Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 2, 1998 (this
"Agreement"), between Berlitz International, Inc., a New York corporation
("Company"), and Apollo Management IV, L.P., a Delaware limited partnership on
behalf of Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P.
(collectively, "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 $100,000,000 aggregate principal amount of
convertible exchangeable debentures due 2010, Series A (the "Debentures") of the
Company; and
WHEREAS, pursuant to the terms and conditions of the Debentures, such
Debentures may be convertible at any time at the option of the holder, in part
or in whole, into shares (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:
I. Securities Subject to this Agreement
(i) 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
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.
(ii) 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
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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.
(iii) Registrable Securities. Registrable Securities will cease to be
Registrable Securities when they cease to be Restricted Securities.
II. 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 demands to be given on not more than two (2) separate
occasions (but in no event shall the Company be required to effect more than one
Demand Registration in any nine-month period), then the Company will (i)
promptly notify all other Holders of Registrable Securities 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
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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
more than 50% of the shares requested to be registered by Demanding Holders in
such Demand Registration are not 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.
III. 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
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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 Investor as soon as practicable but in no
event less than 20 business days before the anticipated filing date, and such
notice shall offer Investor the opportunity to register such number of shares of
Registrable Securities as Investor may request. The Company shall permit
Investor, in the event Investor 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, between the Company and Benesse Holdings International, Inc., 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. In the event that the contemplated distribution does not
involve an underwritten
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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.
IV. 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 (the "Registration Statement"), the Company will (i) 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
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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.
V. Registration Procedures
In connection with any sale of Registrable Securities pursuant to a
Registration Statement, the Company will as promptly as practicable:
(i) 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;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep such
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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;
(iii) 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;
(iv) 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;
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(v) 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;
(vi) 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;
(vii) provide a CUSIP number for all Registrable Securities
covered by a Registration Statement not later than the effective date
of such Registration Statement;
(viii) 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");
(ix) 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 0000 (xxx
"Xxxxxxxx Xxx");
(x) in connection with an underwritten offering, participate,
to the extent reasonably requested by the
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managing underwriter for the offering or Investor, in customary efforts
to sell the securities under the offering, including without
limitation, participating in "road shows";
(xi) 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 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;
(xii) 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;
(xiii) 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
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benefit of any underwriters also be made to and for the
benefit of Investor);
(xiv) 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;
(xv) 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;
(xvi) 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
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(xvii) 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.
VI. 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
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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.
VII. Indemnification and Contribution.
(i) 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
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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.
(ii) 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 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.
(iii) 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
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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 the
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
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respect of which any indemnified party is a party, and indemnity could have been
sought hereunder by such 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.
(iv) 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
16
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).
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.
VIII. 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.
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IX. Miscellaneous
(i) 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.
(ii) 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 their 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 any 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.
(iii) Amendments and Waivers. This Agreement may not be amended except
by an instrument in writing signed by the Company and Investor.
(iv) 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)):
(1) if to the Company, to:
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
18
New York, New York 10019-6064
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
(2) if to Investor, to:
Apollo Management IV, L.P.
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(v) 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 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.
(vi) 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.
(vii) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(viii) 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
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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 of venue to the 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.
(ix) 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.
(x) 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.
(xi) 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: /s/ Xxxxxxxx Xxxxx
----------------------
Name: Xxxxxxxx Xxxxx
Title: Chairman, CEO & President
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: /s/ Xxxxxxxx Xxxx
---------------------
Name: Xxxxxxxx Xxxx
Title: Partner
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: /s/ Xxxxxxxx Xxxx
---------------------
Name: Xxxxxxxx Xxxx
Title: Partner
