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EXECUTION COPY
VOTING AND SHARES EXCHANGE AGREEMENT
VOTING AND SHARES EXCHANGE AGREEMENT (this "Agreement"), dated as of March
31, 1999, by and between SRC Holdings, Inc., a Delaware corporation
("Purchaser"), and The Westwood Group, Inc., a Delaware corporation (the
"Stockholder").
WHEREAS, Purchaser and Back Bay Restaurant Group, Inc., a Delaware
corporation (the "Company"), have entered into an Agreement and Plan of Merger,
dated December 3, 1999 (the "Merger Agreement;" capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement),
pursuant to which Purchaser will be merged with and into the Company with the
Company being the surviving corporation (the "Merger");
WHEREAS, under the terms of the Merger Agreement, each Non-Affiliated
Stockholder will receive a cash payment of $10.25 per share, net to the seller
in cash (the "Merger Consideration"), in exchange for each share of common stock
of the Company owned by such person ("Shares");
WHEREAS, as of the date hereof, the Stockholder beneficially owns 673,451
Shares (the "Owned Shares");
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Purchaser has required that the Stockholder agree, and the
Stockholder has agreed (i) to vote the Owned Shares in favor of the adoption of
the Merger Agreement and the approval of the Merger at a Special Meeting of the
Stockholders of the Company to be held in accordance with the Merger Agreement
(the "Stockholders Meeting"); (ii) for purposes of the Stockholder to appoint
Purchaser as the Stockholder's proxy to vote the Owned Shares at the
Stockholders Meeting, and (iii) with respect to other matters put to the
stockholders of the Company for a vote, to vote the Owned Shares in each case,
in accordance with the terms and conditions of this Agreement; and
WHEREAS, as consideration for not receiving Merger Consideration in
exchange for the Stockholder's Owned Shares, the Stockholder shall exchange the
Owned Shares for an equal number of shares of common stock, $.01 par value per
share, of Purchaser (the "Purchaser Shares").
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
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1. VOTING AT THE STOCKHOLDERS MEETING. The Stockholder hereby agrees
that, during the time that this Agreement is in effect, at the Stockholders
Meeting or any meeting of the stockholders of the Company, however called, the
Stockholder shall (a) vote all of the Owned Shares as are beneficially owned by
it on the record date for determining the stockholders of record entitled to
vote at such meeting in favor of the adoption of the Merger Agreement and
approval of the Merger; (b) vote such Owned Shares against any action or
agreement that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (c) vote such Owned Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger, including, but not limited to: (i) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company; or (ii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries or a reorganization,
recapitalization or liquidation of the Company or any of its subsidiaries. The
Stockholder shall forward to Purchaser any proxy cards that the Stockholder
receives with respect to the Merger Agreement duly executed by the Stockholder.
2. IRREVOCABLE PROXY. In the event that the Stockholder shall breach its
covenant set forth in Section 1, the Stockholder (without any further action on
the Stockholder's part) shall be deemed to have hereby irrevocably appointed
Purchaser as the attorney and proxy of the Stockholder, with full power of
substitution, to vote, and otherwise act (by written consent or otherwise) with
respect to all Owned Shares that the Stockholder is entitled to vote at any
meeting of the stockholders of the Company (whether annual, special or the
Stockholders Meeting and whether or not an adjourned or postponed meeting) or
consent in lieu of any such meeting or otherwise, to vote such Shares as set
forth in Section 1 above. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE AND
COUPLED WITH AN INTEREST. The Stockholder hereby revokes, effective upon the
execution and delivery of the Merger Agreement by the parties thereto, all other
proxies and powers of attorney with respect to the Owned Shares that the
Stockholder may have heretofore appointed or granted, and no subsequent proxy or
power of attorney (except in furtherance of the Stockholder's obligations under
Section 1 hereof) shall be given or written consent executed (and if given or
executed, shall not be effective) by the Stockholder with respect thereto so
long as the Stockholder's obligations under this Section remain in effect.
3. EXCHANGE OF OWNED SHARES. On or prior to the Closing, Purchaser will
issue and deliver to the Stockholder, against and in exchange for transfer and
delivery of the Owned Shares, an equal number of Purchaser Shares (the
"Exchange"). The Exchange is intended to qualify as a transaction under Section
351 of the Internal Revenue Code of 1986, as amended.
4. EXPIRATION. This Agreement and the Stockholder's obligations hereunder
shall terminate on the earlier of (a) the consummation of the Merger, or (b) the
termination of the Merger Agreement in accordance with its terms.
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5. REPRESENTATIONS AND WARRANTIES.
5.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants to the Stockholder as follows:
(a) ORGANIZATION; DUE AUTHORIZATION. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. Purchaser has full power and authority to execute and deliver this
Agreement. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Purchaser, and no other corporate proceedings on the
part of Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms, except to the extent (i) such enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights and (ii) the
remedy of specific enforcement and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(b) ISSUANCE OF SECURITIES. The issuance and delivery of the
Purchaser Shares in accordance with this Agreement have been duly authorized by
all necessary corporate action and, when issued in accordance with the terms
hereof, will be duly and validly issued, fully paid and non-assessable.
5.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder hereby represents and warrants to Purchaser as follows:
(a) TITLE. The Stockholder has good and valid title to the Owned
Shares, free and clear of any lien, charge, encumbrance or claim of whatever
nature.
(b) OWNERSHIP OF SHARES. On the date hereof, the Stockholder
beneficially owns the number of Owned Shares, all of which are held of record by
the Stockholder. The Stockholder has sole voting power and sole power of
disposition with respect to the Owned Shares, with no restrictions, subject to
applicable federal and state securities laws, on its rights of disposition
pertaining thereto.
(c) POWER; BINDING AGREEMENT. The Stockholder has the legal
capacity, power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by the Stockholder will not violate any other agreement to which the Stockholder
is a party including, without limitation, any voting agreement, the stockholders
agreement or voting trust. This Agreement has been duly and validly executed and
delivered by the Stockholder and constitutes a valid and binding agreement of
the Stockholder, enforceable against the Stockholder in accordance
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with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights,
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(d) NO CONFLICTS. The execution, delivery and performance of
this Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
properties or assets of the Stockholder under, any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument to which
the Stockholder is a party or by which the Stockholder's properties or assets
are bound.
(e) INVESTMENT REPRESENTATIONS.
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(i) This Agreement is made with the Stockholder in
reliance upon the Stockholder's representation to Purchaser, which by the
Stockholder's acceptance hereof the Stockholder hereby confirms, that (i) the
Purchaser Shares to be received by the Stockholder will be acquired by the
Stockholder, for investment for the Stockholder's own account, and not with a
view to the sale or distribution of any part thereof in violation of applicable
Federal and state securities laws, and (ii) the Stockholder has no current
intention of selling, granting participation in or otherwise distributing the
same in violation of applicable Federal and state securities laws. By executing
this Agreement, the Stockholder further represents that it does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person, or to any third person, with
respect to any of the Purchaser Shares in violation of applicable Federal and
state securities laws.
(ii) The Stockholder understands that the Purchaser
Shares have not been registered under the Securities Act of 1933, as amended
(the "1933 Act") on the basis that the sale provided for in this Agreement and
the issuance of securities hereunder is exempt from registration under the 1933
Act pursuant to Section 4(2) thereof and regulations issued thereunder, and that
Purchaser's reliance on such exemption is predicated on representations of the
Stockholder set forth herein.
(iii) The Stockholder represents that the Stockholder
has, either alone or together with the "Purchaser Representative" as that term
is defined in Regulation D promulgated under the 1933 Act, such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment. The Stockholder further represents that the
Stockholder has had access, during the course of the transaction and prior to
the Stockholder's purchase of the Purchaser Shares, to information concerning
Purchaser and its assets, liabilities and prospects, and that it has had, during
the course of the transaction
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and prior to its purchase of the Purchaser Shares, the opportunity to ask
questions of, and receive answers from, Purchaser concerning the terms and
conditions of the offering and to obtain additional information (to the extent
Purchaser possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to the Stockholder or to which the Stockholder had access.
(iv) The Stockholder understands that the Purchaser
Shares may not be sold, transferred or otherwise disposed of without
registration under the 1933 Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Purchaser Shares or
an available exemption from registration under the 1933 Act, the Purchaser
Shares must be held indefinitely. In particular, the Stockholder is aware that
the Purchaser Shares may not be sold pursuant to Rule 144 promulgated under the
1933 Act unless all of the conditions of that Rule are met. Among the current
conditions for use of Rule 144 by certain holders is the availability to the
public of current information about Purchaser. Such information is not now
available, and Purchaser has no current plans to make such information
available. The Stockholder represents that, in the absence of an effective
registration statement covering the Purchaser Shares, the Stockholder will sell,
transfer or otherwise dispose of the Purchaser Shares only in a manner
consistent with its representations set forth herein.
(v) The Stockholder agrees, except with respect to
transfers permitted under this Agreement, that it will not make a transfer,
disposition or pledge of any of the Purchaser Shares other than pursuant to an
effective registration statement under the 1933 Act, unless and until (i) the
Stockholder shall have notified Purchaser of the proposed disposition and shall
have furnished Purchaser with a statement of the circumstances surrounding the
disposition, and (ii) if requested by Purchaser, at the expense of the
Stockholder or transferee, the Stockholder shall have furnished to Purchaser an
opinion of counsel, reasonably satisfactory to Purchaser and its counsel, to the
effect that such transfer may be made without registration of the Purchaser
Shares under the 1933 Act.
(f) LEGENDS; STOP TRANSFER.
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(a) the Stockholder acknowledges that all certificates
evidencing the Purchaser Shares shall bear the following legend:
"TRANSFER RESTRICTED
The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933 (the "Act") or the securities laws of any state. The shares may
not be transferred by sale, assignment, pledge or otherwise unless (i)
a registration statement for the shares under the Act is in effect or
(ii) the corporation has received an opinion of counsel, which opinion
is reasonably satisfactory to the
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corporation, to the effect that such registration is not
required under the Act or the securities laws of any state.
The corporation is authorized to issue more than one class or
series of stock. Such a statement is set forth in the
Certificate of Incorporation on file in the office of the
Secretary of State. The corporation will furnish a copy of
such statement to the record holder of this certificate
without charge on written request to the corporation at its
principal place of business or registered office.
(b) The certificates evidencing the Purchaser Shares shall
also bear any legend required by any applicable state securities law.
(c) In addition, Purchaser shall make a notation regarding
the restrictions on transfer of the Purchaser Shares in its stock books,
and the Purchaser Shares shall be transferred on the books of Purchaser
only if transferred or sold pursuant to an effective registration statement
under the 1933 Act covering such Purchaser Shares. All common stock of
Purchaser hereafter issued to the Stockholder shall bear the same
endorsement, shall be subject to all the terms and conditions of this
Agreement, and for all purposes shall be deemed the "Purchaser Shares"
hereunder. A copy of this Agreement, together with any amendments thereto,
shall remain on file with the Secretary of Purchaser and shall be available
for inspection to any properly interested person without charge within five
(5) days after Purchaser's receipt of a written request therefor.
5. CERTAIN COVENANTS OF THE STOCKHOLDER. The Stockholder hereby covenants
and agrees as follows:
5.1 RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE. The
Stockholder hereby agrees, while this Agreement is in effect and except as
contemplated hereby, not to (i) directly or indirectly, sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the Owned Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any of the Owned
Shares, or (iii) take any action that would make any representation or warranty
of the Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing its obligations under
this Agreement; provided, however, that the Stockholder shall be permitted to
transfer any of the Owned Shares to any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder (each, a
"Permitted Transferee"), so long as such Permitted Transferee, prior to any such
transfer, agrees in writing, in form and substance satisfactory to Purchaser, to
be bound by the terms hereof to the same extent as the Stockholder is bound and
provided further, however, that no
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such transfer shall relieve the Stockholder of its obligations hereunder if such
Permitted Transferee does not perform such obligations.
5.2 ADDITIONAL SHARES. The Stockholder hereby agrees, while this
Agreement is in effect, to promptly notify Purchaser of the number of additional
Shares acquired by the Stockholder, if any, whether prior to, on or after the
date hereof, which additional Shares shall be deemed Owned Shares for all
purposes of this Agreement.
6. FURTHER ASSURANCES. From time to time, 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 the transactions contemplated by
Section 1 of this Agreement.
7. MISCELLANEOUS.
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7.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, and (ii) shall not
be assigned by operation of law or otherwise, provided that Purchaser may assign
its rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of Purchaser, but no such assignment shall relieve Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
7.2 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 received if so given) by hand delivery, telegram,
facsimile, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder: at the address set forth on the signature
page attached hereto.
To Purchaser:
SRC Holdings, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
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Xxxxxxxx, Xxxxxxx & Xxxxxxx
A Professional Corporation
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
7.4 SPECIFIC PERFORMANCE. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereby agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
7.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same Agreement.
7.6 DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
7.7 SEVERABILITY. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
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IN WITNESS WHEREOF, Purchaser and the Stockholder have caused this
Agreement to be duly executed as an instrument under seal as of the day and year
first above written.
SRC HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President and
Chief Financial Officer
THE WESTWOOD GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
000 X.X.X. Xxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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