REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 2, 1998 (this
"AGREEMENT"), between Berlitz International, Inc., a New York corporation (the
"COMPANY"), and Benesse Holdings International, Inc., a Delaware corporation
("INVESTOR").
WHEREAS, Investor and the Company have entered into a Purchase
Agreement, dated as of October 2, 1998 (the "PURCHASE AGREEMENT"), pursuant to
which Investor will purchase $55,000,000 aggregate principal amount of the
Company's Convertible Exchangeable Subordinated Debentures due 2010, Series B
(the "BENESSE DEBENTURES"); and
WHEREAS, pursuant to the terms and conditions of the Benesse
Debentures, the Benesse Debentures may be converted at any time at the option
of the holder, in part or in whole, into shares (the shares issued upon such
conversion being herein referred to as the "COMMON SHARES") of common stock of
the Company, par value $.10 per share (the "COMMON STOCK").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Securities Subject to this Agreement
(a) Definitions. The term "HOLDER" means any person owning or having
the right to acquire Registrable Securities or any successor or assignee
thereof.
The term "ISSUE DATE" means the date of original issuance of the
Benesse Debentures.
The terms "REGISTRABLE SECURITIES" and "RESTRICTED SECURITIES" shall
each refer to the Common Shares and any shares of Common Stock issued in
respect of the Common Shares, whether by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
(b) Restricted Securities. For the purposes of this Agreement,
Restricted Securities will cease to be Restricted Securities when (i) a
registration statement filed with the Securities and Exchange Commission (the
"COMMISSION") under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), covering such Restricted Securities has been declared effective and
they have been disposed of pursuant to such effective registration statement,
or (ii) such Restricted Securities have been sold pursuant to Rule 144 under
the Securities Act.
(c) Registrable Securities. Registrable Securities will cease to be
Registrable Securities when they cease to be Restricted Securities.
2. Demand Registration.
Commencing on the second anniversary of the Issue Date, in addition
to any other rights of the Holders, upon written request by the Holders of at
least 50% of the Registrable Securities then outstanding (the "DEMANDING
HOLDERS") to the Company that the Company effect a registration of any or all
of the Registrable Securities and specifying the intended method of
disposition thereof, the amount of the Registrable Securities proposed to be
sold and the jurisdiction (if known) in which registration is desired (a
"DEMAND REGISTRATION"), such demand to be given on not more than one (1)
occasion, then the Company will (i) promptly notify all other Holders of
Registrable Securities of each request and (ii) use its reasonable best
efforts to effect the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register by such Holders
for disposition, in accordance with the intended method of disposition stated
in such request, within ninety (90) days of the request therefor. All Holders
who are not Demanding Holders shall be entitled to participate in such
offering in accordance with the terms hereof if they so notify the Company of
their desire to do so, specifying the amount of Registrable Securities they
wish to include, within 15 days of receipt of notice from the Company. If any
registration statement relating to any such registration is not declared
effective, such registration shall not count towards the limit set forth in
this paragraph. The Demanding Holders shall have the right to designate the
managing underwriters for any underwritten offering pursuant to a Demand
Registration, which underwriters shall be reasonably acceptable to the
Company.
The Company shall be entitled to include in any Demand Registration
authorized but unissued shares of Common Stock, shares of Common Stock held by
the Company as treasury stock and shares of Common Stock held by other
shareholders. Notwithstanding the foregoing, if the managing underwriter or
underwriters of such offering determine in good faith that the total amount of
Registrable Securities and shares of Common Stock requested to be included in
such offering would adversely affect the success of such offering, then the
number of shares of Common Stock to be offered for the account of the
Demanding Holders and any other selling shareholder and the number of shares
of Common Stock to be offered by the Company to the public shall each be
reduced, to the extent necessary to reduce the total amount of shares to be
included in such offering to the amount recommended by such managing
underwriter or underwriters, in the following order of priority: first, the
shares of Common Stock proposed to be registered by any other selling
shareholders or Holders; second, the shares of Common Stock proposed to be
registered by the Company; and third, the shares of Registrable Securities
proposed to be registered by the Demanding Holders. If any of such categories
is to be reduced and consists of more than one shareholder, the part of the
total reduction to that category of shares imposed on each shareholder in that
category shall be in the same proportion that the total number of shares of
Common Stock held (including shares issuable upon conversion of convertible
debentures) by such shareholder bears to the total number of shares of Common
Stock held (including shares issuable upon conversion of convertible
debentures) by all shareholders in that category who sought to have shares
registered. If less than 50% of the shares requested to be registered by
Demanding Holders in such Demand Registration are
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included in such Demand Registration as a result of any reduction set forth in
this paragraph, such Demand Registration shall not count towards the limit set
forth in the preceding paragraph.
Notwithstanding the foregoing, the Company shall have the right to
delay any registration of Registrable Securities requested pursuant to this
Section 2 for up to one hundred twenty (120) days if such registration would,
in the reasonable good faith judgment of the Company's Board of Directors,
substantially interfere with any material transaction being considered at the
time of receipt of the request.
3. Piggy-Back Registration
If at any time the Company proposes to file a registration statement
under the Securities Act with respect to an offering of Common Stock (other
than a registration statement on Form S-4 or S-8, or any form substituted
therefor, or filed in connection with an exchange offer or an offering of
securities solely to the Company's existing stockholders) (the "PIGGY-BACK
REGISTRATION"), then the Company shall in each case give written notice of
such proposed filing to each Holder as soon as practicable but in no event
less than 20 business days before the anticipated filing date, and such notice
shall offer each Holder the opportunity to register such number of shares of
Registrable Securities as such Holder may request. The Company shall permit
each Holder, in the event such Holder has given the Company notice (which may
be given by telephone, to be confirmed promptly in writing, or by facsimile)
within 10 business days after receipt of such notice of its desire, to include
any or all of the Registrable Securities held by it in such offering on the
same terms and conditions as included therein. Notwithstanding the foregoing,
if the managing underwriter or underwriters of such offering determine in good
faith that the total amount of Registrable Securities and shares of Common
Stock requested to be included in such offering would adversely affect the
success of such offering, then the number of shares of Common Stock to be
offered by the Company to the public and the number of shares of Registrable
Securities to be offered for the account of Investor or any other Holder and
the number of shares of Common Stock to be offered for the account of any
other selling shareholders shall each be reduced to the extent necessary to
reduce the total amount of shares to be included in such offering to the
amount recommended by such managing underwriters, in the following order of
priority: (i) if the offering is a "Demand Registration" under the
Registration Rights Agreement, dated the date hereof, among the Company,
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P., then in
such order as in accordance with the provisions thereunder and (ii) in all
other instances, first, the shares of Registrable Securities proposed to be
registered by the Investor or Holders and the shares of Common Stock proposed
to be registered by any other selling stockholders, on a pro rata basis; and
second, the shares of Common Stock proposed to be registered by the Company.
If any of such categories is to be reduced and consists of more than one
shareholder, the part of the total reduction to that category of shares
imposed on each shareholder in that category shall be in the same proportion
that the total number of shares of Common Stock held (including shares
issuable upon conversion of convertible debentures) by such shareholder bears
to the total number of shares of Common Stock held (including shares issuable
upon conversion of convertible debentures) by all shareholders in that
category who sought to have shares registered.
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In the event that the contemplated distribution does not involve an
underwritten public offering, such determination that the inclusion of such
Registrable Securities shall adversely affect the success of the offering
shall be made in reasonable good faith by the Board of Directors of the
Company.
No registration effected under this Section 3, and no failure to
effect a registration under this Section 3, shall relieve the Company of its
obligation to effect a registration upon the request of Demanding Holders
pursuant to Section 2. No failure to effect a registration under this Section
3 or under Section 2 and to complete the sale of Registrable Securities in
connection therewith shall relieve the Company of any other obligation under
this Agreement, including without limitation, the Company's obligations under
Sections 6 and 7.
4. Holdback Agreement
If reasonably requested by the managing underwriter or underwriters
for any public offering of Registrable Securities being made pursuant to a
registration statement relating to a Demand Registration or a Piggy-Back
Registration (a "REGISTRATION STATEMENT"), the Company will not publicly sell
or distribute any securities similar to those being registered, or any
securities convertible into or exchangeable or exercisable for such securities
(other than any such sale or distribution of such securities in connection
with any merger or consolidation by the Company or any subsidiary thereof, or
the acquisition by the Company or a subsidiary thereof of the capital stock or
substantially all of the assets of any other person, or by reason of the
existence of previously issued and outstanding convertible securities, options
or warrants), during the time reasonably requested by the underwriter, not to
exceed 14 business days prior to, and during the 90-day period beginning on,
the effective date of any Registration Statement in which Investor is
participating or the commencement of a public distribution of the Registrable
Securities pursuant to such Registration Statement; provided, however, that in
no event shall this clause prevent the Company from selling or distributing
any securities registered under the Securities Act on Form S-4 or Form S-8 or
any successor form; and (ii) use reasonable efforts to cause each other holder
of privately placed securities similar to those being registered to agree not
to effect any public sale or distribution of any such securities during the
periods described in clause (i) above, in each case including a sale pursuant
to Rule 144 under the Securities Act (except as part of any such registration,
if permitted).
If requested by the managing underwriter or underwriters for any
public offering of Registrable Securities being made pursuant to a
Registration Statement, the Investor will not publicly sell or distribute any
Registrable Securities or any securities convertible into or exchangeable or
exercisable for such securities, including a sale pursuant to Rule 144 under
the Act, during the time reasonably requested by the underwriter, not to
exceed 14 business days prior to, and during the 90-day period beginning on,
the effective date of any Registration Statement in which Investor is
participating or the commencement of a public distribution of the Registrable
Securities pursuant to such Registration Statement or other underwritten
offering.
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5. Registration Procedures
In connection with any sale of Registrable Securities pursuant to a
Registration Statement, the Company will as promptly as practicable:
(a) prepare and file with the Commission a Registration Statement on
the appropriate form under the Securities Act, which form shall comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the Commission to be filed
therewith, and use its reasonable best efforts to have such Registration
Statement declared effective and remain effective in accordance with the
provisions of this Agreement; provided, however, that, prior to filing a
Registration Statement or prospectus relating to Registrable Securities or any
amendments or supplements thereto, the Company shall (A) furnish to Investor,
Investor's counsel and the underwriters, if any, copies of all such documents
proposed to be filed and (B) provide Investor and Investor's counsel with an
adequate and appropriate opportunity to participate in the preparation of such
Registration Statement or prospectus relating to Registrable Securities or any
amendments or supplement thereto to be filed with the Commission;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary to
keep such Registration Statement effective for as long as such registration is
required to remain effective pursuant to the terms hereof; shall cause the
prospectus contained in the Registration Statement to be supplemented by any
required prospectus supplement, and, as so supplemented, to be filed pursuant
to Rule 424 under the Securities Act; and shall comply with the provisions of
the Securities Act applicable to it with respect to the disposition of all
Registrable Securities covered by such Registration Statement during the
applicable period in accordance with the intended methods of disposition set
forth in such Registration Statement or supplement to the prospectus;
(c) promptly notify Investor, counsel to Investor and any underwriter
and (if requested by any such person) confirm such notice in writing, (i) when
a prospectus or any prospectus supplement or post-effective amendment has been
filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any state securities authority for amendments and supplements to
a Registration Statement and prospectus or for additional information after
the Registration Statement has become effective, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (iv) of the issuance by any state securities commission or other
regulatory authority of any order suspending the qualification or exemption
from qualification of any of the Registrable Securities under state securities
or "blue sky" laws or the initiation of any proceedings for that purpose, and
(v) if, between the effective date of a Registration Statement and the closing
of any sale of Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement, securities
sales agreement or other similar agreement, if any, relating to the offering
cease to be true and correct in all material respects;
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(d) use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement, and if one is issued
use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment;
(e) if requested by the managing underwriter or underwriters, if any,
or by Investor or its counsel, incorporate in a prospectus supplement or
post-effective amendment such information as such managing underwriter or
underwriters request, or Investor's counsel reasonably requests, to be
included therein, including, without limitation, with respect to the
Registrable Securities being sold by Investor to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and with respect to any other terms of an underwritten offering
of the Registrable Securities to be sold in such offering, and make all
required filings of such prospectus supplement or post-effective amendment;
(f) cooperate with Investor and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless required
under applicable law) representing securities sold under a Registration
Statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any,
or Investor may request and keep available and make available to the Company's
transfer agent or depositary prior to the effectiveness of such Registration
Statement a supply of such certificates;
(g) provide a CUSIP number for all Registrable Securities covered by
a Registration Statement not later than the effective date of such
Registration Statement;
(h) cooperate with Investor and each underwriter participating in the
disposition of Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc. ("NASD");
(i) during the period when the prospectus is required to be delivered
under the Securities Act, promptly file all documents required to be filed
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (the "EXCHANGE ACT");
(j) in connection with an underwritten offering, participate, to the
extent reasonably requested by the managing underwriter for the offering or
Investor, in customary efforts to sell the securities under the offering,
including without limitation, participating in "road shows";
(k) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as Investor shall reasonably request, use its reasonable best
efforts to keep each such registration or qualification (or exemption
therefrom) effective during the period in which the Registration Statement is
required to be kept effective, and do any and all other acts and things that
may be reasonably necessary or advisable to enable such sellers to consummate
the disposition in such jurisdictions of the
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Registrable Securities owned by Investor; provided, however, that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (k), (ii) subject itself to general taxation in any such
jurisdiction where it is not then so subject, or (iii) consent to general
service of process in any such jurisdiction;
(l) notify Investor at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement contains an untrue statement of a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
promptly prepare and file with the Commission a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(m) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such
Registrable Securities (Investor may, at its option, require that any or all
of the representations, warranties and covenants of the Company to or for the
benefit of any underwriters also be made to and for the benefit of Investor);
(n) make available for inspection by Investor, any underwriter
participating in any disposition pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by the managing underwriter
(collectively, the "INSPECTORS"), all pertinent financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"RECORDS"), as shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such Inspector
in connection with the Registration Statement. Records and other information
that the Company determines, in good faith, to be confidential shall be
identified as confidential prior to delivery of such Records or information to
the Inspectors, and if the Company so notifies the Inspectors that such
Records and information are confidential, such Records and information shall
not be disclosed by the Inspectors unless (i) the disclosure of such Records
in the opinion of counsel reasonably acceptable to the Company is necessary to
avoid or correct a misstatement or omission in the Registration Statement or
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction; Investor agrees that it will,
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at
the Company's expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential;
(o) if the offering is an underwritten public offering, use its best
efforts to obtain a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of the type
customarily covered by "cold comfort" letters as Investor or the managing
underwriter reasonably request;
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(p) use its best efforts to obtain an opinion or opinions from
counsel for the Company in customary form and covering such matters of the
type customarily covered by opinions as Investor or the managing underwriter
reasonably request; and
(q) otherwise comply with all applicable rules and regulations of the
Commission and any other governmental, quasi-governmental or private body to
which the Company or the transactions contemplated by this Agreement is
subject, and make available to its security holders, as soon as reasonably
practicable, an earning statement, which earning statement shall satisfy the
provisions of section 11(a) of the Securities Act.
The Company may require Investor to furnish to the Company, and the
registration rights of Investor hereunder shall be subject to Investor
furnishing, such information regarding the distribution of such Registrable
Securities as the Company may from time to time reasonably request in writing
and the Investor shall represent and warrant to the Company and the
underwriter that such information is true and correct in all material
respects.
Investor agrees that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5(l) hereof,
Investor will forthwith discontinue disposition of Registrable Securities
pursuant to the Registration Statement until Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 5(l) hereof
and, if so directed by the Company, such holder will deliver to the Company
(at the Company's expense) all copies, other than permanent file copies then
in Investor's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice.
All underwriting discounts, selling commissions and expenses of
underwriters will be borne by Investor.
6. Registration and Other Expenses
The Company will pay all expenses incident to the Company's
performance of or compliance with this Agreement, including, without
limitation, all costs and expenses of registration hereunder, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities), fees and expenses
of the counsel and accountants for the Company (including the reasonable
expenses of any special audit and "cold comfort" letters required by or
incident to such performance), opinions of counsel and all other costs and
expenses of the Company incident to Rule 144 sales or the preparation,
printing and filing under the Securities Act of the Registration Statement
(and all amendments and supplements thereto) and furnishing copies thereof and
of the prospectus included therein. In addition, the Company will reimburse
Investor for the reasonable fees and expenses of not more than one counsel
chosen by Investor.
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7. Indemnification and Contribution
(a) Indemnification by the Company. The Company agrees to indemnify
and hold harmless, to the full extent permitted by law, Investor, its
officers, directors, partners, employees and agents, and each person who
controls Investor within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, or is under common control with, or is
controlled by, Investor (collectively, the "INVESTOR INDEMNIFIED PERSONS"),
from and against all losses, claims, damages, liabilities and expenses
(including without limitation any reasonable legal or other fees and expenses
incurred by any such Investor Indemnified Person in connection with defending
or investigating any action or claim in respect thereof) (collectively, the
"INVESTOR DAMAGES") to which any such Investor Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such Investor
Damages (or proceedings in respect thereof) arise out of or are caused by any
untrue statement or alleged untrue statement of material fact or any omission
or alleged omission of a material fact required to be stated in the
Registration Statement or prospectus or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, except insofar as such Investor Damages arise out of or are caused
by any untrue statement or alleged untrue statement or omission or alleged
omission contained in any information with respect to Investor so furnished in
writing by Investor expressly for use therein (or any amendment or supplement
thereto). In connection with an underwritten offering, the Company shall agree
to indemnify the underwriters thereof, their officers and directors and each
person who controls such underwriters (within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act) on similar terms as
provided above with respect to the indemnification of Investor; provided,
however, if pursuant to an underwritten public offering of Registrable
Securities, the Company and any underwriters enter into an underwriting
agreement or purchase agreement relating to such offering that contains
provisions relating to indemnification between the Company and such
underwriters such provision shall be deemed to govern indemnification as
between the Company and the underwriters.
(b) Indemnification by Investor. Investor agrees to indemnify and
hold harmless, to the full extent permitted by law, the Company, its officers,
directors, stockholders, employees and agents, and each person who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or is
controlled by, the Company (collectively, the "COMPANY INDEMNIFIED PERSONS"),
from and against all losses, claims, damages, liabilities and expenses
(including without limitation any reasonable legal or other fees and expenses
incurred by any such Company Indemnified Person in connection with defending
or investigating any action or claim in respect thereof) (collectively, the
"COMPANY DAMAGES") to which any such Company Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such Company Damages
(or proceedings in respect thereof) arise out of or are caused by any untrue
statement or alleged untrue statement of material fact or any omission or
alleged omission of a material fact required to be stated in the Registration
Statement or prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of a prospectus, in the
light of
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the circumstances under which they were made) not misleading, to the extent,
but only to the extent, that such Company Damages arise out of or are caused
by any untrue statement or alleged untrue statement or omission or alleged
omission contained in any information with respect to Investor so furnished in
writing by, or on behalf of, Investor expressly for use therein (or any
amendment or supplement thereto). In no event shall the liability of Investor
hereunder be greater in amount than the dollar amount of the proceeds (net of
underwriting commissions and fees) received by Investor upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such person of any written notice of
the commencement of any action, suit, proceeding or investigation or threat
thereof made in writing for which such person will claim indemnification or
contribution pursuant to this Agreement and, upon request of the indemnified
party, permit the indemnifying party to assume the defense thereof and retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and shall pay the fees and disbursements of such counsel
relating to such proceeding; provided, however, that failure by such person
entitled to indemnification to give prompt written notice shall not materially
prejudice such person's right of indemnification granted hereunder, except to
the extent the indemnifying party is materially prejudiced thereby. In any
such proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, or (ii) the
indemnifying party fails promptly to assume the defense of such proceeding or
fails to employ counsel reasonably satisfactory to such indemnified party, or
(iii) the named parties to any such proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying parties or
an affiliate of the indemnifying party or such indemnified party, and there
may be one or more defenses available to such indemnified party that are
different from or additional to the defenses available to the indemnifying
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel of its choice at
the expense of the indemnifying party, the indemnifying party shall not have
the right to assume the defense thereof and such counsel shall be at the
expense of the indemnifying party, it being understood, however, that unless
there exists a conflict among indemnified parties, the indemnifying party
shall not, in connection with any one such proceeding or separate but
substantially similar or related proceedings in the same jurisdiction, arising
out of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all indemnified parties. The
indemnifying party will not be subject to any liability for any settlement
made without its consent, which shall not be unreasonably withheld but, if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is a party, and indemnity could have
been sought hereunder by such
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indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) Contribution. If the indemnification provided for in this Section
7 from an indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect (i) the relative benefits
received by the Company on the one hand and Investor on the other hand from
the offering of such Registrable Securities, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
indemnifying party and indemnified parties in connection with the actions that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference
to, among other things, whether any action in question, including any untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact, has been made by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
any investigation or proceeding.
Notwithstanding the provisions of this Section 7(d), Investor shall
not be required to contribute any amount in excess of the amount by which the
dollar amounts of the proceeds (net of underwriting commissions and fees)
received by Investor upon sale of the Registrable Securities giving rise to
such contribution obligation exceeds the amount of any damages which Investor
has otherwise been required to pay by reason of such untrue statement or
omission.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the second preceding paragraph. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 7(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 7(d).
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The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
8. Rule 144
The Company covenants that it will file the reports required to be
filed by the Company under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder (or, if the Company
is not required to file such reports, it will, upon the request of Investor,
make publicly available other information so long as necessary to permit sales
under Rule 144 under the Securities Act), and it will take such further action
as Investor may reasonably request, all to the extent required from time to
time to enable Investor to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, and any similar rule or regulation hereafter adopted by the Commission.
Upon the request of Investor, the Company will deliver to Investor a written
statement as to filings made by the Company with the Commission.
9. Miscellaneous
(a) No Inconsistent Agreements. The Company has not and will not
hereafter enter into any agreement with respect to its securities that is
inconsistent with the rights granted to Investor in this Agreement or
otherwise conflicts with the provisions hereof.
(b) Remedies. The Company and Investor, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company and Investor agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by either of them of
the provisions of this Agreement and hereby agree not to oppose the granting
of such relief on the basis that the other party has an adequate remedy at
law. Each party hereto severally agrees that it will not seek, and agrees to
waive any requirement for, the securing or posting of a bond in connection
with any other party's seeking or obtaining such equitable relief.
(c) Amendments and Waivers. This Agreement may not be amended except
by an instrument in writing signed by the Company and Investor.
(d) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (and shall be deemed to have been
duly given upon receipt) by delivery in person, facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 9(d));
(i) if to the Company, to:
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Berlitz International, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
(ii) if to Investor, to:
Benesse Holdings International, Inc.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
Facsimile: 000-000-0000
with a copy to:
Benesse Corporation
Tokyo Legal Administration Office
0-00 Xxxxxx, Xxxx-xxx
Xxxxx 000, Xxxxx
Attention: Xx. Xxxxxx Xxxx
Facsimile: 00-00-000-0000
and:
Coudert Brothers
Xxxxx Xxxxxxxxx Xxxxxxxx, 00X
0-00-00 Xxxxxxxxx Xxxxxx-xx
Xxxxx, Xxxxx 105
Attention: Xxxxx X. Xxxxx
Facsimile: 000-0000-0000
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties
hereto including, without limitation and without the need for an express
assignment, subsequent holders of Registrable Securities. If any transferee of
any holder of Registrable Securities shall acquire Registrable
13
Securities in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of the terms and provisions of this Agreement and such person shall be
entitled to receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. All
actions and proceedings arising out of or relating to this agreement shall be
brought by the parties and heard and determined only in a Federal or State
court located in the Borough of Manhattan in the City and State of New York
and the parties hereto consent to jurisdiction before and waive any objections
to the venue of such Federal and New York courts. The parties hereto agree to
accept service of process in connection with any such action or proceeding in
any manner permitted for a notice hereunder.
(i) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the
parties' hereto shall be enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the parties to be
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Further Assurances. Each party shall cooperate and take such
action as may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement.
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IN WITNESS WHEREOF the parties hereto have executed and delivered
this Agreement as of the date first written above.
BERLITZ INTERNATIONAL, INC.
By: ______________________________
Name
Title:
BENESSE HOLDINGS INTERNATIONAL, INC.
By: ______________________________
Name:
Title:
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