EXCHANGE AGREEMENT
exchanging
2,252 SHARES OF SERIES 10 CLASS J CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
for
2,252 SHARES OF SERIES 13 CLASS M CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
TABLE OF CONTENTS
Page
1. Exchange and Subscription for Purchase of Securities. . . .3
1.1 Issuance of Common Stock and Warrants. . . . . . . . .3
1.1.1 Delivery . . . . . . . . . . . . . . . . . .3
1.1.2 Cancellation of Series 10 Preferred. . . . .4
1.1.3 Restrictive Legends. . . . . . . . . . . . .4
1.2 Discharge. . . . . . . . . . . . . . . . . . . . . . .4
1.3 Exchange . . . . . . . . . . . . . . . . . . . . . . .4
1.4 Reporting Company. . . . . . . . . . . . . . . . . . .4
1.5 Terms of the Series 13 Preferred . . . . . . . . . . .5
1.6 No Effect on Series 10 Warrants. . . . . . . . . . . .5
2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . .5
3. Representations, Warranties and Covenants of Subscriber . .5
3.1 Investment Intent. . . . . . . . . . . . . . . . . . .5
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . .5
3.3 Prior Investment Experience. . . . . . . . . . . . . .6
3.4 No Review by the SEC . . . . . . . . . . . . . . . . .6
3.5 Not Registered . . . . . . . . . . . . . . . . . . . .6
3.6 No Public Market . . . . . . . . . . . . . . . . . . .6
3.7 Sophisticated Investor . . . . . . . . . . . . . . . .7
3.8 Tax Consequences . . . . . . . . . . . . . . . . . . .7
3.9 SEC Filing . . . . . . . . . . . . . . . . . . . . . .7
3.10 Documents, Information and Access. . . . . . . . . . .8
3.11 No Registration, Review or Approval. . . . . . . . . .8
3.12 Transfer Restrictions. . . . . . . . . . . . . . . . .8
3.13 No Short Sale. . . . . . . . . . . . . . . . . . . . .8
3.14 No Commission. . . . . . . . . . . . . . . . . . . . .9
3.15 Reliance . . . . . . . . . . . . . . . . . . . . . . .9
3.16 Accuracy or Representations and Warranties . . . . . .9
3.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . .9
3.18 Survival . . . . . . . . . . . . . . . . . . . . . . .9
4. Representations, Warranties and Covenants of the Company. 10
4.1 Organization, Authority, Qualification . . . . . . . 10
4.2 Authorization. . . . . . . . . . . . . . . . . . . . 10
4.3 No Commission. . . . . . . . . . . . . . . . . . . . 10
4.4 Ownership of, and Title to, Securities . . . . . . . 10
-i-
4.5 Exemption from Registration. . . . . . . . . . . . . 10
5. Registration Rights . . . . . . . . . . . . . . . . . . . 11
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . 11
6.1 By the Company . . . . . . . . . . . . . . . . . . . 11
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . 11
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . 12
7. Securities Legends and Notices. . . . . . . . . . . . . . 12
8. Miscellaneous.
8.1 Assignment and Power of Attorney. . . . . . . . . . .14
8.2 Amendment; Waiver. . . . . . . . . . . . . . . . . . 14
8.3 Binding Effect; Assignment . . . . . . . . . . . . . 14
8.4 Governing Law; Litigation Costs. . . . . . . . . . . 14
8.5 Severability . . . . . . . . . . . . . . . . . . . . 15
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 15
8.8 Transfer Taxes . . . . . . . . . . . . . . . . . . . 15
8.9 Entire Agreement . . . . . . . . . . . . . . . . . . 15
8.10 Authority; Enforceability. . . . . . . . . . . . . . 15
8.11 Notices. . . . . . . . . . . . . . . . . . . . . . . 16
8.12 No Third Party Beneficiaries . . . . . . . . . . . . 16
8.13 Public Announcements . . . . . . . . . . . . . . . . 16
8.14 Conflicts with Subscription Agreement. . . . . . . . 17
Exhibit "A" Certificate of Designations
-ii-
THIS EXCHANGE AGREEMENT (the "Agreement") is entered on the
15th day of July 1999, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation, having offices at 0000
Xxxxxxxxx 00xx Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (the "Company"),
and RBB BANK AKTIENGESELLSCHAFT, organized under the laws of
Austria, and having its principal offices at Xxxxxxxx 00, 0000
Xxxx, Xxxxxxx (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber previously entered
into a certain Private Securities Subscription Agreement dated June
30, 1998 ("Subscription Agreement") under which (i) 3,000 shares of
"Series 10 Class Convertible Preferred Stock," par value $.001 per
share (the "Series 10 Preferred"), and (ii) an aggregate of 350,000
common stock purchase warrants were issued to the Subscriber in the
form of one common stock purchase warrant dated June 30, 1998,
providing for the purchase of 200,000 shares of the Company's
common stock, par value $.001 per share (the "Common Stock"), at an
exercise price of $1.875 per share, and one common stock warrant
dated June 30, 1998, providing for the purchase of 150,000 shares
of Common Stock at an exercise price of $2.50 per share
(collectively, the "Series 10 Warrants")(the Common Stock issuable
upon the exercise of the Series 10 Warrants is referred to
hereinafter as the "Warrant Shares");
WHEREAS, pursuant to the terms of the Series 10 Preferred, the
Subscriber has previously converted seven hundred forty-eight (748)
shares of Series 10 Preferred into Common Stock leaving two
thousand two hundred fifty-two (2,252) shares remaining issued and
outstanding as of the date of this Agreement;
WHEREAS, the subscriber owns all of the issued and outstanding
shares of Series 10 Preferred as of the date of this Agreement;
WHEREAS, the Company and the Subscriber both desire to enter
into this Agreement, under which all of the issued and outstanding
shares of the Series 10 Preferred will be delivered and tendered to
the Company in exchange (the "Exchange") for an aggregate of two
thousand two hundred fifty-two (2,252) 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 13 Class
M Convertible Preferred Stock" (the "Series 13 Preferred"), with
the Series 13 Preferred containing such terms, conditions,
restrictions and provisions as set forth in the Series 13 Preferred
Certificate of Designations, attached hereto as Exhibit "A,"
("Series 13 Preferred Certificate of Designations");
WHEREAS, the Subscription Agreement is not terminated, except
from and after the date of this Agreement (i) the Subscriber shall
have no rights under the Subscription Agreement or otherwise
arising out of or in connection with or relating to the Series 10
Preferred or to subscribe for Series 10 Preferred or any shares of
Common Stock issuable or obtainable upon conversion of the Series
10 Preferred and (ii) if the Subscription Agreement is in conflict
with this Agreement, this Agreement shall control in all respects;
-1-
WHEREAS, the terms, conditions, restrictions and provisions of
the Series 13 Preferred shall be the same as the terms, conditions,
restrictions and provisions of the Series 10 Preferred, except that
(i) the Series 13 Preferred shall not be convertible for a period
of twelve months from the date of this Agreement, (ii) the Minimum
Conversion Price (as defined herein) shall be $1.50 for a period of
twenty-four months from the date of issuance of the Series 13
Preferred, (iii) the Company shall, at any time and from time to
time within 120 days from the date of issuance of the Series 13
Preferred have the option to redeem up to 450 shares of Series 13
Preferred of the 2,252 currently outstanding for $1,000 per share,
and upon such redemption the holder of the Series 13 Preferred so
redeemed shall not have the right to convert such redeemed shares,
(iv) for a period of twelve months from the date of issuance of the
Series 13 Preferred, the Company shall at any time and from time to
time, have the option of redeeming the Series 13 Preferred for
$1,100 per share, except as otherwise provided in (iii) above, and
upon such redemption the holder of the Series 13 Preferred so
redeemed shall not have the right to convert such redeemed shares,
(v) after a period of twelve months from the date of issuance of
the Series 13 Preferred, the Company shall, at any time and from
time to time, have the option of redeeming the Series 13 Preferred
for $1,200 per share, and (vi) after a period of twelve months from
the date of the issuance of the Series 13 Preferred, upon receipt
of notice of redemption, the holder of the Series 13 Preferred
being redeemed shall have five business days in which to exercise
an option to convert some or all of the shares of Series 13
Preferred being redeemed by the Company;
WHEREAS, the Series 10 Warrants shall not be affected by this
Agreement and shall remain issued and outstanding pursuant to the
terms, provisions and conditions of the Series 10 Warrants;
WHEREAS, the shares of Common Stock issuable upon conversion
of the Series 13 Preferred ("Conversion Shares") and the Series 13
Preferred are collectively referred to hereinafter as the
"Securities;"
WHEREAS, the Company and the Subscriber each desire that the
Exchange and the execution of the Agreement act to fully and
completely terminate the Subscriber's rights under the Series 10
Preferred, terminate the Series 10 Preferred and will act to fully
and completely release all obligations of the Company under the
Series 10 Preferred;
WHEREAS, the Common Stock is listed for trading on the Boston
Stock Exchange and the National Association of Securities Dealers
Automated Quotation SmallCap market ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and has been subject to such filing requirements for the past
ninety (90) days;
WHEREAS, the Subscriber is an "accredited investor," as such
term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act") and the
Subscriber received all information as required under Rule 502 of
Regulation D.;
-2-
WHEREAS, the Subscriber is not a "U. S. Person," as such term
is defined in Regulation S promulgated under the Securities Act;
WHEREAS, in reliance upon the representations made by the
Subscriber in this Agreement, the transactions contemplated by this
Agreement are such that the offer and exchange of securities by the
Company hereunder will be exempt from registration under applicable
federal (U. S.) securities laws since this is an exchange offer
pursuant to Section 3(a)(9) of the Securities Act, and it is a
private placement and intended to be a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act; and,
WHEREAS, the Securities will not be quoted or listed for
trading on any securities exchange, organized market or quotation
system at the time of acquisition hereunder.
NOW, THEREFORE, for and in consideration of the premises, and
the mutual representations, warranties, covenants and agreements
set forth herein, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Exchange and Subscription for Purchase of Securities.
1.1 Issuance of Common Stock and Warrants. In full and
complete termination of the Series 10 Preferred and the
Subscriber's rights, and the interest in and to the
Series 10 Preferred, and in full and complete release of
any and all obligations of the Company under the Series
10 Preferred and to the Subscriber under the Series 10
Preferred, at the Closing (as defined herein) the
Subscriber shall deliver all of the issued and
outstanding shares of the Series 10 Preferred to the
Company in exchange for 2,252 shares of Series 13
Preferred, containing such terms, conditions and
provisions as set forth in the Series 13 Preferred
Certificate of Designations, pursuant to the terms and
conditions set forth in this Agreement. Dividends on the
Series 10 Preferred shall cease to accrue as of the close
of business on the day immediately preceding the date of
this Agreement, and dividends on the Series 13 Preferred
shall begin to accrue on the date of this Agreement.
1.1.1 Delivery. Upon receipt by the Company of the
canceled Series 10 Preferred duly assigned to
the Company, the Company shall deliver or
cause to be delivered: (a) to Xxxxxx &
Xxxxxxx, A Professional Corporation ("Xxxxxx &
Xxxxxxx"), a certificate or certificates
representing the 2,252 shares of Series 13
Preferred issued in the name of the
Subscriber, in such denominations as
Subscriber requests in writing, to be held in
escrow by Xxxxxx & Xxxxxxx, for the
Subscriber; and (b) to the Subscriber, written
evidence from the Secretary of State of the
State of Delaware that the Series 13 Preferred
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.
-3-
1.1.2 Cancellation of Series 10 Preferred. At the
Closing the Subscriber does hereby assign and
transfer unto the Company all of the Series 10
Preferred, the Series 10 Preferred shall be
terminated and rendered null and void in all
respects, and Xxxxxx & Xxxxxxx is directed to
deliver to the Company the Series 10 Preferred
marked "Canceled."
1.1.3 Restrictive Legends. Subscriber agrees that
all certificates representing the Securities
shall bear the restrictive legend
substantially in the form set forth in Section
7 below which shall include, but not be
limited to, a legend to the effect that (a)the
Securities represented by such certificate
have not been registered under the Securities
Act, and (b) unless there is an effective
registration statement relating to the
Securities, the Securities may not be offered,
sold, transferred, mortgaged, pledged or
hypothecated without an exemption from
registration and an opinion of counsel to the
Company with respect thereto, or an opinion
from counsel for the Subscriber, which opinion
is satisfactory to the Company, to the effect
that registration under the Securities Act is
not required in connection with such sale or
transfer and the reasons therefor.
1.2 Discharge. As of the Closing, the Series 10 Preferred
shall be fully terminated in all respects. From and
after the Closing, the Subscriber releases, acquits and
forever discharges the Company, and all of its respective
subsidiaries, affiliates, agents, employees, officers,
and directors, as well as their respective heirs, suc-
cessors, legal and personal representatives, and assigns
of any and all of them, from and against any and all
claims, liabilities, losses, damages, cause or causes of
action of any kind or character whatsoever, whether
liquidated, unliquidated or disputed, asserted or
assertable, known or unknown, in contract or in tort, at
law or in equity, which the Subscriber might now or
hereafter have arising out of or in connection with or
relating to the Series 10 Preferred.
1.3 Exchange. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, at the Closing,
the Company agrees to exchange and deliver to the
Subscriber, and the Subscriber agrees to accept in such
exchange the delivery from the Company, of the Series 13
Preferred in exchange for the transfer of the Series 10
Preferred from the Subscriber to the Company.
1.4 Reporting Company. The Company is a reporting company
under the Exchange Act and has filed with the United
States Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The Subscriber has had
the opportunity to review, and has reviewed, all such
reports and information which the Subscriber deemed
material to an investment decision regarding the purchase
of the Series 13 Preferred.
-4-
1.5 Terms of the Series 13 Preferred. The Series 13
Preferred shall contain and be subject to the terms,
conditions, preferences and restrictions set forth in the
Series 13 Preferred Certificate of Designations attached
hereto as Exhibit "A."
1.6 No Effect on Series 10 Warrants. Nothing contained in
this Agreement shall have any effect on the Series 10
Warrants.
2. Closing.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on at the time and on the date that
the 2,252 shares of Series 13 Preferred are delivered by
the Company to Xxxxxx & Xxxxxxx (the "Closing Date").
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
3.1 Investment Intent. The Subscriber represents and
warrants that the shares of Series 13 Preferred are
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 Securities have not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the Subscriber's representations as to
investment invention, investor status, and related and
other matters set forth herein. Subscriber understands
that, in the view of the SEC, among other things, a
purchase now with an intent to distribute or resell would
represent a purchase and acquisition with an intent
inconsistent with its representation to the Company, and
the SEC might regard such a transfer as a deferred sale
for which the registration exemption is not available.
3.2 Certain Risk. The Subscriber recognizes that the
purchase of the Series 13 Preferred involves a high
degree of risk in that (a) the Company has sustained
losses through December 31, 1998, from its operations,
and may require substantial funds in addition to the
proceeds of this private placement; (b) that the Company
has a substantial accumulated deficit; (c) an investment
in the Company is highly speculative and only investors
who can afford the loss of their entire investment should
consider investing in the Company and the Series 13
Preferred; (d) an investor may not be able to liquidate
his investment; (e) transferability of the Series 13
Preferred is extremely limited; (f) in the event of a
disposition an investor could sustain the loss of his
entire investment; (g) the Series 13 Preferred represent
non-voting equity securities, and the right to convert
into and purchase shares of voting equity securities in
a corporate entity that has an accumulated deficit; (h)
no return on investment, whether through distributions,
-5-
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 and while the Subscriber is a
beneficiary of certain registration rights provided
herein, the Series 13 Preferred subscribed for and that
are purchased under this Agreement and the Conversion
Shares (i) are not registered under applicable federal
(U. S.) or state securities laws, and thus may not be
sold, conveyed, assigned or transferred unless registered
under such laws or unless an exemption from registration
is available under such laws, as more fully described
herein, and (ii) the Series 13 Preferred subscribed for
and that are to be purchased under this Agreement are not
quoted, traded or listed for trading or quotation on the
NASDAQ, or any other organized market or quotation
system, and there is therefore no present public or other
market for the Series 13 Preferred, nor can there be any
assurance that the Common Stock of the Company will
continue to be quoted, traded or listed for trading or
quotation on the Boston Stock Exchange or the NASDAQ 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 13 Preferred has not
been reviewed by the SEC because this private placement
is intended to be an exchange offer under Section 3(a)(9)
of the Securities Act and a nonpublic offering pursuant
to Section 4(2) of the Securities Act and/or Regulation
D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 13 Preferred and the Conversion Shares have not
been registered under the Securities Act by reason of a
claimed exemption under the provisions of the Securities
Act which depends, in part, upon the Subscriber's
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 13 Preferred. The
Subscriber understands that although there is presently
-6-
a public market for the Common Stock, including the
Conversion Shares, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. The
Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in
the future of any reporting requirements under the
Exchange Act, or its dissemination to the public of any
current financial or other information concerning the
Company, as is required by the Rule as one of the
conditions of its availability. The Subscriber
understands and hereby acknowledges that the Company is
under no obligation to register the Series 13 Preferred
or the Conversion Shares under the Securities Act. The
Subscriber agrees to hold the Company and its directors,
officers and controlling persons and their respective
heirs, representatives, successors and assigns harmless
and to indemnify them against all liabilities, costs and
expenses incurred by them as a result of any
misrepresentation made by the Subscriber contained herein
or any sale or distribution by the Subscriber in
violation of the Securities Act or any applicable state
securities or "blue sky" laws (collectively, "Securities
Laws").
3.7 Sophisticated Investor. That (a) the Subscriber 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 13 Preferred; (b) the Subscriber is able to bear
the economic risks inherent in an investment in the
Series 13 Preferred and that an important consideration
bearing on its ability to bear the economic risk of the
purchase of Series 13 Preferred is whether the
Subscriber can afford a complete loss of the Subscriber's
investment in the Series 13 Preferred and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (c) 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 13 Preferred.
3.8 Tax Consequences. The Subscriber acknowledges that the
Company has made no representation regarding the
potential or actual tax consequences for the Subscriber
which will result from entering into the Agreement and
from consummation of the Exchange. The Subscriber
acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and
the Exchange.
3.9 SEC Filing. The Subscriber acknowledges that it has been
previously furnished with true and complete copies of the
following documents which have been filed with the SEC
pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the
Exchange Act, and that such have been furnished to the
Subscriber a reasonable time prior to the date hereof:
-7-
(i) Annual Report on Form 10-K for the year ended
December 31, 1998 (the "Form 10-K"); (ii) Current Report
on Form 8-K, date of earliest event reported April 8,
1999; (iii) Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999; and (iv) the information contained
in any reports or documents required to be filed by the
Company under Sections 13(a), 14(a), 14(c) or 15(d) of
the Exchange Act since the distribution of the Form 10-K.
3.10 Documents, Information and Access. The Subscriber's
decision to purchase the Series 13 Preferred is not based
on any promotional, marketing or sales materials, and the
Subscriber and its representatives have been afforded,
prior to purchase thereof, the opportunity to ask
questions of, and to receive answers from, the Company
and its management, and has had access to all documents
and information which Subscriber deems material to an
investment decision with respect to the purchase of
Series 13 Preferred hereunder.
3.11 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of securities pursuant to this Agreement has not
been reviewed or approved by the SEC or by any state
securities commission, authority or agency, and is not
registered under the Securities Laws. The Subscriber
acknowledges, understands and agrees that the shares of
Series 13 Preferred are being offered and exchanged
hereunder pursuant to (i) an exchange offer exemption
under Section 3(a)(9) of the Securities Act and (ii) (x)
a private placement exemption to the registration
provisions of the Securities Act pursuant to Section 4(2)
of such Securities Act and/or Regulation D promulgated
under the Securities Act) and (y) a similar exemption to
the registration provisions of applicable state
securities laws.
3.12 Transfer Restrictions. The Subscriber will not transfer
any Series 13 Preferred Securities purchased under this
Agreement or any Conversion Shares purchased under this
Agreement unless such are registered under the Securities
Laws, or unless an exemption is available under such
Securities Laws, and the Company may, if it chooses,
where an exemption from registration is claimed by such
Subscriber, condition any transfer of Series 13 Preferred
or Conversion Shares out of the Subscriber's name on
receipt of an opinion of the Company's counsel, to the
effect that the proposed transfer is being effected in
accordance with, and does not violate, an applicable
exemption from registration under the Securities Laws, or
an opinion of counsel to the Subscriber, which opinion is
satisfactory to the Company, to the effect that
registration under the Securities Act is not required in
connection with such sale or transfer and the reasons
therefor.
3.13 No Short Sale. The Subscriber expressly agrees that
until such time that it has sold all of the Securities
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,
-8-
agreement, arrangement, scheme, or artifice of nature
whatsoever, engage in the short selling of the Company's
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.
3.14 No Commission. The Subscriber agrees and acknowledges
that no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
3.15 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgments and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 13
Preferred to the Subscriber.
3.16 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.
3.17 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.
3.18 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
-9-
execution, delivery and Closing of this Agreement, the
sale, purchase, and conversion, if any, of the Series 13
Preferred, the sale of the Conversion Shares, the
exercise of the Series 10 Warrants, and the sale of the
Warrant Shares.
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
exchange the Series 10 Preferred for the Series 13 Preferred, the
Company hereby represents, warrants and covenants to Subscriber as
follows:
4.1 Organization, Authority, Qualification. The Company is
a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
The Company has full corporate power and authority to own
and operate its properties and assets and to conduct and
carry on its business as it is now being conducted and
operated.
4.2 Authorization. The Company has full power and authority
to execute and deliver this Agreement and to perform its
obligations under and consummate the transactions
contemplated by this Agreement. Upon the execution of
this Agreement by the Company and delivery of the
Securities, this Agreement shall have been duly and
validly executed and delivered by the Company and shall
constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance
with its terms.
4.3 No Commission. The Company agrees and acknowledges that
no commission or other remuneration is being paid or
given directly or indirectly for soliciting the Exchange.
4.4 Ownership of, and Title to, Securities. The Series 13
Preferred to be exchanged for the Series 10 Preferred by
the Subscriber are, and all Conversion Shares, when
issued, will be, duly authorized, validly issued, fully
paid and nonassessable shares of the capital stock of the
Company, free of personal liability. Upon consummation
of the exchange of the Series 13 Preferred (and upon the
conversion of the Series 13 Preferred, in whole or in
part) pursuant to this Agreement, the Subscriber will own
and acquire title to the Series 13 Preferred (and the
Conversion Shares, as the case may be) free and clear of
any and all proxies, voting trusts, pledges, options,
restrictions, or other legal or equitable encumbrance of
any nature whatsoever (other than the restrictions on
transfer due to Securities Laws or as otherwise provided
for in this Agreement or the Series 13 Preferred
Certificate of Designations).
4.5 Exemption from Registration. The offer and exchange of
securities with the Subscriber in accordance with the
terms and provisions of this Agreement is being affected
in accordance with the Securities Act, pursuant to an
exchange offer exemption to the registration provision of
the Securities Act pursuant to Section 3(a)(9) thereunder
and to a private placement exemption to the registration
-10-
provisions of the Act pursuant to Section 4(2) of such
Act and/or Regulation D promulgated under the Securities
Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and exchange the Series 10 Preferred for
the Series 13 Preferred, the Company hereby covenants and agrees to
grant to the Subscriber the registration rights with respect to the
Conversion Shares and the shares of Common Stock which may issue as
dividends on the Series 13 Preferred, as set forth in Section 10 of
the Subscription Agreement regarding the shares of Common Stock
issuable upon conversion of the Series 13 Preferred and as
dividends thereon. The registration rights as set forth in Section
10 of the Subscription Agreement regarding the shares of Common
Stock issuable upon exercise of the Series 10 Warrants are not
changed by this Agreement.
6. Indemnification.
6.1 By the Company. Subject to the terms of this Section 6,
the Company will indemnify and hold harmless the
Subscriber, its directors and officers, and any
underwriter (as defined in the Securities Act) for the
Subscriber and each person, if any, who controls the
Subscriber or such underwriter within the meaning of the
Act, from and against, and will reimburse the Subscriber
and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost and
expense to which such holder or any such underwriter or
controlling person may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained
in the Registration Statement filed with the SEC in
connection with the Conversion Shares, any prospectus
contained therein or any amendment or supplement thereto,
or arise out of, or are based upon, the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances in
which they were made not misleading; provided, however,
that the Company will not be liable in any such case to
the extent that any such loss, damage, liability, cost or
expense arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or
alleged omission so made in conformity with information
furnished by the Subscriber, such underwriter or such
controlling person in writing specifically for use in the
preparation thereof.
6.2 By the Subscriber. Subject to the terms of this Section
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,
-11-
liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material
fact contained in a Registration Statement filed with the
SEC in connection to the Conversion Shares, any
prospectus contained therein or any amendment or
supplement thereto, or arise out of, or are based upon,
the omission or alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances in which they were made, not misleading, in
each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance
upon, and in strict conformity with, written information
furnished by, or on behalf of, the Subscriber
specifically for use in the preparation thereof.
6.3 Procedure. Promptly after receipt by an indemnified
party pursuant to the provisions of Section 6.1 or 6.2 of
notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions,
such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the
provisions of Section 6.1 or 6.2, promptly notify the
indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not
relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any
indemnified party and the indemnified party notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall have the 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 13 Preferred:
-12-
Series 13 Preferred Legends
NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON
STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED
STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED
STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION ARE ALSO SUBJECT TO THE
REGISTRATION RIGHTS SET FORTH IN THAT CERTAIN
SUBSCRIPTION AGREEMENT BY AND BETWEEN THE HOLDER HEREOF
AND THE COMPANY, DATED AS OF JUNE 30, 1998, A COPY OF
WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL EXECUTIVE
OFFICE.
Conversion Shares Legends
THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS. THIS
COMMON STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
-13-
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THESE SHARES OF COMMON
STOCK ARE ALSO SUBJECT TO THE REGISTRATION RIGHTS SET
FORTH IN THAT CERTAIN SUBSCRIPTION AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED AS OF
JUNE 30, 1998, A COPY OF WHICH IS ON FILE AT THE
COMPANY'S PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Assignment and Power of Attorney. For purposes of
affecting the exchange of the Series 10 Preferred in
accordance with the terms of this Agreement at the
Closing, the Subscriber does hereby assign all of its
right, title and interest in and to the Series 10
Preferred to the Company and irrevocably makes,
constitutes and appoints the Company as the true and
lawful agents and attorneys-in-fact of the Subscriber
("Attorney-In-Fact") with full power and authority
(except as provided below) to act hereunder individually,
or through duly appointed successor attorneys-in-fact, in
its sole discretion, all as hereinafter provided, in the
name of, for and on behalf of the Subscriber, as fully as
could the Subscriber if present and acting in person,
with respect to all matters in connection with the
transfer of the Series 10 Preferred.
8.2 Amendment; Waiver. Neither this Agreement nor the
Warrants shall be changed, modified or amended in any
respect except by the mutual written agreement of the
parties hereto. Any provision of this Agreement or the
Warrants may be waived in writing by the party which is
entitled to the benefits thereof. No waiver of any
provision of this Agreement or the Series 10 Warrants
shall be deemed to, or shall constitute a waiver of, any
other provision hereof or thereof (whether or not
similar), nor shall nay such waiver constitute a
continuing waiver.
8.3 Binding Effect; Assignment. Neither this Agreement nor
the Series 10 Warrants, or any rights or obligations
hereunder or thereunder, are assignable by the
Subscriber.
8.4 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
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
-14-
action has been reduced to a final, unappealable
judgment, the prevailing party shall be entitled to
recover from the other party all reasonable, documented
attorneys' fees and disbursements and court costs from
the other party.
8.5 Severability. Any term or provisions of this Agreement
or the Series 10 Warrants which is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction only, be ineffective only to the extent of
such prohibition or unenforceability without invalidating
the remaining provisions hereof or thereof affecting the
validity or enforceability of such provision in any other
jurisdiction.
8.6 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or the Warrants or any term or provisions
hereof or thereof.
8.7 Counterparts. This Agreement may be executed in one or
more original or facsimile 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.
8.8 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Shares to be sold.
8.9 Entire Agreement. This Agreement, along with the Series
10 Warrants and the Series 13 Preferred Certificate of
Designations, merges and supersedes any and all prior
agreements, understandings, discussions, assurances,
promises, representations or warranties among the parties
with respect to the subject matter hereof, and contains
the entire agreement among the parties with respect to
the subject matter set forth herein and therein.
8.10 Authority; Enforceability. The Subscriber is duly
authorized to enter into this Agreement and to perform
all of its obligations hereunder. Upon the execution and
delivery of this Agreement by the Subscriber, this
Agreement shall be enforceable against the Subscriber in
accordance with its terms.
-15-
8.11 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
service, or by private overnight mail service (e.g.,
Federal Express). Any such notice shall be deemed to
have been given (i) on the business day actually received
if given by hand or by fax, (ii) on the business day
immediately subsequent to mailing, if sent by U.S.
Express Mail service or private overnight mail service,
or (iii) five (5) business days following the mailing
thereof, if mailed by certified or registered mail,
postage prepaid, return receipt requested, and all such
notices shall be sent to the following addresses (or to
such other address or addresses as a party may have
advised the other in the manner provided in this Section
8.11:
If to the Company: Xx. Xxxxx X. Xxxxxxxxxx
Perma-Fix Environmental
Services, Inc.
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 Xxxxxxx Xxxxxxx
Subscriber: RBB Bank Aktiengesellschaft
Xxxxxxxx 00, 0000 Xxxx, Xxxxxxx
Fax No.: 011-43-316-8072 ext. 392
8.12 No Third Party Beneficiaries. This Agreement and the
rights, benefits, privileges, interests, duties and
obligations contained or referred to herein shall be
solely for the benefit of the parties hereto and no third
party shall have any rights or benefits hereunder as a
third party beneficiary or otherwise hereunder.
8.13 Public Announcements. Neither Subscriber nor any
officer, director, stockholder, employee, affiliate or
affiliated person or entity of Subscriber, shall make or
issue any press releases or otherwise make any public
-16-
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.
8.14 Conflicts with Subscription Agreement. In the event of
a conflict between the terms of the Subscription
Agreement and the terms of this Agreement, this Agreement
shall control in all respects.
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement on the 15th day of July,
1999.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Xxxxx Xxxxxxxxxx
___________________________
Xx. Xxxxx X. Xxxxxxxxxx
Chief Executive Officer
RBB BANK AKTIENGESELLSCHAFT
By /s/ Xxxxxxx Xxxxxxx
___________________________
Xxxxxxx Xxxxxxx
Headtrader
-17-
