VOTING AGREEMENT
EXHIBIT 4.1
EXECUTION COPY
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”).
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:
eToys Direct, Inc.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
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
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.
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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.
| ETOYS DIRECT, INC. | ||||||
| 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 | |||||
SCHEDULE A
| Total Number of Votes | ||||||
| Represented by Shares of | ||||||
| Number of Shares of | Parent Common Stock of | |||||
| Parent Common Stock of | Other Securities of which | which Stockholder is both | ||||
| which Stockholder is both | Stockholder is both the | the Record and Beneficial | ||||
| Name and Address | the Record and Beneficial | Record and Beneficial | Owner To Be Covered | |||
| of Stockholder | Owner | Owner | 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. |
