[Execution Copy]
VOTING AGREEMENT
VOTING AGREEMENT, dated this 21st day of December, 2001, (this
"Agreement") by and among DirectPlacement, Inc., a Delaware corporation (the
"Company"), Xxxxxxx X. Xxxxxx, an individual residing at 0000 00xx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000 ("Xxxxxx"), Xxxxxxx X. Xxxx, III, an individual
residing at 000 Xxxxxx Xxxxx Xxxx, Xxxxxxxx Xxxxx, XX 00000 ("Hill"), Xxxxx X.
Xxxxxxxxxx, the President and Chief Executive Officer of the Company
("Xxxxxxxxxx"), and Midori USA Corporation ("Midori"; Pruitt, Hill,
Xxxxxxxxxx and Midori shall be collectively referred to
as the "Stockholders").
RECITALS:
WHEREAS, each of the Stockholders currently owns the shares of
common stock, par value $.0001 per share, of the Company (the "Common Stock")
shown on Schedule A attached hereto; and
WHEREAS, that certain Agreement and Plan of Merger, dated as of
December 14, 2001, by and among the Company, PCS Merger Corp., PCS
Securities, Inc., Xxxxxx and Hill (the "Merger Agreement") requires that the
Company and each of the Stockholders execute and deliver this Agreement.
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Agreement to Vote Shares. (a) During the term of this
Agreement, each of the Stockholders agrees to vote, or cause to be voted, the
shares of Common Stock shown opposite the Stockholder's name on Schedule A
hereto and any other shares of voting capital stock of the Company legally or
beneficially acquired or controlled after the date hereof, in person or by
proxy, in favor of the election of each of Pruitt, Hill, and Xxxxxxxxxx at each
annual or special meeting of the Company's stockholders where the election of
directors of the Company are considered, and in any written consent of
stockholders executed in lieu of any such meetings.
Notwithstanding the foregoing, in the event that Pruitt, Hill, or Xxxxxxxxxx
becomes Disqualified (as hereinafter defined), none of the Stockholders shall be
required to vote in favor of the election of such Stockholder.
"Disqualified" shall mean any event or occurrence described in Rule 262(b)
promulgated under the Securities Act of 1933, as amended, which is
applicable to Pruitt, Hill, or Xxxxxxxxxx.
(b) In addition to the obligations set forth in Section 1(a) above,
each of Xxxxxx and Hill agree that Xxxxxxxxxx shall be entitled to vote the
Shares (as hereinafter defined), on each matter submitted to a vote of the
stockholders of the Company at any annual or special meeting of the Company's
stockholders, or in any written consent of stockholders executed in lieu of any
such meeting(s). The "Shares" means (i) 765,000 shares of Common Stock owned or
controlled by Xxxxxx, and (ii) 735,000 shares of Common Stock owned or
controlled by Hill, subject to appropriate adjustment in the event of
recapitalizations, forward or reverse stock splits, or other reorganizations.
(c) Other than Permitted Transfers (as hereinafter defined), no
transfer of any of the shares of Common Stock subject to this Agreement shall be
effective unless the transferee shall have executed and delivered to the
Company, as a condition to its acquisition of such shares, a Joinder Agreement
substantially in the form of Exhibit A confirming that such transferee is taking
the shares subject to all of the terms and conditions of this Agreement.
"Permitted Transfers" means all sales of shares of Common Stock covered by this
Agreement which are (a) sold to the public pursuant to (i) Rule 144 promulgated
under the Securities Act of 1933, as amended, or (ii) under an effective
registration statement, or (b) sold or transferred to a person or persons in a
transaction that is exempt from the registration requirements of the Securities
Act of 1933, as amended; provided however, that such transferees or purchasers
shall not be affiliated with such Stockholder.
2. Grant of Irrevocable Proxy. Each of Xxxxxx and Xxxx hereby
grants to Xxxxxxxxxx an irrevocable proxy, which proxy is coupled with an
interest because of the consideration recited herein and in the Merger
Agreement, to exercise, at any time and from time to time, all rights and powers
of Xxxxxx and Xxxx with respect to the Shares to vote, give approvals, and
receive and waive notices of meetings for any and all purposes. By giving this
proxy each of Xxxxxx and Hill hereby revokes any other proxy granted by either
of them to vote any of the Shares in a manner inconsistent with the foregoing
grant. The power and authority hereby conferred shall not be terminated by any
act of Xxxxxx or Xxxx or by operation of law, by the dissolution of, by lack of
appropriate power or authority, or by the occurrence of any other event or
events and shall be binding upon all its successors and assigns.
3. No Other Grant of Proxy. During the Term, each of Xxxxxx,
Xxxx and Xxxxxxxxxx will not, directly or indirectly, grant any proxies or
powers of attorney with respect to the shares of Common Stock subject to this
Agreement to any person in connection with her/his vote, consent or other
approval that would be adverse to his obligations under this Agreement.
4. Representations and Warranties of the Stockholders. Each of
the Stockholders hereby represents and warrants as to herself, himself or
itself, as the case may be, to the other parties to this Agreement as follows:
(a) Except as set forth in Schedule 4, each such Stockholder
beneficially owns, with power to vote, the number of shares shown opposite the
Stockholder's name on Schedule A free and clear of any and all claims, liens,
charges, encumbrances, covenants, conditions, voting trust
arrangements, options and adverse claims or rights whatsoever, except as
contemplated by the Merger Agreement or as granted hereby.
(b) Except as set forth in Schedule 4, each such Stockholder has
the full right, power and authority to enter into this Agreement; there are no
options, warrants, calls, commitments or agreements of any nature whatsoever
pursuant to which any person will have the right to purchase or otherwise
acquire the shares of Common Stock owned by such Stockholder except as would, if
exercised, require such purchaser or acquiror to abide by this Agreement and the
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proxy granted hereby with respect thereto; except as provided in this Agreement,
such Stockholder has not granted or agreed to grant any proxy or entered into
any voting trust, vote pooling or other agreement with respect to the right to
vote or give consents or approval of any kind as to the shares of Common Stock
which proxy, trust, pooling or other agreement remains in effect as of the date
hereof and is in conflict with this Agreement;
(c) Each such Stockholder is not a party to, subject to or bound
by any agreement or judgment, order, writ, prohibition, injunction or decree of
any court or other governmental body that would prevent the execution, delivery
or performance of this Agreement by such Stockholder;
(d) This Agreement has been duly and validly executed and
delivered by each such Stockholder and constitutes a legal, valid and binding
obligation of such Stockholder, enforceable in accordance with its terms,
subject only to (i) the effect of bankruptcy, insolvency, reorganization or
moratorium laws or other laws generally affecting the enforceability of
creditors' rights and (ii) general equitable principles which may limit the
right to obtain specific performance or other equitable remedies; and
(e) Each such Stockholder will use her/his/its best efforts so
that the representations and warranties set forth in this Agreement shall remain
true and correct for the duration of the Term (as hereinafter defined).
5. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
6. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties, and any attempt to make
such assignment without such consent shall be null and void.
7. Specific Performance. In addition to the remedies available under
Section 13 below, the parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that 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 in any court of the United States
located in the State of New York, or in New York state court, this being in
addition to any other remedy to which they are entitled at law or in equity. If
a Stockholder institutes any action or proceeding to specifically enforce the
provisions of Sections 1, 2 or 3 hereof, any person against whom such action or
proceeding is brought hereby waives the claim or defense therein that such party
has an adequate remedy at law, and such person shall not offer in any such
action or proceeding the claim or defense that such remedy at law exists.
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8. Amendments. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if (a) delivered personally, (b)
sent by reputable overnight courier service on the business day after mailing,
(c) telecopied (which is confirmed) (if confirmed during business hours) at the
time of such confirmation or (if confirmed outside of business hours) the next
business day or (d) mailed by registered or certified mail (return receipt
requested) five days after being so mailed, in each case to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
If to the Company or Xxxxxxxxxx: DirectPlacement, Inc.
0000 Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx
With copies to: Berlack, Israels & Xxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
If to Xxxxxx or Xxxx: To the addresses set forth in the
introductory paragraph of this
Agreement.
With a copy to: Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Any party may change its address for notice by notice so given.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
regard to the principle of conflicts of law.
11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
12. Term. The term of this Agreement shall commence on the date
hereof and terminate on December 31, 2006 (the "Term").
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13. Arbitration. The following procedures shall be used to resolve
any controversy or claim ("dispute") as provided in this Agreement. If any of
these provisions are determined to be invalid or unenforceable, the remaining
provisions shall remain in effect and binding on the parties to the fullest
extent permitted by law.
(a) Mediation.
---------
(i) A dispute shall be submitted to mediation by written notice to the
other party or parties. In the mediation process, the parties will try to
resolve their differences voluntarily with the aid of an impartial mediator, who
will attempt to facilitate negotiations. The mediator will be selected by
agreement of the parties. If the parties cannot agree on a mediator, a mediator
shall be designated by the American Arbitration Association ("AAA") or
JAMS/Endispute at the request of a party. Any mediator so designated must be
acceptable to all parties.
(ii) The mediation will be conducted as specified by the mediator and
agreed upon by the parties. The parties agree to discuss their differences in
good faith and to attempt, with the assistance of the mediator, to reach an
amicable resolution of the dispute.
(iii) The mediation will be treated as a settlement discussion and
therefore will be confidential. The mediator may not testify for either party in
any later proceedings relating to the dispute. No recording or transcript shall
be made of the mediation proceedings.
(iv) Each party will bear its own costs in the mediation. The fees and
expenses of the mediator will be shared equally by the parties.
(b) Arbitration.
-----------
(i) If a dispute has not been resolved within 90 days after the
written notice beginning the mediation process (or a longer period, if the
parties agree to extend the mediation), the mediation shall terminate and the
dispute will be settled by arbitration. The arbitration will be conducted in the
County and City of New York in accordance with the procedures in this document
and the Arbitration Rules for Commercial Disputes of the AAA as in effect on the
date hereof ("AAA Rules"). In the event of a conflict, the provisions of this
document will control.
(ii) The arbitration will be conducted before a panel of three
arbitrators, regardless of the size of the dispute, one of whom will be selected
by the Pruitt and Xxxx, one of whom will be selected by Xxxxxxxxxx and one of
whom will be agreed upon by the two previously selected arbitrators and
otherwise to be selected as provided in the AAA Rules. Any issue concerning the
extent to which any dispute is subject to arbitration, or concerning the
applicability, interpretation or enforceability of these procedures, including
any contention that all or part of these procedures are invalid and
unenforceable, shall be governed by the Federal Arbitration Act and resolved by
the arbitrators. No potential arbitrator may serve on the panel unless he or she
has agreed in writing to abide and be bound by these procedures.
(iii) All aspects of the arbitration shall be treated as confidential.
Neither the parties nor the arbitrators may disclose the existence, content or
results of the arbitration, except as necessary to comply with legal or
regulatory requirements. Before making any such disclosure, a party shall give
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written notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interests.
(iv) The result of the arbitration will be binding on the parties, and
judgment on the arbitrators' award may be entered by any party in any court
having jurisdiction, including the State and/or Federal Courts located in the
City of New York.
(v) Additionally, any party may seek injunctive relief from any Court
of competent jurisdiction in the City of New York. In the event that either
party has to seek injunctive relief or any provisional remedy, the parties to
this Agreement consent to jurisdiction in the Federal and/or State Courts
located in the City of New York.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned, on the day and year first above written.
DIRECTPLACEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President and Chief
Executive Officer
MIDORI USA CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Managing Director
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxx, III
--------------------------------------------
Xxxxxxx X. Xxxx, III
/s/ Xxxxx X. Xxxxxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxxxxx
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DIRECTPLACEMENT, INC.
SCHEDULE A to Voting Agreement
Stockholder Number of Shares
----------- ----------------
Xxxxxxx X. Xxxxxx 5,355,000
Xxxxxxx X. Xxxx, III 5,145,000
Xxxxx X. Xxxxxxxxxx 2,690,625
Midori USA Corporation 768,750(1)
---------------------------------
(1) As of August 20, 2001, Midori USA Corporation issued options to purchase an
aggregate of 419,783 shares of Common Stock.
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Schedule 4
To
Voting Agreement
----------------
In connection with the private placements by the Company of its securities
in March 2000 and June 2001, Midori USA Corporation ("Midori") agreed to pay
certain commissions for introducing the Company to certain investors. The
commissions were paid through the issuance by Midori of options to purchase
shares of Common Stock and performance warrants owned by Midori. As of [August
20, 2001], Midori issued options to purchase an aggregate of (i) 419,783
shares of Common Stock and (ii) 1,259,350 performance warrants owned by it
to the following individuals and/or entities in the denominations set forth
opposite such individuals and/or entity's name:
Name Parent Shares Performance Warrants
Xxxxxx X. Xxxx 384,375 1,153,125
Saphire Pure, Inc 26,164 78,494
Melimar, Inc. 5,007 15,021
Xxxxx X. Xxxxxx Investment Trust 4,237 12,710
Each of the options to purchase shares of Common Stock and performance warrants
are exercisable for a period of five years at an exercise price of $1.00 per
share or per performance warrant, as the case may be.
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Exhibit A to Voting Agreement
FORM OF JOINDER AGREEMENT
-------------------------
Relating to Voting Agreement
WHEREAS, the undersigned is acquiring simultaneously with the execution
of this Agreement shares of common stock of DirectPlacement, Inc., a Delaware
corporation (the "Company") in accordance with the terms of that certain
Voting Agreement dated as of December 14, 2001 by and among the Company,
Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, III, , Xxxxx X. Xxxxxxxxxx, and Midori
USA Corporation (the "Voting Agreement"); and
WHEREAS, the undersigned understands that the execution of this Agreement
is a condition precedent to an acquisition of shares of Common Stock.
NOW, THEREFORE, the undersigned agrees as follows:
1. Capitalized terms used herein without definition shall have the
meanings given to such terms in the Voting Agreement.
2. The undersigned hereby joins in the Voting Agreement and agrees to
be bound by all of the terms and provisions thereof.
3. The address for the undersigned with respect to the notices given
under section 9 of the Voting Agreement is as follows:
IN WITNESS WHEREOF, the undersigned has executed this Agreement this ___
day of _____________, 200_.
[NAME]
By:
---------------------------
Name:
Title:
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