SUBSCRIPTION AND PURCHASE AGREEMENT
for
350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
July 7, 1997
TABLE OF CONTENTS
Page
1. Subscription for Purchase of Series 5 Preferred Stock . . . . . . . 2
1.1 Sale and Purchase. . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Reporting Company. . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Terms of the Series 5 Preferred Stock. . . . . . . . . . . . . 3
2. Payment of Purchase Price; Delivery of Securities . . . . . . . . . 3
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Purchase Price and Payment . . . . . . . . . . . . . . . . . . 3
2.3 Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . 3
3. Representations, Warranties and Covenants of Subscriber . . . . . . 3
3.1 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Prior Investment Experience. . . . . . . . . . . . . . . . . . 5
3.4 No Review by the SEC . . . . . . . . . . . . . . . . . . . . . 5
3.5 Not Registered . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 No Public Market . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Sophisticated Investor . . . . . . . . . . . . . . . . . . . . 6
3.8 SEC Filing . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9 Documents, Information and Access. . . . . . . . . . . . . . . 6
3.10 No Registration, Review or Approval. . . . . . . . . . . . . . 7
3.11 Transfer Restrictions. . . . . . . . . . . . . . . . . . . . . 7
3.12 Trading Activity . . . . . . . . . . . . . . . . . . . . . . . 7
3.13 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Accuracy or Representations and Warranties . . . . . . . . . . 8
3.15 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.16 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Representations, Warranties and Covenants of the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Organization, Authority, Qualification . . . . . . . . . . . . 9
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Ownership of, and Title to, Securities . . . . . . . . . . . . 9
4.4 Exemption from Registration. . . . . . . . . . . . . . . . . . 9
4.5 Use of Proceeds from this Offering . . . . . . . . . . . . . . 9
5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Registration . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Current Registration Statement . . . . . . . . . . . . . . . . 10
5.3 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 By the Company . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Securities Legends and Notices. . . . . . . . . . . . . . . . . . . 13
8. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 14
8.3 Governing Law; Litigation Costs. . . . . . . . . . . . . . . . 14
8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . 15
8.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 15
8.9 Authority; Enforceability. . . . . . . . . . . . . . . . . . . 15
8.10 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.11 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . 16
8.12 Public Announcements . . . . . . . . . . . . . . . . . . . . . 16
Exhibit "A" - Certificate of Designations
-ii-
SUBSCRIPTION AND PURCHASE AGREEMENT
for
350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
THIS SUBSCRIPTION AND PURCHASE AGREEMENT (the "Agreement") is
dated as of the 3rd day of July, 1997, by and between PERMA-FIX
ENVIRONMENTAL SERVICES, INC., a Delaware corporation, having offices
at 0000 Xxxxxxxxx 00xx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (the
"Company"), and THE INFINITY FUND, L.P., a Georgia limited
partnership, and having its principal offices at 0 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Subscriber and the Company have arranged for the
Agreement to provide for the subscription and, if such subscription
as set forth in this Agreement is accepted by the Company, the
purchase by the Subscriber, on the terms and subject to the
conditions set forth in this Agreement, of an aggregate of 350
shares of a new series of convertible preferred stock, par value
$.001 per share, to be designated by the Company's Board of
Directors as "Series 5 Class E Convertible Preferred Stock" (the
"Series 5 Preferred Stock"), with such Series 5 Preferred Stock
containing such terms, conditions, restrictions and provisions as
set forth in the Certificate of Designations attached hereto as
Exhibit "A;"
WHEREAS, the Company's Common Stock is listed for trading on
the Boston Stock Exchange and the National Association of Securities
Dealers Automated Quotation system ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
has been subject to such filing requirements for the past ninety
(90) days;
WHEREAS, the Subscriber is an "accredited investor" as such
term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the principal place of business of the Subscriber is
located in Atlanta, Georgia;
WHEREAS, in order to induce the Subscriber to enter into this
Agreement and to subscribe for and purchase the Securities on the
terms and subject to the conditions hereof, the Company is granting
certain registration rights under the Agreement with respect to the
Common Stock issuable upon the conversion of the Series 5 Preferred
Stock;
WHEREAS, in reliance upon the representations made by the
Subscriber in this Agreement, the transactions contemplated by this
Agreement are such that the offer and sale of the Series 5
Preferred Stock by the Company hereunder will be exempt from
registration under applicable federal and state (U. S.) securities
laws since this is a private placement and intended to be a
nonpublic offering pursuant to Sections 4(2) and/or 3(b) of the
Securities Act and/or Regulation D promulgated under the Securities
Act; and,
WHEREAS, the Series 5 Preferred Stock to be sold in accordance
with this Agreement will not be quoted or listed for trading on any
securities exchange, organized market or quotation system at the
time of acquisition hereunder.
NOW, THEREFORE, for and in consideration of the premises, and
the mutual representations, warranties, covenants and agreements set
forth herein, and for other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereto agree as
follows:
1. Subscription for Purchase of Series 5 Preferred Stock.
1.1 Sale and Purchase. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, on the Closing
Date, the Company agrees to sell, transfer, convey and
deliver to the Subscriber, and the Subscriber agrees to
purchase, acquire and accept delivery from the Company,
three hundred fifty (350) shares of the Series 5
Preferred Stock for an aggregate purchase price of Three
Hundred Fifty Thousand Dollars ($350,000) ("Purchase
Price").
1.2 Reporting Company. Although the Series 5 Preferred Stock
and the shares of Common Stock issuable upon conversion
of the Series 5 Preferred Stock (the "Conversion Shares")
shall not be registered as of the Closing under federal
or state securities laws or any rules or regulations
promulgated thereunder, the Company is a reporting
company under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and has filed with the
Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The Subscriber has had
the opportunity to review, and has reviewed, all such
reports and information which the Subscriber deemed
material to an investment decision regarding the purchase
of the Securities.
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1.3 Terms of the Series 5 Preferred Stock. The Series 5
Preferred Stock shall contain and be subject to the
terms, conditions, preferences and restrictions set forth
in the Certificate of Designations attached hereto as
Exhibit "A" ("Certificate of Designations").
2. Payment of Purchase Price; Delivery of Securities.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on July 3, 1997 (the "Closing
Date"), at the offices of the Company or at such other
mutually convenient time or at such other mutually
convenient place as agreed upon by the parties.
2.2 Purchase Price and Payment. At the Closing, the
Subscriber shall deliver to the Company the Purchase
Price, in cash by wire transfer. Upon receipt by the
Company of the Purchase Price, the Company shall cause to
be delivered: (a) to the Subscriber, c/o Bear Xxxxxxx &
Co., 00 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, a certificate or
certificates representing the 350 shares of Series 5
Preferred Stock purchased by the Subscriber, in such
denominations as Subscriber requests in writing, and (b)
to the Subscriber, written evidence from the Secretary of
State of the State of Delaware that the Certificate of
Designations has been filed in the Office of the
Secretary of State of the State of Delaware on or before
the Closing Date.
2.3 Restrictive Legends. Subscriber agrees that, subject to
the provisions of Section 5 below, all certificates
representing the Series 5 Preferred Stock shall bear the
restrictive legend substantially in the form set forth in
Section 7 below which shall include, but not be limited
to, a legend to the effect that (a) the Series 5
Preferred Stock represented by such certificate has not
been registered under the Securities Act, and (b) unless
there is an effective registration statement relating to
the Series 5 Preferred Stock and the Conversion Shares,
neither the Series 5 Preferred Stock nor the Conversion
Shares may be offered, sold, transferred, mortgaged,
pledged or hypothecated without an exemption from
registration and an opinion of counsel to the Company
with respect thereto, or an opinion from counsel for the
Subscriber, which opinion is satisfactory to the Company,
to the effect that registration under the Act is not
required in connection with such sale or transfer and the
reasons therefor. The legend on all such certificates
shall make reference to the registration rights set forth
in Section 5 hereof.
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
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3.1 Investment Intent. The Subscriber represents and
warrants that the Series 5 Preferred Stock is being, and
any underlying Conversion Shares will be, purchased or
acquired solely for the Subscriber's own account, for
investment purposes only and not with a view toward the
distribution or resale to others. The Subscriber
acknowledges, understands and appreciates that the Series
5 Preferred Stock has not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the Subscriber's representations as to
investment invention, investor status, and related and
other matters set forth herein. Subscriber understands
that, in the view of the United States Securities and
Exchange Commission (the "SEC"), among other things, a
purchase now with an intent to distribute or resell would
represent a purchase and acquisition with an intent
inconsistent with its representation to the Company, and
the SEC might regard such a transfer as a deferred sale
for which the registration exemption is not available.
3.2 Certain Risk. The Subscriber recognizes that the
purchase of the Series 5 Preferred Stock involves a high
degree of risk in that (a) the Company has sustained
losses through March 31, 1997, from its operations, and
may require substantial funds in addition to the proceeds
of this private placement; (b) that the Company has a
substantial accumulated deficit; (c) an investment in the
Company is highly speculative and only investors who can
afford the loss of their entire investment should
consider investing in the Company and the Series 5
Preferred Stock; (d) an investor may not be able to
liquidate his investment; (e) transferability of the
Series 5 Preferred Stock is extremely limited; (f) in the
event of a disposition an investor could sustain the loss
of his entire investment; (g) the Series 5 Preferred
Stock represents non-voting equity securities, and the
right to convert into and purchase shares of voting
equity securities in a corporate entity that has an
accumulated deficit; (h) no return on investment, whether
through distributions, appreciation, transferability or
otherwise, and no performance by, through or of the
Company, has been promised, assured, represented or
warranted by the Company, or by any director, officer,
employee, agent or representative thereof; and, (i) while
the Common Stock is presently quoted and traded on the
Boston Stock Exchange and the Nasdaq SmallCap Market and
while the Subscriber is a beneficiary of certain
registration rights provided herein, the Series 5
Preferred Stock subscribed for and that is purchased
under this Agreement and the Conversion Shares (i) are
not registered under applicable federal or state
securities laws, and thus may not be sold, conveyed,
assigned or transferred unless registered under such laws
or unless an exemption from registration is available
under such laws, as more fully described herein, and (ii)
the Series 5 Preferred Stock subscribed for and that is
to be purchased under this Agreement is not quoted,
-4-
traded or listed for trading or quotation on the NASDAQ,
or any other organized market or quotation system, and
there is therefore no present public or other market for
the Series 5 Preferred Stock, nor can there be any
assurance that the Common Stock of the Company will
continue to be quoted, traded or listed for trading or
quotation on the Boston Stock Exchange or the Nasdaq
SmallCap Market or on any other organized market or
quotation system.
3.3 Prior Investment Experience. The Subscriber acknowledges
that it has prior investment experience, including
investment in non-listed and non-registered securities,
or has employed the services of an investment advisor,
attorney or accountant to read all of the documents
furnished or made available by the Company to it and to
evaluate the merits and risks of such an investment on
its behalf, and that it recognizes the highly speculative
nature of this investment.
3.4 No Review by the SEC. The Subscriber hereby acknowledges
that this offering of the Series 5 Preferred Stock has
not been reviewed by the SEC because this private
placement is intended to be a nonpublic offering pursuant
to Sections 4(2) and/or 3(b) of the Securities Act and/or
Regulation D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 5 Preferred Stock and the Conversion Shares have
not been registered under the Securities Act by reason of
a claimed exemption under the provisions of the
Securities Act which depends, in part, upon the
Subscriber's investment intention. In this connection,
the Subscriber understands that it is the position of the
SEC that the statutory basis for such exemption would not
be present if its representation merely meant that its
present intention was to hold such securities for a short
period, such as the capital gains period of tax statutes,
for a deferred sale, for a market rise (assuming that a
market develops), or for any other fixed period.
3.6 No Public Market. The Subscriber understands that there
is no public market for the Series 5 Preferred Stock.
The Subscriber understands that although there is
presently a public market for the Common Stock, including
the Common Stock issuable upon conversion of the Series
5 Preferred Stock, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. The
Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in
the future of any reporting requirements under the
Exchange Act, or its dissemination to the public of any
current financial or other information concerning the
Company, as is required by the Rule as one of the
conditions of its availability. The Subscriber
-5-
understands and hereby acknowledges that the Company is
under no obligation to register the Series 5 Preferred
Stock or the Conversion Shares under the Securities Act,
except as set forth in Section 5 hereof. The Subscriber
agrees to hold the Company and its directors, officers
and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and
expenses incurred by them as a result of any
misrepresentation made by the Subscriber contained herein
or any sale or distribution by the Subscriber in
violation of the Securities Act or any applicable state
securities or "blue sky" laws (collectively, "Securities
Laws").
3.7 Sophisticated Investor. That (a) the Subscriber is an
"accredited investor," as such term is defined in Rule
501 of Regulation D promulgated under the Securities Act,
and has total assets in excess of $5,000,000; (b) the
Subscriber has adequate means of providing for the
Subscriber's current financial needs and possible
contingencies and has no need for liquidity of the
Subscriber's investment in the Series 5 Preferred Stock;
(c) the Subscriber is able to bear the economic risks
inherent in an investment in the Series 5 Preferred Stock
and that an important consideration bearing on its
ability to bear the economic risk of the purchase of
Series 5 Preferred Stock is whether the Subscriber can
afford a complete loss of the Subscriber's investment in
the Series 5 Preferred Stock and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (d) the Subscriber has such
knowledge and experience in business, financial,
investment and banking matters (including, but not
limited to, investments in restricted, non-listed and
non-registered securities) that the Subscriber is capable
of evaluating the merits, risks and advisability of an
investment in the Series 5 Preferred Stock.
3.8 SEC Filing. The Subscriber acknowledges that it has been
previously furnished with true and complete copies of the
following documents which have been filed with the SEC
pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the
Exchange Act since January 1, 1997, and that such have
been furnished to the Subscriber a reasonable time prior
to the date hereof: (a) the Company's Form 10-K for the
year ended December 31, 1996; (b) the Company's Form 10-Q
for the quarter ended March 31, 1997, and (c) the
Company's Form 8-K, date of event reported: June 11,
1997, as amended by the Company's Form 8-K/A, dated
June 25, 1997.
3.9 Documents, Information and Access. The Subscriber's
decision to purchase the Series 5 Preferred Stock is not
based on any promotional, marketing or sales materials,
and the Subscriber and its representatives have been
afforded, prior to purchase thereof, the opportunity to
ask questions of, and to receive answers from, the
Company and its management, and has had access to all
-6-
documents and information which Subscriber deems material
to an investment decision with respect to the purchase of
Series 5 Preferred Stock hereunder.
3.10 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of Series 5 Preferred Stock pursuant to this
Agreement has not been reviewed or approved by the SEC or
by any state securities commission, authority or agency,
and is not registered under the Securities Laws. The
Subscriber acknowledges, understands and agrees that the
Series 5 Preferred Stock is being offered and sold
hereunder pursuant to (i) a private placement exemption
to the registration provisions of the Securities Act
pursuant to Section 3(b) and/or Section 4(2) of such
Securities Act and/or Regulation D promulgated under the
Securities Act) and (ii) a similar exemption to the
registration provisions of applicable state securities
laws.
3.11 Transfer Restrictions. That Subscriber will not transfer
any Series 5 Preferred Stock purchased under this
Agreement or any Conversion Shares acquired upon
conversion of the Series 5 Preferred Stock unless such
Series 5 Preferred Stock or the Conversion Shares,
whichever is applicable, is registered under the
Securities Laws, or unless an exemption is available
under such Securities Laws, and the Company may, if it
chooses, where an exemption from registration is claimed
by such Subscriber, condition any transfer of Series 5
Preferred Stock or Conversion Shares out of the
Subscriber's name on an opinion of the Company's counsel,
to the effect that the proposed transfer is being
effected in accordance with, and does not violate, an
applicable exemption from registration under the
Securities Laws, or an opinion of counsel to the
Subscriber, which opinion is satisfactory to the Company,
to the effect that registration under the Securities Act
is not required in connection with such sale or transfer
and the reasons therefor.
3.12 Trading Activity. The Subscriber expressly agrees that
until such time that it has sold all of the Series 5
Preferred Stock and/or all of the Conversion Shares that
it shall not, directly or indirectly, through an
affiliate (as that term is defined under Rule 405
promulgated under the Securities Act) or by, with or
through an unrelated third party or entity, whether or
not pursuant to a written or oral understanding,
agreement, arrangement, scheme, or artifice of nature
whatsoever, engage in the short selling of the Company's
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Common Stock or any other equity securities of the
Company, whether now existing or hereafter issued, or
engage in any other activity of any nature whatsoever
that has the same effect as a short sale, or is a de
facto or de jure short sale, of the Company's Common
Stock or any other equity security of the Company,
whether now existing or hereafter issued, including, but
not limited to, the sale of any rights pursuant to any
understanding, agreement, arrangement, scheme or artifice
of any nature whatsoever, whether oral or in writing,
relative to the Company's Common Stock or any other
equity securities of the Company whether now existing or
hereafter created. The Subscriber agrees that it will
not engage, and will cause its affiliates not to engage,
in any activity designed to reduce the price of the
Company's Common Stock, as quoted on the Boston Stock
Exchange or the NASDAQ, in connection with the
Subscriber's conversion of any of the Series 5 Preferred
Stock. The Subscriber agrees to refrain, and cause its
affiliates to refrain, from engaging in, or inducing
others to engage in, any activity relating to the Company
or Common Stock of the Company that is proscribed under
Regulation M promulgated under the Exchange Act.
3.13 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgements and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 5 Preferred
Stock to the Subscriber.
3.14 Accuracy or Representations and Warranties. All of the
representations, warranties, understandings and
acknowledgments that Subscriber has made herein are true
and correct in all material respects as of the date of
execution hereof. The Subscriber will perform and comply
fully in all material respects with all covenants and
agreements set forth herein, and the Subscriber covenants
and agrees that until the acceptance of this Agreement by
the Company, the Subscriber shall inform the Company
immediately in writing of any changes in any of the
representations or warranties provided or contained
herein.
3.15 Indemnity. The Subscriber hereby agrees to indemnify and
hold harmless the Company, and the Company's successors
and assigns, from, against and in all respects of any
demands, claims, actions or causes of action,
assessments, liabilities, losses, costs, damages,
penalties, charges, fines or expenses (including, without
limitation, interest, penalties, and attorney and
accountants' fees, disbursements and expenses), arising
out of or relating to any breach by Subscriber of any
representations, warranty, covenant or agreement made by
Subscriber in this Agreement. Such right to
indemnification shall be in addition to any and all other
rights of the Company under this Agreement or otherwise,
at law or in equity.
3.16 Survival. The Subscriber expressly acknowledges and
agrees that all of its representations, warranties,
agreements and covenants set forth in this Agreement
shall be of the essence hereof and shall survive the
execution, delivery and Closing of this Agreement, the
sale and purchase of the Series 5 Preferred Stock, the
conversion of the Series 5 Preferred Stock, and the sale
of the Conversion Shares.
-8-
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
purchase the Series 5 Preferred Stock, the Company hereby
represents, warrants and covenants to Subscriber as follows:
4.1 Organization, Authority, Qualification. The Company is
a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
The Company has full corporate power and authority to own
and operate its properties and assets and to conduct and
carry on its business as it is now being conducted and
operated.
4.2 Authorization. The Company has full power and authority
to execute and deliver this Agreement and to perform its
obligations under and consummate the transactions
contemplated by this Agreement. Upon the execution of
this Agreement by the Company and delivery of the Series
5 Preferred Stock, this Agreement shall have been duly
and validly executed and delivered by the Company and
shall constitute the legal, valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms.
4.3 Ownership of, and Title to, Securities. The Series 5
Preferred Stock to be purchased by the Subscriber is, and
all Conversion Shares, when issued, will be, duly
authorized, validly issued, fully paid and nonassessable
shares of the capital stock of the Company, free of
personal liability. Upon consummation of the purchase of
the Series 5 Preferred Stock (and upon the conversion of
the Series 5 Preferred Stock, in whole or in part)
pursuant to this Agreement, the Subscriber will own and
acquire title to the Series 5 Preferred Stock (and the
Conversion Shares) free and clear of any and all proxies,
voting trusts, pledges, options, restrictions, or other
legal or equitable encumbrance of any nature whatsoever
(other than the restrictions on transfer due to
Securities Laws or as otherwise provided for in this
Agreement or the Certificate of Designation).
4.4 Exemption from Registration. The offer and sale of
Series 5 Preferred Stock to the Subscriber in accordance
with the terms and provisions of this Agreement is being
effected in accordance with the Securities Act, pursuant
to a private placement exemption to the registration
provisions of the Act pursuant to Section 3(b) and/or
4(2) of such Act and/or Regulation D promulgated under
such Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
4.5 Use of Proceeds from this Offering. The net proceeds
from the sale of the Series 5 Preferred Stock are
estimated to be approximately $345,000 after payment of
legal fees and expenses of approximately $5,000, but
prior to any fees and expenses relating to the
registration of the Conversion Shares pursuant to the
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terms of Section 5 hereof. The Company intends to
utilize the net proceeds to reduce outstanding debt and
for general working capital.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and purchase the Series 5 Preferred Stock,
the Company hereby covenants and agrees to grant to the Subscriber
the rights set forth in this Section 5 with respect to the
registration of the Conversion Shares.
5.1 Registration. Subject to the terms of Section 5 hereof,
the Company agrees that within thirty (30) days after the
Closing Date, it shall prepare and file with the SEC, a
registration statement on Form S-3 or equivalent form
(the "Registration Statement") and such other documents,
including a prospectus, as may be necessary in the
opinion of counsel for the Company in order to comply
with the provisions of the Securities Act, so as to
permit a public offering and sale by the Subscriber of up
to 200,000 shares of Common Stock issuable upon
conversion of the Series 5 Preferred Stock, plus up to
36,000 shares of Common Stock, if any, issuable as
payment of dividends on the Series 5 Preferred Stock
pursuant to the terms of the Series 5 Preferred Stock.
The Company shall use its reasonable efforts to cause
such Registration Statement to become effective at the
earliest possible date after filing. In connection with
the offering of such Common Stock registered pursuant to
this Section 5, the Company shall take such reasonable
actions, as it deems necessary, to qualify the Common
Stock issuable upon conversion of the Series 5 Preferred
Stock, plus the Common Stock issuable as payment of
dividends on the Series 5 Preferred Stock, covered by
such Registration Statement under such "blue sky" or
other state securities laws for offer and sale as shall
be reasonably necessary to permit the public offering and
sale of such shares of Common Stock covered by such
Registration Statement; provided, however, that the
Company shall not be required (a) to qualify generally to
do business in any jurisdiction where it would not
otherwise be required to qualify but for this
subparagraph, (b) to subject itself to taxation in any
such jurisdiction, or (c) to consent to general service
of process in any such jurisdiction. It is expressly
agreed that in no event are any registration rights being
granted to the Series 5 Preferred Stock itself, but only
with respect to up to 200,000 shares of the underlying
Conversion Shares issuable upon exercise of the Series 5
Preferred Stock, plus up to 36,000 shares of Common Stock
that the Company may issue in payment of dividends on the
Series 5 Preferred Stock.
5.2 Current Registration Statement. Once effective, the
Company shall use its reasonable efforts to cause such
Registration Statement filed hereunder to remain current
and effective for a period of two (2) years or until the
Conversion Shares covered by such Registration Statement
are sold by the Subscriber, whichever is sooner. The
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Subscriber shall promptly provide all such information
and materials and take all such action as may be required
in order to permit the Company to comply with all
applicable requirements of the SEC and to obtain any
desired acceleration of the effective date of such
registration statement.
5.3 Other Provisions. In connection with the offering of any
Conversion Shares registered pursuant to this Section 5,
the Company shall furnish to the Subscriber such number
of copies of any final prospectus as it may reasonably
request in order to effect the offering and sale of the
Conversion Shares to be offered and sold under such
Registration Statement. In connection with any offering
of Conversion Shares registered pursuant to this Section
5, the Company shall (a) furnish to the underwriters (if
any), at the Company's expense, unlegended certificates
representing ownership of the Conversion Shares sold
under such Registration Statement in such denominations
as requested and (b) instruct any transfer agent and
registrar of the Conversion Shares sold under such
Registration Statement to release immediately any stop
transfer order, and to remove any restrictive legend,
with respect to such Conversion Shares included in any
registration becoming effective pursuant to this
Agreement upon the sale of such shares by the Subscriber.
5.4 Costs. Subject to the immediately following sentence,
the Company shall in all events pay and be responsible
for all fees, expenses, costs and disbursements
associated with the Registration Statement relating to
the Conversion Shares under this Section 5, including
filing fees, fees, costs and disbursements of any
counsel, accountants and other consultants representing
the Company in connection therewith. Notwithstanding
anything set forth herein to the contrary, Subscriber
shall be responsible for and pay any and all underwriting
discounts and commissions in connection with the sale of
the Conversion Shares pursuant hereto or the Registration
Statement and all fees of its legal counsel and other
advisors retained in connection with reviewing such
Registration Statement.
5.5 Successors. The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all
of the business, properties, stock or assets of the
Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place.
6. Indemnification.
6.1 By the Company. Subject to the terms of this Section 6,
the Company will indemnify and hold harmless the
Subscriber, its directors and officers, and any
underwriter (as defined in the Securities Act) for the
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Subscriber and each person, if any, who controls the
Subscriber or such underwriter within the meaning of the
Act, from and against, and will reimburse the Subscriber
and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost and
expense to which such holder or any such underwriter or
controlling person may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained
in the Registration Statement filed with the SEC pursuant
to Section 5, any prospectus contained therein or any
amendment or supplement thereto, or arise out of, or are
based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made not misleading;
provided, however, that the Company will not be liable in
any such case to the extent that any such loss, damage,
liability, cost or expense arises out of, or is based
upon, an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with
information furnished by the Subscriber, such underwriter
or such controlling person in writing specifically for
use in the preparation thereof.
6.2 By the Subscriber. Subject to the terms of this Section
6, the Subscriber will indemnify and hold harmless the
Company, its directors and officers, any controlling
person and any underwriter from and against, and will
reimburse the Company, its directors and officers, any
controlling person and any underwriter with respect to,
any and all loss, damage, liability, cost or expense to
which the Company or any controlling person and/or any
underwriter may become subject under the Securities Act
or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material
fact contained in such Registration Statement filed with
the SEC pursuant to Section 5, any prospectus contained
therein or any amendment or supplement thereto, or arise
out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances in which they were
made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so
made in reliance upon, and in strict conformity with,
written information furnished by, or on behalf of, the
Subscriber specifically for use in the preparation
thereof.
6.3 Procedure. Promptly after receipt by an indemnified
party pursuant to the provisions of Section 6.1 or 6.2 of
notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions,
such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the
provisions of Section 6.1 or 6.2, promptly notify the
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indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not
relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any
indemnified party and the indemnified party notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate
in, and, to the extent that it may wish, assume the
defense thereof; or, if there is a conflict of interest
which would prevent counsel for the indemnifying party
from also representing the indemnified party, the
indemnified parties have the right to select only one (1)
separate counsel to participate in the defense of such
action on behalf of all such indemnified parties. After
notice from the indemnifying parties to such indemnified
party of the indemnifying parties' election so to assume
the defense thereof, the indemnifying parties will not be
liable to such indemnified parties pursuant to the
provisions of said Section 6.1 or 6.2 for any legal or
other expense subsequently incurred by such indemnified
parties in connection with the defense thereof, other
than reasonable costs of investigation, unless (a) the
indemnified parties shall have employed counsel in
accordance with the provisions of the preceding sentence;
(b) the indemnifying parties shall not have employed
counsel satisfactory to the indemnified parties to
represent the indemnified parties within a reasonable
time after the notice of the commencement of the action
or (c) the indemnifying party has authorized the
employment of counsel for the indemnified party at the
expense of the indemnifying parties.
7. Securities Legends and Notices. Subscriber represents and
warrants that it has read, considered and understood the following
legends, and agrees that such legends, substantially in the form and
substance set forth below, shall be placed on all of the
certificates representing the Series 5 Preferred Stock:
Series 5 Preferred Stock Legends
NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON
STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED
STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED
STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
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SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK ARE ALSO
SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT
CERTAIN SUBSCRIPTION AND PURCHASE AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED JULY 7,
1997, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Amendment; Waiver. This Agreement shall not be changed,
modified or amended in any respect except by the mutual
written agreement of the parties hereto. Any provision
of this Agreement may be waived in writing by the party
which is entitled to the benefits thereof. No waiver of
any provision of this Agreement shall be deemed to, or
shall constitute a waiver of, any other provision hereof
or thereof (whether or not similar), nor shall nay such
waiver constitute a continuing waiver.
8.2 Binding Effect; Assignment. Neither this Agreement nor
any rights or obligations hereunder are assignable by the
Subscriber.
8.3 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
Subscriber expressly and irrevocably consent to the
jurisdiction and venue of the federal courts located in
Wilmington, Delaware. Each of the parties agrees that in
the event either party brings an action to enforce any of
the provisions of this Agreement or to recovery for an
alleged breach of any of the provisions of this
Agreement, each party shall be responsible for its own
legal costs and disbursements during the pendency of any
such action; provided, however, that after any such
action has been reduced to a final, unappealable
judgment, the prevailing party shall be entitled to
recover from the other party all reasonable, documented
attorneys' fees and disbursements and court costs from
the other party.
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8.4 Severability. Any term or provisions of this Agreement
which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction only, be ineffective only
to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof
affecting the validity or enforceability of such
provision in any other jurisdiction.
8.5 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or any term or provisions hereof.
8.6 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, notwithstanding that all parties are
not signatories to the same counterpart. Upon delivery
of an executed counterpart by the undersigned Subscriber
to the Company, which in turn is executed and delivered
by the Company, this Agreement shall be binding as one
original agreement between Subscriber and the Company.
8.7 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Series 5 Preferred Stock to be sold.
8.8 Entire Agreement. This Agreement, along with the
Certificate of Designations, merges and supersedes any
and all prior agreements, understandings, discussions,
assurances, promises, representations or warranties among
the parties with respect to the subject matter hereof,
and contains the entire agreement among the parties with
respect to the subject matter set forth herein and
therein.
8.9 Authority; Enforceability. The Subscriber is duly
authorized to enter into this Agreement and to perform
all of its obligations hereunder. Upon the execution and
delivery of this Agreement by the Subscriber, this
Agreement shall be enforceable against the Subscriber in
accordance with its terms.
8.10 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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service, or by private overnight mail service (e.g.,
Federal Express). Any such notice shall be deemed to
have been given (i) on the business day actually received
if given by hand or by fax, (ii) on the business day
immediately subsequent to mailing, if sent by U.S.
Express Mail service or private overnight mail service,
or (iii) five (5) business days following the mailing
thereof, if mailed by certified or registered mail,
postage prepaid, return receipt requested, and all such
notices shall be sent to the following addresses (or to
such other address or addresses as a party may have
advised the other in the manner provided in this Section
8.11:
If to the Company: Xx. Xxxxx X. Xxxxxxxxxx
Perma-Fix Environmental
Services, Inc.
0000 Xxxxxxxxx 00xx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Fax No.: (000) 000-0000
with copies Xxxxx X. Xxxxxxxxx, Esquire
simultaneously Xxxxxx & Xxxxxxx
by like means to: One Leadership Square, Suite 1700
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
If to the The Infinity Fund, L.P.
Subscriber: 0 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Fax No.: (000) 000-0000
8.11 No Third Party Beneficiaries. This Agreement and the
rights, benefits, privileges, interests, duties and
obligations contained or referred to herein shall be
solely for the benefit of the parties hereto and no third
party shall have any rights or benefits hereunder as a
third party beneficiary or otherwise hereunder.
8.12 Public Announcements. Neither Subscriber nor any
officer, director, stockholder, employee, affiliate or
affiliated person or entity of Subscriber, shall make or
issue any press releases or otherwise make any public
statements or make any disclosures to any third person or
entity with respect to the transactions contemplated
herein and will not make or issue any press releases or
otherwise make any public statements of any nature
whatsoever with respect to the Company without the
express prior approval of the Company.
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IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement as of this 7th day of July,
1997.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Xxxxx Xxxxxxxxxx
______________________________
Xx. Xxxxx X. Xxxxxxxxxx
Chief Executive Officer
THE INFINITY FUND, L.P.
By /s/ Xxxx Xxxxx
______________________________
Name: Xxxx Xxxxx
_______________________
Title: Executive Director
______________________
\N-P\PESI\8K\797\EXHIB4.1
