VOTING AGREEMENT This Voting Agreement (this "Agreement") is made as of May
30, 2000 by and among Cypress Financial Services, Inc., a Nevada
corporation (the "Company"), FBR Financial Fund II, L.P., a Delaware
limited partnership ("FBR"), and Pacific Life Insurance Company, a
_________ corporation ("Pacific Life").
RECITALS
A. FBR desires to purchase from the Company 15,000,000 shares (the
"Shares") of the Company's common stock, par value $.001 per share (the
"Common Stock"), and the Company desires to sell such Shares to FBR;
B. Pacific Life currently owns shares of the Company's Common Stock;
C. The parties desire that Pacific Life be given the right to designate one
(1) nominee to serve on the Board of Directors (the "Board") of the Company
(the "Pacific Life Director");
D. The parties desire that FBR be given the right to designate the
remaining nominees (the "Remaining Directors") to serve on the Board in the
manner described below; and
E. FBR, Pacific Life and the Company acknowledge that they are entering
into this Agreement in consideration of the purchase of the Shares by FBR,
pursuant to that certain Common Stock Purchase Agreement dated as of the
date hereof.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Size of Board. During the term of this Agreement and so long as (a) FBR and
its affiliates ("Affiliates") (as defined in Rule 405 promulgated under the
Securities Act of 1933, as amended) hold at least Seven Million Five
Hundred Thousand (7,500,000) shares of the Common Stock (on a fully
diluted, as-converted basis and subject to adjustment for any stock split,
dividend, combination or other recapitalization) and (b) Pacific Life and
its Affiliates hold at least One Million One Hundred Fifty Thousand
(1,150,000) shares of the Common Stock (on a fully diluted, as-converted
basis and subject to adjustment for any stock split, dividend, combination
or other recapitalization), each of FBR and Pacific Life covenant and agree
that it will vote its shares of Common Stock so as to provide, and the
Company will use its best efforts to cause, the Board to consist of at
least three (3) members.
Pacific Life Nominee. During the term of this Agreement and so long as
Pacific Life and its Affiliates hold at least One Million One Hundred Fifty
Thousand (1,150,000) shares of the Common Stock (on a fully diluted,
as-converted basis and subject to adjustment for any stock split, dividend,
combination or other recapitalization), each of FBR and Pacific Life agree
to vote all of its shares of Common Stock now or hereafter owned by it as
follows:
(i) to elect the nominee of Pacific Life ("Pacific Life Nominee") as the
Pacific Life Director and (ii) if requested by Pacific Life, to remove the
incumbent Pacific Life Director and elect a new Pacific Life Nominee as the
Pacific Life Director or to fill a vacancy created by the death of such
Pacific Life Director or otherwise.
Pacific Life shall designate the Pacific Life Nominee in writing to the
Company prior to each election of Directors of the Company. The Company
shall promptly notify FBR of the nomination of the Pacific Life Nominee by
Pacific Life. Any vacancy occurring because of the death, resignation,
removal or disqualification of the Pacific Life Nominee shall be filled
according to this Section 2.
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Remaining Directors. During the term of this Agreement and so long as FBR
and its Affiliates hold at least Seven Million Five Hundred Thousand
(7,500,000) shares of the Common Stock (on a fully diluted, as-converted
basis and subject to adjustment for any stock split, dividend, combination
or other recapitalization), each of FBR and Pacific Life agrees as follows:
FBR shall have the right to nominate all other directors of the Board;
provided that FBR will give Pacific Life the opportunity to discuss any
questions or concerns Pacific Life may have in respect of any FBR nominee
for seats one (1) through four (4) of the Board.
Pacific Life agree to vote all of its shares of Common Stock now or
hereafter owned by it to elect the nominee of FBR for one of Board seats
one (1) through four (4) (the "FBR Nominee") and (ii) if requested by FBR,
to remove the incumbent FBR director and elect a new FBR Nominee as the a
director or to fill a vacancy created by the death of such FBR director or
otherwise.
FBR shall designate its director nominees in writing to the Company prior
to each election of directors of the Company. The Company shall promptly
notify Pacific Life of the nominations of the directors by FBR. Any vacancy
occurring because of the death, resignation, removal or disqualification of
any director other than the Pacific Life Director shall be filled according
to this Section 3.
Directors upon Closing. Upon the consummation of the closing of the sale of
the Shares, Diane Dales, Edward M. Wheeler and George L. McCabe Jr. shall
fill three (3) of the five (5) Board seats and the remaining two (2) seats
shall be vacant.
Successors in Interest. The rights of FBR and Pacific Life under Sections 1
through 4 above are not assignable other than to one of their respective
Affiliates; however, the provisions of this Agreement shall be binding upon
the successors in interest to any of the shares of Common Stock. The
Company shall not permit the transfer of any shares of the Common Shares on
its books or issue new certificates representing any shares of such
securities unless and until the person(s) to whom such shares are 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 was a party hereunder.
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Legend. Each certificate representing any of the shares of Common Stock
held by FBR or Pacific Life shall bear a legend reading as follows:
"The shares evidenced hereby are subject to the terms of a Voting Agreement
(a copy of which may be obtained without charge from the issuer), and by
accepting any interest in such shares the person accepting such interest
shall be deemed to agree to and shall become bound by all the provisions of
such Voting Agreement."
Voting Agreement; Proxy to Vote Shares. This Agreement is intended to be a
"voting agreement" for purposes of Section 706 of the California
Corporations Code. Without limitation, if either FBR or Pacific Life shall
fail to vote their shares of Common Stock so as to achieve the structure of
the Board and/or representation on the Board as set forth in this
Agreement, such party shall be deemed immediately upon the existence of
such a breach to have granted to a designee of the other party a proxy on
the shares then held by such defaulting party as shall be necessary to
obtain from such defaulting party the minimum requisite voting power to
ensure such appropriate structure of the Board and/or such representation
on the Board. Each of parties acknowledges that each proxy granted hereby,
including successive proxies if need be, is given to secure the performance
of a duty and shall be irrevocable until the duty is performed.
Termination. This Agreement shall terminate on the tenth (10th) anniversary
hereof.
Amendments and Waivers. Any term hereof may be amended and the observance
of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Company, FBR and Pacific Life. Any amendment or waiver so
effected shall be binding upon the Company, FBR, Pacific Life and their
assigns subject to the terms of this Agreement, whether or not such party,
assignee, or other stockholder entered into or approved such amendment or
waiver.
Stock Splits, Stock Dividends, etc. In the event of any stock split, stock
dividend, recapitalization, reorganization, or the like, any securities
issued with respect to the Common Stock held by FBR or Pacific Life shall
become subject to this Agreement and shall be endorsed with the legend set
forth in Section 6 hereof.
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Enforceability/Severability. The parties hereto agree that each provision
of this Agreement shall be interpreted in such a manner as to be effective
and valid under applicable law. If any provision of this Agreement shall
nevertheless be held to be prohibited by or invalid under applicable law,
such provision shall be effective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement, so as to make effective and
enforceable the intent of this Agreement.
Governing Law. This Agreement shall be governed by and construed under the
laws of the State of California as applied to contracts among California
residents entered into and to be performed entirely within California.
Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Notices. All notices, requests and other communications to any party
hereunder shall be in writing, shall refer specifically to this Agreement
and shall be personally delivered or sent by facsimile transmission,
overnight delivery with a nationally recognized overnight delivery service
or by registered or certified mail, return receipt requested, postage
prepaid, in each case to the respective address specified on the signature
page hereto. Any notice or communication given in conformity with this
Section 14 shall be deemed to be effective when received by the addressee,
if delivered by hand or facsimile transmission, one (1) business day after
deposit with a nationally recognized overnight delivery service and three
(3) days after mailing by first class U.S. Mail.
Equitable Remedies. The Company, FBR and Pacific Life acknowledge and agree
that the legal remedies available to the Company, FBR and Pacific Life in
the event any party violates the covenants and agreements made in this
Agreement would be inadequate and that the Company, FBR and Pacific Life
shall be entitled, without posting any bond or other security, to
temporary, preliminary and permanent injunctive relief, specific
performance and other equitable remedies in the event of such a violation,
in addition to any other remedies which the Company, FBR or Pacific Life
may have at law or in equity.
Further Assurances. Each of the parties hereto shall execute and deliver
all additional documents and instruments and shall do any and all acts and
things reasonably requested in connection with the performance of the
obligations undertaken in this Agreement and/or otherwise to effectuate in
good faith the intent of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year hereinabove first written.
THE COMPANY:
CYPRESS FINANCIAL SERVICES, INC.
By:
Name:
Title:
Address: 5400 Orange Avenue
Suite 200
Cypress, CA 90630
FBR FINANCIAL FUND II, L.P.
By: FBR Financial Fund Management, L.L.C.,
Title:General Partner
By: Friedman, Billings, Ramsey
Investment Management, Inc.
Title: Managing Member
By:
Name:
Title:
Address: 1001 19th Street North
Arlington, VA 22209
PACIFIC LIFE INSURANCE COMPANY
By:
Name:
Title:
Address:
