ASSIGNMENT AND AMENDMENT AGREEMENT
Exhibit
10.5
ASSIGNMENT and AMENDMENT AGREEMENT
(this “Agreement”), dated
March 20, 2008 by and among the assignors listed on Schedule of Assignors
attached hereto (the “Assignors”), ADH
Ventures, LLC (the “Assignee”) and
Analytical Surveys, Inc., a Colorado corporation (the “Company”).
WITNESSETH:
WHEREAS, the Assignors are holders of
(a) the Company’s 13% Secured Convertible Debentures due March 31, 2008, as
amended by the Amendment and Waiver Agreements, dated September 30, 2007 and
December 30, 2007 (the “Debentures”) in the
outstanding principal amount set forth on the Schedule of Assignors, and (b)
warrants (the “Warrants”) to acquire
a number of the Company’s common stock, with no par value (the “Common Stock”), as
set forth in the Schedule of Assignors;
WHEREAS, the Debentures and the
Warrants were issued to the Assignors pursuant to that certain Securities
Purchase Agreement, dated as of November 24, 2006 (as amended, the “Purchase Agreement”),
among the Assignors and the Company;
WHEREAS, the obligations under the
Debenture are (a) guaranteed by the Subsidiary Guarantee, dated as of November
24, 2006 (the “Guarantee”), of
Survey Holdings, Inc. (the “Guarantor”) in favor
of the holders of the Debentures and (b) secured by certain assets of the
Company and the Guarantor pursuant to that certain Security Agreement, dated as
of November 24, 2006 (the “Security Agreement”),
among the Company, the Guarantor and the Assignors, and that certain Mortgage,
dated as of November 24, 2006 (the “Mortgage”), by the
Company in favor of the Assignors;
WHEREAS, in connection with the
Purchase Agreement, the Assignors and the Company entered into a Registration
Rights Agreement, dated as of November 24, 2006 (the “Registration Rights
Agreement”) relating to the shares of Common Stock underlying the
Debentures and the Warrants;
WHEREAS, the Assignors desire to sell
to the Assignees, and the Assignees desire to purchase from the Assignors,
$1,000,000 in principal amount of the Debentures;
WHEREAS, the Assignors have agreed to
grant a 30 day option to the Assignee to purchase the remaining Debentures
having a principal amount of approximately $650,000;
WHEREAS, the Company has formed a new
subsidiary, Axion Acquisition Corp., a Delaware corporation, which has entered
into a merger (the “Merger”) with Axion
International, Inc., a Delaware corporation (the “New Guarantor”),
thereby making the New Guarantor a wholly owned subsidiary of the
Company;
WHEREAS, the parties desire to, among
other things, (a) amend and restate the Debentures; (b) terminate the Purchase
Agreement and the Registration Rights Agreement; (c) cancel the Warrants; and
(d) complete the assignment of the Debentures.
NOW, THEREFORE, in consideration of the
representations and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Restatement of
Debentures. Simultaneously, upon the Closing, as defined
herein, the Assignors shall exchange the Debentures for replacement Debentures
(“Replacement
Debentures”) consisting of (a) Replacement Debentures in the aggregate
principal amount of $1,000,000 with interest thereon paid by the Company to the
Assignors through the date of such exchange (the “$1,000,000 Replacement
Debentures”); and (b) the remaining Replacement Debentures (“Remaining
Debentures”) being in such denominations (as shall equal in the aggregate
the principal amount of the Debentures less the $1,000,000 Replacement
Debentures). The Replacement Debentures and shall be amended and restated in the
form attached hereto as Exhibit
A. The Remaining Debentures shall be issued and delivered to
the Assignors respectively as provided in the Schedule of Assignors and the
$1,000,000 Replacement Debentures shall be issued and delivered to the
Assignee.
2. Assignment.
(a) Assignment of Debentures and
Other Transaction Documents. Subject to all of the terms
hereof at the Closing, each of the Assignors shall (i) assign to the Assignee
the $1,000,000 Replacement Debentures, free and clear of any claim, pledge,
charge, lien and any other encumbrance whatsoever; and (ii) shall amend the
Mortgage by adding the Assignee as a Mortgagee thereunder as set forth in Exhibit B
(collectively, the “Assignment”).
(b) Closing. The
closing (the “Closing”) of the
Assignment shall occur simultaneous with the closing of the Merger at the
offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ PLLC, 381 Park Avenue South, New
York, New York, or such other date and time as is mutually agreed to by the
parties hereto.
(c) Purchase
Price. At the Closing, the Assignee shall deliver to each
Assignor the purchase price for the $1,000,000 Replacement Debenture set forth
opposite such Assignor’s name in the Schedule of Assignors, in United States
dollars and in immediately available funds.
3. Option.
(a) Grant of
Option. The Assignors hereby grant to the Assignee an option
(the “Option”)
to purchase all or any part of the Remaining Debentures for a purchase price
(the “Option
Price”) equal to the outstanding principal amount of the Remaining
Debentures being purchased together with interest accrued thereon as of the
Exercise Date (as defined below), which Option shall be exercisable in the
period commencing on the date of the Closing and within thirty (30) calendar
days thereafter (the “Option
Period”). The Option shall be exercised by written notice (the
“Exercise
Notice”) by the Assignee to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLP, The Graybar Building, 420 Lexington Avenue, New York, New
York
(b) 10170
(the “Assignors’
Representative”) by overnight delivery of such notice within the Option
Period. “Exercise Date” shall
mean the date the Exercise Notice is deposited with a nationally recognized
overnight courier for next business day delivery to the Assignors’
Representative. 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 Assignee shall be deemed to be the holder and beneficial owner of such
Remaining Debentures as of the Exercise Date.
(c) Deliveries Upon Exercise of
Option. The Option Price for the Remaining Debenture covered
by the Exercise Notice shall be delivered to the holders of such Debentures in
United States Dollars in immediate available funds within three (3) business
days following the Exercise Date. Upon receipt of the Option Price,
the Assignors shall promptly deliver to the Assignee (i) the Remaining
Debentures covered by the Exercise Notice duly endorsed for transfer to the
Assignees, free and clear of any claim, pledge, charge, lien and any other
encumbrance whatsoever; and (ii) an assignment to Assignee of Assignor’s
interest in and to the Security Agreement, Mortgage and Guarantees to the extent
of the Remaining Debentures being purchased.
(d) No
Encumbrances. Until the expiration of the Option Period, each
Assignor shall continue to own, free and clear of any hypothecation, pledge,
mortgage or other encumbrance (except pursuant to the Option), the Remaining
Debentures set forth opposite such Assignor’s name in the Schedule of
Assignors.
4. Termination of
Agreements. Simultaneous with the consummation of the
Assignment, the Purchase Agreement and the Registration Rights Agreement shall
be terminated in their entirety and none of the parties hereto shall have any
further obligations under such agreements; provided, however, Sections 4.1, 4.2
4.3, 4.4, 4.5, 4.6 (other than the first sentence), 4.7, 4.8, 4.10, 4.11, 4.12,
4.14(b), 4.15 and 4.19 and 5 of the Purchase Agreement and Section 5 of the
Registration Rights Agreement shall survive such termination and remain in full
force and effect in accordance with its terms.
5. Cancellation of
Warrants. Simultaneous with the consummation of the
Assignment, 60.6% of Warrants held by the Assignors (pro-rata among the
Assignors, as set forth opposite each Assignor’s name under the column
“Cancelled Warrants” in the Schedule of Assignors) shall be cancelled and none
of the parties hereto shall have any further obligations under such portion of
Warrants. With respect to the remaining 39.4% of Warrants (the
“Remaining Warrants”), each of the Assignors hereby agree (a) during the Option
Period, not to exercise any of the Remaining Warrants and the Company shall have
no obligation to honor any such exercise; and (b) until the expiration of the
Option Period, to continue to own, free and clear of any hypothecation, pledge,
mortgage or other encumbrance, the Remaining Warrants set forth opposite such
Assignor’s name in the Schedule of Assignors. Upon exercise in full of the
Option, the balance of the outstanding Warrants held by the Assignors shall be
cancelled and none of the parties hereto shall have any further obligations
under such portion of Warrants. At the closing of the Option, each of the
Assignors shall deliver to the Company the Warrants set forth opposite such
Assignor’s name in the Schedule of Assignors for cancellation.
6. Amendments to Security
Agreement. Simultaneous with the consummation of the
Assignment, the Security Agreement shall be amended as follows:
(a) By adding
the Assignee as a “Secured Party” thereunder;
(b) By
deleting the last sentence of Section 4(c);
(c) By
deleting Sections 4(n), 4(w) and 4(dd);
(d) By
replacing the Assignee as “Agent” and by replacing all references to Harborview
Master Fund with ADH Ventures, LLC under Section 18 and the Annex to Security
Agreement; and
(e) Notwithstanding
anything to the contrary contained in Sections 4(e) and 4(x), by permitting the
Debtors to relocate their chief executive offices, their books of accounts,
their records and tangible collateral to ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
7. New
Guarantor. In accordance with the terms of the Guarantee and
the Security Agreement, at the Closing, the Company shall (a) cause the New
Guarantor to deliver to the Assignee (i) an Assumption Agreement in the form
attached hereto as Exhibit C and (ii)
the Additional Debtor Joinder in the form attached hereto as Exhibit D; together
with supplements to the Schedules to the Security Agreement and UCC-1 Financing
Statement naming the New Guarantor as Debtor and the Assignee and Assignors as
Secured Party, and (b) deliver to the Assignee as Pledged Securities (as defined
in the Security Agreement) the certificates representing all of the issued and
outstanding shares of the New Guarantor.
8. Amendment to Financing
Statement. The Assignors and the Company hereby authorize the
Assignee to take all steps it deems reasonably necessary to perfect its security
interest in the Collateral (as defined in the Security Agreement), including,
without limitation, the filing of any amendment to financing statements adding
the Assignee as a “Secured Party” thereunder.
9. Consent to Equity Issuances
and Merger. Notwithstanding Sections 4.13, 4.14 and 4.19 of
the Purchase Agreement and Section 8(a)(viii) of the Debentures, the Assignors
and the Assignee hereby waive (a) any and all rights to participate in the
issuance of shares of the Company’s Common Stock pursuant to Section 4.13 of the
Purchase Agreement (i) in connection with the Merger, (ii) to the current or
former members of the Company’s Board of Directors as payment for past director
fees in lieu of cash and (iii) to certain finders in connection with the Merger
(collectively, the “Subject Issuances”);
(b) any default pursuant to Section 4.14 of the Purchase Agreement arising out
of the Subject Issuances; and (c) any default under Section 8(a)(viii) of the
Debentures arising out of the Merger or the replacement of the members of the
Company’s Board of Directors in connection with the Merger.
10. Representation and
Warranties of Assignor. Each of the Assignors hereby
represents and warrants as to itself as follows:
(a) this
Agreement has been duly authorized, executed and delivered by, and is
binding upon such Assignor;
(b) such
Assignor is the sole owner and holder of the Debenture and the Warrants set
forth opposite its name in the Schedule of Assignors, free and clear of all
liens, claims and encumbrances, and has the full right to assign such Debenture,
and Assignor has not previously pledged, hypothecated or assigned such Debenture
or Warrant; and
(c) such
Assignor is not now, nor has it been for the preceding three months, an
“affiliate” (as such term is defined in Paragraph (a)(1) of Rule 144 under the
Securities Act of 1933, as amended (the “1933 Act”)) of the
Company.
11. Representation and
Warranties of Assignee. The Assignee hereby represents and
warrants as follows:
(a) the
Assignee is an “accredited investor” as defined in Regulation D under the 1933
Act. The Assignee is purchasing the $1,000,000 Replacement
Debentures, and upon exercise of the Option, will be purchasing the Remaining
Debentures, for Assignee’s own account for investment purposes only and not with
a view towards, or for resale in connection with, the public sale or
distribution thereof, or the shares issuable upon conversion thereof, nor with
any present intention of distributing or selling the same, and it has no present
or contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof;
(b) the
Assignee understands that the $1,000,000 Replacement Debentures are being, and
upon the exercise of the Option, the Remaining Debentures will be, assigned and
transferred to the Assignee in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Assignors are relying upon the truth and accuracy of, and the
Assignee’s compliance with, the representations, warranties, agreements and
acknowledgments of the Assignee set forth herein in order to determine the
availability of such exemptions and the eligibility of the Assignee to acquire
the Replacement Debentures;
(c) the
Assignee and his advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and the
Additional Guarantor, including copies of the Company most recent
publicly available financial statements (as available on the SEC’s ▇▇▇▇▇
system). The Assignee and his advisors, if any, have been afforded the
opportunity to ask questions of the Assignors. Neither such inquiries
nor any other due diligence investigation conducted by the Assignee or any of
his advisors or representatives shall modify, amend or affect the Assignee’s
right to rely on the Assignors’ representations and warranties contained in this
Agreement. The Assignee understands that its investment in the
Replacement Debentures (including the shares issuable upon conversion thereof)
involves a significant degree of risk;
(d) the
Assignee understands that no United States federal or state agency or any other
government or governmental agency has passed upon or made any recommendation or
endorsement of the Replacement Debentures or the shares issuable upon conversion
thereof;
(e) the
Assignee understands that the sale or resale of the Replacement Debentures, or
the shares issuable upon conversion thereof, has not been and is not
being
(f) registered
under the 1933 Act or any applicable state securities laws, and the Replacement
Debentures and/or the shares issuable upon conversion thereof may not be
transferred unless (i) such security is sold pursuant to an effective
registration statement under the 1933 Act, or (ii) the security is sold or
transferred pursuant to an exemption from such registration; and provided
further that neither the Assignor nor any other person is under any obligation
to comply with the terms and conditions of any exemption under the 1933
Act;
(g) this
Agreement has been duly executed and delivered by, and is binding upon the
Assignee; and
(h) the
Assignee acknowledges that the Assignment is made without any representation,
warranty or recourse, express, implied or statutory (other than as expressly set
forth herein).
12. Miscellaneous.
(a) Effect of this
Agreement. Except as modified or terminated pursuant hereto,
no other changes or modifications to any of the Transaction Documents (as
defined in the Purchase Agreement) are intended or implied and in all other
respects each of the Transaction Documents is hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date
hereof. To the extent of conflict between the terms of this Agreement
and any of the Transaction Documents, the terms of this Agreement shall
control.
(b) Further
Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be necessary or
desirable to effectuate the provisions and purposes of this
Agreement.
(c) Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
(d) Severability. Any
provision of this Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Agreement.
(e) Governing Law; Venue and
Jurisdiction. In all respects, including all matters of
construction, validity and performance, this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
applicable to contracts made and performed in such state, without regard to the
principles thereof. Each of the parties hereto hereby agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Agreement. Each of
the parties hereto irrevocably consents to the non-exclusive jurisdiction of
Supreme Court of New York, New York County and the United States District Court
for the Southern District of New York in any action or proceeding with respect
to this Agreement.
(f) Counterparts. This
Agreement may be executed in any number of counterparts, but all of such
counterparts shall together constitute but one and the same
agreement. Execution and delivery of this Agreement by exchange of
facsimile copies bearing
(g) the
facsimile signature of a party shall constitute a valid and binding execution
and delivery of this Agreement by such party.
[signature pages
follows]
IN WITNESS WHEREOF, the parties have
executed this Assignment and Amendment Agreement as of the date first set forth
above.
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THE ASSIGNORS:
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HARBORVIEW
MASTER FUND LP
By: Navigator
Management LTD,
its authorized
signatory
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By:
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Name:
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Title: Authorised
Signatory
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MONARCH
CAPITAL FUND
By: Navigator
Management LTD,
its authorized
signatory
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By:
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Name:
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Title: Director
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DKR
SOUNDSHORE OASIS
HOLDING
FUND LTD
By: DKR
Oasis management Company LP
its investment
manager
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By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇
▇▇▇▇▇▇
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Title: Authorized
Signatory
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THE ASSIGNEE:
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ADH
VENTURES, LLC
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By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇
▇▇▇▇▇▇▇
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Title:
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[signature pages
continues]
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THE COMPANY:
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ANALYTICAL
SURVEYS, INC.
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By:/s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇
▇▇▇▇▇
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Title: CEO
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The
undersigned hereby consents to this Assignment and Amendment
Agreement.
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SURVEYS
HOLDINGS, INC.
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By:/s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇
▇▇▇▇▇
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Title: CEO
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