EXHIBIT 1
Xxxxx X. Xxxxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxxxx
F. Xxxx Xxxxxxxxxxxxx
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
February 9, 2000
CI Merger Co.
c/o Capricorn Investors III, L.P.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Capricorn Investors III, L.P.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Gentlemen:
Reference is made to the Agreement and Plan of Merger, dated as of
February 9, 2000 (the "Merger Agreement"), among CI Merger Co., a Delaware
corporation ("Newco"), Capricorn Investors III, as limited guarantor of
Newco's obligations ("Guarantor"), and TCBY Enterprises, Inc., a Delaware
corporation (the "Company"), as to which the undersigned are stockholders
(the "Stockholders").
The Stockholders represent and warrant that they are the record
and beneficial holders of 10,728,332 outstanding shares of the Company's
common stock (the "Company Common Stock"), representing approximately 47%
of the shares of the Company Common Stock outstanding, and do not have
beneficial ownership in any other shares of Company Common Stock other than
up to 826,940 shares issuable upon exercise of employee stock options. The
Stockholders represent and warrant that they have sole power to direct the
voting and disposition of all such outstanding shares of Company Common
Stock that they beneficially own and that they will have sole power to
direct the voting and disposition of any additional shares of Company
Common Stock that they acquire by reason of exercise of employee stock
options.
In order to induce Newco and Guarantor to enter into the Merger
Agreement and in accordance with Section 212 of the Delaware General
Corporation Law (the "DGCL"), the Stockholders hereby irrevocably make,
constitute and appoint Newco to act as the Stockholders' true and lawful
proxy to (1) vote in favor of the approval of the Merger Agreement and the
merger of Newco and the Company pursuant to the Merger Agreement, and (2)
vote against any approval of any Takeover Proposal (as such term is defined
in Section 5.09 of the Merger Agreement). Newco may vote pursuant to this
proxy only to the extent and as to the matters specifically referred to
above. Without limiting the generality of the preceding sentence, this
proxy shall not extend to, and Newco shall have no right to vote with
respect to, any (i) election of directors of the Company, (ii) amendment to
the terms or conditions of the Merger Agreement, and (iii) merger with
Newco or its affiliates on terms or conditions that are different from the
terms and conditions set forth in the Merger Agreement, including without
limitation, terms and conditions relating to merger consideration and
financing arrangements.
The Stockholders hereby agree that the Stockholders will not (i)
revoke, amend or otherwise revise such proxy, (ii) take or knowingly fail
to take any action that would cause the Company to breach any of its
obligations under the Merger Agreement or would otherwise prevent or delay
the consummation of the transactions contemplated by the Merger Agreement,
or (iii) sell, transfer pledge or otherwise dispose of any of the shares of
Company Common Stock beneficially owned by them other than pursuant to the
Merger or to a Permitted Transferee (as defined below), or agree to do any
of the foregoing, except for bona fide pledges to a financial institution.
By giving this proxy, the Stockholders hereby revoke any other proxy
granted by them to vote the Company Common Stock which they beneficially
own.
Notwithstanding the foregoing, the Stockholders may transfer any
of their shares of Common Stock to a Permitted Transferee; provided that,
prior to such transfer, such Permitted Transferee shall agree in writing to
take such shares of Common Stock subject to, and comply with, all of the
provisions of this Agreement. For purposes of this Agreement, a "Permitted
Transferee" shall mean (i) any immediate family member of a Stockholder,
(ii) any corporation, partnership, limited liability company or other
entity controlled by such Stockholder or (iii) any trust established for
the benefit of a Stockholder or such Stockholder's immediate family members
of lineal descendants.
The Stockholders hereby expressly acknowledge that all power and
authority granted pursuant to this proxy is coupled with an interest and is
irrevocable to the fullest extent permitted under the DGCL. This proxy
shall be binding upon all beneficiaries, heirs at law, distributees,
successors, assigns and legal representatives of the Stockholders.
The Stockholders hereby represent and warrant that the
representations and warranties of the Company under Section 3.03 of the
Merger Agreement, as such sections relate to the Stockholders, are true,
accurate and correct in all respects.
It is expressly acknowledged and agreed that this Agreement,
including without limitation the proxy granted herein, will terminate upon
the earlier of (i) the Effective Time (as defined in Section 1.03 of the
Merger Agreement), (ii) the termination of the Merger Agreement by Newco
pursuant to any provision of Section 7.01, (iii) the termination of the
Merger Agreement by Company pursuant to Section 7.01(b), (c), (d), (h) or
(i) thereof, or (iv) the failure by Newco to vote this proxy for approval
of the Merger Agreement prior to the Company Meeting (as defined in the
Merger Agreement).
The Stockholders agree that money damages or other remedy at law
would not be a sufficient or adequate remedy for any breach or violation
of, or a default under, this Agreement by them and that in addition to all
other remedies available to them, Newco and Guarantor shall be entitled to
the fullest extent permitted by law to an injunction restraining such
breach, violation or default or threatened breach, violation or default and
to any other equitable relief, including, without limitation, specific
performance, without bond or other security being required.
This letter agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to
principles of conflicts of laws thereof and shall be binding upon all
beneficiaries, heirs at law, distributees, successors, assigns and legal
representatives of the Stockholders. This letter agreement may be executed
in counterparts, each of which shall be deemed an original, but which
together constitute one and the same instrument.
Very truly yours,
/s/ Xxxxx X. Xxxxxxxxxxxx
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Xxxxx X. Xxxxxxxxxxxxx
/s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxxx
/s/ F. Xxxx Xxxxxxxxxxxxx
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F. Xxxx Xxxxxxxxxxxxx
Accepted and agreed as of
the date first written above:
CI MERGER CO.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
CAPRICORN INVESTORS III, L.P.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
