PRIVATE SECURITIES SUBSCRIPTION AGREEMENT
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(Regulation "D")
THIS PRIVATE SECURITIES SUBSCRIPTION AGREEMENT (hereinafter
"Agreement") has been executed by the undersigned in connection
with the purchase in a private placement pursuant to Section 4(2)
of the Securities Act of 1933, as amended (the "Act"), and
Regulation D as promulgated under the Act of certain Series 10
Class J Convertible Preferred Stock (hereinafter the "Preferred"),
containing such terms, conditions, qualifications and restrictions
as set forth in the Certificate of Designations attached hereto as
Exhibit A ("Certificate of Designations), convertible into shares
of the Company's (as defined below) common stock, par value $.001
per share (hereinafter "Shares"), and certain Warrants (hereinafter
"Warrants") exercisable into Shares ("Warrant Shares"), from PERMA-
FIX ENVIRONMENTAL SERVICES, INC., 0000 X.X. 00xx Xxxxx,
Xxxxxxxxxxx, Xxxxxxx, 00000, XXX, a corporation organized under the
laws of Delaware (hereinafter the "Company" or "Seller") by RBB
Bank Aktiengesellschaft, a bank, located in Austria, organized
under the laws of Austria, (hereinafter "Buyer"). Seller and Buyer
(hereinafter collectively the "parties") each hereby represent,
warrant and agree as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE:
(i) Seller and Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration
afforded by Section 4(2) of the Act and/or Rule 506 under
Regulation D ("Regulation D") as promulgated by the United States
Securities and Exchange Commission (the "Commission") under the
Act; and
(ii) Buyer hereby subscribes for up to 3,000 shares of Preferred at
a value of $1,000.00 per each share of Preferred for an aggregate
amount of $3,000,000.00USD which Preferred shall contain such
terms, provisions, and conditions pursuant to the Certificate of
Designation attached as Exhibit A to and forming an integral part
of this Agreement. The Buyer shall pay to the Company
$3,000,000.00 for 3,000 shares of Preferred on the date the
Preferred is duly executed by the Company and received in escrow by
the Buyer's counsel (the "Closing Date").
(iii) The Company shall grant to the Buyer the following
Warrants ("Warrants") to purchase up to an aggregate of 150,000
Shares of the Company, with each Warrant entitling the Buyer to
purchase one Share at a warrant exercise price of Two Dollars and
50/100 ($2.50) per Share expiring three (3) years after the Closing
Date and Warrants to purchase up to an aggregate of 200,000 shares
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of the Company with each Warrant entitling the Buyer to purchase
one Share at a warrant exercise price of One Dollar and 875/1000
($1.875) per Share expiring three (3) years after the Closing Date;
(a) On the Closing Date and upon receipt by the Company of the
Three Million and No/100 Dollars ($3,000,000) for the 3,000 Shares
of Preferred, the Company shall issue to the Buyer a Warrant to
purchase up to One Hundred and Fifty Thousand (150,000) Shares at
an exercise price of Two Dollars and 50/100 ($2.50) per Share, and,
the Company shall issue to the Buyer a Warrant to purchase up to
Two Hundred Thousand (200,000) Shares at an exercise price of One
Dollar and 875/1000 ($1.875) per Share with the term of each
Warrant being for a period of three (3) years from the Closing
date; and
Each Warrant shall be substantially in the form attached hereto as
Exhibit B.
2. BUYER'S REPRESENTATIONS, COVENANTS:
Buyer represents, warrants and covenants as follows:
(i) Authorization: Such Buyer has full power and authority to
enter into this Agreement, the Preferred and the Warrant
(collectively, the "Transaction Documents") and that the
Transaction Documents, when executed and delivered will constitute
a valid and legally binding obligation of Buyer in accordance with
their terms, subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws now or
hereafter in effect relation to creditors' rights and (B) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceedings therefor may
be brought.
(ii) Purchase Entirely for Own Account: This Agreement is made by
the Buyer in reliance upon Buyer's representation to the Company,
which by such Buyer's execution of this Agreement Buyer hereby
confirms, that the Preferred and Warrants to be purchased by the
Buyer and the Shares issuable upon conversion and exercise thereof,
(collectively, the "Securities") will be acquired for investment
for Buyer's own account, and not with a view to resale or
distribution of any part thereof. By execution of this Agreement,
Buyer further represents that Buyer does not have any contract,
undertaking, agreement or arrangement with any person, to sell,
transfer or grant participation to such person or to any third
person, with respect to any of the Securities
(iii) Buyer is not a corporation, syndicate, partnership or
other form unincorporated entity or corporation created solely to
permit the purchase of the Securities, and Buyer is not purchasing
the Securities as a result of an advertisement or general
solicitation of the Securities, including an advertisement in
printed media of general and regular paid circulation, radio or
television.
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(iv) The Buyer represents that it is an Accredited Investor as
defined in Regulation D.
(v) Buyer understands that the Securities may not be sold,
transferred or otherwise disposed of without registration under the
Act or an exemption therefrom.
(vi) Buyer acknowledges that no person has made to Buyer any
written or oral representations:
(1) that any person will resell or repurchase the
Securities;
(2) that any person will refund the purchase price of
the Securities; and
(3) as to the future price or value of the Securities.
(vii) Buyer, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. The Buyer has
been advised that the Company has not retained any independent
professionals to review or comment or otherwise protect the
interests of the Buyer. Although the Company has retained its own
counsel, neither the Company's counsel nor Xxxxxxx X. Xxxxxxx,
Esq., has acted on behalf of the Buyer and the Buyer should not
rely on the Company's legal counsel or Xxxxxxx X. Xxxxxxx, Esq.,
with respect to the transactions herein described;
(viii) Buyer is able to bear the economic risk of an investment
in the Securities and, at the present time, is able to afford a
complete loss of such investment; and
(ix) Buyer acknowledges that it has (i) received copies of the
Company's Form 10-K for the year ended December 31, 1997, Form 10-Q
for the quarter ended March 31, 1998, and proxy soliciting material
for the Company's 1998 annual meeting of shareholders (collectively
the "Commission Filings") and (ii) been afforded (1) the
opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities;
(2) access to information about the Company and the Company's
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment in the Securities; and (3) the opportunity to obtain
such additional information which the Company possesses or can
acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the Securities
and to verify the accuracy and completeness of the information as
requested.
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(x) Neither the Buyer nor its affiliates will sell the Company's
Shares short.
(xi) Certain Risk. In addition to the risks described in the
Commission Filings, the Buyer recognizes that the purchase of the
Preferred and Warrants involves a high degree of risk, in that (a)
the Company has sustained losses every year since its inception,
including the first quarter of 1998, from its operations, and may
require substantial funds in addition to the proceeds of this
private placement; (b) that the Company has a substantial
accumulated deficit; (c) 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
Preferred and Warrants; (d) an investor may not be able to
liquidate his investment; (e) transferability of the Preferred and
Warrants is extremely limited; (f) in the event of a disposition an
investor could sustain the loss of his entire investment; (g) the
Preferred and Warrants represent non-voting equity securities in a
corporate entity that has an accumulated deficit; (h) 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 (i) while the Shares are presently
quoted and traded on the Boston Stock Exchange ("BSE") and the
Nasdaq SmallCap Market ("NASDAQ") and while the Buyer is the
beneficial owner of other series of convertible preferred stock and
is beneficiary of certain registration rights provided herein, the
Securities subscribed for and that are purchased under this
Agreement, the Shares to be received upon conversion of the
Preferred, and the Shares to be acquired upon exercise of the
Warrants (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 Preferred and Warrants
subscribed for and that are to be purchased under this Agreement
are 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
Preferred and the Warrants nor can there by 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 of the
NASDAQ or on any other organized market or quotation system.
(xii) No Review by the SEC. The Buyer hereby acknowledges that
this offering 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 Act and/or Regulation D promulgated under the
Act.
(xiii) No Public Market. The Buyer understands that there is no
public market for the Preferred or the Warrants. The Buyer
understands that although there is presently a public market for
the Shares, including the Shares issuable upon conversion of the
Preferred or exercise of the Warrants, Rule 144 (the "Rule")
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promulgated under the 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 Act. The Buyer understands and
hereby acknowledges that the Company shall register the Shares
under the Act, pursuant to the terms in Section 10 hereof.
(xiv) Survival. The Buyer expressly acknowledges and agrees that
all 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 sale and
purchase of the Preferred and Warrants, the conversion of the
Preferred, exercise of the Warrants and the sale of the "Shares".
3. SELLER'S REPRESENTATIONS:
Seller represents and warrants as follows, except as otherwise
disclosed in the Company's Commission Filings:
(i) The Company is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, and
has all requisite corporate power and authority to carry on its
material business as now conducted and as currently proposed to be
conducted. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on the business or the
properties of the Company and its subsidiaries taken as a whole.
The Company is not the subject of any pending or, to its knowledge,
threatened or contemplated investigation or administrative or legal
proceedings by the Internal Revenue Service, the taxing authorities
of any State of local jurisdiction, or the Commission, or any State
Securities Commission, or any other governmental entity which could
have a material adverse effect in the Company and its subsidiaries
taken as a whole.
(ii) Seller has not conducted any general solicitation or general
advertising (as defined in Regulation D) with respect to any of the
Securities offered hereby;
(iii) The Preferred, when issued and delivered pursuant to the
terms of this Agreement, will have been duly authorized, executed,
issued and delivered and will constitute valid and legally binding
obligations of the Company in accordance with their terms, subject
to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws now or hereafter in
effect relating to creditors' rights and (B) that the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceedings therefore may be brought.
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(iv) The Shares, when issued and delivered upon conversion of the
Preferred, and exercise of the Warrants, in accordance with their
terms and the terms of this Agreement, will be duly and validly
authorized and issued fully paid and non- assessable and will not
subject the holders thereof to personal liability by reason of
being such holders. There are no preemptive rights of any
shareholder or Seller with respect to the Shares contained in
Seller's Certificate of Incorporation or any agreement to which
Seller is a party.
(v) This Agreement has been duly authorized, validly executed and
delivered on behalf of Seller and is a valid and binding agreement
of Seller in accordance with its terms and subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws new or hereafter in effect relating to
creditors' rights and (B) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject
to equitable deficiencies and to the discretion of the court before
which any proceedings thereafter may be brought.
(vi) The execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement do
not and will not conflict with or result in a breach by Seller of
any of the terms or provisions of, or constitute default under, the
certificate of incorporation (or charter) or by-laws of Seller, any
indenture, mortgage, deed of trust or other material agreement or
instrument to which Seller is a party or by which it or any of its
proprietors or agents are bound, or any existing applicable decree,
judgment or order of any court, federal or state regulatory body,
administrative agency or governmental body having jurisdiction over
Seller or any of it properties or assets the effect of which would
have a material adverse effect on the Company and its subsidiaries
taken as a whole;
(vii) No authorization, approval or consent of or filing with
any federal, state or local governmental body of the United States
is legally required for the issuance and sale of the Preferred and
(provided no commission or other remuneration is paid or given
directly or indirectly by Seller for soliciting such conversion)
the issuance of the Shares upon conversion of the Preferred in
accordance with their terms, as contemplated by this Agreement;
except the filing of a Form D with the Commission, the listing of
the Shares with the BSE and the NASDAQ, and the filing of the
Certificate of Designation with the Delaware Secretary of State;
(viii) To the best of the Company's knowledge, the information
contained in the Company's quarterly reports on Form 10-Q for the
quarter ended March 31, 1998 and annual report on Form 10-K for
the year ended December 31, 1997 ("Reports"), as filed with the
Commission do not contain any untrue statement of material fact or
omit any material fact necessary in order to make the statements
therein, and in the light of the circumstances under which they are
made are not misleading. Since March 31, 1998, there has been no
material adverse development in the business, properties,
6
operations, financial condition or results of operations of Seller
except as disclosed in the Reports.
(ix) Seller will issue one or more certificates representing the
Preferred in the name of Buyer that are purchased by the Buyer
pursuant to the terms hereof, in such denominations to be specified
by Buyer prior to closing and will issue one or more certificates
representing the Shares in such denominations to be specified by
the Buyer upon conversion of the Preferred. Seller further
warrants that the Preferred and the Shares shall be transferable
by the Buyer on the books and records of Seller as and to the
extent provided in the Transaction Documents, subject to compliance
with Federal and State securities laws.
(x) Within twenty (20) days of the Closing Date the Company shall
secure the listing of the Shares issuable on conversion of the
3,000 shares of Preferred purchased by the Buyer under Section
1(ii) and exercise of the Warrants issued to the Buyer hereunder
("Warrant Shares") upon the Nasdaq SmallCap Market or such national
securities exchange or automated quotation system, if any, upon
which Shares are then listed (subject to official notice of
issuance) and shall maintain such listing of all Shares and Warrant
Shares from time to time issuable upon conversion or exercise of
the Preferred purchased by the Buyer hereunder and the Warrants
issued to the Buyer hereunder. The Company will obtain and
maintain the listing and trading of its Shares on the Nasdaq
SmallCap Market or other national securities exchange or automated
quotation system and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules
of the Nasdaq SmallCap Market or such exchanges, as applicable.
The Company shall promptly provide to the Buyer copies of any
notices it receives regarding the continued eligibility of the
Shares for listing on the Nasdaq SmallCap Market or other principal
exchange or quotation system on which the Shares are then listed or
traded.
(xi) So long as a Buyer beneficially owns any Preferred or
Warrants, the Company shall maintain its corporate existence in
good standing under the laws of the jurisdiction in which it is
incorporated and, prior to the registration statement referred to
in Section 10(a) hereof being declared effective by the Commission,
the Company shall not sell all or substantially all of the
Company's assets, except in the event of a sale of all or
substantially all of the Company's assets where the holders of such
outstanding Preferred shall have the right to convert such
Preferred, then outstanding, into the kind and amount of shares of
stock or other securities and properly receivable upon such sale by
a holder of the number of Shares into which such shares of
Preferred, then outstanding, could have been converted into
immediately prior to such sale.
(xii) The Company has conducted, and shall conduct its business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business (including without
limitation, all applicable local, state and federal environmental
laws and regulations), except where the failure to comply with such
7
laws, rules or regulations would not have a material adverse effect
on the Company and its subsidiaries taken as a whole.
(xii) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general and specific authorizations;
(ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization and; (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences.
(xiv) The Company has maintained, and shall maintain liability,
casualty and other insurance with responsible insurance companies
against such risk of the types and in the amounts customarily
maintained by companies of comparable size, and business to the
Company.
(xv) The Company understands and acknowledges that the number of
Conversion Shares issuable upon conversion of the Preferred will
increase in certain circumstances. The Company further
acknowledges that its obligation to issue Conversion Shares upon
conversion of the Preferred in accordance with this Agreement and
the Certificate of Designations, Exhibit A, is absolute and
unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the
Company.
(xvi) As of May 11, 1998, the Company has presently authorized
50,000,000 Shares of which 12,001,746 Shares are outstanding.
(xvii) Except as disclosed in the Commission Filings, the
Company is not involved in any litigation which if determined
adversely to the Company, would have a material adverse effect upon
the Company's and its subsidiaries taken as a whole.
4. USE OF PROCEEDS:
As of the date hereof, the Company expects to use the proceeds from
the issuance of the Preferred for working capital and/or to reduce
the outstanding balance of its credit facilities, subject to the
Company reborrowing under such credit facilities.
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5. RESERVATION OF SHARES:
The Company shall, at all times, reserve and have available all
Shares (Conversion Shares) necessary to convert the entire amount
of Preferred then outstanding, and to effect the exercise of the
Warrants.
The Company shall take all action necessary to at all times have
authorized, and reserved for the purpose of issuance, all Shares
needed to provide for the issuance of the Conversion Shares and
Shares issuable upon exercise of the Warrants. If 2,200,000 Shares
is insufficient to effect conversion of the entire amount of
Preferred then outstanding and the Shares issuable upon exercise of
the Warrants, the Company shall forthwith have authorized for the
purpose of issuance sufficient additional Shares to effect
conversion and exercise of the Warrants.
6. INSTRUCTIONS TO TRANSFER AGENT
Upon the registration statement described in Section 10(a) being
declared effective by the Commission, the Company shall, forthwith,
issue instructions to its transfer agent to the effect that on the
date the registration statement registering the Shares underlying
the Preferred and Warrants is declared effective by the Commission,
to issue, upon receipt by the Company of a Conversion Notice from
the Buyer, the required number of Shares, subject to the Conversion
Notice, provided that the number of Shares that the Transfer Agent
shall be authorized to issue to the Buyer shall not exceed the
number of Shares underlying the Preferred and Warrants that are
covered by such registration statement and provided further that
the registration statement covering such Shares is effective on the
date of receipt of the Conversion Notice from the Buyer.
7. CLOSING:
Preferred shall be delivered to Buyer and the funds therefor shall
be delivered to Seller on this 30th day of June, 1998 (the
"Closing"), or at such time to be mutually agreed.
Seller shall execute the appropriate copies of the Transaction
Documents (the "Seller's Closing Documents") and deliver the
executed documents to Hechter and Associates, counsel for Buyer,
with instructions to hold the documents in trust and not to release
the documents to Buyer until advised to do so by Seller or Seller's
counsel. Buyer shall execute the appropriate copies of the
Transactions Documents (the "Buyer's Closing Documents") and
deliver the executed documents to Xxxxxx & Xxxxxxx, counsel for
Seller, with instructions to hold the documents in trust and not to
release the documents to Seller until advised to do so by Buyer or
Buyer's counsel.
Immediately after Buyer's counsel has received the Seller's Closing
Documents executed by Seller, then Buyer shall pay to Seller the
principal amount of the Preferred for which Buyer subscribed and
9
purchased (the "Purchase Price") as set forth in Section 1(ii)
hereof. Buyer shall pay to Seller the Purchase Price, less all
legal fees and expenses (not to exceed an aggregate of $22,000) and
commissions (not to exceed 71/2% of that portion of the Purchase
Price to be paid to Seller) by wire transfer of immediately
available funds in accordance with the following instructions:
Bank
Name: Suntrust/North Central Florida
ABA #: 000000000
Credit: Perma-Fix Environmental Services, Inc.
Account #: 0050000117164
On the banking day that Seller has confirmed that its counsel has
received the Buyer's Closing Documents and is credited with having
received the Purchase Price (the "Closing Date"), the Seller shall
advise Buyer. Immediately thereafter, and Seller shall advise
Hechter & Associates to release the Seller's Closing Documents to
Buyer and Buyer shall advise Xxxxxx & Xxxxxxx, to release the
Buyer's Closing Documents to Seller. The transaction Documents
shall not be deemed to have been delivered except in accordance
with the procedures described in this Section 7.
If the Closing Date as to the 3,000 shares of Preferred to be
acquired by the Buyer pursuant to Section 1(ii) hereof, does not
occur before July 15, 1998 then either party may terminate this
Agreement immediately upon written notice to the other party and
all Transaction Documents shall be deemed to be null and void.
7a. CONDITIONS TO CLOSING:
The obligation of the Buyer hereunder to purchase the Preferred at
the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that
these conditions are for the Buyer's sole benefit and may be waived
by the Buyer at any time in its sole discretion:
a. The Company shall have executed this Agreement and the
Certificate of Designation, and the Preferred, and delivered the
same to the Buyer.
b. The Shares shall be authorized for quotation on the electronic
bulletin board, over-the-counter market, AMEX, the NASDAQ SmallCap
Market or The New York Stock Exchange, Inc., trading in the Shares
shall not have been suspended for any reason.
c. The Company shall request the approval for the issuance of the
Securities from its lender, Congress Financial Corporation. If
said approval is not received in writing within thirty (30) days of
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the Closing Date, the Company shall forthwith repay the total
amount invested of $3,000,000.00 plus interest calculated at 6%
annually, from the date that the $3,000,000.00 is paid to the
Company until repaid in full.
d. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made
and as of the Closing Date as though made at that time and the
Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the
foregoing effect.
e. The Buyer shall have received the opinion of the Company's
counsel dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer.
f. As of the Closing Date, the Company shall have reserved out of
its authorized and unissued Shares, 2,200,000 Shares for which are
issuable upon conversion of the 3,000 shares of Preferred sold to
the Buyer under Section 1(ii) hereof.
8. INDEMNIFICATION:
In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Preferred and Conversion Shares
hereunder and in addition to all of the Company's other obligations
under this Agreement, the Company shall defend, indemnify and hold
harmless the Buyer and all of its officers, directors, employees
and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection
therewith, and including reasonable attorneys' fees and
disbursements (the "Indemnified Liabilities"), incurred by the
Indemnitees or any of them as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in this Agreement
and, (b) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement. To the extent that the
foregoing undertaking by the Company may be unenforceable for any
reason, the Company shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
9. RIGHT OF FIRST REFUSAL:
The Company for a period expiring ninety (90) days after the
Closing Date, hereby grants to the Buyer the right of first offer
to purchase all (or any part) of New Securities (as defined herein)
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which the Company may, from time to time, propose to sell and
issue. This right of first offer shall be subject to the following
provisions:
In the event the Company proposes to issue New Securities, it shall
give Buyer written notice of its intention, describing the type of
New Securities, the price and the general terms upon which the
Company proposes to issue the same. Buyer shall have three (3)
days from the date of receipt of any such notice to agree to
purchase such New Securities for the price and upon the general
terms specified in the notice by giving written notice to the
Company and stating therein the quantity of New Securities to be
purchased. The sale of New Securities to Buyer shall be closed
within ten (10) days of Buyer's notice to the Company agreeing to
purchase such New Securities.
In the event the Buyer fails to exercise the right of first offer
with respect to all of the available New Securities proposed to be
sold by the Company within said three (3) day period or in the
event Buyer fails to close within ten (10) days of Buyer's notice
to the Company agreeing to purchase such New Securities, the
Company shall have 30 days thereafter to enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall
be closed, if at all, within 45 days from the date of said
agreement), to sell the New Securities respecting which the Buyer's
option was not exercised, at a price and upon general terms no more
favourable to the purchasers thereof than specified in the
Company's notice to the Buyer.
In the event the Company has not entered into an agreement to sell
the New Securities within said 30 day period (or sold and issued
New Securities in accordance with the foregoing within 45 days from
the date of said agreement), the Company shall not thereafter,
during the period of Right of First Refusal, issue or sell any New
Securities, without first offering such securities to the Buyer in
the manner provided above.
"New Securities" means any securities to be issued pursuant to
Regulation D or S under the Act, except (i) securities issued
pursuant to the acquisition of another business entity or segment
of any such entity by the Company by merger, asset purchase, stock
purchase or otherwise, (ii) any borrowing, direct or indirect, from
financial institutions or other persons by the Company, whether or
not presently authorized, including any type of loan or payment
evidenced by any type of debt instrument, provided such borrowings
do not have any equity features including warrants, options or
other rights to purchase capital stock and are not convertible into
capital stock of the Company (iii) securities issued to employees,
consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or
arrangement, (iv) securities issued to vendors or customers or to
other persons in similar commercial situations with the Company,
(v) securities issued in connection with obtaining lease financing,
whether issued to a lessor, guarantor or other person, (vi)
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securities issued in connection with any stock split, stock
dividend or recapitalization of the Company, or (vi) securities
issued in connection with corporate partnering transactions.
10. Registration Rights. In order to induce the Buyer to enter
into this Agreement and purchase the Preferred and Warrants, the
Company hereby convenants and agrees to grant to the Buyer the
rights set forth in this Section 10 with respect to the
registration of the Shares.
10a. Registration of Conversion Shares. Subject to the terms of
Section 10 hereof, the Company agrees that within forty-five (45)
days after the Closing Date hereof, it shall prepare and file with
the Commission, a registration statement on Form S-3 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 Act, so as to permit a public offering and sale
by the Buyer of up to 2,200,000 Shares issuable upon conversion of
the 3,000 shares of Preferred to be initially sold to the Buyer
hereunder and issuable as payment of dividends on the Preferred
pursuant to the terms of the Preferred and the 350,000 Shares
issuable upon exercise of the Warrants issued to the Buyer under
Section 1(iii)(a). The Company shall use its reasonable efforts to
cause such registration statement to become effective at the
earliest possible date after filing. In connection with the
offering of such Shares registered pursuant to this Section 10, the
Company shall take such actions as shall be reasonably necessary to
qualify the Shares 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
the sale of Shares covered by such registration statement;
provided, however, that the Company shall not be required (i) to
qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this subparagraph,
(ii) to subject itself to taxation in any such jurisdiction, or
(iii) to consent to general service of process in any such
jurisdiction. It is expressly agreed that in no event are any
registration rights being granted to the Preferred itself, but only
with respect to the underlying Shares issuable upon conversion of
the Preferred, and exercise of the Warrants.
In the event that the 2,200,000 Shares registered pursuant to this
Section 10(a), are not sufficient to effect conversion of the
outstanding Preferred sold to the Buyer, to pay all dividends, and
to effect the exercise of the Warrants, than the Company shall
within thirty (30) days file with the Commission all necessary
documents to increase the number of Shares in the Company's
registration statement in order to effect conversion of the
outstanding Preferred sold to the Buyer, and to pay all dividends,
and to effect the exercise of all Warrants.
10b. Current Registration Statement. Once effective, the Company
shall use its reasonable efforts to cause any registration
statement filed hereunder to remain current and effective for a
period of two (2) years or until the Shares covered by such
registration statement are sold by the Buyer, whichever is less.
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The Buyer 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
Commission and to obtain any desired acceleration of the effective
date of such registration statement.
10c. Penalty. The Company expressly agrees that in the event that
it does not file with the Commission, the registration statement
relative to the Shares referred to in Section 10(a) above within
seventy-five (75) days after the Closing Date, or if the Commission
has not declared the registration statement covering the 2,200,000
Shares referred in Section 10(a) hereof effective within one
hundred and twenty (120) days after the Closing Date (Default), the
Company shall pay to the Buyer in cash for such Default the
penalties of 1.5% per month of the amount paid by the Buyer for the
Preferred under this Agreement prorated, until the registration
statement covering the 2,200,000 Shares is declared effective by
the Commission. The cash penalty shall commence on the 121st day
after the Closing Date.
10d. Other Provisions. In connection with the offering of any
Shares registered pursuant to this Section 10, the Company shall
furnish to the Buyer such number of copies of any final prospectus
as it may reasonably request in order to effect the offering and
sale of the Shares registered pursuant to this Section 10, and the
Company shall (x) furnish to the underwriters (if any), at the
Company's expense, unlegended certificates representing ownership
of the Shares being sold in such denominations as requested and (y)
instruct any transfer agent and registrar of the Shares to release
immediately any stop transfer order, and to remove any restrictive
legend with respect to Shares included in any registration becoming
effective pursuant to this Agreement.
10e. Costs. Subject to the immediately following sentence, the
Company shall in all events pay and be responsible for all fees,
expenses, costs and disbursements associated with the registration
statement relating to the Shares under this Section 10, including
filing fees, fees, costs and disbursements of any counsel,
accountants and other consultants representing the Company in
connection therewith. Notwithstanding anything set forth herein to
the contrary, Buyer shall be responsible for any and all
underwriting discounts and commissions in connection with the sale
of the Shares pursuant hereto and all fees of its legal counsel and
other advisors retained in connection with reviewing any
registration statement.
10f. 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 this Section 10 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.
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10g. Indemnification.
i. The Company will indemnify and hold harmless the Buyer,
its directors and officers, and any underwriter (as defined in the
Act) for the Buyer and each person, if any, who controls the Buyer
or such underwriter within the meaning of the Act, from and
against, and will reimburse the Buyer 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 such registration
statement, referred to in Section 10(a) of this Agreement, 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, any untrue statement or
alleged untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished
by the Buyer, such underwriter or such controlling person in
writing specifically for use in the reparation thereof.
ii. The Buyer 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
expenses to which the Company or any controlling person and/or any
underwriter 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, any
prospectus, as referred to in Section 10(a) of this Agreement,
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 Buyer specifically
for use in the preparation thereof.
11. Securities Legends and Notices. Buyer represents and warrants
that it has read, considered and understood that the following
legends, substantially in the form and substance set forth below,
shall be placed on all of the certificates representing the
Preferred and Warrants:
(i) 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
15
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.
NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT
CERTAIN SUBSCRIPTION AND PURCHASE AGREEMENT BY AND BETWEEN THE HOLDER
HEREOF AND THE COMPANY, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
(ii) NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON
THE EXERCISE OF THIS WARRANT. HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED UNDER
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT 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.
NOTWITHSTANDING THE FOREGOING, THE SHARES ISSUABLE UPON EXERCISE ARE
SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN SUBSCRIPTION
AND PURCHASE AGREEMENT BETWEEN THE HOLDER HEREOF AND THE COMPANY, A COPY
OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
12. GOVERNING LAW: INTERPRETATION AN DISPUTES:
This Agreement, and all exhibits attached, shall be governed by and
construed under the laws of the State of Delaware and the laws
applicable therein without regard to its choice of law principles.
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All disputes shall be determined and litigated in the courts of
Delaware.
Any litigation based thereon, or arising out of, under, or in
connection with, this Agreement shall be brought and maintained
exclusively in the courts of the state of Delaware. The Company
and the Buyer hereby expressly and irrevocably submit to the
jurisdiction of the state and federal Courts of the state of
Delaware for the purpose of any such litigation as set forth above
and irrevocably agrees to be bound by any final judgment rendered
thereby in connection with such litigation. The Company and the
Buyer further irrevocably consents to the service of process by
registered mail, postage prepaid, or by personal service within or
without the State of Delaware. The Company and the Buyer hereby
expressly and irrevocably waive, to the fullest extent permitted by
law, any objection which it may have or hereafter may have to the
laying of venue of any such litigation brought in any such court
referred to above and any claim that any such litigation has been
brought in any inconvenient forum. To the extent that the Company
and the Buyer have or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment
in aid of execution or otherwise) with respect to itself or its
property. The Company and the Buyer hereby irrevocably waives such
immunity in respect of its obligations under this agreement and the
other loan documents.
Buyer and the Company hereby knowingly, voluntarily and
intentionally waive any rights they may have to a trial by jury in
respect of any litigation based hereon, or arising out of, under,
or in connection with, this Agreement. The Company and the Buyer
acknowledge and agree that they have received full and sufficient
consideration for this provision and that this provision is a
material inducement for the Company and the Buyer entering into
this agreement.
Any legal action or proceeding in connection with this Agreement or
the performance hereof may be brought in the state and federal
courts located in Delaware, and the parties hereby irrevocably
submit to the non-exclusive jurisdiction of such courts for the
purpose of any such action or proceeding.
13. ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement among the parties
hereof with respect to the subject matter hereof and supersedes any
and all prior contemporaneous representations, warranties,
agreements and understandings in connection therewith. This
Agreement may be amended only by a writing executed by all parties
hereto. This Agreement may be executed in counterparts and the
facsimile transmission of an executed counterpart to this Agreement
shall be effective as an original.
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15. FULL NAME AND ADDRESS OF BUYER
FOR REGISTRATION PURPOSES:
NAME: RBB Bank Aktiengesellschaft
ADDRESS: Xxxxxxxx 00
0000 Xxxx, Xxxxxxx
TEL. No. 0000-000-0000-000 Fax. No. 0000-000-0000-000
CONTACT
NAME: Xxxxxxx Xxxxxx, Xxxxxxxxxx
00. DELIVERY INSTRUCTIONS: (if different from
Registration Name):
NAME: _________________________________________
ADDRESS: _________________________________________
_________________________________________
TEL. No.: _________________________________________
FAX No.: _________________________________________
CONTACT
NAME: _________________________________________
SPECIAL
INSTRUCTIONS: _______________________________________
_______________________________________
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IN WITNESS WHEREOF, this Agreement was duly executed on the date
first written below
Dated this 30th day of the month of June, 1998.
COMPANY Perma-Fix Environmental Services, Inc.
NAME: 0000 X.X. 00xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx
BY: Xx. Xxxxx X. Xxxxxxxxxx
TITLE: President
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
BY: /s/ Xxxxx Xxxxxxxxxx
_________________________________________
BUYER: RBB Bank Aktiengesellschaft
ADDRESS: Xxxxxxxx 00
0000 Xxxx, Xxxxxxx
BY: Xxxxxxx Xxxxxx
TITLE: Headtrader
RBB BANK AKTIENGESELLSCHAFT
BY: /s/ Xxxxxxx Xxxxxx
___________________________________
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