Exhibit 99.4
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
2
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 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
3
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 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.
4
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;
5
(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
6
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;
7
(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.
8
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
9
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
10
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).
11
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:
12
Berlitz International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Investor, to:
Benesse Holdings International, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Benesse Corporation
Tokyo Legal Administration Office
▇-▇▇ ▇▇▇▇▇▇, ▇▇▇▇-▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
Facsimile: ▇▇-▇▇-▇▇▇-▇▇▇▇
and:
Coudert Brothers
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇-▇▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 105
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇▇-▇▇▇▇
(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.
14
IN WITNESS WHEREOF the parties hereto have executed and delivered this
Agreement as of the date first written above.
BERLITZ INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President, General
Counsel & Secretary
BENESSE HOLDINGS INTERNATIONAL, INC.
By: /s/ Mako ▇▇▇▇▇
------------------
Name: Mako ▇▇▇▇▇
Title: President & CEO
15