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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(AMENDMENT NO. 2)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Cyrk, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
232817 10 6
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(CUSIP Number)
Allan I. Brown
c/o Simon Marketing, Inc.
1900 Avenue of the Stars, 4th Floor
Los Angeles, California 90067-4301
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Martin Gelfand, Esq.
Irell & Manella LLP
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067-4276
September 1, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
(Continued on following pages)
(Page 1 of ___ Pages)
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CUSIP NO. 232817 10 6 13D PAGE __ OF __ PAGES
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1. NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Allan I. Brown
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
N/A
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
US
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7. SOLE VOTING POWER
1,148,023
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NUMBER OF 8. SHARED VOTING POWER
SHARES
BENEFICIALLY 4,869,046*
OWNED BY
EACH ---------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON WITH
1,148,023*
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10. SHARED DISPOSITIVE POWER
1,148,023*
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,148,023*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.3% (Based on the number of shares of Cyrk, Inc. common stock reported
as being outstanding in Cyrk, Inc's Quarterly Report on Form 10-Q for the
quarter ending June 30, 1999)*
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14. TYPE OF REPORTING PERSON
IN
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* Pursuant to the Shareholders Agreement described in Item 4 of the Schedule
13D, a copy of which is filed with the Schedule 13D, certain shareholders of
the Company are required, in specified circumstances, to vote all of the
shares of the Company's Common Stock held by each such shareholder in favor
of the Reporting Person's election to the Board of Directors of the Company.
Accordingly, the Reporting Person may be deemed to be part of a "group" with
such shareholders and have voting power over 4,869,046 shares of Common
Stock (or approximately 30.9% of the Company's Common Stock, based on the
number of shares of Common Stock reported as being outstanding in the
Company's Quarterly Report on Form 10-Q for the quarter ending June 30, 1999
as of June 30, 1999). See Item 4 of the Schedule 13D. The parties to the
Shareholders Agreement have entered into a Termination Agreement (described
in Item 6, below) pursuant to which the parties have agreed to terminate the
Voting Agreement, effective and conditioned upon consummation of the
transactions contemplated by the Securities Purchase Agreement.
In addition, pursuant to the Voting Agreement described in Item 6 below, a
copy of which is attached as Exhibit 99.1, certain shareholders of the
Company, including the Reporting Person, are required, in specified
circumstances, to vote all of the shares of the Company's Common Stock held
by each such stockholder in favor of the Securities Purchase Agreement
(described in Item 6 below) and the designees of Overseas Toys for election
to the Board of Directors of the Company. Accordingly, the Reporting Person
may be deemed to be a "group" with such shareholders, although the Reporting
Person does not control the voting of the shares of Common Stock owned by
the other shareholders. In addition, disposition of the shares of Common
Stock owned by the Reporting Person is restricted under certain
circumstances by the Voting Agreement. Accordingly, Overseas Toys may be
deemed to have shared dispositive power over the shares of Common Stock
owned by the Reporting Person.
The Reporting Person expressly disclaims beneficial ownership of any shares
of Common Stock except the 1,148,023 shares with respect to which he
possesses sole or shared dispositive power.
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This Statement relates to the Schedule 13D (as amended and restated by
Amendment No. 1 thereto, the "SCHEDULE 13D") filed by Allan I. Brown with regard
to beneficial ownership of common stock, par value $.01 per share (the "COMMON
STOCK"), of Cyrk, Inc. (the "COMPANY") and constitutes Amendment No. 2 thereto.
Terms used herein and not otherwise defined have the meaning set forth in the
Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF ISSUER
Item 6 is hereby amended by adding the following:
VOTING AGREEMENT. Pursuant to a Securities Purchase Agreement, dated as
of September 1, 1999 (the "SECURITIES PURCHASE AGREEMENT"), between the Company
and Overseas Toys, L.P., a Delaware limited partnership ("OVERSEAS TOYS"),
Overseas Toys has agreed to purchase from the Company, and the Company has
agreed to sell to Oversea Toys, (i) 25,000 shares of a new series of preferred
stock of the Company and (ii) a warrant to purchase an additional 15,0000 shares
of a new series of preferred stock of the Company, subject to the satisfaction
of certain conditions, including approval of the Securities Purchase Agreement
by the Company's stockholders. As an inducement for Overseas Toys to enter into
the Securities Purchase Agreement, a Voting Agreement, dated as of September 1,
1999 (the "VOTING AGREEMENT"), was entered into among Overseas Toys, Mr. Brown
and certain other stockholders of the Company (collectively with Mr. Brown, the
"STOCKHOLDERS").
Pursuant to the terms of the Voting Agreement, each Stockholder
irrevocably and unconditionally agreed to vote all shares of Common Stock that
such Stockholder is entitled to vote in favor of the Securities Purchase
Agreement, and the transactions contemplated thereby, and against any action
which would reasonably be expected to result in a failure of certain conditions
to the consummation of the Securities Purchase Agreement. Each Stockholder also
irrevocably and unconditionally agreed to vote all shares of Common Stock that
such Stockholder is entitled to vote in favor of the designees of Overseas Toys
nominated by the Company (or which Overseas Toys is entitled to have nominated
by the Company) for election as directors at any meeting of the Company's
stockholders called for such purpose. Each Stockholder also granted a proxy,
effective as of the Closing under the Securities Purchase Agreement, appointing
Overseas Toys 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 such voting power solely with respect to the
matters covered by the agreement of the Stockholders described in the preceding
sentence and in the manner contemplated by the Voting Agreement.
Pursuant to the terms of the Voting Agreement, each Stockholder also
agreed not to sell or otherwise dispose of any shares of Common Stock held by
such Stockholder prior to the vote to approve the Securities Purchase Agreement
or prior to the Company's 2001 Annual Meeting of Stockholders (but in no event
later than December 31, 2001). Notwithstanding the foregoing, a Stockholder may
sell shares of Common Stock so long as the recipient agrees to be bound by the
terms of the Voting Agreement and executes a counterpart to such effect. Certain
Stockholders (not including Mr. Brown) are excluded from the requirements of
these restrictions in certain instances.
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As permitted by the Voting Agreement, Mr. Brown has entered into an
Option Agreement conveying the right to purchase 40,818 shares to Vivian Foo (in
substantially the form of the "OPTION AGREEMENT"); and Mr. Brown intends to
enter into a Stock Assignment transferring 25,000 shares to Bruce R. Bailey,
Esq. (in substantially similar form to the "FORM OF STOCK ASSIGNMENT
AGREEMENT").
The Voting Agreement will terminate upon the earlier to occur of: (i)
the termination of the Securities Purchase Agreement in accordance with its
terms, (ii) Overseas Toys ceasing to have the right to designate three nominees
to the Board of Directors pursuant to the Securities Purchase Agreement, or
(iii) September 1, 2019. In addition, this Voting Agreement will terminate (x)
as to certain Stockholders, including Mr. Brown, if Mr. Brown's employment with
the Company is terminated by the Company without cause (as such term is defined
in the employment agreement between the Company and Mr. Brown) 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
the Voting Agreement).
TERMINATION AGREEMENT. In connection with the execution and delivery of
the Securities Purchase Agreement and the Voting Agreement, the parties to the
Shareholders Agreement entered into a Termination Agreement, dated as of
September 1, 1999 (the "TERMINATION AGREEMENT"), which terminates the
Shareholders Agreement, effective upon the consummation of the transactions
contemplated by the Securities Purchase Agreement. If the transactions
contemplated by the Securities Purchase Agreement are not consummated, the
Shareholders Agreement will remain in full force and effect.
The foregoing descriptions of the Voting Agreement, Termination
Agreement, Option Agreement, and the Form of Stock Assignment Agreement are
qualified in their entirety by reference to the Voting Agreement, Termination
Agreement, Option Agreement, and the Form of Stock Assignment Agreement, copies
of which are attached hereto as Exhibits 99.1, 99.2, 99.3, and 99.4,
respectively.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99.1. Voting Agreement, dated as of September 1, 1999, by and
among Overseas Toys, L.P., a Delaware limited partnership, Patrick Brady, Allan
I. Brown, Gregory P. Shlopak, The Shlopak Foundation, Cyrk International
Foundation and the Eric Stanton Self-Declaration of Revocable Trust dated May
11, 1990.
Exhibit 99.2. Termination Agreement, dated as of September 1, 1999, by
and among the Company, Patrick Brady, Allan Brown, Gregory Shlopak, Eric Stanton
and the Eric Stanton Self-Declaration of Revocable Trust dated May 11, 1990.
Exhibit 99.3. Form of Option Agreement, dated as of August 31, 1999,
by and between Allan I. Brown and Vivian Foo.
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Exhibit 99.4. Form of Stock Assignment Separate From Certificate, by
and between Allan I. Brown and Bruce R. Bailey, Esq.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 14, 1999
/s/ Allan Brown
-----------------------------------
Allan I. Brown
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
Exhibit 99.1 Voting Agreement, dated as of September 1, 1999, by
and among Overseas Toys, L.P., a Delaware limited
partnership, Patrick Brady, Allan I. Brown, Gregory P.
Shlopak, The Shlopak Foundation, Cyrk International
Foundation and the Eric Stanton Self-Declaration of
Revocable Trust dated May 11, 1990.
Exhibit 99.2 Termination Agreement, dated as of September 1, 1999,
by and among the Company, Patrick Brady, Allan Brown,
Gregory Shlopak, Eric Stanton and the Eric Stanton
Self-Declaration of Revocable Trust dated May 11, 1990.
Exhibit 99.3 Form of Option Agreement, dated as of August 31, 1999, by
and between Allan I. Brown and Vivian Foo.
Exhibit 99.4 Form of Stock Assignment Separate From Certificate, by and
between Allan I. Brown and Bruce R. Bailey, Esq.
</TABLE>
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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
<PAGE> 2
Exhibit 99.1
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 purposeta 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) Gregory P. Shlopak 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,
Mr. Shlopak 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 Mr.
Shlopak. Any of Messrs. Brady and Brown and the Eric Stanton 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 Mr. Brown and the
Trust have granted options (the "OPTIONS") to purchase an aggregate of 40,818
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Exhibit 99.1
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
Mr. Brown 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 Mr. Brady, 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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Exhibit 99.1
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 Mr. Brown 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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Exhibit 99.1
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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Exhibit 99.1
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 Mr. Brown and the Trust if Mr. Brown's
employment with the Company is terminated by the Company without cause (as such
term is defined in the employment agreement between the Company and Mr. Brown)
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
10000 Santa Monica Blvd., 5th Floor
Los Angeles, California 90067
Attn: Robert Bermingham
Facsimile: 310-789-7201
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Exhibit 99.1
with a copy to:
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, California 90071-1560
Attn: Judith Kitano
Facsimile: 213-687-3702
(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
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<PAGE> 8
Exhibit 99.1
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 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.
-8-
<PAGE> 9
Exhibit 99.1
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/ Robert Bermingham
---------------------------------------
Name: Robert Bermingham
Title: Secretary
<TABLE>
<CAPTION>
No. of Shares beneficially owned
<S> <C>
/s/ Patrick Brady
- ----------------------------------------------
Name: Patrick Brady 1,205,192
/s/ Allan I. Brown
- ----------------------------------------------
Name: Allan I. Brown 1,148,023
/s/ Gregory P. Shlopak 1,192,999
- ----------------------------------------------
Name: Gregory P. Shlopak
THE SHLOPAK FOUNDATION 84,401
By: /s/ Gregory P. Shlopak
------------------------------------------
Name: Gregory P. Shlopak
Title: Trustee
CYRK INTERNATIONAL FOUNDATION 90,408
By: /s/ Patrick Brady
-------------------------------------------
Name: Patrick Brady
Title: President, Chief Executive Officer and
Chief Operating Officer
THE ERIC STANTON SELF-DECLARATION OF 1,148,023
REVOCABLE TRUST DATED MAY 11, 1990
By: /s/ Eric Stanton
------------------------------------------
Name: Eric Stanton
Title: Trustee
</TABLE>
-9-
<PAGE> 1
EXHIBIT 99.2
TERMINATION AGREEMENT
This Termination Agreement is entered into as of September 1, 1999 by
and among Cyrk, Inc., a Delaware corporation (the "Company"), Patrick Brady,
Allan Brown, Gregory Shlopak, Eric Stanton and Eric Stanton Self-Declaration of
Revocable Trust (each a "Stockholder", and collectively the "Stockholders").
Introduction
The Company and the Stockholders are parties to a Shareholders
Agreement, dated June 9, 1997, as amended on July 21, 1997, and attached hereto
as E-3035427 Exhibit A (the "Shareholders Agreement"). The Company and each of
the Stockholders wish to terminate the Shareholders Agreement in its entirety
pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Section 1. Termination. As of the closing (the "Closing") of the
transactions contemplated by the Securities Purchase Agreement between the
Company and Overseas Toys, L.P. (the "Investor"), dated the date hereof (the
"Securities Purchase Agreement"), the Shareholders Agreement shall be terminated
in its entirety, and shall be of no further force and effect. For the avoidance
of doubt, Eric Stanton hereby acknowledges and agrees that at the Closing any
right he had to be named to the Board of Directors of the Company (the "Board")
pursuant to his Consulting Agreement with SMI Merger and the Company, dated May
7, 1997 (the "Consulting Agreement"), or otherwise shall be terminated in its
entirety and shall be of no further force and effect. In addition, Eric Stanton
also acknowledges and agrees that he shall not exercise any right to be named to
the Board pursuant to the Shareholders Agreement, the Consulting Agreement or
otherwise from the date hereof until the termination of the Securities Purchase
Agreement.
Section 2. Conflicts. If there arises any conflict among any provision
of the Shareholders Agreement and/or this Agreement, on the one hand, and any
provision in the Voting Agreement entered into as of the date hereof among the
Stockholders and the Investors (the "Voting Agreement"), on the other hand, then
such provisions or provisions in the Voting Agreement, as the case may be, shall
prevail.
Section 3. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the state of Delaware, without regard
to its choice of law principles.
Section 4. Counterparts. This agreement may be executed in multiple
counterparts, and counterparts by facsimile, each of which shall be deemed an
original, but all of which when taken together shall constitute one and the same
instrument.
<PAGE> 2
Exhibit 99.2
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first above written.
/s/ Patrick Brady CYRK, INC.
- --------------------------------
Patrick Brady By: /s/ Patrick Brady
----------------------------
Patrick Brady, President,
Chief Executive Officer and
Chief Operating Officer
/s/ Eric Stanton
- --------------------------------
Eric Stanton
/s/ Allan Brown THE ERIC STANTON SELF-DECLARATION
- -------------------------------- OF REVOCABLE TRUST
Allan Brown
/s/ Gregory Shlopak By: /s/ Eric Stanton
- -------------------------------- ----------------------------
Gregory Shlopak Eric Stanton, as Trustee
<PAGE> 1
EXHIBIT 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is made and
entered into as of August 31, 1999, by and between Allan I. Brown ("BROWN") and
Vivian Foo ("OPTIONEE"). Brown has granted Optionee this option ("Option") to
purchase a total of 40,818 shares of the COMMON STOCK of CYRK, INC., $.01 par
value per share (the "SHARES" of the "COMPANY"), at the price determined as
provided herein. Brown has determined that it is to his advantage and in his
best interest to grant this Option to Optionee.
1. EXERCISE PRICE.
The exercise price is $1.00 for each SHARE.
2. VESTING AND EXERCISABILITY.
This Option shall vest and become exercisable as follows:
2.1 RIGHT TO EXERCISE.
2.1.1 This Option shall be exercisable, in whole or in part,
commencing on the date thirty (30) days following the date of the
execution of this Option Agreement. If exercised in part, the balance
of this Option shall be exercisable at any time thereafter.
2.1.2 This Option may not be exercised for a fraction of a Share.
2.1.3 In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in Section 7 below.
2.2 METHOD OF EXERCISE. This Option shall be exercisable by written
notice in the form attached hereto as EXHIBIT A which shall state the election
to exercise this Option, the number of Shares in respect of which this Option is
being exercised, and such other representations and agreements as to Optionee's
investment intent with respect to such Shares as may be required by Brown. Such
written notice shall be signed by Optionee (or by Optionee's beneficiary or
other person entitled to exercise this Option in the event of Optionee's death
under Section 8 of this Option Agreement) and shall be delivered in person or by
certified mail to Brown. The written notice shall be accompanied by payment of
the exercise price. This Option shall be deemed exercised upon receipt by Brown
of such written notice accompanied by the exercise price.
No Shares will be issued pursuant to the exercise of this Option
unless and until there shall have been full compliance with all applicable
requirements of the Securities Act of 1933, as amended (whether by registration
or satisfaction of exemption conditions), all applicable laws, and all
applicable listing requirements of any national securities exchange or other
market system on which shares of the same class are then listed.
<PAGE> 2
Exhibit 99.3
3. OPTIONEE'S REPRESENTATIONS AND SECURITIES LAW COMPLIANCE.
In the event the Shares purchasable pursuant to the exercise of this
Option have not been registered under the Securities Act of 1933, as amended, at
the time this Option is exercised, the certificate for the Shares shall bear
appropriate legends.
4. METHOD OF PAYMENT.
Payment of the exercise price shall be in full at the time of exercise
in cash or by check payable to the order of Brown.
5. RESTRICTIONS ON EXERCISE.
This Option may not be exercised if the issuance of such Shares upon
such exercise or the method of payment of consideration for such Shares would
constitute a violation of the Securities Act of 1933, as amended, or of any
applicable law. As a condition to the exercise of this Option, Brown may require
Optionee to make any representation and warranty to Brown as may be necessary or
appropriate, in Brown's judgment, to comply with any Applicable Law.
6. ADJUSTMENT FOR REORGANIZATIONS, STOCK SPLITS, ETC.
If the outstanding shares of the Common Stock of the Company are
increased, decreased, changed into, or exchanged for a different number or kind
of shares or securities of the Company or a successor entity, or for other
property (including, without limitation, cash) through reorganization,
recapitalization, reclassification, stock dividend, stock split or reverse stock
split, spin off, or other similar transaction, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as covered by
the Option. Such adjustment will be made by Brown, whose determination in that
respect will be final, binding, and conclusive.
7. TERM OF OPTION.
This Option may not be exercised more than two (2) years from the date
of grant of this Option, and may be exercised during such term only in
accordance with terms of this Option.
<PAGE> 3
Exhibit 99.3
8. NON-TRANSFERABILITY OF OPTION.
8.1 NO TRANSFER.
This Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.
8.2 DESIGNATION OF BENEFICIARY.
The Optionee may file a written designation of a beneficiary who is to
receive any Options that remain unexercised in the event of the Optionee's
death. If a participant is married and the designated beneficiary is not the
spouse, spousal consent will be required for the designation to be effective.
The Optionee may change such designation of beneficiary at any time by written
notice to the Administrator, subject to the above spousal consent requirement.
8.3 EFFECT OF NO DESIGNATION.
If the Optionee dies and there is no beneficiary, validly designated
under Section 8.2 and living at the time of the Optionee's death, Brown will
deliver such Options to the executor or administrator of his or her estate, or
if no such executor or administrator has been appointed (to the knowledge of
Brown), Brown, in his discretion, may deliver such Options to the spouse or to
any one or more dependents or relatives of the Optionee, or if no spouse,
dependent or relative is known to Brown, then to such other person as the
Company may designate.
8.4 DEATH OF SPOUSE OR DISSOLUTION OF MARRIAGE.
If the Optionee designates his or her spouse as beneficiary under
Section 8.2, that designation will be deemed automatically revoked if the
Optionee's marriage is later dissolved. Similarly, any designation of a
beneficiary under Section 8.2 will be deemed automatically revoked upon the
death of the beneficiary if the beneficiary predeceases the Optionee. Without
limiting the generality of the preceding sentence, the interest in Options of a
spouse of an Optionee who has predeceased the Optionee whose marriage has been
dissolved will automatically pass to the Optionee, and will not be transferrable
by such spouse in any manner, including but not limited to such spouse's will,
nor will any such interest pass under the laws of intestate succession.
9. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
IN CALIFORNIA, WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS OF CALIFORNIA
OR ANY OTHER JURISDICTION.
<PAGE> 4
Exhibit 99.3
10. NOTICES.
Any notice required or permitted under this Agreement shall be given in
writing by express courier or by postage prepaid, United States registered or
certified mail, return receipt requested, to the address set forth below or to
such other address for a party as that party may designate by ten (10) days
advance written notice to the other parties. Notice shall be effective upon the
earlier of receipt or three (3) days after the mailing of such notice.
If to Brown: Allan I. Brown
c/o Simon Marketing
1900 Avenue of the Stars
5th Floor
Los Angeles, Ca 90067
with a copy to: Irell & Manella, LLP
1800 Avenue of the Stars
Suite 900
Los Angeles, CA 90067
Attn: Martin Gelfand, Esq.
If to Optionee: Vivian Foo
--------------------------
--------------------------
--------------------------
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 5
Exhibit 99.3
DATE OF GRANT: AUGUST 31, 1999
"BROWN"
allan I. Brown
By:
--------------------------------
Allan I. Brown
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS OPTION, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN
EMPLOYEE OF THE COMPANY FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL.
NOTHING IN THIS OPTION AGREEMENT SHALL LIMIT IN ANY MANNER WHATSOEVER THE RIGHT
OR POWER OF THE COMPANY OR ITS SHAREHOLDERS TO TERMINATE OPTIONEE'S RELATIONSHIP
WITH THE COMPANY WITH OR WITHOUT CAUSE.
Optionee also acknowledges that the grant of this Option, the purchase
of Shares upon exercise of this Option, and the sale of such Shares has
important tax implications. Optionee has reviewed this Option in their entirety,
has had an opportunity and has been encouraged to obtain the advice of his or
her independent legal counsel and tax advisor prior to executing this Option and
fully understands all provisions of this Option. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of
Brown upon any questions arising under the Option Agreement.
--------------------------------
Vivian Foo (the "OPTIONEE")
By his or her signature below, the spouse of Optionee affirms that
he/she has read in its entirety and agrees to be bound by all of the terms and
conditions of the foregoing Option Agreement, including, but not limited to,
Section 8.4 of this Option Agreement, which states that an Optionee's
beneficiary designation shall be deemed automatically revoked if the Optionee
names a spouse as beneficiary and the marriage is later dissolved, and that the
interest in Options of a spouse of an Optionee who has predeceased the Optionee
or whose marriage has been dissolved shall automatically pass to the Optionee,
and shall not be transferable by such spouse in any manner.
--------------------------------
(the "SPOUSE")
<PAGE> 1
EXHIBIT 99.4
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR PAST SERVICES RENDERED TO SIMON MARKETING, INC., the undersigned hereby
assigns and transfers unto:
BRUCE R. BAILEY, ESQ.
25,000 shares of the Common Stock of Cyrk, Inc., a Delaware corporation (the
"Company"), standing in the name of the undersigned on the books of the Company,
represented by Certificate No(s). ____________ and do hereby irrevocably
constitute and appoint the Company's Secretary, or his agent, as attorney to
transfer the said stock on the books of the Company, with full power of
substitution in the premises.
Dated:
-------------------------
ALLAN I. BROWN
By:
--------------------------------
Allan I. Brown
