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Exhibit 99.1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of September 1, 1999 among Overseas Toys,
L.P., a Delaware limited partnership ("BUYER"), and each other person set forth
on the signature page hereof (the "STOCKHOLDERS").
WHEREAS, in order to induce Buyer to enter into the Securities Purchase
Agreement, dated as of the date hereof (the "SECURITIES PURCHASE AGREEMENT"),
with C, Inc., a Delaware corporation (the "COMPANY"), Buyer has requested the
Stockholders, and each Stockholder has agreed, to enter into this Agreement with
respect to shares of common stock ("COMMON STOCK") of the Company that each
Stockholder beneficially owns, whether now or hereafter acquired (the "SHARES").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
GRANT OF PROXY; VOTING AGREEMENT; TRANSFER
SECTION 1.1. Agreement to Vote for Securities Purchase Agreement. Each
Stockholder hereby irrevocably and unconditionally agrees to vote all Shares
that such Stockholder is entitled to vote, at the time of any vote to approve
the Securities Purchase Agreement and the transactions contemplated thereby at
any meeting of the stockholders of the Company, and at any adjournment thereof,
at which the Securities Purchase Agreement (or any amended version thereof to
which the Stockholder consents) is submitted for the consideration and vote of
the stockholders of the Company (or in connection with any consent solicitation
conducted for such purpose), in favor of the approval of the Securities Purchase
Agreement and the transactions contemplated by the Securities Purchase Agreement
and against any action which would reasonably be expected to result in a failure
of the conditions described in Article 6 of the Securities Purchase Agreement to
be satisfied.
SECTION 1.2. Agreement to Vote for Nominees. Each Stockholder hereby
irrevocably and unconditionally agrees to vote all Shares that such Stockholder
is entitled to vote and/or to cause such Shares to be voted in favor of the
designees of the Buyer nominated by the Company (or, if the Company fails to
nominate such designees, which the Buyer is entitled to have nominated by the
Company pursuant to the Securities Purchase Agreement) for election as directors
at any meeting of the Company's stockholders called, or any consent solicitation
conducted, for such purpose.
SECTION 1.3. Irrevocable Proxy. Each Stockholder hereby revokes any and
all previous proxies granted with respect to the Shares that are inconsistent
with the voting agreements set forth in Sections 1.1 and 1.2. By entering into
this Agreement, each Stockholder hereby grants a proxy, effective upon the
Closing under the Securities Purchase Agreement, appointing Buyer as the
Stockholder's attorney-in-fact and proxy, with full power of substitution, for
and in the Stockholder's name, to vote, express, consent or dissent, or
otherwise to utilize
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such voting power solely in the manner contemplated by Section 1.2 above. The
proxy granted by each Stockholder pursuant to this Article 1 is irrevocable and
is coupled with an interest and is granted in consideration of Buyer entering
into this Agreement and the Securities Purchase Agreement and as security for
the obligations of such Stockholder under Section 1.2. The proxy granted by each
Stockholder shall be revoked upon termination of this Agreement in accordance
with its terms or, with respect to particular Shares, the sale of such Shares in
accordance with the terms hereof. Without limiting the foregoing, each
Stockholder will, upon the Buyer's request, take all action as shall be
reasonably required from time to time in order to appoint the Buyer as its duly
authorized proxy holder for the Shares solely for the purpose set forth in
Section 1.2. Such appointment shall be renewed upon the Buyer's request as
appropriate by the Stockholder during the term of this Agreement in order to
ensure that the Buyer remains the duly authorized proxy holder of the
Stockholder at all times during such term solely for the purpose to set forth in
Section 1.2.
SECTION 1.4 No Proxies for or Dispositions of Shares. Except pursuant to
the terms of this Agreement, a Stockholder shall not, without the prior written
consent of Buyer, directly or indirectly, (i) grant any proxies or enter into
any voting trust or other agreement or arrangement with respect to the voting of
any Shares that are inconsistent with the voting agreements set forth in
Sections 1.1 and 1.2, (ii) prior to the vote contemplated by Section 1.1 hereof
(provided that such vote occurs on or prior to the termination of the Securities
Purchase Agreement in accordance with its terms; it being agreed that if such
vote has not occurred on or prior to such termination, this clause (ii) shall no
longer be effective), sell, assign, transfer, encumber or otherwise dispose of
(collectively "SELL," correlative terms to have correlative meanings), or enter
into any contract, option or other arrangement or understanding with respect to
the direct or indirect sale of any Shares, or (iii) prior to the vote to elect
directors of the Company at the Company's 2001 Annual Meeting of Stockholders
(but in no event later than December 31, 2001), sell, or enter into any
contract, option or other arrangement or understanding with respect to the
direct or indirect sale of, any of the Shares held by such Stockholder on the
date hereof. Notwithstanding anything in Sections 1.4(ii) or (iii) to the
contrary, (x) a Stockholder may sell Shares so long as the recipient agrees to
be bound by the terms of this Agreement and executes a counterpart to such
effect, (y) Xxxxxxx X. Xxxxxxx may sell up to thirty percent (30%) of his Shares
between the date hereof and the date of the vote contemplated by Section 1.1
(provided that such vote occurs on or prior to the termination of the Securities
Purchase Agreement in accordance with its terms; it being agreed that if such
vote has not occurred prior to such termination, Xx. Xxxxxxx shall thereafter be
able to sell without limitation his Shares), and (z) the restriction set forth
in Section 1.4(iii) shall not apply to Xx. Xxxxxxx. Any of Messrs. Xxxxx and
Xxxxx and the Xxxx Xxxxxxx Self-Declaration of Revocable Trust dated May 11,
1990 (the "TRUST") may transfer any right to sell any Shares pursuant to this
Agreement amongst themselves.
SECTION 1.5 Options. The Buyer acknowledges that Xx. Xxxxx and the Trust
have granted options (the "OPTIONS") to purchase an aggregate of 40,818
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Shares and 81,637 Shares, respectively, and have agreed to sell an additional
25,000 Shares each, to certain individuals. Any sales of Shares pursuant to
exercise of the Options or such agreements to sell are expressly permitted under
this Agreement and shall be disregarded in determining the number of Shares that
Xx. Xxxxx and the Trust may sell pursuant to Section 1.4.
SECTION 1.6 Record Owner. If a Stockholder is not the record owner of
any Shares as to which such Stockholder is the beneficial owner, such
Stockholder agrees to cause or direct the record holder to vote such Shares in
accordance with the terms of this Agreement or, to the extent permitted by law,
to provide a proxy to the Buyer with respect thereto.
SECTION 1.7 Opinions.. Each of Xx. Xxxxx, the Cyrk International
Foundation and the Trust shall either (i) provide to the Buyer no later than the
closing of the transactions contemplated by the Securities Purchase Agreement an
opinion of counsel, which opinion and counsel are reasonably satisfactory to
Buyer (and which opinion shall be deemed to be satisfactory to Buyer if it is
substantially in the form the Buyer has accepted from counsel to any other
Stockholder hereunder), or (ii) reimburse the Buyer up to $25,000 for the
reasonable fees and out-of-pocket costs of special counsel engaged by the Buyer
for the purposes of providing such an opinion of counsel with respect to such
Stockholder.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS
Each Stockholder represents and warrants to Buyer that:
SECTION 2.1. Authorization. The execution, delivery and performance by
Stockholder of this Agreement and the consummation by Stockholder of the
transactions contemplated hereby are within the powers of Stockholder and, if
Stockholder is an entity, such execution, delivery and performance have been
duly authorized by all necessary action of such entity and the individual
signing this Agreement on behalf of such Stockholder represents that he is
authorized to bind the entity thereby. This Agreement constitutes a valid and
binding Agreement of Stockholder, enforceable in accordance with its terms.
SECTION 2.2. Non-Contravention. The execution, delivery and performance
by Stockholder of this Agreement and the consummation of the transactions
contemplated hereby do not and will not, (i) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (ii) require any consent or
other action by any person or private or governmental entity under, constitute a
default under, or give rise to any right of termination, cancellation or
acceleration or to a loss of any benefit to which Stockholder is entitled under
any provision of any agreement or other instrument binding on Stockholder or
(iii) result in the imposition of any lien or encumbrance on any asset of
Stockholder, other than, in respect of each of clauses (i), (ii) and (iii), any
such items as would
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not, individually or in the aggregate, prevent or materially impair the ability
of Stockholder to consummate the transactions contemplated by this Agreement.
SECTION 2.3. Ownership of Shares. Stockholder is the sole beneficial
owner of the Shares set forth opposite such Stockholder's name on the signature
page hereto, free and clear of any lien or encumbrance (including any
restriction on the right to vote or otherwise dispose of the Shares), other than
(i) the Options and agreements to sell referenced in Section 1.5, (ii) the
pledge of 52,904 Shares to the Company by Xx. Xxxxx pursuant to a Promissory
Note and Stock Pledge Agreement, and (iii) in the case of the Trust, any
beneficial interest a beneficiary of the Trust may have. None of such Shares is
subject to any voting trust or other agreement or arrangement with respect to
the voting of such Shares.
SECTION 2.4. Total Shares. Except for the Shares set forth opposite such
Stockholder's name on the signature page hereto, Stockholder does not
beneficially own any (i) shares of capital stock or voting securities of the
Company, (ii) securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company or (iii) options or
other rights to acquire from the Company any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company, other than options granted under the Company's stock
option plans.
SECTION 2.5. Finder's Fees. No investment banker, broker, finder or
other intermediary is entitled to a fee or commission from Buyer or the Company
in respect of this Agreement based upon any arrangement or agreement made by or
on behalf of Stockholder.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Stockholder:
SECTION 3.1. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation by Buyer of the
transactions contemplated hereby are within the limited partnership powers of
Buyer and have been duly authorized by all necessary limited partnership action.
This Agreement constitutes a valid and binding Agreement of Buyer, enforceable
in accordance with its terms.
SECTION 3.2. Non-Contravention. The execution, delivery and performance
by the Buyer of this Agreement and the consummation of the transactions
contemplated hereby do not and will not, (i) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (ii) require any consent or
other action by any person or private or governmental entity under, constitute a
default under, or give rise to any right of termination, cancellation or
acceleration or to a loss of any benefit to which the Buyer is entitled under
any provision of any agreement or other instrument binding on the Buyer or (iii)
result in the imposition of any lien or encumbrance on any asset of Buyer, other
than, in
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respect of each of clauses (i), (ii) and (iii), any such items as would not,
individually or in the aggregate, prevent or materially impair the ability of
the Buyer to consummate the transactions contemplated by this Agreement.
SECTION 3.3. Finder's Fees. No investment banker, broker, finder or
other intermediary is entitled to a fee or commission from a Stockholder or the
Company in respect of this Agreement based upon any arrangement or agreement
made by or on behalf of the Buyer.
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ARTICLE 4
MISCELLANEOUS
SECTION 4.1. Further Assurances. Buyer and each Stockholder will execute
and deliver, or cause to be executed and delivered, all further documents and
instruments and use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations, to vote their Shares to approve
the Securities Purchase Agreement and the transactions contemplated thereby, and
to take all other acts required to be taken by Buyer or such Stockholder
pursuant to this Agreement.
SECTION 4.2. Amendments; Termination. Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or
in the case of a waiver, by the party against whom the waiver is to be
effective. This Agreement shall terminate upon the earlier to occur of (i) the
termination of the Securities Purchase Agreement in accordance with its terms,
(ii) the Buyer ceasing to have the right under Section 4.5(e)(A) of the
Securities Purchase Agreement to designate three nominees to the Board of
Directors of the Company, or (iii) September 1, 2019. In addition, this
Agreement will terminate (x) as to Xx. Xxxxx and the Trust if Xx. Xxxxx'x
employment with the Company is terminated by the Company without cause (as such
term is defined in the employment agreement between the Company and Xx. Xxxxx)
and (y) as to any Stockholder at such time as such Stockholder ceases to
beneficially own any Shares (other than as a result of a disposition of such
Shares in violation of this Agreement).
SECTION 4.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon receipt by the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Buyer, to:
The Yucaipa Companies
00000 Xxxxx Xxxxxx Xxxx., 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxxx
Facsimile: 000-000-0000
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with a copy to:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
(b) if to a Stockholder, to the address set forth under such
Stockholder's name on Exhibit A hereto, with a copy to the person indicated on
Exhibit A hereto.
SECTION 4.4. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
SECTION 4.5. Successors and Assigns; Third Party Beneficiaries. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that no party may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of the other
parties hereto. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except that that the covenants made by the Stockholders in
Article 1 hereof and Section 4.10 shall inure to the benefit of and be
enforceable by the Company (it being expressly understood, however, that such
Article may be amended by the parties, and compliance with any of the provisions
of that Article may be waived, in each case without the consent of or notice to
the Company).
SECTION 4.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard for the conflicts of law principles thereof.
SECTION 4.7. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 4.8. Severability. If any term, provision or covenant of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, and if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Agreement will be
construed and enforced as if such invalid, void or unenforceable provision had
never comprised a part hereof, (iii) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the invalid,
void or
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unenforceable provision or by its severance herefrom and (iv) in lieu of such
invalid, void or unenforceable provision, there will be added automatically as a
part of this Agreement a legal, valid and enforceable provision as similar in
terms to such invalid, void or unenforceable provision as may be possible so as
to carry out the intent of the parties hereto to the maximum extent permitted by
law.
SECTION 4.9. Notice of Sales. Until September 1, 2004, each Stockholder
agrees to provide written notice to the Buyer of any sale of Shares by such
Stockholder within thirty days following such sale (or within five business days
following such sale if, to such Stockholder's knowledge, such sale occurs thirty
or fewer days prior to the record date for any meeting of the stockholders of
the Company); provided, however, that any failure to provide such notice shall
not be deemed to be a breach of this Agreement. Any public filing that a
Stockholder makes with respect to a sale of Shares shall be deemed to be notice
to the Buyer.
SECTION 4.10. Legend. Each Stockholder agrees that the certificates
representing any of such Stockholder's Shares the sale of which is prohibited by
Section 1.4 may contain a legend to the effect that such Shares are subject to
the terms of this Agreement, which limits the ability of the Stockholder to sell
such Shares. Each Stockholder shall promptly, and in any event within thirty
(30) days, deliver such Stockholder's certificates to the Company for legending
in accordance with this section. The parties agree to cooperate in removing the
legend from any certificate that represents Shares that are no longer subject to
any sale restrictions.
SECTION 4.11. Entire Agreement. This Agreement, its exhibits and the
documents executed in connection herewith, constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral and written, between the
parties hereto with respect to the subject matter hereof.
SECTION 4.12. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement is
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
OVERSEAS TOYS, L.P.
By:OA3, L.L.C., its General Partner
By:/s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
No. of Shares beneficially owned
/s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx 1,205,192
/s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx 1,148,023
/s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx 1,192,999
THE SHLOPAK FOUNDATION 84,401
By:/s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Trustee
CYRK INTERNATIONAL FOUNDATION 90,408
By:/s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: President, Chief Executive Officer and
Chief Operating Officer
THE XXXX XXXXXXX SELF-DECLARATION OF 1,148,023
REVOCABLE TRUST DATED MAY 11, 1990
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Trustee
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