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EXHIBIT 10.7
COMPANY AGREEMENT
THIS COMPANY AGREEMENT, dated as of May 22, 1997, is by and between
▇▇▇▇▇▇ GENERAL CORPORATION, a California corporation (the "Company") and
SAGAPONACK PARTNERS, L.P., a California limited partnership and SAGAPONACK
INTERNATIONAL PARTNERS, L.P., a Cayman Islands limited partnership
(individually, an "Investor" and, together, the "Investors").
I. BACKGROUND
1. The Company is authorized to issue 7,304,520 shares of Common
Stock, (the "Shares") and 2,625,432 warrants to purchase Common Stock sold on
or about the date hereof to an Investor (the "Warrants"); and
2. The parties deem it in the best interests of the Company to
provide for the nomination of directors as herein provided and delivery of this
Company Agreement is a condition to the investment to be made by an Investor
concurrently herewith.
II. AGREEMENT
In consideration of the agreements and mutual covenants set forth
herein, the parties agree as follows:
1. BOARD OF DIRECTORS AND CERTIFICATE OF INCORPORATION.
(A) DIRECTORS DESIGNATED BY INVESTORS. The Board of
Directors of the Company shall at all times consist of 5 members. The Company
hereby agrees that the Company and its management will nominate to become
members of the Company's Board of Directors two persons designated in writing
by an Investor (the "Investors Designated Directors") and one person designated
pursuant to clause (b) below. Such nomination shall be made as soon as
possible after designation of such persons by an Investor. The Company and its
management shall not nominate at any one time more than 5 persons to become
members of the Company's Board of Directors.
(B) DIRECTOR SELECTED FROM SCHEDULE 1. Attached hereto as
Schedule 1 is a list of persons from which the members of the Company's Board
of Directors and Investors Designated Directors shall select the person to be
nominated by the Company to one of the five directors. Such nomination shall
be made as soon as possible hereafter.
(C) ▇▇▇ ▇. ▇▇▇▇. In addition to the foregoing, the
Company agrees that as soon hereafter as possible it will nominate ▇▇▇ ▇. ▇▇▇▇
to become a member of the Company's Board of Directors.
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(D) REPLACEMENT DIRECTORS. The Investors may from time to
time designate one or more persons to replace one or more of the directors
designated by it if (i) such director resigns, (ii) such directors becomes
unable to serve as a director or (iii) the Investors determine that they desire
a director to be replaced. The Investors may designate a person or persons to
replace directors pursuant to the immediately preceding sentence by giving
notice to the Company of the person or persons that the Investors have
designated to be nominated to be a director or directors, as the case may be.
Upon each such designation by an Investor, the Company shall be obligated to
nominate such person or persons to become members of the Company's Board of
Directors as soon as possible thereafter.
If a person designated and nominated pursuant to clause (b)
resigns or becomes unable to serve as a director, then the remaining four
directors shall select one person from the person listed on Schedule 1 not
nominated prior thereto. If there are no persons listed on Schedule 1 which
have not been nominated prior thereto, the Investors shall provide a list of
not fewer than three persons from which the remaining directors shall select
the person to be nominated. The Company shall be obligated to nominate such
person or persons to become members of the Company's Board of Directors.
(E) ADDITIONAL DIRECTORS. In the event that the Board of
Directors shall, in accordance with the provisions of the Articles of
Incorporation of the Company, increase the number of members of the Company's
Board of Directors by 2 or more members, the Company and its management shall
nominate the persons designated by an Investor to fill such additional director
positions so that if such designated person is elected to be a member of the
Company's Board of Directors, persons designated by the Investors will equal a
number of members of the Company's Board of Directors equal to the number of
members necessary to constitute a majority of the members of the Company's
Board of Directors minus one member. Such nomination shall be made as soon as
possible after such designation by an Investor.
(F) VOTING UPON EVENT OF DEFAULT. If and whenever an
Event of Default (as such term is defined in the Securities Purchase Agreement,
dated the date hereof, between the Company and an Investor) shall occur, then
in such event and at all times thereafter the Company and its management shall
upon the written request of an Investor nominate to become a member or members
of the Company's Board of Directors each person designated by an Investor in
such written request. Such nomination shall be made as soon as possible after
such designation by an Investor. The obligation of the Company under this
subsection (f) shall apply notwithstanding (i) how many persons designated by
an Investor are or will become members of the Company's Board of Directors and
(ii) that an Investor may designate persons to fill every member position on
the Company's Board of Directors.
2. EQUITABLE RELIEF. The parties hereto agree and declare that
legal remedies may be inadequate to enforce the provisions of this Agreement
and that equitable relief, including specific performance an injunctive relief,
may be used to enforce such provisions.
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3. MISCELLANEOUS.
(A) NOTICES. Any and all notices, designations, consents,
offers, acceptances, or any other communication provided for herein shall be
given in writing delivered personally (including delivery by courier or by
facsimile if received during normal working hours) or by registered or
certified mail, addressed, if to the Company, to ▇▇▇▇▇▇ General Corporation,
▇▇-▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇. Except as
otherwise provided in this Agreement, each such notice shall be deemed given
when delivered or on a date which is 4 days after it is mailed in any post
office or branch post office regularly maintained by the United States Postal
Service (registered or certified, which postage prepaid and properly
addressed).
(B) AMENDMENT. No change in or modification of this
Agreement shall be valid unless the same shall be in writing and signed by an
Investor and the Company.
(C) WAIVER. No failure or delay on the party of the
parties or any of them in exercising any right, power or privilege hereunder,
nor any course of dealing between the parties or any of them shall operate as a
waiver of any such right, power or privilege nor shall any single or partial
exercise of any such right, power or privilege preclude the simultaneous or
later exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and are not exclusive of any rights or
remedies which the parties or any of them would otherwise have. No notice to
or demand on the company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the other parties or any of them to take any other or
further action in any circumstances without notice or demand.
(D) 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 together shall constitute one and the same instrument.
(E) GOVERNING LAW. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California without regard to principles of conflict of laws.
(F) BENEFIT AND BIDING EFFECT. Except as otherwise
provided in this Agreement, no right under this Agreement shall be assignable
and any attempted assignment in violation of this provision shall be void.
This Agreement shall be binding upon and inure to the benefit of the parties
and their executors, administrators, personal representatives, heirs,
successors and permitted assigns. Except as set forth in this clause (i), this
Agreement does not create and shall not be construed as creating any rights
enforceable by any Person not a party hereto.
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(G) TERM. The obligations of the Company hereunder shall
terminate at such time as Investor, nor any successor or assign of any
Investor, owns any shares of Common Stock.
(H) SEVERABILITY. In the event that any potion of this
agreement shall be held to be invalid or unenforceable to any extent, such
portion shall be enforced to the fullest lawful extent and the remaining parts
hereof shall nevertheless continue to be valid and enforceable as though the
invalid portions were not a part hereof. If any time period set forth herein
is held by a court of competent jurisdiction to be unenforceable, a different
time period that is determined by the court to be more reasonable shall replace
the unenforceable time period.
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IN WITNESS WHEREOF, the parties hereto have executed this
Company Agreement as of the date and year first above written.
The Company: ▇▇▇▇▇▇ GENERAL CORPORATION
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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President & CEO
The Investors: SAGAPONACK PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title:
SAGAPONACK INTERNATIONAL PARTNERS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title:
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Schedules
Schedule 1 Names of Potential Board Members
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