AGREEMENT TO EXECUTE SMITH IRREVOCABLE PROXY
AGREEMENT TO EXECUTE XXXXX
IRREVOCABLE PROXY
This Agreement to Exercise Xxxxx
Irrevocable Proxy (“Agreement”) is made and entered into effective as of the
25th day of May, 2010 (“Agreement Effective Date”), by and among Xx. X.X. Xxxxx,
Individually (“Xx. Xxxxx”) and NTR Metals, LLC, a Texas limited liability
company (“NTR”).
WHEREAS, Xx. Xxxxx and NTR are
each parties to that certain Closing Agreement of even date herewith (the
“Closing Agreement”) by and between Xx. Xxxxx, NTR and DGSE Companies, Inc., a
Nevada corporation (“DGSE”). Pursuant to the Closing Agreement, including the
agreements and documents identified therein (the “Closing Documents”), NTR
acquired 3,000,000 shares of the issued and outstanding capital stock of DGSE
(the “NTR Shares”);
WHEREAS, Xx. Xxxxx and NTR are
each parties to that certain Option Contract of even date herewith (the “Option
Contract”) whereby Xx. Xxxxx granted NTR the option to purchase from Xx. Xxxxx
1,000,000 shares of DGSE (the “NTR Stock Option”), subject to the terms and
conditions set forth therein;
WHEREAS, Xx. Xxxxx and NTR are
each parties to that certain NTR Irrevocable Proxy to Vote Shares in DGSE
Companies, Inc. of even date herewith (the “NTR Proxy”) whereby NTR appointed
Xx. Xxxxx as the attorney or proxy to vote the percentage interest in DGSE
represented by the NTR Shares with respect to matters regarding DGSE on which
NTR may otherwise be entitled to vote the NTR Shares (the “NTR Voting Rights”),
subject to the terms and conditions stated therein; and
WHEREAS, as of the Agreement
Effective Date, Xx. Xxxxx owns 2,847,938 shares of DGSE, including 945,634
unexercised stock options (the “Xxxxx Shares”). Further, as of the Agreement
Effective Date, there are 493,282 shares of DGSE that are subject to
proxies (excluding the NTR Proxy) to vote the shares owned by other
persons pursuant to which Xx. Xxxxx holds sole voting power (the “Third-Party
Proxies”).
WHEREAS, in connection with
the Xxxxx Shares and the Proxies, Xx. Xxxxx has voting rights relating to
matters regarding DGSE (the “Xxxxx Voting Rights”).
NOW THEREFORE, in
consideration of the mutual covenants set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Term of Agreement.
The term of this Agreement (“Term”) shall be for a period of four (4) years
commencing on the Agreement Effective Date.
2. Grant of Right to Xxxxx
Voting Rights. As part of the consideration for NTR to enter into and
perform its obligations under the Closing Agreement and the Closing Documents,
during the Agreement Term, Xx. Xxxxx agrees to grant NTR an
irrevocable right to the Xxxxx Voting Rights upon the occurrence of any of the
following events (each a “Trigger Event”):
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(a)
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NTR’s
exercise of the NTR Stock Option;
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(b)
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The
death of Xx. Xxxxx; or
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(c)
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The
appointment of a legal Guardian for Xx. Xxxxx due to incapacity by reason
of physical or mental condition
(“Incapacity”).
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3. Xxxxx Proxy. Xx.
Xxxxx agrees that within thirty (30) days of the occurrence of a Trigger Event,
Xx. Xxxxx (or, if applicable, one of the persons as set forth in Section 4
below) will execute the Xxxxx Irrevocable Proxy to Vote Shares in DGSE
Companies, Inc. in the form attached hereto as Exhibit A (the “Xxxxx Proxy”).
Upon execution of the Xxxxx Proxy, the Xxxxx Proxy shall remain in effect for
the Relevant Proxy Period as set forth therein.
4. Execution of Xxxxx
Proxy. In order to confirm such agreement and obligation of Xx. Xxxxx by
separate document, Xx. Xxxxx agrees that upon the occurrence of a Trigger Event
(in the event that Xx. Xxxxx is incapacitated or otherwise unable to sign the
Xxxxx Proxy), Xx. Xxxxx’x legal guardian, executor, representative and/or heirs
will sign the attached Xxxxx Proxy.
5. Power of Attorney. In
the event that Xx. Xxxxx or his legal guardian, executor, representative and/or
heirs fail to execute the Xxxxx Proxy within thirty (30) days of the occurrence
of a Trigger Event, Xx. Xxxxx, for himself and on behalf of his legal guardian,
executor, representative and/or heirs, hereby grants NTR a power of attorney to
execute the Xxxxx Proxy as provided herein.
6. Attorney’s
Fees. In the event of litigation arising under this Agreement,
the non-prevailing party shall pay the other party’s reasonable attorneys' fees
and expenses.
7. Invalid Provision.
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.
8. Modification. No
change or modification of this Agreement shall be valid unless the same is in
writing and signed by all the parties to this Agreement.
9. Successors and
Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, guardians, legal
representatives, executors, successors, and assigns.
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10. Agreement Governed by Texas
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas. The parties shall have the right, but not the
obligation, to apply to a court of competent jurisdiction within Dallas County,
Texas to enjoin any breach of this Agreement or to seek specific performance of
this Agreement. Excepting the right of a party to seek such injunctive relief,
all claims, disputes and matters in question arising out of or related to this
Agreement, whether sounding in contract, tort or otherwise, shall be resolved by
binding arbitration, administered by the American Arbitration Association
(“AAA”) pursuant to its then current AAA Commercial Arbitration Rules (“Rules”).
The dispute shall be heard and determined by one (1) arbitrator. Within thirty
(30) days of the notification of a party’s intent to proceed with arbitration,
the parties shall mutually agree upon and designate an arbitrator. If the
parties fail to designate an arbitrator within the time specified, then the
arbitrator shall be appointed by the AAA. The arbitrator shall decide whether a
particular dispute is or is not arbitrable. The costs of the arbitrator shall be
divided equally between the parties. Only damages alleged pursuant to this
Agreement may be awarded, and the arbitrator shall have no authority to award
punitive or exemplary damages, the parties hereby waiving their right, if any,
to recover punitive or exemplary damages, either in arbitration or in
litigation. The arbitration shall take place in Dallas,
Texas. Judgment on the award may be entered in any court having
jurisdiction.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement effective as of the day and year first
above written.
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XX.
X.X. XXXXX, an
individual
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Xx.
X.X. Xxxxx
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NTR
METALS, LLC, a Texas limited
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liability
company
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By:
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Name:
Xxxx X. Xxxxxx
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Title:
President
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