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VOTING AGREEMENT, dated as of July
30, 1997 (this "Agreement"), among SAFETY
1ST, INC., a Massachusetts Corporation (the
"Company"), XXXXXXX XXXXXX ("Xxxxxx"),
XXXXXXX X. XXXXXXXXX ("Xxxxxxxxx", and
together with Xxxxxx, the "Stockholders"),
BT CAPITAL PARTNERS, INC. ("BT") and BEAR,
XXXXXXX & CO. INC. ("BS") (each, an
"Investor," and collectively, the
"Investors").
As of the date hereof each Stockholder owns (either
beneficially or of record) the number of shares of Common Stock, par value $.01
per share (the "Safety 1st Stock"), of the Company set forth opposite such
Stockholder's name on Exhibit A hereto (all such shares and any shares hereafter
acquired by the Stockholders prior to the termination of this Agreement
including shares of Safety 1st Stock, and shares of Safety 1st Stock obtained by
a Stockholder upon the exercise, exchange or conversion of any option, warrant
or other security, being referred to herein as the "Shares").
Pursuant to the Stock and Warrant Purchase Agreement dated as
of the date hereof, among the Company and the Investors (the "Purchase
Agreement"), the Company is issuing and the Investors are purchasing Preferred
Stock and Warrants for an aggregate purchase price of $15,000,000. In order to
induce the Investors to enter into the Stock and Warrant Purchase Agreement and
consummate the transactions contemplated thereby, the Company has requested that
each Stockholder agree, and each Stockholder has agreed, to grant the Company
irrevocable proxies to vote his Shares in favor of appointing one Director
designated by each of the Investors to the Board of Directors of the Company
(the "Board") on the terms and conditions set forth in this Agreement.
ACCORDINGLY, in consideration of the promises and of the
mutual agreements and covenants set forth herein and in the Stock and Warrant
Purchase Agreement, the parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby represents
and warrants to the Investors, as follows:
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1.1. DUE AUTHORITY.
(a) Such Stockholder has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by or on behalf of such
Stockholder and, constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
subject to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and subject, as
to enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in proceeding in equity or at law).
(b) There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which such Stockholder is trustee whose consent
is required for the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(c) If such Stockholder is married and such Stockholder's Shares
constitute community property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, such
Stockholder's spouse, enforceable against such person in accordance with its
terms.
1.2. NO CONFLICT; CONSENTS.
(a) The execution and delivery of this Agreement by such Stockholder do
not, and the performance of the transaction contemplated by this Agreement by
such Stockholder and the compliance by such Stockholder with any provisions
hereof shall not (i) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to such Stockholder or by which such Stockholders
assets are bound or affected, (ii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of such Stockholder's assets pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Stockholder is a party or by which
such Stockholder or such Stockholder's assets are bound or affected or (iii)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to such Stockholder or any of such Stockholder's
properties or assets.
(b) The execution and delivery of this Agreement by such Stockholder do
not, and the performance of this Agreement by such Stockholder shall not,
require any consent, approval,
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authorization or permit of, or filing with or notification to, any governmental
or regulatory authority except for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended, and except where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay the performance by such
Stockholder of his, her or its obligations under this Agreement in any material
respect.
1.3. TITLE TO SHARES.
(a) Such Stockholder is the record or beneficial owner of his Shares
free and clear of any proxy or voting restriction other than pursuant to this
Agreement. The Shares set forth opposite such Stockholder's name on Exhibit A
hereto constitute all of the shares of Safety 1st Stock owned of record or
beneficially by such Stockholder.
(b) Except as noted on Exhibit A, such Stockholder has sole power of
disposition with respect to all the Shares set forth opposite such Stockholder's
name on Exhibit A hereto and the sole voting power with respect to the matters
set forth in Article II hereof and the sole power to demand dissenter's or
appraisal rights, in each case with respect to all of the Shares set forth
opposite such Stockholder's name on Exhibit A hereto, with no restrictions on
such rights, subject to applicable federal securities laws and the terms of this
Agreement.
1.4. NO ENCUMBRANCES.
Except as noted on Exhibit A, such Stockholder's Shares and the
certificates representing such Shares are now and at all times during the Term
will be held by such Stockholder, or by a nominee or custodian for the benefit
of such Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever except for any such encumbrances or proxies
arising hereunder, provided that nothing herein shall prevent the bona fide
pledge of such Stockholder's Shares, so long as the pledgee thereof (except in
the case of the pledges referred to on Exhibit A) agrees to be subject to the
terms hereof or such other agreement with provisions reasonably acceptable to
the Investors that provide for the proxy agreement to remain in full force and
effect.
1.5. ACKNOWLEDGMENT OF RELIANCE.
Such Stockholder understands and acknowledges that the Investors are
entering into the Stock and Warrant Purchase Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement.
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ARTICLE II
VOTING OF SHARES
2.1. VOTING OF SHARES; FURTHER ASSURANCES.
(a) Each Stockholder (which term under this Section 2.1 shall be deemed
to include each of the Investors), with respect to those Shares that such
Stockholder owns of record, does hereby, during and for the Term, agree to vote
(except as noted on Exhibit A) each of such Shares at every annual, special or
adjourned meeting of the stockholders of the Company to authorize the Company to
take all actions necessary to cause the Company to be managed at all times by a
Board which shall be comprised (x) so long as BT owns at least 5% of the
10,155,626 Common Equivalents (as hereinafter defined) which are outstanding on
the date hereof (comprised of 7,187,288 shares of issued and outstanding shares
of Common Stock, 1,699,993 shares of Common Stock issuable pursuant to
outstanding options granted pursuant to the Stock Option Plans (as defined in
the Purchase Agreement) and out of plan grants and 1,268,345 shares of Common
Stock issuable pursuant to the Warrants (as defined in the Purchase Agreement)
as the same may be adjusted by stock splits, consolidations, reclassifications,
reorganizations or like adjustments; provided, that for the purpose of
calculating the foregoing percentage of Common Equivalents there shall be
excluded any changes in the number of Common Equivalents outstanding and the
number of Common Equivalents owned by the Investors resulting from any
adjustments made pursuant to Sections 4(c) or (d) of the Warrants), of one
Director designated by BT, and (y) so long as BS owns at least 5% of the
10,155,626 Common Equivalents (as hereinafter defined) which are outstanding on
the date hereof (comprised of 7,187,288 shares of issued and outstanding shares
of Common Stock, 1,699,993 shares of Common Stock issuable pursuant to
outstanding options granted pursuant to the Stock Option Plans (as defined in
the Purchase Agreement) and out of plan grants and 1,268,345 shares of Common
Stock issuable pursuant to the Warrants (as defined in the Purchase Agreement)
as the same may be adjusted by stock splits, consolidations, reclassifications,
reorganizations or like adjustments; provided, that for the purpose of
calculating the foregoing percentage of Common Equivalents there shall be
excluded any changes in the number of Common Equivalents outstanding and the
number of Common Equivalents owned by the Investors resulting from any
adjustments made pursuant to Sections 4(c) or (d) of the Warrants), of one
Director designated by BS. In this Section 2.1 (a) the term "Common Equivalents"
shall mean a share of Common Stock or the right to acquire a share of Common
Stock pursuant to a Warrant or Stock Option Plans and out of plan stock option
grants.
(b) For the purposes of this Agreement, "Term" shall mean the period
from the execution of this Agreement, until the
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earlier to occur of (x) the date that both BT and BS cease to have the right to
designate a Director under Section 2.1(a), (y) the tenth anniversary of the date
hereof and (z) the occurrence of the situation described in (i) of the
definition of Change of Control (as defined in the Certificate of Designation of
the Company dated July 28, 1997) with respect to 51% or more of the total voting
stock of the Company (and not 30%) or of the occurrence of any of the situations
described in (ii) of the definition of Change of Control (as defined in the
Certificate of Designation of the Company dated July 28, 1997).
(c) Each Stockholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in the
Company the power to carry out the intent and provisions of this Agreement.
2.2. CERTAIN EVENTS.
Each Stockholder agrees that this Agreement and the obligations
hereunder shall attach to such Stockholder's Shares and shall be binding upon
any person or entity to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including without limitation
such Stockholder's heirs, guardians, administrators or successors or as a result
of any divorce.
2.3 COMPANY OBLIGATION.
The Company undertakes and agrees with each of the Investors and the
Stockholders that it shall during the Term (a) use its best efforts to cause the
Directors designated by BT and BS in accordance with Section 2.1(a) to be
nominated to the Board, and (b) without limiting the generality of Section 2.3
(a), use its best efforts to cause that, as of the Closing (as defined in the
Purchase Agreement) the original designees of BT and BS, being, respectively,
Xxxxx Xxxxxxx and Xxxx Xxxxxx, shall be appointed to the Board.
2.4. COOPERATION OF OTHER STOCKHOLDERS.
Each Stockholder agrees to cooperate with the Company in all reasonable
respects in complying with the terms and provisions of the letter agreement
between the Company and Investor, a copy of which is attached hereto as EXHIBIT
B, regarding small business matters (the "Small Business Sideletter"), including
without limitation, voting to approve amending the Company's Articles of
Organization, the Company's by-laws or this Agreement in a manner reasonably
requested by Investor or any Regulated Holder (as defined in the Small Business
Sideletter) entitled to make such request pursuant to the Small Business
Sideletter. Anything contained in this Section 2.4 to the contrary
notwithstanding, no Stockholder shall
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be required under this Section 2.4 to take any action that would adversely
affect in any material respect such Stockholder's rights under this Agreement or
as a stockholder of the Company.
2.5. COVENANT NOT TO AMEND.
The Company and each Stockholder agree not to amend or waive the voting
or other provisions of the Company's Articles of Organization, the Company's
by-laws or this Agreement if such amendment or waiver would cause any Regulated
Holder to have a Regulatory Problem (as defined in the Small Business
Sideletter), provided that any such Regulated Holder notifies the Company that
it would have a Regulatory Problem promptly after it has notice of such proposed
amendment or waiver.
ARTICLE III
TRANSFERS
On or before the expiration of the Term no Stockholder shall
Transfer (as hereinafter defined) any Shares to a Person (as hereinafter
defined) not already a party to this Agreement as a Stockholder unless and until
such Person executes and delivers to the Company a written agreement, in form
and substance reasonably acceptable to the Investors, pursuant to which such
Person shall (unless he is already a Stockholder) agree to become a party to,
and to be bound by and to comply with the provisions of, this Agreement in the
same capacity and to the same extent as the Stockholder Transferring such
Shares. Any Transfer of Shares that is not made in compliance with the
provisions hereof shall be void ab initio. The foregoing provisions of this
Article III shall not apply to a Transfer of Shares by a Stockholder pursuant to
Public Sale (as hereinafter defined); and with respect to a Transfer pursuant to
a Public Sale, the transferee shall take the Shares free and clear of any
provisions of this Agreement. In this Article III "Person" shall be construed
broadly and shall include an individual, a partnership, a Company, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof; "Public Sale" means any
sale of securities of the Company to the public pursuant to an offering
registered under the Securities Act of 1933, as amended, or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
promulgated by the Securities and Exchange Commission under the Securities Act
of 1933, as amended, as such rule may be amended from; "Transfer" shall be
construed broadly and shall include any transfer (whether voluntary, involuntary
or by operation of law) of securities or any interest therein, including without
limitation, by way of issuance, sale, participation, pledge, gift, bequeath,
intestate transfer, distribution, liquidation, merger or consolidation.
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ARTICLE IV
GENERAL PROVISIONS
4.1. SEVERABILITY.
If any term or other provision of this Agreement is 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 the transactions
contemplated hereby 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 to the fullest extent pertained by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
4.2. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the parties and
supersedes all prior agreements and undertakings, both written and oral, between
the parties, or any of them, with respect to the subject matter hereof.
4.3. AMENDMENTS.
This Agreement may not be modified, amended, altered or supplemented,
except upon the execution and delivery of a written agreement executed by the
parties hereto; provided that Exhibit A hereto may be supplemented by the
Company by adding the name and other relevant information concerning any
stockholder of the Company who agrees to be bound by the terms of this Agreement
without the agreement of any other party hereto, and thereafter such added
stockholder shall be treated as a "Stockholder" for all purposes of this
Agreement.
4.4. ASSIGNMENT.
This Agreement shall not be assigned by operation of law or otherwise;
provided that this Agreement may be assigned to an affiliate of such Stockholder
so long as such affiliate shall continue to be bound by the obligations hereof
as a Stockholder hereunder.
4.5. PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement,
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express or implied, is intended to or shall confer upon any person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
4.6. SPECIFIC PERFORMANCE.
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to an injunction to prevent
breaches of this Agreement and specific performance of the terms hereof, in
addition to any other remedy at law or in equity.
4.7. FURTHER ASSURANCES.
At the other party's request and without further consideration, each
party hereto shall execute and deliver such additional documents and take all
such further action as may be necessary or desirable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
4.8. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) All questions concerning the construction, interpretation and
validity of this Agreement shall be governed by and construed and enforced in
accordance with the domestic laws of the Commonwealth of Massachusetts, without
giving effect to any choice or conflict of law provision or rule (whether in the
Commonwealth of Massachusetts or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Massachusetts. In furtherance of the foregoing, the internal law of the
Commonwealth of Massachusetts will control the interpretation and construction
of this Agreement, even if under such jurisdiction's choice of law or conflict
of law analysis, the substantive law of some other jurisdiction would ordinarily
or necessarily apply.
(b) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.
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4.9. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
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, the parties have executed this Voting Agreement as
of the date first written above.
SAFETY 1ST, INC.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: President
BT CAPITAL PARTNERS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Managing Director
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
/s/ Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XXXXXXXXX
