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Exhibit 10.15
X.X. XXXXXXXX & CO., INC.
FOUNDED 1960
BROKERS & DEALERS IN SECURITIES
UNDERWRITERS
NEWPORT OFFICE TOWER
000 XXXXXXXXXX XXXX. o X.X. XXX 000 x XXXXXX XXXX, XX 00000-0000
000-000-0000 o 000-000-0000 o FAX 000-000-0000 o xxx.xxxxxxxxxx.xxx
Xx. Xxxx X. Xxxxx
Chairman
Chief Executive Officer
PDG ENVIRONMENTAL, INC.
000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Dear Xx. Xxxxx:
THIS AGREEMENT (the "AGREEMENT") is made as of January 11, 1999 between
PDG Environmental, Inc. ("PDG") Bulletin Board Symbol: "PDGE" and X.X. Xxxxxxxx
& Co., Inc. ("XXXXXXXX") Nasdaq NMS Symbol: "MHMY".
In consideration of the mutual covenants contained herein and intending to
be legally bound thereby, PDG and XXXXXXXX hereby agree as follows:
1. XXXXXXXX will perform investment banking services, on a non-exclusive
basis, for PDG on the terms set forth below for a period of five years
from the date hereof. Such services will be performed on a best
efforts basis and will include, without limitation, assistance to PDG
in mergers, acquisitions, and internal capital structuring and the
placement of new debt and equity issues of PDG, all with the objective
of accomplishing PDG's business and financial goals. In each instance,
XXXXXXXX shall endeavor, subject to market conditions, to assist PDG
in identifying corporate candidates for mergers and acquisitions and
sources of private and institutional funds; to provide planning,
structuring, strategic and other advisory services to PDG; and to
assist in negotiations on behalf of PDG. XXXXXXXX will have the option
to perform all financings to be done by PDG for as long as this
AGREEMENT is in effect. In each instance, XXXXXXXX will render such
services as to which PDG and XXXXXXXX mutually agree and XXXXXXXX will
exert its best efforts to accomplish the goals agreed to by XXXXXXXX
and PDG.
2. In connection with the performance of this AGREEMENT, XXXXXXXX and PDG
shall comply with all applicable laws and regulations, including,
without limitation, those of the National Association of Securities
Dealers, Inc. and the Securities and Exchange Commission.
3. In consideration of the services previously rendered and to be
rendered by XXXXXXXX hereunder, XXXXXXXX is hereby granted five-year
Warrants to purchase, a total of 250,000 shares of Common Stock of
PDG, with demand and piggy back registration rights as set forth in
paragraph 6 below. Such Warrants ("XXXXXXXX Warrants") may be
exercised at any time from January 11, 1999 to and including January
11, 2004. The XXXXXXXX Warrants shall vest and become irrevocable as
follows: 75,000 warrants at a price of $1.20 per share immediately
upon the signing of this AGREEMENT, 75,000 Warrants at a price of
$1.50 per share six months after the signing of this agreement; and
the remaining 100,000 Warrants at a price of $2.00 per share
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one year after the signing of this AGREEMENT. At any time after one
year from the date of this AGREEMENT, XXXXXXXX shall have a cashless
exercise option to exercise the Warrants, in XXXXXXXX'x discretion, by
surrendering shares of common stock of PDG, including shares issuable
pursuant to the exercise of the Warrants, having a fair market value
equal to the exercise price of the Warrants being exercised. The fair
market value per share of common stock on any date shall be deemed to
be the average of the daily closing prices for the three consecutive
trading days immediately preceding the date in question. The
presentation of a copy of this AGREEMENT by XXXXXXXX, together with a
request that part or all of the Warrant be exercised and a direction
that the appropriate number of shares be withheld to pay the exercise
price, shall be deemed to be the surrender of such number of shares
for purposes of exercising the cashless exercise option.
4. In the event that PDG fails to honor the exercise by XXXXXXXX of any
vested warrants as set forth herein, by failing to deliver the
certificate(s) for the underlying shares of common stock to XXXXXXXX
within 10 days after such exercise, and provided that failure to
delivery is the direct result of PDG's actions or inactions, XXXXXXXX
may take legal action, without further notice to PDG to obtain such
underlying shares, and PDG agrees to pay all damages, costs and
expenses incurred by XXXXXXXX, including reasonable attorneys' fees.
5. If PDG should, at any time, or from time to time hereafter, effect a
stock split, a reverse stock split, a business combination, a
recapitalization or merger, the terms of the XXXXXXXX Warrants shall
be proportionally adjusted to prevent the dilution or enlargement of
the rights of the XXXXXXXX interest.
6. During the period from January 11, 2000 to January 11, 2004, the
holders of at least 51% of: (i) the XXXXXXXX Warrants not then
exercised; and (ii) the shares previously issued upon exercise of any
of the XXXXXXXX Warrants (hereinafter, collectively, the "XXXXXXXX
EQUITY",) may demand, on one occasion only, that PDG promptly file a
Registration Statement under the Securities Act of 1933, as amended
("ACT"), to permit a public offering of the shares of Common Stock
issued and issuable pursuant to exercise of the XXXXXXXX Warrants (the
"XXXXXXXX SHARES"). Additionally, if PDG, during the period from
January 11, 2000 to January 11, 2004, files a Registration Statement
covering the sale of any of PDG's common stock, then PDG, on each such
occasion, at the request of the holders of at least 51% of the shares
and warrants constituting the XXXXXXXX EQUITY, shall include in any
such Registration Statement, at PDG's expense, the XXXXXXXX SHARES,
provided that, if the sale of securities by PDG is being made through
an underwriter and the underwriter objects to inclusion of the
XXXXXXXX SHARES in the Registration Statement, the XXXXXXXX SHARES
shall not be so included in the Registration Statement or in any
registration statement filed within 90 days after the effective date
of the underwritten Registration Statement. XXXXXXXX will assume the
cost of the company's registration statement for the Warrants and
underlining shares with our corporate counsel. PDG will assume the
legal expenses of reviewing the same along with any expenses incurred
with preparation of the financials.
7. The obligation of PDG to register the XXXXXXXX SHARES, including the
shares issuable upon exercise of the XXXXXXXX Warrants,pursuant to the
demand or the piggy back registration rights set forth in paragraph 6
above, shall be without regard to whether the XXXXXXXX Warrants have
been or will be exercised.
8. PDG agrees that, for a period of three (3) years from the date of this
AGREEMENT, PDG will not utilize the registration exemption set forth
in Regulation S under the ACT, nor issue any security with a downward
ratchet dilution program without the consent of XXXXXXXX, which
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consent will not be unreasonably withheld.
9. This AGREEMENT constitutes the entire Warrant Agreement between the
parties and when a copy hereof is presented to PDG's transfer agent,
together with a request that all or part of the XXXXXXXX Warrant be
exercised and a certified check in the proper amount of a direction,
pursuant to the cashless exercise option, that shares be withheld to
pay for the exercise, the certificates for the appropriate number of
shares of Common Stock shall be promptly issued.
10. Upon the execution of this AGREEMENT, PDG shall include in its next
annual report and filings the highlights and terms of this investment
banking AGREEMENT.
11. Upon the signing of this AGREEMENT, PDG shall pay XXXXXXXX $25,000 as
a non-accountable and non-refundable expense allowance for due
diligence and general compliance review. XXXXXXXX shall be entitled to
additional compensation, to be negotiated between XXXXXXXX and PDG,
arising out of any transactions that are proposed or executed by
XXXXXXXX and consummated by PDG, or are executed by XXXXXXXX at PDG's
request, during the term of this AGREEMENT to the extent that such
compensation is normal and ordinary for such transactions. In
addition, XXXXXXXX shall be reimbursed by PDG for any reasonable
out-of-pocket expenses that XXXXXXXX may incur in connection with
rendering any service to or on behalf of PDG that is approved, in
writing, in advance by PDG's Chief Executive Officer.
12. PDG agrees to indemnify and hold XXXXXXXX and its directors, officers
and employees harmless from and against any and all losses, claims,
damages, liabilities, costs or expenses arising out of any action or
cause of action brought against XXXXXXXX by any third party in
connection with XXXXXXXX'x rendering services under this AGREEMENT
except for any losses, claims, liabilities, costs or expenses
resulting from any violation by XXXXXXXX of applicable laws and
regulations including, without limitations, those of the National
Association of Securities Dealers, Inc. and the Securities and
Exchange Commission or any state's Securities and Exchange Commission
or from any act of XXXXXXXX involving willful misconduct and except
that PDG shall not be liable for any amount paid in settlement of any
claim that is settled without its prior written consent.
13. XXXXXXXX agrees to indemnify and hold PDG and its directors, officers
and employees harmless from and against any and all losses, claims,
damages, liabilities, costs or expenses arising out of any action or
cause of action brought against PDG in connection with XXXXXXXX'x acts
or omissions while rendering services under this AGREEMENT, including
any losses, claims, damages, liabilities, costs or expenses resulting
from any violation by XXXXXXXX of applicable laws and regulations
including, without limitation, those of National Association of
Securities Dealers, Inc. and the Securities and Exchange Commission or
any state's Securities and Exchange Commission or from any act from
XXXXXXXX involving willful misconduct and except that XXXXXXXX shall
not be liable for any paid in settlement of any claim that is settled
without its prior written consent.
14. Within 90 days of this AGREEMENT, a representative of XXXXXXXX will
visit the corporate headquarters of PDG. PDG will submit to XXXXXXXX a
current business plan setting forth how PDG plans to proceed over the
next two (2) years.
15. Nothing contained in this AGREEMENT shall be construed to constitute
XXXXXXXX as a partner, employee, or agent of PDG; nor shall either
party have any authority to bind the other in any respect, it being
intended that XXXXXXXX is, and shall remain an independent contractor.
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16. This AGREEMENT may not be assigned by either party hereto, except that
XXXXXXXX may assign any or all of its Warrants to its employees, and
shall be interpreted in accordance with the laws of the State of
Delaware, and shall be binding upon the successors of the parties.
Either party may terminate this AGREEMENT at any time, however,
legally vested Warrants will remain with XXXXXXXX.
17. If any paragraph, sentence, clause or phrase of this AGREEMENT is for
any reason declared to be illegal, invalid, unconstitutional, void or
unenforceable, all other paragraphs, sentences, clauses or phrases
hereof not so held shall be and remain in full force and effect.
18. None of the terms of this AGREEMENT shall be deemed to be waived or
modified except by an express agreement in writing signed by the party
against whom enforcement of such waiver or modification is sought. The
failure of either party at any time to require performance by the
other party of any provision hereof shall, in no way, affect the full
right to require such performance at any time thereafter. Nor shall
the waiver by either party of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such
provision or as a waiver of the provision itself.
19. Any dispute, claim or controversy arising out of or relating to this
AGREEMENT, or the breach thereof, shall be settled by arbitration in
Jersey City, New Jersey, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The parties hereto
agree that they will abide by and perform any award rendered by the
arbitrator(s) and that judgment upon any such award may be entered in
any Court, state or federal, having jurisdiction over the party
against whom the judgment is being entered. Any arbitration demand,
summons, complaint, other process, notice of motion, or other
application to an arbitration panel, Court or Judge, and any
arbitration award or judgment may be served upon any party hereto by
registered or certified mail, or by personal service, provided a
reasonable time for appearance or answer is allowed.
20. For purposes of compliance with laws pertaining to potential inside
information being distributed unauthorized to anyone, all
communications regarding PDG's confidential information should only be
directed to Xxxxxx X. Xxxxxxxx, Chairman, Xxxxxxx Xxxxxxxxx,
President, or Xxxxxx Xxxxxxx, Vice President, Compliance. If
information is being faxed, our confidential compliance fax number is
(000)000-0000 for communication use.
IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as of
the day and year set forth above.
X.X. XXXXXXXX & CO., INC. PDG ENVIRONMENTAL, INC.
By: /s/ XXXXXXX XXXXXXXXX By: /s/ XXXX X. XXXXX
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Xxxxxxx Xxxxxxxxx Xxxx X. Xxxxx
President Chairman
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