Exhibit 99.1
STOCKHOLDERS AGREEMENT
August 15, 2001
In connection with Investment Agreement dated as of even date
herewith (the "Investment Agreement"), between Athanor Holdings, LLC
("Athanor") and The Right Start, Inc. ("Right Start"), and as an inducement
to Athanor to enter into the Investment Agreement Xxxx Xxxxx and Xxxxx
Xxxxxxxx Investment Management, Inc. each severally agree with Athanor that
he/it will (i) convert the convertible securities of Right Start (other
than employee or director options) held by them not later than the date
that the Convertible Preferred Stock is converted and (ii) vote all
securities of Right Start held by them which are entitled to vote thereon
(A) in favor of all matters necessary to approve the conversion of the
Convertible Preferred Stock (including a vote to approve making the
Convertible Preferred Stock pari passu with the Series A Convertible
Preferred Stock, the Series B Convertible Preferred Stock and the Series C
Convertible Preferred Stock) and, (B) in favor of the election of 3
directors designated by Athanor at each election of directors hereafter
until such time as Athanor holds less than 20% of the outstanding Common
Stock, 2 directors until such time as Athanor holds less than 15% and 1
director until such time as Athanor holds less than 10% (calculated in each
case on the basis that the Convertible Preferred Stock has been converted).
Athanor agrees that it will vote the shares held by it in favor of
(i) the election of 3 directors designated jointly by Xxxxx Xxxxxxxx
Investment Management and Xxxx Xxxxx until such time as such parties hold
less than 20% of the outstanding Common Stock, 2 directors until such time
as such parties hold less than 15% and 1 director until such time as such
parties hold less than 10% and (ii) the election of the Chief Executive
Officer as a director.
Xxxx Xxxxx and Xxxxx Xxxxxxxx Investment Management represent and
warrant to Athanor that they jointly own sufficient shares of Right Start
to cause, and will cause, on the terms and conditions set forth in the
Investment Agreement, the shareholders of Right Start to approve the
conversion feature of the Convertible Preferred Stock and the authorization
of a sufficient number of shares of Common Stock into which all of the
Convertible Preferred Stock is convertible and all of the Warrants are
exercisable.
[Remainder of Page Intentionally Left Blank]
Xxxx Xxxxx and Xxxxx Xxxxxxxx Investment Management will be
obligated to perform their obligations under this agreement (other than
ii(B) above) only if Athanor has performed or simultaneously will perform
its obligations under the Investment Agreement. The provisions with respect
to voting for directors will become effective only after Athanor has
purchased and The Right Start, Inc. has sold the securities referenced in
the Investment Agreement.
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
Xxxxx Xxxxxxxx Investment Management, Inc.
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Its: General Counsel and Secretary
ATHANOR HOLDINGS, LLC
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Managing Member
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Managing Member
