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Exhibit
10.7
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Voting
Agreement dated August 6, 2009
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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.
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
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