Exhibit 7
SIDE LETTER AGREEMENT, (this "Agreement"), dated as of February 28,
1997 by and between XXXX/Biophile International Corporation, a Delaware
corporation, with headquarters located at 0000 X.X. 00xx Xxxx, Xxxxxxxxxxx,
Xxxxxxx 00000 (the "Company"), and GFL Performance Fund Ltd., a corporation
organized under the laws of the British Virgin Islands ("GFL").
WHEREAS, pursuant to that certain Securities Purchase Agreement among
the Company, Clearwater Fund IV, LLC and Clearwater Offshore Fund Ltd. (the
"Securities Purchase Agreement"), the Company has agreed to amend its Articles
of Incorporation to change the Certificate of Designations, Preferences and
Rights of 5% Cumulative Convertible Preferred Stock, Series C, as further
described in the Securities Purchase Agreement; and
WHEREAS, the execution by GFL of this Agreement is a material
inducement to the Company to such agreement.
NOW, THEREFORE, the Company and GFL hereby agree as follows:
1. Holdback Agreement. GFL agrees not to effect any sale or transfer of
any Common Stock issued upon conversion of the Company's 5% Cumulative
Convertible Preferred Stock Series C, $10 par value per share (the "Series C
Common Shares"), for a one year period commencing on the Closing Date, other
than sales or transfers to "affiliates," as that term is defined under the 1934
Act, who agree in writing to be bound by the foregoing; provided, however, that
notwithstanding the foregoing, GFL and such affiliates shall have the right to
pledge any or all of the Series C Common Shares in connection with margin
transactions, provided such Series C Common Shares are not used to satisfy
margin calls. In consideration of this Agreement, the Company agrees to provide
in the Amended and Restated Certificate of Incorporation, that the Conversion
Price for the Company's 5% Cumulative Convertible Preferred Stock Series C, $10
par value per share, shall be $3.00.
2. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws.
3. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution
and delivery hereof.
4. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
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5. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
6. Entire Agreement: Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor GFL makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing
signed by the party to be charged with enforcement.
7. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by mail or delivered personally or by
courier and shall be effective five days after being placed in the mail, if
mailed, certified or registered, return receipt requested, or upon receipt, if
delivered personally or by courier or by telefacsimile, in each case addressed
to a party. The addresses for such communications shall be:
If to the Company:
0000 X.X. 00xx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Xx.
With copy to:
Marks & Murase, L.L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to GFL:
Xxxx Xxxxxxxxx 0
X.X. Xxx 000
Xxxxxxx, Xxxxxxxxxxx Antilles
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With copy to:
Rosenman & Colin, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Each party shall provide notice to the other party of any change in address.
8. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor GFL shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other (which consent may be
withheld for any reason in the sole discretion of the party from whom consent is
sought). Notwithstanding the foregoing, GFL may assign its rights hereunder to
any of its "affiliates," as that term is defined under the 1934 Act, without the
consent of the Company, provided, however, that any such assignment shall not
release GFL of its obligations hereunder unless such obligations are assumed by
such affiliate and the Company has consented to such assignment and assumption,
such consent not to be unreasonably withheld.
9. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person, other than Clearwater IV and/or Clearwater Offshore, as
defined in the Securities Purchase Agreement.
10. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
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IN WITNESS WHEREOF, GFL and the Company have caused this Side Letter
Agreement to be duly executed as of the date first written above.
XXXX/BIOPHILE INTERNATIONAL CORPORATION
By: /s/
-----------------------
Name:
Its:
GFL PERFORMANCE FUND LTD.
By: /s/
-----------------------
Name:
Its:
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