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VOTING AGREEMENT

Voting Agreement

VOTING AGREEMENT | Document Parties: ZAP | Cathaya Capital, LP You are currently viewing:
This Voting Agreement involves

ZAP | Cathaya Capital, LP

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Title: VOTING AGREEMENT
Governing Law: California     Date: 8/10/2009
Industry: Recreational Products     Law Firm: Wilson Sonsini     Sector: Consumer Cyclical

VOTING AGREEMENT, Parties: zap , cathaya capital  lp
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Exhibit 10.7

Voting Agreement dated August 6, 2009

 

 

 

VOTING AGREEMENT

 

This Voting Agreement (this “ Agreement ”) is made as of August 6, 2009 by and among ZAP, a California corporation (the “ Company ”), Cathaya Capital, L.P., a Cayman Islands exempted limited partnership (the “ Investor ”), and the shareholders of the Company set forth on Schedule I hereto (each a “ Significant Holder ,” and collectively the “ Significant Holders ”).

 

RECITAL

 

The Company proposes to sell and issue to Investor shares of the Company’s Common Stock, a Secured Convertible Promissory Note and warrants to purchase shares of the Company’s Common Stock pursuant to the Securities Purchase Agreement of even date herewith (the “ Purchase Agreement ”), such sale being referred to herein as  the “ Financing .”  As a condition to the Financing, the parties have agreed to enter into this Agreement.

 

The parties therefore agree as follows:

 

SECTION 1

 

VOTING

 

1.1     General.   During the term of this Agreement, each Significant Holder agrees to vote all shares of the Company’s voting securities now or hereafter owned by it, whether beneficially or otherwise, or as to which it has voting power (the “ Shares ”) in accordance with the provisions of this Agreement.

 

SECTION 2

 

ELECTION OF DIRECTORS

2.1     Voting.   During the term of this Agreement, each Significant Holder agrees to vote all Shares in such manner as may be necessary to: (i) elect (and maintain in office) as a member of the Company’s board of directors (the “ Board ”) that person designated by the Investor (the “ Designee ”) in accordance with Section 4.23 of the Purchase Agreement, and (ii) vote for or against, as directed by the Investor, any person’s appointment to or nomination for any position on the Company’s Board that is vacant as of the date of this Agreement.

 

2.2     Changes in Designee.   From time to time during the term of this Agreement, Investor may, in its sole discretion:

 

(a)     notify the Company in writing of an intention to remove from the Company’s board of directors any incumbent director who occupies the board seat for which Investor is entitled to designate the Designee; or

 

 

 


 

(b)   notify the Company in writing of an intention to select a new Designee for election to the board seat for which Investor is entitled to designate the Designee (whether to replace a prior Designee or to fill a vacancy in such board seat).

 

In the event of such an initiation of a removal or selection of a Designee under this section, the Company shall take such reasonable actions as are necessary to facilitate such removals or elections, including, without limitation, soliciting the votes of the appropriate shareholders, and the Significant Holders shall vote their Shares to cause: (a) the removal from the Company’s board of directors of the Designee; and (b) the election to the Company’s board of directors of any new Designee so designated.

 

2.3     Size of the Board of Directors.   During the term of this Agreement, each Significant Holder agrees to vote all Shares to maintain the authorized number of members of the board of directors of the Company at 7 directors.

 

2.4     No Liability for Election of Recommended Director.   None of the parties and no officer, director, shareholder, partner, employee or agent of any party makes any representation or warranty as to the fitness or competence of the Designee of the Investor 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 Designee pursuant to this Agreement.

 

SECTION 3

 

ADDITIONAL AGREEMENTS

 

3.1     Best Efforts.   The Company agrees to use its best efforts to ensure that the rights given to the Investor hereunder are effective and that the Investor enjoys the benefits thereof. Such actions include, without limitation, the use of the Company’s best efforts to cause the nomination and election of the Designee as provided in Section 2, to cause the size of the board of directors to remain as provided in Section 2.3, to enforce the terms of this Agreement and to inform the Investor of any breach hereof (to the extent the Company has knowledge thereof). The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all of the provisions of this Agreement and in the taking of all such actions as may be necessary, appropriate or reasonably requested by the Investor in order to protect the rights of the parties hereunder against impairment and to assist the Investor and the Significant Holders in the exercise of their rights and the performance of their obligations hereunder.

 

3.2     Transfer of Shares.   The Company shall not permit the transfer of any Shares on its books or issue a new certificate representing any Shares unless and until the person to whom such security is to be transferred shall have executed a written 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 Significant Holder hereunder. Each Significant Holder covenants that such Significant Holder will not request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of the Shares unless such transfer is made in compliance with this Agreement.  Each Significant Holder authorizes the Company to issue stop-transfer orders or certificates to prevent any transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of the Shares in breach of this Agreement.

 

 

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3.3     Disclosure.   Each Significant Holder hereby agrees to permit the Company to publish and disclose in any disclosure document which the Company determines to be necessary or desirable in connection with the transactions contemplated by the Purchase Agreement and hereby, such Significant Holder’s identity and ownership of Common Stock and the nature of such Significant Holder’s commitments, arrangements and understandings under this Agreement.

 

3.4     Significant Holder Assurances.   From time to time, and without further consideration, each Significant Holder shall execute and deliver or cause to be executed and delivered such additional documents and instruments and take all such further action as may be reasonably necessary or desirable to consummate the transactions contemplated by this Agreement.  If such Significant Holder is not the legal owner of the Shares set forth opposite such Significant Holder’s name on Schedule I hereto, such Significant Holder shall cause the legal owner to act in accordance or consistent with such Significant Holder’s obligations hereunder.

 

SECTION 4

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Investor and the Significant Holders that:

 

4.1     Authorization; Capacity.   The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary action on the part of the Company.  This Agreement constitutes a valid and binding Agreement of the Company.

 

4.2     Non-contravention.   The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the Articles of Incorporation or Bylaws of the Company, (ii) violate any applicable law, rule, regulation, judgment, injunction, order or decree to which the Company is bound or (iii) require any consent or other action by any person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration or to a loss of any benefit to which the Company is entitled under any provision of any agreement or other instrument binding on the Company.

 

SECTION 5

 

REPRESENTATIONS AND WARRANTIES OF THE SIGNIFICANT HOLDERS

 

The Significant Holders, severally and not jointly, represent and warrant to the Investor and the Company that:

 

5.1     Authorization; Capacity.   The execution, delivery and performance by such Significant Holder (if not an individual) of this Agreement and the consummation by such Significant Holder of the transactions contemplated hereby are within the powers (corporate or otherwise) of such Significant Holder and have been duly authorized by all necessary action (corporate or otherwise) on the part of such Significant Holder.  Such Significant Holder (if an individual) has the legal capacity to enter into this Agreement.  This Agreement constitutes a valid and binding Agreement of such Significant Holder.

 

5.2     Non-Contravention.   The execution, delivery and performance by such Significant Holder of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate the constituent documents, if any, of such Significant Holder, (ii) violate any applicable law, rule, regulation, judgment, injunction, order or decree to which such Significant Holder is bound or (iii) require any consent or other action by any person under, constitute a default under, or give rise to any right of termination, cancellation or acceleration or to a loss of any benefit to which such Significant Holder is entitled under any provision of any agreement or other instrument binding on such Significant Holder.

 

5.3     Ownership of Shares.   Such Significant Holder is, as of the date hereof, the record and beneficial owner of the Shares set forth opposite the name of such Significant Holder on Schedule I to this

 

 

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Agreement, free and clear of any lien and any other limitation or restriction (including any restriction on the right to vote or otherwise dispose of such Shares).  None of the Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares.  Except as set forth opposite the name of such Significant Holder on the applicable signature page to this Agreement, as of the date hereof, such Significant Holder does not beneficially own any (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible int


 
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