VOTING AGREEMENT
VOTING AGREEMENT, dated as of October 2, 1998 (this
"Agreement"), between Benesse Corporation, a shareholder ("Principal
Shareholder") of Berlitz International, Inc., a New York corporation (the
"Company"), and Apollo Management IV, L.P., a Delaware limited partnership on
behalf of Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV, L.P.
("Investor").
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, Investor and the Company are entering into (i) a Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to
which Investor has agreed to purchase $100,000,000 aggregate principal amount of
convertible exchangeable subordinated debentures due 2010, Series A (the
"Debentures") of the Company and (ii) an Investors Agreement, dated as of the
date hereof (the "Investors Agreement"), which contains, among other things,
provisions relating to the appointment of directors to the Board of Directors of
the Company by Investor;
WHEREAS, pursuant to a Purchase Agreement, dated as of the
date hereof (the "Benesse Purchase Agreement"), between the Company and Benesse
Holdings International, Inc., a Delaware corporation ("BHI"), BHI, an Affiliate
(as defined in the Purchase Agreement) of Principal Shareholder, has agreed to
purchase $55,000,000 aggregate principal amount of convertible exchangeable
subordinated debentures due 2010, Series B (the "Benesse Debentures") of the
Company simultaneous with the purchase by Investor of the Debentures;
WHEREAS, Principal Shareholder is the direct or indirect
record holder and beneficial holder of 6,985,338 shares, which is approximately
73.3% of the outstanding common stock of the Company, par value $.10 per share
("Common Stock");
WHEREAS, approval of the shareholders of the Company is
necessary to approve the issuance of the Debentures pursuant to the Purchase
Agreement and the issuance of the Benesse Debentures; and
WHEREAS, in order to induce Investor to enter into the
Purchase Agreement and the Investors Agreement, Principal Shareholder is willing
to agree to vote its Shares (as defined below) so as to (i) approve the issuance
of the Debentures and the Benesse Debentures (the "Issuance") and (ii) elect the
directors appointed by Investor pursuant to the Investors Agreement to the Board
of Directors of the Company.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained herein and for other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. Representations of Principal Shareholder. Principal
Shareholder represents that it (a) directly or through BHI is the record holder
and beneficial holder of 6,985,338 shares of Common Stock and (b) has full power
and authority to make, enter into and carry out the terms of this Agreement.
Principal Shareholder represents that this Agreement has been duly and validly
executed and delivered by Principal Shareholder and constitutes a valid and
binding obligation of Principal Shareholder, enforceable against Principal
Shareholder in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles. The term "Shares" includes the shares Principal Shareholder and BHI
hold on the date of this Agreement, shares that Principal Shareholder and BHI
acquire after the execution of this Agreement and shares that Principal
Shareholder or BHI transfers to its Affiliates (other than the Company or any
Subsidiary as defined in the Purchase Agreement) after the date of this
Agreement, in each case only so long as Principal Shareholder or any of its
Affiliates (including BHI but excluding the Company and its Subsidiaries) shall
continue to own such shares. Principal Shareholder agrees that neither it nor
BHI will transfer any shares of Common Stock unless the transferee has agreed in
writing with or expressly for the benefit of Investor to vote the transferred
shares as provided in Section 2 hereof and to be bound by the provisions of
Section 3 and this sentence.
2. Agreement to Vote Shares.
(a) Principal Shareholder hereby agrees to vote, and to cause
its Affiliates to vote, the Shares, at every meeting of the shareholders of the
Company at which such matters are considered and at every adjournment thereof,
including the meeting contemplated by the Purchase Agreement, or any consent in
lieu thereof, (i) in favor of adoption and approval of the Issuance pursuant to
the Purchase Agreement and the Benesse Purchase Agreement and (ii) against any
action or agreement that would compete with, impede, or interfere with the
adoption and approval of the Purchase Agreement, the Benesse Purchase Agreement
and the Issuance or inhibit the timely consummation of the Issuance.
(b) Principal Shareholder hereby agrees to vote, and to
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cause its Affiliates to vote, the Shares at every meeting of the shareholders of
the Company at which such matters are considered and at every adjournment
thereof, or any consent in lieu thereof, in favor of the directors appointed by
Investor pursuant to the Investors Agreement to the Board of Directors of the
Company. Principal Shareholder also hereby agrees not to vote, and to cause its
Affiliates not to vote, the Shares for any director competing against the
directors appointed by Investor pursuant to the Investors Agreement for
appointment to the Board of Directors of the Company.
3. No Proxy Solicitations. Principal Shareholder agrees that
it will not, nor will it permit any entity under its control to, (a) solicit
proxies or become a "participant" in a "solicitation" (as such terms are defined
in Regulation 14A under the 0000 Xxx) in opposition to or in competition with
the consummation of the Issuance or otherwise encourage or assist any party in
taking or planning any action which would compete with or otherwise serve to
interfere with or inhibit the timely consummation of the Issuance in accordance
with the terms of the Purchase Agreement and the Benesse Purchase Agreement, (b)
directly or indirectly encourage, initiate or cooperate in a shareholders' vote
or action by consent of the Company's shareholders in opposition to or in
competition with the consummation of the Issuance or (c) become a member of a
"group" (as such term is used in Section 13(d) of the 0000 Xxx) with respect to
any voting securities of the Company for the purpose of opposing or competing
with the consummation of the Issuance.
4. Tag-Along Right. (a) If at any time Principal Shareholder
proposes to sell, transfer or otherwise dispose ("Transfer") of (i) 80% or more
of the shares of Common Stock held by it and BHI in the Company on the date of
this agreement (a "Common Stock Tag-Along Transfer") or (ii) 50% or more of the
Benesse Debentures (a "Debenture Tag-Along Transfer" and, together with a Common
Stock Tag-Along Transfer, a "Tag-Along Transfer"), Principal Shareholder shall
afford Investor the opportunity to participate therein in accordance with this
Section 4.
(b) With respect to each Tag-Along Transfer, Investor shall
have the right to Transfer, at the same price and upon identical terms as such
proposed Tag-Along Transfer, any or all of its shares of Common Stock issuable
or issued upon conversion of the Debentures (in the case of a Common Stock
Tag-Along Transfer) or Debentures (in the case of a Debenture Tag-Along
Transfer), not to exceed the Investor's Portion.
(c) At the time a Tag-Along Transfer is proposed, the
Principal Shareholder shall give written notice to the Investor
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(the "Transfer Notice"), which notice shall identify the proposed purchaser and
state the number of shares of Common Stock or principal amount of Benesse
Debentures proposed to be Transferred, the proposed offering price (including
the form and terms of any non-cash consideration to be received in connection
therewith), the proposed date of any such Transfer (the "Transfer Date") and any
other material terms and conditions of the proposed Transfer. The Transfer
Notice shall also contain a complete and correct copy of any offer to, or
agreement with, the Principal Shareholder by the proposed purchaser in
connection therewith. The Principal Shareholder shall use its best efforts to
deliver the Transfer Notice at least 30 days prior to the Transfer Date and in
no event shall the Principal Shareholder provide such Transfer Notice later than
21 days prior to the Transfer Date.
(d) If the Investor wishes to participate in the Tag-Along
Transfer, it shall provide written notice (the "Tag-Along Notice") to the
Principal Shareholder no less than seven days prior to the Transfer Date. The
Tag-Along Notice shall set forth the number of shares of Common Stock or
principal amount of Debentures that Investor elects to include in the Transfer,
which shall not exceed the Investor's Portion.
If a Tag-Along Notice is not received by the Principal
Shareholder prior to the seven day period specified above, the Principal
Shareholder shall have the right to sell or otherwise Transfer the number of
shares of Common Stock or principal amount of Debentures specified in the
Transfer Notice without any participation by the Investor, but only on terms and
conditions with respect to the consideration paid by the proposed purchaser no
more favorable (and other material terms and conditions which a reasonable
investor would consider significant to the decision to include Common Stock or
Debentures in the Transfer no more favorable in any material respect) to the
Principal Shareholder than as stated in the Transfer Notice to the Investor, and
only if such Transfer occurs on a date within 90 days of the Transfer Date.
(e) The Investor shall not be required to make any
representations and warranties to any person in connection with any Tag-Along
Transfer except as to (i) good title and the absence of liens with respect to
the Investor's securities to be sold, (ii) the partnership or other existence of
the Investor and (iii) the authority for and the validity, binding effect and
enforceability of any agreements entered into by the Investor in connection with
such Transfer.
(f) The provisions of this Section 4 shall not apply to any
Transfer by the Principal Shareholder or any of its
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Affiliates to another Affiliate of the Principal Shareholder (provided that such
transferee Affiliate has agreed to be bound by this Agreement). The Principal
Shareholder represents to the Investor that it has not entered into any
agreement providing for any rights inconsistent with the rights provided to the
Investors in this Section 4 and that it has not otherwise directly or indirectly
granted any such rights. The Principal Shareholder shall not enter into any
agreement providing for, or otherwise directly or indirectly grant, any
tag-along or other contractual rights to participate, directly or indirectly, in
any Tag-Along Transfer without the prior written consent of the Investor.
(g) "Investor's Portion" shall mean (i) in the case of a
Common Stock Tag-Along Transfer, that number of Shares of Common Stock
determined by multiplying (A) the number of shares of Common Stock issued or
issuable upon conversion of the Debentures and held by the Investor immediately
prior to the Transfer (the "Investor's Shares") by (B) a fraction, the numerator
of which is the number of shares of Common Stock to be Transferred by Principal
Shareholder and its Affiliates (including shares issuable upon conversion of any
Benesse Debentures to be transferred) and the denominator of which is the total
number of shares of Common Stock held by Principal Shareholder and its
Affiliates immediately prior to the Transfer (including shares issuable upon
conversion of the Benesse Debentures), and (ii) in the case of a Debenture
Tag-Along Transfer, that principal amount of Debentures determined by
multiplying (A) the principal amount of Debentures held by the Investor
immediately prior to the Transfer by (B) a fraction, the numerator of which is
the principal amount of Benesse Debentures to be transferred by Principal
Shareholder and its Affiliates and the denominator of which is the total
principal amount of Benesse Debentures held by Principal Shareholder and its
Affiliates immediately prior to the Transfer. If the Shares of Common Stock or
Debentures so calculated exceeds the amount that the purchaser is willing to
acquire, the number of shares of Common Stock or principal amount of Debentures
to be Transferred by Investor and Principal Shareholder shall be reduced on a
pro rata basis to the number or amount that the purchaser is willing to acquire.
If a Common Stock Tag-Along Transfer and a Debenture Tag-Along Transfer are to
occur together, Investor may choose to have the Debentures held by it counted in
determining the Investor's Portion of either Common Stock or Debentures but not
both. In such case, the Benesse Debentures shall be counted in the same manner
chosen by Investor.
5. Termination. The obligations of Principal Shareholder
pursuant to Sections 2(a) and 3 shall terminate upon the earliest to occur of
(i) the consummation of the Issuance or
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(ii) termination of the Purchase Agreement. The obligations of Principal
Shareholder pursuant to Section 2(b) shall terminate at such time as Investor is
no longer entitled to nominate persons for election to the Board pursuant to the
Investors Agreement. The obligations of Principal Shareholder pursuant to
Section 4 shall terminate when Investor and its Affiliates no longer own any
Debentures or Common Stock issued upon conversion of the Debentures or the
Debentures have been exchanged for Fixed Rate Debentures (as defined in the
Purchase Ageeement).
6. Investor's Representations and Agreements. (a) Investor
represents that it has full power and authority to make, enter into and carry
out the terms of this Agreement and that this Agreement has been duly and
validly executed and delivered by Investor and constitutes a valid and binding
obligation of Investor, enforceable against Investor in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratoriums and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(b) Investor represents that it has delivered to Principal
Shareholder a true and complete copy of the Investors Agreement and the Purchase
Agreement, and agrees that no amendment or modification of either such agreement
shall increase any obligation of Principal Shareholder hereunder unless
Principal Shareholder has consented thereto in writing.
(c) Investor agrees that, notwithstanding any provision of
this Agreement to the contrary and notwithstanding that the Company is an
Affiliate of the Principal Shareholder, the Principal Shareholder shall not be
responsible for any action or inaction by the Company or any Subsidiary (as
defined in the Purchase Agreement) of the Company which is contrary to any
provision of this Agreement.
7. Miscellaneous.
(a) No Inconsistent Agreements. Principal Shareholder has not
and will not hereafter enter into any agreement with respect to the Shares that
is inconsistent with the rights granted to Investor in this Agreement or
otherwise conflicts with the provisions hereof.
(b) Specific Performance. Each party hereto severally
acknowledges that it will be impossible to measure in money the damage to the
other party if a party hereto fails to comply with any of the obligations
imposed by this Agreement, that every such obligation is material and that, in
the event of any such failure, the other party will not have an adequate remedy
at law
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or damages. Accordingly, each party hereto severally agrees that injunctive
relief or other equitable remedy, in addition to remedies at law or damages, is
the appropriate remedy for any such failure and will not oppose the granting of
such relief on the basis that the other party has an adequate remedy at law.
Each party hereto severally agrees that it will not seek, and agrees to waive
any requirement for, the securing or posting of a bond in connection with any
other party's seeking or obtaining such equitable relief.
(c) Amendments and Waivers. This Agreement may not be amended
except by an instrument in writing signed by Principal Shareholder and Investor.
(d) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing (and shall be deemed to have been
duly given upon receipt) by delivery in person, facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
7(d)):
(i) if to Principal Shareholder, to:
Benesse Corporation
Tokyo Legal Administration Office
0-00 Xxxxxx, Xxxx-Xxx
Xxxxx 000, Xxxxx
Attention: Xx. Xxxxxx Xxxx
Facsimile: 00-00-000-0000
with a copy to:
Coudert Brothers
Daini Xxxxxxxxx Xxxxxxxx, 00X
0-00-00 Xxxxxxxxx Xxxxxx-xx
Xxxxx, Xxxxx 105
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 0000-0000
(ii) if to Investor, to:
Apollo Management IV, L.P.
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
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Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto and shall not be assignable by Principal Shareholder without the written
consent of the Investor, or by the Investor (other than to an Affiliate) without
the written consent of the Principal Shareholder.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All actions and proceedings arising out of or relating to this agreement shall
be brought by the parties and heard and determined only in a Federal or State
court located in the Borough of Manhattan in the City and State of New York and
the parties hereto consent to jurisdiction before and waive any objections to
the venue of such Federal and New York courts. The parties hereto agree to
accept service of process in connection with any such action or proceeding in
any manner permitted for a notice hereunder.
(i) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the
parties to be a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings with respect to such subject
matter, other than those set forth or referred to herein. This
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Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
(k) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(l) Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by the other party in order to carry
out the provisions and purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: ___________________________
Name:
Title:
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P.,
its general partner
By: ___________________________
Name:
Title:
BENESSE CORPORATION
By: ___________________________
Name:
Title:
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