Exhibit 10.6
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
AMONG
NEW HORIZONS WORLDWIDE, INC.
AND
THE PARTIES LISTED ON EXHIBITS HERETO
DATED JULY 19, 2006

 

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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
          This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
“Agreement”) is entered into as of July 19, 2006 by and among New Horizons
Worldwide, Inc., a Delaware corporation (the “Company”), Camden Partners
Strategic Fund III, L.P., a Delaware limited partnership, Camden Partners
Strategic Fund III-A, L.P., a Delaware limited partnership (collectively,
“Camden”), the other parties identified as Series B Preferred Stockholders on
Exhibit A hereto, as may be amended from time to time (collectively with Camden,
the “Series B Preferred Stockholders”), Alkhaleej Training and Education
Corporation, a company formed under the laws of the Kingdom of Saudi Arabia
(“Alkhaleej”) and other holders of certain warrants issued by the Company as of
the date hereof (the “Warrants”) and as identified on Exhibit B hereto, as may
be amended from time to time (collectively, including any permitted subsequent
holders hereafter, the “Warrant Holders” and together with the Series B
Preferred Stockholders, the “Holders”).
          WHEREAS, the Company and Camden entered into that certain Registration
Rights Agreement dated as of February 7, 2005 (the “Registration Agreement”);
and
          WHEREAS, in connection with the extension of credit to the Company by
the Warrant Holders (the “Loan”), (i) the Company shall issue to each Warrant
Holder a warrant to purchase common stock of the Company; (ii) the Company and
Camden shall exchange all issued and outstanding shares of Series A Convertible
Preferred Stock held by Camden for shares of Series B Convertible Preferred
Stock (the “Series B Convertible Preferred Stock”) pursuant to that certain
Preferred Stock Exchange Agreement of even date herewith; and (iii) it is a
condition precedent to the Loan that the parties hereto amend and restate the
Registration Agreement in order to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statue (collectively, the “Securities Act”) and applicable
state securities laws.
          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
          1. Definitions. As used in this Agreement and except as otherwise
defined herein, the following defined terms shall have the following meanings:
               “Affiliate” of any specified Person means any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified Person. For purposes of this definition, control of
a Person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.
               “Applicable Securities” means in relation to a Registration
pursuant to Section 2 or Section 3, the Registrable Securities of the Covered
Holder or Warrant Holder, as applicable, to be included in such Registration
Statement.

 

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               “Commission” means the United States Securities and Exchange
Commission.
               “Common Stock” means the Company’s common stock, $.01 par value.
               “Covered Holder” means a Series B Preferred Stockholder, any
transferee or assignee thereof to whom a Series B Preferred Stockholder assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 8 and any transferee or assignee
thereof to whom a transferee or assignee assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 8.
               “Demand Notice” means a notice given by Covered Holders pursuant
to Section 2(a).
               “Effective Time” means the date on which the Commission declares
a Registration Statement effective or on which a Registration Statement
otherwise becomes effective.
               “Effectiveness Period” means as to a Registration Statement the
period during which such Registration Statement is effective.
               “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, or any similar successor
statue.
               “Person” means an individual, partnership, corporation, trust,
limited liability company or unincorporated organization, or other entity or
organization, including a government or agency or political subdivision thereof.
               “Piggy-Back Notice” means a Notice given by a Covered Holder
pursuant to Section 3(a) hereof.
               “Prospectus” means the prospectus (including, without limitation,
any preliminary prospectus, any final prospectus and any prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective Registration Statement in reliance upon Rule 430A under the Securities
Act) included in a Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Applicable Securities covered by a Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
               “Registrable Securities” means (i) the Common Stock issued or
issuable pursuant to the conversion of the Series B Convertible Preferred Stock,
(ii) any Common Stock issued or issuable upon conversion of any capital stock of
the Company acquired by the Covered Holder after the date hereof pursuant to the
Stockholders’ Agreement, (iii) any Common Stock issued upon exercise of any
Warrants after the date hereof; and (iv) any Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or other

 

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security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of the shares referenced in clause
(i) through (iii); provided however, that Registrable Securities shall not
include any shares of Common Stock that have been sold to the public either
pursuant to a registration statement or an exemption from registration under the
Securities Act (including Rule 144), that have been sold in a private
transaction in which the transferor’s rights under this Agreement are not
assigned or that may then be sold by a Covered Holder in a single transaction
pursuant to Rule 144(k).
               “Registration” means a registration under the Securities Act
effected pursuant to Section 2 or Section 3 hereof.
               “Registration Expenses” means all expenses incident to the
Company’s performance of or compliance with any Registration of Registrable
Securities pursuant to this Agreement, including, without limitation, (a) all
registration, listing, qualification, filing and National Association of
Securities Dealers, Inc. fees, (b) all fees and expenses of complying with
securities or blue sky laws, (c) all word processing, duplicating and printing
expenses, messenger and delivery expenses, (d) the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of any special audits or “comfort” letters required by or incident to
such performance and compliance, (e) premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out of the public
offering of Registrable Securities being registered, (f) any fees and
disbursements of underwriters customarily paid by issuers, but excluding the
Covered Holders’ pro rata portion of any underwriting discounts and commissions
and transfer taxes, if any, relating to Registrable Securities, and (g) the fees
and disbursements of one counsel designated by the Covered Holders holding a
majority of the Registrable Securities.
               “Registration Statement” means a registration statement filed
under the Securities Act by the Company pursuant to the provisions of Section 2
or Section 3 hereof, including the Prospectus contained therein, any amendments
and supplements to such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.
               “Rule 144” means Rule 144 promulgated by the Commission under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission that may at any time
permit the Covered Holders or Warrant Holders to sell securities of the Company
to the public without registration.
               “Securities Act” shall have the meaning set forth in the
recitals.
               “Stockholders Agreement” means the Amended and Restated
Stockholders Agreement dated the date hereof by and between the parties thereto.
               “Underwriter” or “Underwriters” means any underwriter or
underwriters that will administer the Underwritten offering of Applicable
Securities.
               “Underwritten offering” means a registration or offering in which
securities are sold to an Underwriter for reoffering to the public.

 

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               “Warrants” means those Warrants issued in connection with that
certain Credit Agreement of even date herewith, as such Warrants may be
subsequently exchanged, transferred or assigned.
               “Warrant Holders” means holders of Warrants at any time.
               The words “include,” “includes” and “including,” when used in
this Agreement, shall be deemed to be followed by the words “without
limitation.”
          2. Demand Registration. (a) If the Company shall receive at any time
after the Company is eligible to file a registration statement on Form S-3, a
written request from any of the Covered Holders that the Company file a
registration statement under the Securities Act covering the registration of at
least fifty percent (50%) of the Registrable Securities then outstanding (the
“Demand Notice”), then the Company shall promptly give written notice of such
request to all other Covered Holders in accordance with Section 11(b), if
needed, and shall, subject to the limitations of Section 2(b), use reasonable
best efforts to effect as soon as practicable, but in no event earlier than
twenty (20) days after the mailing of any written notice required hereby, the
registration under the Securities Act of all Registrable Securities which the
Covered Holders request to be registered, unless the Company has, within the
twelve (12) month period preceding the date of such request, already effected a
Registration for the Covered Holders pursuant to this Section 2(a). A request
for registration hereunder may be made for a “shelf registration” pursuant to
Rule 415 of the Securities Act. Subject to Section 2(b), the Company shall use
its best efforts to keep each Registration Statement continuously effective in
order to permit the Prospectus forming a part thereof to be usable by Covered
Holders for resales of Registrable Securities for an Effectiveness Period ending
on the earlier of (i) ninety (90) days from the Effective Time of such
Registration Statement (two years in the case of a shelf registration pursuant
to Rule 415 or any successor rule thereto on Form S-3) and (ii) such time as all
of such securities have been disposed of by the Covered Holders.
               (b) If the Company determines in good faith after considering the
advice of counsel that the use of such Registration would result in a disclosure
of information that would materially and adversely affect any proposed or
pending material acquisition, merger, business combination or other material
transaction involving the Company and that such disclosure is not in the best
interests of the Company and its stockholders, the Company shall have the right
(i) to postpone (or, if necessary or advisable, withdraw) the filing, or delay
the effectiveness, of a Registration Statement, (ii) to fail to keep such
Registration Statement continuously effective and (iii) not to amend or
supplement the Registration Statement or included Prospectus after the
effectiveness of the Registration Statement; provided that the actions under
(i), (ii), or (iii) shall not exceed 90 days and the Company may only use one
such action in any twelve (12) month period. The Company shall advise the
Covered Holders of any such determination as promptly as practicable.
               (c) The Company may include in any registration requested
pursuant to Section 2(a) hereof other securities for sale for its own account or
for the account of another Person, provided that such inclusion shall not affect
the number of Applicable Securities that can be sold in the related offering. In
connection with an Underwritten offering, if the managing underwriter or
underwriters advise the Company in writing that in its or their opinion the
number

 

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of Applicable Securities requested by Covered Holders to be registered exceeds
the number which can be sold in such offering, the Company shall include in such
Registration the number of Applicable Securities that, in the opinion of such
managing Underwriter or Underwriters, can be sold as follows: (i) first, the
Applicable Securities requested to be registered, pro rata among the Covered
Holders that have requested their Applicable Securities to be registered and
(ii) second, any other securities requested to be included in such Registration.
               (d) The Covered Holders requesting any Registration pursuant to
Section 2(a) hereof shall have the right to withdraw such request, without such
Registration being deemed to have been effected (and, therefore, requested) for
purposes of Section 2(a), (i) prior to the time the Registration Statement in
respect of such Registration has been declared effective, (ii) upon the issuance
by a governmental agency or the Commission of a stop order, injunction or other
order which interferes with such Registration, (iii) upon the Company availing
itself of Section 2(b) hereof, or (iv) if such Covered Holders are prevented
pursuant to Section 2(c) hereof from selling all of the Applicable Securities
they requested to be registered. Notwithstanding the foregoing, the Registration
requested by such Covered Holders shall be deemed to have been effected (and,
therefore, requested) for purposes of Section 2(a) hereof if the Covered Holders
withdraw any Registration request pursuant to Section 2(a) hereof (i) after the
Commission filing fee is paid in full with respect to all Applicable Securities
requested to be registered or (ii) as a result of the provisions of Section 2(c)
hereof in circumstances where at least seventy-five percent (75%) of the
Applicable Securities requested to be included in such Registration by the
Covered Holders demanding such Registration have been included, and in each
case, (x) the Company has not availed itself of Section 2(b) with respect to
such Registration request or (y) the Company has availed itself of Section 2(b)
hereof and the withdrawal request is not made within ten (10) days after the
termination of the suspension period occasioned by the Company’s exercise of its
rights under Section 2(b) hereof. The right to withdraw the request contemplated
by this Section 2(d) may be exercised by a majority of the Covered Holders,
calculated in the manner specified in Section 2(a) hereof, and any withdrawal of
the request shall be made in writing by such Covered Holders. If the Covered
Holders withdraw a request pursuant to Section 2(a) but the Company nevertheless
determines to complete, within thirty (30) days after such withdrawal, the
Registration so requested as to securities other than the Applicable Securities,
such Covered Holders shall be entitled to participate in such Registration
pursuant to Section 3 hereof, but in such case the Intended Offering Notice (as
defined in Section 3) shall be required to be given to the Covered Holders as
soon as practicable after such determination and such Covered Holders shall be
required to give the Piggy-Back Notice no later than 5 business days after the
Company’s delivery of such Intended Offering Notice.
               (e) If the Covered Holders initiating the registration request
hereunder (“Initiating Holders”) intend to distribute the Registrable Securities
covered by their request by means of an Underwritten offering, they shall so
advise the Company as a part of their Demand Notice and the Company shall
include such information in the written notice referred to in Section 2(a). The
Underwriter will be selected by a majority in interest of the Initiating Holders
who have requested the registration pursuant to Section 2(a) and approved by the
Company, which approval shall not unreasonably be withheld. In such event, the
right of any Covered Holder to include his Registrable Securities in such
registration shall be conditioned upon such Covered Holder’s participation in
such underwriting to the extent provided herein. All Covered

 

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Holders proposing to distribute their securities through such Underwriting
offering shall (together with the Company as provided in Section 4(m)) enter
into an underwriting agreement in customary form with such Underwriters.
               (f) The Company is obligated to effect only two (2) such
registrations pursuant to this Section 2, one of which may be a shelf
registration.
          3. Piggy-Back Registration. (a) If at any time the Company intends to
file on its behalf or on behalf of any of its stockholders (other than as set
forth in Section 2) a registration statement in connection with a public
offering of common stock or any securities of the Company convertible into or
exercisable for common stock on a form and in a manner that would permit the
registration for offer and sale under the Securities Act of Registrable
Securities held by a Covered Holder or Warrant Holder, other than a registration
statement on Form S-8 or Form S-4 or any successor form or other forms
promulgated for similar purposes, then the Company shall give written notice (an
“Intended Offering Notice”) of such intention to each Covered Holder and Warrant
Holder at least twenty (20) business days prior to the anticipated filing date
of such registration statement. Such Intended Offering Notice shall offer to
include in such Registration Statement for offer to the public such number or
amount of Registrable Securities as each such Covered Holder and Warrant Holder
may request, subject to the conditions set forth herein, and shall specify, to
the extent then known, the number and class of securities proposed to be
registered, the proposed date of filing of such Registration Statement, any
proposed means of distribution of such securities, any proposed managing
underwriter or underwriters of such securities and (if available or as soon as
available) a good faith estimate (which may be a range) by the Company of the
proposed maximum offering price of such securities, as such price is proposed to
appear on the facing page of such registration statement. Any Covered Holder or
Warrant Holder desiring to have Registrable Securities included in such
Registration Statement and offered to the public shall so advise the Company in
writing (the written notice of any such Holder being a “Piggy-Back Notice”) not
later than ten (10) business days after the Company’s delivery to such Holders
of the Intended Offering Notice, setting forth the number of Registrable
Securities such Holder desires to have included in the Registration Statement
and offered to the public. Upon the request of the Company, such Holders shall
(i) enter into such underwriting, custody and other agreements as shall be
customary in connection with registered secondary offerings or necessary or
appropriate in connection with the offering and (ii) complete and execute all
questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting arrangements.
               (b) In connection with an Underwritten offering, if the managing
Underwriter or Underwriters advise the Company in writing that in its or their
opinion the number of securities proposed to be registered exceeds the number
that can be sold in such offering, the Company shall include in such
Registration the number of securities that, in the opinion of such managing
Underwriter or Underwriters, can be sold as follows: (i) first, the securities
that the Company proposes to sell on its behalf (ii) second, the Applicable
Securities requested to be included in such Registration, pro rata among the
Covered Holders that have submitted a Piggy-Back Notice to the Company pursuant
to Section 3(a), (iii) third, the Applicable Securities to be included in such
Registration, pro rata among the Warrant Holders that have submitted a
Piggy-Back Notice to the Company pursuant to Section 3(a) and (iv) fourth, other
securities requested to be included in such Registration; provided, however, the

 

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Covered Holders desiring to have Registrable Securities included in such an
Underwritten offering shall not be reduced to less than twenty-five percent
(25%) of the aggregate securities to be sold in such offering, unless in the
opinion of such managing Underwriter or Underwriters only the securities that
the Company proposes to sell on its behalf should be included in the
Registration.
               (c) The rights of the Covered Holders pursuant to Section 2
hereof and this Section 3 are cumulative, and the exercise of rights under one
such Section shall not exclude the subsequent exercise of rights under the other
such Section. Notwithstanding anything herein to the contrary, the Company may
abandon and/or withdraw any registration (other than pursuant to Section 2
hereof) as to which any right under this Section 3 may exist at any time and for
any reason without liability hereunder. In such event, the Company shall so
notify each Holder that has delivered a Piggy-Back Notice to participate
therein.
          4. Registration Procedures. In connection with a Registration
Statement, the Company shall use its reasonable best efforts to effect such
Registration to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall, as expeditiously as possible:
               (a) furnish to each Covered Holder and each Warrant Holder, if
applicable, prior to the Effective Time, a copy of the Registration Statement
initially filed with the Commission, and shall furnish to such Covered Holders
and each Warrant Holder, if applicable, copies of each amendment thereto and
each amendment or supplement, if any, to the Prospectus included therein.
               (b) use its reasonable best efforts to promptly take such action
as may be reasonably necessary in respect of a Registration Statement under
Section 2 so that (i) each of the Registration Statement and any amendment
thereto and the Prospectus forming part thereof and any amendment or supplement
thereto (and each report or other document incorporated therein by reference in
each case), when it becomes effective, complies in all material respects with
the Securities Act and the Exchange Act and the respective rules and regulations
thereunder, (ii) each of the Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (iii) each of the Prospectus
forming part of the Registration Statement, and any amendment or supplement to
such Prospectus, does not at any time during the period during which the Company
is required to keep a Registration Statement continuously effective under
Section 2(a) include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
               Notwithstanding the foregoing provisions of this Section 4(b),
the Company shall notify each Covered Holder and each Warrant Holder, if
applicable, at any time after effectiveness of a Registration Statement (when a
Prospectus relating thereto is required to be delivered under the Securities
Act) of the happening of any event or other circumstance as the result of which
(i) the Prospectus included in such Registration Statement, as then in effect,
would include 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 in light of the

 

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circumstances then existing, or (ii) the continued effectiveness of such
Registration Statement or a subsequent Registration Statement, and the use of
such Prospectus, would otherwise have a material and adverse effect on any
proposed or pending material acquisition, merger, business combination or other
material transaction involving the Company, and, upon receipt of such notice and
until the Company makes available to each Covered Holder and each Warrant
Holder, if applicable, a supplemented or amended Prospectus, each Covered Holder
and each Warrant Holder, if applicable, shall not offer or sell any Registrable
Securities pursuant to such Registration Statement and shall (at the Company’s
expense) return all copies of such Prospectus to the Company if requested to do
so by it. As promptly as practicable following any such occurrence, the Company
shall prepare and furnish to each Covered Holder and each Warrant Holder, if
applicable, a reasonable number of copies of a supplement or an amendment to
such Prospectus as may be necessary so that, as thereafter delivered to
subsequent purchasers of the Registrable Securities, such Prospectus shall meet
the requirements of the Securities Act and relevant state securities laws;
provided that the Company’s obligations under and actions pursuant to this
paragraph shall be subject to the provisions, including time limits, of
Section 2(b).
               (c) promptly upon learning thereof, advise each Covered Holder
and each Warrant Holder, if applicable, and confirm such advice in writing if so
requested by any Covered Holder and Warrant Holder, if applicable:
               (i) when the Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or any
post-effective amendment thereto has become effective;
               (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included therein or
for additional information;
               (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for such purpose;
               (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities included in the
Registration Statement for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and
               (v) of the happening of any event or the existence of any state
of facts that requires the making of any changes in the Registration Statement
or the Prospectus included therein so that, as of such date, such Registration
Statement and Prospectus do not contain an untrue statement of a material fact
and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to such Covered Holders and
Warrant Holders, if applicable, to suspend the use of the Prospectus until the
requisite changes have been made).

 

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               (d) use its reasonable best efforts to prevent the issuance, and
if issued to obtain the withdrawal, of any order suspending the effectiveness of
the Registration Statement at the earliest possible time.
               (e) furnish to each Covered Holder and each Warrant Holder, if
applicable, without charge, at least one copy of the Registration Statement and
all post-effective amendments thereto, including financial statements and
schedules, and, if such holder so requests in writing, all reports, other
documents and exhibits that are filed with or incorporated by reference in the
Registration Statement.
               (f) during the period during in which the Company is required to
keep a Registration Statement continuously effective under Section 2(a) or
elects to keep effective under Section 3(a), deliver to each Covered Holder and
each Warrant Holder, if applicable, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in the Registration
Statement and any amendment or supplement thereto as such Covered Holder and
such Warrant Holder, if applicable, may reasonably request; and the Company
consents (except during the continuance of any event described in Section 2(b)
or Section 4(c)(v) hereof) to the use of the Prospectus, with any amendment or
supplement thereto, by each of the Covered Holders and Warrant Holders, if
applicable, in connection with the offering and sale of the Applicable
Securities covered by the Prospectus and any amendment or supplement thereto
during such period.
               (g) use its reasonable best efforts prior to any offering of
Applicable Securities pursuant to the Registration Statement (i) to register or
qualify, if required, or cooperate with the Covered Holders and Warrant Holders,
if applicable, and their respective counsel in connection with the registration
or qualification of such Applicable Securities for offer and sale under the
securities or “blue sky” laws of such jurisdictions within the United States as
any Covered Holder or any Warrant Holder, if applicable, may reasonably request,
(ii) to keep such registrations or qualifications as may be required, if any, in
effect and comply with such laws so as to permit the continuance of offers and
sales in such jurisdictions for the period during which the Company is required
to keep a Registration Statement continuously effective under Section 2(a) and
(iii) to take any and all other actions reasonably requested by an Covered
Holder or a Warrant Holder, if applicable, which are necessary or advisable to
enable the disposition in such jurisdictions of such Applicable Securities;
provided, however, that in no event shall the Company be obligated (i) to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Agreement or (ii) to file any general consent to service of process or subject
itself to tax in any jurisdiction where it is not so subject.
               (h) cooperate with the Covered Holders and the Warrant Holders,
if applicable, to facilitate the timely preparation and delivery of certificates
representing Applicable Securities to be sold pursuant to the Registration
Statement, which certificates shall comply with the requirements of Delaware
General Corporation Law and any United States securities exchange or automated
quotation system upon which any Applicable Securities are listed or quoted
(provided that nothing herein shall require the Company to list any Registrable
Securities on any securities exchange or automated quotation system on which
they are not currently listed), and which certificates shall be free of any
restrictive legends and in such permitted

 

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denominations and registered in such names as Covered Holders and Warrant
Holders, if applicable, may request in connection with the sale of Applicable
Securities pursuant to the Registration Statement.
               (i) use its reasonable best efforts either to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities covered by a
Registration Statement on the Nasdaq National Market, or (iii) if, despite the
Company’s reasonable best efforts to satisfy the preceding clause (i) or (ii),
the Company is unsuccessful in satisfying the preceding clause (i) or (ii), to
use its reasonable best efforts to secure the inclusion for quotation on The
Nasdaq Capital Market for such Registrable Securities and, without limiting the
generality of the foregoing, to use its reasonable best efforts to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. (“NASD”) as such with respect to such Registrable
Securities.
               (j) Not later than the Effective Time of the Registration
Statement, the Company shall use its best efforts to provide any required CUSIP
number for any Applicable Securities.
               (k) The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earning statement (in form complying
with, and in the manner provided by, the provisions of Rule 158 under the
Securities Act) covering a twelve-month period beginning not later than the
first day of the Company’s fiscal quarter next following the effective date of a
Registration Statement.
               (l) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission in connection with any
registration hereunder.
               (m) in the event of an Underwritten offering of Applicable
Securities enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing Underwriters of such
offering, including but not limited to indemnification provisions and procedures
substantially identical to those set forth in Section 6 hereof with respect to
all parties to be indemnified pursuant to Section 6 hereof.
               (n) use its reasonable best efforts to:
               (i) cooperate with the Covered Holders and Warrant Holders, if
applicable, and their advisors in their efforts to conduct appropriate due
diligence as is customary for a company of the size and character of the Company
and make such reasonable representations and warranties in the applicable
underwriting agreement to the Underwriters, in form, substance and scope as are
customarily made by the Company to Underwriters in Underwritten offerings of
equity and/or convertible securities, as applicable;

 

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               (ii) in connection with any Underwritten offering, obtain
opinions of counsel to the Company (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the Underwriters) addressed
to the Underwriters, covering such matters that the Company customarily covers
in opinions requested in secondary Underwritten offerings of equity and/or
convertible securities, as applicable, to the extent reasonably required by the
applicable underwriting agreement;
               (iii) in connection with any Underwritten offering, obtain
“comfort” letters and updates thereof from the independent public accountants of
the Company (and, if necessary, from the independent public accountants of any
Subsidiary (as defined in the Purchase Agreement) of the Company or of any
business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Registration Statement),
addressed to each Covered Holder and each Warrant Holder, if applicable,
participating in such underwritten offering (if such Covered Holder has provided
such letter, representations or documentation, if any, required for such comfort
letter to be so addressed) and the Underwriters, in customary form and covering
matters of the type customarily covered in “comfort” letters in connection with
underwritten offerings of Company securities; and
               (iv) in connection with any Underwritten offering, deliver such
documents and certificates as may be reasonably requested by any Covered Holders
or any Warrant Holders, if applicable, participating in such Underwritten
offering and the Underwriters, if any, including, without limitation,
certificates to evidence compliance with any conditions contained in the
underwriting agreement or other agreements entered into by the Company.
               (o) use its reasonable best efforts in respect of a Registration
Statement under Section 2, to take all other steps reasonably necessary to
effect the timely registration, offering and sale of the Applicable Securities
covered by the Registration Statements contemplated hereby.
               (p) In respect of a Registration Statement under Section 2 or 3,
it shall be a condition precedent to the obligations of the Company to take any
action pursuant to such Sections with respect to the Registrable Securities of
any Covered Holder or any Warrant Holder, if applicable, that such Covered
Holder or Warrant Holder, if applicable, shall furnish to the Company such
information regarding itself, the Registrable Securities held by it, the
intended method of disposition of such securities and any other information and
materials and shall take all such action as shall be reasonably requested by the
Company as shall be required to effect the registration of such Covered Holder’s
or such Warrant Holder’s, if applicable, Registrable Securities
          5. Registration Expenses. The Company shall bear the Registration
Expenses in connection with the performance of its obligations under Sections 2,
3 and 4 hereof. Each Covered Holder and each Warrant Holder, if applicable,
shall bear its pro rata portion of Underwriters’ discounts and commissions and
transfer taxes, if any, relating to the Registrable Securities.

 

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          6. Indemnification and Contribution. (a) Upon the Registration of
Applicable Securities pursuant to Section 2 or 3 hereof, the Company shall
indemnify and hold harmless each Covered Holder, each Warrant Holder, if
applicable, and each Underwriter, selling agent or other securities
professional, if any, which facilitates the disposition of Applicable
Securities, and each of their respective officers, directors, employees and
agents and each person who controls such Covered Holder, such Warrant Holder, if
applicable, Underwriter, selling agent or other securities professional within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (each such person being sometimes referred to as an “Indemnified Person”)
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which such Applicable Securities are to be registered under the Securities
Act, or any Prospectus contained therein or furnished by the Company to any
Indemnified Person, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company hereby agrees to reimburse such Indemnified Person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable to any such
Indemnified Person in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus, or amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by such
Indemnified Person expressly for use therein. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Company or any of the prospective sellers or Underwriters, or any of their
respective Affiliates, directors, officers, employees, agents or controlling
Persons and shall survive the transfer of securities by any Covered Holder or by
any Warrant Holder, if applicable.
               (b) Each Covered Holder and each Warrant Holder agrees, as a
consequence of the inclusion of any of such Holder’s Applicable Securities in
such Registration Statement, severally and not jointly, to indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or such other persons may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement or Prospectus, or any amendment or supplement, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Holder expressly for use therein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, the Underwriters or any of
the prospective sellers, or any of their respective Affiliates, directors,
officers or controlling Persons and shall survive the

 

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transfer of securities by any Covered Holder or by any Warrant Holder. In no
event shall the liability of any Covered Holder or any Warrant Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by that
Covered Holder or that Warrant Holder upon the sale of the Registrable
Securities giving rise to the indemnification obligation.
               (c) Promptly after receipt by any Person entitled to indemnity
(an “Indemnitee”) under Section 6(a) or (b) hereof of notice of the commencement
of any action or claim, such Indemnitee shall, if a claim in respect thereof is
to be made against an indemnifying party under this Section 6 (an “Indemnitor”),
promptly notify such Indemnitor in writing of the commencement thereof, but the
omission so to notify the Indemnitor shall not relieve it from any liability
which it may have to any Indemnitee except to the extent of any actual
prejudice. In case any such action shall be brought against any Indemnitee and
the Indemnitee shall notify an Indemnitor of the commencement thereof, such
Indemnitor shall be entitled to participate therein and, jointly with any other
Indemnitor similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnitee, and, after notice from the
Indemnitor to such Indemnitee of its election so to assume the defense thereof,
such Indemnitor shall not be liable to such Indemnitee under this Section 6 for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such Indemnitee, in connection with the defense
thereof. No Indemnitor shall, without the prior written consent of the
Indemnitee, effect the settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnitee is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnitee from all liability arising out of such
action or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any Indemnitee.
               (d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnitee under Section 6(a)
or (b) hereof in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each Indemnitor, in lieu
of indemnifying the Indemnitee, shall contribute to the amount paid or payable
by such Indemnitee as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Indemnitor and the Indemnitee in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnitor and Indemnitee
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such Indemnitor or by
such Indemnitee, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined solely by pro rata allocation
(even if the Covered Holders and/or Warrant Holders were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 6(d). The
amount paid or payable by an Indemnitee as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above shall
be deemed to include any legal or other fees or expenses reasonably incurred by
such Indemnitee in connection with

 

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investigating or defending any such action or claim. 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. The obligations of the Covered
Holders and Warrant Holders in this Section 6(d) to contribute shall be several
in proportion to the percentage of Applicable Securities registered or sold, as
the case may be, by them and not jointly and shall be subject to the limitations
set forth in the last sentence of Section 6(b).
               (e) The obligations of the Company under this Section 6 shall be
in addition to any liability which the Company may otherwise have to any
Indemnitee and the obligations of any Indemnified Person under this Section 6
shall be in addition to any liability which such Indemnified Person may
otherwise have to the Company. The remedies provided in this Section 6 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to an Indemnitee at law or in equity.
          7. Reports Under The Exchange Act.
               With a view to making available to the Covered Holders and
Warrant Holders the benefits of Rule 144 , the Company agrees, after is shall
have first become current in the filing of its periodic reports with the
Commission (it being acknowledged by all parties hereto that the Company is
delinquent in the filing of periodic reports with the Commission as of the date
hereof) to:
               (a) use its reasonable best efforts to make and keep public
information available, as those terms are understood and defined in Rule 144;
               (b) use its reasonable best efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act so long as the Company remains subject
to such requirements and the filing of such reports and other documents is
required for the applicable provisions of Rule 144; and
               (c) furnish to each Covered Holder and Warrant Holder so long as
such Holder owns Registrable Securities, promptly upon request, (i) a written
statement by the Company, if true, that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act, (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit such Holders to sell such securities
pursuant to Rule 144 without registration.
          8. Assignment of Registration Rights.
               The rights under this Agreement shall be automatically assignable
by the Covered Holders and Warrant Holders to any transferee of all or any
portion of such Holder’s Registrable Securities if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or

 

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assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws; and (iv) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein.
          9. Other Registration Rights; Inconsistent Agreements
               Except for registration rights granted by the Company after the
date hereof which are subordinate to the registration rights of the Covered
Holders and Warrant Holders granted pursuant to this Agreement, the Company
shall not grant any registration rights with respect to Common Stock or any
securities of the Company convertible into or exercisable for Common Stock to
any other Person. The Company has not and will not enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Covered Holders and Warrant Holders in this Agreement or otherwise conflict with
the provision hereof. The Company has not previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person other than the Registration Agreement.
          10. Termination of Registration Rights
               The registration rights granted pursuant to this Agreement shall
terminate upon the date upon which there ceases to be any Registrable Securities
outstanding.
          11. Miscellaneous. (a) This Agreement, including this Section 11(a),
may be amended, and waivers or consents to departures from the provisions hereof
may be given, only by a written instrument duly executed, (x) in the case of an
amendment, by the Company and (i) the Covered Holders and Warrant Holders (with
respect to the Warrants Holders, only as to the provisions affecting the Warrant
Holders contained herein) representing a majority of Registrable Securities at
the time outstanding (who shall be deemed to be acting for themselves and as
agents for each Covered Holder and Warrant Holder, as applicable), (ii) any
Covered Holder on whom such amendment would have an adverse effect materially
disproportionate to the Covered Holders in general, and (iii) any Warrant Holder
on whom such amendment would have an adverse effect materially disproportionate
to the Warrant Holders in general or (y) in the case of a waiver or consent, by
the party against whom the waiver or consent, as the case may be, is to be
effective. Each holder of Registrable Securities outstanding at the time of any
such amendment, waiver or consent or thereafter shall be bound by any amendment,
waiver or consent effected pursuant to this Section 11(a), whether or not any
notice, writing or marking indicating such amendment, waiver or consent appears
on the Registrable Securities or is delivered to such holder. Further if at any
time a Covered Holder or a Warrant Holder no longer holds Registrable
Securities, the consent of such Covered Holder or Warrant Holder shall no longer
be required to amend this Agreement or to waive or consent to departures from
the provisions hereof.
               (b) All notices, demands, requests, or other communications which
may be or are required to be given, served, or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or

 

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mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

         
 
  (i)   If to the Company:
 
      New Horizons Worldwide, Inc.
 
      1900 S. State College Blvd., Suite 200
 
      Anaheim, California 92806
 
      Attention: Thomas J. Bresnan
 
       
 
      with a copy (which shall not constitute notice) to:
 
      Calfee, Halter, & Griswold, LLP
 
      1400 McDonald Investment Center
 
      800 Superior Avenue
 
      Cleveland, Ohio 44114-2688
 
      Attention: Scott R. Wilson

         
 
  (ii)   If to Camden:
 
      Camden Partners Holdings, LLC
 
      500 East Pratt Street
 
      Suite 1200
 
      Baltimore, MD 21202
 
      Attention: David L. Warnock
 
       
 
      with a copy (which shall not constitute notice) to:
 
      Hogan & Hartson L.L.P.
 
      111 South Calvert Street. Suite 1600
 
      Baltimore, Maryland 21202
 
      Attention: Thene M. Martin
 
       
 
  (iii)   If to any other Covered Holder:

               To such Covered Holder’s address shown on Exhibit A hereto.

         
 
  (iv)   If to any Warrant Holder:

               To such Warrant Holder’s address shown on Exhibit B hereto.
Each party may designate by notice in accordance with this Section 11(b) a new
address to which any notice, demand, request or communication may thereafter be
so given, served or sent. Each notice, demand, request, or communication which
shall be hand delivered, sent, mailed, in the manner described above, shall be
deemed sufficiently given, served, sent, received or delivered for all purposes
at such time as it is delivered to the addressee (with the return receipt or the
delivery receipt being deemed conclusive, but not exclusive, evidence of such
delivery) or at such time as delivery is refused by the addressee upon
presentation.

 

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     (c) The parties to this Agreement intend that all Holders of Registrable
Securities shall be entitled to receive the benefits of and shall be bound by
the terms and provisions of this Agreement by reason of electing to have
Applicable Securities included in a Registration Statement. Except as set forth
in Section 8, the terms and provisions of this Agreement shall not be assignable
or transferable and there shall be no third-party beneficiaries hereto. All the
terms and provisions of this Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the respective legal successors and
permitted assigns of the parties hereto and any Holder.
     (d) This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
     (e) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
     (f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY PROVISIONS
RELATING TO CONFLICTS OF LAWS.
     (g) The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or entity or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, such provision and (ii) the remainder of this Agreement
and the application of such provision to other Persons, entities or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
     (h) The respective indemnities, agreements, representations, warranties and
other provisions set forth in this Agreement or made pursuant hereto shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Holder, any
director, officer or partner of such Holder, any agent or Underwriter, any
director, officer or partner of such agent or Underwriter, or any controlling
person of any of the foregoing, and shall survive the transfer and Registration
of the Applicable Securities of such Holder.
[Signature Appears on the Following Page]

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective authorized officers as of the day and year first
above written.

                  NEW HORIZONS WORLDWIDE, INC.    
 
           
 
  By:   /s/ Thomas J. Bresnan
 
        Name: Thomas J. Bresnan         Title: President    
 
            CAMDEN PARTNERS STRATEGIC FUND III, L.P., as         Series B
Convertible Preferred Stockholder and Warrant Holder         By: CAMDEN PARTNERS
STRATEGIC III, LLC,
its General Partner    
 
           
 
  By:   /s/ David L. Warnock
 
David L. Warnock, Managing Member    
 
            CAMDEN PARTNERS STRATEGIC FUND III-A, L.P. ,         as Series B
Convertible Preferred Stockholder and Warrant Holder         By: CAMDEN PARTNERS
STRATEGIC III, LLC,
its General Partner    
 
           
 
  By:   /s/ David L. Warnock
 
David L. Warnock, Managing Member    
 
            ALKHALEEJ TRAINING AND EDUCATION
CORPORATION, as Warrant Holder    
 
  By:   /s/ Alwaleed Aldryann
 
   
 
      Alwaleed Aldryann, President    
 
       
 
  GEORGE S. RICH
 
       
 
  /s/ George S. Rich
 
 
 
George S. Rich

 

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EXHIBIT A
Series B Preferred Stockholders
Camden Partners Strategic Fund III, L.P.
500 East Pratt Street
Suite 1200
Baltimore, MD 21202
PHONE: (410) 878-6810

Fax: (410) 878-6850
Camden Partners Strategic Fund III-A, L.P.
500 East Pratt Street
Suite 1200
Baltimore, MD 21202
PHONE: (410) 878-6810

Fax: (410) 878-6850

 

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EXHIBIT B
Warrant Holders
Camden Partners Strategic Fund III, L.P.
500 East Pratt Street
Suite 1200
Baltimore, MD 21202
PHONE: (410) 878-6810

Fax: (410) 878-6850
Camden Partners Strategic Fund III-A, L.P.
500 East Pratt Street
Suite 1200
Baltimore, MD 21202
PHONE: (410) 878-6810

Fax: (410) 878-6850
Alkhaleej Training and Education Corporation
P.O. Box 295300
Riyadh 11351
Kingdom of Saudi Arabia
Attn: Alwaleed Aldryann
Fax: 9661-4656030
George S. Rich
904 S Broadway
Baltimore, Maryland 21231
Attn: George S. Rich