Contract
THIS CONVERSION AND EXCHANGE AGREEMENT (the "Agreement") is entered on the 25th day of May, 2001, but effective as of April 6, 2001, by and between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation, having offices at 0000 Xxxxxxxxx 00xx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of Austria, and having its principal offices at Xxxxxxxx 00, 0000 Xxxx, Xxxxxxx (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Subscriber, as agent on behalf of certain of its investors, is the owner of
record of all of the Company's issued and outstanding shares of preferred stock, which consisted,
prior to the Conversion (as defined below), of (i) 1,769 shares of Series 14 Class N Convertible
Preferred Stock ("Series 14 Preferred"), (ii) 616 shares of Series 15 Class 0 Convertible Preferred
Stock ("Series 15 Preferred"), and (iii) 1,797 shares of Series 16 Class P Convertible Preferred Stock
("Series 16 Preferred");
WHEREAS, the Subscriber has given notice to the Company to convert 1,314 shares of
Series 14 Preferred and 416 shares of the Series 15 Preferred, pursuant to the terms of the Series 14
Preferred and Series 15 Preferred (the "Conversion"), into an aggregate of 1,153,333 shares of the
Company's common stock, par value $.001 per share ("Common Stock");
WHEREAS, as a result of such Conversion, there remains issued and outstanding 455
shares of Series 14 Preferred, 200 shares of Series 15 Preferred and 1,797 shares of the Series 16
Preferred, for a total of 2,452 shares of the Company's preferred stock remaining issued and
outstanding immediately after the Conversion, all of which are owned of record by RBB Bank;
WHEREAS, the Company and the Subscriber both desire that all of the remaining issued
and outstanding preferred stock after the Conversion will be delivered and tendered to the Company
by RBB Bank in exchange (the "Exchange") for an aggregate of 2,500 shares of a new series of
convertible preferred stock, par value $.001 per share, to be designated by the Company's Board of
Directors as "Series 17 Class Q Convertible Preferred Stock" (the "Series 17 Preferred"), with the
Series 17 Preferred containing such terms, conditions, restrictions and provisions as set forth in the
Series 17 Preferred Certificate of Designations attached hereto as Exhibit "A" ("Series 17 Certificate
of Designations")
WHEREAS, all previous Subscription and Purchase Agreements ("Subscription
Agreements") and Exchange Agreements between the Company and RBB Bank relating to, or in
connection with, the Company's preferred stock are to be terminated and rendered null and void in
all respects upon the execution of this Agreement;
WHEREAS, warrants granted by the Company to RBB Bank that are issued and outstanding
as of the date of this Agreement are not effected by this Agreement and shall remain issued and
outstanding pursuant to the terms, provisions and conditions of the respective warrants;
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WHEREAS, the Series 17 Preferred and the shares of Common Stock issuable upon
conversion of the Series 17 Preferred are collectively defined hereinafter as the "Securities";
WHEREAS, the Common Stock is listed for trading on the Boston Stock Exchange and the
National Association of Securities Dealers Automated Quotation SmallCap market ("NASDAQ"),
and the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and has been subject to such filing
requirements for the past ninety (90) days;
WHEREAS, the Subscriber is an "accredited investor," as such term is defined in Rule 501
of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act")
and the Subscriber received all information as required under Rule 502 of Regulation D;
WHEREAS, the Subscriber is not a "U. S. Person," as such term is defined in Regulation S promulgated under the Securities Act;
WHEREAS, in reliance upon the representations made by the Subscriber in this Agreement,
the transactions contemplated by this Agreement are such that the offer and exchange of securities
by the Company hereunder will be exempt from registration under applicable federal (U. S.)
securities laws since this is a private placement and intended to be a nonpublic offering pursuant to
Sections 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act; and,
WHEREAS, the Securities will not be quoted or listed for trading on any securities
exchange, organized market or quotation system at the time of acquisition hereunder.
NOW, THEREFORE, for and in consideration of the premises, and the mutual
representations, warranties, covenants and agreements set forth herein, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
1.1 Conversion. RBB Bank has recently converted 1,314 shares of the Series 14 Preferred and 416
shares of the Series 15 Preferred into 1,153,333 shares of Common Stock, pursuant to the terms of
the Series 14 Preferred and Series 15 Preferred. The 1,314 shares of Series 14 Preferred so
converted and the 416 shares of the Series 15 Preferred so converted are no longer issued and
outstanding and have become authorized and unissued shares of the Company's preferred stock that
may be reissued as part of a new series of preferred stock hereafter created. As of the date of this
Agreement there remains 455 shares of Series 14 Preferred, 200 shares of the Series 15 Preferred
and 1,797 shares of Series 16 Preferred.
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1.2 Exchange. In full and complete termination of the Series 14 Preferred , Series 15
Preferred
and Series 16 Preferred, and the Subscriber's rights and interest in and to
the Series 14
Preferred, Series 15 Preferred and the Series 16 Preferred, and in full
and complete release
of any and all obligations of the Company under the Series 14
Preferred , Series 15 Preferred
and the Series 16 Preferred, the Subscriber shall
deliver all of the issued and outstanding shares
of the Series 14 Preferred, Series 15
Preferred and the Series 16 Preferred to the Company in
exchange for 2,500 shares
of Series 17 Preferred, with such Series 17 Preferred containing
such terms,
conditions and provisions as set forth in the Series 17 Preferred Certificate of
Designations, pursuant to the terms and conditions set forth in this Agreement.
Dividends on
the issued and outstanding Series 14 Preferred, Series 15 Preferred and
Series 16 Preferred
shall cease to accrue as of the close of business on the day
immediately preceding the date of
this Agreement, and dividends on the Series 17
Preferred shall begin to accrue on the Closing
Date (as defined below).
1.2.1 Delivery. Upon receipt by the Company of the canceled Series 14
Preferred,
Series 15
Preferred and the Series 16 Preferred, duly assigned to the
Company, the Company
shall deliver or cause to be delivered: (a) to Xxxxxx
& Xxxxxxx, A Professional Corporation
("Xxxxxx & Xxxxxxx"), a certificate
or certificates representing the 2,500 shares of Series 17
Preferred issued in
the name of the Subscriber, in such denominations as Subscriber
requests in
writing, to be held in escrow by Xxxxxx & Xxxxxxx, for the Subscriber; and
(b)
to the Subscriber, written evidence from the Secretary of State of the State
of Delaware
that the Series 17 Preferred Certificate of Designations has been
filed in the Office of the
Secretary of State of the State of Delaware on or
before the Exchange.
1.1.2 Cancellation of Series 14 Preferred, Series 15 Preferred and the Series
16 Preferred.
The Subscriber shall, and does hereby, assign and transfer
unto the Company all of the
Series 14 Preferred, Series 15 Preferred and the
Series 16 Preferred for the Exchange, and
Xxxxxx & Xxxxxxx is directed to
deliver to the Company certificates evidencing the Series 14
Preferred, Series
15 Preferred and the Series 16 Preferred marked "Canceled."
1.1.3 Restrictive Legends. Subscriber agrees that all certificates
representing the
Securities shall
bear the restrictive legend substantially in the form set forth
in Section 7 below which shall
include, but not be limited to, a legend to the
effect that (a)the Securities represented by such
certificate have not been
registered under the Securities Act, and (b) unless there is an
effective
registration statement relating to the Securities, the Securities may not be
offered,
sold, transferred, mortgaged, pledged or hypothecated without an
exemption from
registration and an opinion of counsel to the Company with
respect thereto, or an opinion
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from counsel for the Subscriber, which opinion
is satisfactory to the Company, to the
effect that registration under the
Securities Act is not required in connection with such
sale or transfer and the
reasons therefor.
1.2 Discharge. As of the Closing (as defined below), the Series 14 Preferred,
Series 15 Preferred
and the Series 16 Preferred shall be fully terminated and
null and void in all respects. From
and after the Closing, the Subscriber
releases, acquits and forever discharges the Company,
and all of its respective
subsidiaries, affiliates, agents, employees, officers, and directors, as
well as
their respective heirs, successors, legal and personal representatives, and
assigns of
any and all of them, from and against any and all claims, liabilities,
losses, damages, cause
or causes of action of any kind or character
whatsoever, whether liquidated, unliquidated
or disputed, asserted or
assertable, known or unknown, in contract or in tort, at law or in
equity,
which the Subscriber might now or hereafter have arising out of or in
connection
with or relating to the Series 14 Preferred, Series 15 Preferred and
the Series 16 Preferred.
1.3 Exchange. On the basis of the representations, warranties, covenants and
agreements, and
subject to the terms and conditions set forth herein, at the
Closing, the Company agrees to
exchange and deliver to the Subscriber, and
the Subscriber agrees to accept in such
exchange the delivery from the
Company, of the Series 17 Preferred in exchange for the
transfer of the Series
14 Preferred, Series 15 Preferred and the Series 16 Preferred from
the
Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company under the
Exchange Act and
has filed with the United States Securities and Exchange
Commission (the "SEC") all reports
required to be filed by the Company
under Section 13 or 15(d) of the Exchange Act. The
Subscriber has had the
opportunity to review, and has reviewed, all such reports and
information
which the Subscriber deemed material to an investment decision regarding
the
purchase of the Series 17 Preferred.
1.5 Terms of the Series 17 Preferred. The Series 17 Preferred shall contain and
be subject
to the terms, conditions, preferences and restrictions set forth in the
Series 17 Preferred
Certificate of Designations attached hereto as Exhibit
"A."
1.6 No Effect on Warrants Issued and Outstanding as of the Date of this
Agreement.
Nothing contained in this Agreement shall have any effect on
any of the warrants granted
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by the Company to RBB Bank to purchase
Common Stock that are issued and outstanding
as of the date of this
Agreement.
2.1 Closing. The consummation of this Agreement (the "Closing") will occur on at the time and
on the date that the 2,500 shares of Series 17 Preferred are delivered by the Company to
Xxxxxx & Xxxxxxx (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The Subscriber hereby
represents, warrants and covenants to the Company as follows:
3.1 Investment Intent. The Subscriber represents and warrants that the shares of Series 17
Preferred are being, and the underlying Common Stock issuable upon conversion of the
Series 17 Preferred (the Common Stock issuable upon conversion of the Series 17
Preferred herein referred to as the "Conversion Shares") will be, acquired by the Subscriber,
for and on behalf of itself and as agent for the account of certain of its investors, all of whom
are accredited investors (as that term is defined under Rule 501 of Regulation D
promulgated under the Securities Act), and the Subscriber and such investors are acquiring
the Series 17 Preferred and the Conversion Shares, if and when the Series 17 Preferred is
converted, for investment purposes only and not with a view toward the distribution or resale
to others. The Subscriber acknowledges, understands and appreciates that the Securities have
not been registered under the Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large part, upon the Subscriber's repre-
sentations as to investment invention, investor status, and related and other matters set forth
herein. Subscriber understands that, in the view of the SEC, among other things, a purchase
now with an intent to distribute or resell would represent a purchase and acquisition with an
intent inconsistent with its representation to the Company, and the SEC might regard such a
transfer as a deferred sale for which the registration exemption is not available. The Subscriber
has advised the Company that it is prohibited by Austrian law from disclosing the identities
of its investors but has advised the Company that all of the investors are accredited investors.
3.2 Certain Risk. The Subscriber, for and on behalf of itself and as agent for its investors,
recognizes that the acquisition of the Series 17 Preferred involves a high degree of risk in that
(a) the Company is in the process of a private placement to offer and sell up to 5,000,000
units for $1.75 per unit, with each unit consisting of one share of Common Stock and one
warrant to purchase one share of Common Stock at an exercise price of $1.75, and has
reviewed in detail the Confidential Private Placement Memorandum, dated April 6, 2001
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("Memorandum"), issued by the Company in connection with such
private placement and the
Subscriber has reviewed in detail the "Risk
Factors" contained in the Memorandum; (b) the
Company has sustained
losses for the year ended December 31, 2000, and the first quarter
of 2001,
from operations, and will require the infusion of substantial funds; (c) that the
Company has a substantial accumulated deficit; (d) an investment in the
Company is highly
speculative and only investors who can afford the loss of
their entire investment should
consider investing in the Company and the
Series 17 Preferred; (e) the Subscriber may not be
able to liquidate its
investment in the Series 17 Preferred; (f) transferability of the Series 17
Preferred is extremely limited; (g) in the event of a disposition, the
Subscriber could sustain the
loss of his entire investment; (h) the Series 17
Preferred represent non-voting equity securities,
and the right to convert into
and purchase shares of voting equity securities in a corporate entity
that has
an accumulated deficit; (i) no return on investment, whether through
distributions,
appreciation, transferability or otherwise, and no performance
by, through or of the Company,
has been promised, assured, represented or
warranted by the Company, or by any director,
officer, employee, agent or
representative thereof; and, (j) while the Common Stock is
presently quoted
and traded on the Boston Stock Exchange and the NASDAQ and while the
Subscriber is a beneficiary of certain registration rights provided herein, the
Series 17 Preferred
subscribed for under this Agreement and the Conversion
Shares (i) are not registered under
applicable federal (U. S.) or state securities
laws, and thus may not be sold, conveyed,
assigned or transferred unless
registered under such laws or unless an exemption from
registration is
available under such laws, as more fully described herein, and (ii) the Series
17
Preferred subscribed for under this Agreement is not quoted, traded or
listed for trading or
quotation on the NASDAQ, or any other organized
market or quotation system, and there is
therefore no present public or other
market for the Series 17 Preferred, nor can there be any
assurance that the
Common Stock of the Company will continue to be quoted, traded or
listed
for trading or quotation on the Boston Stock Exchange or the Nasdaq
SmallCap Market
or on any other organized market or quotation system.
3.3 Prior Investment Experience. The Subscriber acknowledges that it is, and
each of its
investors are, "accredited investors" (as that term is defined in
Rule 501 promulgated under the
Securities Act), and the Subscriber and each
of its investors have prior investment experience,
including investment in
non-listed and non-registered securities, or employed the services of an
investment advisor, attorney or accountant to read all of the documents
furnished or made
available by the Company to it and to evaluate the merits
and risks of such an investment on
its behalf, and that it recognizes the highly
speculative nature of this investment.
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3.4 No Review by the SEC. The Subscriber hereby acknowledges that this
offering of the
Series 17 Preferred has not been reviewed by the SEC because
this private placement is
intended to be a nonpublic offering pursuant to
Section 4(2) of the Securities Act and/or
Regulation D promulgated under the
Securities Act.
3.5 Not Registered. The Subscriber understands that the Series 17 Preferred and
the
Conversion Shares have not been registered under the Securities Act by
reason of a claimed
exemption under the provisions of the Securities Act
which depends, in part, upon the
Subscriber's and its investors' investment
intention. In this connection, the Subscriber
understands that it is the position
of the SEC that the statutory basis for such exemption would
not be present
if its representation merely meant that its present intention was to hold such
securities for a short period, such as the capital gains period of tax statutes,
for a deferred
sale, for a market rise (assuming that a market develops), or for
any other fixed period.
3.6 No Public Market. The Subscriber understands that there is no public
market for the Series 17
Preferred. The Subscriber understands that although
there is presently a public market for the
Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated under
the Securities
Act requires, among other conditions, a one-year holding period following
full
payment of the consideration therefor prior to the resale (in limited
amounts) of securities
acquired in a nonpublic offering without having to
satisfy the registration requirements under
the Securities Act. The Subscriber
understands that the Company makes no representation
or warranty regarding
its fulfillment in the future of any reporting requirements under the
Exchange
Act, or its dissemination to the public of any current financial or other
information
concerning the Company, as is required by the Rule as one of the
conditions of its availability.
Except as otherwise provided in Section 5
hereof, the Subscriber understands and hereby
acknowledges that the
Company is under no obligation to register the Series 17 Preferred or
the
Conversion Shares under the Securities Act. The Subscriber agrees to hold
the Company
and its directors, officers and controlling persons and their
respective heirs, representatives,
successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses
incurred by them
as a result of any misrepresentation made by the Subscriber contained herein
or any sale or distribution by the Subscriber in violation of the Securities Act
or any applicable
state securities or "blue sky" laws (collectively, "Securities
Laws").
3.7 Sophisticated Investor. That (a) the Subscriber and each of its investors
have adequate
means of providing for their current financial needs and
possible contingencies and has no
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need for liquidity of the investment in the
Series 17 Preferred; (b) the Subscriber and each
of its investors are able to
bear the economic risks inherent in an investment in the Series 17
Preferred
and that an important consideration bearing on its ability to bear the
economic risk
of the purchase of Series 17 Preferred is whether the
Subscriber and each of its investors can
afford a complete loss of the
Subscriber's investment in the Series 17 Preferred and the
Subscriber
represents and warrants that the Subscriber can afford such a complete loss;
and
(c) the Subscriber and each of its investors have such knowledge and
experience in business,
financial, investment and banking matters (including,
but not limited to, investments in restricted,
non-listed and non-registered
securities) that the Subscriber, on its own behalf and as agent
for its investors,
is capable of evaluating the merits, risks and advisability of an investment in
the Series 17 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the Company has
made no
representation regarding the potential or actual tax consequences for
the Subscriber which
will result from entering into the Agreement and from
consummation of the Exchange. The
Subscriber acknowledges that it bears
complete responsibility for obtaining adequate tax
advice regarding the
Agreement and the Exchange.
3.9 SEC Filing. The Subscriber acknowledges that it has been previously
furnished with true
and complete copies of the following documents which
have been filed with the SEC
pursuant to Sections 13(a), 14(a), 14(c) or 15(d)
of the Exchange Act, and that such have
been furnished to the Subscriber a
reasonable time prior to the date hereof: (i) Annual Report
on Form 10-K,
for the year ended December 31, 2000 (the "Form 10-K"); (ii) Quarterly
Report on Form 10-Q for the quarter ended March 31, 2001; (iii) Current
Reports on
Form 8-K, date of earliest event reported January 31, 2001, March
21, 2001, and April 6,
2001, and (iv) the information contained in any
reports or documents required to be filed
by the Company under Sections
13(a), 14(a), 14(c) or 15(d) of the Exchange Act since
the distribution of the
Form 10-K.
3.10 Documents, Information and Access. The Subscriber's decision to acquire,
for and on its
own behalf and on behalf of its investors, the Series 17
Preferred is not based on any
promotional, marketing or sales materials, and
the Subscriber and its representatives have
been afforded, prior to purchase
thereof, the opportunity to ask questions of, and to receive
answers from, the
Company and its management, and has had access to all documents and
information which Subscriber deems material to an investment decision with
respect to the
purchase of Series 17 Preferred hereunder.
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3.11 No Registration, Review or Approval. The Subscriber acknowledges and
understands
that the private offering and sale of securities pursuant to this
Agreement has not been reviewed
or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the
Securities Laws. The Subscriber acknowledges, understands and agrees
that
the shares of Series 17 Preferred are being exchanged hereunder pursuant to
a private
placement exemption to the registration provisions of the Securities
Act pursuant to Section
4(2) of such Securities Act and/or Regulation D
promulgated under the Securities Act) and
a similar exemption to the
registration provisions of applicable state securities laws.
3.12 Transfer Restrictions. The Subscriber will not, and will not allow any of
its investors to,
transfer any Series 17 Preferred exchanged for under this
Agreement or any Conversion
Shares unless such are registered under the
Securities Laws, or unless an exemption is
available under such Securities
Laws, and the Company may, if it chooses, where an
exemption from
registration is claimed by such Subscriber, condition any transfer of
Series
17 Preferred or Conversion Shares out of the Subscriber's name on receipt of
an
opinion of the Company's counsel, to the effect that the proposed transfer
is being effected
in accordance with, and does not violate, an applicable
exemption from registration under
the Securities Laws, or an opinion of
counsel to the Subscriber, which opinion is satisfactory
to the Company, to
the effect that registration under the Securities Act is not required in
connection with such sale or transfer and the reasons
therefor.
3.13 Reliance. The Subscriber understands and acknowledges that the Company
is relying upon
all of the representations, warranties, covenants,
understandings, acknowledgments and
agreements contained in this
Agreement in determining whether to accept this subscription
and to sell and
issue the Series 17 Preferred to the Subscriber.
3.14 Accuracy or Representations and Warranties. All of the representations,
warranties,
understandings and acknowledgments that Subscriber has made
herein are true and correct
in all material respects as of the date of execution
hereof. The Subscriber will perform and
comply fully in all material respects
with all covenants and agreements set forth herein,
and the Subscriber
covenants and agrees that until the acceptance of this Agreement by
the
Company, the Subscriber shall inform the Company immediately in writing
of any
changes in any of the representations or warranties provided or
contained herein.
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3.15 Indemnity. The Subscriber hereby agrees to indemnify and hold harmless
the Company,
and the Company's successors and assigns, from, against and
in all respects of any
demands, claims, actions or causes of action,
assessments, liabilities, losses, costs, damages,
penalties, charges, fines or
expenses (including, without limitation, interest, penalties, and
attorney and
accountants' fees, disbursements and expenses), arising out of or relating to
any breach by Subscriber of any representations, warranty, covenant or
agreement made
by Subscriber in this Agreement. Such right to
indemnification shall be in addition to any
and all other rights of the
Company under this Agreement or otherwise, at law or in equity.
3.16 Survival. The Subscriber expressly acknowledges and agrees that all of its
representations,
warranties, agreements and covenants set forth in this
Agreement shall be of the essence
hereof and shall survive the execution,
delivery and Closing of this Agreement, the
Conversion and Exchange of the
Series 17 Preferred and the sale of the Conversion Shares.
4. Representations, Warranties and Covenants of the Company. In order to induce
Subscriber to enter into this Agreement and to exchange the Series 14 Preferred, Series 15 Preferred
and the Series 16 Preferred that are issued and outstanding immediately after the Conversion for the
Series 17 Preferred, the Company hereby represents, warrants and covenants to Subscriber as
follows:
4.1 Organization, Authority, Qualification. The Company is a corporation
duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware. The Company
has full corporate power and authority to
own and operate its properties and assets and to
conduct and carry on its
business as it is now being conducted and operated.
4.2 Authorization. The Company has full power and authority to execute and
deliver this
Agreement and to perform its obligations under and consummate
the transactions contemplated
by this Agreement. Upon the execution of this
Agreement by the Company and delivery of the
Securities, this Agreement
shall have been duly and validly executed and delivered by the
Company and
shall constitute the legal, valid and binding obligation of the Company,
enforceable
against the Company in accordance with its terms.
4.3 Ownership of, and Title to, Securities. The Series 17 Preferred to be
exchanged for the
Series 14 Preferred, Series 15 Preferred and Series 16
Preferred by the Subscriber are, and
all Conversion Shares, when issued, will
be, duly authorized, validly issued, fully paid and
nonassessable shares of the
capital stock of the Company, free of personal liability. Upon
consummation
of the exchange of the Series 17 Preferred (and upon the conversion of the
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Series 17 Preferred, in whole or in part) pursuant to this Agreement, the
Subscriber will own
and acquire title to the Series 17 Preferred (and the
Conversion Shares, as the case may be)
free and clear of any and all proxies,
voting trusts, pledges, options, restrictions, or other
legal or equitable
encumbrance of any nature whatsoever (other than the restrictions on
transfer
due to Securities Laws or as otherwise provided for in this Agreement or the
Series 17 Preferred Certificate of Designations).
4.4 Exemption from Registration. The Exchange in accordance with the terms
and provisions
of this Agreement is being affected in accordance with the
Securities Act, pursuant to an
exchange offer exemption to the registration
provision of the Securities Act a private
placement exemption to the
registration provisions of the Act pursuant to Section 4(2) of
such Act and/or
Regulation D promulgated under the Securities Act, based on the
representations, warranties and covenants made by the Subscriber contained
in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to enter into this Agreement and the
Exchange, the Company hereby covenants and agrees to grant to the Subscriber the rights set forth
in this Section 5 with respect to the registration of the Conversion Shares.
5.1 Registration. Subject to the terms of Section 5 hereof, the Company agrees
that after the
Closing Date, it shall use its reasonable efforts to prepare and
file with the SEC a registration
statement on Form S-3 or equivalent form
(the "Registration Statement") and such other
documents, including a
prospectus, as may be necessary in the opinion of counsel for the
Company
in order to comply with the provisions of the Securities Act, so as to permit
a public
offering and sale by the Subscriber of the Conversion Shares. The
Company shall use its
reasonable efforts to cause such Registration Statement
to become effective within 180 days
after the Closing Date. In connection
with the offering of such Conversion Shares registered
pursuant to this
Section 5, the Company shall take such reasonable actions, as it deems
necessary, to qualify the Conversion Shares issuable upon conversion of the
Series 17
Preferred, covered by such Registration Statement under such "blue
sky" or other state
securities laws for offer and sale as shall be reasonably
necessary to permit the public offering
and sale of such shares of the
Conversion Shares covered by such Registration Statement;
provided,
however, that the Company shall not be required (a) to qualify generally to
do
business in any jurisdiction where it would not otherwise be required to
qualify but for this
subparagraph (b) to subject itself to taxation in any such
jurisdiction, or (c) to consent to
general service of process in any such
jurisdiction. It is expressly agreed that in no event are
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any registration rights
being granted to the Series 17 Preferred itself, but only with respect
to the
underlying Conversion Shares issuable upon conversion of the Series 17
Preferred.
5.2 Current Registration Statement. Once effective, the Company shall use its
reasonable
efforts to cause such Registration Statement filed hereunder to
remain current and effective
until the Conversion Shares covered by such
Registration Statements are sold by the
Subscriber. The Subscriber shall
promptly provide all such information and materials and
take all such action
as may be required in order to permit the Company to comply with
all
applicable requirements of the SEC and to obtain any desired acceleration of
the
effective date of such Registration Statement.
5.3 Other Provisions. In connection with the offering of any Conversion Shares
registered
pursuant to this Section 5, the Company shall furnish to the
Subscriber such number of
copies of any final prospectus as it may
reasonably request in order to effect the offering
and sale of the Conversion
Shares to be offered and sold under such Registration
Statement. In
connection with any offering of Conversion Shares registered pursuant to
this
Section 5, the Company shall (a) furnish to the underwriters (if any), at the
Company's expense, unlegended certificates representing ownership of the
Conversion
Shares sold under such Registration Statement in such
denominations as requested and
(b) instruct any transfer agent and registrar
of the Conversion Shares sold under such
Registration Statement to release
immediately any stop transfer order, and to remove
any restrictive legend,
with respect to such Conversion Shares included in any
registration becoming
effective pursuant to this Agreement upon the sale of such shares
by the
Subscriber.
5.4 Costs. Subject to the immediately following sentence, the Company shall in
all events
pay and be responsible for all filing fees, costs and disbursements
of counsel, accountants
and other consultants representing the Company in
connection the Registration Statement
relating to the Conversion Shares
under this Section 5. Notwithstanding anything set forth
herein to the
contrary, Subscriber shall be responsible for and pay any and all underwriting
discounts and commissions in connection with the sale of the Conversion
Shares pursuant
hereto or the Registration Statement and all fees of its legal
counsel and other advisors
retained in connection with reviewing such
Registration Statement.
5.5 Successors. The Company will require any successor (whether direct or
indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business,
properties, stock or assets of the Company,
to expressly assume and agree to perform its
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obligations under this Section
5 in the same manner and to the same extent that the Company
would be
required to perform it if no such succession had taken place.
5.6 One Percent (1%) Penalty. In the event the Registration Statement referred
to in Section
5.1 above is not declared effective by the SEC on or before the
expiration of 180 days after
the Closing Date (or the next business day
thereafter if the 180th day falls on a Saturday,
Sunday or legal holiday), the
Company agrees to pay to the Subscriber. as liquidated
damages and not as
a penalty, an amount equal to one percent (1%) of the product of (a) the
number of shares of Series 17 Preferred then outstanding times (b) $1,000,
payable in cash
or in shares of Common Stock, at the election of the
Company. The Company agrees that
for each full month thereafter which
terminates without the Registration Statement being
declared effective by the
SEC before 5:00 p.m. Eastern Daylight Savings Time on the last
day of such
month (or the next business day thereafter if such day is a Saturday, Sunday
or
legal holiday), the Company shall pay to the Subscriber a penalty in an
amount equal to
one percent (1%) of the product of (a) the number of shares
of Series 17 Preferred then
outstanding times (b) $1,000, payable in cash or
in shares of Common Stock, at the election
of the Company. If the Company
elects to deliver such payment in Common Stock of the
Company, the
number of shares of Common Stock to be issued to the Subscriber shall be
determined by dividing the amount of the payment by the average closing bid
price of the
Company's Common Stock as reported on the NASDAQ, or if
the Common Stock is not
listed for trading on the NASDAQ but is listed for
trading in a national securities exchange,
the average closing price of the
Common Stock as quoted in such national securities exchange,
for the five
(5) trading days immediately prior to the date on which the damages are
imposed.
6. Indemnification.
6.1 By the Company. Subject to the terms of this Section 6, the Company will
indemnify and
hold harmless the Subscriber, its directors and officers, and
any underwriter (as defined in
the Securities Act) for the Subscriber and each
person, if any, who controls the Subscriber
or such underwriter within the
meaning of the Act, from and against, and will reimburse the
Subscriber and
each such underwriter and controlling person with respect to, any and all loss,
damage, liability, cost and expense to which such holder or any such
underwriter or
controlling person may become subject under the Act or
otherwise, insofar as such losses,
damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue
statement of any material
fact contained in the Registration Statement filed with the SEC in
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connection
with the Conversion Shares, any prospectus contained therein or any
amendment
or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission
to state therein a material fact required to be
stated therein or necessary to make the
statements therein, in light of the
circumstances in which they were made not misleading;
provided, however,
that the Company will not be liable in any such case to the extent that
any
such loss, damage, liability, cost or expense arises out of, or is based upon,
an untrue
statement or alleged untrue statement or omission or alleged
omission so made in
conformity with information furnished by the
Subscriber, such underwriter or such
controlling person in writing
specifically for use in the preparation thereof.
6.2 By the Subscriber. Subject to the terms of this Section 5, the Subscriber
will indemnify
and hold harmless the Company, its directors and officers, any
controlling person and
any underwriter from and against, and will reimburse
the Company, its directors and
officers, any controlling person and any
underwriter with respect to, any and all loss,
damage, liability, cost or
expense to which the Company or any controlling person
and/or any
underwriter may become subject under the Securities Act or otherwise,
insofar as such losses, damages, liabilities, costs or expenses are caused by
any
untrue statement or alleged untrue statement of any material fact
contained in a Registration
Statement filed with the SEC in connection to the
Conversion Shares, any prospectus
contained therein or any amendment or
supplement thereto, or arise out of, or are based
upon, the omission or alleged
omission to state therein a material fact required to be
stated therein or
necessary to make the statements therein, in light of the circumstances
in
which they were made, not misleading, in each case to the extent, but only to
the
extent, that such untrue statement or alleged untrue statement or omission
or alleged
omission was so made in reliance upon, and in strict conformity
with, written information
furnished by, or on behalf of, the Subscriber
specifically for use in the preparation thereof.
6.3 Procedure. Promptly after receipt by an indemnified party pursuant to the
provisions
of Section 6.1 or 6.2 of notice of the commencement of any action
involving the subject
matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof
is to be made against the
indemnifying party pursuant to the provisions of Section 6.1 or 6.2,
promptly
notify the indemnifying party of the commencement thereof; but the omission
to
so notify the indemnifying party will not relieve the indemnifying party
from any liability
which it may have to any indemnified party otherwise than
hereunder. In case such
action is brought against any indemnified party and
the indemnified party notifies the
indemnifying party of the commencement
thereof, the indemnifying party shall have the
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right to participate in, and, to
the extent that it may wish, assume the defense thereof; or, if
there is a
conflict of interest which would prevent counsel for the indemnifying party
from
also representing the indemnified party, the indemnified parties have the
right to select only
one (1) separate counsel to participate in the defense of
such action on behalf of all such
indemnified parties. After notice from the
indemnifying parties to such indemnified party of
the indemnifying parties'
election so to assume the defense thereof, the indemnifying parties
will not
be liable to such indemnified parties pursuant to the provisions of said
Section 6.1
or 6.2 for any legal or other expense subsequently incurred by
such indemnified parties in
connection with the defense thereof, other than
reasonable costs of investigation, unless (a)
the indemnified parties shall have
employed counsel in accordance with the provisions of the
preceding
sentence; (b) the indemnifying parties shall not have employed counsel
satisfactory
to the indemnified parties to represent the indemnified parties
within a reasonable time after
the notice of the commencement of the action
or (c) the indemnifying party has authorized
the employment of counsel for
the indemnified party at the expense of the indemnifying parties.
7. Securities Legends and Notices. Subscriber represents and warrants that it has read,
considered and understood the following legends, and agrees that such legends, substantially in the
form and substance set forth below, shall be placed on all of the certificates representing the Series
17 Preferred:
Series 17 Preferred Legends
NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON
STOCK
ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK
HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE
"SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES
LAWS. THIS PREFERRED STOCK AND THE COMMON
STOCK ISSUABLE UPON
CONVERSION OF THIS PREFERRED STOCK MAY
NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION
STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO
UNDER THE SECURITIES ACT AND UNDER
ANY APPLICABLE STATE
SECURITIES LAW OR WITHOUT THE PRIOR
WRITTEN CONSENT OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
AND AN OPINION OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.'S
COUNSEL, OR AN
OPINION FROM COUNSEL FOR THE HOLDER HEREOF,
WHICH OPINION
IS SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION AND
QUALIFICATION IS NOT REQUIRED UNDER APPLICABLE
FEDERAL AND
STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM.
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Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS. THIS COMMON STOCK MAY NOT BE
OFFERED,
SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AND QUALIFI-
CATION IN EFFECT WITH RESPECT THERETO
UNDER THE SECURITIES ACT
AND UNDER ANY APPLICABLE STATE
SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF
PERMA-FIX ENVIRONMENTAL SERVICES,
INC. AND AN OPINION OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.'S
COUNSEL, OR AN
OPINION FROM COUNSEL FOR THE HOLDER HEREOF,
WHICH OPINION
IS SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION AND
QUALIFICATION IS NOT REQUIRED UNDER
APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of affecting the exchange of the
Series 14 Preferred, Series 15 Preferred and the Series 16 Preferred in accordance
with
the terms of this Agreement, at the Closing the Subscriber does hereby assign
all of its right,
title and interest in and to the Series 14 Preferred, Series 15 Preferred
and the Series 16
Preferred to the Company and irrevocably makes, constitutes and
appoints the Company
as the true and lawful agents and attorneys-in-fact of the
Subscriber ("Attorney-In-Fact")
with full power and authority (except as provided
below) to act hereunder individually, or
through duly appointed successor attorneys-in-fact, in its sole discretion, all as hereinafter
provided, in the name of, for and on
behalf of the Subscriber, as fully as could the Subscriber
if present and acting in
person, with respect to all matters in connection with the transfer of
the Series 14
Preferred, Series 15 Preferred and the Series 16 Preferred.
8.2 Amendment; Waiver. This Agreement shall be changed, modified or amended in
any respect
except by the mutual written agreement of the parties hereto. Any
provision of this Agreement
may be waived in writing by the party which is entitled
to the benefits thereof. No waiver of any
provision of this Agreement shall be
deemed to, or shall constitute a waiver of, any other
provision
hereof or thereof
(whether or not similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. This Agreement nor any rights or obligations
hereunder or
thereunder, are assignable by the Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its validity, construction
and
performance shall be governed in all respects by the internal laws of the State of
Delaware
without giving effect to such State's conflicts of laws provisions. Each of
the Company and the
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Subscriber expressly and irrevocably consent to the jurisdiction
and venue of the federal courts
located in Wilmington, Delaware. Each of the parties
agrees that in the event either party brings
an action to enforce any of the provisions
of this Agreement or to recovery for an alleged
breach of any of the provisions of this
Agreement, each party shall be responsible for its own
legal costs and disbursements
during the pendency of any such action; provided, however, that
after any such action
has been reduced to a final, unappealable judgment, the prevailing party
shall be
entitled to recover from the other party all reasonable, documented attorneys' fees
and disbursements and court costs from the other party.
8.5 Severability. Any term or provisions of this Agreement which is prohibited or
unenforceable
in any jurisdiction shall, as to such jurisdiction only, be ineffective
only to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof
affecting the validity or enforceability of such
provision in any other jurisdiction.
8.6 Headings. The captions, headings and titles preceding the text of each or any
Section,
subsection or paragraph hereof are for convenience of reference only and
shall not affect the
construction, meaning or interpretation of this Agreement or the
Warrants or any term or
provisions hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or more original or
facsimile counter-
parts, each of which shall be deemed an original and all of which
shall be considered one and
the same agreement, binding on all of the parties hereto,
notwithstanding that all parties are not
signatories to the same counterpart. Upon
delivery of an executed counterpart by the under-
signed Subscriber to the Company,
which in turn is executed and delivered by the Company,
this Agreement shall be
binding as one original agreement between Subscriber and the Company.
8.8 Transfer Taxes. Each party hereto shall pay all such sales, transfer, use, gross
receipts,
registration and similar taxes arising out of, or in connection with, the
transactions contemplated
by this Agreement (collectively, the "Transfer Taxes") as
are payable by such party under
applicable law, and the Company shall pay the cost
of any documentary stock transfer
stamps, if any, to be affixed to the certificates
representing the Shares to be sold.
8.9 Entire Agreement. This Agreement and the Series 17 Preferred Certificate of
Designations,
merges and supersedes any and all prior agreements, understandings,
discussions, assurances,
promises, representations or warranties among the parties
with respect to the subject matter
hereof, and contains the entire agreement among
the parties with respect to the subject matter
set forth herein and therein.
8.10 Authority; Enforceability. The Subscriber is duly authorized to enter into this
Agreement
and to perform all of its obligations hereunder. Upon the execution and
delivery of this
Agreement by the Subscriber, this Agreement shall be enforceable
against the Subscriber in
accordance with its terms.
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8.11 Notices. Except as otherwise specified herein to the contrary, all notices, requests,
demands
and other communications required or desired to be given hereunder shall
only be effective
if given in writing, by hand or by fax, by certified or registered
mail, return receipt requested,
postage prepaid, or by U. S. Express Mail service, or
by private overnight mail service
(e.g., Federal Express). Any such notice shall be
deemed to have been given (i) on the
business day actually received if given by hand
or by fax, (ii) on the business day immediately
subsequent to mailing, if sent by U.S.
Express Mail service or private overnight mail service,
or (iii) five (5) business days
following the mailing thereof, if mailed by certified or registered
mail, postage
prepaid, return receipt requested, and all such notices shall be sent to the
following
addresses (or to such other address or addresses as a party may have advised
the other
in the manner provided in this Section 8.11:
If to the Company:
Xx. Xxxxx X. Xxxxxxxxxx
;Perma-Fix Environmental Services, Inc.
;1940 Xxxxxxxxx 00xx Xxxxx
;Xxxxxxxxxxx, Xxxxxxx 00000
;Fax No.: (000) 000-0000
with copies
simultaneously Xxxxx X. Xxxxxxxxx, Esquire
by like means to:
Xxxxxx & Xxxxxxx, A Professional Corporation
;One Xxxxxxxxxx Xxxxxx, Xxxxx 0000
;000 Xxxxx Xxxxxxxx
;Oklahoma City, Oklahoma 73102
;Fax No.: (000) 000-0000
If to the Subscriber:
Xxxxxxx Xxxxxxx
;RBB Bank Aktiengesellschaft
;Xxxxxxxx 00, 0000 Xxxx, Xxxxxxx
;Fax No.: 011-43-316-8072 ext. 392
8.12 No Third Party Beneficiaries. This Agreement and the rights, benefits, privileges,
interests,
duties and obligations contained or referred to herein shall be solely for the
benefit of the
parties
hereto and no third party shall have any rights or benefits
hereunder as a third party
beneficiary or otherwise hereunder. Nothing contained in
this Section 7.12 shall prohibit
the Subscriber from entering into this Agreement as
agent for, and on behalf of, certain of its
investors.
8.13 Public Announcements. Neither Subscriber nor any officer, director, stockholder,
employee, affiliate or affiliated person or entity of Subscriber, shall make or issue
any press
releases or otherwise make any public statements or make any disclosures
to any third
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person or entity with respect to the transactions contemplated herein and
will not make
or issue any press releases or otherwise make any public statements of
any nature
whatsoever with respect to the Company without the express prior
approval of the
Company.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber have each duly executed this Agreement on the 25th day of May, 2001, but effective as of April 6, 2001..
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/
Xxxxx Xxxxxxxxxx
Xx. Xxxxx X. Xxxxxxxxxx
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/
Xxxxxxx
Xxxxxxx
Xxxxxxx Xxxxxxx
Headtrader
