VOTING TRUST AND PROXY AGREEMENT
Voting Trust and Proxy Agreement (this "Agreement"), dated as of November
23, 1999 (this "Agreement"), by and among Liberty Food Group, LLC, a Delaware
limited liability company (the "Company"), Ferro Foods Corporation, a New York
corporation ("Seller"), Xxxxx Xxxxx, Xx. ("Xxxxx") and Xxxxx Xxxxxxx ("Xxxxxxx",
and together with Seller and Ferro, the "Holders", and each a "Holder").
WITNESSETH:
WHEREAS, the Company and the Holders have entered into an Asset Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"; capitalized
items used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement), pursuant to which the Company has acquired all
of the assets of the Seller in exchange for 2,000,000 shares (the "Shares") of
common stock of the Seller; and
WHEREAS, it is contemplated that each of Ferro and Xxxxxxx, at some future
date, will acquire the Shares ("Future Shares", and together with the Shares and
any other shares of common stock of the Company to be acquired by the Holders,
the "Subject Shares"); and
WHEREAS, as a condition of its entering into the Purchase Agreement, the
Company has requested that the Holders agree, and the Holders have agreed, to
enter into this Agreement with respect to their respective portion of Subject
Shares owned by each of the Holders on or after the date hereof.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, and intending to be legally bound hereby,
the parties hereto agree as follows:
Section 1. Agreement to Vote Shares. (a) Commencing on the date hereof, and
continuing for a period of twenty-four (24) months from and after the date
hereof (the "Expiration Date") (i) at every annual or special meeting of the
stockholders of the Company, and at every continuation or adjournment thereof,
and (ii) on every action or approval by written consent of the stockholders of
the Company in lieu of any such meeting, the Holders shall vote the Subject
Shares as determined in the sole discretion of Xxxxx Xxxx or his designee.
(b) No person executing this Agreement who is or becomes prior to
the Expiration Date a director of the Company makes any agreement or
understanding herein in his capacity as such director. The Holder signs solely
in its or his capacity as the owner of the Subject Shares.
Section 2. Delivery of Proxy. (a) Simultaneously with the execution and
delivery of this Agreement, each of the Holders is executing and delivering to
the Company the Irrevocable Proxy in the form attached hereto as Exhibit A (the
"Proxy"), which Proxy shall be coupled with an interest.
(b) The Proxy shall be irrevocable prior to the Expiration Date.
Section 3. Representations and Warranties of the Holders. Each Holder
hereby represents and warrants to the Company that:
(a) this Agreement has been duly executed and delivered by
the Holder;
(b) is the legal, valid and binding obligation of the
Holder, enforceable against such Holder in accordance
with its terms;
(c) no consent of any Governmental Entity, beneficiary,
co-trustee or other person or entity is necessary for
the execution, delivery and performance of this
Agreement by the Holder;
(d) the Holder holds the Subject Shares free and clear of
any Lien other than as provided for in this Agreement;
and
(e) the Holder has not (x) granted any power-of-attorney or
other authorization or interest with respect to any of
the Subject Shares, (y) deposited any of the Subject
Shares into a voting trust or (z) entered into any
voting agreement or other arrangement with respect to
the voting of any of the Subject Shares.
Section 4. Covenants of the Holders. Each Holder hereby agrees and
covenants that during the period between the date hereof and the Expiration
Date:
(a) any shares of capital stock of the Company that the
Holder acquires record or beneficial ownership (as such
term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) or the right to
acquire beneficial ownership (including by reason of
stock dividends, split-ups, recapitalizations,
combinations, exchanges of shares or the like) shall be
considered Subject Shares and subject to each of the
terms and conditions of this Agreement;
(b) the Holder shall not directly or indirectly sell,
assign, pledge, transfer, gift, hypothecate, encumber,
grant a proxy or option in, or otherwise dispose, in
whole or in part ("Transfer"), any of the Subject Shares
other than in accordance with Section 5 below;
(c) the Holder shall own the Subject Shares free and clear
of any Lien other than in accordance with Section 5
below; and
(d) except as provided herein, the Holder shall not (x)
grant any power-of-attorney or other authorization or
interest with respect to any of the Subject Shares, (y)
deposit any of the Subject Shares into a voting trust or
(z) enter into any voting agreement or other arrangement
with respect to the voting of any of the Subject Shares.
Section 5. Permitted Transfer. Each Holder agrees that it or he, as
the case may be, shall not directly or indirectly Transfer all or any portion of
the Subject Shares, other than in connection with a financial accommodation
satisfactory to the Company as collateral for all the outstanding debts and
liabilities connected with the Business.
Section 6. Legend. Certificates for the Subject Shares shall be
endorsed with a restrictive legend which shall read substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF UNLESS (A) SUCH DISPOSITION IS
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) THE HOLDER HEREOF SHALL HAVE
DELIVERED TO THE COMPANY AN OPINION, FROM COUNSEL AND IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THAT
ACT.
THIS CERTIFICATE IS SUBJECT TO AND IS TRANSFERABLE ONLY UPON
COMPLIANCE WITH THE PROVISIONS OF (i) THE ESCROW AGREEMENT DATED AS
OF NOVEMBER 23, 1999 BETWEEN LIBERTY FOOD GROUP, LLC AND FERRO FOODS
CORPORATION AND (ii) THE VOTING TRUST AND PROXY AGREEMENT DATED AS
OF NOVEMBER 23, 1999, AMONG LIBERTY FOOD GROUP, LLC, FERRO FOODS
CORPORATION, XXXXX XXXXX, XX. AND XXXXX XXXXXXX. ANY DIRECT OR
INDIRECT TRANSFER, GIFT, ASSIGNMENT, PROXY, PLEDGE, LIEN OR ANY
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IN
VIOLATION OF SAID AGREEMENTS SHALL BE INVALID."
Section 7. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, telecopy or
by registered or certified mail (postage prepaid, return receipt requested) or
by overnight courier to the respective parties at the following address (or at
such other address for a Holder as shall be specified in a notice given in
accordance with this Section 7).
If to any of the Holders, to:
Ferro Foods Corporation
00 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: 718-
Attention: Xxxxx Xxxxx, Xx.
If to the Company, to:
Liberty Food Group, LLC
00 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxx Xxxx
Section 8. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed by each Holder and the Company.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 9. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; and in addition, with respect to each
individual Holder, their heirs and legal representatives. This Agreement shall
not be assigned by the Holders by operation of law or otherwise. Any transferee
of the Shares by will or by the laws of descent shall take the Shares subject to
all the terms and provisions of this Agreement.
Section 10. Counterparts. This Agreement may be signed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed an original but all of which when taken
together shall constitute one and the same agreement.
Section 11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York governing
agreements made wholly within the State of New York, without reference to the
principles of conflict of laws.
Section 12. Jurisdiction; Jury Trial Waiver. (a) All suits, actions or
proceedings arising out of, or in connection with, this Agreement or the
transactions contemplated by this Agreement shall be brought in any federal or
state court of competent subject matter jurisdiction sitting in New York County.
Each of the undersigned by execution and delivery of this Agreement, expressly
and irrevocably: (i) consents and submits to the personal jurisdiction of any
such courts in any such action or proceeding; (ii) consents to the service of
any complaint, summons, notice or other process relating to any such action or
proceeding by delivery thereof to such party as set forth in Section 7 of this
Agreement; and (iii) waives any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue or
forum non conveniens or any similar basis.
(b) EACH PARTY HERETO HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING INSTITUTED BY ANY PARTY AGAINST THE OTHER WHICH
PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, ANY ALLEGED TORTIOUS CONDUCT
BY ANY PARTY, OR IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO
THE RELATIONSHIP AMONG THE PARTIES HERETO.
Section 13. 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, in addition to any
remedy to which they are entitled at law or in equity the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement. Without
in any way limiting any of the rights or remedies otherwise available to the
Company and its successors and assigns, each Holder shall indemnify and hold
harmless the Company and its directors, officers, employees, agents,
representatives, affiliates, successors and assigns from and against any damages
suffered or incurred by any of the foregoing that arise from any breach of any
representation, warranty or agreement of Holder contained herein.
Section 14. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof. Each party
acknowledges and agrees that no other party hereto makes any representations or
warranties, whether express or implied, other than the express representations
and warranties contained herein.
Section 15. 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 the transactions contemplated herein is not
affected in any manner materially adverse to any party hereto. 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.
Section 16. Further Assurances. The parties hereto will execute and
deliver such further instruments, agreements and documents and do such further
acts and things as may be necessary to carry out the intent and purposes of this
Agreement, including, without limitation, the preparation and filing of a
Schedule 13D with the Securities and Exchange Commission and any and all
amendments thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Voting Trust and
Proxy Agreement as of the day and year first above written.
EXHIBIT A
IRREVOCABLE PROXY
The undersigned stockholder of LIBERTY GROUP HOLDINGS, INC., f/k/a
BIO-RESPONSE, INC., a Delaware corporation (the "Company"), hereby irrevocably
(to the full extent permitted by law) appoints and constitutes Xxxxx Xxxx and
any individual designated by said individual, the attorney and proxy of the
undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to all the shares of common
stock of the Company beneficially owned by the undersigned, and any and all
other shares or securities issued or issuable in respect thereof on or after the
date hereof or which the undersigned may acquire after the date hereof (the
"Shares"), until such time as the Voting Trust and Proxy Agreement, dated as of
November 23, 1999 (the "Voting Agreement") by and among the Liberty Food Group,
LLC, Ferro Foods Corporation, a New York corporation, Xxxxx Xxxxx, Xx. and Xxxxx
Xxxxxxx shall be terminated in accordance with its terms.
This proxy is irrevocable (to the fullest extent permitted by law), shall
be deemed to be coupled with an interest, and is granted in connection with the
Voting Agreement and in consideration of the Company entering into the Asset
Purchase Agreement, dated the date hereof by and among Liberty Food Group, LLC,
Ferro Foods Corporation, a New York corporation, Xxxxx Xxxxx, Xx. and Xxxxx
Xxxxxxx. This proxy shall terminate on the Expiration Date (as defined in the
Voting Agreement).
The attorney and proxy named above shall be empowered at any time prior to
termination of the Voting Agreement to exercise all voting and other rights
(including, without limitation, the power to execute and deliver written
consents with respect to the Shares) of the undersigned in his own discretion at
every annual or special meeting of the stockholders of the Company and at every
continuation or adjournment thereof, and on every action or approval by written
consent of the stockholders of the Company in lieu of any such meeting.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned, and with respect to the undersigned
who are individuals, upon their respective heirs and legal representatives.
If any term or other provision of this proxy 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 proxy shall nevertheless remain in full
force and effect. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the undersigned agrees with the
Company and Xxxxx Xxxx to negotiate in good faith to modify this proxy so as to
effect the original intent of the parties as closely as possible.
Dated: November 23, 1999
Signature of Stockholder: _________________________
Xxxxx Xxxxx, Xx.
FERRO FOODS CORPORATION
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
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Xxxxx Xxxxx, Xx.
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Xxxxx Xxxxxxx
LIBERTY FOOD GROUP, LLC
By: LIBERTY GROUP HOLDINGS, INC.
f/k/a BIO RESPONSE, INC.,
its sole member
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
