SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
THIS PURCHASE AGREEMENT (“Agreement”)
is made by and between Axion International Holdings, Inc., a Colorado
corporation (the “Company”),
and the Purchaser set forth on the signature page affixed hereto (the “Purchaser”).
Recitals
A. The
Company is offering (the “Offering”)
up to 2,500,000 shares of the Company’s Common Stock, without par value (the
“Common
Stock”), at a price per share of Eighty-eight cents ($.88) per
share;
B. The
Offering is made on a best effort basis with no minimum number of shares
required to be sold, to Accredited Investors (as defined below) in reliance upon
the exemption from securities registration afforded by Section 4(2) under the
Securities Act of 1933, as amended (“1933
Act”), and the provisions of Regulation D (“Regulation
D”), as promulgated by the U.S. Securities and Exchange Commission (the
“SEC”)
under the 1933 Act; and
C. By
executing this Agreement, the Purchaser has agreed to purchase, and the Company
upon counter-execution of this Agreement will agree to sell and issue to the
Purchaser, upon the terms and subject to the conditions stated in this
Agreement, such number of shares of the Company’s Common Stock (the “Shares”)
as set forth on the signature page affixed hereto.
NOW, THEREFORE, In consideration of the
mutual promises made herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. In
addition to those terms defined above and elsewhere in this Agreement, for the
purposes of this Agreement, the following terms shall have the meanings here set
forth:
“Accredited Investor”
shall have the meaning assigned to such term in Rule 501(a) of Regulation D, a
copy of which is attached hereto as Exhibit
A.
“Affiliate” means,
with respect to any Person, any other Person which directly or indirectly
controls, is controlled by, or is under common control with, such Person, where
“control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Agreements” means
this Agreement and any other agreement entered into, now or in the future, by
the Company in connection with this Agreement or any of the other
Agreements.
1.3. “Closing” means the
consummation of the purchase and sale of the Shares.
1.4.
“Material Adverse
Effect” means a material adverse effect on the (i) condition (financial
or otherwise), business, assets or results of operations of the Company; (ii)
ability of the Company to perform any of its material obligations under the
terms of the Agreements; or (iii) material rights and remedies of a Purchaser
under the terms of the Agreements.
1.5. “Person” means an
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other
form of entity not specifically listed herein.
1.6. “1934 Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
2. Purchase and Sale of
Shares. Subject to the terms and conditions of this Agreement and on the
basis of the representations and warranties made herein, the Purchaser hereby
agrees to purchase, and the Company, upon counter-execution of this Agreement,
agrees to sell and issue to the Purchaser, the number of Shares set forth on the
signature page attached hereto for a purchase price of $.88 per Share (the
“Purchase
Price”). The Purchase Price shall be payable by wire transfer or as
otherwise agreed to by the Company and the Purchaser.
3. Subscription
Procedure. In order to subscribe for the Shares, the Purchaser
shall deliver to the Company (a) the signature page to this Agreement executed
by the Purchaser with all blanks properly completed, indicating the number of
Shares subscribed for, and (b) the aggregate Purchase Price for such
Shares. On delivery of the executed signature page by the Purchaser,
the Purchaser will become bound by the terms of the Agreement, and unless
otherwise required by applicable securities laws, the Agreement will not be
revocable by the Purchaser. Thereafter if the Company elects, in its
sole and absolute discretion, to accept the Purchaser’s subscription for such
shares, the Company shall execute this Agreement and deliver its signature page,
together with a certificate for the number of shares being purchased by the
Purchaser. The Closing shall be deemed to have occurred upon the
delivery of such Shares by the Company to the Purchaser.
4. Representations and
Warranties of the Company. Except as disclosed in the
Company’s SEC Filings (as defined below), the Company hereby represents and
warrants to the Purchases that:
4.1. Organization, Good Standing
and Qualification. The Company is a corporation validly existing and in
good standing under the laws of Colorado and has all requisite corporate power
and authority to carry on its business as now conducted and own its
properties. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification or
licensing necessary unless the failure to so qualify would not result in a
Material Adverse Effect.
4.2. Authorization. The
Company has full corporate power and authority and has taken all requisite
action on the part of the Company necessary for (i) the authorization, execution
and delivery of the Agreements, (ii) authorization of the performance of all
obligations of the Company hereunder and thereunder, and (iii) the
authorization, issuance (or reservation for issuance) and delivery of the
Shares. The Agreements constitute the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally and general principles of equity that restrict the
availability of equitable or legal remedies.
4.3. Valid
Issuance. As of the Closing, the Company has reserved a
sufficient number of shares of Common Stock for the issuance of the Shares. The
Shares are duly authorized and, when issued in accordance herewith, will be
validly issued, fully paid, non-assessable and free and clear of all
encumbrances and restrictions imposed by or through the Company, except for
restrictions on transfer imposed by applicable securities laws.
4.4. Consents. The
execution, delivery and performance by the Company of the Agreements and,
subject to the truth and accuracy of the representations made by the Purchaser
in this Agreement, the offer, issuance and sale of the Shares to the Purchaser,
require no consent of, action by or in respect of, or filing with, any Person,
agency, or official and filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws.
4.5. SEC Filings;
Business. The Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the 1934
Act (all of the foregoing filed prior to or on the date hereof and all
registration statements and exhibits included therein and financial statements
and schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the "SEC
Filings"). As of the date of filing of such SEC Filings, each
such SEC Filing, as it may have been subsequently amended by filings made by the
Company with the SEC prior to the date hereof, complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Filing. None of the SEC Filings,
as of the date filed and as they may have been subsequently amended by filings
made by the Company with the SEC prior to the date hereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Filings complied as to form in all material respects with applicable
accounting requirements and published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently applied,
during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude footnotes or may be
condensed or summary statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).
4.6. No Conflict, Breach,
Violation or Default; Compliance with Law. The execution, delivery and
performance of the Agreements by the Company and the issuance and sale of the
Shares will not conflict with or result in a breach or violation of any of the
terms and provisions of, constitute a default under, require any consent,
approval or filing under, result in or require the creation or imposition of any
lien or encumbrance upon or with respect to the Company’s property under (i) the
Company’s Articles of Incorporation (including any certificates of designation)
or the Company’s Bylaws, both as in effect on the date hereof, (ii)
any statute, rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or any of its
properties; or (iii) any contract, loan or instrument by which the company or
its property is bound. The Company (i) is not to its knowledge in
violation of any statute, rule or regulation applicable to the Company or its
assets or its activities, (ii) is not in violation of any judgment, order or
decree applicable to the Company or its assets; and (iii) has not received
notice from any Person of any claim, investigation or inquiry, that, if
adversely determined, would render the preceding sentence untrue or incomplete
and the Company is aware of no facts or circumstances which could give rise to
such a claim, investigation or inquiry.
4.7. Brokers and Finders.
The Purchaser shall have no liability or responsibility for the payment of any
commission or finder’s fee to any third party in connection with or resulting
from this agreement or the transactions contemplated by this Agreement by reason
of any agreement of or action taken by the Company.
5. Representations and
Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company that:
5.1 Organization, Good Standing,
Authorization. If Purchaser is an entity, it is a corporation,
limited liability company, trust or partnership or other similar entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction. Purchaser has full power and authority (corporate or
otherwise) to execute, deliver and enter into the Agreements. The
execution, delivery and performance by the Purchaser of the Agreements have been
duly authorized and each of the Agreements constitutes the valid and legally
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability,
relating to or affecting creditors’ rights generally and general principles of
equity that restrict the availability of equitable or legal
remedies.
5.2 Purchase Entirely for Own
Account. The Shares to be received by the Purchaser hereunder
will be acquired for the Purchaser’s own account, not as nominee or agent, and
not with a view to the resale or distribution of any part thereof and the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. The Purchaser is not a registered
broker dealer or an entity engaged in the business of being a broker
dealer.
5.3 Investment
Experience. The Purchaser acknowledges that it can bear the
economic risk and complete loss of its investment in the Shares and has such
knowledge and experience in financial or business matters and in private
placement transactions of companies similar to the Company so that it is capable
of evaluating the merits and risks of the purchase contemplated
hereby.
5.4 Disclosure of
Information. The Purchaser has had an opportunity to receive
documents related to the Company and to ask questions of and receive answers
from the Company regarding the Company, its business and the terms and
conditions of the offering of the Shares and has received and read the SEC
Filings filed via XXXXX. Neither such inquiries nor any other due
diligence investigation conducted by the Purchaser shall modify, amend or affect
the Purchaser’s right to rely on the Company’s representations and warranties
contained in this Agreement or made pursuant to this Agreement.
5.5 Restricted
Securities. The Purchaser understands that the Shares are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable state laws
and regulations such securities may be resold without registration under the
1933 Act only in certain limited circumstances.
5.6 Legends. It
is understood that the certificates evidencing the Shares may bear one or all of
the following legends or legends substantially similar thereto:
1. (a) “The shares represented by this
certificate may not be transferred without (i) the opinion of counsel reasonably
satisfactory to the corporation that such transfer may lawfully be made without
registration under the Securities Act of 1933 or qualification under applicable
state securities laws; or (ii) such registration or qualification.”
2.
3. (b) If required by the
authorities of any state in connection with the issuance of sale of the Shares,
the legend required by such state authority.
5.7 Accredited
Investor. The Purchaser is an Accredited
Investor.
5.8. No General
Solicitation. The Purchaser did not learn of the investment in
the Shares as a result of any public advertising or general
solicitation.
6. Miscellaneous.
6.1 Successors and
Assigns. This Agreement may not be assigned by the
Company. The Purchaser may assign its rights and delegate its duties
hereunder in whole or in part to any Person (who is not a competitor or vendor
of the Company) to which the Purchaser has transferred or assigned all or part
of its Shares, provided in each case that such transferee or assignee
acknowledges in writing to the Company that the representations and warranties
contained herein shall apply to such transferee or assignee. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this
Agreement.
6.2 Counterparts. This
Agreement may be executed in two or more counterparts, by original or facsimile
signature, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
6.3 Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
6.4 Notices. Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given only upon delivery to
each party to be notified by (i) personal delivery, (ii) facsimile, with
electronic confirmation of transmittal, (iii) certified mail, return receipt
requested, or (iv) an internationally recognized overnight air courier,
addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice to
the other party:
If to the
Company:
c/o Axion
International, Inc.
000
Xxxxxxxxxxxx Xxxx
Xxxxxxx
Xxxxx, Xxx Xxxxxx 00000
Facsimile:
(000) 000-0000
Att: Xxxxx
Xxxxxxxx, CEO
With a
copy to:
Xxxxxxxxx
Xxxxx Xxxx & Xxxxx PLLC
000 Xxxx
Xxxxxx Xxxxx
Facsimile:
(000) 000-0000
Att: Xxxx
Xxxx, Esq.
If to the
Purchaser, to the addresses set forth on the
signature
page hereto.
6.5 Amendments and
Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Purchaser.
6.6 Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
6.7 Entire
Agreement. This Agreement, including the exhibits and
schedules hereto, and the other documents contemplated hereby constitute the
entire agreement among the parties hereof with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings, both
oral and written, between the parties with respect to the subject matter hereof
and thereof.
6.8 Further
Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
6.9 Applicable
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
6.10 No Strict
Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement and the
other Agreements. In the event an ambiguity or question of intent or
interpretation arises, this Agreement and the other Agreements shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the other
Agreements.
[Signature
Pages Follow]
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the 9th day of
January, 2009.
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The
Company:
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By:
/s/ Xxxx
Xxxxx
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Name:
Xxxx Xxxxx
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Title:
President
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Purchaser
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Insight
Partners, LLC
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/s/ Xxxx
Xxxxxxxxx
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By: Xxxx
Xxxxxxxxx
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| _____________________ | |
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Title: Managing
Partner
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Number
of Shares to be purchased at the Closing:
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1,562,500
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Purchase
Price (number of Shares x $.88):
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$1,375,000.00
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Social
Security/Tax Identification Number:
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Principal
jurisdiction in which business is conducted:
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Maryland
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If
Purchaser is an entity, form of entity:
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Limited
Liability Company
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State
under which entity is formed:
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Maryland
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Address:
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Facsimile:
_____________________
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with
a copy to:
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