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EXHIBIT 10.7
AMENDMENT TO INVESTMENT AGREEMENT
THIS AMENDMENT TO INVESTMENT AGREEMENT ("Amendment"), dated as of June
21,1999, is by and between ACTEL INTEGRATED COMMUNICATIONS, INC. (the
"Company"), XXXXXXX COMMUNICATIONS CORPORATION (the "Investor"), Xxxx Xxxx,
shareholder, and Xxxxxxx Xxxxxxxx, shareholder.
RECITALS
1. Investor, Company, and shareholders entered into a certain
Investment Agreement ("Agreement") dated March 10, 1999 whereby Investor was
provided an opportunity to invest sufficient capital to acquire 3,500,000 shares
of Series A Preferred Stock of the Company convertible into a maximum of
5,100,000 shares of common stock of the Company;
2. Investor has provided a total amount of three million ($3,000,000)
dollars and has on two occasions not provided requested funding within fourteen
(14) days of Requests for Funds (as defined in the Agreement) by the Company's
President pursuant to Section 1.2 of the Agreement;
3. Company and Investor believe and acknowledge that it is in the best
interests of Company, and of Investor, to broaden and diversify the base of
investors in Company;
4. Company and Investor desire that Company not request and Investor
not provide any further investment in Company by Investor to further the
interests of diversifying Company's investment base;
5. Investor and Company desire to amend and clarify the Agreement as
set forth herein;
AGREEMENTS
In consideration of the recitals and the mutual agreements which
follow, the Company and Investor agree as follows:
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1. Loan. The Investor agrees to loan $1,000,000 to the Company on the
terms and conditions set forth in a Promissory Note mutually agreeable to the
parties, to be executed and delivered to the Investor by the Company.
2. Forgiveness and Waiver of Defaults. Company and Investor hereby
forgive each other with prejudice of any and all existing known and unknown
defaults by either or both and forever waive all remedies for same. Forgiveness
of any failure to fund and/or defaults by Investor is conditioned upon
Investor's loan to Company of the amounts set forth in Paragraph 1 above. The
parties hereby reserve any and all rights they may have with respect to future
defaults under this Amendment.
3. Relief from Negative Covenants, Restrictions, and Limitations.
Investor hereby irrevocably consents to Company's issuance of any equity
security of any type, class, series and quantity, with any conversion,
liquidation, dividend or voting rights, of any value, to any person whatsoever,
notwithstanding any other agreement, including without limitation the Investment
Agreement and any Exhibit thereto, the Articles of Incorporation or By-laws of
the Company, or any other right or entitlement by law, agreement, understanding
or contract. However, until Investor converts its Series A Preferred Stock,
Company shall not sell any preferred stock senior to that currently authorized.
Investor further irrevocably consents hereby to any loan or debt financing to
Company from any source and secured by any property or equity security, provided
such debt financing is subject to terms and conditions deemed acceptable by the
Company's board of directors. To enhance Company's ability to raise additional
capital, Investor further irrevocably consents to such actions deemed in the
Company's best interest by its Board of Directors, including without limitation
(a) any increase in the Company's authorized shares of common stock, (b) any
increase in the number of Series A Preferred Stock, and (c) the creation of
different classes or series of common or preferred stock. Investor shall
cooperate with Company to cause any amendments to the Company's Articles of
Incorporation or By-laws necessary for any debt financing or private or public
placement of any security described above by Company, in the discretion of the
Company's board of directors.
4. Specific Amendments to the Investment Agreement. The Investment
Agreement is hereby amended specifically as set forth below.
(a) Paragraphs 5.10, 7.1(a), 7.1(b), and 7.3, are hereby
deleted in their entirety effective as of March 10, 1999.
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(b) Paragraph 10.1 as amended shall provide: "All
representations and warranties contained herein or made by or on behalf of the
Company in writing in connection with the transactions contemplated herein shall
be true and correct as of the Closing and shall survive the consummation of the
transaction contemplated hereby until June 22, 1999."
(c) Investor and Company agree to execute and deliver the
Agreement to License and Assign Trademark attached hereto.
5. Specific Amendments to Exhibit A to the Investment Agreement.
Exhibit A to the Investment Agreement is hereby amended as follows:
a. Paragraph 2 shall be amended to terminate the Board Composition
Agreement attached to the Investment Agreement as Exhibit A upon issuance of
10,000,000 shares of common stock, public offering, or acquisition of 25% of the
authorized common stock of the Company:
"2. Notwithstanding anything contrary in this Statement of Terms, the
parties obligations under this Exhibit "A" shall expire and the
Company's board of directors shall be elected according to the then
effective Articles of Incorporation and By-laws of the Company upon any
of the following events: (a) the issuance of a number of shares of
common stock that with all previously issued or committed shares of
common stock total 10,000,000 shares of common stock; or (b) the
registration of any of the Company's securities with the Securities and
Exchange Commission."
6. Director. Notwithstanding anything to the contrary in the Investment
Agreement or any exhibit thereto, including, without limitation, Exhibit A,
Investor shall have only one representative on the Company's Board or Directors
pursuant to paragraph 2 of Exhibit A as amended hereby.
7. Specific Amendments to Exhibit B to the Investment Agreement and
Articles of Incorporation.
(a) Exhibit B to the Investment Agreement is hereby amended
specifically as set forth below. Investor shall execute any and all documents to
amend the Company's Articles of Incorporation in such a manner as to make such
Articles of Incorporation consistent with any and all terms of Exhibit B as
amended hereby: Paragraphs 6, 7, and 8 are hereby deleted as of this date.
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(b) Notwithstanding, however, anything to the contrary
contained in the Investment Agreement, as amended, in no event: (1) shall an
increase in or issuance of authorized shares of Common Stock of the Company
(other than a split thereof) increase the number of shares of Common Stock to
which Investor is entitled upon surrender and conversion of the Series A
Preferred Stock or (2) shall Investor have preemptive rights with respect to
Series A Preferred Stock or Common Stock.
8. Integration. This Amendment shall supercede any and all terms of the
Agreement and any exhibit thereto inconsistent with the terms hereof. This
Amendment shall further serve as an agreement among shareholders should any term
herein be inconsistent with the terms and/or requirements of the Company's
Articles of Incorporation or By-laws.
ACTEL INTEGRATED COMMUNICATIONS, INC.
BY/s/ Xxxx Xxxx
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Its President
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XXXXXXX COMMUNICATIONS CORPORATION
BY/s/ Xxxxxx X. Xxxxxxx
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Its Chief Executive Officer
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/s/ Xxxx Xxxx
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Xxxx Xxxx, Shareholder
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Shareholder
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