Axion International Holdings, Inc. Basking Ridge, New Jersey September 12, 2009
EXHIBIT
10.21
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
September
12, 2009
▇▇.
▇▇▇▇▇▇▇ C. Love
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Mr.
Love:
This
letter shall serve as an Engagement Agreement (the “Agreement”) pursuant to
which Axion International Holdings, Inc. (the '"Company", “we” or “us”) engages
you (''Consultant") to render specified professional and senior business
development services.
1. Engagement: The
Company hereby engages Consultant, and Consultant agrees to assist the Company
to: (A) consult with Company management on potential customers for
Company products in the U.S. and internationally; (B) promote the Company and
its products to potential investors, and; (C) identify potential strategic
partners, acquisition opportunities and joint venture partners for the expansion
and development of the Company’s business and products. The
Consultant shall report directly to the President and/or the Chief Executive
Officer
2. Term: This Agreement
shall commence as of September 1, 2009, and shall continue for the next six
months, and be renewable for up to five years (the "Term"). This
Agreement may only be terminated upon the mutual agreement of the parties. In
the event the Consultant terminates this Agreement on an ex parte basis, without the
written consent of the Company, the “Warrant”, identified below, shall
automatically terminate.
3. Compensation: In
appreciation of Consultant’s agreement to serve as a consultant to the Company,
the Company shall issue to Consultant a common stock purchase warrant to
purchase up to Three Hundred Sixty Thousand (360,000) common shares of the
Company per year, subject to the terms and conditions set forth therein, at the
exercise price of $.90 per share and exercisable over a five-year period, a copy
of which is annexed hereto as Exhibit A (the “Warrant”).
4. Assignment:
Consultant may not assign any of his rights, duties or obligations under this
Agreement without the prior written consent of the Company.
5. Consultant
Representations: Consultant agrees and represents: (a) that he is an
independent contractor and not an employee or agent of the Company and that in
acting pursuant to this engagement he will not legally bind or obligate the
Company in any manner whatsoever; and (b) that the execution and delivery of his
performance under this Agreement shall not violate or breech any agreement,
contract or obligation currently in existence between the Consultant and any
third party. In addition, the Consultant represents to the Company with
respect to the Warrants and the common shares underlying them
that:
(A) Consultant
is acquiring the Warrant for his own account, for investment and not with a view
to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act of 1933, as amended (the
“Act”);
(B) Consultant
understands that neither the Warrant nor the common shares underlying the
Warrant have not been registered under the Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements of
the Act pursuant to Section 4(2) thereof, and that they must be held by the
Consultant indefinitely, and that the Consultant must therefore bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Act or is exempted from such
registration;
(C) Consultant
is an “accredited investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Act and has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
purchase and acceptance of the Warrant and of protecting his interests in
connection therewith, and;
(D) Consultant
is able to bear the economic risk of the entire loss of any and all value and
economic benefits of the Warrant.
6. Reimbursement of
Expenses. The Company will reimburse Consultant for all pre-approved in
writing reasonable, ordinary and necessary business expenses incurred by him in
the fulfillment of his duties hereunder upon presentation of an itemized account
of such expenditures, in accordance with Company practices and pertinent IRS
regulations.
7. Confidentiality and
Non-Compete: Except as contemplated by the terms hereof or as required by
applicable law, Consultant shall keep confidential during the Term and for a
period of twenty-four months thereafter all non-public information provided to
Consultant by the Company, and shall not disclose such information to any third
party, other than such of Consultant’s partners, employees and advisors as
Consultant determines to have a need to know and shall not use any such
information for any purpose other than the purpose of performing Consultant’s
services for the Company as herein contemplated. In addition, Consultant hereby
agrees not to compete, either directly or indirectly as a shareholder, employee
or independent contractor of another company or entity, with the Company in the
field of recycled products or building materials that could reasonably compete
with the products of the Company or solicit any of the Company's customers or
employees to leave the Company during the Term and for a period of twenty-four
months thereafter.
8. Short Position:
During the term of this engagement and for a period of twenty-four months
thereafter, Consultant will not maintain a net short position at any time in the
Company's shares. This net position includes freely trading shares and any
preferred shares and warrants on an "as converted" basis.
9. Agreement: This
Agreement may not be amended or modified except in writing and shall be deemed
to have been made and delivered in the State of New Jersey, and this letter and
the transactions contemplated hereby shall be governed as to validity,
interpretation, construction, effect, and in all other respects by the internal
laws of the State of New Jersey. Any legal action or proceeding arising out of
or relating to this Agreement and/or the transactions contemplated hereby shall
be instituted exclusively in either the Superior Court, Somerset
County, State of New Jersey or in the United States District Court for the State
of New Jersey, and the parties hereby expressly submit to the personal
jurisdiction of said courts. Consultant acknowledges that a material part of the
consideration upon which the Company is relying to enter into this Agreement is
the Consultant’s promises made in Paragraphs 7, 8 and this Paragraph 9 and that
if Consultant breached such promise or promises the Company would suffer
immediate and irreparable harm of a unique nature that could not be determined
in liquidated damages. Accordingly, Consultant agrees that in the event he
breaches or threatens to breach any of these promises the Company may obtain an
injunction against any such breach or threat of breach in any one of the above
identified New Jersey courts.
- 2
-
10. Complete
Agreement;
Survival: This Agreement
supersedes and replaces any and all prior consulting agreements, oral or
written, between the parties.
The
parties hereby agree that their promises made in Paragraphs 7, 8, 9 and 11 shall
survive any termination of this Agreement.
11. Indemnification. The
Consultant and the Company hereby agree to defend one another and to indemnify
each other from and against any liability of any nature whatsoever that may
arise out of or as a result of any material misrepresentations or omissions made
in connection with the services rendered under the terms of this Agreement made
by either the Consultant or the Company, as the case may be (the “Indemnifying
Party”). By this indemnification, the Indemnifying Party shall pay, on demand,
to the other party (the “Indemnified Party”) any and all costs, expenses,
judgments, fines, including reasonable attorney’s fees, incurred during any
administrative proceeding or legal process instituted against either the Company
or the Consultant whose material allegations include a claim or claims that the
Indemnifying Party made a material misrepresentation or omission in connection
with the conduct of the services rendered under this
Agreement.
If the
foregoing correctly sets forth the understanding and agreements between the
Company and Consultant, Consultant shall indicate so by signing in the space
provided for that purpose below, whereupon this letter shall constitute a
binding agreement as of the date first above written.
This
Agreement is subject to approval by the Company's Board of
Directors.
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
CEO
Agreed
to:
/s/
▇▇▇▇▇▇▇ ▇. Love
▇▇▇▇▇▇▇
▇. Love
- 3
-
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
|
Issuance
Date: as of September 1, 2009
|
Number:
040
|
PURCHASE
WARRANT
WARRANT (“WARRANT”) TO PURCHASE SHARES OF COMMON STOCK,
NO PAR VALUE PER SHARE
This is
to certify that, FOR VALUE RECEIVED, ▇▇▇▇▇▇▇ Love, (“Warrantholder”), is
entitled to purchase, subject to the provisions of this Warrant, from Axion
International Holdings, Inc., a Colorado corporation, having its principal place
of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (the “Company”), , a total
of three hundred sixty thousand
(360,000) shares (“Warrant Shares”) of
Common Stock, no par value (“Common Stock”) of the
Company, at an initial exercise
price per share of $0.90. The exercise price in effect from
time to time is hereafter called the “Warrant
Price”. The number of Warrant Shares purchasable upon exercise
of this Warrant and the Warrant Price shall be subject to adjustment from time
to time as described herein. The Warrant shall become vested and
exercisable in accordance with the vesting schedule below, provided that the
Engagement Agreement between the Warrantholder and the Company has not
terminated prior to the Exercise Date. The Warrant shall not be
exercisable later than 5:00 P.M., Eastern time, on September 1, 2014
(“Expiration
Date”).
|
Number of Shares
|
Vesting Date (“Exercise
Date”)
|
|
72,000
|
August
31, 2010
|
|
72,000
|
August
31, 2011
|
|
72,000
|
August
31, 2012
|
|
72,000
|
August
31, 2013
|
|
72,000
|
August
31, 2014
|
Section
1. Registration. The
Company shall maintain books for the transfer and registration of the
Warrant. Upon the initial issuance of the Warrant, the Company shall
issue and register the Warrant in the name of the Warrantholder.
Section
2. Transfers. Subject
to compliance with any applicable securities law, the Company shall transfer
this Warrant from time to time, upon the books to be maintained by the Company
for that purpose, upon surrender hereof for transfer properly endorsed or
accompanied by appropriate instructions for transfer upon any such transfer, and
a new Warrant shall be issued to the transferee and the surrendered Warrant
shall be canceled by the Company.
Section
3.
Exercise of
Warrant. (a) Subject to the provisions hereof, the
Warrantholder may exercise this Warrant in whole or in part at any time and from
time to time on and after the Exercise Date and ending on the Expiration Date,
upon surrender of the original of this Warrant, together with delivery of the
duly executed Warrant exercise form attached hereto (the “Exercise Agreement”),
to the Company during normal business hours on any business day at the Company’s
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon payment to the Company
in cash, by certified or official bank check or by wire transfer for the account
of the Company of the Warrant Price for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed
to be issued to the holder hereof or such holder’s designee, as the record owner
of such shares, as of the close of business on the date on which the completed
Exercise Agreement and original of this Warrant, together with the applicable
Warrant Price for the Warrant Shares, shall have been delivered to the Company
(or such later date as may be specified in the Exercise
Agreement). Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof promptly, after this Warrant shall have
been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the holder hereof and shall be registered
in the name of such holder or such other name as shall be designated by such
holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised.
(b) The
Warrantholder may, at its election exercised in its sole discretion, exercise
this Warrant and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the Warrant Price for
the Warrant Shares specified in the Exercise Agreement, elect instead to receive
upon such exercise the “Net Number” of shares
of Common Stock determined according to the following formula (a “Cashless
Exercise”):
Net
Number = ((A x B) - (A x C))/B
For
purposes of the foregoing formula:
A= the
total number of shares with respect to which this Warrant is then being
exercised.
B= the
Closing Sale Price of the Common Stock on the trading day immediately preceding
the date of the Exercise Agreement.
C= the
Warrant Price then in effect at the time of such exercise.
Section
4. Compliance with the
Securities Act of 1933. Neither this Warrant nor the Common
Stock issued upon exercise hereof nor any other security issued or issuable upon
exercise of this Warrant may be offered or sold except as provided in this
Warrant and in conformity with the Securities Act, as amended, and then only
against receipt of an agreement of such person to whom such offer of sale is
made to comply with the provisions of this Section 4 with respect to any resale
or other disposition of such security. The Company may cause the
legend set forth on the first page of this Warrant to be set forth on each
Warrant or similar legend on any security issued or issuable upon exercise of
this Warrant unless counsel for the Company is of the opinion as to any such
security that such legend is unnecessary.
Section
5. Payment of
Taxes. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the registered holder of this Warrant in respect of
which such shares are issued. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is
due.
Section
6. Mutilated or Missing
Warrants. In case this Warrant shall be mutilated, lost,
stolen, or destroyed, the Company shall issue in exchange and substitution of
and upon cancellation of the mutilated Warrant, or in lieu of and substitution
for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for
the purchase of a like number of Warrant Shares, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction of the Warrant, and with respect to a lost, stolen or destroyed
Warrant, reasonable indemnity or bond with respect thereto, if reasonably
requested by the Company.
Section
7. Reservation of Common
Stock. The Company hereby represents and warrants that there
have been reserved, and the Company shall at all applicable times keep reserved,
out of the authorized and unissued Common Stock, a number of shares sufficient
to provide for the exercise of the rights of purchase represented by the Warrant
in full (without regard to any restrictions on beneficial ownership contained
herein). The Company agrees that all Warrant Shares issued upon
exercise of the Warrant in accordance with its terms shall be, at the time of
delivery of the certificates for such Warrant Shares, duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock of the
Company.
Section
8. Warrant
Price. The Warrant Price, subject to adjustment as provided in
Section 9, shall be payable in lawful money of the United States of
America.
- 4
-
Section
9. Adjustment of Warrant
Exercise Price and Number Of Shares. The Warrant Price and the
number of shares of Common Stock issuable upon exercise of this Warrant shall be
adjusted from time to time as follows:
(a) If
the Company or any of its subsidiaries shall at any time or from time to time
while the Warrant is outstanding, pay a dividend or make a distribution on its
capital stock in shares of Common Stock, subdivide its outstanding shares of
Common Stock into a greater number of shares or combine its outstanding shares
into a smaller number of shares or issue by reclassification of its outstanding
shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(b) If
any capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation, or
sale, transfer or other disposition of all or substantially all of the Company’s
assets to another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions herein specified and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
such shares of stock, securities or assets as would have been
- 5 -