EX-10.17: STOCK PURCHASE AGREEMENT



Table of Contents


EXECUTION COPY








BERLITZ GLOBALNET, INC.


STOCK PURCHASE AGREEMENT


by and among


BGS COMPANIES, INC.,


as Buyer,


and


BERLITZ INTERNATIONAL, INC.


and


BERLITZ INVESTMENT CORPORATION,


as Sellers







Dated as of August 7, 2002



















TABLE OF CONTENTS




									
	EX-10.17: STOCK PURCHASE AGREEMENT
	EX-99.1: CERTIFICATION
	EX-99.2: CERTIFICATION








Table of Contents



	Table of Contents

	 

	 
	 
	 
	Page

	 
	

	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




i







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	Page

	 
	

	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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	Page

	 
	

	 
	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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Table of Contents


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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2





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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3





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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4





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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5





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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6






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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7





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 Closing Date,









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8


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, individually or in the









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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 products or services owned, used,









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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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17


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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18


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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19





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 professional advisors to investigate claims for







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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 transfer is not completed
 prior to







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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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29


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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30




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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34


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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35


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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36



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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37




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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38






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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39





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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40





“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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41





“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

	
	

	
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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42



	Term
	
Section

	
	

	
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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43



(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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44



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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45



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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46



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


[Remainder of page intentionally
 left blank]







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47


       
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

	 
	 
	

	 
	 

	 
	Name:
	Carl D. Glaeser

	 
	Title:
	President & CEO

	 
	 

	 
	SELLERS:

	 
	 

	 
	BERLITZ INTERNATIONAL, INC.

	 
	 

	 
	By:
	 
	/s/ James B. Lewis

	 
	 
	

	 
	 
	Name:
	James B. Lewis

	 
	 
	Title:
	Executive Vice President

	 
	 

	 
	BERLITZ INVESTMENT

	 
	CORPORATION

	 
	 

	 
	By:
	 
	/s/ Paul H. Weinstein

	 
	 
	

	 
	 
	Name:
	Paul H. Weinstein

	 
	 
	Title:
	Vice President