EXECUTION VERSION AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

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EDGE ACQUISITION CORPORATION | Edge Acquisition, LLC | Educate, Inc

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Title: EXECUTION VERSION AGREEMENT AND PLAN OF MERGER
Governing Law: Delaware Date: 1/29/2007
Industry: Schools Law Firm: Skadden Arps;Hughes Hubbard;Katten Muchin Sector: Services

Exhibit 2.1

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

EDGE ACQUISITION, LLC

EDGE ACQUISITION CORPORATION

and

EDUCATE, INC.

Dated as of January 28, 2007

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”) is entered into as of January 28, 2007, by and among Edge Acquisition, LLC, a Delaware limited liability company (“ Parent ”), Edge Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of Parent (“ MergerCo ”), and Educate, Inc., a Delaware corporation (the “ Company ”). Capitalized terms used, but not otherwise defined, herein shall have the meanings set forth in Section 8.1 .

RECITALS

WHEREAS, the parties intend that MergerCo be merged with and into the Company, with the Company surviving that merger on the terms and subject to the conditions set forth herein;

WHEREAS, in the Merger, upon the terms and subject to the conditions of this Agreement, each share of common stock, par value $0.01 per share, of the Company (the “ Common Stock ”) will be converted into the right to receive $8.00 per share in cash;

WHEREAS, the Board of Directors of the Company, acting upon the unanimous recommendation of the Negotiation Committee, has, by unanimous vote of all of the directors (other than Douglas L. Becker and R. Christopher Hoehn-Saric, each of whom abstained), (i) determined that it is in the best interests of the Company and its stockholders (other than those stockholders who will exchange their Shares for membership interests in Parent prior to the Effective Time), and declared it advisable, to enter into this Agreement with Parent and MergerCo, (ii) approved the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, including the Merger but excluding the Asset Sales, and (iii) resolved to recommend adoption of this Agreement by the stockholders of the Company, except in certain situations provided herein;

WHEREAS, the Board of Directors and stockholders of MergerCo have unanimously approved this Agreement and declared it advisable for MergerCo to enter into this Agreement;

WHEREAS, certain existing stockholders of the Company desire to contribute their Shares to Parent immediately prior to the Effective Time in exchange for membership interests in Parent;

WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to Parent’s and MergerCo’s willingness to enter into this Agreement, Parent, MergerCo and certain stockholders of the Company are entering into a voting agreement, of even date herewith (the “ Voting Agreement ”), pursuant to which such stockholders have agreed, subject to the terms thereof, to vote their Shares in favor of adoption of this Agreement; and

WHEREAS, the parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and the transactions contemplated by this Agreement (excluding the Asset Sales) and also to prescribe certain conditions to the Merger;

NOW, THEREFORE, in consideration of the foregoing and of the representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, agree as follows:

I. THE MERGER

Section 1.1 The Merger . On the terms and subject to the conditions set forth in this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the “ DGCL ”), at the Effective Time, (a) MergerCo will merge with and into the Company (the “ Merger ”), (b) the separate corporate existence of MergerCo will cease and (c) the Company will continue its corporate existence under Delaware law as the surviving corporation in the Merger (the “ Surviving Corporation ”) and a subsidiary of Parent.

Section 1.2 Closing . Unless otherwise mutually agreed in writing by the Company and Parent, the closing of the Merger (the “ Closing ”) will take place at the offices of Katten Muchin Rosenman LLP, 525 West Monroe, Chicago, Illinois 60661, at 9:00 a.m. local time on the third Business Day following the day (the “ Satisfaction Date ”) on which all of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied by actions taken at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or, if permissible, waived in accordance with this Agreement or another date mutually agreed to by the parties. The date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date .”

Section 1.3 Effective Time . Subject to the provisions of this Agreement, at the Closing, the Company will cause a certificate of merger (the “ Certificate of Merger ”) to be executed, acknowledged and filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL. The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by Parent and the Company in writing and specified in the Certificate of Merger in accordance with the DGCL (the effective time of the Merger being hereinafter referred to as the “ Effective Time ”).

Section 1.4 Effects of the Merger . The Merger will have the effects set forth in this Agreement and the applicable provisions of the DGCL.

Section 1.5 Organizational Documents . At the Effective Time,

(a) the Company Certificate, as in effect immediately prior to the Effective Time, shall be further amended to read as set forth in Exhibit 1.5(a) and, as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein or by applicable Law; and

(b) the by-laws of the Company, as in effect immediately prior to the Effective Time, shall be amended to read as set forth in Exhibit 1.5(b) and, as so amended, shall be the by-laws of the Surviving Corporation until thereafter amended as provided therein or by applicable Law.

Section 1.6 Directors and Officers of Surviving Corporation . The directors of MergerCo and the officers of the Company, in each case, as of the Effective Time shall, from and after the Effective Time, be the directors and officers, respectively, of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation or bylaws of the Surviving Corporation.

II. EFFECT OF THE MERGER ON CAPITAL STOCK

Section 2.1 Effect of the Merger on Capital Stock . At the Effective Time, as a result of the Merger and without any action on the part of MergerCo or the Company or the holder of any capital stock of MergerCo or the Company:

(a) Cancellation of Certain Common Stock . Each share of Common Stock that is owned by MergerCo, Parent or the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly owned Subsidiaries will automatically be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor.

(b) Conversion of Common Stock . Each share of Common Stock, including each restricted Share, whether or not vested (each, a “ Share ” and collectively, the “ Shares ”), issued and outstanding immediately prior to the Effective Time (other than (i) Shares to be cancelled in accordance with Section 2.1(a) and (ii) Dissenting Shares (each, an “ Excluded Share ” and collectively, the “ Excluded Shares ”)), will be converted into the right to receive $8.00 in cash from Parent or MergerCo (through the Paying Agent as provided in Section 2.2 ), without interest (the “ Merger Consideration ”).

(c) Cancellation of Shares . At the Effective Time, all Shares will cease to be outstanding, will be cancelled and will cease to exist, and, in the case of non-certificated shares represented by book-entry (“ Book-Entry Shares ”), the names of the former registered holders shall be removed from the registry of holders of such shares, and, subject to Section 2.3 , each holder of a certificate formerly representing any such Shares (each, a “ Certificate ”) and each holder of a Book-Entry Share, other than Dissenting Shares, will cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest, in accordance with Section 2.2 .

(d) Conversion of MergerCo Capital Stock . Each share of common stock, par value $0.01 per share, of MergerCo issued and outstanding immediately prior to the Effective Time will be converted into one share of common stock, par value $0.01 per share, of the Surviving Corporation.

Section 2.2 Surrender of Certificates and Book-Entry Shares .

(a) Paying Agent . Prior to the Effective Time, for the benefit of the holders of Shares (other than Excluded Shares), Parent will (i) designate, or cause to be designated, a bank or trust company that is reasonably acceptable to the Company (the “ Paying Agent ”) and (ii) enter into a paying agent agreement, in form and substance reasonably acceptable to the Company, with such Paying Agent to act as agent for the payment of the Merger Consideration in respect of Certificates upon surrender of such Certificates (or effective affidavits of loss in lieu thereof and a bond, if required, pursuant to Section 2.2(f) ) and the Book-Entry Shares in accordance with this Article II from time to time after the Effective Time. Immediately prior to the Effective Time, Parent or MergerCo will deposit, or cause to be deposited, with the Paying Agent cash in the amount necessary for the payment of the Merger Consideration pursuant to Section 2.1(b) upon surrender of such Certificates and Book-Entry Shares and the aggregate amount required to be paid to the holders of Options (as defined below) pursuant to Section 2.4(a) (such cash being herein referred to as the “ Payment Fund ”). The Payment Fund shall not be used for any other purpose. The Payment Fund shall be invested by the Paying Agent as directed by the Surviving Corporation; provided , however , that such investments shall be (i) in obligations of, or guaranteed by, the United States of America or any agency or instrumentality thereof and backed by the full faith and credit of the United States of America, (ii) in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or (iii) in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion (based on the most recent financial statements of such bank which are then publicly available). Any net profit resulting from, or interest or income produced by, such investments shall be the property of and payable to the Surviving Corporation.

(b) Payment Procedures . Promptly after the Effective Time, but in no event more than five (5) business days after the Effective Time, the Surviving Corporation will instruct the Paying Agent to mail to each holder of record of Shares (other than Excluded Shares) a letter of transmittal in customary form as reasonably agreed by the parties hereto specifying that delivery will be effected, and risk of loss and title to Certificates and Book-Entry Shares will pass, only upon proper delivery of Certificates (or effective affidavits of loss in lieu thereof and a bond, if required, pursuant to Section 2.2(f) ) or Book-Entry Shares, as the case may be, to the Paying Agent and instructions for use in effecting the surrender of the Certificates (or effective affidavits of loss in lieu thereof and a bond, if required, pursuant to Section 2.2(f) ) and Book-Entry Shares in exchange for the Merger Consideration. Upon the proper surrender of a Certificate (or effective affidavit of loss in lieu thereof and a bond, if required, pursuant to Section 2.2(f) ) or Book-Entry Share to the Paying Agent, together with a properly completed letter of transmittal, duly executed, and such other documents as may reasonably be requested by the Paying Agent, the holder of such Certificate or Book-Entry Share will be entitled to receive in exchange therefor cash in an amount equal to the Merger Consideration (after giving effect to any required tax withholdings) for each Share (other than Dissenting Shares) formerly represented by such Certificate or Book-Entry Share that such holder has the right to receive pursuant to this Article II , and the Certificate or Book-Entry Share so surrendered will forthwith be cancelled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates or Book-Entry Shares. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, the Merger Consideration to be paid upon

due surrender of the Certificate or Book-Entry Share may be paid to such a transferee if the Certificate or Book-Entry Share formerly representing such Shares is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid or are not applicable.

(c) Withholding Taxes . The Surviving Corporation and the Paying Agent will be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement to any holder of Shares or holder of Stock Options any amounts required to be deducted and withheld with respect to such payments under the Code and the rules and Treasury Regulations promulgated thereunder, or any provision of state, local or foreign Tax law. Any amounts so deducted and withheld will be timely paid to the applicable Tax authority and will be treated for all purposes of this Agreement as having been paid to the holder of the Shares or holders of Stock Options, as the case may be, in respect of which such deduction and withholding was made.

(d) No Further Transfers . After the Effective Time, there will be no transfers on the stock transfer books of the Company of Shares that were outstanding immediately prior to the Effective Time other than to settle transfers of Shares that occurred prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares are presented to the Paying Agent, they will be cancelled and exchanged for the Merger Consideration as provided in this Article II .

(e) Termination of Payment Fund . Any portion of the Payment Fund that remains undistributed to the holders of the Certificates or Book-Entry Shares twelve months after the Effective Time will be delivered to the Surviving Corporation, on demand, and any holder of a Certificate or Book-Entry Share who has not theretofore complied with this Article II will thereafter look only to the Surviving Corporation for payment of his or her claims for Merger Consideration. Notwithstanding the foregoing, to the fullest extent permitted by applicable Law, none of Parent, MergerCo, the Company, the Surviving Corporation, the Paying Agent or any other Person will be liable to any former holder of Shares for any amount delivered to a public official pursuant to applicable abandoned property, escheat or similar Laws.

(f) Lost, Stolen or Destroyed Certificates . In the event any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond in customary amount and upon such terms as the Surviving Corporation may determine are necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration pursuant to this Agreement.

Section 2.3 Dissenting Shares . Notwithstanding any provision of this Agreement to the contrary and to the extent provided under the DGCL, any Shares outstanding immediately prior to the Effective Time that are held by stockholders (each, a “ Dissenting Stockholder ”) that have neither voted in favor of the adoption of this Agreement nor consented thereto in writing and that have demanded properly in writing appraisal for such Shares and otherwise properly perfected and not withdrawn or lost his or her rights (the “ Dissenting Shares ”) in accordance with Section 262 of

the DGCL will not be converted into, or represent the right to receive, the Merger Consideration. Such Dissenting Stockholders will be entitled to receive payment of the appraised value of Dissenting Shares held by them in accordance with the provisions of such Section 262, except that all Dissenting Shares held by stockholders who have failed to perfect or who effectively have withdrawn or lost their rights to appraisal of such Dissenting Shares pursuant to Section 262 of the DGCL will thereupon be deemed to have been converted into, and represent the right to receive, the Merger Consideration in the manner provided in Article II and will no longer be Excluded Shares. The Company will give Parent prompt notice of any written demands for appraisal, attempted withdrawals of such demands, and any other instruments served pursuant to applicable Law received by the Company relating to stockholders’ rights of appraisal. The Company will give Parent the opportunity to participate in and direct all negotiations and proceedings with respect to demands for appraisal. The Company will not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisals of Dissenting Shares, offer to settle or settle any such demands or approve any withdrawal or other treatment of any such demands.

Section 2.4 Treatment of Stock Options .

(a) Except as set forth in Section 2.4(a) of the Acquiror Disclosure Letter, each option to purchase Shares (collectively, the “ Stock Options ”), whether vested or unvested, outstanding immediately prior to the Effective Time pursuant to the Company Benefit Plans will at the Effective Time become fully vested and be cancelled and the holder of such Stock Option will, in full settlement of such Stock Option, receive from Parent or MergerCo (through the Paying Agent as provided in Section 2.2 ) an amount (subject to any applicable withholding tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per Share of such Stock Option multiplied by (y) the number of Shares subject to such Stock Option (with the aggregate amount of such payment rounded up to the nearest whole cent). The holders of Stock Options will have no further rights in respect of any Stock Options from and after the Effective Time.

(b) Upon the Effective Time, the Company shall deliver to the Paying Agent an electronic listing, suitable for the Paying Agent’s use, of each holder of Stock Options as of the Effective Time, provided that such listing shall be in form and content reasonably satisfactory to Parent. Parent or MergerCo shall instruct the Paying Agent to deliver the payment due each such holder promptly following the Effective Time.

(c) Prior to the Effective Time, the Company Board (or a committee thereof) will adopt such resolutions and will take such other actions as shall be required to effectuate the actions contemplated by this Section 2.4 , without paying any consideration or incurring any debts or obligations on behalf of the Company or the Surviving Corporation.

Section 2.5 Timing of Equity Rollover . For the avoidance of doubt, the parties acknowledge and agree that the contribution of Shares to Parent or MergerCo pursuant to the Equity Rollover (and any subsequent contribution of such Shares prior to the Effective Time by Parent to MergerCo) shall be deemed to occur immediately prior to the Effective Time and prior to any other above-described event.

III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and MergerCo that, except (i) as set forth in the corresponding sections or subsections of the letter delivered to Parent and MergerCo by the Company concurrently with entering into this Agreement (the “ Company Disclosure Letter ”) (it being understood that any information set forth in a particular section or subsection of the Company Disclosure Letter shall be deemed to be disclosed in each other section or subsection thereof to which the relevance of such information is reasonably apparent on its face), (ii) as may be disclosed in any of the Company SEC Documents filed on or after December 31, 2005 and at least five (5) Business Days prior to the date of this Agreement or (iii) as arising after the date of this Agreement from any actions taken by the Company or any of its Subsidiaries after the date hereof at, and in accordance with, the specific request of Parent, MergerCo or their respective Representatives to facilitate the Asset Sales:

Section 3.1 Organization; Power; Qualification. The Company and each of its Subsidiaries is a corporation, limited liability company or other legal entity duly organized, validly existing and in good standing (to the extent such concept is legally recognized) under the Laws of its jurisdiction of organization, except in the case of a Subsidiary, where the failure to be so incorporated, existing and in good standing would not reasonably be expected to have a Company Material Adverse Effect. Each of the Company and its Subsidiaries has the requisite corporate or similar power and authority to own, lease and operate its assets and to carry on its business as now conducted and as it will be conducted through the Effective Time. Each of the Company and its Subsidiaries is duly qualified or licensed to do business as a foreign corporation, limited liability company or other legal entity and is in good standing (to the extent such concept is legally recognized) in each jurisdiction where the character of the assets and properties owned, leased or operated by it or the nature of its business makes such qualification or license necessary, except where the failure to be so qualified or licensed or in good standing would not reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any Subsidiary is in violation of its organizational or governing documents, except for such violations that would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.2 Corporate Authorization; Enforceability .

(a) The Company has all requisite corporate power and authority to enter into and to perform its obligations under this Agreement and, subject to adoption of this Agreement by the Requisite Company Vote, to consummate the transactions contemplated by this Agreement, excluding the Asset Sales. The Board of Directors of the Company (the “ Company Board ”), acting upon the unanimous recommendation of the Negotiation Committee, at a duly held meeting has, by unanimous vote of all of the directors (other than Douglas L. Becker and R. Christopher Hoehn-Saric, each of whom abstained), (i) determined that it is in the best interests

of the Company and its stockholders (other than stockholders who invest in Parent or MergerCo), and declared it advisable, to enter into this Agreement with Parent and MergerCo, (ii) approved the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby, including the Merger but excluding the Asset Sales, and (iii) subject to a Recommendation Change (as defined below) to the extent provided for under Section 5.3 , resolved to recommend that the stockholders of the Company adopt this Agreement (including the recommendation of the Negotiation Committee, the “ Company Board Recommendation ”) and directed that such matter be submitted for consideration of the stockholders of the Company at the Company Stockholders Meeting. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement, excluding the Asset Sales, have been duly and validly authorized by all necessary corporate action on the part of the Company, subject to obtaining the Requisite Company Vote.

(b) This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Agreement by Parent and MergerCo, constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except to the extent that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws, now or hereafter in effect, relating to creditor’s rights generally, (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (iii) the remedy of specific performance and injunctive and other forms of equitable relief being subject to the discretion of the Governmental Entity before which any enforcement proceeding therefor may be brought.

Section 3.3 Capitalization; Options .

(a) The Company’s authorized capital stock consists solely of 120,000,000 shares of Common Stock and 20,000,000 shares of preferred stock (the “ Preferred Stock ”). As of the close of business on January 18, 2007 (the “ Measurement Date ”), 43,157,998 shares of Common Stock were issued and outstanding, and no shares of Preferred Stock were issued or outstanding. As of the Measurement Date, no shares of Common Stock were held in the treasury of the Company. No Shares are held by any Subsidiary of the Company. Since the Measurement Date until the date of this Agreement, other than in connection with the issuance of Shares pursuant to the exercise of Stock Options outstanding as of the Measurement Date, there has been no change in the number of outstanding shares of capital stock of the Company or the number of shares issuable upon the exercise of outstanding Stock Options. As of the Measurement Date, Stock Options to purchase 3,285,275 shares of Common Stock were outstanding. Section 3.3(a) of the Company Disclosure Letter sets forth a true, complete and correct list of all Stock Options that are outstanding as of the Measurement Date, the exercise price of each such Stock Option, and with respect to the Persons specified thereon, the number of shares issuable upon the exercise of outstanding Stock Options held by each such Person. As of the date of this Agreement, except as set forth in this Section 3.3 , there are no shares of capital stock or securities or other rights convertible or exchangeable into or exercisable for shares of capital stock of the Company or such securities or other rights which in each case have been issued by the Company (which term, for purposes of this Agreement, will be deemed to include

stock appreciation rights, “phantom stock” or other commitments that provide any right to receive value or benefits similar to such capital stock, securities or other rights). Since the Measurement Date through the date of this Agreement, other than in connection with the issuance of Shares pursuant to the exercise of Stock Options outstanding as of the Measurement Date, there have been no issuances of any securities of the Company or any of its Subsidiaries.

(b) All outstanding Shares, and all shares of Common Stock reserved for issuance upon the exercise of Stock Options as noted in clause (a) above, when issued in accordance with the respective terms thereof, are or will be duly authorized, validly issued, fully paid and non-assessable and are not and will not be subject to any pre-emptive rights.

(c) Except as set forth in this Section 3.3 , there are no outstanding contractual obligations of the Company or any of its Subsidiaries to issue, sell, or otherwise transfer to any Person, or to repurchase, redeem or otherwise acquire from any Person, any Shares, Preferred Stock, capital stock of any Subsidiary of the Company, or securities or other rights convertible or exchangeable into or exercisable for shares of capital stock of the Company or any Subsidiary of the Company or such securities or other rights.

(d) Other than the issuance of Shares upon exercise of Stock Options and the issuance of Shares to participants in the Company’s 401(k) plan in accordance with such plan, since December 31, 2005 and through the date of this Agreement, the Company has not declared or paid any dividend or distribution in respect of any of the Company’s securities, and neither the Company nor any Subsidiary has issued, sold, repurchased, redeemed or otherwise acquired any of the Company’s securities, and their respective boards of directors have not authorized any of the foregoing.

(e) Each Company Benefit Plan providing for the grant of Shares or of awards denominated in, or otherwise measured by reference to, Shares (each, a “ Company Stock Award Plan ”) is set forth (and identified as a Company Stock Award Plan) in Section 3.15(a) of the Company Disclosure Letter. The Company has made available to Parent or any of its Affiliates true, complete and correct copies of all Company Stock Award Plans and all forms of options and other stock based awards (including award agreements) issued under such Company Stock Award Plans.

Section 3.4 Subsidiaries and Company Joint Ventures . Section 3.4 of the Company Disclosure Letter sets forth each Subsidiary of the Company and the jurisdiction of organization of each such Subsidiary. All of the issued and outstanding shares of capital stock, voting securities or other equity interests of the Company’s Subsidiaries are directly or indirectly owned beneficially and of record by the Company, free and clear of all Liens, other than Liens created as a result of federal or state securities laws, and all such shares or interests have been duly authorized, validly issued and fully paid and, in the case of shares of capital stock issued by a corporate entity formed under the laws of the United States, nonassessable, free of any preemptive rights. Neither the Company nor any Subsidiary have any direct or indirect equity interest in any Company Joint Venture.

Section 3.5 Required Filings and Consents . The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement, including the Merger but excluding the Asset Sales, do not and will not require any consent, approval, authorization or permit of, or filing with or notification to, (x) any international, foreign, supranational, national, federal, state, provincial or local governmental, regulatory or administrative authority (including any self-regulatory authority), agency, commission, court, tribunal or arbitral body, whether domestic or foreign (each, a “ Governmental Entity ”) or (y) any entity or organization, whether private or quasi-private, whether foreign or domestic, which is not a Governmental Entity and which engages in the granting or withholding of accreditation of supplemental education services in accordance with standards and requirements relating to the performance, operations, financial condition and/or academic standards of such services (each such entity or organization, an “ Accrediting Body ”), other than: (i) the filing and recordation of the Certificate of Merger with the Secretary of State of the State of Delaware; (ii) applicable requirements of the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder (the “ Exchange Act ”); (iii) any filings with, and approvals from, relevant state securities administrators or related to the blue sky laws of various states; (iv) the filing with the Securities and Exchange Commission (the “ SEC ”) of a proxy statement (the “ Company Proxy Statement ”) relating to the special meeting of the stockholders of the Company to be held to consider the adoption of this Agreement (the “ Company Stockholders Meeting ”) and the related Rule 13E-3 Transaction Statement (the “ Schedule 13E-3 ”); (v) any filings required by, and any approvals required under, the rules and regulations of the National Association of Securities Dealers, Inc. or its wholly owned Subsidiary, NASD Regulation, Inc., or any successor entity or entities thereto (collectively, the “ NASD ”), including requirements of the NASDAQ Stock Market (the “ NASDAQ ”); (vi) compliance with and filings under (A) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), (B) applicable requirements of Council Regulation (EC) No. 139/2004 of the Council of the European Union (the “ EC Merger Regulation ”), if any, and (C) applicable competition or merger control Laws of any other jurisdiction identified in Section 3.5(vi) of the Company Disclosure Letter (the “ Foreign Merger Control Laws ”); (vii) any consent, approval or other authorization of, or filing with or notification to, any Governmental Entity or Accrediting Body identified in Section 3.5(vii) of the Company Disclosure Letter; and (viii) in such circumstances where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not have a Company Material Adverse Effect.

Section 3.6 Non Contravention . The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated by this Agreement, including the Merger but excluding the Asset Sales, do not and will not:

(a) conflict with or result in any breach of any provision of (i) the Company Organizational Documents or (ii) any Subsidiary’s organizational or governing documents;

(b) result in any violation, or the breach of, or constitute a default (with notice or lapse of time or both) under (or give rise to any right of termination, cancellation or acceleration or guaranteed payments under or to, a loss of a material benefit or result in the

creation or imposition of a Lien under) any of the terms, conditions or provisions of any Company Contract, except for such violations, breaches, defaults, or rights of termination, cancellation or acceleration, losses or imposition of Liens which would not, individually or in the aggregate, reasonably be expected to (i) result in a Company Material Adverse Effect, or (ii) prevent or materially delay the consummation of the transactions contemplated hereby or the Company’s ability to perform its obligations hereunder; or

(c) contravene or conflict with, or result in any violation or breach of, any Permit of the Company or any of its Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to (i) result in a Company Material Adverse Effect, or (ii) prevent or materially delay the consummation of the transactions contemplated hereby (excluding the Asset Sales) or the Company’s ability to perform its obligations hereunder; or

(d) violate the provisions of any Law, Order or any standard or requirement of any Accrediting Body, applicable to the Company or any of its Subsidiaries, except for any such violations which would not, individually or in the aggregate, reasonably be expected to (i) result in a Company Material Adverse Effect or (ii) prevent or materially delay the consummation of the transactions contemplated hereby or the Company’s ability to perform its obligations hereunder.

Section 3.7 Accreditation and Licensing . Since June 30, 2005, except as would not have a Company Material Adverse Effect, the Company and its Subsidiaries are (i) accredited by, and in good standing with, and in compliance in all material respects with the requirements of their respective applicable Accrediting Bodies and (ii) licensed to operate by, in good standing with, and in compliance in all material respects with the requirements of the Governmental Entities in the states or foreign jurisdictions in which they operate; and, in each case, the Company and its Subsidiaries have not received written notice of, and the Company has no Knowledge of, any facts or circumstances which would materially interfere with or jeopardize such license or accreditation.

Section 3.8 Compliance with Laws and Permits . As of the date hereof, the Company and each of its Subsidiaries is in possession of all Permits necessary for it to own, lease and operate its properties and assets or to carry on its business as it is now being conducted in compliance with applicable Laws, and all such Permits are in full force and effect, except where the failure to hold such Permits, or the failure of such Permits to be in full force and effect, would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect. No suspension or cancellation of any of the Permits is pending or, to the Knowledge of the Company, threatened, except where such suspension or cancellation would not be reasonably expected to have a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in violation of, nor since January 1, 2004 has the Company or any such Subsidiary violated or, to the Knowledge of the Company, nothing is under investigation with respect to or has been threatened to be charged with, or been given notice of, any violation of, any applicable Law, except for any violation or possible violation that has not had and would not, individually or in the aggregate, reasonably be expected to have, a Company Material Adverse Effect. This Section 3.8 does not relate to matters with respect to Taxes or Environmental Laws which are exclusively the subject of Section 3.17 and Section 3.18 , respectively.

Section 3.9 Voting .

(a) The Requisite Company Vote is the only vote of the holders of any class or series of the capital stock of the Company or any of its Subsidiaries necessary to approve and adopt this Agreement and approve the Merger and the other transactions contemplated thereby, excluding the Asset Sales.

(b) There are no voting trusts, proxies or similar agreements, arrangements or commitments to which the Company or any of its Subsidiaries is a party with respect to the voting of any shares of capital stock of the Company or any of its Subsidiaries , other than the Voting Agreement. There are no bonds, debentures, notes or other instruments of indebtedness of the Company or any of its Subsidiaries that have the right to vote, or that are convertible or exchangeable into or exercisable for securities or other rights having the right to vote, on any matters on which stockholders of the Company may vote.

Section 3.10 Financial Reports and SEC Documents .

(a) The Company has filed or furnished all forms, statements, reports and documents required to be filed or furnished by it with the SEC pursuant to the Exchange Act or other applicable securities statutes, regulations, policies and rules since September 22, 2004 (the forms, statements, reports and documents filed or furnished with the SEC since September 22, 2004, including any exhibits and amendments thereto, the “ Company SEC Documents ”). Each of the Company SEC Documents, at the time of its filing (except as and to the extent such Company SEC Document has been modified or superseded in any subsequent Company SEC Document filed and publicly available at least five (5) Business Days prior to the date of this Agreement), complied in all material respects with the applicable requirements of each of the Exchange Act and the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “ Securities Act ”). As of their respective dates, except as and to the extent modified or superseded in any subsequent Company SEC Document filed and publicly available at least five (5) Business Days prior to the date of this Agreement, the Company SEC Documents did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. The Company SEC Documents included all certificates required to be included therein pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated thereunder (“ SOX ”), and the internal control report and attestation of the Company’s outside auditors required by Section 404 of SOX. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to the Company SEC Documents. To the Company’s Knowledge, none of the Company SEC Documents is the subject of ongoing SEC review or outstanding SEC comment.

(b) Each of the consolidated balance sheets, statements of income, changes in stockholders’ equity and cash flows of the Company and its Subsidiaries included in or

incorporated by reference into the Company SEC Documents (including any related notes and schedules) (i) fairly presents in all material respects the consolidated financial position of the Company and its Subsidiaries as of the date of each such balance sheet, and the results of operations and cash flows of the Company and its Subsidiaries, as the case may be, for the periods set forth in each such consolidated statement of income, changes in stockholders’ equity and cash flows (subject, in the case of unaudited statements, to the absence of notes and normal year-end audit adjustments that are not expected to be material in amount or effect) and (ii) has in each case been prepared in accordance with U.S. generally accepted accounting principles (“ GAAP ”) consistently applied during the periods involved, except as may be noted therein.

(c) The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liability is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences. The Company has timely filed and made publicly available on the SEC’s EDGAR system prior to the date hereof, all certifications and statements required by (A) Rule 13a-14 or Rule 15d-14 under the 1934 Act and (B) Section 906 of SOX with respect to any Company SEC Documents. The Company maintains disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the 1934 Act; such controls and procedures are effective to ensure that the information required to be disclosed by the Company in the reports that it files with or submits to the SEC (x) is recorded, processed, summarized and reported accurately within the time periods specified in the SEC’s rules and forms and (y) is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. The Company maintains internal control over financial reporting required by Rule 13a-14 or Rule 15d-14 under the 1934 Act; such internal control over financial reporting is effective and does not contain any material weaknesses.

(d) To the Company’s Knowledge, (x) from January 1, 2005 through the date of this Agreement, none of the Company or any of its Subsidiaries, or any director, officer or independent auditor of the Company or any of its Subsidiaries, has received or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls, and (y) since January 1, 2005, through the date of this Agreement, no attorney representing the Company or any of its Subsidiaries has reported evidence of a material violation of securities Laws, breach of fiduciary duty or other duty recognized under applicable federal or state statutory or regulatory Law or at common Law (including any abdication of duty, abuse of trust or approval of unlawful transactions) or similar violation, relating to periods after January 1, 2005, by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Company Board or any committee thereof or, to the Knowledge of the Company, to any director or officer of the Company.

Section 3.11 Undisclosed Liabilities . Except as and to the extent disclosed or reserved against on the consolidated balance sheet of the Company and its Subsidiaries dated as of September 30, 2006 (including the notes thereto) included in the Company SEC Documents or disclosed in the Company Disclosure Letter, neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether or not accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and whether or not required to be disclosed, reserved against or otherwise provided for, other than (i) liabilities or obligations incurred in the ordinary course of business consistent with past practice since September 30, 2006, (ii) liabilities or obligations that the Company is expressly permitted to incur pursuant to Section 5.1 or that are incurred pursuant to, and in accordance with the terms of, Contracts listed on Section 3.14 of the Company Disclosure Letter (as in effect on the date hereof, without amendment or modification), (iii) liabilities or obligations that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (iv) fees and expenses actually incurred by the Company in connection with the transactions contemplated by this Agreement (excluding the Asset Sales) and estimated on the date hereof at Nine Million dollars ($9,000,000) in the aggregate (excluding any fees and expenses related to any litigation arising in connection with the transactions contemplated hereby or incurred in connection with responding to any Takeover Proposal).

Section 3.12 Absence of Certain Changes .

(a) Since December 31, 2005, there has not been any Company Material Adverse Effect or any change, event or development that, individually or in the aggregate, would reasonably be expected to have a Company Material Adverse Effect.

(b) Since December 31, 2005, the Company and each of its Subsidiaries have conducted their business only in the ordinary course of business consistent with past practice, and there has not been any (i) action or event that, if taken on or after the date of this Agreement without Parent’s consent, would violate the provisions of any of Sections 5.1(a) , (b) , (c)(i) –(ii) , (c)(iv) –(v) , (d)(i) –(iii) or (d)(v) , (e) (except with respect to mergers or consolidations between entities that were wholly owned by the Company at the time of merger or consolidation), (f) (except with respect to dispositions of assets in the ordinary course of business consistent with past practice), (h) , (k) , (l) , (m) , (n) , (o) (except with respect to the Company’s Subsidiaries or former Subsidiaries), (p) and (q) or (ii) agreement or commitment to do any of the foregoing.

Section 3.13 Litigation .

Other than workers compensation claims arising in the ordinary course of business and except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, there are no claims, actions, suits, demand letters, judicial, administrative or regulatory proceedings or hearings, notices of violation, or, to the Company’s Knowledge, investigations before any Governmental Entity (each, a “ Legal Action ”) pending or, to the Knowledge of the Company, threatened, against the Company or any of its Subsidiaries or any executive officer or director of Company or any of its Subsidiaries in connection with his or her status as a director or executive officer of the Company or any of its Subsidiaries, other than

any claims, actions, suits or demand letters relating to the Merger and the other transactions contemplated by this Agreement of which the Company obtains Knowledge, without inquiry or investigation, after the date of this Agreement. There is no outstanding material Order against the Company or any of its Subsidiaries or by which any property, asset or operation of the Company or any of its Subsidiaries is bound or affected. To the Knowledge of the Company, as of the date of this Agreement, neither the Company, any Subsidiary of the Company, nor any executive officer or director of the Company or any such Subsidiary is under any investigation by any Governmental Entity related to the conduct of the Company’s or any such Subsidiary’s business that could reasonably be expected to have a Company Material Adverse Effect.

Section 3.14 Contracts .

(a) As of the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to or bound by any Contract: (i) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to be performed in full or in part after the date of this Agreement that has not been filed in the Company SEC Documents; (ii) which constitutes a contract or commitment relating to material indebtedness of the Company or its Subsidiaries for borrowed money (whether incurred, assumed, guaranteed or secured by any asset); (iii) which contains any provision that would prohibit or materially restrict the ability of the Company or any of its Subsidiaries to operate in any geographical area or compete or operate in any line of business in which the Company or such Subsidiary, as applicable, presently is engaged. Each contract, arrangement, commitment or understanding of the type described in clause (i) of this Section 3.14(a) , whether or not set forth in the Company Disclosure Letter or in the Company SEC Documents, is referred to herein as a “ Disclosed Contract ” (for purposes of clarification, each “ material contract ” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after the date of this Agreement, whether or not filed with the SEC, is a Disclosed Contract) and true, complete and correct copies thereof have been provided to Parent by the Company.

(b) (i) Except for such failure to be valid and binding and in full force and effect as would not reasonably be expected to have a Company Material Adverse Effect, each Disclosed Contract is valid and binding on the Company and any of its Subsidiaries that is a party thereto, as applicable, and in full force and effect, other than any such Company Contract that expires or is terminated after the date hereof in accordance with its terms or amended by agreement with the counterparty thereto ( provided that, if any such Disclosed Contract is so amended in accordance with its terms after the date hereof ( provided such amendment is not prohibited by the terms of this Agreement), then to the extent the representation and warranty contained in this sentence is made or deemed made as of any date that is after the date of such amendment, the reference to “ Disclosed Contract ” in the first clause of this sentence shall be deemed to be a reference to such contract as so amended), (ii) the Company and each of its Subsidiaries has in all respects performed all obligations required to be performed by it to date under each Company Contract, except where such noncompliance would not reasonably be expected to have a Company Material Adverse Effect, and (iii) neither the Company nor any of its Subsidiaries knows of, or has received notice of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a default on the part of the Company or any of its Subsidiaries under any such Disclosed Contract, except where such default would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.15 Benefit Plans .

(a) Section 3.15(a) of the Company Disclosure Letter contains a true, complete and correct list as of the date of this Agreement of each Material Company Benefit Plan. Each Material Company Benefit Plan that is a “multiemployer plan” (within the meaning of Section 3(37) of ERISA) (a “ Multiemployer Plan ”) or a plan that has two or more contributing sponsors at least two of whom are not under common control (within the meaning of Section 4063 of ERISA) (a “ Multiple Employer Plan ”) is denoted as such in Section 3.15(a) of the Company Disclosure Letter. No entity other than the Company and its Subsidiaries is a member of the Company’s “controlled group” (within the meaning of Section 414 of the Code).

(b) With respect to each Material Company Benefit Plan, other than any Multiemployer Plan, if applicable, the Company has provided or made available to Parent true, complete and correct copies of (i) all plan texts and agreements and related trust agreements (or other funding vehicles); (ii) the most recent summary plan descriptions and material employee communications concerning the extent of the benefits provided under a Material Company Benefit Plan; (iii) the three most recent annual reports (including all schedules); (iv) the three most recent annual audited financial statements and opinions; (v) if the plan is intended to qualify under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service (the “ IRS ”); and (vi) all material communications with any Governmental Entity given or received since June 30, 2004. There is no present intention that any Material Company Benefit Plan, other than a Multiemployer Plan, be materially amended, suspended or terminated, or otherwise modified to adversely change benefits (or the level thereof) under any Company Benefit Plan, other than a Multiemployer Plan, at any time within the 12 months immediately following the date of this Agreement.

(c) Since December 31, 2005, there has not been any amendment or change in interpretation relating to any Company Benefit Plan, other than a Multiemployer Plan, which would materially increase the cost of such plan, or, in the case of any Company Benefit Plan other than a Material Company Benefit Plan and other than a Multiemployer Plan, materially increase the aggregate cost to the Company of maintaining all Company Benefit Plans that are not Material Company Benefit Plans.

(d) With respect to each Material Company Benefit Plan that is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not exist any accumulated funding deficiency within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market value of the assets of such plan equals or exceeds the actuarial present value of all accrued benefits under such plan (whether or not vested); (iii) no reportable event within the meaning of Section 4043(c) of ERISA for which the 30-day notice requirement has not been waived has occurred, and the consummation by the Company of the transactions contemplated by this Agreement (excluding the Asset Sales) will not result in the occurrence of any such reportable event; (iv) no liability (other than for premiums to the Pension Benefit Guaranty Corporation (the “ PBGC ”)) under Title IV of ERISA

has been or is expected to be incurred by the Company or any of its Subsidiaries; and (v) the PBGC has not instituted proceedings to terminate any such plan or made any inquiry which would reasonably be expected to lead to termination of any such plan, and, to the Company’s Knowledge, no condition exists that presents a risk that such proceedings will be instituted or which would constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any such plan. Neither the Company nor any of its Subsidiaries has, at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan or Multiple Employer Plan other than a plan listed in Section 3.15(a) of the Company Disclosure Letter. To the Knowledge of the Company, (x) neither the Company nor any of its Subsidiaries would be reasonably expected to be liable for any material liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan (as those terms are defined in Part I of Subtitle E of Title IV of ERISA) (a “ Withdrawal Liability ”) that has not been satisfied in full and (y) with respect to each Company Benefit Plan that is a Multiemployer Plan, neither the Company nor any of its Subsidiaries has received any notification that any such plan is in reorganization, has been terminated, is insolvent, or may reasonably be expected to be in reorganization, to be insolvent, or to be terminated.

(e) Each Company Benefit Plan, other than a Multiemployer Plan, that requires registration with a Governmental Entity has been properly registered, except where any failure to register would not reasonably be expected to have a Company Material Adverse Effect. Each Company Benefit Plan, other than a Multiemployer Plan, which is intended to qualify under Section 401(a) of the Code has been issued a favorable determination letter by the IRS with respect to such qualification, its related trust has been determined to be exempt from taxation under Section 501(a) of the Code and no event has occurred since the date of such qualification or exemption that would reasonably be expected to materially adversely affect such qualification or exemption. Each Company Benefit Plan, other than a Multiemployer Plan, has been established and administered in material compliance with its terms and with the applicable provisions of ERISA, the Code and other applicable Laws. No event has occurred and no condition exists that would reasonably be expected to subject the Company by reason of its affiliation with any current or former member of its “controlled group” (within the meaning of Section 414 of the Code) to any material (i) Tax, penalty, fine, (ii) Lien (other than a Permitted Lien) or (iii) other liability imposed by ERISA, the Code or other applicable Laws.

(f) There are no (i) Company Benefit Plans under which welfare benefits are provided to past employees or made available to present employees of the Company and its Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“ COBRA ”), Section 4980B of the Code, Title I of ERISA or any similar state group health plan continuation Laws, the contributions for which are fully paid by such employees or their dependents; or (ii) unfunded Company Benefit Plan obligations with respect to any past or present employees of the Company and its Subsidiaries that are not fairly reflected by reserves shown on the most recent financial statements contained in the Company SEC Documents, except in the case of clause (i) or (ii) as would not have, or reasonably be expected to have, a Company Material Adverse Effect.

(g) Neither the execution and delivery by the Company of this Agreement nor the consummation by the Company of the transactions contemplated hereby (excluding the Asset Sales) will (either alone or in combination with another event): (i) result in any payment becoming due, or increase the amount of any compensation or benefits due, to any current or former employee of the Company and its Subsidiaries or with respect to any Company Benefit Plan; (ii) increase any benefits otherwise payable under any Company Benefit Plan; (iii) result in the acceleration of the time of payment or vesting of any such compensation or benefits, other than vesting to comply with Section 401(a) of the Code; (iv) assuming that none of the assets being used by Parent or MergerCo in connection with the transactions contemplated hereby constitute “plan assets” within the meaning of Section 3(42) of ERISA or 29 C.F.R. 2510.3-101, result in a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code; (v) limit or restrict the right of the Company to merge, amend or terminate any of the Company Benefit Plans; or (vi) result in the payment of any amount that would, individually or in combination with any other such payment, reasonably be expected to constitute an “excess parachute payment,” as defined in Section 280G(b)(1) of the Code.

(h) None of the Company, any of its Subsidiaries, or any Company Benefit Plan, nor to the Knowledge of the Company, any “disqualified person” (as defined in Section 4975 of the Code) or “party in interest” (as defined in Section 3(18) of ERISA), has engaged in any non-exempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which has resulted or would reasonably be expected to result in any material liability to the Company and its Subsidiaries, taken as a whole. With respect to any Material Company Benefit Plan, other than a Multiemployer Plan, (i) no Legal Actions (including any administrative investigation, audit or other proceeding by the Department of Labor or the Internal Revenue Service but excluding routine claims for benefits in the ordinary course) are pending or, to the Knowledge of the Company, threatened, and (ii) to the Knowledge of the Company, no events or conditions have occurred or exist that would reasonably be expected to give rise to any such Legal Actions, except in each case such as would not reasonably be expected to have a Company Material Adverse Effect.

(i) Each “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) of the Company (i) has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code, the regulations promulgated thereunder and IRS Notice 2005-1 and (ii) has not been “materially modified” (within the meaning of IRS Notice 2005-1) at any time after October 3, 2004.

(j) Every stock option issued by the Company (i) was issued in compliance with the terms of the plan under which it was issued and in compliance with applicable laws, rules and regulations, including the rules and regulations of the NASDAQ, and (ii) has been accounted for in accordance with GAAP and otherwise been disclosed in accordance in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations thereunder, including Rule 402 of Regulation S-K.

(k) Each Company Benefit Plan that has been adopted or maintained by the Company or any of its Affiliates, whether informally or formally, or with respect to which the Company or any of its Affiliates will or may have any liability, for the benefit of employees of the Company or any of its Subsidiaries who perform services outside the United States (each a

“ Company International Employee Plan ”) has been established, maintained and administered in material compliance with its terms and conditions and with the requirements prescribed by any and all statutory or regulatory laws that are applicable to such Company International Employee Plan. No Company International Employee Plan has unfunded liabilities that, as of the Effective Time, will not be offset by insurance or fully accrued on the Company’s balance sheets included in or incorporated by reference into the Company SEC Documents. Except as required by law, no condition exists that would prevent the Company from terminating or amending any Company International Employee Plan at any time for any reason without liability to the Company or any of its Affiliates (other than ordinary administration expenses or routine claims for benefits).

(l) Except as set forth on Section 3.15(l) of the Company Disclosure Letter, (i) the liabilities of the Company and its Subsidiaries do not include any obligation to make any payments that, individually or collectively, would reasonably be expected to give rise to the payment of any material amount that would not be deductible pursuant to Sections 280G or 162(m) of the Code, and (ii) the liabilities of the Company and its Subsidiaries do not include any obligations under any contract, agreement, plan or arrangement to which the Company is a party or by which it is bound to compensate any individual for excise Taxes paid pursuant to Section 4999 of the Code.

Section 3.16 Labor Relations .

(a) Except as would not reasonably be expected to have a Company Material Adverse Effect: (x) none of the employees of the Company or its Subsidiaries is represented by a union and, to the Knowledge of the Company, no union organizing efforts have been conducted or threatened since June 30, 2004 or are currently being conducted or threatened, (y) neither the Company nor any of its Subsidiaries is a party to or negotiating any collective bargaining agreement or other labor Contract, and (z) there is no pending, and, to the Knowledge of the Company, there is no threatened, strike, picket, work stoppage, work slowdown or other organized labor dispute affecting the Company or any of its Subsidiaries.

(b) Except as would not reasonably be expected to have a Company Material Adverse Effect, there are no material unfair labor practice charges or complaints pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries.

Section 3.17 Taxes .

(a) All material Tax Returns required to be filed by or with respect to the Company or any of its Subsidiaries have been properly prepared and timely filed, and all such Tax Returns are true, correct and complete in all material respects. There are no adjustments relating to such Tax Returns that have been proposed in writing by any Tax authority and to the Company’s Knowledge as of the date hereof no basis exists for any such adjustment and there are no Tax liens on any of the Assets for Taxes that are not Permitted Liens.

(b) The Company and its Subsidiaries have fully and timely paid all Taxes (whether or not shown to be due on the Tax Returns) required to be paid by any of them. The

Company and its Subsidiaries have made adequate provision for any Taxes that are not yet due and payable for all taxable periods on the most recent financial statements contained in the Company SEC Documents to the extent required by GAAP or in the case of foreign entities, in accordance with generally applicable accounting principles in the relevant jurisdiction.

(c) As of the date of this Agreement, there are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection, assessment or reassessment of, Taxes due from the Company or any of its Subsidiaries for any taxable period and, to the Knowledge of the Company, no request for any such waiver or extension is currently pending. The Company has not received any written requests for information by any Tax authority that are currently outstanding that could adversely affect the Taxes of the Company or any of its Subsidiaries; and there are no proposed reassessments received in writing by the Company of any property owned by the Company or any of its Subsidiaries or other proposals that could increase the amount of any Tax to which the Company or any of its Subsidiaries would be subject.

(d) As of the date of this Agreement, no audit or other proceeding by any Governmental Entity is pending or, to the Knowledge of the Company, threatened with respect to any Taxes due from or with respect to the Company or any of its Subsidiaries.

(e) Neither the Company nor any of its Subsidiaries is a party to any Tax sharing or similar Tax agreement (other than an agreement exclusively between or among the Company and its Subsidiaries) pursuant to which it will have any obligation to make any payments on account of indemnification for Taxes after the Closing Date. Neither the Company nor any of its Subsidiaries has any liability as a result of being or having been before the Closing Date a member of an affiliated, consolidated, combined or unitary group, other than a group of which the Company and its Subsidiaries are currently members, or as a result of a Tax sharing, Tax indemnity or Tax allocation agreement.

(f) Neither the Company nor any of its Subsidiaries has distributed stock of another Person or had its stock distributed by another Person in a transaction that was intended to be governed in whole or in part by Section 355 or 361 of the Code in the two years prior to the date of this Agreement.

(g) Neither the Company nor any of its Subsidiaries will be required based upon actions taken by the Company or any of its Subsidiaries prior to the Closing to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (A) change in method of accounting for a taxable period ending on or prior to the Closing Date, (B) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date, (C) installment sale or open transaction disposition made on or prior to the Closing Date or (D) prepaid amount received on or prior to the Closing Date.

(h) As of the date hereof, neither the Company nor any of its Subsidiaries has agreed to nor has already been required to make any adjustment under Section 481(a) of the Code for any taxable year ending after the Closing.

(i) Neither the Company nor any of its Subsidiaries is a party to any understanding or arrangement described in Section 6111(d) or Section 6662(d)(2)(C)(ii) of the Code, and, to the Knowledge of the Company, has “participated” in a “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4 (without regard to Section (b)(3) thereof).

(j) Neither the Company nor any of its Subsidiaries has participated in or cooperated with an international boycott within the meaning of Section 999 of the Code or been requested to do so in connection with any transaction or proposed transaction.

(k) (i) The Company has provided or made available to Parent true, complete and correct copies of (A) all material Tax Returns filed by the Company or any of its Subsidiaries for Tax years ending in 2004 and thereafter and (B) all ruling requests, private letter rulings, notices of proposed deficiencies, closing agreements, settlement agreements, and similar documents sent to or received by the Company or any of its Subsidiaries relating to Taxes; and (ii) the Company is not, and has not at any time during the last five years been, a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code.

Section 3.18 Environmental Liability . Except for matters that would not reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries are in compliance with all applicable Environmental Laws and have obtained or applied for all Environmental Permits necessary for their operations as currently conducted; (ii) there have been no Releases of any Hazardous Materials that require investigation or remediation by the Company or any of its Subsidiaries pursuant to any Environmental Law; and (iii) there are no Environmental Claims pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries.

Section 3.19 Intellectual Property .

(a) As of the date of this Agreement (i) the Company or one or more of its Subsidiaries own, in all material respects, all rights, title and interest in and to, or otherwise has, in all material respects, a valid right to use, all Intellectual Property necessary to conduct the Business as it is conducted as of the date of this Agreement, (ii) there are no Legal Actions instituted or pending against the Company or any of its Subsidiaries or, to the Knowledge of the Company, threatened in writing in the two (2) year period immediately preceding the date of this Agreement by any Person, contesting or challenging the right of the Company or any of its Subsidiaries to use any of the material Intellectual Property owned or used by the Company or any of its Subsidiaries in the conduct of the Business or alleging that such material Intellectual Property infringes or otherwise violates the Intellectual Property of any third party; and to the Knowledge of the Company, no Person is infringing or otherwise violating in any material respect any of the Intellectual Property owned or used by the Company or any of its Subsidiaries; (iii) each trademark registration, service mark registration, copyright registration, domain name registration and patent that is owned by the Company or any of its Subsidiaries is subsisting; (iv) neither the Company nor any of its Subsidiaries has received any written notice claiming that it has infringed or otherwise violated any Intellectual Property of any third party; (v) the Company

and its Subsidiaries make reasonable efforts to protect and maintain their Intellectual Property and the security of their technology systems and software; and (vi) the consummation by the Company of the Merger and the other transactions contemplated by this Agreement to be consummated by the Company (excluding the Asset Sales) will not impair the right of the Company or any of its Subsidiaries immediately following the Merger to use any Intellectual Property currently owned or used by the Company or any of its Subsidiaries in the conduct of the Business as currently conducted. To the Knowledge of the Company, the Company and its Subsidiaries are in compliance in all material respects with applicable Laws relating to data protection and privacy and their own privacy policies.

(b) All material franchise and license agreements granting to third parties the right to use the Intellectual Property give the Company and its Subsidiaries as franchisor or licensor and its successors and assigns the rights to control the quality of products and services sold under the material trademarks described under the franchise agreements or license agreements, as the case may be.

(c) Section 3.19(c) of the Company Disclosure Letter sets forth all material registered trademarks and registered service marks, trademark and service mark registration applications, domain name registrations, copyright registrations, copyright registration applications, patents and patent applications, currently owned by the Company or its Subsidiaries.

Section 3.20 Title to Real Properties . Neither the Company nor any of its Subsidiaries own any real property. The Company and each of its Subsidiaries have good and valid leasehold interests in all real property leased by them, except as would not reasonably be expected to have a Company Material Adverse Effect. With respect to all leases under which the Company or any of its Subsidiaries lease any real property, such leases are in good standing, valid and effective against the Company or any of its Subsidiaries and, to the Company’s Knowledge, the counterparties thereto, in accordance with their respective terms, and there is not, under any of such leases any existing default by the Company or any of its Subsidiaries or, to the Company’s Knowledge, the counterparties thereto, or any event which, with notice or lapse of time or both, would become a default by the Company or any of its Subsidiaries or, to the Company’s Knowledge, the counterparties thereto, other than failures to be in good standing and defaults under such leases which would not reasonably be expected to have a Company Material Adverse Effect.

Section 3.21 Franchises . With respect to the Business,

(a) Section 3.21(a) of the Company Disclosure Letter sets forth a list, which is true, complete and correct in all material respects, of each of the Company’s franchisees, the applicable form of franchise agreement (collectively, the “ Franchise Agreements ”) and the stated termination date of each such Franchise Agreement .

(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, as of the date of this Agreement, all Franchise Agreements constitute valid and binding obligations of the Company or any of its Subsidiaries party thereto, as the case may be, enforceable against the Company or its applicable

Subsidiaries in accordance with their respective terms, except to the extent that the enforcement thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws now or hereafter in effect relating to creditor’s rights generally, (ii) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (iii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the discretion of the Governmental Entity before which any enforcement proceeding therefor may be brought. The consummation by the Company of the transactions contemplated by this Agreement (excluding the Asset Sales) will not constitute a breach or default or other event which, with notice, lapse of time, or both, would constitute a default or an event of default under any Franchise Agreement or Development Agreement.

(c) Neither the Company nor any of its Subsidiaries has entered into any contracts, agreements or arrangements, orally or in writing, whereby the Company or any of its Subsidiaries receive rebates, commissions, discounts or other payments or remuneration based on purchases by Franchisees or Licensees.

Section 3.22 Franchise Registration .

(a) To the Knowledge of the Company, the jurisdictions in which the Company and its Subsidiaries are registered as of the date hereof are the only jurisdictions in which they are required to be registered in light of the rights granted under the Franchise Agreements.

(b) The Company has made available to Parent each material letter or other material correspondence from federal, state and/or foreign franchise examiners received by the Company since January 1, 2004 through the date of this Agreement relating to:

(i) franchise or license agreements for the Business System or the Business Marks currently in effect as of the date of this Agreement;

(ii) franchise registration status of the Company in that jurisdiction with respect to the sale of franchises for Franchised Learning Centers;

(iii) the Company’s exemption from the registration provisions of jurisdiction’s franchise registration law with respect to the sale franchises for Franchised Learning Centers;

(iv) the form of each franchise offering circular provided to Franchisees or Licensees or registered with any jurisdiction since January 1, 2004 with respect to the sale of franchises for Franchised Learning Centers; and

(v) the form of each franchise offering circular, if any, currently being used by the Company in connection with offers to sell and sales of franchises for Franchised Learning Centers.

(c)(i) The offers and sales of franchises for Franchised Learning Centers have been made in substantial compliance with applicable Laws and (ii) since such offers or sales, the Company has not committed any material violation of any applicable Laws with respect to the operation of the Business System or the administration of any Franchise Agreement or Development Agreement. Without limitation of the foregoing, no right of rescission or set-off exists or has been asserted or threatened with respect to any Franchise Agreement or Development Agreement.

Section 3.23 Takeover Statutes; No Rights Agreement; Company Certificate .

(a) The approval by the Company Board of this Agreement, the Voting Agreement, the Merger and the other transactions contemplated by this Agreement (excluding the Asset Sales) and the Voting Agreement constitutes approval of this Agreement, the Voting Agreement, the Merger and the other transactions contemplated by this Agreement (excluding the Asset Sales) and the Voting Agreement for purposes of Section 203 of the DGCL and represents the only action necessary to ensure that none of the restrictions provided for in Section 203 of the DGCL apply or will apply to the execution, delivery, performance and consummation of this Agreement, the Voting Agreement , the Merger and the other transactions contemplated by this Agreement (excluding the Asset Sales) and the Voting Agreement.

(b) The Company and its Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination or other similar anti-takeover provision under the Certificate of Incorporation or the laws of Delaware or any other jurisdiction that is, or is reasonably likely to become, applicable to the Company as a result of the transactions contemplated by this Agreement and the Voting Agreement, including the Merger but excluding the Asset Sales.

(c) The Company has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.

Section 3.24 Foreign Corrupt Practices . Neither the Company nor any of its Subsidiaries, nor to the Company’s Knowledge, any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its Subsidiaries, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

Section 3.25 Opinion of Financial Advisor . Each of Credit Suisse Securities (USA) LLC and Houlihan Lokey Howard & Zukin Financial Advisors, Inc. (collectively, the “ Company Financial Advisors ”) has delivered to the Negotiation Committee its written opinion (or oral opinion to be confirmed in writing) to the effect that, as of January 27, 2007 and subject to the assumptions, qualifications and limitations set forth in such opinion, the Merger Consideration was fair to the holders of Common Stock (other than Apollo Sylvan, LLC, Apollo Sylvan II, LLC, Parent, MergerCo, the holders of direct or indirect equity interests in Parent and each of their respective Affiliates, including those stockholders of the Company who will exchange their Shares for membership interests in Parent prior to the Effective Time) from a financial point of view. The Company has provided to Parent a true, complete and correct copy of such opinions; it being agreed that Parent and MergerCo have no rights with respect to such opinions.

Section 3.26 Brokers and Finders . Other than the Company Financial Advisors, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger or the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has provided to Parent a true, complete and correct copy of all agreements between the Company and each Company Financial Advisor under which a Company Financial Advisor would be entitled to any payment relating to the Merger or such other transactions.

Section 3.27 Interested Party Transactions . Except for employment Contracts entered into in the ordinary course of business consistent with past practice or filed as an exhibit to a Company SEC Report at least five (5) Business Days prior to the date hereof, Section 3.27 of the Company Disclosure Letter (i) sets forth a true, complete and correct list of the contracts or arrangements under which the Company has any existing or future liabilities of the type required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC (an “ Affiliate Transaction ”), between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any (A) present or former officer or director of the Company or any of its Subsidiaries or any of such officer’s or director’s immediate family members, (B) record or beneficial owner of more than 5% of the Shares, or (C) any Affiliate of any such officer, director or owner, and (ii) identifies each Affiliate Transaction that is in existence as of the date of this Agreement.

IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERCO

Except as set forth in the letter (the “ Acquiror Disclosure Letter ”) delivered by Parent and MergerCo to the Company concurrently with the execution of this Agreement (each section of which, to the extent specified therein, qualifies the correspondingly numbered representation and warranty or covenant of Parent or MergerCo contained herein), Parent and MergerCo hereby represent and warrant to the Company as follows:

Section 4.1 Organization and Power . Parent is a limited liability company, duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the requisite

power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted. MergerCo is a corporation, duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted.

Section 4.2 Corporate Authorization . Parent and MergerCo each have all requisite corporate or other power and authority to enter into and to perform their respective obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by each of Parent and MergerCo and the consummation by each of Parent and MergerCo of the transactions contemplated hereby have been duly and validly authorized by all necessary limited liability company or corporate action on the part of each of Parent and MergerCo.

Section 4.3 Enforceability . This Agreement has been duly executed and delivered by each of Parent and MergerCo and, assuming the due authorization, execution and delivery of this Agreement by the Company, constitutes a legal, valid and binding agreement of each of Parent and MergerCo, enforceable against each of Parent and MergerCo in accordance with its terms, except to the extent that the enforcement thereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar Laws now or hereafter in effect relating to creditor’s rights generally, (b) general principles of equity (regardless of whether such enforcement is considered in a proceeding at law or in equity) and (c) the remedy of specific performance and injunctive and other forms of equitable relief being subject to the discretion of the Governmental Entity before which any enforcement proceeding therefor may be brought.

Section 4.4 Required Filings and Consents . The execution, delivery and performance of this Agreement by each of Parent and MergerCo and the consummation by each of Parent and MergerCo of the transactions contemplated by this Agreement do not and will not require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or Accrediting Body other than: (a) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware; (b) applicable requirements of the Exchange Act; (c) the filing with the SEC of the Company Proxy Statement and the Schedule 13E-3; (d) any filings required by, and any approvals required under, the rules and regulations of the NASD or the NASDAQ; (e) compliance with and filings under (i) the HSR Act, (ii) any applicable requirements of the EC Merger Regulation, and (iii) any applicable requirements of any Foreign Merger Control Law; (f) any consent, approval or other authorization of, or filing with or notification to, any Governmental Entity or Accrediting Body identified in Section 4.4 of the Acquiror Disclosure Letter or Schedule 6.1(b)(iv) to this Agreement; and (g) in such other circumstances where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not reasonably be expected to have a MergerCo Material Adverse Effect.

Section 4.5 Non-Contravention . The execution, delivery and performance of this Agreement by each of Parent and MergerCo and the consummation by each of Parent and MergerCo of the transactions contemplated by this Agreement, including the Merger, do not and will not:

(a) conflict with, or result in any breach of any provision of the organizational documents of either Parent or MergerCo; or

(b) contravene or conflict with, or result in any violation of breach of, any Permit of the Company or any of its Subsidiaries;

(c) violate the provisions of any Law applicable to either Parent or MergerCo or any of MergerCo’s Subsidiaries except for any such violations as would not, individually or in the aggregate, reasonably be expected to (i) result in a MergerCo Material Adverse Effect or (ii) prevent or materially delay the consummation of the transactions contemplated hereby or Parent’s or MergerCo’s or any of MergerCo’s Subsidiary’s ability to perform their respective obligations hereunder.

Section 4.6 Financing . True, complete and correct copies of the following documents have been delivered to the Company: (i) the fully executed commitment letter, dated as of the date of this Agreement (the “ Debt Financing Letter ”), pursuant to which J.P. Morgan Securities, Inc. and JPMorgan Chase Bank, N.A. have committed, subject to the terms and conditions thereof, to lend to Parent and/or MergerCo the amounts set forth therein (the “ Debt Financing ”), and (ii) the fully executed equity commitment letters, dated as of the date of this Agreement, from funds managed by Sterling Capital Partners, LLC, Sterling Capital Partners II, LLC, and Citigroup Alternative Investments LLC (the “ Equity Financing Letters ” and together with the Debt Financing Letter, the “ Financing Letters ”), pursuant to which such parties have committed, subject to the terms and conditions thereof, to provide or cause to be provided to Parent and/or MergerCo the cash amounts set forth therein (the “ Equity Financing ” and together with the Debt Financing, the “ Financing ”). The Financing Letters are the only agreements that have been entered into by Parent or its respective Affiliates with respect to the Financing. Prior to the date of this Agreement, (i) none of the Financing Letters has been amended or modified, and (ii) the respective commitments contained in the Financing Letters have not been withdrawn or rescinded in any respect. Subject to the seventh and eighth sentences of this paragraph, and the terms and conditions set forth therein, each of the Financing Letters, in the form so delivered, is in full force and effect and is a legal, valid and binding obligation of Parent and/or MergerCo and, to MergerCo’s Knowledge, the other parties thereto. No event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Parent and/or MergerCo under any term or condition of the Financing Letters. Parent and/or MergerCo has fully paid any and all commitment fees or other fees incurred in connection with the Financing Letters that have become due and payable. Subject to its terms and conditions, the Financing, when funded in accordance with the Financing Letters, and after giving effect to the Equity Rollover Commitment, together with cash on hand from operations of the Company, will provide funds at the Closing and at the Effective Time sufficient to consummate the Merger upon the terms contemplated by this Agreement and to pay all related fees and expenses associated therewith, including payment of all amounts under Article II of this Agreement. Notwithstanding anything in this Agreement to the contrary, any of the Financing Letters may be

superseded at the option of Parent after the date of this Agreement but prior to the Effective Time by instruments (the “ New Debt Financing Letters ”) which replace such existing Debt Financing Letter and/or contemplate co-investment by or financing from one or more other or additional nationally recognized financial institutions. In such event, the term “Debt Financing Letter” as used herein shall be deemed to include the New Debt Financing Letters to the extent then in effect. There are no conditions precedent or other contingencies to the funding of the Financing other than as set forth in the Financing Letters. Assuming the accuracy of the representations and warranties of the Company set forth in Article III of this Agreement and the Company’s compliance with its covenants herein required to be performed prior to the Effective Time, as of the date of this Agreement, Parent and MergerCo have no reason to believe that any of the conditions precedent to the Financing will not be satisfied in connection with the consummation of the transactions contemplated by this Agreement or that the Financing will not be available to Parent and/or MergerCo on the Closing Date.

Section 4.7 Equity Rollover Commitment . Parent has delivered to the Company a true, complete and correct copy of the equity rollover letter, dated as of the date of this Agreement, from the Persons listed on Section 4.7 of the Acquiror Disclosure Letter (the “ Equity Rollover Commitment ”), pursuant to which such persons have each committed to contribute to Parent (i) that number of Shares a

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