WAIVER AGREEMENT
Exhibit 10.1
This Waiver Agreement (the “Agreement”) is made and entered into, effective as of June 8, 2009 (the “Effective Date”), by and among American Defense Systems, Inc., a Delaware corporation (the “Company”), and the stockholders of the Company parties hereto (individually, a “Holder” and collectively, the “Holders”). Unless otherwise specified herein, capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Certificate of Designations (as defined below).
RECITALS:
A. The Company and the Holders are parties to the Securities Purchase Agreement, dated as of March 7, 2008 (as may be amended, modified, restated or supplemented from time to time, the “Securities Purchase Agreement”), pursuant to which the Holders purchased from the Company (i) shares of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), the terms of which are set forth in the certificate of designation for such series of preferred stock filed by the Company with the Secretary of State of the State of Delaware on March 7, 2008 (the “Certificate of Designations”), and (ii) certain Warrants numbered X-0, X-0, X-0 and A-4 (the “Warrants”).
B. The parties previously executed that certain Settlement Agreement, Waiver and Amendment dated effective May 22, 2009 (the “Settlement Agreement”), pursuant to which, inter alia, the parties amended the Warrants to reduce the “Exercise Price” thereunder.
C. Under the Certificate of Designations, with respect to the shares of Series A Preferred Stock described therein, and the Warrants, with respect to the shares of common stock issuable under such Warrants, each Holder may not convert its shares of Series A Preferred Stock or exercise its Warrant if such Holder (together with its affiliates) would be treated as beneficially owning more than 9.99% of the Company’s outstanding common stock immediately after such conversion or exercise (such provisions of the Certificate of Designations and Warrants are herein referred to as the “Blocker Provisions”).
D. The parties have agreed to execute this Agreement to memorialize their agreement to waive the Blocker Provisions.
AGREEMENTS:
NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows:
1. Waiver of Blocker Provisions. Notwithstanding any provision of the Certificate of Designations or the Warrants to the contrary, the parties hereto hereby agree to waive the Blocker Provisions in the Certificate of Designations and the Warrants, with the effect that such Blocker Provisions shall not preclude a Holder from converting its shares of Series A Preferred Stock into shares of the Company’s common stock, and shall not preclude a Holder from exercising its Warrant for shares of the Company’s common stock.
2. Miscellaneous.
2.1 Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute under or in connection with this Agreement or the other documents or agreements contemplated hereby (including the Securities Purchase Agreement and the documents and agreements executed in connection therewith, notwithstanding any provision therein to the contrary) or with any transaction contemplated hereby or thereby or discussed herein or therein, 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. 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.
2.2 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; provided that a facsimile signature and a signature delivered electronically (including by delivery via electronic mail of a signature page in “pdf” format) shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or electronic signature.
2.3 Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
2.4 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
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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).
2.5 Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Holders, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein 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 any Holder makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders, and any amendment to this Agreement made in conformity with the provisions of this Section 2.5 shall be binding on all Holders and holders of Securities (as such term is defined in the Securities Purchase Agreement), as applicable. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the applicable Securities then outstanding.
2.6 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: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) 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:
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If to the Company: |
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American Defense Systems, Inc. |
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000 Xxxxx Xxxxxx, Xxxx X |
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Xxxxxxxxxx, XX 00000 |
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Telephone: |
(000) 000-0000 |
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Facsimile: |
(000) 000-0000 |
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Attention: |
Chief Financial Officer |
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With a copy (for informational purposes only) to: |
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Xxxxxxxxx Traurig, LLP |
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0000 Xxxxxx Xxxxxxxxx |
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Xxxxx 0000 |
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XxXxxx, Xxxxxxxx 00000 |
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Telephone: |
(000) 000-0000 |
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Facsimile: |
(000) 000-0000 |
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Attention: |
Xxxxxxx X. Xxxxx, Esq. |
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If to a Holder, to its address and facsimile number set forth on the Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Holder’s representatives as set forth on such Schedule of Buyers,
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with a copy (for informational purposes only) to: |
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Reicker, Pfau, Xxxx & XxXxx LLP |
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0000 Xxxxx Xxxxxx, Xxxxx X |
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Xxxxx Xxxxxxx, XX 00000 |
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Telephone: |
(000) 000-0000 |
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Facsimile: |
(000) 000-0000 |
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Attention: |
Xxxxxxx X. Xxxx, Esq. |
or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’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 (i), (ii) or (iii) above, respectively.
2.7 Successors and Assigns. 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 Preferred Shares or the Warrants. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holders. A Holder may assign some or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be a Holder hereunder with respect to such assigned rights.
2.8 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.
2.9 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 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.
2.10 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.
2.11 Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder under this Agreement are several and not joint with the obligations of any other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein, and no action taken by any
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Holder pursuant hereto, shall be deemed to constitute the Holders as, and the Company acknowledges that the Holders do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group, and the Company will not assert any such claim with respect to such obligations or the transactions contemplated by this Agreement and the Company acknowledges that the Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated hereby. The Company acknowledges and each Holder confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
[Signature Pages Follow]
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IN WITNESS WHEREOF, each Holder and the Company have caused their respective signature page to this Waiver Agreement to be duly executed as of the date first written above.
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COMPANY: |
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AMERICAN DEFENSE SYSTEMS, INC. |
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By: |
/s/ Xxxx Xxxxxxxx |
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Name: Xxxx Xxxxxxxx |
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Title: Chief Financial Officer |
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IN WITNESS WHEREOF, each Holder and the Company have caused their respective signature page to this Waiver Agreement to be duly executed as of the date first written above.
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HOLDERS: |
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WEST COAST OPPORTUNITY FUND, LLC |
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By: |
/s/ Atticus Xxxx |
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Name: Atticus Xxxx |
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Title: CIO of Managing Member |
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IN WITNESS WHEREOF, each Holder and the Company have caused their respective signature page to this Waiver Agreement to be duly executed as of the date first written above.
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HOLDERS: |
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CENTAUR VALUE FUND, LP |
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By: |
/s/ Xxxx Xxxxxx |
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Name: Xxxx Xxxxxx |
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Title: Managing Partner |
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IN WITNESS WHEREOF, each Holder and the Company have caused their respective signature page to this Waiver Agreement to be duly executed as of the date first written above.
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HOLDERS: |
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UNITED CENTAUR MASTER FUND |
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By: |
/s/ Xxxx Xxxxxx |
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Name: Xxxx Xxxxxx |
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Title: Investment Manager |
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