VOTING AGREEMENT
EXECUTION
COPY
EXHIBIT
99.2
This
VOTING
AGREEMENT
(this
“Agreement”),
dated
as of March 13, 2007, is entered into by and among eToys Direct, Inc., a
Delaware corporation (the “Company”),
and
the individuals and other parties listed on Schedule A hereto (each, a
“Stockholder”,
and
collectively, the “Stockholders”).
WHEREAS,
the Stockholders own (both beneficially and of record) in the aggregate
2,153,553 shares of the Parent Common Stock (together with any shares of Parent
Common Stock acquired by the Stockholders after the date hereof, referred to
hereinafter collectively as the “Shares”);
WHEREAS,
Parent, Merger Sub, and the Company have entered into an Agreement and Plan
of
Merger, dated as of the date hereof (the “Merger
Agreement”);
and
WHEREAS,
each Stockholder has agreed to enter into this Agreement in order to induce
the
Company to enter into the Merger Agreement and to consummate the transactions
contemplated by the Merger Agreement.
NOW,
THEREFORE, in consideration of the Company’s entering into the Merger Agreement
and of the mutual covenants and agreements contained herein and other good
and
valuable consideration, the adequacy of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as
follows:
SECTION
1. Defined
Terms. Capitalized terms used in this Agreement and not otherwise defined herein
shall have the meanings assigned to them in the Merger Agreement.
SECTION
2. Representations
and Warranties of Stockholders. Each Stockholder hereby severally, and not
jointly, represents and warrants to the Company as follows:
2.1 Title
to the Shares.
Such
Stockholder is both the record and beneficial owner of, and has good and
marketable title to, the number of shares of Parent Common Stock and other
securities convertible into or exercisable or exchangeable for any shares of
Parent Common Stock set forth opposite the name of such Stockholder on Schedule
A hereto, which as of the date hereof constitutes all of the shares of Parent
Common Stock and all other securities convertible into or exercisable or
exchangeable for shares of Parent Common Stock owned both beneficially and
of
record by such Stockholder. Such Stockholder has the exclusive right to vote
such shares of Parent Common Stock, and any shares acquired upon the conversion,
exercise or exchange of all such other securities held by him, her or it as
of
the date hereof, on all matters submitted to holders of shares of Parent Common
Stock. Such Stockholder does not have any rights of any nature to acquire any
additional securities of Parent, except as set forth on Schedule A. Such
Stockholder owns all of such shares of Parent Common Stock free and clear of
all
security interests, liens, claims, pledges, options, rights of first refusal,
limitations on voting rights, restrictions, charges, proxies and other
encumbrances of any nature, except for any such (the “Existing
Liens”)
(i) as
will be terminated in connection with the Parent Debt Repayment, (ii) as are
disclosed in a Schedule 13D filed by any Stockholder with the SEC prior to
the
date of this Agreement, or (iii) as are provided for in a brokerage margin
account agreement to which any such shares of Parent Common Stock are subject
as
of the date of this Agreement, and has not appointed or granted any proxy,
which
appointment or grant is still effective, with respect to any of such shares
of
Parent Common Stock owned by such Stockholder. To the extent any Person other
than such Stockholder possesses the power to direct the voting of any Shares
of
which such Stockholder is both the record and beneficial owner, the identity
of
such Person is noted in a footnote to Schedule A.
2.2 Organization.
Such
Stockholder (if an entity) is duly organized, validly existing and in good
standing under the laws of the state of its incorporation, formation or
organization.
2.3 Authority
Relative to this Agreement.
Such
Stockholder has the legal capacity (in the case such Stockholder is a natural
person) and all necessary power and authority to execute and deliver this
Agreement, to perform his, her or its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of such Stockholder (in case such Stockholder
is
not a natural person). This Agreement has been duly and validly executed and
delivered by such Stockholder and, assuming its due authorization, execution
and
delivery by the Company, constitutes a legal, valid and binding obligation
of
such Stockholder, enforceable against such Stockholder in accordance with its
terms, (i) except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to enforcement of creditors’ rights
generally, and (ii) subject to general principles of equity.
2.4 No
Conflict.
The
execution and delivery of this Agreement by such Stockholder does not, and
the
performance of this Agreement by such Stockholder will not, (a) require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity or any other Person by such Stockholder, except
for
any such filings with the SEC on Schedule 13D as may be required under the
Exchange Act; (b) conflict with, or result in any violation of, or default
(with
or without notice or lapse of time or both) under any provision of, the articles
or certificate of incorporation, bylaws or analogous documents of such
Stockholder (other than Stockholders that are natural persons) or any other
agreement to which such Stockholder is a party, including any voting agreement,
stockholders agreement, voting trust, trust agreement, pledge agreement, loan
or
credit agreement, note, bond, mortgage, indenture lease or other agreement,
instrument, permit, concession, franchise or license; or (c) conflict with
or
violate any judgment, order, notice, decree, statute, law, ordinance, rule
or
regulation applicable to such Stockholder or to such Stockholder’s property or
assets.
SECTION
3. Covenants
of Stockholders.
3.1 Restriction
on Transfer.
Each
Stockholder hereby covenants and agrees that, prior to the termination of this
Agreement, except as otherwise specifically contemplated by this Agreement,
such
Stockholder shall not, and shall not offer or agree to, sell, transfer, tender,
assign, hypothecate or otherwise dispose of, grant any proxy with respect to,
or
deposit into a voting trust such Stockholder’s Shares, or enter into a voting
trust agreement or create any additional security interest, lien, claim, pledge,
option, right of first refusal, limitation on voting rights, charge or other
encumbrance of any nature whatsoever with respect to such Shares.
3.2 Additional
Shares.
During
the period prior to the termination of this Agreement, each Stockholder will
promptly notify the Company of the number of new shares of Parent Common Stock
or any other securities of Parent acquired directly or beneficially by such
Stockholder, if any, after the date hereof. Any such shares shall become
“Shares” within the meaning of this Agreement.
3.3 Nonsolicitation.
Prior
to the termination of this Agreement, each Stockholder, severally and not
jointly, agrees to not, and to not propose, resolve, agree or permit any
Subsidiary or representative of such Stockholder to, directly or indirectly,
(i)
solicit, initiate or take any action to facilitate or encourage the submission
of inquiries, proposals or offers from any Person relating to any Acquisition
Proposal, or agree to or endorse any Acquisition Proposal; (ii) enter into
any
agreement to (x) facilitate or further the consummation of any Acquisition
Proposal, (y) approve or endorse any Acquisition Proposal or (z) in connection
with any Acquisition Proposal, require Parent or Merger Sub to abandon,
terminate or fail to consummate the Merger; or (iii) except as and to the extent
Parent may be permitted so to do pursuant to the terms of the Merger Agreement,
including, without limitation, Section 7.5 thereof, enter into or participate
in
any discussions or negotiations in connection with any Acquisition Proposal
or
inquiry with respect to any Acquisition Proposal, or furnish to any Person
any
information with respect to Parent’s business, properties or assets in
connection with any Acquisition Proposal or inquiry with respect to any
Acquisition Proposal.
SECTION
4. Voting
Agreement; Proxy.
4.1 Voting
Agreement.
Each
Stockholder hereby agrees, severally and not jointly, that, prior to the
termination of this Agreement, at any meeting of the stockholders of Parent,
however called, in any action by written consent of the stockholders of Parent,
or in any other circumstances upon which such Stockholder’s vote, consent or
other approval is sought, such Stockholder shall vote the Shares owned both
beneficially and of record by such Stockholder, and any other Shares over which
such Stockholder possesses the power to direct the vote:
(a) in
favor
of adoption of the Merger Agreement and approval of the terms thereof and of
the
Merger and each of the other transactions contemplated thereby;
(b) against
any action or agreement that is, or would be, reasonably likely to result in
any
conditions to Parent’s obligations under the Merger Agreement not being
fulfilled or would result in, or would reasonably be likely to result in, a
material breach of any representation, warranty, covenant or agreement of Parent
or Merger Sub under the Merger Agreement;
(c) against
any Acquisition Proposal;
(d) against
any amendments to the amended and restated articles of incorporation or amended
bylaws of Parent; and
(e) against
any other action or agreement that is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone or discourage the Merger or the
transactions contemplated by the Merger Agreement or change in any manner the
voting rights of any class of stock of Parent.
4.2 Grant
of Proxy.
(a) Until
the
termination of this Agreement, each Stockholder, acting severally and not
jointly, hereby irrevocably (to the extent permitted by Section 607.0722 of
the
FBCA) appoints the Company and each of its designees, and each of them
individually, as such Stockholder’s proxy and attorney-in-fact (with full power
of substitution) for and in the name, place and stead of such Stockholder,
to
vote such Stockholder’s Shares or execute one or more written consents or
approvals in respect of such Shares:
(1) in
favor
of adoption of the Merger Agreement and approval of the terms thereof and of
the
Merger and each of the other transactions contemplated thereby;
(2) against
any action or agreement that is, or would be, reasonably likely to result in
any
conditions to Parent’s obligations under the Merger Agreement not being
fulfilled or would result in, or would reasonably be likely to result in, a
material breach of any representation, warranty, covenant or agreement of Parent
or Merger Sub under the Merger Agreement;
(3) against
any Acquisition Proposal;
(4) against
any amendments to the amended and restated articles of incorporation or amended
bylaws of Parent; and
(5) against
any other action or agreement that is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone or discourage the Merger or the
transactions contemplated by the Merger Agreement or change in any manner the
voting rights of any class of stock of Parent.
(b) Each
Stockholder hereby ratifies and confirms that the irrevocable proxy given by
him, her or it pursuant to this Section 4.2 is given in connection with the
execution of the Merger Agreement and that such irrevocable proxy is given
to
secure the performance of such Stockholder’s duties in accordance with this
Agreement. Each Stockholder hereby further ratifies and confirms that the
irrevocable proxy granted hereby by him, her or it is coupled with an interest
and may under no circumstances be revoked, except as otherwise provided in
this
Agreement. Such irrevocable proxy shall be valid until the termination of this
Agreement.
4.3 Other
Voting.
Each
Stockholder shall have the right to vote on all issues other than those
specified in Section 4.1 that may come before a meeting of the stockholders
of
Parent in his, her or its sole discretion, provided that such vote does not
contravene the provisions of Section 4.1.
SECTION
5. Representations
and Warranties of the Company. The Company hereby represents and warrants to
the
Stockholders as follows:
5.1 Organization.
The
Company is duly organized, validly existing and in good standing under the
laws
of the state of Delaware.
5.2 Authority
Relative to this Agreement.
The
Company has all necessary power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of the Company. This Agreement has been duly and validly
executed and delivered by the Company and, assuming its due authorization,
execution and delivery by the Stockholders, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, (i) except as may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors’ rights generally, and (ii) subject to general principles of equity.
5.3 No
Conflict.
The
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, (a) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity or any other Person by the Company; (b) conflict with,
or
result in any violation of, or default (with or without notice or lapse of
time
or both) under any provision of, the certificate of incorporation or by-laws
of
the Company or any other agreement to which the Company is a party; or (c)
conflict with or violate any judgment, order, notice, decree, statute, law,
ordinance, rule or regulation applicable to the Company or to the Company’s
property or assets.
SECTION
6. Further
Assurances. Until the termination of this Agreement, each Stockholder shall,
without further consideration, from time to time, execute and deliver, or cause
to be executed and delivered, such additional or further consents, documents
and
other instruments as the Company may reasonably request for the purpose of
effectuating the matters covered by this Agreement.
SECTION
7. Certain
Events. Each Stockholder agrees that, until the termination of this Agreement,
this Agreement and the obligations of such Stockholder hereunder shall attach
to
such Stockholder’s Shares and shall be binding (subject to the rights of the
holders or beneficiaries of any Existing Liens to which such Shares are subject)
on any Person to which legal or beneficial ownership of such Shares shall pass,
whether by operation of law or otherwise. In the event of any stock split,
stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of Parent affecting the Parent Common Stock or other voting
securities of Parent, the number of Shares shall be deemed adjusted
appropriately and this Agreement and the obligations hereunder shall attach
to
any additional shares of Parent Common Stock or other securities of Parent
issued to or acquired by a Stockholder (subject to the rights of the holders
or
beneficiaries of any Existing Liens to which such additional shares are
subject).
SECTION
8. No
Termination or Closure of Trusts. Unless, in connection herewith, the Shares
held by any trust which are presently subject to the terms of this Agreement
are
transferred upon termination, closure, or liquidation of such trust to one
or
more Stockholders and remain subject in all respects to the terms of this
Agreement, the Stockholders who are trustees of any such trust shall not take
any action to terminate, close or liquidate such trust and shall take all steps
necessary to maintain the existence thereof at least until the first to occur
of
(i) the Effective Time and (ii) the termination of this Agreement in accordance
with its terms.
SECTION
9. Fiduciary
Duties. Notwithstanding anything to the contrary in this Agreement, in the
event
a Stockholder is an officer or director of Parent, nothing in this Agreement
is
intended, or shall be construed, to require the Stockholder, in the
Stockholder's capacity as an officer or director of Parent, to act otherwise
than in accordance with the Stockholder’s fiduciary duties to Parent and its
stockholders in such capacity.
SECTION
10. Termination.
This Agreement shall automatically terminate, and be of no further force or
effect, on the first to occur of (a) the Effective Time or (b) the termination
of the Merger Agreement in accordance with its terms, provided that the
provisions of Section 11 hereof shall survive any such termination. Upon
such termination, except for any rights any party may have in respect of any
breach by any other party of its obligations hereunder or as set forth in
Section 11 hereof, none of the parties shall have any further obligation or
liability hereunder.
SECTION
11. Miscellaneous.
11.1 Expenses.
All
costs and expenses incurred in connection with the transactions contemplated
by
this Agreement shall be paid by the party incurring such costs and
expenses.
11.2 Specific
Performance.
The
parties hereto agree that, in the event any provision of this Agreement is
not
performed in accordance with the terms hereof, (a) the non-breaching parties
will sustain irreparable damages for which there is not an adequate remedy
at
law for money damages and (b) the non-breaching parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law
or in equity.
11.3 Entire
Agreement.
This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among such parties with respect to the
subject matter hereof.
11.4 Assignment.
Without
the prior written consent of each Stockholder, the Company may not, and without
the prior written consent of the Company, a Stockholder may not, assign any
rights or delegate any obligations under this Agreement. Any such purported
assignment or delegation made without prior consent of the other party shall
be
null and void.
11.5 Parties
in Interest.
This
Agreement shall be binding upon, inure solely to the benefit of, and be
enforceable by, the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person not a party hereto any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
11.6 Amendment.
This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
11.7 Severability.
If any
term or other provision of this Agreement is determined to be invalid, illegal
or incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of this Agreement
is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent
possible.
11.8 Notices.
Except
as otherwise provided herein, all
notices and other communications hereunder shall be in writing and shall be
deemed duly given (a) on the date of delivery if delivered personally, or upon
mechanical confirmation of receipt, if by facsimile, (b) on the first business
day following the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the fifth 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 in writing by the
party
to receive such notice (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 11.8):
if
to the
Company:
0000
00xx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Facsimile:
(000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxx & Xxxxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxx
X. Xxxx, Esq.
Facsimile:
(000) 000-0000
if
to the
Stockholders, at their respective addresses set forth on Schedule A hereto
(or
at such other address for such party as shall be specified by like
notice).
11.9 Governing
Law.
This
Agreement shall be governed and construed in accordance with the laws of the
State of Delaware, regardless of the laws that might otherwise govern under
the
principles of conflicts of laws of that or any other jurisdiction.
11.10 Headings.
The
descriptive headings contained in this Agreement are included for convenience
of
reference only and shall not affect in any way the meaning or interpretation
of
this Agreement.
11.11 Counterparts.
This
Agreement may be executed and delivered (including by facsimile transmission)
in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
to be
an original but all of which taken together shall constitute one and the same
agreement.
[Rest
of
page intentionally left blank]
IN
WITNESS WHEREOF, each of the parties hereto has caused this Voting Agreement
to
be duly executed and delivered as of the date first written above.
|
By:
/s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Chief Executive Officer
STOCKHOLDERS:
Wyndcrest
BabyUniverse Holdings, LLC
By:
/s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
President of the Manager
Wyndcrest
BabyUniverse Holdings II, LLC
By:
/s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
President of the Manager
Wyndcrest
BabyUniverse Holdings III, LLC
By:
/s/ Xxxx X.
Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
President of the Manager
/s/
Xxxx X.
Xxxxxx
By:
Xxxx X. Xxxxxx
/s/
Xxxxxxxx
Xxxxxxx
By:
Xxxxxxxx Xxxxxxx
/s/
Xxxxxx
Xxxxxxx
By:
Xxxxxx Xxxxxxx
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SCHEDULE
A
|
Name
and Address
of
Stockholder
|
Number
of Shares of Parent Common Stock of which Stockholder is both the
Record
and Beneficial Owner
|
Other
Securities of which Stockholder is both the Record and Beneficial
Owner
|
Total
Number of Votes Represented by Shares of Parent Common Stock of which
Stockholder is both the Record and Beneficial Owner To Be Covered
Under
This Agreement
|
|||
|
Xxxx
X. Xxxxxx
|
253,601
|
253,601
|
||||
|
Wyndcrest
BabyUniverse Holdings, LLC
|
28,4601
|
28,460
|
||||
|
Wyndcrest
BabyUniverse Holdings II, LLC
|
579,4582
|
579,458
|
||||
|
Wyndcrest
BabyUniverse Holdings III, LLC
|
1,209,0063
|
1,209,006
|
||||
|
Xxxxxxxx
Xxxxxxx
|
78,028
|
78,028
|
||||
|
Xxxxxx
Xxxxxxx
|
367,9334
|
5,000
|
||||
|
Total:
|
2,153,553
|
| 1 |
Xx.
Xxxxxx holds sole investment and voting power over the shares owned
by
Wyndcrest BabyUniverse Holdings,
LLC.
|
| 2 |
Xx.
Xxxxxx holds sole investment and voting power over the shares owned
by
Wyndcrest BabyUniverse Holdings II,
LLC.
|
| 3 |
Xx.
Xxxxxx holds sole investment and voting power over the shares owned
by
Wyndcrest BabyUniverse Holdings III,
LLC.
|
| 4 |
362,933
of the shares of Parent Common Stock owned by Xx. Xxxxxxx are not
covered
by this Agreement. Xx. Xxxxxxx may vote such 362,933 shares at his
discretion, and may sell such shares subject to the terms of the
Xxxxxxx
Xxxxxxx Policy of BabyUniverse, Inc. and all applicable securities
laws,
rules and regulations.
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