter, subject to the conditions and
restrictions on issuance set forth herein.
-3-
<PAGE>
6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made
(a) to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have received One hundred dollars ($100.00) per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the
holders of shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (b) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other such
parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time after the date hereof declare
or pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter
---------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the date
hereof declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case
the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred Stock shall not be
-------------
redeemable.
9. Rank. The Series A Preferred Stock shall rank junior with respect
----
to payment of dividends and on liquidation to all other Preferred Stock of
the Corporation unless the terms of any other Preferred Stock specifically
provide that it shall rank junior to, or on a parity with, the Series A
Preferred Stock.
10. Amendment. The Charter of the Corporation shall not be amended in
---------
any manner that would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the
outstandingshares of Series A Preferred Stock, voting together as a single
class.
-4-
<PAGE>
IN WITNESS WHEREOF, SYLVAN LEARNING SYSTEMS, INC. has caused these
presents to be signed in its name and on its behalf by its President and
witnessed by its Assistant Secretary on October 28, 1996.
WITNESS: SYLVAN LEARNING SYSTEMS, INC.
/s/ O. Steven Jones By: /s/ Douglas L. Becker
------------------------------------ -------------------------------
O. Steven Jones, Assistant Secretary Douglas L. Becker, President
THE UNDERSIGNED, President of Sylvan Learning Systems, Inc., who
executed on behalf of the Corporation Articles Supplementary of which this
Certificate is made a part, hereby acknowledges in the name and on behalf of
said Corporation the foregoing Articles Supplementary to be the corporate act of
said Corporation and hereby certifies that the matters and facts set forth
herein with respect to the authorization and approval thereof are true in all
material respects under the penalties of perjury.
/s/ Douglas L. Becker
-------------------------------
Douglas L. Becker, President
-5-
<PAGE>
EXHIBIT 5.1
-----------
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201-3018 WASHINGTON
410-539-2530 NEW YORK
FAX: 410-539-0489 PHILADELPHIA
EASTON
LONDON
November 11, 1996
Sylvan Learning Systems, Inc.
9135 Guilford Road
Columbia, Maryland 21046
Re: Registration Statement on Form S-3
----------------------------------
Dear Sirs:
We have acted as counsel to Sylvan Learning Systems, Inc., a Maryland
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-3 (the "Registration Statement") filed on the date hereof
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement
relates to 544,486 shares of the Company's Common Stock, par value $.01 per
share (the "Shares"), which were previously issued by the Company and are being
registered for resale by the holders thereof.
In this capacity, we have examined the Company's Charter and By-Laws,
the proceedings of the Board of Directors of the Company relating to the
issuance of the Shares and such other documents, instruments and matters of law
as we have deemed necessary to the rendering of this opinion. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, and the conformity with originals
of all documents submitted to us as copies.
<PAGE>
PIPER & MARBURY
L.L.P.
Sylvan Learning Systems, Inc.
November 11, 1996
Page 2
Based upon the foregoing, we are of the opinion and advise you that each
of the Shares described in the Registration Statement has been duly authorized
and validly issued and is fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving our consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the Rules and Regulations of the Commission thereunder.
Very truly yours,
/S/ PIPER & MARBURY L.L.P.
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
--------------------------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-_______) and related Prospectus of
Sylvan Learning Systems, Inc. for the registration of 544,486 shares of its
common stock and to the incorporation by reference therein of our report dated
February 16, 1996, with respect to the consolidated financial statements and
schedule of Sylvan Learning Systems, Inc. and subsidiaries included in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Baltimore, MD
November 8, 1996
