VOTING AGREEMENT
EXHIBIT
10.4
THIS VOTING AGREEMENT (the
“Agreement”) is made and entered into as of this 8th day of
October, 2009, by and among Internet Media Services, Inc., a Delaware
corporation (the “Company”), those holders of the Company’s Common Stock listed
on Schedule A hereto (the “Key Holders”) and Document Security Systems, Inc., a
New York corporation (the “Investor”).
RECITALS
WHEREAS,
the Key Holders are the beneficial owners of an aggregate of 13,000,000 shares
of the common stock of the Company (the “Common Stock”);
WHEREAS,
Investor is acquiring shares of the Company’s Common Stock pursuant to that
certain Asset Purchase Agreement of even date herewith (the “Asset Purchase
Agreement”) pursuant to which the Investor’s wholly-owned subsidiary, Xxxxxx
Xxxxx Inc., a New York corporation (“LLI”) is selling and transferring certain
assets of its XxxxxXxxxx.xxx business to the Company in exchange for the
issuance to DSS of 7,500,000 shares of common stock of the Company (the
“Transaction”);
WHEREAS,
the obligations in the Asset Purchase Agreement are conditioned upon the
execution and delivery of this Agreement; and
WHEREAS,
in connection with the consummation of the Transaction, the Company, the Key
Holders and the Investor have agreed to provide for the future voting of the Key
Holders’ shares of the Company’s capital stock as set forth below.
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto further agree as follows:
1.
Voting
1.1 Key Holder Shares; Investor
Shares. The Key Holders each agree to hold all shares of
voting capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof and any and all other
securities of the Company legally or beneficially acquired by each of the Key
Holders after the date hereof (collectively, the “Key Holder Shares”) subject
to, and to vote the Key Holder Shares in accordance with, the provisions of this
Agreement; provided however that the Key Holder Shares may be pledged pursuant
to those certain Stock Pledge and Security Agreements entered into of even date
herewith, between each Key Holder, Investor and LLI.
1.2 Election of
Directors. On all matters relating to the election of directors of the
Company, the Key Holders agree to vote all Key Holder Shares held by them (or to
consent pursuant to an action by written consent of the holders of capital stock
of the Company) so as to elect two nominees designated by LLI and/or the
Investor as members of the Company’s board of directors (the “Board of
Directors”). Any vote taken to remove any director elected pursuant
to this Section 1.2, or to fill any vacancy created by the resignation, removal,
or death of a director elected pursuant to this Section 1.2, shall also be
subject to the provisions of this Section 1.2.
1.3 No Liability for Election of
Recommended Director. None of the parties hereto and no officer,
director, stockholder, partner, employee or agent of any party makes any
representation or warranty as to the fitness or competence of the nominee of any
party hereunder to serve on the Board of Directors by virtue of such party’s
execution of this Agreement or by the act of such party in voting for such
nominee pursuant to this Agreement.
1.4 Legend.
(a) Concurrently
with the execution of this Agreement, there shall be placed on certificates
representing the Key Holder Shares the following restrictive legend (the
“Legend”):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF A VOTING AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF THE
SHARES REPRESENTED HEREBY. ANY PERSON ACCEPTING ANY INTEREST IN SUCH SHARES
SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SUCH
AGREEMENT. A COPY OF SUCH VOTING AGREEMENT WILL BE FURNISHED TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT
ITS PRINCIPAL PLACE OF BUSINESS.”
(b) The
Company agrees that, during the term of this Agreement, it will maintain (upon
registration of transfer, reissuance or otherwise) the Legend on any such
certificate and will place or cause to be placed the Legend on any new
certificate issued to represent Key Holder Shares previously represented by a
certificate carrying the Legend.
1.5 Successors. The
provisions of this Agreement shall be binding upon the successors in interest to
any of the Key Holder Shares. The Company shall not permit the
transfer of any of the Key Holder Shares on its books or issue a new certificate
representing any of the Key Holder Shares unless the person to whom such
security is to be transferred shall have executed a written agreement,
substantially in the form of this Agreement, pursuant to which such person
becomes a party to this Agreement and agrees to be bound by all the provisions
hereof as if such person were a Key Holder, as applicable; provided however that
the Key Holder Shares may be pledged and transferred pursuant to those certain
Stock Pledge and Security Agreements entered into of even date herewith, between
each Key Holder, Investor, LLI and the Company (“Stock Pledge and Security
Agreements”).
1.6 Other Rights. Except
as provided by this Agreement, the Stock Pledge and Security Agreements or any
other agreement entered into in connection with the Transaction, each Key Holder
shall exercise the full rights of a holder of capital stock of the Company with
respect to the Key Holder Shares, respectively.
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2. Termination. This Agreement
shall continue in full force and effect from the date hereof through the
earliest of the following dates, on which date it shall terminate in its
entirety:
(a) the
date on which Investor and LLI no longer own any Common Stock of the Company;
and
(b) two
(2) years from the date of this Agreement;
3. Miscellaneous.
3.1 Ownership. Each Key
Holder represents and warrants to the Investor and the Company that (a) such Key
Holder now owns the Key Holder Shares, free and clear of liens or encumbrances,
and has not, prior to or on the date of this Agreement, executed or delivered
any proxy or entered into any other voting agreement or similar arrangement
other than one which has expired or terminated prior to the date hereof, and (b)
such Key Holder has full power and capacity to execute, deliver and perform this
Agreement, which has been duly executed and delivered by, and evidences the
valid and binding obligation of, such Key Holder enforceable in accordance with
its terms.
3.2 Further Action. If
the Key Holder Shares are sold, the Key Holders or the personal representative
of the Key Holders shall do all things and execute and deliver all documents and
make all transfers, and cause any transferee of the Key Holder Shares to do all
things and execute and deliver all documents, as may be necessary to consummate
such sale consistent with this Agreement.
3.3 Specific Performance.
The parties hereto hereby declare that it is impossible to measure in money the
damages that will accrue to a party hereto or to a party’s heirs, personal
representatives, or assigns by reason of a failure to perform any of the
obligations under this Agreement and agree that the terms of this Agreement
shall be specifically enforceable. If any party hereto or such party’s heirs,
personal representatives, or assigns institutes any action or proceeding to
specifically enforce the provisions hereof, any person against whom such action
or proceeding is brought hereby waives the claim or defense therein that such
party or such personal representative 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. The Key Holders hereby constitute and
appoint the Chief Executive Officer and Chief Financial Officer of the Investor,
and each of them, with full power of substitution, as the proxies of such party
with respect to the matters set forth herein, and hereby authorizes each of them
to vote on such matters, if and only if the party (i) fails to vote or (ii)
attempts to vote (whether by proxy, in person or by written consent), in a
manner inconsistent with the terms of this Agreement, all of such party’s Key
Holder Shares in favor of the election of persons as members of the Board of
Directors determined in accordance with this Agreement. Such proxy is given in
consideration of the agreements of the parties hereto in connection with the
transactions contemplated by this Agreement and accordingly is coupled with an
interest and irrevocable until the termination of this Agreement. Each party
hereto hereby revokes any previous proxy with respect to Key Holder Shares and
shall not hereafter grant any other proxy or power of attorney with respect to
any Key Holder Shares, deposit any Key Holder Shares into a voting trust or
enter into any agreement, arrangement or understanding with any person to vote
or grant any proxy with respect to any Key Holder Shares with respect to the
matters set forth herein, expect as set forth in the Stock Pledge and Security
Agreements.
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3.4 Governing Law. This
Agreement shall be governed by and construed under the laws of the State of New
York as such laws are applied to agreements among New York residents entered
into and performed entirely within the State of New York. The parties agree that
any action brought by any party under or in relation to this Agreement,
including without limitation to interpret or enforce any provision of this
Agreement, shall be brought in, and each party agrees to and does hereby submit
to the jurisdiction and venue of, any state or federal court located in the
County of Monroe, State of New York.
3.5 Amendment or Waiver.
This Agreement may be amended or modified (or provisions of this Agreement
waived) only upon the written consent of the parties hereto.
3.6 Severability. In the
event one or more of the provisions of this Agreement should, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
3.7 Successors and
Assigns. The provisions hereof shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors, assigns,
heirs, executors, administrators and other legal representatives.
3.8 Additional Shares. If
after the date of this Agreement any shares or other securities are issued on,
or in exchange for, any of the Key Holder Shares by reason of any stock
dividend, stock split, combination of shares, reclassification, or the like,
such shares or securities shall be deemed to be Key Holder Shares, as the case
may be, for purposes of this Agreement.
3.9 Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, but all of which together shall constitute one
instrument.
3.10 Waiver. No waivers of
any breach of this Agreement extended by any party hereto to any other party
shall be construed as a waiver of any rights or remedies of any other party
hereto or with respect to any subsequent breach.
3.11 Delays or Omissions.
No delay or omission to exercise any right, power or remedy accruing to any
party, upon any breach, default or noncompliance by another party under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of or in any similar breach, default or noncompliance
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on any party’s part of any breach, default or noncompliance under this
Agreement or any waiver on such party’s part of any provisions or conditions of
the Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
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3.12 Attorney’s Fees. If
any suit or action is instituted under or in relation to this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing
party all fees, costs and expenses of such suit or action (including any
appeals), including without limitation, the reasonable fees and expenses of
attorneys and accountants.
3.13 Notices. All notices
required in connection with this Agreement shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient; if not, then on the next business day,
(c), one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written notification of receipt. All
communications shall be sent to the parties at the address and facsimile number
appearing on the signature page hereof or at such address as such party may
designate by ten (10) days written notice to the other parties
hereto.
3.14 Entire Agreement.
This Agreement and the Exhibits hereto, along with the Asset Purchase Agreement
and the other documents delivered pursuant thereto, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof and no party shall be liable or bound to any other
in any manner by any oral or written representations, warranties, covenants or
agreements except as specifically set forth herein and therein. Each party
expressly represents and warrants that it is not relying on any oral or written
representations, warranties, covenants or agreements outside of this
Agreement.
[SIGNATURE PAGE
FOLLOWS]
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VOTING
AGREEMENT SIGNATURE PAGE
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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COMPANY:
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INVESTOR:
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INTERNET
MEDIA SERVICES, INC.
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DOCUMENT
SECURITY SYSTEMS, INC.
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By:
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/s/ Xxxxxxx Xxxxxx
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By:
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/s/ Xxxxxxx Xxxxx
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Name:
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Xxxxxxx Xxxxxx
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Name:
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Xxxxxxx Xxxxx
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Title:
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President
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Title:
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Chief Executive Officer
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Address:
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0000 Xxxxxxx Xxxxxx, Xxxxx
000
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Address:
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00 Xxxx Xxxx Xxxxxx, Xxxxx
0000
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Marina del Rey, CA 90272
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Xxxxxxxxx, XX 00000
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Fax:
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(000) 000-0000
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Fax:
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(000) 000-0000
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KEY
HOLDER: Xxxxxxx Xxxxxx
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/s/ Xxxxxxx Xxxxxx
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Address:
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0000 Xxxxxxx Xxxxxx, Xxxxx
000
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Xxxxxx xxx Xxx, XX 00000
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Fax:
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(000) 000-0000
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KEY
HOLDER: Xxxxxxx Xxxxxxxx
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/s/ Xxxxxxx Xxxxxxxx
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Address:
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0000 Xxxxxxx Xxxxxx, Xxxxx
000
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Xxxxxx xxx Xxx, XX 00000
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Fax:
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(000) 000-0000
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EXHIBIT
A
LIST OF
KEY HOLDERS
Xxxxxxx
Xxxxxx
Xxxxxxx
Xxxxxxxx
A-1
