SECURITIES PURCHASE AGREEMENT
Exhibit
10.12
THIS
SECURITIES PURCHASE AGREEMENT (this "Agreement") is dated as of
September 22, 2008, by and among Thor United ("Thor") and Berkshire
International Finance ("Berkshire") (collectively the
“Sellers” and each,
individually a “Seller”), Harborview Master
Fund, LP ("Purchaser"),
Axion International Holdings, Inc., a Colorado corporation, having its
principal place of business at 000 Xxxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxx Xxxxxx 00000 (the “Company”) and Xxxxxxx
Xxxxxxxxx & Xxxxx LLP (the "Escrow Agent").
WHEREAS, the Sellers are holders of the Company’s 13% Secured Convertible
Debentures in the aggregate principal amount of $600,000 due <?xml:namespace
prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />March 30,
2009 with a conversion price as of the date hereof equal to $0.40, subject to
adjustment therein (the “Debentures”).
WHEREAS, Sellers desire to sell to Purchaser and Purchaser desires to
purchase from Sellers $325,000 principal amount of the Debentures, together with
a six month option to purchase an additional aggregate of $275,000 principal
amount of Debentures from the Sellers, on the basis of the representations,
warranties and agreements contained in this Agreement, and upon the terms but
subject to the conditions set forth herein.
WHEREAS, Sellers desire to assign to Purchaser and Purchaser desires to
assume from Sellers, all of their rights as a holder of the
Debentures.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
(a)
Purchase and
Sale. Sellers hereby agree to sell to Purchaser, and Purchaser
agrees to purchase from Sellers, an aggregate of $325,000 principal amount of
the Debentures, of which Thor will sell $225,000 principal amount and Berkshire
shall sell $100,000 principal amount (“Purchased Debentures”).
The aggregate purchase price for the Purchased Debentures shall be $487,500 (the
"Purchase Price").
(b)
Conversion of
Purchased Debentures. Subject to and conditioned upon the Company
and Sellers complying with all of their obligations hereunder, the Purchaser
hereby agrees to convert the Purchased Debentures into 812,500 shares of common
stock of the Company (“Common
Stock” and such shares, the “Converted Shares”). On
the Closing Date (as defined below), the Company shall deliver the Converted
Shares electronically and free of legend or resale restrictions to the Purchaser
through The Depository Trust Company (“DTC”) to ________________,
Account Number ___________, account name: ________________.
(c)
Issuance of New
Debenture. As additional consideration to the Purchaser, and
because the Company shall directly and indirectly benefit from the transactions
contemplated hereunder, and as a material inducement for the Purchaser to enter
into this Agreement, the Company shall issue to the Purchaser a convertible
debenture with a principal amount equal to $162,500, a conversion price equal to
$1.50, otherwise in the form of the Debentures as amended in accordance with
this Agreement (the “New
Debenture”).
(d)
Closing. The date and
time of the Closing (the "Closing Date") shall be 10:00
a.m., New York City time, on the date all of the conditions set forth in Section
2 hereof are satisfied, (or such other time as the parties may agree) after
notification of satisfaction or waiver of the conditions to the closing set
forth in Section 2 below at the office of the Escrow Agent.
(e)
Form of
Payment. On the Closing Date, each of the Sellers and Purchaser
shall instruct the Escrow Agent to transfer to each Seller that part of the
aggregate Purchase Price set forth opposite such Seller’s name on column (7) of
the Securities Schedule attached hereto for the Purchased Debentures by wire
transfer of immediately available funds in accordance with each Seller’s written
wire instructions.
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(f)
Grant of
Option. The Sellers hereby grant to the Purchaser an option (the
“Option”) to purchase
all or any part of the balance of the Debenture with an aggregate principal
amount of $275,000 outstanding (“Remaining Debentures”) for a
purchase price (the “Option
Price”) equal to, in the aggregate for the entire Remaining Debentures
(pro-rata if partial exercise) of $423,076 together with interest accrued
thereon as of the Exercise Date (as defined below). The Option shall be
exercisable from the date hereof until April 1, 2010 (the “Option Period”). The
Option shall be exercised by written notice (the “Exercise Notice”) by the
Purchaser to the Sellers by overnight delivery of such notice within the Option
Period. If the Purchaser exercises the Option in part, each Seller’s
obligation to transfer the Remaining Debenture hereunder shall be pro-rata to
the other Seller. “Exercise Date” shall mean the
date the Exercise Notice is deposited with a nationally recognized overnight
courier for next business day delivery to the Sellers. Subject to the
delivery of the Option Price as set forth below, for all purposes, the
assignment of the Remaining Debentures covered by the Exercise Notice shall be
deemed to have occurred on the Exercise Date, and Purchaser shall be deemed to
be the holder and beneficial owner of such Remaining Debentures as of the
Exercise Date. During the Option Period, the Sellers shall not convert,
offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Sellers or any
affiliate of the Sellers or any person in privity with the Sellers or any
affiliate of the undersigned), directly or indirectly, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities and Exchange Act of 1934, as
amended (“Exchange
Act”), with respect to, any Remaining Debentures or shares underlying the
Remaining Debentures Beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act.
(g)
Escrow.
(i) Purchaser and the Sellers
hereby appoint the Escrow Agent to serve in such capacity hereunder.
Simultaneously with the execution and delivery of this Agreement, Purchaser,
shall promptly cause a wire transfer of immediately available funds (U.S.
dollars) in an amount representing the Purchase Price, to be paid to an escrow
account of the Escrow Agent set forth on Exhibit
A attached hereto (the aggregate amounts received being held in
escrow by the Escrow Agent are referred to herein as the “Escrow Amount”).
Simultaneously with the execution and delivery of this Agreement, Sellers shall
promptly deliver to the Escrow Agent the Debentures and at least five undated
stock powers duly manually endorsed for transfer in blank (the "Stock Powers") and the Company
shall deliver to Escrow Agent the New Debentures registered in the name of the
Purchaser and the instructions to the Company’s transfer agent (Computershare)
to deliver the Converted Shares pursuant to Section 1(b). The Escrow Agent
shall hold the Escrow Amount, Debentures, New Debentures and Stock Powers in
escrow in accordance with Section 1(g)(ii) and (iii) below. The Company
expressly waivers and requirement that the stock powers contain any signature
guarantee or other third-party evidence of authenticity, and agrees to accept
the same from the Escrow Agent “as-is” as delivered to the Escrow Agent by the
Sellers.
(ii) The Escrow Agent shall hold the
Escrow Amount, the Stock Powers, the Debentures and the New Debentures delivered
to the Escrow Agent pursuant to Section 1(g)(i) of this Agreement, in escrow in
accordance with and subject to this Agreement until the receipt of written
instructions signed by the Sellers, the Purchaser and the Company that the
conditions to the Closing have been satisfied (the "Release Instructions").
Upon receipt of the Release Instructions, the Escrow Agent shall release to
Sellers that part of the Escrow Amount constituting the Purchase Price set forth
opposite Sellers’ name on column (7) of the Securities Schedule attached hereto
in accordance with written wire transfer instructions received from Sellers, and
shall release to Purchaser the New Debenture. The Escrow Agent shall
deliver the Debentures to the Company and the Company will cancel the Purchased
Debentures and re-issue certificates for the Remaining Debentures back to the
Escrow Agent. Upon notice (the "Delivery Confirmation") from
the Escrow Agent that the Escrow Amount, the Debentures, the New Debentures and
the Stock Powers have been delivered to the Escrow Agent, the Purchaser
together with the Sellers and the Company shall deliver the Release
Instructions. If Purchaser fails to deliver the Release Instructions to
the Escrow Agent within 3 business days after delivery by the Escrow Agent to
Purchaser of the Delivery Confirmation, the Sellers may, at their option, direct
the Escrow Agent to deliver to the Sellers the Stock Power and the Debentures
and if the Sellers deliver such instruction, contemporaneously with the delivery
of the foregoing to the Sellers, the Escrow Agent shall deliver to Purchaser the
Escrow Amount. If the Sellers fail to deliver the Release Instructions to
the Escrow Agent within 3 business days after the Escrow Agent has delivered the
Delivery Confirmation to the Sellers, Purchaser may instruct the Escrow Agent to
deliver to the Purchaser the Escrow Amount and if Purchaser delivers such
instruction, contemporaneously with the delivery of the foregoing to Purchaser,
the Escrow Agent shall deliver to the Sellers the Stock Power and the
Debentures.
(iii) Upon delivery of an Exercise
Notice to the Sellers, the Purchaser shall deliver a copy of such notice to the
Escrow Agent and deliver the Option Price for the Remaining Debenture covered by
such Exercise Notice to the Escrow Agent in United States Dollars in immediate
available funds within three (3) business days following the Exercise
Date. Upon receipt of an Exercise Notice, the Escrow Agent shall submit
the Remaining Debentures to the Company and the Company shall re-issue a
certificate for the Remaining Debentures covered by the Exercise Notice
registered in the name of the Purchaser, free and clear of any claim, pledge,
charge, lien and any other encumbrance whatsoever, and re-issue the balance of
the Remaining Debentures, if any, in the name of the Sellers. Upon receipt
by the Escrow Agent of the Remaining Debentures subject to the Exercise Notice
registered in the name of the Purchasers, the Escrow Agent shall release the
Remaining Debentures so purchased to the Purchaser and the Option Price to the
Sellers. The exercise of the Option shall be applied pro-rata to Sellers
according to the outstanding principal amount of Remaining Debentures then held
by the Sellers. Following the Option Period, provided that the Escrow
Agent has received no Exercise Notice during such period unless such Exercise
Notices were honored in full, the Escrow Agent shall return the balance of the
Remaining Debentures not subject to an Exercise Notice to the
Sellers.
(iv) It is expressly understood that
the Escrow Agent acts hereunder as an accommodation to the Purchaser and the
Sellers and as a depository only and is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity of any
instrument deposited with it, or for the form of execution of such instruments
or for the identity, authority or right of any person executing or depositing
the same or for the terms and conditions of any instrument pursuant to which the
Escrow Agent or the parties may act.
(v) The Escrow Agent shall no
have duties or responsibilities except those set forth in this Agreement and
shall incur no liability, other than by its own gross negligence, willful
misconduct or fraud, in acting upon any signature, notice, request, waiver,
consent, receipt or other paper or document believed by the Escrow Agent to be
genuine, and the Escrow Agent may assume that any person purporting to give it
any notice on behalf of any party in accordance with the provisions hereof has
been duly authorized to do so. The Purchaser and the Sellers acknowledge
that the Escrow Agent is acting solely as a stakeholder at their request and
that the Escrow Agent shall not be liable for any action taken by Escrow Agent
in good faith and believed by Escrow Agent to be authorized or within the rights
or powers conferred upon Escrow Agent by this Agreement and shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care beyond what Escrow Agent gives its own similar property. The Purchaser
and the Sellers hereby jointly and severally agree to indemnify and save the
Escrow Agent harmless from and against any and all loss, damage, claims,
liabilities, judgments and other costs and expenses of every kind and nature
which may be incurred by the Escrow Agent (including attorneys' fees) by reason
of its acceptance of, and its performance under, this Agreement unless caused by
the gross negligence, willful misconduct or fraud of the Escrow Agent.
Absent the Escrow Agent's gross negligence, willful misconduct or fraud, the
Escrow Agent shall be automatically released from all responsibility and
liability under this Agreement upon the Escrow Agent's distribution of the
Escrow Amount and the Purchased Preferred Shares and the Purchased Warrants in
accordance with the provisions of this Agreement.
(vi) This Agreement sets forth
exclusively the duties of the Escrow Agent with respect to any and all matters
pertinent thereto and no implied duties or obligations shall be read into this
Agreement.
(vii) The Sellers and the Company
acknowledge that Escorw Agent represents the Purchaser on other legal matters
and has represented the Purchaser in connection with this Agreement, and each
the Sellers and the Company expressly waive any actual or potential conflict of
interest which may be caused by such representation or such dual roles of the
Escrow Agent.
(viii) The provisions of this Section 1(g) shall
survive any termination of this Agreement.
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Section 2. Closing Conditions
(a)
Conditions to
Seller's Obligation to Sell.
The
obligation of Sellers hereunder to sell the Debentures to Purchaser on the
Closing Date is subject to the satisfaction, on or before the Closing Date, of
each of the following conditions, provided ,
that these conditions are for Sellers’ sole benefit and may be waived by the
Sellers at any time in its sole discretion by providing Purchaser with prior
written notice thereof:
(i) Contemporaneously with the
Closing, the Purchaser shall have delivered to the Escrow Agent that part of the
aggregate Purchase Price set forth opposite each Seller's name on column (7) of
the Securities Schedule attached hereto by wire transfer of immediately
available funds pursuant to wire instructions provided by such
Seller.
(ii) The representations and
warranties of Purchaser shall be true and correct in all material respects
(other than representations and warranties that are already qualified by
materiality which shall be true and correct in all respects) as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date which shall be
true as of such specified date), and Purchaser shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by Purchaser at or prior to the Closing Date.
(b)
Conditions to
Purchaser's Obligation to Purchase.
The
obligation of Purchaser hereunder to purchase the Debentures on the Closing Date
is subject to the satisfaction, on or before the Closing Date, of each of the
following conditions, provided, that these
conditions are for Purchaser's sole benefit and may be waived by Purchaser at
any time in its sole discretion by providing Seller with prior written notice
thereof:
(i) On or prior to the Closing
Date, Sellers shall have delivered to the Escrow Agent the Stock Power and the
Debentures being purchased in such Closing and the Company shall have delivered
the New Debentures.
(ii) The representations and
warranties of each Seller shall be true and correct in all material respects
(other than representations and warranties that are already qualified by
materiality which shall be true and correct in all respects) as of the date when
made and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date which shall be
true as of such specified date), and each Seller shall have performed, satisfied
and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by each Seller at or prior to the Closing Date.
(iii) The Company shall have
irrevocably instructed its transfer agent to transfer the Converted Shares to
the DTC account of the Purchaser pursuant to Section 1(b) and provided a copy of
such instructions to the Escrow Agent.
(iv) All Debentures shall have been
amended as set forth in Section 2(c)(i).
(v) No debt of the Company
shall be subject to a security interest in any of the Company’s
assets.
(c)
Conditions
to Company’s Obligations.
The
obligation of Company hereunder to issue the new Debenture and Warrants on the
Closing Date is subject to the satisfaction, on or before the Closing Date, of
each of the following conditions:
(i) Subject to the closing of
the transaction herein, the Sellers agree (x) that the Remaining Debentures
shall be amended to reduce the interest rate thereon from 13% to 7%, to extend
the term of such Debentures to March 31, 2011; and (y) that all security
interests held to secure payment of the Debentures shall be terminated effective
as of the Closing Date (collectively, the “Debenture Amendments”);
(ii) ADH Ventures LLC (“ADH”),
on or before the Closing Date, (x) shall have converted so much of the Company’s
13% Debentures which it holds in the aggregate principal amount of $667,435 as
is permissible in accordance with the terms of such Debenture, subject to
reduction of the conversion price thereunder to $.30; (y) shall have agreed to
convert the remaining principal balance of such Debenture at such time as it is
permissible for it to do so in accordance with its terms; and (z) shall have
agreed to the Debenture Amendments;
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Section 3. Sellers’ Representations and
Warranties.
Each Seller hereby represents, warrants and covenants, severally and not
jointly, to Purchaser as follows as of the date hereof:
(b)
Seller has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement. This Agreement has been
duly and validly authorized, executed and delivered on behalf of Seller and
shall constitute the legal, valid and binding obligation of Seller enforceable
against it in accordance with its terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.
(c)
The execution, delivery and performance by Seller of this Agreement
and the consummation by Seller of the transactions contemplated hereby will not
(a) result in a violation of the organizational documents of Seller, (b)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which Seller is a party, or (c) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to Seller, except in the case of clauses (b)
and (c) above, for such conflicts, defaults, rights or violations which would
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of Seller to perform its obligations
hereunder.
(d)
No consent, approval, permit, order, notification, waiver
(including any waiver of a right of first refusal) or authorization of, or any
exemption from registration, declaration or filing with, any person
(governmental or private) is required in connection with the execution, delivery
and performance by Seller of this Agreement or the consummation by Seller of the
transactions contemplated hereby. There is no agreement, other than this
Agreement, to sell all or any portion of the Debentures and no person has a
right of co-sale or tag-along right that would be triggered hereby.
(e)
Seller has good and valid title to the Debentures free and clear of
lien, mortgage, security interest, pledge, charge or encumbrance of any kind
("Liens").
Delivery of the Debentures to Purchaser will pass to Purchaser good and valid
title to the Debentures, free and clear of Liens other than those of Purchaser
or under securities laws.
(f)
Seller is acting solely for Seller's own account, and has made
Seller's own independent decision to enter into this Agreement and as to whether
this Agreement is appropriate or proper for Seller based upon Seller's own
judgment and upon advice of such advisors as Seller deems necessary.
Seller acknowledges and agrees that Seller is not relying, and has not relied,
upon any communication (written or oral) of Purchaser or any affiliate, employee
or agent of Purchaser with respect to the legal, accounting, tax or other
implications of this Agreement and that Seller has conducted Seller's own
analyses of the legal, accounting, tax and other implications hereof and
thereof; it being understood that information and explanations related to the
terms and conditions of this Agreement shall not be considered investment advice
or a recommendation to enter into this Agreement. Seller acknowledges that
neither Purchaser nor any affiliate, employee or agent of Purchaser is acting as
a fiduciary for or an advisor to Seller in respect of this
Agreement.
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(g)
There is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency or self
regulatory organization or body pending or, to the knowledge of Seller,
threatened against or affecting Seller that could reasonably be expected to have
a material adverse affect on the ability of Seller to perform its obligations
hereunder.
(i) Neither
the Seller nor any of its affiliates is an officer, director or a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”)). Neither Seller nor any of its
affiliates is, (a) effecting or seeking, offering or proposing (whether publicly
or otherwise) to effect, or cause or participate in or in any way assist any
other person to effect or seek, offer or propose (whether publicly or otherwise)
to effect or participate in, (i) any material acquisition of any securities (or
beneficial ownership thereof) or assets of the Company or any of its
subsidiaries out of the ordinary course of business , (ii) any tender or
exchange offer, merger or other business combination involving the Company or
any of its subsidiaries, (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries, or (iv) any “solicitation” of “proxies” (as such terms
are used in the proxy rules of the Securities and Exchange Commission) or
consents to vote any voting securities of the Company; (b) forming, joining or
in any way participating in a “group” (as defined under the 0000 Xxx) with
respect to the Company with respect to the matters set forth in (a) above; (c)
otherwise acting, alone or in concert with others, to seek to control or
influence the management, Board of Directors or policies of the Company; or (d)
entering into any discussions or arrangements with any third party with respect
to any of the foregoing. The Purchased Debentures have been continuously
held by the Seller for a period of at least twelve (12) months as of the date
hereof.
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Section 4. Purchaser Representations and
Warranties. Purchaser hereby represents and warrants to each Seller
as follows:
(a)
Purchaser is an entity duly organized and validly existing under
the laws of the jurisdiction of its formation.
(b)
Purchaser understands that, the Debenture and the New Debentures
have not been and are not being registered under the Securities Act of 1933, as
amended (the "Securities
Act") or any state securities laws, and may not be offered for sale,
sold, assigned or transferred unless subsequently registered thereunder or an
exemption from such registration is available.
(c)
Purchaser has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement. This Agreement has been
duly and validly authorized, executed and delivered on behalf of Purchaser and
shall constitute the legal, valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(d)
The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the transactions contemplated
hereby will not (a) result in a violation of the organizational documents of
Purchaser, (b) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which Purchaser is a party, or (c) result
in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to Purchaser, except in
the case of clauses (b) and (c) above, for such conflicts, defaults, rights or
violations which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of Purchaser to
perform its obligations hereunder.
(e)
Purchaser (a) is a sophisticated person with respect to the sale of
the Debentures and the New Debentures; (b) has adequate information concerning
the business and financial condition of the Company to make an informed decision
regarding the purchase of the Debentures and the New Debentures; and (c) has
independently and without reliance upon the Sellers, and based on such
information as Purchaser has deemed appropriate, made its own analysis and
decision to enter into this Agreement, except that Purchaser has relied upon
each Seller’s express representations, warranties and covenants in this
Agreement. Purchaser acknowledges that neither Seller has given Purchaser
any investment advice, credit information or opinion on whether the purchase of
the Debentures and the New Debentures is prudent.
(f)
There is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency or
self-regulatory organization or body pending or, to the knowledge of Purchaser,
threatened against or affecting Purchaser that could reasonably be expected to
have a material adverse affect on the ability of Purchaser to perform its
obligations hereunder.
(g)
Purchaser is purchasing the Debentures and the New Debentures
solely for its own account and not with a view to the distribution or
resale of the Debentures and the New Debentures or its rights thereunder except
pursuant to a registration statement declared effective under, or an exemption
from the registration requirements of, the Securities Act.
(h)
Purchaser is an "accredited investor" (as defined in Regulation D
under the Securities Act) and has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
transaction contemplated herein, and it is able to bear the economic risk of
such purchase.
(i)
Purchaser understands that the Debentures and the New Debentures
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities
laws.
(j)
Purchaser understands that the New Debentures shall bear
appropriate restrictive legends.
(k)
Purchaser has taken no action that would give rise to any claim by
any person for brokerage commissions, finder's fees or similar payments relating
to this Agreement or the transactions contemplated hereby.
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Section 5. Company Representations and
Warranties. The Company hereby represents and warrants as
follows:
(a)
Company and its subsidiaries are an entities duly organized and
validly existing under the laws of the jurisdiction of their
formation.
(b)
The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement. This Agreement
has been duly and validly authorized, executed and delivered on behalf of the
Company and shall constitute the legal, valid and binding obligation of the
Company enforceable against it in accordance with its terms, except as such
enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(c)
The execution, delivery and performance by Company of this
Agreement and the consummation by Company of the transactions contemplated
hereby will not (a) result in a violation of the organizational documents of
Company, (b) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which Company is a party, or (c) result in
a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to Company, except in the case of
clauses (b) and (c) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of Company to perform its
obligations hereunder.
(d)
No consent, approval, permit, order, notification, waiver
(including any waiver of a right of first refusal) or authorization of, or any
exemption from registration, declaration or filing with, any person
(governmental or private) is required in connection with the execution, delivery
and performance by Company of this Agreement or the consummation by Company of
the transactions contemplated hereby. There is no agreement, other than
this Agreement, to sell all or any portion of the Debentures and no person has a
right of co-sale or tag-along right that would be triggered hereby.
(e)
Company is acting solely for Company's own account, and has made
Company's own independent decision to enter into this Agreement and as to
whether this Agreement is appropriate or proper for Company based upon Company's
own judgment and upon advice of such advisors as Company deems necessary.
Company acknowledges and agrees that Company is not relying, and has not relied,
upon any communication (written or oral) of Purchaser or any affiliate, employee
or agent of Purchaser with respect to the legal, accounting, tax or other
implications of this Agreement and that Company has conducted Company's own
analyses of the legal, accounting, tax and other implications hereof and
thereof; it being understood that information and explanations related to the
terms and conditions of this Agreement shall not be considered investment advice
or a recommendation to enter into this Agreement. Company acknowledges
that neither Purchaser nor any affiliate, employee or agent of Purchaser is
acting as a fiduciary for or an advisor to Company in respect of this
Agreement.
(f)
There is no action, suit, claim, proceeding, inquiry or
investigation before or by any court, public board, government agency or self
regulatory organization or body pending or, to the knowledge of Company,
threatened against or affecting Company that could reasonably be expected to
have a material adverse affect on the ability of Company to perform its
obligations hereunder.
(g)
Company has taken no action that would give rise to any claim by
any person for brokerage commissions, finder's fees or similar payments relating
to this Agreement or the transactions contemplated hereby.
(h)
The New Debentures are duly authorized and, when issued and paid
for in accordance with this Agreement, will be duly and validly issued, fully
paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in this Agreement. The shares
underlying the New Debentures, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer provided
for in this Agreement. The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance pursuant to the
New Debentures.
7
Section 6. Covenants. Sellers, for good and
valuable consideration, effective as of the Closing Date, hereby assign,
transfer, convey and deliver to Purchaser all of its right, title and interest
in and to the Purchased Debentures, and agree to take such actions in the future
that are reasonably requested by the Purchaser to effect the foregoing, and to
give effect to any exercise of the Option by the Purchaser.
The Company agrees that all accrued but unpaid interest on the Purchased
Debentures through the Closing Date remain obligations of the Company to the
Sellers.
Section 7. Notices. Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement must be in writing and will be deemed to have
been delivered: (a) upon receipt, when delivered personally; (b) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (c) one business day after deposit with an overnight courier service, in each
case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
If to Purchaser:
Xxxxxx Capital Partners LLC
00 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy (for informational purposes only) to:
Xxxxxxx Xxxxxxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to Sellers:
Thor Asset
Management USA, LLC
000 xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX
00000
c/o Xxxxx
Xxxxxxxx
Managing
Director
Berkshire
International Finance, Inc.
000 Xxxx
Xxxxxx Xxxx
00xx Xxxxx
Xxxxxxx, XX
X0X 0X0
8
with a
copy (for informational purposes only) to:
If to Escrow Agent:
Xxxxxxx Xxxxxxxxx & Xxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to Company:
Axion International Holdings,
Inc.
000 Xxxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx
Xxxxx, Xxx Xxxxxx 00000
With a
copy to:
Xxxxxxxxx
Xxxxx Xxxx & Xxxxx PLLC
000 Xxxx
Xxxxxx Xxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx
Tel:
000-000-0000
Fax:
000-000-0000
Attn: Xxxxx
X. Xxxxxxxxx
Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by Seller's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with clause
(a) or (c) above, respectively.
9
Section 8. Governing Law; Submission to
Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
Section 9. Entire Agreement; Amendments.
This Agreement supersedes all other prior oral or written agreements among
Purchaser, the Sellers, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and 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 Sellers nor Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought.
Section 10. Severability.
If any provision of this Agreement is prohibited by law or
otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or
unenforceable shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this
Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace
the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).
Section 11. Headings. The headings
of this Agreement are for convenience of reference and shall not form part of,
or affect the interpretation of, this Agreement.
10
Section 12 No Strict Construction.
The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
Section 13 No 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.
Section 14 Further Assurances.
Each party shall use its commercially reasonable efforts to 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 any 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.
Section 15 Successors. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Purchased Preferred
Shares, Purchased Warrants or Purchased Put Options.
Section 16 Survival. Unless this
Agreement is terminated by mutual consent of the Sellers and Purchaser, the
representations and warranties of Sellers and Purchaser contained in Section 3
and 4 shall survive the Closing Date and the delivery and exercise of the
Option, as applicable, through the date that is one year after the Closing Date.
[The remainder of the page is intentionally left
blank]
11
IN WITNESS
WHEREOF, Purchaser, Sellers and the Escrow Agent have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
|
tHOR UNITED
By: /s/
Xxxx
Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: Director
|
|
BERKSHIRE INTERNATIONAL
FINANCE
By: /s/
Xxxx
Figlioni
Name: Xxxx Figlioni
Title:
|
|
XXXXXX CAPITAL
PARTNERS LLC
By: /s/
Xxxxxx X.
Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
|
|
XXXXXXX XXXXXXXXX & XXXXX
LLP, as
Escrow Agent
By: /s/ Xxxxxx X.
Xxxxx
Name: Xxxxxx X. Xxxxx Title: Authorized
Signatory
|
By: /s/
Xxxxx
Xxxxxxxx
Name:
Name:
Title:
