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BERLITZ GLOBALNET, INC.

STOCK PURCHASE AGREEMENT

by and among

BGS COMPANIES, INC.,

as Buyer,

and

BERLITZ INTERNATIONAL, INC.

and

BERLITZ INVESTMENT CORPORATION,

as Sellers

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Dated as of August 7, 2002

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EX-10.17: STOCK PURCHASE AGREEMENT [y65302exv10w17.htm] EX-99.1: CERTIFICATION
[y65302exv99w1.htm] EX-99.2: CERTIFICATION [y65302exv99w2.htm]

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1. Sale and Purchase of Shares 1   1.1 Sale and Purchase of Shares 1   1.2
Payment of Purchase Price 1   1.3 Delivery of Shares 1   1.4 Purchase Price
Adjustment 1 2. Closing; Closing Date 3 3. Representations and Warranties of the
Sellers as to the Company 3   3.1 Due Organization and Authority 3   3.2
Subsidiaries 3   3.3 Qualification 3   3.4 Capitalization 4   3.5 Options or
Other Rights 4   3.6 Organizational Documents and Corporate Records 4   3.7
Financial Statements 5   3.8 Undisclosed Liabilities 5   3.9 Absence of Changes
6   3.10 Tax Matters 7   3.11 Compliance with Laws 8   3.12 Permits 8   3.13
Environmental Compliance 8   3.14 No Breach 8   3.15 Contracts 9   3.16 Property
10   3.17 Intellectual Property 11   3.18 Litigation 12   3.19 Brokers 12   3.20
Employee Benefit Plans 12   3.21 Employee Relations 14   3.22 Accounts
Receivable 14   3.23 Banks, Brokers and Powers of Attorney 15   3.24 Affiliate
Transactions 15   3.25 Insurance 15   3.26 Customers 15   3.27 Full Disclosure
16   3.28 Exclusivity of Representations 16 4. Representations and Warranties of
Sellers as to the Shares and this Agreement 16   4.1 Title to the Shares 16  
4.2 Authority to Execute and Perform Agreement 16

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5. Representations and Warranties of the Buyer 17   5.1 Due Incorporation and
Authority 17   5.2 Authority to Execute and Perform Agreement 17   5.3 Brokers
18   5.4 Purchase for Investment 18   5.5 Financial Ability 18   5.6 Exclusivity
of Representations 18 6. Covenants and Agreements 19   6.1 Conduct of Business
19   6.2 Confidentiality 20   6.3 Expenses 20   6.4 Publicity 20   6.5
Intercompany Payables 20   6.6 Required Consents 21   6.7 Access to Information
and Cooperation 21   6.8 Further Assurances 22   6.9 Transfer Taxes 22   6.10
Berlitz Names and Marks 22   6.11 Employee Matters 23   6.12 Stock Options 25  
6.13 Covenant Not to Compete 25   6.14 Website Traffic 26   6.15 Transfers of
Subsidiary Shares 26   6.16 Termination of Subleases 27   6.17 Transition
Services 27   6.18 Distributions 27 7. Conditions Precedent to the Obligation of
the Buyer to Close 28   7.1 Representations and Covenants 28   7.2 HSR Act and
Other Antitrust Filings 28   7.3 No Orders or Proceedings 28   7.4 Consents 28  
7.5 Resignations 28   7.6 Intercompany Payables 28   7.7 Opinion of Sellers’
Counsel 29 8. Conditions Precedent to the Obligation of the Sellers to Close 29
  8.1 Representations and Covenants 29   8.2 HSR Act and Other Antitrust Filings
29   8.3 No Orders or Proceedings 29   8.4 Consents 29   8.5 Opinion of Buyer’s
Counsel 29 9. Survival 30 10. Indemnification 30

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  10.1 Obligation of the Sellers to Indemnify 30   10.2 Obligation of the Buyer
to Indemnify 31   10.3 Indemnification Procedure 31   10.4 Measure of and
Limitations upon Indemnification 32   10.5 Exclusivity of Indemnity 33   10.6
Subrogation 33 11. Tax Indemnification; Tax Matters 33   11.1 Preparation of Tax
Returns and Payment of Taxes 33   11.2 Tax Indemnification by the Sellers 35  
11.3 Tax Indemnification by Buyer 35   11.4 Tax Indemnification Procedures 35  
11.5 Cooperation 36   11.6 Tax Treatment of Certain Payments 36   11.7
Section 338(h)(10) Election 37 12. Termination of Agreement 38   12.1
Termination 38   12.2 Survival After Termination 39 13. Miscellaneous 39   13.1
Certain Definitions 39   13.2 Consent to Jurisdiction; Service of Process;
Waiver of Jury Trial 42   13.3 Notices 43   13.4 Entire Agreement 44   13.5
Waivers and Amendments 44   13.6 Governing Law 44   13.7 Binding Effect;
Assignment 44   13.8 Usage 45   13.9 Articles and Sections 45   13.10
Interpretation 45   13.11 Severability of Provisions 45   13.12 Counterparts 45
  13.13 No Third Party Beneficiaries 45

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STOCK PURCHASE AGREEMENT

Stock Purchase Agreement, dated as of August 7, 2002 (this “Agreement”), by and
among BGS Companies, Inc., a Delaware corporation (the “Buyer”), Berlitz
International, Inc., a New York corporation (“Berlitz International”), and
Berlitz Investment Corporation, a Delaware corporation (“Berlitz Investment” and
together with Berlitz International, the “Sellers”), for the purchase and sale
of all of the issued and outstanding shares of capital stock of Berlitz
GlobalNET, Inc., a New York corporation (the “Company”).

The Sellers are the beneficial and record owners of all of the issued and
outstanding shares of common stock, par value $0.01 per share, of the Company
(the “Shares”). The Sellers wish to sell to the Buyer, and the Buyer wishes to
purchase from the Sellers, all of the Shares upon the terms and subject to the
conditions of this Agreement.

Certain terms used herein are defined as provided in Section 13.1.

Accordingly, the parties agree as follows:

1.       Sale and Purchase of Shares.

1.1       Sale and Purchase of Shares. At the Closing provided for in Article 2,
upon the terms and subject to the conditions of this Agreement and in reliance
upon the representations, warranties and agreements contained herein, the
Sellers shall sell to the Buyer, and the Buyer shall purchase from the Sellers,
all of the Shares for an aggregate purchase price (the “Purchase Price”) equal
to $75,000,000, subject to adjustment as set forth in Section 1.4, such Purchase
Price to be paid in cash in accordance with Section 1.2.

1.2       Payment of Purchase Price. At the Closing, the Purchase Price shall be
paid by the Buyer to the Sellers in cash by wire transfer of immediately
available funds in United States dollars to the respective bank accounts
designated by the Sellers in writing at least two Business Days prior to the
Closing, which funds shall be allocated between the Sellers in the percentages
set forth opposite each Seller’s name in Section 3.4(a) of the Sellers’
Disclosure Letter.

1.3       Delivery of Shares. At the Closing, the Sellers shall deliver, or
cause to be delivered, to the Buyer stock certificates representing the Shares,
constituting all of the issued and outstanding capital stock of the Company,
duly endorsed in blank or accompanied by stock powers duly executed in blank, in
proper form for transfer.

1.4       Purchase Price Adjustment. The Purchase Price shall be subject to
adjustment as follows:

(a)       As soon as practicable following the Closing, but in no event later
than 30 days after the Closing Date, the Sellers shall prepare and deliver to

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the Buyer a statement setting forth the Net Current Assets of the Company and
the Subsidiaries as at Closing (the “Net Current Assets Statement”). The Net
Current Assets Statement shall (i) set forth the amounts of the components of
Net Current Assets as they would appear on a combined balance sheet of the
Company and the Subsidiaries prepared in a manner consistent with the Company
Financial Statements and (ii) present such amounts in accordance with GAAP
consistently applied and calculated in a manner consistent with the accounting
principles and practices used in the preparation of the Company Financial
Statements. Without limiting the foregoing, accounts receivable shall be
calculated on the same basis and using the same percentage reserve for
non-collectibility as was utilized in the preparation of the Company Financial
Statements. For purposes of this Agreement, “Net Current Assets” shall mean the
excess of (i) total current assets over (ii) total current liabilities, as
reflected on the final Net Current Assets Statement. For purposes of this
Agreement, “Cash” shall mean the total amount of cash and temporary investments
of the Company and the Subsidiaries.

(b)       Each party will cooperate with the other party in the determination of
Net Current Assets, including allowing the Sellers and their representatives
reasonable access after the Closing to the books and records of the Company and
the Subsidiaries. Upon receipt of the Net Current Assets Statement, the Buyer
shall be permitted to examine the work papers prepared by the Sellers. If the
Buyer disputes the Sellers’ calculation of Net Current Assets, as set forth in
the Net Current Assets Statement, the Buyer shall notify the Sellers in writing,
setting forth its objections in detail, within 30 days after delivery of the Net
Current Assets Statement. If the Buyer does not object within such 30-day
period, the Net Current Assets Statement shall be deemed to have been accepted
by the Buyer and shall be final, binding and conclusive on the parties. If the
Buyer does object within such period, the Buyer and the Sellers shall endeavor
for 30 days in good faith to resolve any dispute over the calculation of Net
Current Assets, and, upon such resolution, the Net Current Assets Statement
shall be final, binding and conclusive on the parties. If the parties cannot
resolve their dispute within this time period, such dispute shall be submitted
to a nationally recognized accounting firm in the United States (other than
Deloitte & Touche LLP, KPMG LLP or Arthur Andersen LLP) as is mutually
acceptable to the Buyer and the Sellers (the “ Independent Accounting Firm”),
which shall resolve all such disputes within 30 days from their submission. The
decision of the Independent Accounting Firm shall be final, binding and
conclusive on the parties. The Independent Accounting Firm shall address only
those items in dispute and may not assign a value greater than the greatest
value for such items claimed by either party or smaller than the smallest value
for such items claimed by either party. The fees and expenses of the Independent
Accounting Firm shall be paid by the party whose calculation of Net Current
Assets is farther from the value calculated by the Independent Accounting Firm.

(c)       To the extent that (i) Cash, as set forth in the final Net Current
Assets Statement, is less than $16,000,000 or (ii) Net Current Assets, as set
forth in the final Net Current Assets Statement, is less than $32,000,000, the
Purchase Price shall be decreased by the difference. The Sellers shall pay to
the Buyer the amount of any such decrease in the Purchase Price within ten days
after the date on which the Net Current Assets Statement has become final,
binding and conclusive on the parties. Such

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payment shall be made by wire transfer of immediately available funds in United
States dollars to the bank account or accounts designated in writing by the
Buyer.

2.       Closing; Closing Date. The closing of the sale and purchase of the
Shares contemplated hereby (the “Closing”) shall take place at the offices of
Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York,
New York, at 10:00 a.m. local time, on the tenth Business Day after the
conditions to closing set forth in Sections 7.2 and 8.2 have been satisfied, or
such other time or date as the parties may mutually agree in writing; provided,
that all of the conditions to the Closing set forth in Articles 7 and 8 have
been satisfied or waived by the party or parties entitled to waive them. The
time and date upon which the Closing occurs is referred to herein as the
“Closing Date.”

3.       Representations and Warranties of the Sellers as to the Company. The
Sellers, jointly and severally, represent and warrant to the Buyer that, as of
the date of this Agreement and as of the Closing Date, except as set forth in
the disclosure letter relating to this Agreement (the “ Sellers’ Disclosure
Letter”) delivered by the Sellers to the Buyer on the date hereof:

3.1       Due Organization and Authority. The Company is a corporation duly
organized and validly existing under the laws of the State of New York. The
Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.

3.2       Subsidiaries.

(a)       Section 3.2(a) of the Sellers’ Disclosure Letter sets forth the name
and jurisdiction of organization of each corporation or other entity
(collectively, the “Subsidiaries”) in which the Company directly or indirectly
owns or has the power to vote shares of any capital stock or other ownership
interests having voting power to elect a majority of the directors of such
corporation or other Persons performing similar functions for such entity, as
the case may be. Except for the Subsidiaries, the Company does not directly or
indirectly own any interest in any other Person.

(b)       Each of the Subsidiaries is an entity duly organized, validly existing
and (to the extent the concept of good standing exists in the applicable
jurisdiction) in good standing under the laws of its jurisdiction of
organization. Each of the Subsidiaries has all requisite corporate or other
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted.

3.3       Qualification. Each of the Company and the Subsidiaries is duly
qualified or licensed to do business in all other jurisdictions where the
Company or any of the Subsidiaries currently conducts business that require such
qualification or licensing, except where the failure to so qualify or be
licensed would not have, individually or in the aggregate, a Company Material
Adverse Effect. As used in this Agreement, a “Company Material Adverse Effect”
means any effect (i) that is, or

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insofar as reasonably can be foreseen in the future is reasonably likely to be,
materially adverse to the financial condition, business, results of operations,
properties or assets of the Company and the Subsidiaries, taken as a whole,
except that events, changes, developments, impairments, conditions or
circumstances resulting from any of the following shall not constitute a Company
Material Adverse Effect: (A) events, changes, developments or impairments in
worldwide, national or local conditions or circumstances (political, economic or
regulatory), (B) the departure of management personnel or other employees, or
the loss of business from customers, as a result of the announcement of this
Agreement and the transactions contemplated hereby or (C) any changes in law or
accounting principles (and any changes resulting therefrom) that adversely
affect enterprises or the Company’s industry generally and do not specifically
relate to (or have the effect of specifically relating to or having a materially
disproportionate effect (relative to most other industry participants) on) the
Company and the Subsidiaries, taken as a whole, or (ii) that could reasonably be
expected to materially impair or delay the ability of the Sellers to consummate
the transactions contemplated hereby.

3.4       Capitalization.

(a)       The Company is authorized to issue 10,000,000 shares of common stock,
par value $0.01 per share, of the Company (“Company Common Stock”), of which
8,500,000 shares of Company Common Stock are issued and outstanding. All of the
Shares are owned by the Sellers, free and clear of any Lien, and the Sellers’
respective ownership of the Shares is set forth in Section 3.4(a) of the
Sellers’ Disclosure Letter. All of the Shares are duly authorized and validly
issued, fully paid and nonassessable. No other class of capital stock or other
ownership interests of the Company is authorized or outstanding.

(b)       The authorized and issued shares of capital stock or other ownership
interests of each of the Subsidiaries are set forth in Section 3.4(b) of the
Sellers’ Disclosure Letter. All of the issued and outstanding capital stock and
other ownership interests of each of the Subsidiaries is owned by the Company,
free and clear of any Lien. All of the outstanding shares of capital stock of
each of the Subsidiaries are duly authorized and validly issued, fully paid and
nonassessable. No other class of capital stock or other ownership interests of
any of the Subsidiaries is authorized or outstanding.

3.5       Options or Other Rights. As of August 1, 2002, there were outstanding,
under the Option Plan, options to purchase an aggregate of 1,456,000 shares of
Company Common Stock (the “Options”). Other than the Options, there is no
outstanding right, subscription, warrant, call, unsatisfied preemptive right,
option or other agreement to purchase, or otherwise to receive from the Company
or any of the Subsidiaries, any shares of the capital stock or any other equity
security of the Company or any of the Subsidiaries, and there is no outstanding
security of the Company or any of the Subsidiaries convertible into any such
capital stock or other equity security.

3.6       Organizational Documents and Corporate Records. The Sellers have
previously made available to the Buyer copies of the certificate of

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incorporation and by-laws, or comparable instruments, of the Company and each of
the Subsidiaries as in effect on the date hereof. True and complete copies of
the minute books, or comparable records, of the Company and the principal
Subsidiaries listed on Section 3.6 of the Sellers’ Disclosure Schedule have
previously been made available to the Buyer for its inspection. The names of the
officers and directors of the Company and each Subsidiary as of the date hereof
are set forth on Section 3.6 of the Sellers’ Disclosure Letter.

3.7       Financial Statements. The Sellers have previously made available to
the Buyer copies of (i) the audited combined balance sheet of the Company, the
Subsidiaries and the affiliated entities set forth on Section 3.7 of the
Sellers’ Disclosure Letter (the “Affiliated Entities ”) as of December 31, 2001
and the related statements of operations and cash flows for the year then ended
(the “Audited Financial Statements”) and (ii) the unaudited combined balance
sheet of the Company, the Subsidiaries and the Affiliated Entities as of March
31, 2002 and the related statement of earnings before interest, taxes and
amortization for the three months then ended (the “ Interim Financial
Statements” and, together with the Audited Financial Statements, the “Company
Financial Statements”). The Company Financial Statements fairly present in all
material respects the financial position of the Company, the Subsidiaries and
the Affiliated Entities as of the dates presented therein, and fairly present in
all material respects the results of the operations of the Company, the
Subsidiaries and the Affiliated Entities for the fiscal periods then ended. The
Company Financial Statements have been prepared in accordance with United States
generally accepted accounting principles (“GAAP”) consistently applied during
the periods involved (except as indicated in any notes thereto), except that the
Interim Financial Statements do not contain normal audit adjustments (the effect
of which will not have or reflect, individually or in the aggregate, a Company
Material Adverse Effect) and certain footnote disclosure required by GAAP. The
Company maintains internal accounting controls that provide reasonable assurance
that material transactions are recorded as necessary in order to permit
preparation of the Company’s financial statements and maintain accountability
for the assets and liabilities of the Company and the Subsidiaries.

3.8       Undisclosed Liabilities. Neither the Company nor any of the
Subsidiaries has any liabilities (including service warranties or guarantees of
obligations of any Person other than the Company or any of the Subsidiaries)
other than (a) liabilities reflected on the face of the Company Financial
Statements, (b) contractual and service obligations arising in the ordinary
course of business (other than obligations arising out of a material default or
alleged material default), (c) liabilities accruing after March 31, 2002 in the
ordinary course of business or in accordance with this Agreement, (d)
liabilities otherwise disclosed herein and (e) other liabilities that are not
significant. For purposes of clause (e) only, it is understood that (i) with
respect to any liability that is specifically addressed in any representation or
warranty contained herein, “significant” shall be determined by the applicable
materiality standards contained in such representation or warranty and (ii) in
any other case, “significant” shall mean an amount greater than $50,000.

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3.9       Absence of Changes. Except as disclosed in the Company Financial
Statements and except as contemplated or permitted by this Agreement, since
April 1, 2002 there has not been:

(a)       any damage, destruction or loss, whether or not covered by insurance,
that would have, individually or in the aggregate, a Company Material Adverse
Effect;

(b)       any declaration, setting aside or payment of any dividend or other
distribution (whether in cash or property) with respect to any of the Shares;

(c)       any change, occurrence or circumstance in the financial condition,
business, results of operations, properties or assets of the Company or any of
the Subsidiaries that would have, individually or in the aggregate, a Company
Material Adverse Effect;

(d)       any loan or advance by the Company or any of the Subsidiaries to any
Seller or any Affiliate of any Seller (other than the Company or any of the
Subsidiaries);

(e)       any sale or conveyance of any assets of the Company or any of the
Subsidiaries, except in the ordinary course of business or transfers among the
Company and the Subsidiaries;

(f)       any change in the accounting methods or practices of the Company or
any of the Subsidiaries, or any change in depreciation or amortization policies
or rates adopted by any of them, except as may be required by law or GAAP;

(g)       any cancellation of any material debt, any waiver or release of any
material right or claim or any payment, discharge, release, compromise, waiver
or satisfaction of any material claim or liability by the Company or any of the
Subsidiaries;

(h)       any material increase in the compensation payable to any executive
officers or directors of the Company or any of the Subsidiaries, except in the
ordinary course of business or as may be required by law;

(i)       any material amendment to or the entering into of any employment,
severance, retention or similar agreement with any Company Employee, or any
material amendment to or the adoption of any Benefit Plan by the Company or any
of the Subsidiaries; or

(j)       any agreement to do any of the foregoing.

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3.10     Tax Matters.

(a)       Each of the Company and the Subsidiaries has filed or has caused to be
filed in a timely manner (within any applicable extensions of time) all Tax
Returns required to be filed by it through the date of this Agreement, and will
prepare and file, in a manner consistent with prior years, all Tax Returns
required to be filed by it on or before the Closing Date. Such Tax Returns have
been and will be correctly prepared in all material respects.

(b)       All Taxes shown on such previously filed Tax Returns have been paid
or, in the case of such Tax Returns that will be filed prior to Closing, will be
timely paid upon the filing of such Tax Returns.

(c)       With respect to any period for which Tax Returns have not yet been
filed, or with respect to which Taxes are not yet due or owing, each of the
Company and the Subsidiaries has made sufficient current accruals for such Taxes
in accordance with GAAP. Neither the Company nor any of the Subsidiaries has
incurred any Tax liabilities since December 31, 2001, except in the ordinary
course of business.

(d)       No penalties or other charges are or will become due with respect to
the late filing of any Tax Return or payment of any Tax of the Company or any of
the Subsidiaries required to be filed or paid on or before the Closing Date.

(e)       There are no outstanding agreements, waivers or arrangements extending
the statutory period of limitations applicable to any claim for Taxes due from
or with respect to the Company or any of the Subsidiaries for any taxable
period.

(f)       No closing agreement that could affect the Taxes of the Company or any
of the Subsidiaries for periods ending after the Closing Date pursuant to
Section 7121 of the Code (or any predecessor provision) or any similar provision
of any state, local or foreign law has been entered into by or with respect to
the Company or any of the Subsidiaries.

(g)       Neither the Company nor any of the Subsidiaries (i) has agreed to or
is required to make any adjustment pursuant to Section 481 of the Code (or any
predecessor or similar provision of other laws or regulations) by reason of a
change in accounting method or otherwise; (ii) has any knowledge that any taxing
authority has proposed any such adjustment or change which proposal is currently
pending; or (iii) has an application pending with any taxing authority
requesting permission for any change in accounting methods that relates to its
business and operations.

(h)       As of the Closing Date, neither the Company nor any of the
Subsidiaries will be bound by any tax sharing, allocation or indemnification
agreement and, after the Closing Date, no payments will be due to or payable by
the Company or any of the Subsidiaries under any such agreement. As of the
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neither the Company nor any of the Subsidiaries will have any material liability
for any unpaid Taxes of any other entity by reason of being a member of a
consolidated, combined or unitary group for Tax purposes.

(i)       To the Knowledge of the Sellers, (i) the Tax Returns of the Company
and the Subsidiaries are not currently under audit or examination by the IRS,
and (ii) no audit or other proceeding by any court, governmental or regulatory
authority or similar authority is pending, and neither the Company nor any of
the Subsidiaries has received any written notification that such an audit or
proceeding may be commenced, with respect to any Taxes due from the Company or
any of the Subsidiaries.

3.11     Compliance with Laws. Neither the Company nor any of the Subsidiaries
is in violation of any applicable orders, judgments, injunctions, awards,
decrees or writs (collectively, “Orders”), or any applicable laws, statutes,
regulations or other requirements, including the U.S. Foreign Corrupt Practices
Act of 1977, as amended (collectively, “Laws”), of any courts, administrative
agencies or commissions or other governmental authorities (collectively, “
Governmental Bodies”), which violations would have, individually or in the
aggregate, a Company Material Adverse Effect; provided, however, that the
Sellers make no representation or warranty in this Section 3.11 with respect to
tax Laws, Environmental Laws or ERISA and employee benefit Laws, which are
specifically and exclusively addressed in Sections 3.10, 3.13 and 3.20,
respectively.

3.12     Permits. Each of the Company and the Subsidiaries has all licenses,
franchises, permits and authorizations of any Governmental Bodies as are
necessary for the lawful conduct of the business of the Company and the
Subsidiaries (collectively, “Permits”), except where the failure to have such
Permits would not have, individually or in the aggregate, a Company Material
Adverse Effect.

3.13     Environmental Compliance. Each of the Company and the Subsidiaries has
complied, and is currently in compliance, in all material respects with all
applicable laws, regulations, codes or ordinances relating to pollution or
protection of the environment (collectively, “Environmental Laws”).

3.14     No Breach. The execution and delivery by the Sellers of this Agreement,
the consummation of the transactions contemplated hereby, and the performance by
the Sellers of this Agreement in accordance with its terms will not:

(a)       violate the certificate of incorporation or by-laws (or comparable
instruments) of the Company or any of the Subsidiaries;

(b)       require the Company to obtain any consents, approvals, authorizations
or actions of, or make any filings with or give any notices to, any Governmental
Bodies or any other Person in order to permit the business of the Company and
the Subsidiaries to continue to be conducted substantially in the same manner as
currently conducted immediately following the Closing Date, except for the

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notification requirements of the HSR Act or as set forth in Section 3.14(b) of
the Sellers’ Disclosure Letter (the “Company Consents and Notices”);

(c)       if the Company Consents and Notices are obtained or made, violate or
result in the breach of any of the terms and conditions of, cause the
termination of or give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time, or both, constitute) a material
default under, or result in the acceleration of any monetary liabilities under,
any Material Contract or result in the creation of any Lien upon any of the
properties of the Company or any of the Subsidiaries pursuant to the terms of
any Material Contract; or

(d)       if the Company Consents and Notices are obtained or made, violate or
result in the revocation or suspension of any Permits held by the Company or any
of the Subsidiaries;

provided, however, that each of the cases set forth in clauses (b) through (d)
above is subject to exceptions that would not have, individually or in the
aggregate, a Company Material Adverse Effect.

3.15     Contracts.

(a)       Each of the contracts, agreements, leases and licenses to which the
Company or any of the Subsidiaries is a party or is bound and that are of the
type listed below (collectively, the “Material Contracts”) is set forth in
Section 3.15(a) of the Sellers’ Disclosure Letter:

(i)       contracts or agreements with customers of the Company or any of the
Subsidiaries for whom the Company and the Subsidiaries, taken as a whole, have
recognized revenue in excess of $100,000 for either (A) the year ended December
31, 2001 or (B) the period between January 1, 2002 and May 31, 2002, which
contracts or agreements as to each customer shall be represented herein by
either (x) a master or umbrella contract or agreement with such customer or (y)
a contract or agreement (including a purchase order) with such customer covering
a recent or ongoing project that represents the Company’s or the applicable
Subsidiary’s customary terms and conditions and contractual relationship with
such customer;

(ii)      other than contracts or agreements with customers or employees, any
contracts or agreements that involve aggregate payments or other consideration
in excess of $50,000 per year, including contracts with suppliers;

(iii)     any contracts or agreements pursuant to which the Company or any of
its Subsidiaries has made any loan or advance to any of its directors, officers
or employees outside the ordinary course of business;

(iv)     any joint venture or partnership contracts or agreements;

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(v)      any contracts or agreements relating to the borrowing of money or any
guarantee in respect thereof or any capitalized lease obligation by the Company
or any of the Subsidiaries, in each case in excess of $50,000 or pursuant to
which the Company or any of the Subsidiaries has granted a security interest in
any of its assets, tangible or intangible;

(vi)     any contracts or agreements that limit or restrict the Company or any
of the Subsidiaries from engaging in any line of business or with any Person in
any geographical area; or

(vii)    any collective bargaining contracts or agreements.

(b)       The Sellers have delivered to the Buyer a correct and complete copy of
each of the Material Contracts and a brief description of each Material Contract
that is written in a language other than English. Each such description includes
information regarding the names of the parties, the duration or term, the nature
of the work to be performed, any change of control provisions and any material
limitations on liabilities contained therein and is substantially accurate with
respect to the information contained therein. None of the Material Contracts set
forth in Section 3.15(a)(i) of the Sellers’ Disclosure Letter contains any
provision imposing any material obligations or liabilities on the Company or any
of the Subsidiaries other than obligations or liabilities related to or arising
out of the provision of services to customers. Each of the Material Contracts is
valid and binding on the Company or such Subsidiary and, to the Knowledge of the
Sellers, on the other party or parties thereto and is in full force and effect.
Neither the Company nor any of the Subsidiaries has received notice of any
uncured or unwaived material default by the Company or any of the Subsidiaries
or, to the Knowledge of the Sellers, by any other party or parties thereto, nor
does there exist any condition that with the passage of time or the giving of
notice or both would cause such a material default under any Material Contract
by the Company or any of the Subsidiaries or, to the Knowledge of the Sellers,
by any other party or parties thereto. None of the Sellers, the Company or any
of the Subsidiaries has received from any party to any Material Contract written
notice of its intention to cancel or terminate such Material Contract.

3.16     Property. Each of the Company and the Subsidiaries has good title, free
and clear of all Liens, to all of its owned properties and assets, real and
personal, tangible or intangible, that are material to the business of the
Company and the Subsidiaries as currently being conducted, including the owned
property and assets that are reflected on the Company Financial Statements or
were acquired after March 31, 2002, except for (i) Liens incurred in the
ordinary course of business, (ii) Liens relating to purchase money security
interests entered into in the ordinary course of business, (iii) properties or
assets disposed of in the ordinary course of business, (iv) mechanics’,
materialmen’s, workmen’s, repairmen’s, warehousemen’s, carrier’s and other
similar Liens arising in the ordinary course of business, (v) Liens for current
Taxes and assessments not yet past due or delinquent or that are being contested
in good faith by appropriate proceedings or (vi) Liens that would not have,
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aggregate, a Company Material Adverse Effect. All of the real property owned or
leased by the Company and the Subsidiaries, and all real property owned or
leased by any Seller or any Affiliate of any Seller (other than the Company or
any Subsidiary) and leased to, or otherwise used by, the Company and the
Subsidiaries, is set forth in Section 3.16 of the Sellers’ Disclosure Letter.
All leases pursuant to which the Company or any of the Subsidiaries, as lessee,
leases real or personal property are valid and binding on the Company and the
Subsidiaries and, to the Knowledge of the Sellers, on the other parties thereto
and neither the Company nor such Subsidiary nor, to the Knowledge of the
Sellers, any other party thereto, is in material default thereunder. There are
no leases, subleases, licenses or other agreements granting to any Person other
than the Company or any of the Subsidiaries any right to the possession, use,
occupancy or enjoyment of the real property owned or leased by the Company or
any of the Subsidiaries, or any portion thereof. To the Knowledge of the
Sellers, all buildings, structures and other improvements included within the
real property owned or leased by the Company and the Subsidiaries are presently
in a condition that is adequate for the intended uses of such property, subject
to continued repair and replacement in accordance with past practice, and normal
wear and tear excepted.

3.17     Intellectual Property.

(a)       Section 3.17(a) of the Sellers’ Disclosure Letter sets forth all
patents and patent applications, trademark and service mark registrations and
applications, Internet domain name registrations and applications, copyright
registrations and applications and other material registered or unregistered
Intellectual Property owned or filed by the Company and/or the Subsidiaries as
of the date hereof. Section 3.17(a) of the Sellers’ Disclosure Letter sets forth
all material licenses under which the Company or a Subsidiary is a licensee or
licensor of Intellectual Property, except such licenses and other agreements
relating to “off-the-shelf” products, standard products or any products subject
to mass market licenses or that are commercially available on a retail basis.
Section 3.17(a) of the Sellers’ Disclosure Letter sets forth details regarding
any outstanding payment obligations of the Company or any Subsidiary under any
agreement under which the Intellectual Property is licensed to the Company or
any Subsidiary in excess of $10,000 per agreement.

(b)       The Company or one of the Subsidiaries owns or has the right to use
pursuant to a valid license all Intellectual Property that is necessary to
conduct the business of the Company and the Subsidiaries as presently conducted,
free and clear of all liens and encumbrances.

(c)       Neither the Company nor any Subsidiary has received any written notice
nor, to the Knowledge of the Sellers, any other notice, asserting (i) the
invalidity, misuse or unenforceability of any Intellectual Property or (ii) the
infringement or misappropriation of any third party intellectual property rights
(including any demand or request that the Company or any Subsidiary license any
rights from a third party) and, to the Knowledge of the Sellers, there are no
valid grounds for such claims. To the Knowledge of the Sellers, no Person is
infringing upon or otherwise violating the Intellectual Property. None of the
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provided or sold by the Company or any Subsidiary infringes upon or violates any
third party intellectual property rights, except as would not have, individually
or in the aggregate, a Company Material Adverse Effect.

3.18     Litigation. There are no actions, suits, proceedings or investigations
pending or, to the Knowledge of the Sellers, threatened against the Company or
any of the Subsidiaries or any Benefit Plan (other than routine claims for
benefits). There is no pending governmental audit or inquiry with respect to any
Benefit Plan. Neither the Company nor any of the Subsidiaries is subject to any
outstanding Orders that would restrict or limit the conduct of the business of
the Company and the Subsidiaries as currently being conducted.

3.19     Brokers. None of the Sellers, the Company or any of the Subsidiaries
has used any broker or paid or agreed to pay, or received any claim with respect
to, any brokerage commissions, finders’ fees or similar compensation in
connection with the transactions contemplated hereby.

3.20     Employee Benefit Plans.

(a)       Each Benefit Plan is set forth in Section 3.20(a) of the Sellers’
Disclosure Letter. There is no Benefit Plan that (i) is a multiemployer plan
within the meaning of Section 3(37) of ERISA, or (ii) is a plan, other than a
multiemployer plan, subject to Title IV of ERISA.

(b)       The Sellers have previously made available to the Buyer written
summaries of the Foreign Plans and copies of the Benefit Plans (other than the
Foreign Plans) (and, if applicable, related trust agreements) and all amendments
thereto, together with the most recent annual report (Form 5500 including, if
applicable, Schedule B thereto), the most recent actuarial valuation report
prepared in connection with any Benefit Plan (other than the Foreign Plans), the
most recent determination letter received from any taxation authority with
respect to any Benefit Plan (other than the Foreign Plans), and each summary
plan description, summary of material modification and registration statement,
permit application and prospectus prepared in connection with any Benefit Plan
(other than the Foreign Plans).

(c)       Each Benefit Plan that is intended to be qualified under an applicable
provision of the Code or any regulation thereunder, including Section 401(a) of
the Code, is so qualified and has been so qualified during the period since its
adoption; each trust created under any such Benefit Plan is exempt from tax and
has been so exempt since its creation and, to the Knowledge of the Sellers,
nothing has occurred with respect to the operation of any Benefit Plan that
would cause the loss of such qualification or exemption. Each Benefit Plan
(other than the Foreign Plans) has been maintained in substantial compliance
with its terms and with the requirements prescribed by any applicable statutes,
orders, rules and regulations, including ERISA and the Code.

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(d)       Neither the Company nor any of the Subsidiaries has any material
current or projected liability in respect of post-employment or post-retirement
health or medical or life insurance benefits for retired, former or current
employees of the Company, except as required under applicable Laws or pursuant
to binding contracts in existence on the date hereof and listed on Section
3.20(a) of the Sellers’ Disclosure Letter.

(e)       The Sellers have previously made available to the Buyer a true and
complete list and copies of each Benefit Plan that covers employees of the
Company and the Subsidiaries (“Company Employees”) outside of the United States
(each, a “ Foreign Plan”). Except as would not have, individually or in the
aggregate, a Company Material Adverse Effect, each Foreign Plan has been
maintained in substantial compliance with its terms and with the requirements of
all applicable Laws and has been maintained in good standing with applicable
Governmental Bodies. Except as would not have, individually or in the aggregate,
a Company Material Adverse Effect, all material contributions to, and material
payments from, the Foreign Plans that may have been required to be made in
accordance with the terms of any such Foreign Plan, and, when applicable, the
law of the jurisdiction in which such Foreign Plan is maintained, have been
timely made or shall be made by the Closing Date, and all such contributions to
the Foreign Plans, and all payments under the Foreign Plans, for any period
ending before the Closing Date that are not yet, but will be, required to be
made, are reflected as an accrued liability in accordance with GAAP on the
Company Financial Statements, or disclosed to the Buyer in writing within
fifteen days following the date hereof, and the consummation of the transactions
contemplated by this Agreement will not by itself create or otherwise result in
any liability with respect to any Foreign Plan other than the triggering of
payment to participants.

(f)       From and after the Closing Date, the Buyer will have no liability
under any Benefit Plan sponsored by Berlitz International in connection with the
transactions contemplated by this Agreement.

(g)       The Sellers have previously made available to the Buyer true, complete
and correct copies of (i) all severance plans, agreements, programs and policies
of either Seller, the Company and each Subsidiary that are applicable to any
employee, director or consultant of the Company or any Subsidiary, and (ii) all
plans, programs, agreements and other arrangements of either Seller, the Company
and each Subsidiary with or relating to any employee, director or consultant of
the Company or any Subsidiary that contain “change of control” provisions that
would result in a financial obligation of the Company or any Subsidiary and are
listed in Section 3.20(a) of the Sellers’ Disclosure Letter.

(h)       Section 3.20(h) of the Sellers’ Disclosure Letter sets forth the name
of each Company Employee whose annual base salary exceeded $100,000 for calendar
year 2001 (except for the president of the Company, who is expected to resign as
of the Closing). No payment or benefit that may be required to be made by the
Company or any Subsidiary or that may otherwise be required to be made under the

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terms of any Benefit Plan or other arrangement will constitute a parachute
payment under Section 280(G)(1) of the Code.

(i)       Neither the Company nor any Subsidiary is required to obtain the
consent of any Option Holder in connection with the consummation of the
transactions described in and contemplated by Section 6.12 of this Agreement.

3.21     Employee Relations.

(a)       None of the individuals employed by the Company or any of the
Subsidiaries is represented by a union, local works council or similar
organization. Neither the Company nor any of the Subsidiaries has at any time
during the last three years had, or, to the Knowledge of the Sellers, is there
now threatened, any strike, work stoppage or other material labor dispute. To
the Knowledge of the Sellers, there are no current activities or proceedings of
any union, local works council or similar organization in connection with an
attempt to organize the Company’s or any Subsidiary’s employees.

(b)       As of the date hereof, none of the Company Employees covered by the
2002 GlobalNET Management Incentive Plan or the Berlitz International, Inc.
Short Term Executive Incentive Compensation Plan (the “Bonus Plans”) has given
formal notice of or formally expressed to the Sellers such employee’s intent to
terminate his or her employment with the Company or any Subsidiary (except for
the president of the Company, who is expected to resign as of the Closing).

(c)       All employees who are active in the business of the Company and the
Subsidiaries are employed by the Company or one of the Subsidiaries, other than
certain senior-level executives, the accounting, legal and tax departments and
employees conducting internal audits, handling insurance matters and performing
headquarters administrative functions.

(d)       The Sellers have previously made available to the Buyer a copy of
Berlitz International’s code of corporate conduct in existence as of the date
hereof (the “Code of Corporate Conduct”). The Code of Corporate Conduct sets
forth the general corporate policies and guidelines of Berlitz International and
its subsidiaries, including the Company and the Subsidiaries, with respect to
business ethics, including the treatment of proprietary and other confidential
information.

3.22     Accounts Receivable. All accounts receivable reflected on the March 31,
2002 balance sheet included in the Company Financial Statements, and all
accounts receivable arising subsequent to March 31, 2002, have arisen in the
ordinary course of business and the reserves in respect thereof (including the
reserves included in the general reserve provision) are reflected on the March
31, 2002 balance sheet included in the Company Financial Statements or, with
respect to accounts receivable arising subsequent to March 31, 2002, on the
accounting records of the Company and the Subsidiaries, in each case in amounts
not less than those that would be required to be established in accordance with
GAAP. As of the date hereof, the outstanding accounts

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receivable of (i) the 10 largest customers of the Company and the Subsidiaries,
taken as a whole, by revenue recognized for the year ended December 31, 2001,
and (ii) the 10 largest customers of the Company and the Subsidiaries, taken as
whole, by revenue recognized for the period between January 1, 2002 and May 31,
2002, are at least as collectible as the outstanding accounts receivable of the
customers of the Company and the Subsidiaries, taken as a whole, in the
aggregate.

3.23     Banks, Brokers and Powers of Attorney. Section 3.23 of the Sellers’
Disclosure Letter sets forth (a) the name of each bank, safe deposit company or
other financial institution with which the Company or any of the Subsidiaries
has an account, safe deposit box or lock box, (b) the name of each person
authorized by the Company or any of the Subsidiaries to draw on any account or
to have access to any safe deposit box or lock box and (c) the names of all
persons authorized by powers of attorney to act on behalf of the Company or any
of the Subsidiaries in matters concerning its business or affairs.

3.24     Affiliate Transactions. Except for employment relationships and
compensation and benefits in the ordinary course of business, neither the
Company nor any Subsidiary is a party to any agreement, arrangement or
understanding (whether written or oral) with, or involving the making of any
payment or transfer of assets to, any Seller or any Affiliate of any Seller
(other than the Company or any Subsidiary) or any stockholder, officer or
director of any Seller or of any Affiliate of any Seller.

3.25     Insurance. Set forth in Section 3.25 of the Sellers’ Disclosure Letter
is a list of all insurance policies maintained with respect to the Company and
the Subsidiaries (the “Insurance Policies”). Each of the Company and the
Subsidiaries is, and at all times during the past two years has been, insured
with reputable insurers (or self-insured) against all risks normally insured
against by companies in similar lines of business, except as would not have,
individually or in the aggregate, a Company Material Adverse Effect. All of the
Insurance Policies required to be maintained with respect to the Company and the
Subsidiaries are valid and binding in accordance with their terms and are in
full force and effect, except as would not have, individually or in the
aggregate, a Company Material Adverse Effect. Neither the Company nor any of the
Subsidiaries is in material breach or default with respect to any provision
contained in any Insurance Policy, nor does there exist any condition that with
the passage of time or the giving of notice or both would cause any material
breach or default with respect to any provision contained in any Insurance
Policy by the Company or any of the Subsidiaries.

3.26     Customers. Since December 31, 2001 until the date hereof, none of (i)
the 10 largest customers of the Company and the Subsidiaries, taken as a whole,
by revenue recognized for the year ended December 31, 2001, or (ii) the 10
largest customers of the Company and the Subsidiaries, taken as whole, by
revenue recognized for the period between January 1, 2002 and May 31, 2002, has
terminated or materially reduced or, to the Knowledge of the Sellers, has
threatened to terminate or materially reduce its business relationship with the
Company or any of the Subsidiaries.

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3.27     Full Disclosure. In providing documents to the Buyer in connection with
the Buyer’s due diligence review, the Sellers have not knowingly (i) provided
any document that contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements made, in the context in which made, not materially false or
misleading, except for documents or omissions corrected by a subsequent document
delivered, or (ii) failed to provide any material document in response to the
Buyer’s reasonable requests, except for documents that the Sellers have
previously informed the Buyer would not be provided, which are described on
Section 3.27 of the Sellers’ Disclosure Letter. In connection with the Buyer’s
due diligence review, the Sellers have provided certain information regarding
the gross margins of the Company and the Subsidiaries by allowing the Buyer’s
accountants to access the Company’s customer database and to interview relevant
Company Employees, and all such information provided to the Buyer’s accountants
was materially accurate and not misleading.

3.28     Exclusivity of Representations. The representations and warranties made
by the Sellers in this Agreement are in lieu of and are exclusive of all other
representations and warranties, including any implied warranties. The Sellers
hereby disclaim any such other or implied representations or warranties,
notwithstanding the delivery or disclosure to the Buyer or its officers,
directors, employees, agents or representatives of any documentation or other
information (including any pro forma financial information, supplemental data or
financial projections or other forward-looking statements).

4.       Representations and Warranties of Sellers as to the Shares and this
Agreement. The Sellers, jointly and severally, represent and warrant to the
Buyer as follows:

4.1       Title to the Shares. Each Seller owns beneficially and of record, free
and clear of any Lien, and has full power and authority to convey free and clear
of any Lien, the Shares set forth opposite such Seller’s name in Section 3.4(a)
of the Sellers’ Disclosure Letter and, upon payment for such Shares at the
Closing as herein provided, such Seller will convey to the Buyer good and valid
title thereto, free and clear of any Lien.

4.2       Authority to Execute and Perform Agreement.

(a)       Each Seller is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, and has the full
legal right and power and all authority and approvals required to enter into,
execute and deliver this Agreement and to perform fully such Seller’s
obligations hereunder. This Agreement has been duly executed and delivered by
such Seller, and assuming due execution and delivery hereof by the Buyer, this
Agreement will be a valid and binding obligation of such Seller enforceable
against such Seller in accordance with its terms.

(b)       The execution and delivery by such Seller of this Agreement, the
consummation of the transactions contemplated hereby, and the

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performance by such Seller of this Agreement in accordance with its terms has
been duly authorized by such Seller and will not:

(i)       violate the certificate of incorporation or by-laws of such Seller;

(ii)      require such Seller to obtain any material consents, approvals,
authorizations or actions of, or make any filings with or give any notices to,
any Governmental Bodies or any other Person, except for the notification
requirements of the HSR Act or as set forth in Section 4.2(b) of the Sellers’
Disclosure Letter (collectively, the “Seller Consents and Notices”);

(iii)     if the Seller Consents and Notices are obtained or made, violate or
result in the breach of any of the terms and conditions of, cause the
termination of or give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time, or both, constitute) a material
default under, any material contract, agreement, lease or license to which such
Seller is a party or by or to which such Seller, any of its properties or the
Shares held by such Seller is or may be bound or subject, except as could not
reasonably be expected to materially impair or delay the ability of the Sellers
to consummate the transactions contemplated hereby; or

(iv)     result in the creation of any Lien on the Shares held by such Seller.

5.       Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Sellers as follows:

5.1       Due Incorporation and Authority. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation or organization. The Buyer has all requisite power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to have such power and authority could
not reasonably be expected to materially impair or delay the ability of the
Buyer to consummate the transactions contemplated hereby.

5.2       Authority to Execute and Perform Agreement.

(a)       The Buyer has the full legal right and power and all authority and
approvals required to enter into, execute and deliver this Agreement and to
perform fully its obligations hereunder. This Agreement has been duly executed
and delivered by the Buyer, and assuming due execution and delivery hereof by
the Sellers, this Agreement will be a valid and binding obligation of the Buyer
enforceable against the Buyer in accordance with its terms.

(b)       The execution and delivery by the Buyer of this Agreement, the
consummation of the transactions contemplated hereby, and the

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performance by the Buyer of this Agreement in accordance with its terms have
been duly authorized by the Buyer and will not:

(i)       violate the certificate of incorporation or by-laws (or comparable
instruments) of the Buyer;

(ii)      require the Buyer to obtain any material consents, approvals,
authorizations or actions of, or make any filings with or give any notices to,
any Governmental Bodies or any other Person, except for the notification
requirements of the HSR Act and filings or notices required under Foreign
Antitrust Laws in Brazil, Ireland and Finland (collectively, the “Buyer Consents
and Notices” and, together with the Company Consents and Notices and the Seller
Consents and Notices, the “Required Consents and Notices”); or

(iii)     if the Buyer Consents and Notices are obtained or made, violate or
result in the breach of any of the terms and conditions of, cause the
termination of or give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time, or both, constitute) a material
default under, any material contract, agreement, lease or license to which the
Buyer is a party or by or to which the Buyer or any of its properties is or may
be bound or subject, except as could not reasonably be expected to materially
impair or delay the ability of the Buyer to consummate the transactions
contemplated hereby.

5.3       Brokers. No Person retained by or on behalf of the Buyer or any of its
Affiliates is entitled to any brokerage commissions, finders’ fees or similar
compensation in connection with the transactions contemplated hereby.

5.4       Purchase for Investment. The Buyer is purchasing the Shares for its
own account for investment and not for resale or distribution in any transaction
that would be in violation of the securities laws of the United States of
America or any state thereof. The Buyer is an “accredited investor” as defined
in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as
amended.

5.5       Financial Ability. The Buyer has cash available or has existing
borrowing facilities or unconditional, binding funding commitments that are
sufficient to enable it to consummate the transactions contemplated by this
Agreement. The financing, if any, required to consummate the transactions
contemplated by this Agreement is referred to herein as the “ Financing.” Each
of the conditions to the Financing will be satisfied and the Financing will be
available for the transactions contemplated hereby on a timely basis and in no
event later than the tenth Business Day after the conditions to Closing set
forth in Sections 7.2 and 8.2 have been satisfied.

5.6       Exclusivity of Representations. The representations and warranties
made by the Buyer in this Agreement are in lieu of and are exclusive of all
other representations and warranties, including any implied warranties.

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6.       Covenants and Agreements.

6.1       Conduct of Business. The Sellers agree that:

(a)       Between the date of this Agreement and the Closing Date, except as set
forth in this Agreement or in Section 6.1(a) of the Sellers’ Disclosure Letter
or otherwise agreed to in writing by the Buyer (which agrees to respond promptly
to any request for such agreement and not to unreasonably withhold such
agreement), the Sellers shall cause each of the Company and the Subsidiaries to
operate in the ordinary course of business consistent with past practice and, to
the extent consistent therewith, the Sellers shall cause each of the Company and
the Subsidiaries to continue to use the same efforts it currently expends to
preserve its business organization and to preserve its present relationships
with its customers and all other Persons having business relationships with the
Company and the Subsidiaries, and the Sellers shall cause each of the Company
and the Subsidiaries to cooperate fully, between the date hereof and the Closing
Date, in the Buyer’s efforts to retain senior management personnel and other
employees of the Company and the Subsidiaries. The Sellers will use reasonable
efforts to cause the Company to have at least $16,000,000 in Cash as of the
Closing Date.

(b)       Between the date of this Agreement and the Closing Date, except as
provided for in this Agreement, as set forth in Section 6.1(b) of the Sellers’
Disclosure Letter or as otherwise agreed to in writing by the Buyer (which
agrees to respond promptly to any request for such agreement and not to
unreasonably withhold such agreement), the Sellers shall:

(i)       not permit the Company or any of the Subsidiaries to amend its
certificate of incorporation or by-laws (or comparable instruments);

(ii)      not permit the Company or any of the Subsidiaries to incur any
additional indebtedness for borrowed money;

(iii)     not permit the Company or any of the Subsidiaries to issue, deliver,
sell or authorize, or propose the issuance, delivery, sale or purchase of, any
shares of capital stock or any other equity security, or any class of securities
convertible into, or rights, warrants or options to acquire, any such capital
stock or other equity securities;

(iv)     not permit the Company or any of the Subsidiaries to cancel, terminate
or materially amend any Material Contract, except in the ordinary course of
business;

(v)      not knowingly take or omit to take, or cause the Company or any
Subsidiary to take or omit to take, any action that would result in a breach of
any of the Sellers’ representations or warranties contained in Articles 3 and 4;
and

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(vi)     cause the Company and the Subsidiaries to maintain insurance at
presently existing levels so long as such insurance is available on commercially
reasonable terms.

6.2       Confidentiality. The Buyer reaffirms the confidentiality letter
agreement, dated January 29, 2002 (the “Confidentiality Agreement”), between the
Company and the Buyer, and agrees to fulfill its obligations thereunder. If this
Agreement is, for any reason, terminated prior to the Closing, the
Confidentiality Agreement shall nonetheless continue in full force and effect.
The Buyer and the Sellers agree to maintain, before and after the Closing, the
confidentiality of all information concerning the Sellers (including the amounts
paid to each Seller hereunder) or the Buyer, as the case may be, except as may
be required by applicable Law, in which case the Buyer or the Sellers, as the
case may be, shall promptly notify the Sellers or the Buyer, as the case may be,
of any such requirement and the Sellers or the Buyer, as the case may be, shall
be permitted to seek confidential treatment for such information.

6.3       Expenses. Other than all HSR Act filing fees, which shall be the
responsibility of the Buyer, and except as otherwise specifically provided
herein, the Buyer and the Sellers (and not the Company) shall bear their
respective expenses, including all fees and expenses of agents, representatives,
counsel and accountants, incurred in connection with the preparation, execution
and performance of this Agreement and the transactions contemplated hereby. The
Buyer shall reimburse the Sellers for all out-of-pocket expenses incurred in
connection with the audit of the Audited Financial Statements, including all
fees and expenses of the Sellers’ independent certified public accountants;
provided, that such reimbursement obligation shall not exceed $300,000.

6.4       Publicity. Except as may be required by law, the parties agree that no
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be made without advance approval thereof by the
Sellers and the Buyer. If any public announcement is required by law to be made
by any party hereto, prior to making such announcement, such party will deliver
a draft of such announcement to the other parties and shall give the other
parties reasonable opportunity to comment thereon. Attached hereto as Exhibit A
are the forms of press releases to be issued upon execution of this Agreement.

6.5       Intercompany Payables. On or before the Closing, the Sellers shall
cause (i) any amounts that are owed by the Sellers or any of the Affiliates of
the Sellers (other than the Company or any Subsidiary) to be set off against any
amounts due and owing by the Company or any of the Subsidiaries to the Sellers
or any of the Affiliates of the Sellers (other than the Company or any
Subsidiary) and (ii) any net amounts due and owing by the Company or any of the
Subsidiaries to the Sellers or any of the Affiliates of the Sellers (other than
the Company or any Subsidiary) to be settled, forgiven or converted into equity
(including by the contemporaneous contribution of an equivalent amount of
capital), as described in Section 6.5 of the Sellers’ Disclosure Letter.

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6.6       Required Consents.

(a)       Each of the Sellers and the Buyer shall use all reasonable efforts to
obtain or make all Required Consents and Notices. In the event that any of the
Company Consents and Notices are not obtained or made and the Buyer proceeds
with the Closing without such Company Consents and Notices having been obtained
or made, the Sellers shall, or shall cause their agents to use all reasonable
efforts to assist the Buyer in obtaining or making any such Company Consents and
Notices after the Closing Date until such time as such Company Consents and
Notices have been obtained or made; provided, that the Sellers shall not be
liable to the Buyer in the event that the Buyer and the Sellers are unable to
secure any such Company Consents and Notices.

(b)       At all times prior to the Closing, the parties shall cooperate and
coordinate with each other, as appropriate, with respect to filings and
notifications to Governmental Bodies in connection with obtaining or making the
Required Consents and Notices. Without limiting the generality of the foregoing,
the Sellers, on the one hand, and the Buyer, on the other hand, shall make or
cause to be made available all information reasonably requested by the other
party to permit all necessary filings and notices to be made with or to
Governmental Bodies as promptly as practicable after the date hereof. Each party
shall promptly furnish or cause to be furnished all information and documents
reasonably required by the relevant Governmental Bodies as may be appropriate in
order to obtain or make the Required Consents and Notices.

6.7       Access to Information and Cooperation.

(a)       From and after the date hereof until the Closing, the Sellers shall,
and shall cause the Company and the Subsidiaries to, give to the Buyer’s
officers, employees, agents, attorneys, consultants and accountants, reasonable
access during normal business hours upon reasonable notice to all of the
properties, books, contracts, documents and records with respect to the Company
and the Subsidiaries and shall furnish to the Buyer and such Persons as the
Buyer shall designate to the Sellers such information relating to the Company or
any Subsidiary as the Buyer or such Persons may at any time and from time to
time reasonably request. No investigation pursuant to this Section 6.7(a) shall
affect any representation or warranty made by the Sellers to the Buyer hereunder
or otherwise affect the indemnification obligations of the Sellers hereunder.

(b)       From and after the Closing, the Buyer (including, for the purpose of
this Section 6.7(b), the Company and the Subsidiaries after the Closing) shall
provide the Sellers and their professional advisors with reasonable access to
the books and records of the Company and the Subsidiaries (i) in connection with
the preparation of the Net Current Assets Statement contemplated by Section 1.4,
(ii) if reasonably required in connection with any litigation, investigation,
tax audit, discovery or similar proceeding, or in the preparation of Tax
Returns, and (iii) as may be necessary in order to enable the Sellers and their
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indemnification under Article 10 or Article 11 and to exercise fully all rights
they may have in connection with such claims. If any Seller shall reasonably
request the assistance (including testimony) of employees of the Buyer, the
Company or any of the Subsidiaries after the Closing (or any successors thereto)
in connection with any third-party litigation, investigation, tax audit,
discovery, similar proceeding or claim against any Seller, the Buyer shall make
such employees available for a reasonable period of time; provided, that all
out-of-pocket costs shall be borne by the Seller or Sellers making such request.

6.8       Further Assurances. The Buyer and the Sellers shall execute such
documents and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Without limiting the generality of the foregoing, each such party shall
use commercially reasonable efforts to fulfill or obtain the fulfillment of the
conditions to the Closing set forth in Articles 7 and 8.

6.9       Transfer Taxes. The Buyer, on the one hand, and the Sellers, on the
other hand, shall each be liable for, and shall pay, 50% of all transfer, real
property, sales, use, goods and services, conveyance, recording or any other
similar fees or taxes, and all documentary or other stamp taxes, arising out of
or related to the transactions contemplated by this Agreement (but not including
any income, franchise, profits, gross receipts or similar taxes).

6.10     Berlitz Names and Marks.

(a)       Subject to the terms of the License Agreement, the Buyer acknowledges
and agrees that the Buyer has no rights in and to (i) the names or marks
“BERLITZ” and “BERLITZIT”, (ii) any other trade names, trademarks or Internet
domain names in which the word “BERLITZ” appears, (iii) the trade name
“GLOBALNET” or (iv) any other marks or names owned, used or licensed by the
Sellers or any of their Affiliates (the “Berlitz Names and Marks”) and,
following the Closing Date, the Buyer shall not have any right, title or
interest in and to, or right to use, the Berlitz Names and Marks or any marks or
names confusingly similar thereto. The Buyer covenants that it will not
hereafter adopt, use, or register or authorize others to adopt, use, or
register, any trade names, trademarks, service marks or Internet domain names
consisting of or incorporating the Berlitz Names and Marks or any marks, names
or Internet domain names confusingly similar thereto. Notwithstanding anything
in this Agreement to the contrary, the representations and warranties provided
by the Sellers pursuant to Article 3 hereof shall not apply to the Berlitz Names
and Marks. On the Closing Date, Berlitz Investment and the Company shall enter
into a license agreement, substantially in the form attached hereto as Exhibit A
(the “License Agreement”), pursuant to which the Company and the Subsidiaries
will be permitted to use (x) the Berlitz Names and Marks for a period not to
exceed 90 days and (y) if (but only to the extent that) the names of any
non-U.S. Subsidiaries cannot be changed within such 90-day period using all
reasonable efforts, the “BERLITZ” or “BERLITZ GLOBALNET” names as a corporate
name in non-U.S. Subsidiaries for a period and within the parameters set forth
in the License Agreement, each for the limited purpose of ensuring a

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smooth transition of the business of the Company and the Subsidiaries and
deterring consumer confusion, as more fully set forth in the License Agreement.

(b)       If at any time the Buyer is deemed to have acquired any right, title
or interest in and to any Berlitz Names and Marks (other than the license
granted pursuant to the License Agreement), or marks, names or Internet domain
names similar thereto, the Buyer hereby assigns to Berlitz Investment all right,
title and interest in and to such marks and names. The Buyer shall execute and
sign all such instruments, applications and documents and shall take all such
actions as are reasonably requested by Berlitz Investment to enable Berlitz
Investment and its Affiliates, nominees and successors to enjoy the full benefit
of the Berlitz Names and Marks and to secure the vesting in Berlitz Investment
absolutely of the Buyer’s right, title and interest in and to such Berlitz Names
and Marks.

(c)       Within five Business Days after the Closing, the Buyer will cause an
amendment to the certificate of incorporation of the Company to be filed with
the Secretary of State of the State of New York, and as soon as reasonably
practicable based upon the legal requirements in each applicable jurisdiction,
but in no event more than 60 days after the Closing, the Buyer will cause
amendments to the certificate of incorporation (or comparable instruments) for
each of the Subsidiaries to be filed with the appropriate Governmental Bodies in
the relevant jurisdictions, to change the name of each of the Company and the
Subsidiaries to a name not containing any of the Berlitz Names and Marks or any
marks or names confusingly similar thereto and will cause to be filed as soon as
practicable after the Closing based upon the legal requirements in each
applicable jurisdiction, in all jurisdictions in which the Company and the
Subsidiaries are qualified to do business, any documents necessary to (i)
reflect such change in their corporate names, (ii) terminate their qualification
or de-register their names with the appropriate Governmental Bodies and (iii)
register their new corporate names with the appropriate Governmental Bodies. The
Buyer shall send copies of all amendments and filings under this Section 6.10(c)
to the attention of the Legal Department at the address of the Sellers listed in
Section 13.3.

(d)       For a period of nine months following the Closing Date, none of the
Sellers or their subsidiaries shall use the name “GLOBALNET” as part of its
corporate name or otherwise conduct business using the “GLOBALNET” name.

6.11     Employee Matters.

(a)       On or as soon as practicable following the Closing Date, those
employees of the Company and the Subsidiaries who become employees of the Buyer
shall be eligible to participate in those benefit plans and programs maintained
for similarly situated employees of the Buyer (or in substantially similar
programs), on the same terms applicable to similarly situated employees of the
Company and the Subsidiaries and to the extent that such plans and programs
provide the following benefits: medical/dental/vision care, life insurance,
disability income, sick pay, holiday and vacation pay, 401(k) plan coverage,
Code Section 125 benefit arrangements, bonus,

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profit-sharing or other incentive plans, pension or retirement programs,
dependent care assistance, severance benefits, and employee stock option and
stock purchase plans.

(b)       Except as otherwise specifically provided herein, on and after the
Closing Date, the Buyer shall cause the Company and the Subsidiaries to
recognize the service of each Company Employee for the Company and the
Subsidiaries and any Affiliates thereof before the Closing Date for all
employment-related purposes other than (to the extent permitted by applicable
Law) with respect to the accrual of benefits under any defined benefit pension
plan maintained by the Buyer). To the extent applicable, the Buyer shall cause
(i) all pre-existing condition exclusions under the Buyer’s welfare and other
employee benefit plans to be waived for each Company Employee and his or her
covered dependents to the extent that such exclusion did not operate to prohibit
coverage of such Company Employee and his or her covered dependents under the
analogous Benefit Plan immediately prior to the commencement of coverage under
the Buyer’s welfare and other employee benefit plans and (ii) any eligible
expenses incurred by any Company Employee and his or her covered dependents
during the portion of the year that ends on the commencement of coverage under
the Buyer’s welfare and other employee benefit plans to be taken into account
under the Buyer’s welfare and other employee benefit plans for purposes of
satisfying all deductible, co-insurance and maximum out-of-pocket requirements
applicable to such Company Employee and his or her covered dependents for such
plan year as if such amounts had been paid in accordance with the Buyer’s
welfare and other employee benefit plans.

(c)       Company Employees shall not accrue benefits under any employee benefit
policies, plans, arrangements, programs, practices or agreements of the Sellers
or any of their Affiliates after the Closing Date. After the Closing has
occurred, the Buyer shall be obligated to pay the Company Employees who are
employed by the Company or one of the Subsidiaries immediately prior to the
Closing Date and (i) who are employed by the Buyer as of December 31, 2002 or
(ii) whose employment with the Buyer has been involuntarily severed other than
for cause, any bonuses accrued on the “Payroll and Commissions” item of the Net
Current Assets Statement, as have been adjusted to reflect actual Company
performance through the period ending on the last day of the month ending prior
to the date of this Agreement, with respect to the Bonus Plans plus any
additional bonus amounts determined at the discretion of the Buyer; provided,
that the Sellers shall provide the Buyer, no later than the Closing Date, with
reasonable substantiation of such performance and corresponding bonus payments
in accordance with the terms of the Bonus Plans, as determined by the board of
directors of Berlitz International; provided, further, that any accrued benefits
under the Bonus Plans for the president of the Company shall be paid by the
Company prior to Closing. For purposes of this section, “cause” is defined as
(i) the Company Employee’s indictment for any felony or any crime involving
moral turpitude, (ii) gross negligence or willful misconduct by the Company
Employee in connection with his position hereunder or (iii) the Company
Employee’s willful and continuing refusal to perform his duties. Payment of
bonuses under the Bonus Plans pursuant to this Section 6.11(c) shall be made no
later than March 31, 2003. The Buyer shall not assume any obligations under the
Berlitz International, Inc. Supplemental Executive Retirement Plan.

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(d)       On and after the Closing Date, the Buyer shall be responsible with
respect to Company Employees and their beneficiaries for compliance with the
Worker Adjustment and Retraining Notification Act of 1988 and any other
applicable Law, including any requirement to provide for and discharge any and
all notifications, benefits and liabilities to Company Employees and
Governmental Bodies that might be imposed as a result of the consummation of the
transactions contemplated by this Agreement or otherwise.

6.12     Stock Options. On or prior to the Closing Date, the Sellers shall (i)
pay to each holder of an Option (an “Option Holder”) the consideration payable
in respect of all Options held by such Option Holder in accordance with the
Company’s 2000 Stock Option Plan (the “Option Plan”), (ii) cause all Options
outstanding under the Option Plan to be cancelled as of the Closing Date, and
(iii) cause the Option Plan to be terminated effective immediately prior to the
Closing Date.

6.13     Covenant Not to Compete.

(a)       Each of the Sellers agrees that, for a period of five years after the
Closing (the “Restricted Period”), it shall not, and shall not permit any of its
subsidiaries to, directly or indirectly, engage, anywhere in the world, whether
as a partner, stockholder, principal, agent or consultant, in any business
involving the provision of translation, interpretation or localization services
that competes, in whole or in part, with the business of the Buyer, its
subsidiaries, the Company and the Subsidiaries as currently being conducted (the
“Restricted Business”).

(b)       During the Restricted Period, none of the Sellers or any of their
subsidiaries shall, directly or indirectly, (i) induce any customer of the
Company or any of the Subsidiaries, or any other Person with whom the Company or
any of the Subsidiaries has a business relationship, whether contractual or
otherwise, to discontinue, or alter in a manner materially adverse to the
business of the Company and the Subsidiaries, such business relationship, or
(ii) solicit or induce any employee of the Company or any of the Subsidiaries to
leave the employment of the Company or any of the Subsidiaries; provided,
however, that the foregoing shall not preclude any solicitation by either Seller
or any of their subsidiaries through a general advertising not specifically
directed at the employees of the Company or any of the Subsidiaries.

(c)       Notwithstanding anything to the contrary contained in this Agreement,
each of the Sellers and their subsidiaries may (i) engage in the businesses and
activities described in Section 6.13(c) of the Sellers’ Disclosure Letter or
(ii) own or acquire, directly or indirectly, solely as an investment, securities
of any Person, whether or not traded on any securities exchange, if such Seller
or subsidiary or any of its Affiliates is not a controlling Person of, or a
member of a group that controls, such Person and does not, directly or
indirectly, own 10% or more of any class of equity securities of such Person.

(d)       If any Seller breaches, or threatens to commit a breach of, any of the
provisions of this Section 6.13 (the “Restrictive Covenants”), the

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Buyer shall have the right and remedy without regard to any other available
remedy to (i) have the Restrictive Covenants specifically enforced by any court
of competent jurisdiction and (ii) have issued an injunction restraining any
such breach; it being agreed that such Seller will not challenge an assertion by
the Buyer that any breach of any of the Restrictive Covenants will cause
irreparable injury to the Buyer, nor will such Seller assert as a defense to any
such attempt to obtain equitable relief that money damages will provide an
adequate remedy to the Buyer. Each Seller further agrees that if any Seller
breaches this covenant, it would be difficult or impossible to quantify actual
damages. As a result, the Sellers, jointly and severally, agree to pay
liquidated damages in an amount equal to 100% of all revenues received in
connection with any conduct that is in breach of this covenant and not rectified
by the Sellers within 60 days’ notice of such breach. This amount does not
constitute a penalty but is a reasonable approximation of damages. Under no
circumstances shall the Buyer be required to post a bond to enforce this
covenant.

(e)       It is the desire and intent of the parties that the Restrictive
Covenants will be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any Restrictive Covenant shall be adjudicated to be invalid or
unenforceable, such Restrictive Covenant shall be deemed amended to the extent
necessary in order that such provision be valid and enforceable, such amendment
to apply only with respect to the operation of such Restrictive Covenant in the
particular jurisdiction in which such adjudication is made.

(f)       Each of the Sellers acknowledges and agrees that the Restrictive
Covenants are reasonable and valid in geographical and temporal scope and in all
other respects. If any court determines that any of the Restricted Covenants, or
any part thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not be affected thereby and shall be given full effect without
regard to the invalid portions.

6.14     Website Traffic. From and after the Closing Date, the Sellers shall
promptly redirect all Internet traffic containing references to “Berlitz
GlobalNET” or translation, localization and interpretation services that exist
on the Berlitz.com website to the Buyer’s website, www.bowneglobal.com, or to
such other website as may be designated by the Buyer to the Sellers at least
five Business Days prior to the Closing Date.

6.15     Transfers of Subsidiary Shares.

(a)       From and after the date hereof until the Closing, the Sellers shall,
and shall cause the Company and the Subsidiaries to, use all reasonable efforts
to complete the transfer of shares of any Subsidiary in which the Company or one
of the Subsidiaries does not own all of the issued and outstanding shares of
capital stock and other ownership interests (other than Berlitz Global Services
Ltda., Berlitz GlobalNET Chile Traducciones Ltda. and Berlitz Translations
s.r.l.) to the Company or one of the Subsidiaries prior to Closing. If any such
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Closing, the Sellers shall transfer all economic and other beneficial interests
in any such Subsidiary to the Company or one of the Subsidiaries as of the
Closing Date and shall use all reasonable efforts to complete such transfer as
soon as practicable.

(b)       With respect to the transfer of any shares not owned by the Company or
one of the Subsidiaries in each of Berlitz Global Services Ltda., Berlitz
GlobalNET Chile Traducciones Ltda. and Berlitz Translations s.r.l., (i) the
Sellers shall transfer all economic and other beneficial interests in any such
Subsidiary to the Company or one of the Subsidiaries as of the Closing Date,
(ii) as soon as practicable but in any event within 30 days following the
Closing Date, the Buyer shall designate in writing one or more affiliated or
associated companies to whom such shares should be transferred, and (iii)
following such designation, the Sellers shall use all reasonable efforts to
complete such transfers as soon as practicable.

(c)       If any transfer contemplated under Section 6.15(a) or (b) cannot be
completed for any reason, the Sellers shall use all reasonable efforts to
transfer, or cause to be transferred, all of the assets, properties, rights,
licenses, permits, contracts, causes of action, claims and operations of such
Subsidiary, and all of the liabilities and obligations of such Subsidiary, that
relate to the ownership and conduct of the business of such Subsidiary, as the
same existed on the Closing Date, to the Company or one of its Subsidiaries (or
the Buyer’s designee, in the case of transfers contemplated under Section
6.15(b)), whether by asset transfer or other means permitted in the relevant
jurisdiction. The Sellers shall pay all expenses incurred in connection with any
transfer contemplated under this Section 6.15, including the Buyer’s reasonable
attorney’s fees.

6.16      Termination of Subleases. Within three months following the Closing
Date, the Buyer shall notify the Sellers in writing if the Buyer desires to
terminate any sublease arrangement in the offices currently occupied by the
Company or one of the Subsidiaries in Canada, Italy or Japan. If the Buyer
desires to terminate any such sublease arrangement, the Buyer shall pay the
Sellers an amount equal to 50% of the remaining obligations under such sublease
arrangement from the date of such payment through the end of the term of such
sublease arrangement. Upon receipt of such payment, the Sellers shall, or shall
cause their Affiliates to, terminate such sublease arrangement, such termination
to be effective as of the date of such payment.

6.17      Transition Services. Upon Closing and for a period of up to 90 days
following the Closing Date, at the Company’s request, Berlitz International
agrees to provide the Company and the Subsidiaries with such accounting,
computer, administrative and other services as Berlitz International provides to
the Company and the Subsidiaries on the date hereof (except for services
provided by Berlitz International headquarters) for such compensation and on
such terms as such services are now provided to the Company and the
Subsidiaries.

6.18      Distributions. Each of the Sellers agrees that, for a period of 18
months following the Closing, it shall not distribute all or any portion of the
Purchase Price received by it hereunder to any Person, unless, as a condition to
such distribution, such Seller obtains a written instrument for the benefit of
the Buyer pursuant

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to which the Person to whom such distribution is ultimately distributed agrees
to be liable for such Seller’s obligations hereunder to the extent of the amount
of such distribution.

7.       Conditions Precedent to the Obligation of the Buyer to Close. The
obligation of the Buyer to enter into and complete the Closing is subject to the
fulfillment on or prior to the Closing Date of the following conditions, any one
or more of which may be waived by the Buyer:

7.1       Representations and Covenants. The representations and warranties of
the Sellers contained in Articles 3 and 4 to the extent qualified by materiality
or by reference to a Company Material Adverse Effect shall be true and correct
in all respects and, to the extent not so qualified, shall be true and correct
in all material respects, in each case on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date, except for
those representations and warranties that are expressly limited by their terms
to dates or times other than the Closing Date, which representations and
warranties need only be true and correct as aforesaid as of such other dates or
times. The Sellers shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be performed or
complied with by the Sellers on or prior to the Closing Date. Each Seller shall
have delivered to the Buyer a certificate, dated the date of the Closing and
signed by an officer of such Seller, to the foregoing effect.

7.2       HSR Act and Other Antitrust Filings. Any Person required in connection
with the transactions contemplated hereby to file a notification and report form
in compliance with the HSR Act shall have filed such form and the applicable
waiting period with respect to each such form (including any extension thereof
by reason of a request for additional information) shall have expired or been
terminated, and any approvals required under the Foreign Antitrust Laws in
connection with the transactions contemplated hereby shall have been obtained.

7.3       No Orders or Proceedings. No Order shall have been issued or
proceeding or litigation initiated by any Governmental Body to restrain or
prohibit, or to obtain damages or a discovery order in respect of, this
Agreement or the consummation of the transactions contemplated hereby.

7.4       Consents. All of the Required Consents and Notices (other than those
referred to in Section 7.2) shall have been obtained or made.

7.5       Resignations. The Sellers shall cause to be delivered to the Buyer on
the Closing Date all resignations of members of the Board of Directors and
officers of the Company and the Subsidiaries that have been requested in writing
by the Buyer at least two Business Days prior to the Closing, such resignations
to be effective immediately after the Closing.

7.6       Intercompany Payables. Pursuant to Section 6.5, the Sellers shall have
caused any net amounts due and owing by the Company or any of the Subsidiaries
to the Sellers or any of the Affiliates of the Sellers (other than the Company

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or any Subsidiary) to be settled, forgiven or converted into equity (including
by the contemporaneous contribution of an equivalent amount of capital).

7.7       Opinion of Sellers’ Counsel. The Buyer shall have received (i) the
opinion of Paul, Weiss, Rifkind, Wharton & Garrison, counsel to the Sellers,
dated as of the Closing Date, substantially in the form attached hereto as
Exhibit C, and (ii) the opinion of the general counsel of the Sellers, dated as
of the Closing Date, substantially in the form attached hereto as Exhibit D.

8.       Conditions Precedent to the Obligation of the Sellers to Close. The
obligation of the Sellers to enter into and complete the Closing is subject to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived by the Sellers:

8.1       Representations and Covenants. The representations and warranties of
the Buyer contained in Article 5 to the extent qualified by materiality shall be
true and correct in all respects and, to the extent not so qualified, shall be
true and correct in all material respects, in each case on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date, except for those representations and warranties that are expressly limited
by their terms to dates or times other than the Closing Date, which
representations or warranties need only be true and correct as aforesaid as of
such other dates or times. The Buyer shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Buyer on or prior to the Closing Date.
The Buyer shall have delivered to the Sellers a certificate, dated the date of
the Closing and signed by an officer of the Buyer, to the foregoing effect.

8.2       HSR Act and Other Antitrust Filings. Any Person required in connection
with the transactions contemplated hereby to file a notification and report form
in compliance with the HSR Act shall have filed such form and the applicable
waiting period with respect to each such form (including any extension thereof
by reason of a request for additional information) shall have expired or been
terminated, and any approvals required under the Foreign Antitrust Laws in
connection with the transactions contemplated hereby shall have been obtained.

8.3       No Orders or Proceedings. No Order shall have been issued or
proceeding or litigation initiated by any Governmental Body to restrain or
prohibit, or to obtain damages or a discovery order in respect of, this
Agreement or the consummation of the transactions contemplated hereby.

8.4       Consents. All of the Required Consents and Notices (other than those
referred to in Section 8.2) shall have been made or obtained.

8.5       Opinion of Buyer’s Counsel. The Sellers shall have received the
opinion of Brobeck, Phleger & Harrison LLP, counsel to the Buyer, dated as of
the Closing Date, substantially in the form attached hereto as Exhibit E.

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9.       Survival. The representations and warranties of the Sellers and the
Buyer contained herein shall survive the Closing for the respective periods set
forth in this Article 9. All of the representations and warranties of the
Sellers contained in Articles 3 and 4 shall terminate 18 months from the Closing
Date, except that the representations and warranties contained in Sections 3.10
and 4.1 shall survive until the expiration of the applicable statute of
limitations with respect to the subject matter thereof. Thereafter all such
representations and warranties of the Sellers shall be extinguished and no claim
for the recovery of any Losses may be asserted against either Seller in respect
thereof; provided, however, that claims first asserted in writing with
specificity within the applicable period referred to above shall not thereafter
be barred. All of the representations and warranties of the Buyer contained in
Article 5 shall terminate one year from the Closing Date. The provisions of
Article 11 shall survive until the later of (i) the expiration of the applicable
statute of limitations or (ii) the conclusion of litigation, including appeals,
plus 30 days. The agreements of the Buyer and the Sellers contained in this
Agreement shall survive beyond the Closing, except for those agreements that are
expressly limited by their terms to other dates or times, which shall survive
only to such dates or times.

10.      Indemnification.

10.1     Obligation of the Sellers to Indemnify. From and after the Closing
Date, subject to Sections 10.3, 10.4 and 10.5, the Sellers shall, jointly and
severally, indemnify, defend and hold harmless the Buyer and each of its
Affiliates, directors, officers, employees, agents and representatives, and each
of the heirs, executors, successors and assigns of any of the foregoing (the
“Buyer Indemnified Parties”), from and against all liabilities, losses, claims,
costs and damages (whether absolute, accrued, conditional or otherwise and
whether or not resulting from third party claims), including interest and
penalties with respect thereto and reasonable attorneys’ fees, court costs and
other out-of-pocket expenses (collectively, “Losses”) that arise out of, or
result from, (a) the breach of any representation, warranty, covenant or
agreement of the Sellers that survives the Closing to the extent not waived by
the Buyer, (b) the Company’s or any Subsidiary’s use of the name “GlobalNET”
prior to the Closing Date, (c) any claim relating to (i) the cancellation of the
Options and the termination of the Option Plan pursuant to Section 6.12 and the
assertion of any rights in connection therewith by any Option Holder or (ii) any
withholding Taxes required to be paid in connection with the payment to the
Option Holders pursuant to Section 6.12, and (d) any claim relating to the
repayment of grants by the Industrial Development Agency (Ireland) to Berlitz
(Ireland) Limited; provided, that the Sellers’ obligation to indemnify for any
Losses pursuant to this Section 10.1(d) shall terminate upon the earliest of (i)
the Buyer’s announcement of its intention to discontinue the Company’s
operations in Ireland or materially reduce the number of its employees or the
level of its operations or investment in Ireland, (ii) the Buyer’s termination
of the Company’s operations in Ireland or material reduction in the number of
its employees or the level of its operations or investment in Ireland and (iii)
18 months from the Closing Date. From and after the Closing Date, subject to
Sections 10.3, 10.4 and 10.5, the Sellers shall, jointly and severally,
indemnify, defend and hold harmless the Buyer Indemnified Parties for all
Immaterial Losses if and to the extent that the Threshold Amount has been
exceeded pursuant to Section 10.4(b).

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10.2     Obligation of the Buyer to Indemnify. From and after the Closing Date,
subject to Sections 10.3, 10.4 and 10.5, the Buyer shall indemnify, defend and
hold harmless the Sellers and each of their respective Affiliates, directors,
officers, employees, agents and representatives, and each of the heirs,
executors, successors and assigns of any of the foregoing, from and against all
Losses that arise out, of or result from, the breach of any representation,
warranty, covenant or agreement of the Buyer that survives the Closing to the
extent not waived by the Sellers. From and after the Closing Date, the Company
and the Subsidiaries shall be jointly and severally liable for the Buyer’s
indemnification obligations pursuant to this Article 10 and Article 11.

10.3     Indemnification Procedure.

(a)       Any indemnified party seeking indemnification under this Agreement
(each, an “Indemnified Party”) shall promptly notify the indemnifying party or
parties (collectively, the “Indemnifying Party”) of any third party claim or
demand for which the Indemnified Party is asserting a claim hereunder. Such
notice shall be accompanied by a reasonably complete description of the basis
for such claim or demand (including an estimate of the amount thereof and copies
of all correspondence, process, legal pleadings and other relevant documentation
relating thereto) and reference to the provisions of this Agreement under which
liability is asserted. The failure to provide such notice shall not relieve the
Indemnifying Party of any of its obligations hereunder, or impair the right of
the Indemnified Party to indemnification hereunder, except to the extent that
such failure shall actually prejudice the Indemnifying Party.

(b)       The Indemnifying Party shall have the right, at its own cost, to
participate jointly in the defense of any claim or demand in connection with
which the Indemnified Party has claimed indemnification hereunder, and may elect
to take over the defense of such claim or demand through counsel of its own
choosing by so notifying the Indemnified Party within 30 days of receipt of the
Indemnified Party’s notice of such claim or demand. If the Indemnifying Party
makes such an election:

(i)       it shall keep the Indemnified Party reasonably informed as to the
status of such matter and shall promptly send copies of all pleadings to the
Indemnified Party;

(ii)      with respect to any issue involved in such claim or demand, it shall
have the sole right to settle or otherwise dispose of such claim or demand on
such terms as it, in its sole discretion, shall deem appropriate; provided,
however, that the consent of the Indemnified Party to the settlement or
disposition of any claim or demand shall be required if such settlement or
disposition shall result in any liability to, or equitable relief against, the
Indemnified Party, which consent shall not be unreasonably withheld; and

(iii)     the Indemnified Party shall have the right to participate jointly in
the defense of such claim or demand, but shall do so at its own cost not subject
to reimbursement under Section 10.1 or 10.2.

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(c)       If the Indemnifying Party does not elect to take over the defense of a
claim or demand, the Indemnified Party shall have the right to contest,
compromise or settle such claim or demand in the exercise of its reasonable
judgment; provided, however, that the consent of the Indemnifying Party to any
compromise or settlement of such claim or demand shall be required, which
consent shall not be unreasonably withheld.

(d)       The parties shall use commercially reasonable efforts to minimize
Losses from claims by third parties and shall act in good faith in responding
to, defending against, settling or otherwise dealing with such claims. Without
limiting the generality of the foregoing, each party agrees to pursue any
available claims against insurers who may have provided insurance coverage for
any Losses and further agrees to use commercially reasonable efforts to pursue,
or to assign to the Indemnifying Party, any claims or rights it may have against
any Person that may reduce the Losses otherwise incurred by the Indemnified
Party. Each party agrees that it shall cooperate with the other parties in the
defense of any claim or action.

10.4     Measure of and Limitations upon Indemnification.

(a)       The amount of the Indemnifying Party’s liability under this Agreement
shall be determined taking into account any applicable insurance proceeds
received by the Indemnified Party.

(b)       The Sellers’ liability for any Losses under this Article 10 and for
any Tax Losses attributable to Pre-Closing Foreign Taxes under Article 11 shall
be subject to the following limitations: (i) the Sellers shall have no liability
for any such Losses or Tax Losses (other than those arising out of, or resulting
from, the breach by either Seller of its representations and warranties in
Article 4) unless and until the aggregate amount of such Losses and Tax Losses
for which the Sellers are obligated to indemnify pursuant to Section 10.1(a) or
Section 11.2, and other Losses suffered by the Buyer that would have been
indemnifiable under Section 10.1(a) but for their exclusion under standards of
materiality (indicated by the use of the words “Company Material Adverse
Effect,” “material,” “significant” or “substantial”) set forth in Sections 3.3,
3.8(e), 3.9(a), 3.11, 3.12, 3.13, 3.14, 3.17(c), 3.20(c) and 3.20(e), the third
line and the third sentence of Section 3.16 and the third and fourth sentences
of Section 3.25 (“Immaterial Losses”) shall exceed $1,000,000 (the “Threshold
Amount”), in which case the Sellers shall be liable only to the extent that the
aggregate amount of such Losses, Immaterial Losses and Tax Losses, as finally
determined, shall exceed the Threshold Amount; (ii) the aggregate liability of
the Sellers for all such Losses, Immaterial Losses and Tax Losses pursuant to
Section 10.1(a) or Section 11.2 (other than those arising out of, or resulting
from, the breach by either Seller of its representations and warranties in
Article 4) shall not exceed, in the aggregate, the Purchase Price and (iii) the
aggregate liability of the Sellers for all Losses arising out of, or resulting
from, Section 10.1(d) shall not exceed, in the aggregate, Euro 936,000.

(c)       EXCEPT IN THE CASE OF FRAUD (FOR WHICH LIABILITY SHALL BE GOVERNED BY
APPLICABLE LAW) AND AS

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PROVIDED BELOW, IN NO EVENT SHALL ANY INDEMNIFYING PARTY BE LIABLE TO ANY
INDEMNIFIED PARTY FOR ANY DAMAGES THAT ARE NOT REASONABLY FORESEEABLE, SUCH AS
CONSEQUENTIAL, INDIRECT, INCIDENTAL OR OTHER SIMILAR DAMAGES, FOR ANY BREACH OR
DEFAULT UNDER, OR ANY ACT OR OMISSION ARISING OUT OF OR IN ANY WAY RELATING TO,
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, UNDER ANY FORM OF ACTION
WHATSOEVER, WHETHER IN CONTRACT OR OTHERWISE. THE FOREGOING SHALL NOT, HOWEVER,
LIMIT THE ABILITY OF THE BUYER TO ALLEGE DAMAGES FOR THE DIMINUTION IN PRESENT
VALUE OF THE COMPANY ASSOCIATED WITH ANY BREACH OF THE SELLERS’ REPRESENTATIONS
AND WARRANTIES RELATING TO THE COMPANY AND THE SUBSIDIARIES.

10.5     Exclusivity of Indemnity. Except in the event the Buyer is seeking
equitable relief or liquidated damages pursuant to Section 6.13 or in the case
of fraud (for which liability shall be governed by applicable law), the
indemnification provided in this Article 10 and the Tax indemnification provided
in Article 11 shall be the sole and exclusive remedy after the Closing Date for
damages available to the parties to this Agreement for breach of any of the
representations, warranties, covenants and agreements contained herein or any
right, claim or action arising from the transactions contemplated hereby. Except
in the event the Buyer is seeking equitable relief or liquidated damages
pursuant to Section 6.13 or in the case of fraud (for which liability shall be
governed by applicable law), the Buyer expressly waives, releases and agrees not
to make any claim against the Sellers, except for indemnification claims made
pursuant to this Article 10 or Article 11, for the recovery of any costs or
damages, whether directly or by way of contribution, or for any other relief
whatsoever, under any applicable Laws, whether now existing or applicable or
hereinafter enacted or applicable (including claims for breach of contract or
failure of disclosure).

10.6      Subrogation. In the event of payment by or on behalf of any
Indemnifying Party to any Indemnified Party (including pursuant to this Article
10 or Article 11) in connection with any claim or demand by any Person other
than the parties hereto or their respective Affiliates, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnified Party as
to any events or circumstances in respect of which such Indemnified Party may
have any right, defense or claim relating to such claim or demand against any
claimant or plaintiff asserting such claim or demand. Such Indemnified Party
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost of such Indemnifying Party, in presenting any subrogated right, defense or
claim.

11      Tax Indemnification; Tax Matters.

11.1      Preparation of Tax Returns and Payment of Taxes.

(a)       The Sellers shall prepare or cause to be prepared and file all Tax
Returns of the affiliated group or consolidated, combined or unitary

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group, within the meaning of Section 1504(a) of the Code or comparable provision
of state or local law, filing consolidated federal income Tax Returns or
consolidated, combined or unitary state and local income Tax Returns of which
the Sellers and the Company or any of the Subsidiaries are or were members on or
prior to the Closing Date (the “Seller Group”) required to be filed with any Tax
authority for Tax periods or portions thereof ending on or before the Closing
Date, which are filed after the Closing Date (any such consolidated federal
income Tax Returns together with any such consolidated, combined or unitary
state and local income Tax Returns are referred to herein as “Pre-Closing Seller
Group Tax Returns”). The Sellers also shall prepare or cause to be prepared and
file all other Tax Returns required to be filed with respect to the Company or
any of the Subsidiaries on or prior to the Closing Date.

(b)       The Sellers shall include the income and deductions of the Company and
the Subsidiaries that are members of the Seller Group (including any deferred
income triggered into income under Treasury Regulation Sections 1.1502-13 and
1.1502-14, any excess loss accounts taken into income under Treasury Regulation
Section 1.1502-19 resulting from or related to transactions contemplated under
this Agreement and any Taxes resulting from the Section 338(h)(10) Election, any
Section 338(g) Election and any Check-the-Box Election) on the Pre-Closing
Seller Group Tax Returns for all periods or portions thereof through and
including the Closing Date and pay any federal, state, or local income Taxes
attributable to such income (“Pre-Closing Seller Group Taxes”).

(c)       Other than as set forth in Sections 11.1(a) and 11.1(b), the Buyer
shall prepare or cause to be prepared and file all Tax Returns of the Company
and the Subsidiaries required to be filed with any Tax authority after the
Closing Date. Such Tax Returns shall include the Tax Returns of any non-United
States Subsidiaries, which are not members of the Seller Group, required to be
filed with any Tax authority after the Closing Date (“Foreign Tax Returns”). In
the event that any Taxes payable are shown on such Foreign Tax Returns for Tax
periods or portions thereof through and including the Closing Date (“
Pre-Closing Foreign Taxes”) exceed Taxes which are included as current
liabilities (excluding any reserve for deferred taxes established to reflect
timing differences between book and Tax income (a “Deferred Tax Reserve”)) on
the Net Current Assets Statement as finally determined pursuant to Section 1.4,
the Buyer shall permit the Sellers to review and comment on such Foreign Tax
Returns prior to filing. The Buyer shall notify the Sellers of the amount of
such Pre-Closing Foreign Taxes and any other Taxes with respect to such Tax
Returns for which the Sellers are liable pursuant to Section 11.2. The Sellers
shall pay the amount of such Taxes to the Buyer in immediately available funds
at least five Business Days prior to the date such Taxes are required to be
paid.

(d)       For purposes of this Agreement, in the case of any Taxes of the
Company or any of the Subsidiaries that are payable with respect to any Tax
period beginning before and ending after the Closing Date (a “Straddle Period”),
the portion of any such Taxes that are allocable to the portion of the Straddle
Period ending on the Closing Date shall: (i) in the case of Taxes that are
either (x) based upon or related to income or receipts, or (y) imposed in
connection with any sale or other transfer

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or assignment of property (real or personal, tangible or intangible) (other than
conveyances pursuant to this Agreement, which are covered under Section 6.9), be
deemed equal to the amount that would be payable if the Tax year or period ended
on the Closing Date; and (ii) in the case of Taxes (other than those described
in clause (i) above) that are imposed on a periodic basis with respect to the
business or assets of the Company or the Subsidiaries or otherwise measured by
the level of any item, be deemed to be the amount of such Taxes for the entire
Straddle Period (or, in the case of such Taxes determined on an arrears basis,
the amount of such Taxes for the immediately preceding Tax period) multiplied by
a fraction, the numerator of which is the number of calendar days in the portion
of the Straddle Period ending on the Closing Date and the denominator of which
is the number of calendar days in the entire Straddle Period. All determinations
necessary to give effect to the foregoing allocations shall be made in a manner
consistent with past practice of the Company and the Subsidiaries.

11.2      Tax Indemnification by the Sellers. From and after the Closing Date,
the Sellers shall (without duplication of the payments required by Section
11.1(c)), jointly and severally, indemnify the Buyer, the Company, the
Subsidiaries and their respective Affiliates (each, a “Tax Indemnified Buyer
Party” and collectively, the “Tax Indemnified Buyer Parties ”) against and hold
harmless from any and all liabilities, losses, damages, claims, costs, expenses,
interest, awards, judgments and penalties (including reasonable fees for both
in-house and outside counsel, accountants and other outside consultants)
suffered or incurred (each a “Tax Loss” and collectively, the “Tax Losses”)
arising out of (i) any Taxes imposed on the Company or the Subsidiaries for all
periods or portions of periods through the Closing Date, including the
Pre-Closing Seller Group Taxes or Pre-Closing Foreign Taxes of the Company or
any of the Subsidiaries, in excess of Taxes which are included as current
liabilities (excluding any Deferred Tax Reserve) on the Net Current Assets
Statement as finally determined pursuant to Section 1.4; (ii) Taxes of any
member of an affiliated, consolidated, combined or unitary group of which the
Company or any of the Subsidiaries is or was a member on or prior to the Closing
Date by reason of liability under Treasury Regulation Section 1.1502-6, Treasury
Regulation Section 1.1502-78 or comparable provision of foreign, state or local
law; and (iii) Taxes imposed on a Tax Indemnified Buyer Party as a result of a
breach of a representation or warranty set forth in Section 3.10.

11.3      Tax Indemnification by Buyer. From and after the Closing Date, the
Buyer shall indemnify the Sellers and their Affiliates (each, a “Tax Indemnified
Seller Party” and collectively, the “Tax Indemnified Seller Parties”) against
and hold harmless from any and all Tax Losses arising out of Taxes of the
Company or the Subsidiaries other than amounts for which a Tax Indemnified Buyer
Party is indemnified by the Sellers under Section 11.2.

11.4      Tax Indemnification Procedures.

(a)       After the Closing, each party to this Agreement (whether the Buyer or
the Sellers, as the case may be) shall promptly notify the other party in
writing of any demand, claim or notice of the commencement of an audit received
by such party from any Tax authority or any other Person with respect to Taxes

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for which such other party is liable pursuant to Sections 11.2 or 11.3;
provided, however, that a failure to give such notice will not affect such other
party’s rights to indemnification under this Article 11. Such notice shall
contain factual information (to the extent known) describing the asserted Tax
liability and shall include copies of the relevant portion of any notice or
other document received from any Tax authority or any other Person in respect of
any such asserted Tax liability.

(b)       Payment by an indemnitor of any amount due to an indemnitee under this
Article 11 shall be made within 10 days following written notice by the
indemnitee that payment of such amounts to the appropriate Tax authority or
other applicable third party is due by the indemnitee; provided, that the
indemnitor shall not be required to make any payment earlier than five Business
Days before it is due to the appropriate Tax authority or applicable third
party. In the case of a Tax that is contested in accordance with the provisions
of Section 11.5, payment of such contested Tax will not be considered due
earlier than the date a final determination to such effect is made by such Tax
authority or a court.

(c)       All amounts required to be paid pursuant to this Article 11 shall be
paid promptly in immediately available funds by wire transfer to a bank account
designated by the indemnified party.

11.5      Cooperation. The Sellers and the Buyer agree to furnish or cause to be
furnished to each other, upon request, as promptly as practicable, such
information (including access to books and records) and assistance relating to
the Company and the Subsidiaries as is reasonably requested for the filing of
any Tax Returns and the preparation, prosecution, defense or conduct of any
audit, claim for refund, or administrative or judicial proceeding involving any
asserted Tax liability or refund with respect to the Company or any of the
Subsidiaries (any such audit, claim for refund or proceeding is referred to
herein as a “ Contest”). The Sellers and the Buyer shall each be entitled to
participate in the proceedings relating to any Contest and shall reasonably
cooperate with each other in the conduct of any Contest or other proceeding
involving or otherwise relating to the Company or the Subsidiaries (or their
income or assets) with respect to any Tax and each shall execute and deliver
such powers of attorney and other documents as are necessary to carry out the
intent of this Section 11.5. No Contest shall be settled without the consent of
the party that is responsible for the resulting Taxes hereunder, which consent
shall not be unreasonably withheld or delayed. Any information obtained under
this Section 11.5 shall be kept confidential, except as may be otherwise
necessary in connection with the filing of Tax Returns or in the conduct of a
Contest or other Tax proceeding.

11.6      Tax Treatment of Certain Payments. The parties agree to treat any
adjustment to the Purchase Price under Section 1.4(c), any payment made under
Section 6.16 and any indemnity payment made under this Agreement, including any
indemnity payment made under Article 10 or this Article 11, as an adjustment to
the Purchase Price for all Tax purposes and the parties agree to file their Tax
Returns accordingly.

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11.7     Section 338(h)(10) Election.

(a)       Upon the request of the Buyer made no later than 60 days after the
Closing Date, the Sellers shall join with the Buyer in making an election under
Section 338(h)(10) of the Code and any corresponding or similar elections under
state, local or foreign law (collectively, the “Section 338(h)(10) Election”)
with respect to the purchase and sale of the stock of the Company and any
domestic Subsidiaries hereunder and agree that the Buyer also may make an
election under Section 338(g) of the Code and any corresponding or similar
elections under state, local or foreign law (collectively, the “Section 338(g)
Elections”) with respect to any foreign Subsidiaries hereunder; provided,
however, that (i) the Buyer agrees that upon the request of the Sellers, the
Buyer will make (or cause the Company and any foreign Subsidiary designated by
the Sellers to make) an election, to be effective at least 10 days prior to the
Closing Date, under Treasury Regulation Sections 301.7701-1 to 301.7701-3 to
treat any foreign Subsidiary designated by the Sellers as disregarded as an
entity separate from its owner (the “Check-the-Box Elections”), in which case
the Buyer shall be entitled to make a protective Section 338(g) Election with
respect to such entity; and (ii) if the combined effect of the Section
338(h)(10) Election, any Section 338(g) Election and any Check-the-Box Election
is to increase the amount of Taxes payable by the Sellers compared with the
Taxes that would be payable by the Sellers in the absence of all such elections,
the Sellers are not required to join with the Buyer in making the Section
338(h)(10) Election unless the Buyer reimburses the Sellers for such increased
Taxes. In the event the Buyer does not request that the Sellers join in making
the Section 338(h)(10) Election, the remainder of the provisions of this Section
11.7 shall not apply.

(b)       The Sellers currently estimate that the amount that will be required
to be reimbursed to the Sellers under clause (ii) of the proviso to Section
11.7(a) will not exceed $2,000,000. At the Buyer’s request, no later than 20
days after the completion of the allocation of the purchase price under Section
11.7(c), the Sellers will provide the Buyer with the final calculation of the
amount required to be reimbursed to the Sellers under clause (ii) of the proviso
to Section 11.7(a) (including documentation showing the manner in which the
amount was calculated) and a list of the foreign Subsidiaries with respect to
which the Sellers wish to make the Check-the-Box Elections.

(c)       The Buyer shall determine and allocate the “aggregate deemed sales
price” (“ADSP”) with respect to the assets of the Company and the Subsidiaries
in accordance with Section 338 of the Code and the applicable Treasury
Regulations promulgated thereunder or comparable provisions of state, local and
foreign law (the “ADSP Allocation”). The Buyer shall forward a draft of the ADSP
Allocation to the Sellers for the Sellers’ consent, which consent shall not be
unreasonably withheld or delayed. The Buyer and the Sellers and their respective
Affiliates shall be bound by the ADSP Allocation for all Tax purposes. The Buyer
and the Sellers shall file, and shall cause their respective Affiliates to file,
all Tax Returns in a manner consistent with the Section 338(h)(10) Election, any
Section 338(g) Election, any Check-the-Box Election and the ADSP Allocation and
shall take no position contrary thereto unless required to do so by applicable
Tax laws.

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12.     Termination of Agreement.

12.1     Termination.

(a)        This Agreement may be terminated prior to the Closing as follows:

(i)       at the election of the Sellers, if any one or more of the conditions
to the obligation of the Sellers to close set forth in Article 8 (other than
those that by their nature cannot be satisfied prior to the Closing) has not
been fulfilled as of the close of business on September 30, 2002;

(ii)      at the election of the Buyer, if any one or more of the conditions to
the obligation of the Buyer to close set forth in Article 7 (other than those
that by their nature cannot be satisfied prior to the Closing) has not been
fulfilled as of the close of business on September 30, 2002;

(iii)     at the election of the Sellers or the Buyer, if any legal proceeding
is commenced by any Governmental Body seeking to prevent the consummation of the
Closing or any other transaction contemplated hereby and either the Sellers, on
the one hand, or the Buyer, on the other hand, as the case may be, reasonably
and in good faith deems it impracticable or inadvisable to proceed in view of
such legal proceeding;

(iv)     at the election of the Sellers, if the Buyer has breached any material
representation, warranty, covenant or agreement contained in this Agreement,
which breach is incapable of being, or is not, cured within five Business Days
after written notice of such breach from the Sellers to the Buyer, it being
understood that the mere disclosure of such breach shall not constitute a cure;

(v)      at the election of the Buyer, if the Sellers have breached any material
representation, warranty, covenant or agreement contained in this Agreement,
which breach is incapable of being, or is not, cured within five Business Days
after written notice of such breach from the Buyer to the Sellers, it being
understood that the mere disclosure of such breach shall not constitute a cure;
or

(vi)     at any time on or prior to the Closing Date, by mutual written consent
of the Sellers and the Buyer.

(b)       If this Agreement terminates in accordance with Section 12.1(a)(i),
(ii), (iii), (iv) or (vi), it shall become null and void and have no further
force or effect, except as provided in Section 12.2.

(c)       If the Buyer validly terminates this Agreement pursuant to Section
12.1(a)(v), the Sellers shall (i) reimburse the Buyer for all of its reasonable
out-of-pocket expenses incurred in connection with the preparation, execution

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and performance of this Agreement and the transactions contemplated hereby,
including all reasonable fees and expenses of agents, representatives, counsel
and accountants, and (ii) refund to the Buyer any amounts previously paid to the
Sellers pursuant to Section 6.3 to reimburse expenses incurred in connection
with the audit contemplated by Section 6.15. The Buyer and the Sellers agree
that the remedy provided by this Section 12.1(c) shall be the Buyer’s sole and
exclusive remedy hereunder for the termination of this Agreement pursuant to
Section 12.1(a)(v).

12.2     Survival After Termination. If this Agreement terminates pursuant to
Section 12.1 and the transactions contemplated hereby are not consummated, this
Agreement shall become null and void and have no further force or effect;
provided, that any such termination shall not affect the rights set forth in
Section 12.1(c) and shall be without prejudice to the rights of any party on
account of the nonsatisfaction of the conditions set forth in Articles 7 and 8
resulting from the intentional or willful breach or violation of the
representations, warranties, covenants or agreements of another party under this
Agreement. Notwithstanding anything in this Agreement to the contrary, the
provisions of Sections 6.2, 6.3, 6.4 and 12.1(c), this Section 12.2 and Article
13 shall survive any termination of this Agreement.

13.     Miscellaneous.

13.1     Certain Definitions.

(a)       As used in this Agreement, the following terms have the following
meanings:

“Affiliate” means, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person.

“Benefit Plan” means any employee benefit plan, arrangement, policy or
commitment (whether or not an employee benefit plan within the meaning of
Section 3(3) of ERISA), including any material employment, consulting or
deferred compensation agreement, executive compensation, bonus, incentive,
pension, profit-sharing, savings, retirement, stock option, stock purchase or
severance pay plan, any life, health, disability or accident insurance plan or
any holiday or vacation practice, as to which the Company or any of the
Subsidiaries has, or in the future could have, any material liability, other
than plans mandated by applicable laws.

“Business Day” means a day other than Saturday, Sunday or any day on which banks
located in New York, New York are authorized or obligated to close.

“Code” means the Internal Revenue Code of 1986, as amended.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Foreign Antitrust Laws” means any applicable antitrust, competition or trade
regulatory laws, rules or regulations of any foreign Governmental Body.

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“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.

“IRS” means the Internal Revenue Service.

“Intellectual Property” means all of the following, to the extent used by the
Company or any of the Subsidiaries: (i) patents, patent applications, patent
disclosures and inventions, designs and improvements; (ii) copyrights
(registered and unregistered), including all renewals and extensions thereof and
all applications for registration thereof; (iii) trademarks, service marks,
trade names, trade dress, brand names, designs, logos or corporate names,
Internet domain names, and all applications and registrations thereof, together
with all of the goodwill associated therewith; (iv) trade secrets, know-how,
processes, procedures and databases; (v) computer software programs, data,
databases and documentation related thereto and (vi) other proprietary
confidential information (including ideas, formulas, compositions, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
manufacturing and production processes and techniques, internal processes and
systems, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and marketing plans and
customer and supplier lists and information); provided, that, notwithstanding
anything to the contrary contained herein, “Intellectual Property” shall not
include the Berlitz Names and Marks.

“Knowledge” of the Sellers means the actual knowledge, after due inquiry, where
appropriate, of local country managers and finance officers, of any of the
following individuals: James B. Lewis, Brian Kelly, Brian Giambagno, Deane
Dayton, Ken Murphy, John Murphy, Alistair Gatoff, Ronald Stark, Charles Court,
Adam Ratner, Paul Weinstein and Karl Chase.

“Lien” means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, license, charge, option, right of first refusal, easement,
servitude, transfer restriction, encumbrance or any other restriction or
limitation whatsoever.

“Person” means any individual, corporation, partnership, limited liability
company, limited liability partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, Governmental Body or
other entity.

“Tax” or “Taxes” means all taxes, charges, fees, imposts, levies or other
assessments, including all net income, franchise, profits, gross receipts,
capital, sales, use, ad valorem, value added, transfer, transfer gains,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, real or personal
property, and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever, together with any interest and any penalties, fines,
additions to tax or additional amounts thereon, imposed by any taxing authority
(federal, state, local or foreign) and shall include any transferee liability in
respect of Taxes and any liability arising by virtue of being a member of a
consolidated, combined or unitary group.

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“Tax Returns” means all returns, declarations, reports, forms, estimates,
information returns and statements required to be filed in respect of any Taxes
or to be supplied to a taxing authority in connection with any Taxes.

(b)       The following capitalized terms are defined in the following Sections
of this Agreement:

Term Section

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ADSP
1.4(a)
ADSP Allocation
11.7(c)
Affiliated Entities
3.7
Agreement
Preamble
Audited Financial Statements
3.7
Berlitz International
Preamble
Berlitz Investment
Preamble
Berlitz Names and Marks
6.10(a)
Bonus Plans
3.21(b)
Buyer
Preamble
Buyer Consents and Notices
5.2(b)(ii)
Buyer Indemnified Parties
10.1
Cash
1.4(a)
Check-the-Box Elections
11.7(a)
Closing
2
Closing Date
2
Code of Corporate Conduct
3.21(d)
Company
Preamble
Company Common Stock
3.4(a)
Company Consents and Notices
3.14(b)
Company Employees
3.20(e)
Company Financial Statements
3.7
Company Material Adverse Effect
3.3
Confidentiality Agreement
6.2
Contest
11.5
Deferred Tax Reserve
11.1(c)
Environmental Laws
3.13
Financing
5.5
Foreign Plan
3.20(e)
Foreign Tax Returns
11.1(c)
GAAP
3.7
Governmental Bodies
3.11
Indemnified Party
10.3(a)
Indemnifying Party
10.3(a)
Immaterial Losses
10.4(b)
Independent Accounting Firm
1.4(b)
Insurance Policies
3.25
Interim Financial Statements
3.7

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Term Section

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Laws
3.11
License Agreement
6.10(a)
Losses
10.1
Material Contracts
3.15(a)
Net Current Assets
1.4(a)
Net Current Assets Statement
1.4(a)
Option
3.5
Option Holder
6.12
Option Plan
6.12
Orders
3.11
Permits
3.12
Pre-Closing Foreign Taxes
11.1(c)
Pre-Closing Seller Group Taxes
11.1(b)
Pre-Closing Seller Group Tax Returns
11.1(a)
Purchase Price
1.1
Required Consents and Notices
5.2(b)(ii)
Restricted Business
6.13(a)
Restricted Period
6.13(a)
Restrictive Covenants
6.13(d)
Section 338(g) Elections
11.7(a)
Section 338(h)(10) Election
11.7(a)
Seller Consents and Notices
4.2(b)(ii)
Seller Group
11.1(a)
Sellers
Preamble
Sellers’ Disclosure Letter
3
Shares
Recitals
Straddle Period
11.1(d)
Subsidiaries
3.2(a)
Tax Indemnified Buyer Parties
11.2
Tax Indemnified Seller Parties
11.3
Tax Losses
11.2
Threshold Amount
10.4(b)

13.2     Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.

(a)       Any claim arising out of or relating to this Agreement or the
transactions contemplated hereby may be instituted in any Federal court in the
State of New York, and each party agrees not to assert, by way of motion, as a
defense or otherwise, in any such claim, that it is not subject personally to
the jurisdiction of such court, that the claim is brought in an inconvenient
forum, that the venue of the claim is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court. Each party
further irrevocably submits to the jurisdiction of such court in any such claim.

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(b)        Any and all service of process and any other notice in any such claim
shall be effective against any party if given personally or by registered or
certified mail, return receipt requested, or by any other means of mail that
requires a signed receipt, postage prepaid, mailed to such party as herein
provided. Nothing herein contained shall be deemed to affect the right of any
party to serve process in any manner permitted by law or to commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.

(c)        EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY.

(d)        EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
WAIVER IN SECTION 13.2(c), (ii) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVER, (iii) SUCH PARTY MAKES SUCH WAIVER VOLUNTARILY AND
(iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS, AGREEMENTS AND CERTIFICATIONS IN SECTION 13.2(c) AND
THIS SECTION 13.2(d).

13.3    Notices.  Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given (a) on
the day of delivery if delivered in person, or if delivered by facsimile upon
confirmation of receipt, (b) on the first Business Day following the date of
dispatch if delivered by a nationally recognized express courier service, or (c)
on the tenth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated by notice given in accordance with this
Section 13.3 by the party to receive such notice:

(a)        if to the Buyer, to:

BGS Companies, Inc.
14 Walsh Drive
Parsippany, New Jersey 07054
Attention: Carl D. Glaeser
Facsimile: (973) 394-2013

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with a copy to:

Brobeck, Phleger & Harrison LLP
1633 Broadway
New York, New York 10019
Attention: Mark L. Mandel, Esq.
Facsimile: (212) 586-7878

if to the Sellers, to:

Berlitz International, Inc.
400 Alexander Park
Princeton, New Jersey 08540-6306
Attention: Legal Dept.
Facsimile: (609) 514-9670

with a copy to:

Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
United States of America
Attention: David K. Lakhdhir, Esq.
Facsimile: (212) 757-3990

13.4    Entire Agreement.  This Agreement, together with the Confidentiality
Agreement and any other collateral agreements executed in connection with the
consummation of the transactions contemplated hereby, contain the entire
agreement among the parties with respect to the sale and purchase of the Shares
and supersede all prior agreements, written or oral, with respect thereto.

13.5    Waivers and Amendments.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the Buyer and the Sellers or, in the case of a
waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.

13.6    Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to any conflict
of laws rules thereof that might indicate the application of the laws of any
other jurisdiction.

13.7    Binding Effect; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
This Agreement is not assignable by any party without the prior written consent

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of the other parties, except that the Buyer may assign its rights hereunder to
any of its Affiliates without the prior written consent of any other party
hereto; provided, however, that such assignee also assumes all of the Buyer’s
obligations hereunder and the Buyer remains liable for the performance of all of
the Buyer’s obligations hereunder.

13.8    Usage.  All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require. All terms
defined in this Agreement in their singular or plural forms have correlative
meanings when used herein in their plural or singular forms, respectively.
Unless otherwise expressly provided, the words “include,” “includes” and
“including” do not limit the preceding words or terms and shall be deemed to be
followed by the words “without limitation.”

13.9    Articles and Sections.  All references herein to Articles and Sections
shall be deemed references to such parts of this Agreement, unless the context
shall otherwise require. The Article and Section headings in this Agreement are
for reference only and shall not affect the interpretation of this Agreement.

13.10  Interpretation.  The parties acknowledge and agree that (a) each party
and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision, (b) the rule of construction to
the effect that any ambiguities are resolved against the drafting party shall
not be employed in the interpretation of this Agreement, and (c) the terms and
provisions of this Agreement shall be construed fairly as to all parties,
regardless of which party was generally responsible for the preparation of this
Agreement.

13.11  Severability of Provisions.  If any provision or any portion of any
provision of this Agreement shall be held invalid or unenforceable, the
remaining portion of such provision and the remaining provisions of this
Agreement shall not be affected thereby. If the application of any provision or
any portion of any provision of this Agreement to any Person or circumstance
shall be held invalid or unenforceable, the application of such provision or
portion of such provision to Persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.

13.12  Counterparts.  This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the parties hereto.

13.13  No Third Party Beneficiaries.  Except as otherwise provided in Articles
10 and 11, no provision of this Agreement is intended to, or shall, confer any
third party beneficiary or other rights or remedies upon any Person other than
the parties hereto. Without limiting the generality of the foregoing, no
provision of this Agreement (including Section 6.11) shall create any third
party beneficiary rights in any employee or former employee of the Company or
any of the Subsidiaries (including any

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beneficiary or dependent thereof) in respect of continued employment by the
Company or any of the Subsidiaries or otherwise.

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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

          BUYER:       BGS COMPANIES, INC.       By:    /s/ Carl D. Glaeser    

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      Name: Carl D. Glaeser   Title: President & CEO       SELLERS:      
BERLITZ INTERNATIONAL, INC.       By:   /s/ James B. Lewis    

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    Name: James B. Lewis     Title: Executive Vice President       BERLITZ
INVESTMENT   CORPORATION       By:   /s/ Paul H. Weinstein    

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    Name: Paul H. Weinstein     Title: Vice President