Execution Copy THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND ANY...
Execution Copy
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED OR
QUALIFIED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
UNLESS THE COMPANY RECEIVES AN OPINION IN REASONABLY ACCEPTABLE FORM
AND SCOPE TO THE COMPANY OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION, QUALIFICATION OR OTHER SUCH ACTIONS ARE NOT
REQUIRED UNDER ANY SUCH LAWS OR THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE OFFERING OF THIS WARRANT HAS NOT BEEN REVIEWED
OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION,
OR BY ANY STATE'S SECURITIES ADMINISTRATOR. THIS WARRANT IS ALSO SUBJECT
TO CERTAIN ADDITIONAL TRANSFER RESTRICTIONS PROVIDED FOR HEREIN.
Warrant No. _________ Dated: January 31, 2001
WARRANT
THIS IS TO CERTIFY THAT, for value received, BHC INTERIM FUNDING L.P. or
registered assigns ("Holder") is entitled to purchase from PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation (the "Company"), at any time prior to 5:00 p.m., New
York City time, on January 31, 2006 (the "Expiration Date"), at the exercise price set forth below
per share (the "Exercise Price"), such number of shares of common stock, $.001 par value, of the
Company (the "Common Stock") as shall equal, upon issuance, the Vested Shares (as hereinafter
defined). The Exercise Price and the Vested Shares purchasable hereunder are subject to adjustment
as provided in Article IV of this Warrant. This Warrant is subject to the terms and conditions
hereinafter provided, and the Holder is entitled also to exercise the other appurtenant rights, powers
and privileges hereinafter described.
This Warrant is being issued by the Company in connection with its entering into a Loan and
Security Agreement of even date herewith between the Company and the Holder (the "Loan
Agreement").
Certain terms used in this Warrant are defined in Article VI. All capitalized terms not
expressly defined herein have the definitions ascribed to them in the Loan Agreement.
For purposes of this Warrant, each of the parties acknowledges and agrees that the Warrant
shall automatically be deemed to be for the amount of the Vested Shares as the same may be
computed in accordance herewith based on the circumstances that occur after the date of this
Warrant, subject to
adjustment as provided herein. The "Vested Shares" shall be determined as
follows, subject to adjustment as provided herein:
(i)
Vested Shares on the date hereof and at all times hereafter if the Loan is repaid in full
on or prior to July 31, 2001, shall mean 817,142 shares of Common Stock, and in
such event the Exercise Price shall be the Closing Price.
(ii)
If the Loan is not paid in full prior to July 31, 2001, then from and after such date
until August 31, 2001, the Vested Shares shall be increased by 209,485 to 1,026,627
shares of Common Stock, and in such event the Exercise Price shall be the lower of
the Closing Price or Fair Market Value as of July 31, 2001.
(iii)
If the Loan is not paid in full prior to August 31, 2001, then from and after such date
until September 30, 2001, the Vested Shares shall be increased by 209,485 to
1,236,112 shares of Common Stock, and in such event the Exercise Price shall be the
lower of the Closing Price or Fair Market Value as of August 31, 2001.
(iv)
If the Loan is not paid in full prior to September 30, 2001, then from and after such
date until October 31, 2001, the Vested Shares shall be increased by 209,485 to
1,445,597 shares of Common Stock, and in such event the Exercise Price shall be the
lower of the Closing Price or Fair Market Value as of September 30, 2001.
(v)
If the Loan is not paid in full prior to October 31, 2001, then from and after such
date until November 30, 2001, the Vested Shares shall be increased by 209,485 to
1,655,082 shares of Common Stock, and in such event the Exercise Price shall be the
lower of the Closing Price or Fair Market Value as of October 31, 2001.
(vi)
If the Loan is not paid in full prior to November 30, 2001, then from and after such
date until December 31, 2001, the Vested Shares shall be increased by 209,485 to
1,864,567 shares of Common Stock, and in such event the Exercise Price shall be the
lower of the Closing Price or Fair Market Value as of November 30, 2001.
(vii)
If the Loan is not paid in full prior to December 31, 2001, then from and after such
date until January 31, 2002, the Vested Shares shall be increased by 209,485 to
2,074,052 shares of Common Stock, and in such event the Exercise Price shall be the
lower of the Closing Price or Fair Market Value as of December 31, 2001.
(viii)
If the Loan is not paid in full prior to January 31, 2002, then from and after such date
the Vested Shares shall be increased by 209,485 to 2,283,537 shares of Common
Stock, and in such event the Exercise Price shall be the lower of the Closing Price or
Fair Market Value as of January 31, 2002.
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(ix)
If the Loan is not paid in full on or prior to the Maturity Date, then effective on the
Maturity Date the Vested Shares shall increase by 1,500,000 to 3,783,537 shares of
Common Stock, and the Vested Shares shall thereafter increase at a rate of 300,000
shares of Common Stock per 30-day period for each 30-day period following the
Maturity Date that the Loan is not paid in full until the Loan is paid in full. The
Exercise Price shall be the lower of the Closing Price or the Fair Market Value as
of the Maturity Date.
Notwithstanding anything contained herein, the total number of shares of Common Stock of
the Company issued pursuant to the terms of this Warrant will not exceed 4,465,910, or such other
number as determined to be 19.9% of the total issued and outstanding shares of Common Stock of
the Company as of the day before the date of this Warrant.
The number of Vested Shares shall be as provided in (i) through (ix) above assuming total
advances of $6,000,000 under the Loan Agreement, and assuming the Term Loan in the aggregate
amount of $6,000,000 is outstanding in its entirety by the above-referenced measuring dates.
Notwithstanding the number of Vested Shares set forth above, the number of Vested Shares
shall be decreased pro rata if the amount of the Term Loan advanced by the Holder to the Company
(or its designee) is below $6,000,000 by the above-referenced measuring dates. In addition, to the
extent the Loan is prepaid in part at any time prior to the Maturity Date, the incremental amount by
which the Vested Shares increases shall be adjusted pro rata for any partial payment of principal
made after Closing, subject to a $400,000 minimum prepayment. By way of example, if the amount
of the Term Loan outstanding, by virtue of advances and prepayments, aggregates $3,000,000 on
July 31, 2001 (a measuring date), then the number of Vested Shares on July 31, 2001, would be
513,313 (because the Vested Shares as of the Closing Date would be 408,571 and the incremental
209,485 increase in the number of Vested Shares would be reduced by 50% to 104,742). If an
additional advance of $1,000,000 is made by August 31, 2001 (a measuring date), then the number
of Vested Shares on such date shall be 789,159 (i.e. increased by 136,190 or 1/6 of 817,142 plus
139,656 or 4/6 of 209,485). If the total $6,000,000 loan has been advanced by Holder to the
Company prior to August 31, 2001, and is not prepaid prior to the Maturity Date, the number of
Vested Shares shall be as set forth in paragraphs (iii) - (ix) above.
ARTICLE I - EXERCISE OF WARRANT
1.1. Method of Exercise. To exercise this Warrant in whole or in part, the Holder shall
deliver on any Business Day to the Company at its principal place of business (a) this Warrant, (b)
a written notice in substantially the form of the Subscription Notice attached hereto, of the Holder's
election to exercise this Warrant, which notice shall specify the number of Vested Shares to be
purchased (which shall be a whole number of shares if for less than all the shares then issuable
hereunder), and (c) payment of the Exercise Price with respect to such shares. Such payment may
be made, at the option of the Holder, either (a) by cash,
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certified or bank cashier's check or wire
transfer in an amount equal to the product of (i) the Exercise Price times (ii) the number of Warrant
Shares as to which this Warrant is being exercised or (b) by a "cashless exercise" of this Warrant,
in which event the Holder shall receive from the Company the number of Warrant Shares equal to
(i) the number of Warrant Shares as to which this Warrant is being exercised minus (ii) the number
of Warrant Shares having an aggregate value (determined by reference to the Fair Market Value of
a share of Common Stock on the Business Day immediately prior to the date of such exercise), equal
to the product of (x) the Exercise Price times (y) the number of Warrant Shares as to which this
Warrant is being exercised.
The Company shall, as promptly as practicable and in any event within seven days after
payment, execute and deliver or cause to be executed and delivered, in accordance with such notice,
a certificate or certificates representing the aggregate number of shares of Common Stock specified
in said notice together with cash in lieu of any fractions of a share as provided in Section 1.3, less
those shares not to be issued in the event that the payment of the full Exercise Price is paid or to be
paid in the form of a "cashless exercise" pursuant to this Section 1.1. The share certificate or
certificates so delivered shall be in such denominations as may be specified in such notice, and shall
be issued in the name of the Holder or such other name or names as shall be designated in such
notice. This Warrant shall be deemed to have been exercised and such certificate or certificates shall
be deemed to have been issued, and such Holder or any other Person so designated to be named
therein shall be deemed for all purposes to have become a holder of record of shares, as of the date
the aforementioned notice and payment is received by the Company. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of such certificate or certificates,
deliver to the Holder a new Warrant evidencing the right to purchase the remaining shares of
Common Stock called for by this Warrant, which new Warrant shall, in all other respects, be
identical with this Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant which shall then be returned to the Holder. The Company shall pay all expenses,
stamp, documentary and similar taxes and other charges payable in connection with the preparation,
issuance and delivery of share certificates and new Warrants under this provision.
1.2. Shares to Be Fully Paid And Nonassessable. All shares of Common Stock issued
upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable and, if such
Common Stock is then quoted on NASDAQ or listed on any national securities exchange (as defined
in the Exchange Act), such Common Stock shall, to the extent permitted under the applicable rules
of such exchange or NASDAQ, be duly quoted or listed thereon, as the case may be.
1.3. No Fractional Shares Required to Be Issued. The Company shall not be required to
issue fractions of shares of Common Stock upon exercise of this Warrant. If any fraction of a share
would, but for this Section 1.3, be issuable upon final exercise of this Warrant, in lieu of such
fractional share, the Company shall pay to the Holder in cash an amount equal to the same fraction
of the Fair Market Value of the Company per share of Common Stock Outstanding on the Business
Day immediately prior to the date of such exercise.
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1.4. Investment Intent. The Holder represents and warrants that this Warrant is being acquired, and all Warrant Shares to be purchased upon the exercise of this Warrant will be acquired, by the Holder solely for the account of such Holder and not with a view to the fractionalization and distribution thereof and will not be sold or transferred except in accordance with the applicable provisions of the Securities Act and the rules and regulations of the Commission promulgated thereunder, and the Holder agrees that neither this Warrant nor any of the Warrant Shares may be sold or transferred except under cover of a Registration Statement under the Act which is effective and current with respect to such Warrant Shares or pursuant to an opinion of counsel reasonably satisfactory to the Company that registration under the Securities Act is not required in connection with such sale or transfer. Each certificate for shares of Common Stock issued upon exercise of this Warrant, unless at the time of exercise such shares are registered under the Securities Act, shall bear substantially the following legend:
"This security has not been registered under the Securities Act of 1933 and may not
be sold or offered for sale unless registered or qualified under said Act and any
applicable state securities laws or unless the Company receives an opinion in
reasonably acceptable form and scope to the Company of counsel reasonably
satisfactory to the Company that registration, qualification or other such actions are
not required under any such laws or that an exemption from such registration is
available. The offering of this security has not been reviewed or approved by the
United States Securities and Exchange Commission or by any state's securities
administrator. This security is also subject to certain additional transfer restrictions
provided for in the Warrant the exercise of which resulted in the original issuance of
this security, a copy of which restrictions shall be furnished to the holder hereof by
the Company upon written request and without charge."
Any certificate issued at any time in exchange or substitution for any certificate bearing such
legend (except a new certificate issued upon completion of a public offering pursuant to a
registration statement under the Securities Act) shall also bear such legend unless, in the opinion of
counsel selected by the Holder of such certificate and reasonably acceptable to the Company, the
securities represented thereby need no longer be subject to restrictions on resale under the Securities
Act.
1.5. Reservation; Authorization; Capitalization. The Company has duly reserved, and will
keep available for issuance upon exercise of the Warrant, the total number of Warrant Shares
deliverable from time to time upon exercise of this Warrant in its entirety. The Company will not
take any actions during the term of this Warrant that would result in any adjustment of the number
of shares of Common Stock issuable upon the exercise of this Warrant if (i) the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, (ii) all shares of
Common Stock issued and outstanding and (iii) all shares of Common Stock then issuable (y) upon
the exercise of all outstanding options and (z) upon the exercise, conversion or exchange of all other
outstanding securities which are exercisable for, convertible into or exchangeable for Common
Stock, would exceed the total number of shares of Common Stock then
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authorized for issuance by the Company. The Company will not, for as long as this Warrant has not been exercised, change the par value of its Common Stock. The issuance of the Warrant Shares has been duly and validly authorized and, when issued and sold in accordance with the Warrants, the Warrant Shares will be duly and validly issued, fully paid and non-assessable. Neither the issuance of this Warrant nor the issuance of Warrant Shares upon exercise of this Warrant violates or conflicts with the Company's certificate of incorporation or bylaws or any agreement to which the Company is a party.
ARTICLE II - TRANSFER, EXCHANGE AND REPLACEMENT OF WARRANTS
2.1. Ownership of Warrant. The Company shall deem and treat the person in whose name
this Warrant is registered as the Holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by any person other than the Company) for all purposes and shall
not be affected by any notice to the contrary, until due presentment of this Warrant for registration
of transfer as provided in this Article II.
2.2. Transfer of Warrant. The Company agrees to maintain at its principal office the
books for the registration of transfers of the Warrants, and transfer of this Warrant and all rights
hereunder shall be registered, in whole or in part, on such books, upon surrender of this Warrant at
the Company, together with (i) a written assignment of this Warrant duly executed by the Holder or
its duly authorized agent or attorney, with (if the Holder is a natural person) signatures guaranteed
by a bank or trust company or a broker or dealer registered with the NASD, (ii) funds sufficient to
pay any transfer taxes payable upon such transfer, and (iii) documentation executed by the transferee
whereby transferee agrees to be bound by the terms of this Warrant. Upon surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denominations specified in the instrument of assignment (which
shall be whole numbers of shares only) and shall issue to the assignor a new Warrant evidencing the
portion of this Warrant not so assigned, and this Warrant shall promptly be canceled. The Company
shall permit the Warrant Securityholders to inspect the warrant registration books from time to time
during normal business hours at the Company. Holder shall pay all fees (including reasonable
attorney's fees), costs and expenses associated with any transfer of this Warrant requested by Holder.
2.3. Division or Combination of Warrants. This Warrant may be divided or combined
with other Warrants upon presentment to the Company of this Warrant and of any Warrant or
Warrants with which this Warrant is to be combined, together with a written notice specifying the
names and denominations (which shall be whole numbers of shares only) in which the new Warrant
or Warrants are to be issued, signed by the Holders hereof and thereof or their respective duly
authorized agents or attorneys. Subject to compliance with Section 2.2 as to any transfer or
assignment which may be involved in the division or combination, the Company shall execute and
deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
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2.4. Expenses of Delivery of Warrants. The Company shall pay all expenses, stamp,
documentary and similar taxes (other than transfer taxes) and other charges payable in connection
with the preparation, issuance and delivery of the Warrants.
ARTICLE III - CERTAIN RIGHTS
3.1 Determination of Fair Market Value. Subject to Section 3.2 hereof, each
determination of Fair Market Value shall be made by the Company in accordance with the definition
of the term Fair Market Value set forth in Article VI hereof. Upon each determination of Fair
Market Value, the Company shall promptly give written notice thereof to all Warrant
Securityholders, setting forth in reasonable detail (i) the transaction giving rise to the necessity for
such determination (ii) the calculation of such Fair Market Value and the (iii) method and basis of
determination thereof (the "Company Determination"). In the event Fair Market Value is determined
with reference to subsection (i)(C) or (ii) of the definition of Fair Market Value, the Company's
Board of Directors shall make such initial determination within twenty-one (21) days of the event
giving rise to the necessity for such determination.
3.2. Contest And Appraisal Rights.
(a) In the event that Fair Market Value is determined with reference to subsection
(i)(C) or (ii) of the definition of Fair Market Value, or in the event that the Warrantholder believes
that the Company determined Fair Market Value with reference to any other subsection of the
definition of Fair Market Value in bad faith or gross malfeasance and a Warrantholder disagrees
with the Company Determination (an "Objecting Holder") and by notice to the Company given
within 20 days after receipt of notice of the Company Determination (an "Appraisal Notice") elects
to dispute the Company Determination, such dispute shall be resolved as set forth in subsection (b)
of this Section 3.2.
(b) For a period of 10 days after the Appraisal Notice, the Company and the
Objecting Holder shall negotiate in good faith to resolve their differences as to the determination of
Fair Market Value. In the absence of a mutually satisfactory resolution within such 10 day period,
the Company shall within 5 days after the last day of such 10 day period engage an investment bank
or other qualified appraisal firm reasonably acceptable to the Objecting Holder (the "Appraiser") to
make an independent determination of Fair Market Value (the "Appraiser Determination"). The
Appraiser Determination shall be made within 20 days of the engagement of such Appraiser and
shall be final and binding on the Company and the Objecting Holder. The costs of conducting the
appraisal shall be borne solely by the Company.
(c) If the Company does not determine the Fair Market Value of a share of
Common Stock, or property or service, as applicable, within the period specified in Section 3.1, then
any Warrantholder shall have the right to determine the Fair Market Value (the "Holder
Determination") which determination shall be final and binding upon the Company and the
Warrantholder(s). Upon each such determination, the
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Warrantholder which has determined the Fair
Market Value shall promptly give written notice of the Holder Determination to the Company setting
forth in reasonable detail (i) the transaction giving rise to the necessity for such determination, (ii)
the calculation of such Fair Market Value and (iii) the method and basis of determination thereof.
Upon its receipt of the Holder Determination and related notice, the Company shall promptly send
such determination and notice to all other Warrantholders. The costs of making the Holder
Determination shall be borne solely by the Company.
3.3. Financial Statements And Other Information. Promptly upon transmission thereof,
the Company will deliver to each Warrant Securityholder copies of any and all financial statements,
proxy statements, notices and other reports as it may send to its public stockholders and copies of
all registration statements and all reports which it files with the Commission (or any governmental
body or agency succeeding to its functions).
ARTICLE IV - ANTIDILUTION PROVISIONS
4.1. Anti Dilution.
(a) Except as hereinafter provided, in case the Company shall at any time after
the date hereof issue or sell any shares of Common Stock (including shares held in the Company's
treasury), without consideration or for a consideration per share less than the Exercise Price in
effect immediately prior to such issuance or sale of such shares then, and thereafter successively
upon each issuance or sale, the Exercise Price in effect immediately prior to each such issuance
or sale shall forthwith be reduced to a price determined by multiplying the Exercise Price in effect
immediately prior to such issuance or sale by a fraction:
(i) the numerator of which shall be (i) the total number of shares of
Common Stock outstanding immediately prior to such issuance or sale, plus (ii) the number of
shares of Common Stock which the aggregate consideration, if any, received by the Company
upon such issuance or sale would purchase at such Exercise Price, and
(ii) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such issuance or sale.
(b) For the purposes of any computation to be made in accordance with the
provisions of Section 4.1(a), the following provisions shall be applicable:
(i) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be cash, the amount of the cash consideration therefor shall
be deemed to be the amount of cash received by the Company for such shares (or, if such shares
of Common Stock are offered by the Company for subscription, the subscription price, or, if
shares of Common Stock shall be sold to underwriters or dealers for public offering without a
subscription offering, the initial public offering price)
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before deducting therefrom any
commissions or other expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with, the issuance of such shares.
(ii) In case of the issuance or sale of shares of Common Stock for a
consideration part or all of which shall be other than cash (otherwise than as a dividend or other
distribution on any shares of the Company or on conversion, exchange or exercise of other
securities of the Company or upon acquisition of the assets or securities of another company or
upon merger or consolidation with another entity), the amount of consideration therefor other than
cash shall be the value of such consideration as of the date of the issuance or sale of the shares
of Common Stock, irrespective of accounting treatment. The reclassification of securities other
than Common Stock into securities including Common Stock shall be deemed to involve the
issuance for a consideration other than cash of such Common Stock immediately prior to the close
of business on the date fixed for the determination of security holders entitled to receive such
Common Stock.
(iii) In case of the issuance of shares of Common Stock upon conversion
or exchange of any obligations or of any shares of stock of the Company that shall be convertible
into or exchangeable for shares of Common Stock or upon the exercise of rights or options to
subscribe for or to purchase shares of Common Stock, the amount of consideration received by
the Company for such shares of Common Stock shall be deemed to be the total of (A) the amount
of the consideration received by the Company upon the original issuance of such obligations,
shares, rights or options, as the case may be, plus (B) the consideration, if any, other than such
obligations, shares, rights or options, received by the Company upon such conversion, exchange,
or exercise except in adjustment of interest and dividends. The amount of the consideration
received by the Company upon the original issuance of the obligations, shares, rights or options
so converted, exchanged or exercised and the amount of the consideration, if any, other than such
obligations, shares, rights or options, received by the Company upon such conversion, exchange
or exercise shall be determined in the same manner provided in clauses (i) and (ii) above with
respect to the consideration received by the Company in case of the issuance of shares of Common
Stock; if such obligations, shares, rights or options shall have been issued as a dividend upon any
stock of the Company, the amount of the consideration received by the Company upon the original
issuance thereof shall be deemed to be zero.
(iv) In case of the issuance of shares of Common Stock upon acquisition
by the Company of the assets or securities of another company or upon merger or consolidation
of the Company with another entity, the consideration therefor received by the Company for such
issuance shall be deemed to equal the cash and the Fair Market Value of securities issued by the
Company. The Fair Market Value of securities issued shall be the lesser of the Fair Market Value
of the securities on the date an agreement in principle with respect to such merger, consolidation
or purchase is reached among the parties or the date the agreement of consolidation, merger or
purchase is executed.
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(v) Shares of Common Stock issuable by way of dividend or other
distribution on any stock of the Company shall be deemed to have been issued and to be
outstanding at the close of business on the record date fixed for the determination of stockholders
entitled to receive such dividend or other distribution and shall be deemed to have been issued
without consideration. Shares of Common Stock issued otherwise than as a dividend, shall be
deemed to have been issued and to be outstanding at the close of business on the date of issue.
(vi) The number of shares of Common Stock at any time outstanding
shall not include any shares then owned or held by or for the account of the Company, but shall
include the aggregate number of shares deliverable in respect of the options, rights and convertible
and exchangeable securities referred to in Section 4.1(c) at all times while such options, rights or
securities remain outstanding and unexercised, unconverted or unexchanged, as the case may be,
and thereafter to the extent such options, rights or securities have been exercised, converted or
exchanged.
(vii) Notwithstanding anything to the contrary contained herein, no
adjustment shall be made to the Exercise Price in case of the issuance of shares of Common Stock
(A) upon conversion, exchange or exercise of any obligations or securities or of any shares of
stock of the Company that shall be convertible into or exchangeable or exercisable for shares of
Common Stock for which an adjustment in the Exercise Price has previously been made in
accordance with Section 4.1(c), (B) upon the exercise of rights or options to subscribe for or to
purchase shares of Common Stock for which an adjustment in the Exercise Price has previously
been made in accordance with Section 4.1(c), (C) upon the grant or exercise of rights or options
to subscribe for or to purchase shares of Common Stock under the Company's Outside Director
Option Plan (500,000 shares), Employee Stock Purchase Plan (500,000 shares), Non-Qualified
Stock Option Plan (1,412,562 f/y/e 2001), and the Performance Equity Plan (500,000 shares), up
to an aggregate maximum of approximately 3,912,562 shares of Common Stock, subject to
adjustment as therein provided (without amendment of the Plans) or (D) upon the exercise of
warrants outstanding as attached on Schedule 4.1 attached.
(viii) Treasury Shares shall not be deemed to be issued and outstanding
solely by reason of being held in the Company's or any of its Subsidiaries' treasury.
(c) In case the Company shall at any time after the date hereof issue options or
rights to subscribe for shares of Common Stock (including shares held in the Company's
treasury), or issue any securities convertible into or exchangeable for shares of Common Stock,
for a consideration per share less than the Exercise Price then in effect, or without consideration,
the Exercise Price in effect immediately prior to the issuance of such options or rights or securities
shall be reduced to a price determined by making a computation in accordance with the provisions
of Section 4.1(a), provided that:
(i) the aggregate maximum number of shares of Common Stock
deliverable under such options or rights shall be considered to have been delivered at the time
such options or rights were
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issued, and for a consideration equal to the minimum purchase price
per share of Common Stock provided for in such options or rights, plus the cash consideration
(determined in the same manner as consideration received on the issue or sale of Common Stock)
received by the Company for such options or rights;
(ii) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or exchange for any such securities shall be considered to have
been delivered at the time of issuance of such securities, and for a consideration equal to the
consideration (determined in the same manner as consideration received on the issue or sale of
Common Stock) received by the Company for such securities, plus the consideration, if any, to
be received by the Company upon the exchange or conversion thereof; and
(iii) on the expiration of such options or rights, or the termination of such
right to convert or exchange, the Exercise Price shall forthwith be readjusted to such Exercise
Price as would have obtained had the adjustments made upon the issuance of such options, rights
or convertible or exchangeable securities been made upon the basis of the delivery of only the
number of shares of Common Stock actually delivered upon the exercise of such options or rights
or upon conversion or exchange of such securities.
(d) In case the Company shall at any time subdivide or combine the outstanding
shares of Common Stock, the Exercise Price shall forthwith be proportionately decreased in the
case of the subdivision or proportionately increased in the case of combination to the nearest one
cent. Any such adjustment shall become effective at the close of business on the date that such
subdivision or combination shall become effective.
(e) In the event that the number of outstanding shares of Common Stock is
increased by a stock dividend payable in shares of Common Stock or by a subdivision of the
outstanding shares of Common Stock, which may include a stock split, then from and after the
time at which the adjusted Exercise Price becomes effective pursuant to Section 4.1(a) by reason
of such dividend or subdivision, the number of shares issuable upon the exercise of this Warrant
shall be increased in proportion to such increase in outstanding shares. In the event that the
number of outstanding shares of Common Stock is decreased by a combination of the outstanding
shares of Common Stock, then, from and after the time at which the adjusted Exercise Price
becomes effective pursuant to Section 4.1(a) by reason of such combination, the number of shares
issuable upon the exercise of this Warrant shall be decreased in proportion to such decrease in
outstanding shares.
(f) In the event of an adjustment of the Exercise Price the number of shares of
Common Stock (or reclassified stock) issuable upon exercise of this Warrant after such adjustment
shall be equal to the number determined by dividing:
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(i) an amount equal to the product of (A) the number of shares of
Common Stock issuable upon exercise of this Warrant immediately prior to such adjustment, and
(B) the Exercise Price immediately prior to such adjustment, by
(ii) the Exercise Price immediately after such adjustment.
(g) In the case of any reorganization or reclassification of the outstanding shares
of Common Stock (other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination) or in the case of any
consolidation of the Company with, or merger of the Company with, another corporation, or in
the case of any sale, lease or conveyance of all, or substantially all, of the property, assets,
business and goodwill of the Company as an entity, the Holder of this Warrant shall thereafter
have the right upon exercise to purchase the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification, consolidation,
merger or sale by a holder of the number of shares of Common Stock which the Holder of this
Warrant would have received had all Warrant Shares issuable upon exercise of this Warrant been
issued immediately prior to such reorganization, reclassification, consolidation, merger or sale,
at a price equal to the Exercise Price then in effect pertaining to this Warrant (the kind, amount
and price of such stock and other securities to be subject to adjustment as herein provided).
(h) In case the Company shall, at any time prior to the expiration of this
Warrant and prior to the exercise thereof, dissolve, liquidate or wind up its affairs, the
Warrantholder shall be entitled, upon the exercise thereof, to receive, in lieu of the Warrant
Shares of the Company which it would have been entitled to receive, the same kind and amount
of assets as would have been issued, distributed or paid to it upon such Warrant Shares of the
Company, had it been the holder of record of shares of Common Stock receivable upon the
exercise of this Warrant on the record date for the determination of those entitled to receive any
such liquidating distribution. After any such dissolution, liquidation or winding up which shall
result in any distribution in excess of the Exercise Price provided for by this Warrant, the
Warrantholder may at its option exercise the same without making payment of the aggregate
Exercise Price and in such case the Company shall upon the distribution to said Warrantholder
consider that the aggregate Exercise Price has been paid in full to it and in making settlement to
said Warrantholder, shall deduct from the amount payable to such Warrantholder an amount equal
to the aggregate Exercise Price.
(i) In case the Company shall, at any time prior to the expiration of this
Warrant and prior to the exercise thereof make a distribution of assets (other than cash) or
securities of the Company to its stockholders (the "Distribution") the Warrantholder shall be
entitled, upon the exercise thereof, to receive, in addition to the Warrant Shares it is entitled to
receive, the same kind and amount of assets or securities as would have been distributed to it in
the Distribution had it been the holder of record of shares of Common Stock receivable upon
exercise of this Warrant on the record date for determination of those entitled to receive the
Distribution.
(j) Irrespective of any adjustments in the number of Warrant Shares and the
Exercise Price or the number or kind of shares purchasable upon exercise of this Warrant, this
Warrant may continue to express the same price and number and kind of shares as originally
issued.
4.2 Officer's Certificate. Whenever the number or kind of Warrant Shares and the
Exercise Price shall be adjusted pursuant to the provisions hereof, the Company shall forthwith
file, at its principal executive office a statement, signed by the Chairman of the Board, President,
or one of the Vice Presidents of the Company and by its Chief Financial Officer or one of its
Treasurers or Assistant Treasurers, stating the adjusted number of Warrant Shares and the new
Exercise Price calculated to the nearest one hundredth and setting forth in reasonable detail the
method of calculation and the facts requiring such adjustment and upon which such calculation is
based. Each adjustment shall remain in effect until a subsequent adjustment hereunder is required.
A copy of such statement shall be mailed to the Warrantholder.
ARTICLE V - REGISTRATION RIGHTS
5.1 Registration on Request.
(a) Subject to the terms and conditions of this Section 5.1(g), at any time or from
time to time from the date beginning the date hereof and ending on January 31, 2006, upon the
written request of the Holder or Holders of a majority of the outstanding Warrant Shares and
Warrants (such majority determined, for purposes of this Section 5.1, by calculating the number of
Warrant Shares for which such Warrants are then exercisable) (the "Initiating Holder(s)"), requesting
that the Company effect the registration under the Securities Act of all or not less than a majority of
such Initiating Holders' Registrable Securities and specifying the intended method of disposition
thereof, the Company will promptly give written notice of such requested registration to all holders
of Registrable Securities (who shall have the right to request that their Registrable Securities be
included in the registration statement requested pursuant to this Section 5.1 upon written notice to
the Company made within 20 days after receipt of the Company's written notice. Thereupon, the
Company will use its best efforts to effect the registration under the Securities Act of the Registrable
Securities which the Company has been so requested to register for disposition in accordance with
the intended method of disposition stated in the Initiating Holder's request; all to the extent requisite
to permit the disposition (in accordance with the intended methods thereof as aforesaid), of the
Registrable Securities and the additional shares of Common Stock, if any, to be so registered,
provided that the holders of Registrable Securities as a class shall be entitled to not more than one
registration upon request pursuant to this Section 5.1.
(b) Registrations under this Section 5.1 shall be on such appropriate registration
form of the Commission (i) as shall be selected by the Company and (ii) as shall permit the
disposition of such Registrable Securities in accordance with the intended method or methods of
disposition specified in the Initiating Holders' request for such registration. The Company agrees
to include in any such registration
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statement all information which holders of Registrable Securities being registered shall reasonably request provided disclosure of such information is in compliance with the Securities Act.
(c) The Company will pay all Registration Expenses in connection with the registrations requested pursuant to this Section 5.1. The Initiating Holders shall pay all underwriting discounts, brokerage commissions and applicable insurance and transfer taxes relating to sale of the Warrant Shares (the "Selling Expenses").(d) The Initiating Holders will be entitled to request one registration pursuant to this Section 5.1 for which the Company will pay all registration expenses, excluding Selling Expenses. A registration requested pursuant to this Section 5.1 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective and closes; provided that a registration which does not become effective after being filed by the Company pursuant to Section 5.1 solely by reason of the refusal to proceed by the Initiating Holders (other than a refusal to proceed based upon the advice of counsel relating to a matter with respect to the Company) shall be deemed to have been effected by the Company at the request of the Initiating Holders unless the Initiating Holders shall have elected to pay all Registration Expenses in connection with such registration, (ii) if, after it has become effective, such registration is subject to a stop order, injunction or other order of the Commission or other governmental agency or court suspending the effectiveness of such registration statement for any reason, other than by reason of misstatements or omissions made or not made in the registration statement in reliance upon and in conformity with written information furnished to the Company by a Holder of Registrable Securities specifically for use in the preparation of such registration statement, or (iii) the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of some act or omission by any Holder of Registrable Securities participating in the offering. Except as provided in Sections 5.1(c) and 5.1(d)(i) above, whether or not the registration becomes effective and closes, the Company will pay all registration expenses in connection with any registration so initiated.
(e) If a registration requested pursuant to this Section 5.1 involves an underwritten offering, the underwriter or underwriters thereof shall be selected by the holders of at least a majority (by a number of shares) of the Registrable Securities as to which registration has been requested and shall be reasonably acceptable to the Company.
(f) If a requested registration by the Holder pursuant to this Section 5.1 involves an underwritten offering, and the managing underwriter shall advise the Company (with a copy of any such notice to each holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration (including securities proposed to be sold for the account of the Company) exceeds the number which can be sold in such offering within a price range acceptable to the Initiating Holders, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, (i) first, Registrable Securities requested to be included in such registration by the holder or holders of Registrable Securities, pro rata among such holders
14
requesting such registration on the
basis of the number of such securities requested to be included by such holders, (ii) second, all shares
proposed to be included by the Company in such registration and (iii) third, all shares other than
Registrable Shares (any such shares with respect to any registration, "Other Securities") requested
to be included in such registration by the holder or holders thereof.
(g) The Company may suspend any registration requested pursuant to this Section
5.1 for a period of up to 90 days upon notice to the holders of Registrable Securities whose
Securities are covered by the registration Statement requesting pursuant to this Section 5.1 that, in
the good faith determination of the Board of Directors of the Company, the registration and sale at
such time of the Registrable Securities requested to be so registered would not be in the best interests
of the Company, provided that notwithstanding such suspension, the Company shall continue to
diligently process the preparation of the documentation required for such registration. No
registration shall be requested pursuant to this Section 5.1 during the period from the date of the
notice to the Warrant Securityholders pursuant to Section 5.1(a) of the Company's intention to
register securities until the expiration of the lockup period specified in Section 5.4(b), or, if earlier,
the date of the Company's notice pursuant to the proviso to the second sentence of Section 5.2(a).
5.2 Incidental Registration.
(a) If the Company at any time from the date hereof and expiring on January __,
2006, proposes to register any of its securities under the Securities Act (other than (x) by a
registration on Form S-4 or S-8 or any successor or similar forms) or (y) pursuant to Section 5.1)
whether for its own account or for the account of the holder or holders of any other Shares, it will
each such time give prompt written notice to all holders of Registrable Securities of its intention to
do so and of such holders' rights under this Section 5.2. Upon the written request of any such holder
made within 20 days after the receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder and the intended method of disposition thereof),
the Company will use its commercially reasonable efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so requested to register, by
inclusion of such Registrable Securities in the registration statement which covers the securities
which the Company proposes to register; provided that if, at any time after giving written notice of
its intention to register any securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason either not to
register or to delay registration of such securities, the Company may, at its election, give written
notice of such determination to each holder of Registrable Securities and, thereupon, (i) in the case
of a determination not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of any holder of
Registrable Securities entitled to request that such registration be effected as a registration under
Section 5.1, and (ii) in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 5.2 shall relieve the Company of its
obligation to effect any registration upon request under Section 5.1, nor shall any such registration
hereunder be deemed to have been effected pursuant to Section 5.1. The Company will pay all
Registration
15
Expenses in connection with each registration of Registrable Securities pursuant to this
Section 5.2, except for Selling Expenses, which shall be borne by the holder or holders of
Registrable Securities selling hereunder.
(b) If the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by Section 5.2 and such securities are to be distributed by or through
one or more underwriters, the Company will, if requested by any holder of Registrable Securities
as provided in this Section 5.2, use its commercially reasonable efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by such holder among
the securities to be distributed by such underwriters, provided that if the managing underwriter of
such underwritten offering shall inform the Company and holders of the Registrable Securities
requesting such registration and all other holders of any Other Securities in respect of such
underwritten offering, by letter of its belief that inclusion in such distribution of all or a specified
number of the securities proposed to be distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters (such letter to state the
approximate number of such Registrable Securities and such Other Securities which may be
distributed without such effect), then the Company may, upon written notice to all holders of such
Registrable Securities and holders of such Other Securities, reduce pro rata (if and to extent stated
by such managing underwriter to be necessary to eliminate such effect) first the number of Other
Securities that have been requested be included in such registration statement and second the number
of Registrable Securities that have been requested be included in such registration statement so that
the resultant aggregate number of such Registrable Securities and Other Securities so included in
such registration, together with the number of securities to be included in the registration for the
account of the Company, shall be equal to the number of shares stated in such managing
underwriter's letter.
5.3 Registration Procedures.
(a) If and whenever the Company is required to effect the registration of any
Registrable Securities under the Securities Act as provided in Section 5.1 or Section 5.2, the
Company shall, as promptly as possible:
(i) prepare and (within the later of 60 days after the end of the fiscal
quarter of the Company within which requests for registration may be given to the Company or 15
days after the date the Company files its quarterly report on Form 10-Q for such period provided that
such 10-Q is filed on a timely basis taking into account all possible extension periods, except in the
case (A) where requests for registration may be given in the Company's fourth fiscal quarter, in
which case the filing shall be within the later of 120 days after the end of such quarter or 30 days
after the date the Company files its annual report on Form 10-K for the fiscal year then ended,
provided that such 10-K is filed on a timely basis taking into account all possible extension periods,
or (B) a registration pursuant to Section 5.1, in which case the filing shall be made as soon as
possible after the initial request of an Initiating Holder of Registrable Securities or in any event
within ninety (90) days after such request), unless such request is made during the Company's fourth
fiscal quarter, in which case the filing shall be within the later of 120 days after the end of such
quarter or 30 days after the
16
date the Company timely files its annual report on Form 10-K for the
fiscal year then ended, file with the Commission the requisite registration statement to effect such
registration (including such audited financial statements as may be required by the Securities Act)
and thereafter use reasonable efforts to cause such registration statement to become and remain
effective, subject to the provisions of Article V hereto; provided further that the Company may
discontinue any registration of its securities which are not Registrable Securities at any time prior
to the effective date of the registration statement relating thereto; and provided further that before
filing such registration statement or any amendments thereto, the Company will furnish to the
Initiating Holders of Registrable Securities which are to be included in such registration copies of
all such documents proposed to be filed, which documents will be subject to their review and review
of their counsel only with respect to the information contained therein relating to the Holder;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such registration statement
until the earlier of (x) in the case of a registration pursuant to Section 5.1, the expiration of 180 days
after such registration statement becomes effective (provided that if the registration statement is
suspended pursuant to Section 5.1 (g), the registration statement shall be effective for 180 days after
suspension is ended), or (y) in the case of a registration pursuant to Section 5.2, the expiration of 120
days after such registration statement becomes effective;
(iii) furnish to each seller of Registrable Securities covered by such
registration statement and each underwriter, if any, of the securities being sold by such seller such
number of conformed copies of such registration statement and of each such amendment and of
copies of the prospectus contained in such registration statement supplement thereto (in each case
including all exhibits), such number (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as such seller and
underwriter, if any, may reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller;
(iv) use its commercially reasonable efforts to register or qualify all
Registrable Securities and other securities covered by such registration statement under blue sky or
similar laws of such jurisdictions as any seller thereof and any underwriter of the securities being
sold by such seller shall reasonably request, to keep such registrations or qualifications in effect for
so long as such registration statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller and underwriter to consummate the
disposition in such jurisdictions of the securities owned by such seller except that the Company shall
not for any such purpose be required to qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this subdivision (iv) be obligated
to be so qualified, to subject itself to taxation in any such jurisdiction or to consent to general service
of process in any such jurisdiction;
17
(v) use its commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities;
(vi) intentionally left blank
(vii) notify the holders of Registrable Securities and the managing
underwriter or underwriters, if any, promptly and confirm such advice in writing promptly thereafter:
(A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment
to the registration statement has been filed, and, with respect to the
registration statement or any post-effective amendment thereto, when
the same has become effective;
(B) of any request by the Commission for amendments or
supplements to the registration statement or the prospectus or for
additional information;
(C) of the issuance by the Commission of any stop order
suspending the effectiveness of the registration or the initiation of any
proceedings by any Person for that purpose; and
(D) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable
Securities for sale under the securities or blue sky laws of any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(viii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon the Company's discovery that, or upon the happening of any event
as a result of which, the prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the circumstances then
existing, and promptly prepare and furnish to such seller and each underwriter, if any, a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the circumstances then
existing;
18
(ix) make reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the registration statement at the earliest possible moment;
(x) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission;
(xi) make available for inspection by a representative of the holders of
Registrable Securities participating in the offering, any underwriter participating in any disposition
pursuant to the registration and any attorney or accountant retained by such selling holders or
underwriter (each, an "Inspector"), all financial and other records, pertinent corporate documents and
properties of the Company (the "Records"), and cause the Company' officers, directors and
employees to supply all information reasonably requested by any such Inspector in connection with
such registration; provided that the Company shall not be required to comply with this subdivision
(xi) if immediately prior to the effective date of the registration contemplated hereby, the Company
is a Reporting Company within the definition of the Securities Exchange Act of 1934, as amended,
and has been for a period of at least one year, or if there is a reasonable likelihood, in the judgment
of the Company, that such delivery could result in the loss of any attorney-client privilege related
thereto; and provided further that Records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors (other than to any holder of Registrable Securities participating in the offering, and if
disclosed to any such holder shall not be disclosed by such holder) unless (x) such Records have
become generally available to the public or (y) the disclosure of such Records may be necessary or
appropriate (A) to comply with any law, rule, regulation or order applicable to any such Inspectors
or holder of Registrable Securities, (B) in response to any subpoena or other legal process or (C) in
connection with any litigation to which such Inspectors or any holder of Registrable Securities is a
party (provided that the Company is provided with reasonable notice of such proposed disclosure
and a reasonable opportunity to seek a protective order or other appropriate remedy with respect to
such Records);
(xii) provide and cause to be maintained a transfer agent and registrar for
all Registrable Securities covered by such registration statement from and after a date not later than
the effective date of such Registration Statement;
(xiii) use its commercially reasonable efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any of the Common
Stock is then listed and, if not so listed, to be listed on the NASD automated quotation system and,
if listed on the NASD automated quotation system, use its best efforts to secure designation of all
such Registrable securities covered by such registration statement as a NASDAQ "national market
system security" within the meaning of Rule 11Aa2-1 of the Securities and Exchange Commission
or, failing that, to secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market makers to register as such
with respect to such Registrable Securities with the NASD; and
19
(xiv) use its commercially reasonable efforts to provide a CUSIP number
for the Registrable Securities, not later than the effective date of the registration.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company with such information regarding such seller and
the distribution of such Registrable Securities as the Company may from time to time reasonably
request in writing for purposes of preparing the relevant registration statement and amendments and
supplements thereto.
(b) Each holder of Registrable Securities agrees by acquisition of such Registrable
Securities that, upon receipt of any notice from the Company of the occurrence of any event of the
kind described in of Section 5.3(a) (viii), such holder will forthwith discontinue such holder's
disposition of Registrable Securities pursuant to the registration statement relating to such
Registrable Securities until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by of Section 5.3(a) (viii). In the event the Company shall give any such
notice, the periods specified in of Section 5.3(a) (ii) shall be extended by the length of the period
from and including the date when each seller of any Registrable Securities covered by such
registration statement shall have received such notice to the date on which each such seller has
received the copies of the supplemented or amended prospectus contemplated by of Section 5.3(a)
(viii) .
(c) If any such registration or comparable statement refers to any holder of
Registrable Securities by name or otherwise as the holder of any securities of the Company, then
such holder shall have the right to require, in the event that such reference to such holder by name
or otherwise is not required by the Securities Act or any similar federal statute then in force, the
deletion of the reference to such holder.
5.4 Underwritten Offerings.
(a) If requested by the underwriters for any underwritten offering by holders of
Registrable Securities pursuant to a registration requested pursuant to Section 5.1, the Company will
enter into an underwriting agreement with such underwriters for such offering, such agreement to
be reasonably satisfactory in substance and form to the Company, each such holder and the
underwriters, and be pursuant to this Warrant, and to contain such representations and warranties by
the Company and such other terms as are generally prevailing in agreements of this type, including,
without limitation, indemnities to the effect and to the extent provided in Section 5.5. The holders
of the Registrable Securities will cooperate with the Company in the negotiation of the underwriting
agreement.
(b) Each holder of Registrable Securities agrees by acquisition of its Registrable
Securities not to sell, make any short sale of, loan, grant any option for the purchase of, effect any
public sale or distribution of or otherwise dispose of any equity securities of the Company, during
the ten days prior to and the 90 days after the effective date of any registration statement filed
pursuant to Section 5.1 or Section 5.2 which
20
involves an underwritten offering, except as part of such
registered underwritten offering, whether or not such holder participates in such offering, and except
as otherwise permitted by the managing underwriter of such registered underwritten (if any). Each
holder of Registrable Securities agrees that the Company may instruct its transfer agent to place stop
transfer notations in its records to enforce this Section 5.4(b).
(c) No Person may participate in any registered underwritten offering hereunder
unless such Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved, subject to the terms and conditions hereof, by the Person or
a majority of the Persons entitled to approve such arrangements and (ii) completes and executes all
agreements, questionnaires, indemnities and other documents (other than powers of attorney)
required under the terms of such underwriting arrangements.
5.5 Expiration of Registration Rights. Notwithstanding anything in Section 5.1 or 5.2
to the contrary, the rights of the Holder or Holders of the Warrants or the Warrant Shares under
Sections 5.1 and 5.2 hereof shall expire at such time as such Holder or Holders shall have received
from counsel to the Company a written opinion of such counsel that such Holder or Holders has the
right, pursuant to the provisions of Rule 144 under the Securities Act, to sell within any three-month
period all Warrant Shares then held by and purchasable upon the exercise of Warrants by such
Holder.
5.6 Indemnification.
(a) The Company agrees to indemnify and hold harmless each holder of
Registrable Securities whose Registrable Securities are covered by any registration statement, its
directors and officers and each other Person, if any, who controls such holder within the meaning
of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any
such indemnified party may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse each such indemnified party for
any legal or any other expenses reasonably incurred by them in connection with investigating or
defending any such loss, liability, action or proceeding; provided that the Company shall not be
liable in any such case to the extent that any such loss, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by or on behalf of such holder
specifically for use in the preparation thereof. In addition, the Company shall indemnify any
underwriter of such offering and each other Person, if any, who controls and
21
such underwriter within
the meaning of the Securities Act in substantially the same manner and to substantially the same
extent as the indemnity herein provided to each indemnified party. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of such holder or any such
director, officer, underwriter or controlling person and shall survive the transfer of such securities
by such holder.
(b) Each prospective seller of Registrable Securities hereunder shall indemnify
and hold harmless (in the same manner and to the same extent as set forth in subdivision (a) of this
Section 5.6) the Company, each director of the Company, each officer of the Company and each
other person, if any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereof, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such seller specifically for use in the
preparation of such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such director, officer
or controlling person and shall survive the transfer of such securities by such seller. The amount
payable by any prospective seller of Registrable Securities with respect to the indemnification set
forth in this Section 5.6 (b) in connection with any offering of securities will not exceed the amount
of net proceeds received by such prospective seller pursuant to such offering.
(c) Promptly after receipt by an indemnified party of notice of the commencement
of any action or proceeding involving a claim referred to in this Section 5.6, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to
the latter of the commencement of such action; provided that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of its obligations under this
Section 5.6, except to the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that the indemnifying party may wish, with counsel reasonably satisfactory
to such indemnified party, and upon notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses incurred by the latter in connection with the
defense thereof. No indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement of any such action which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation. No indemnified party shall consent
to entry of any judgment or enter into any settlement of any such action
22
the defense of which has
been assumed by an indemnifying party without the consent of such indemnifying party, which
consent shall not be unreasonable withheld.
(d) If the indemnification provided for in this Section 5.6 is unavailable to an
indemnified party in respect of any expense, loss, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such expense, loss, claim, damage or
liability (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holder or underwriter, as the case may be, on the other from the
distribution of the Registrable Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and
of the Holder or underwriter, as the case may be, on the other in connection with the statements or
omissions which resulted in such expense, loss, damage or liability, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the one hand and the
Holder or underwriter, as the case may be, on the other in connection with the distribution of the
Registrable Securities shall be deemed to be in the same proportion as the total net proceeds received
by the Company from the initial sale of the Registrable Securities by the Company to the purchaser
bear to the gain realized by the selling Holder or the underwriting discounts and commissions
received by the underwriter, as the case may be. The relative fault of the Company on the one hand
and of the Holder or underwriter, as the case may be, on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or omission
to state a material fact relates to information supplied by the Company, by the Holder or by the
underwriter and parties' relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission; provided that the foregoing contribution agreement shall not
inure to the benefit of any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the proviso contained in the first sentence of Section 5.6 (a), and in
no event shall the obligation of any indemnifying party to contribute under this Section 5.6 (d)
exceed the amount that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under Section 5.6 (a) or Section 5.6 (b) had been
available under the circumstances.
The Company and the holders of Registrable Securities agree that it would not be just
and equitable if contribution pursuant to this Section 5.6 (d) were determined by pro rata allocation
(even if the Holders and any underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable considerations referred to in
the immediately preceding paragraph and Section 5.6 (c). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
23
Notwithstanding the provisions of this Section 5.6 (d), no holder of Registrable
Securities or underwriter shall be required to contribute any amount in excess of the amount by
which (i) in the case of any such holder, the net proceeds received by such holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the public exceeds, in any
such case, the amount of any damages that such holder or underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
5.7 Rule 144. If the Company shall have filed a registration statement pursuant to
Section 12 of the Exchange Act or a registration statement pursuant to the Securities Act, the
Company will file the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the Commission thereunder and will take such further
action as any holder of Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any holder of Registrable Securities, the Company
will deliver to such holder a written statement as to whether it has complied with such requirements.
ARTICLE VI - DEFINITIONS
The following terms, as used in this Warrant, have the following meanings:
"Affiliate" has the meaning set forth in the Loan Agreement.
"Appraisal Notice" has the meaning set forth in Section 3.2(a).
"Appraiser" has the meaning set forth in Section 3.2(b).
"Appraiser Determination" has the meaning set forth in Section 3.2(b).
"Business Day" means any day excluding Saturday, Sunday and any day on which banking
institutions located in New York are authorized by law or other governmental action to be closed,
unless there shall have been an offering of Common Stock registered under the Securities Act, in
which case "Business Day" means (a) if Common Stock is listed or admitted to trading on a national
securities exchange, a day on which the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for business or (b) if Common Stock is not so listed or
admitted to trading, a day on which the New York Stock Exchange is open for business.
"Capital Stock" means and includes any and all shares, interests, participations or other
equivalents of or interests in (however designated) corporate stock, including without limitation,
shares of preferred or
24
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited liability company interests
in any limited liability company and (iv) all equity ownership interests in any Person of any other
type.
"Closing Price" means seventy-five (75%) percent of the Fair Market Value of the Common
Stock as of the Closing Date.
"Commission" means the Securities and Exchange Commission or any other Federal agency
at the time administering the Securities Act.
"Common Stock" has the meaning ascribed to such term in the first paragraph of this
Warrant.
"Company" has the meaning set forth in the first paragraph of this Warrant.
"Company Determination" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor
Federal statute, and the rules and regulations of the Commission (or its successor) thereunder, all as
the same shall be in effect at the time.
"Expiration Date" has the meaning set forth in the first paragraph of this Warrant.
"Fair Market Value" of:
(i) a share of common stock as of any date of determination means:
(A) if the common stock is traded on an exchange or is quoted on the NASDAQ
National Market System, then the average of the closing or last sale prices,
respectively, reported for the 5 trading days ended immediately preceding the
determination date, provided, however, that if the date of determination is either the
Maturity Date, or a date of determination for computation of Fair Market Value in
accordance with Section 4.1(b)(iv), then the Fair Market Value of a share of common
stock shall be the average of the closing or last sale prices, respectively, reported for
the 20 trading days ended the fifth day immediately preceding the Maturity Date or
such determination date; or
(B) if the common stock is not traded on an exchange or on the NASDAQ
National Market System but is traded in the over-the-counter market, then the mean
of the average of the closing bid and asked prices reported for the 5 trading days
ended immediately preceding the determination date, provided, however, that if the
date of determination is either the Maturity Date, or a date of determination for
25
computation of Fair Market Value in accordance with Section 4.1(b)(iv), then the
Fair Market Value of a share of common stock shall be the mean of the average of
the closing bid and asked prices reported for the 20 trading days ended the fifth day
immediately preceding the Maturity Date or such determination date; or
(C) in all other circumstances, the fair market value per share of the common
stock as determined in good faith by the Board of Directors of the Company, or
otherwise in accordance with Section 3.2 hereof;
(ii) the business or property or services in question as of any date of determination,
means the amount determined in good faith by the Board of Directors of the Company or
otherwise in accordance with Section 3.2 hereof; or
(iii) the Company as of any date of determination shall be the Fair Market Value of a
share of Common Stock determined as provided in clause (i) above multiplied by the number
of shares of Common Stock then outstanding.
"Holder" has the meaning set forth in the first paragraph of this Warrant.
"Holder Determination" has the meaning set forth in Section 3.2(c).
"Initiating Holder(s)" has the meaning set forth in Section 5.1 hereof.
"Issuance Date" has the meaning set forth in Section 1.5.
"Loan Agreement" has the meaning set forth in the second paragraph of this Warrant.
"NASD" means The National Association of Securities Dealers, Inc.
"NASDAQ" means The National Association of Securities Dealers, Inc. Automated
Quotation System.
"Objecting Holder" has the meaning set forth in Section 3.2(a).
"Other Securities" has the meaning set forth in Section 5.1.
"Person" means any natural person, corporation, limited liability company, limited
partnership, general partnership, joint stock company, joint venture, association, company, trust,
bank, trust company, land trust, business trust or other organization, whether or not a legal entity,
and any government agency or political subdivision thereof.
26
"Public Sale" means any sale of Capital Stock to the public pursuant to an offering registered
under the Securities Act or to the public through a broker, dealer or market maker pursuant to the
provisions of Rule 144 (or any successor provision then in effect) adopted under the Securities Act.
"Registrable Securities" means any Warrants or Warrant Shares until the date (if any) on
which such Warrant Shares shall have been transferred or exchanged and new certificates for them
not bearing a legend restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force.
"Registration Expenses" means all expenses incident to the Company's performance of or
compliance with Section 5.1 through Section 5.6 hereof, including (i) all registration, filing and
NASD fees, (ii) all fees and expenses of complying with federal and state securities or blue sky laws,
(iii) all word processing, duplicating and printing expenses, (iv) all messenger telephone and delivery
expenses, (v) the fees and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees and disbursements of any one counsel and
any one accountant retained by the holder or holders of more than 50% of the Registrable Securities
being registered, (or, in the case of any registration effected pursuant to Section 5.1, as the Initiating
Holders shall have selected to represent all holders of the Registrable Securities being registered)
up to a maximum of $7,500 in the aggregate, (vii) the fees and expenses of "qualified independent
appraiser participating in an offering pursuant to Section 3 of Schedule of the By laws of the NASD,
(viii) premiums and other costs of policies of insurance (if any) against liabilities arising out of the
public offering of the Registrable Securities being registered if the Company desires such insurance
(ix) fees and expenses of other persons retrained by the Company, (x) internal expenses of the
Company (including without limitation, relating to all salaries and expenses of officers and
employees of the Company to perform legal or accounting duties), (xi) the expense of any annual
audit, (xii) the fees and expenses of listing on any securities exchange, and (xiii) any fees and
disbursements of underwriters customarily paid by issuers or sellers of securities, but not including
underwriting discounts and commissions and transfer taxes, if any, provided that, in any case where
Registration Expenses are not to be borne by the Company, such expenses shall not include (i)
salaries of the Company personnel or general overhead expenses of the Company, (ii) auditing fees,
(iii) premiums or other expenses relating to liability insurance required by underwriters of the
Company or (iv) other expenses for the preparation of financial statements or other data, to the extent
that any of the foregoing either is normally prepared by the Company in the ordinary course of its
business or would have been incurred by the Company had no public offering taken place.
"Securities Act" means the Securities Act of 1933, as amended, and any successor Federal
statute and the rules and regulations of the Securities and Exchange Commission (or its successors)
thereunder, all as the same shall be in effect from time to time.
27
"Subsidiary" of any Person means any corporation, partnership, joint venture, association or
other business entity of which more than 50% of the total voting power of shares of stock or other
interests therein entitled to vote in the election of members of the board of directors, partnership
committee, board of managers or trustees or other managerial body thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof. Unless otherwise specified, "Subsidiary" means a Subsidiary of
the Company and "Subsidiaries" means all Subsidiaries of the Company.
"Vested Shares" has the meaning set forth in the fourth paragraph of this Warrant.
"Warrant" means the Warrant(s) to purchase Common Stock issued by the Company in
connection with the Loan Agreement.
"Warrant Securityholder" means at any time any Warrantholder or any holder of Warrant
Shares.
"Warrant Shares" means (i) any shares of Common Stock or other securities issued upon the
exercise of any Warrants and (ii) any securities issued with respect to any of such shares or other
securities referred to in clause (i) upon the conversion thereof into other securities or by way of stock
dividend or stock split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise; provided that any of such securities shall cease
to be Warrant Shares when such securities shall have (x) been disposed of pursuant to a Public Sale
or (y) ceased to be outstanding.
"Warrantholder" means a holder of a Warrant.
All references herein to "days" shall mean calendar days unless otherwise specified.
ARTICLE VII - MISCELLANEOUS
7.1. Notices. Notices and other communications provided for herein must be in writing
and may be given by mail, courier, confirmed telex or facsimile transmission and shall, unless
otherwise expressly required, be deemed given when received or, if mailed, four Business Days after
being deposited in the United States mail with postage prepaid and properly addressed. In the case
of the Company, such notices shall be addressed to it as follows:
If to Company:
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
0000 X.X. 00xx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxxxx, President
Facsimile: (000) 000-0000
28
With a copy to:
Xxxxxx & Xxxxxxx
000 X. Xxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
In the case of the Holder, such notices and communications shall be addressed to its address as
shown on the books maintained by the Company, unless the Holder shall notify the Company that
notices and communications should be sent to a different address (or telex or facsimile number), in
which case such notices and communications shall be sent to the address (or telex or facsimile
number) specified by the Holder.
7.2. Waivers; Amendments. No failure or delay of the Holder in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other right or power. No notice
or demand on the Company in any case shall entitle the Company to any other or future notice or
demand in similar or other circumstances. The rights and remedies of the Holder are cumulative and
not exclusive of any rights or remedies which it would otherwise have. The provisions of this
Warrant may be amended, modified or waived with (and only with) the written consent of the
Company and the Warrantholders holding Warrants entitling such holders to purchase a majority of
the Common Stock subject to purchase upon exercise of all the outstanding Warrants (exclusive of
Warrants then owned by the Company or any Subsidiary or Affiliate of the Company); provided,
however, that no such amendment, modification or waiver shall, without the written consent of the
holders of all Warrants at the time outstanding, (a) change the number of shares of Common Stock
subject to purchase upon exercise of this Warrant, the Exercise Price or provisions for payment
thereof or (b) amend, modify or waive the provisions of this Section 7.2 or Articles III, IV, Section
1.5 or the definition of Fair Market Value in Article VI and (ii) no amendment, modification or
waiver shall, without the written consent of the holders of a majority of Registrable Shares, amend,
modify or waive the provisions of Article V.
Any such amendment, modification or waiver effected pursuant to and in accordance with
the provisions of this Section shall be binding upon the holders of all Warrants and Warrant Shares,
upon each future holder thereof and upon the Company. In the event of any such amendment,
modification or waiver, the Company shall give prompt notice thereof to all holders of Warrants and
Warrant Shares and, if appropriate, notation thereof shall be made on all Warrants thereafter
surrendered for registration of transfer or exchange.
7.3 Governing Law. THIS WARRANT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
29
7.4. Transfer; Covenants to Bind Successor and Assigns. All covenants, stipulations,
promises and agreements in this Warrant contained by or on behalf of the Company or the Holder
shall bind its successors and assigns, whether so expressed or not. This Warrant and all of the
Holder's rights hereunder, shall be transferable and assignable by the Holder hereof in whole, or from
time to time in part, to any other Person, subject to the restrictions on transferability contained herein
and under the applicable securities laws, and the provisions of this Warrant shall be binding upon
and inure to the benefit of the Holder hereof and its successors and assigns.
7.5 Severability. In case any one or more of the provisions contained in this Warrant
shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
7.6. Section Headings. The section headings used herein are for convenience of reference
only, are not part of this Warrant and are not to affect the construction of or be taken into
consideration in interpreting this Warrant.
7.7 Right to Specific Performance. The Company acknowledges and agrees that in the
event of any breach of the foregoing covenants and agreements, the Holder would be irreparably
harmed and could not be made whole only by the award of monetary damages. Accordingly, the
Company agrees that the Holder, in addition to any other remedy to which the Holder may be
entitled at law or equity, will be entitled to seek and obtain an award of specific performance of any
of the foregoing covenants and agreements.
7.8. CONSENT TO JURISDICTION. THE COMPANY HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK, AND IRREVOCABLY AGREES THAT,
SUBJECT TO HOLDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS WARRANT SHALL BE LITIGATED IN SUCH COURTS. THE
COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS WARRANT. IF THE BORROWER PRESENTLY IS , OR IN THE
FUTURE BECOMES, A NONRESIDENT OF THE STATE OF NEW YORK, BORROWER
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES
THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO
BORROWER, AT BORROWER'S ADDRESS
30
APPEARING IN LENDER'S RECORDS AND
SERVICE SO MADE SHALL BE COMPLETE (10) DAYS AFTER THE SAME HAS BEEN
POSTED AS AFORESAID.
7.9. WAIVER OF JURY TRIAL. THE COMPANY AND HOLDER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS WARRANT. THE COMPANY AND HOLDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
INTO THIS WARRANT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE COMPANY AND HOLDER FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
[This space intentionally left blank.]
31
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed in its
corporate name by one of its officers thereunto duly authorized, and its corporate seal to be hereunto
affixed, attested by its Secretary or an Assistant Secretary, all as of the day and year first above
written.
PERMA-FIX ENVIRONMENTAL SERVICES,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: V.P.
Accepted as of the day and year
first above written:
BHC INTERIM FUNDING L.P.
By: BHCGP, L.L.C., its General Partner
By: BHC INVESTORS, L.L.C., its Managing Member
By: /s/ Xxxxxx X.
Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Manager
Address: BHC Interim Funding L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
32
SUBSCRIPTION FORM
(To Be Executed by the Registered Holder If He Desires to Exercise the Warrant)
TO: Perma-Fix Environmental Services, Inc.
The undersigned hereby exercises the right to purchase ____________ shares of Common Stock, no par value per share, covered by the attached Warrant in accordance with the terms and conditions thereof, and herewith makes payment of the Warrant Price for such shares in full.
________________________________________
Signature
________________________________________
Address
________________________________________
Dated: ___________________________
Dated: ______________________
33
ASSIGNMENT
(To Be Executed by the Registered Holder If He Desires to Exercise the Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the right to purchase shares of Common Stock of Perma-Fix Environmental Services, Inc. evidenced by the within Warrant, and does hereby irrevocably constitute and appoint [ ] Attorney to transfer the said Warrant on the books of the Company, with full power of substitution.
____________________________________
Signature
____________________________________
Address
____________________________________
Dated: ______________________
In the Presence of:
____________________________
