DEBT-FOR-STOCK EXCHANGE AGREEMENT
DEBT-FOR-STOCK EXCHANGE AGREEMENT
THIS DEBT-FOR-STOCK EXCHANGE AGREEMENT (the "Agreement") is effective as of the 9th day of July 2001, by and between PERMA-FIX ENVIRONMENTAL SERVICES, INC., a Delaware corporation, having offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), AND CAPITAL BANK -- ▇▇▇▇▇ GRUPPE AG (f/k/a as RBB BANK AKTIENGESELLSCHAFT), organized under the laws of Austria, and having its principal offices at ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ (the "Lender").
W I T N E S S E T H:
WHEREAS, the Lender, as agent for certain of its investors, has advanced to the Company a loan in the original principal amount of $3,000,000 pursuant to the loan agreement, dated August 29, 2000, between
the Lender and the Company, as amended December 19, 2000, and clarified January 12, 2001 (the "$3 Million Loan");
WHEREAS, the Lender has advised the Company that it is prohibited by Austrian law from disclosing the identities of its investors;
WHEREAS, the $3 Million Loan is evidenced by the Unsecured Promissory Note, dated August 29, 2000, in the original principal amount of $3,000,000 (the A
$3 Million Note");
WHEREAS, the unpaid principal amount of the $3 Million Note, together with all accrued and unpaid interest thereon, is due and payable on July 1, 2001;
WHEREAS, as of the date of this Agreement, the unpaid principal amount of the $3 Million Note is $3,000,000 and the accrued and unpaid interest due thereon is $218,958.90;
WHEREAS, the terms of the $3 Million Loan provide that if the $3 Million Loan is not paid by certain dates, the Company will issue to the Lender a certain number of shares of the Company=s common stock, par value $.001 per share (the "Common Stock") (all of the foregoing payments are collectively, the "Additional Payments");
WHEREAS, the Company and the Lender have agreed that the Company, in full and complete payment of the $3 Million Loan and the $3 Million Note, including, but not limited to, all accrued and unpaid interest due thereon and any and all Additional Payments due and payable to the Lender, will issue to the Lender 1,893,505 shares of Common Stock and a warrant to purchase up to 1,839,405 shares of Common Stock at an exercise price of $1.75 per share of Common Stock, with such warrant being in the form of Exhibit A attached hereto (the "Warrant"), in exchange for the $3 Million Loan, the $3 Million Note and any and all Additional Payments due and payable to the Lender (the "Exchange"), subject to and in accordance with the terms and conditions described in this Agreement;
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WHEREAS, upon the issuance by the Company of the 1,893,505 shares of Common Stock and the Warrant to the Lender in connection with the Exchange in full and complete payment of the $3 Million Loan and the $3 Million Note, including, but not limited to, the accrued interest due thereon, and any and all Additional Payments, the $3 Million Loan and the $3 Million Note shall terminate and be null and void in all respects and the Company shall have no obligations to pay any Additional Payments due thereunder;
WHEREAS, warrants granted by the Company to the Lender that are issued and outstanding as of the date of this Agreement are not effected by this Agreement and shall remain issued and outstanding pursuant to the terms, provisions, and conditions of the respective warrants;
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 90 days;
WHEREAS, the Lender 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 Lender received all information as required under Rule 502 of Regulation D;
WHEREAS, the Lender is not a "U.S. Person," as such term is defined in Regulation S promulgated under the Securities Act; and
WHEREAS, in reliance upon the representations made by the Lender in this Agreement, the transactions contemplated by this Agreement are such that the offer and exchange of securities by the Company hereunder will be exempt from registration under applicable federal (U. S.) securities laws since this is a private placement and intended to be a nonpublic offering pursuant to Sections 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act.
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1. Exchange. In full and complete
satisfaction of the $3 Million Loan, the $3 Million Note and any and all
Additional Payment due and owing, and in full and complete release of any and all obligations of the Company under the $3 Million Loan, the $3 Million Note, and any and all Additional Payments due thereunder, at Closing, the Lender will deliver the $3
Million Note to the Company in exchange for 1,893,505 shares of Common Stock and the Warrant subject to and pursuant to the terms and conditions set forth in this Agreement (the "Exchange").
1.1 $3 Million Note Paid in Full.
Simultaneously with the issuance of the 1,893,505 shares
of
Common
Stock and the Warrant pursuant to this Section 1, the Lender will ▇▇▇▇
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"Paid
in Full" on the face of the $3 Million Note. If the $3 Million Note is not so marked
by the Lender at the time of delivery of the shares of Common Stock and the Warrant,
the Lender hereby authorizes and directs the Company to so ▇▇▇▇ the $3 Million Note
immediately upon issuance to the Lender of such shares of Common Stock and Warrant
pursuant to Section 1.
1.2 Delivery of Shares. At the Closing, the Company will deliver, or cause to be delivered to
the Lender, a certificate or certificates representing the 1,893,505 shares of Common
Stock and the Warrant issued in the name of the Lender, with such shares of Common
Stock
to be in such denominations as Lender requests in writing.
1.3 Satisfaction and Release. As of the Closing (as defined in paragraph 4 below), (a) the $3
Million Loan and the $3 Million Note shall be deemed canceled, paid in full,
and satisfied
in all respects, including, but not limited to, all principal and accrued
interest due in connection
therewith, (b) all obligations of the Company to Lender under
the $3 Million Loan and the $3 Million Note shall terminate and be null and void, and
(c) Lender will be deemed to waive all rights to the Additional Payments, and the
Company will have no obligation to make any Additional Payment which has not been
made prior to the Closing. From and after the Closing, the Lender releases, acquits
and forever discharges the Company, and all of its respective subsidiaries, affiliates,
agents, employees, officers, and directors, as well as their respective heirs,
successors, legal and personal representatives, and assigns of any and all of them,
from and against any and all claims, liabilities, losses, damages, cause or causes of
action of any
kind or character whatsoever, whether liquidated, unliquidated or disputed,
asserted or assertable, known or unknown, in contract or in tort, at law or in equity,
which the Lender might now or hereafter have arising out of, or in connection with, or
relating to, the $3 Million Note and $3 Million Loan, including, but not limited to, all
obligations of the Company under the $3 Million Loan for the payment of any
Additional Payments.
2. 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 Lender has had the opportunity to review, and has reviewed, all such reports and information which the Lender deemed material to an investment decision regarding the purchase of the Common Stock.
3. No Effect on Warrants Issued and Outstanding as of the Date of this Agreement. Nothing contained in this Agreement shall have any effect on any of the warrants granted by the Company to the Lender to purchase Common Stock that are issued and outstanding as of the date of this Agreement, except that the warrants issued to the Lender in connection with the $3 Million Loan shall terminate and be null and void in all respects.
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4. Closing. The consummation of this Agreement (the "Closing") will occur two (2) business days after the date that the Company gives written notification to the Lender that the NASDAQ has no objection to listing the shares of Common Stock issuable as part of the Exchange and issuable upon exercise of the Warrant issued in connection with the Exchange or at such other time as designated by the parties in writing (the "Closing Date"). The consummation of this Agreement by the parties hereto is conditioned upon and subject to the NASDAQ not objecting to the listing of the shares of the Company's Common Stock issuable pursuant to this Agreement and issuable upon the exercise of the Warrant.
5. Additional Agreements of the Company. In consideration for the Lender entering into this Agreement and the Exchange contemplated by this Agreement, the Company agrees that upon the Closing, the Company will pay to the Lender a closing fee of $325,000.00 (the "Closing Fee"), payable by delivery to the Lender of (a) the sum of $75,000.00 cash and (b) the number of shares of Common Stock equal to the quotient of $250,000 divided by the last closing bid price of the Common Stock as quoted on the NASDAQ on June 26, 2001.
6. Representations, Warranties, and Covenants of Lender. The Lender hereby represents, warrants, and covenants to the Company as follows:
6.1 Investment Intent. The Lender represents and warrants that the shares of Common Stock
issuable in connection with the Exchange and the underlying Common Stock issuable
upon exercise of the Warrant (the "Warrant Shares"), will be, acquired by the Lender
for, and on behalf of, itself and as agent for the account of certain of its investors, all
of whom are accredited investors (as defined in Rule 501 of Regulation D promulgated
under the Securities Act), and the Lender agrees that, and represents that such investors
are, acquiring the Common Stock and the Warrant Shares for investment purposes
only and not with a view toward the distribution or resale to others. The Lender
acknowledges, understands, and appreciates that the Common Stock issuable
hereunder, and the Warrant shares (herewith 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 Lender's
representations as to investment intention, investor status, and related and other
matters set forth herein. Lender understands that, in the view of the SEC, among
other things, a purchase now with an intent to distribute or resell would represent a
purchase and acquisition with an intent inconsistent with its representation to the
Company, and the SEC might regard such a transfer as a deferred sale for which
the registration exemption is not available. The Lender has advised the Company
that it is prohibited by Austrian law from disclosing the identities of its investors.
6.2 Certain Risk. The Lender, for and on behalf of itself and as agent for its investors,
recognizes that the acquisition of the Common Stock and the Warrant Shares
involves a high degree of risk (a) as more fully described in the "Risk Factors"
set forth in the Confidential Private Placement Memorandum, dated April 6, 2001,
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as
amended by Amendment No. 1, dated June 15, 2001 (together, the "Memorandum"),
issued by the Company in connection with a private placement, and the Lender has
reviewed in detail the "Risk Factors" contained in the Memorandum; (b) the Company
has sustained losses for the year ended December 31, 2000, and the first quarter of
2001, from operations; (c) that the Company has a substantial
accumulated deficit;
(d) an investment in the Company is highly speculative and only investors who
can
afford the loss of their entire investment should consider investing in the Company and
the Common Stock; (e) the Lender may not be able to liquidate its investment in the
Common Stock; (f) in the event of a disposition, the Lender could sustain the loss of
his entire
investment; (g) 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, (h) while
the Common Stock is presently quoted and traded on the Boston Stock Exchange
and the NASDAQ and (i) while the
Lender is a beneficiary of certain registration
rights provided herein, the Common Stock subscribed for under this Agreement
and the Warrant 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) no 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.
6.3 Prior Investment Experience. The Lender acknowledges that it is, and each of its
investors are, "accredited investors" (as that term is defined in Rule 501 promulgated
under the Securities Act), and the Lender and each of its investors have, prior
investment experience, including investment in non-listed and non-registered securities,
or employed the services of an investment advisor, attorney or accountant to read all
of the documents furnished
or made available by the Company to it and to evaluate
the merits and risks of such an
investment on its behalf, and that it recognizes the
highly speculative nature of this investment.
6.4 No Review by the SEC. The Lender hereby acknowledges that this offering of the
Common Stock has not been reviewed by the SEC because this private placement is
intended to be a nonpublic offering pursuant to Section 4(2) of the Securities Act
and/or Regulation D promulgated under the Securities Act.
6.5 Not Registered. The Lender understands that the Common Stock and the Warrant
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
Lender's and its investors' investment intention. In this connection, the Lender
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
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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.
6.6 No Public Market. The Lender understands that although there is presently a public
market for the Common Stock, including the Warrant Shares, Rule 144 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 Lender 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 Rule 144 as one of the conditions of its availability. Except as otherwise
provided in paragraph 8 hereof, the Lender understands and hereby
acknowledges
that the Company is under no obligation to register the Common Stock or the
Warrant Shares under the Securities Act. The Lender 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 Lender contained herein or any sale or distribution by the Lender in
violation of the Securities Act or any applicable state securities or "blue sky" laws
(collectively, "Securities Laws").
6.7 Sophisticated Investor. That (a) the Lender and each of its investors have adequate
means of providing for their current financial needs and possible contingencies and
have no need for liquidity of the investment in the Common Stock; (b) the Lender
and each of its investors are able to bear the economic risks inherent in an investment
in the Common Stock, and that an important consideration bearing on their ability to
bear the economic risk of the purchase of Common Stock is whether the Lender
and each of its investors can afford a complete loss of the Lender's investment in the
Common Stock, and the Lender represents and warrants that the Lender can afford
such a complete loss; and (c) the Lender and each of its investors
have such
knowledge and experience in business, financial, investment and banking matters
(including, but not limited to, investments in restricted, non-listed and non-registered
securities) that the Lender, on its own behalf and as agent for its investors, is capable
of evaluating the merits, risks, and advisability of an investment in the Common Stock.
6.8 Tax Consequences. The Lender acknowledges that the Company has made no
representation
regarding the potential or actual tax consequences for the Lender which
will result from entering into this Agreement and from consummation of the Exchange.
The Lender acknowledges that it bears complete responsibility for obtaining adequate
tax advice regarding this Agreement
and the Exchange.
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6.9 SEC Filing. The Lender 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 Lender a reasonable time prior to the date hereof: (a) Annual
Report on Form 10-K,
for the year ended December 31, 2000 (the "Form 10-K");
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 2001; (c) Current
Reports on Form 8-K, date of earliest event reported January 31, 2001, March 21,
2001, and April 6, 2001, and (d) 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.
6.10 Documents, Information and Access. The Lender's decision to acquire for, and on its
own behalf, and on behalf of its investors, the Common Stock is not based on any
promotional, marketing, or sales materials, and the Lender 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 Lender deems material to an investment decision
with respect to the purchase of Common Stock hereunder.
6.11 No Registration, Review or Approval. The Lender 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 Lender acknowledges,
understands, and agrees that the shares of Common Stock are being exchanged
hereunder pursuant to a private placement exemption to the registration provisions
of the Securities Act pursuant to Section 4(2) of such Securities Act and/or
Regulation D promulgated under the Securities Act) and
a similar exemption to the
registration provisions of applicable state securities laws.
6.12 Transfer Restrictions. The Lender will not, and will not allow any of its investors to,
transfer any Common Stock exchanged under this Agreement or any Warrant Shares
unless such are registered under the Securities Laws, or unless an exemption is available
under such Securities Laws, and the Company may, if it chooses, where an exemption
from registration is claimed by such Lender, condition any transfer of Common Stock
or Warrant Shares out of the Lender'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 Lender, 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.
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6.13 Reliance. The Lender 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 Common Stock to
the Lender.
6.14 Accuracy or Representations and Warranties. All of the representations, warranties,
understandings, and acknowledgments that Lender has made herein are true and
correct in all material respects as of the date of execution hereof. The Lender will
perform and comply fully in all material respects with all covenants and agreements
set forth herein, and the Lender covenants and agrees that until the acceptance of this
Agreement by the Company,
the Lender shall inform the Company immediately in
writing of any changes in any of the representations or warranties provided or
contained herein.
6.15 Indemnity. The Lender 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 Lender of any representations, warranties,
covenants or agreements made by Lender 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.
6.16 Survival. The Lender expressly acknowledges and agrees that all of its representations,
warranties, agreements, and covenants set forth in this Agreement shall be of the essence
hereof and shall survive the execution, delivery, and Closing of this Agreement, the
Conversion and Exchange of the Common Stock and the sale of the Warrant Shares.
6.17 Authority; Title. The Lender has full power and authority to tender, sell, assign,
and transfer the $3 Million Loan and the $3 Million Note to the Company pursuant
to the terms of this Agreement, and that, when accepted for exchange, the Company
will acquire good, marketable, and unencumbered title to the $3 Million Loan and
the $3 Million Note, free and clear of all liens, restrictions, charges and encumbrances,
and that the$3 Million Loan and the $3 Million Note are not subject to any adverse
claims.
7. Representations, Warranties and Covenants of the Company. In order to induce Lender to enter into this Agreement and to consummate the Exchange, the Company hereby represents, warrants, and covenants to Lender as follows:
7.1 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
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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.
7.2 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.
7.3 Ownership of, and Title to, Securities. The shares of Common Stock to be exchanged
in full and
complete satisfaction and payment of all of the Company's obligations under
the $3 Million Loan and the $3 Million Note pursuant to this Agreement and all Warrant
Shares, when issued pursuant to the terms of the Warrant, 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 pursuant to this Agree-
ment (and upon exercise of the Warrant, in whole or in part), the Lender will own and
acquire title to the Common Stock (and the Warrant 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 Warrants).
7.4 Exemption from Registration. The Exchange in accordance with the terms and
pro-
visions of this
Agreement is being affected in accordance with the Securities Act,
pursuant to the private placement exemption to the registration provisions of the
Securities Act pursuant to Section 4(2) and/or Regulation D promulgated under
the Securities Act, based on the representations,
warranties, and covenants made
by the Lender contained in this Agreement.
8. Registration Rights. To induce the Lender to enter into this Agreement and the Exchange, the Company hereby covenants and agrees to grant to the Lender the rights set forth in this paragraph 8 with respect to the registration of the Common Stock to be issued under this Agreement and the Warrant Shares.
8.1 Registration. Subject to the terms of this paragraph 8, the Company agrees that after the
Closing, it shall use its reasonable efforts to prepare and file with the SEC a registration
statement on Form S-3 or equivalent form (the "Registration Statement") and such other
documents, including a prospectus, as may be necessary in the opinion of counsel for the
Company to comply with the
provisions of the Securities Act, so as to permit a public
offering and sale by the Lender of the
Common Stock acquired by Lender upon
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consummation
of the Exchange and the Warrant Shares (together, the "Registrable
Securities"). The Company shall use its reasonable efforts to cause such
Registration
Statement to become effective within 180 days after the Closing. In connection with
the offering of such Registrable Securities registered pursuant to this Section 8, the
Company shall take such reasonable actions, as it deems necessary, to qualify the
Registrable Securities
covered by such Registration Statement under such "blue sky"
or other state securities laws for offer and sale as shall be reasonably necessary to
permit the public offering and sale of such shares of the Registrable Securities
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.
8.2 Current Registration Statement. Once effective, the Company shall use its reasonable
efforts to cause such Registration Statement filed hereunder to remain effective until the
earlier of: all of the
shares of Common Stock received by the Lender under this Agree-
ment and issueable upon exercise of the Warrant are sold or transferred by the Lender
or the Company and the Lender receives an opinion from counsel for the Company that
the Lender may sell all such shares of Common Stock under Rule 144 promulgated
under the Securities Act (or equivalent exception from registration) without limitation as
to the amount of such shares of Common Stock that may be sold. The Lender shall
promptly provide all such information and materials and take all such action as may be
required 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.
8.3 Other Provisions. In connection with the offering of any Registrable Securities registered
pursuant to this paragraph 8, the Company shall furnish to the Lender such number of
copies of any final prospectus as it may reasonably request to effect the offering and
sale of the Registrable Securities to be offered and sold under such Registration
Statement. In connection with any offering of Registrable Securities registered pursuant
to this paragraph 8, the Company shall (a) furnish to the underwriters (if any), at the
Company's expense, unlegended certificates representing ownership of the Registrable
Securities sold under such Registration Statement in such denominations as requested
and (b) instruct any transfer agent and registrar of the Registrable Securities sold under
such Registration Statement to release immediately any stop transfer order, and to
remove any restrictive legend, with respect to such Registrable
Securities included in
any registration becoming effective pursuant to this Agreement upon the sale of such
shares by the Lender.
8.4 Costs. Subject to the immediately following sentence, the Company shall in all
events pay, and be responsible for, all filing fees, costs and disbursements of counsel,
accountants, and other consultants representing the Company in connection the
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Registration
Statement relating to the Registrable Securities under this paragraph 8.
Notwithstanding anything set forth herein to the contrary, Lender shall pay, and be
responsible for, any and all underwriting discounts and commissions in connection
with the sale of the Registrable Securities pursuant hereto or the Registration
Statement and all fees of its legal counsel and other advisors retained by the Lender
in connection with reviewing such Registration Statement.
8.5 Successors. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business,
properties, stock or assets of the Company, to expressly assume and agree to perform
its obligations under this paragraph 8 in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
9. Indemnification.
9.1 By the Company. Subject to the terms of this paragraph 9, the Company will indemnify
and hold
harmless the Lender, its directors, officers, and any underwriter (as defined
in the Securities Act) for the Lender and each person, if any, who controls the Lender
or such underwriter within the meaning of the Act, from and against, and will reimburse
the Lender 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 Registrable Securities, 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 Lender, such
underwriter or such controlling person in
writing specifically for use in the preparation thereof.
9.2 By the Lender. Subject to the terms of this paragraph 9, the Lender will indemnify
and hold harmless the Company, its directors, officers, any controlling person, and
any underwriter from and against, and will reimburse the Company, its directors,
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
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untrue
statement or alleged untrue statement of
any material fact contained in a
Registration
Statement filed with the SEC in connection to the Registrable Securities,
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 Lender specifically for use
in the preparation thereof.
9.3 Procedure. Promptly after receipt by an indemnified party, pursuant to the provisions of
paragraph 9.1 or 9.2, 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
para-
graph 9.1 or 9.2, 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
here-
under. 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. 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 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 paragraph 9.1 or 9.2 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.
10. Securities Legends and Notices. Lender 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 Common Stock and the Warrant Shares:
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
12
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 Company, that such registration and qualification is
not required under applicable federal and state securities laws or an exemption
therefrom.
11. Miscellaneous.
11.1 Assignment and Power of Attorney. For purposes of affecting the Exchange in
accord-
ance with the terms of this Agreement, at the Closing the Lender does hereby
irrevoc-
ably make, constitute and appoint the Company as the true and lawful agents and
attorneys-in-fact of the Lender ("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 Lender, as fully as could the Lender if present
and acting in person, with the cancellation of the $3 Million Note.
11.2 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.
11.3 Binding Effect; Assignment. Neither this Agreement nor any rights or obligations
here-
under
or thereunder are assignable by the Lender.
11.4 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 Lender 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 recover 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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11.5 Severability. Any term or provision of this Agreement which is prohibited or
unenforce-
able 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.
11.6 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 terms or provisions hereof or thereof.
11.7 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,
not-
withstanding that all parties are not signatories to the same counterpart. Upon delivery
of an executed counterpart by the
undersigned Lender to the Company, which in
turn is executed and delivered by the Company, this Agreement shall be binding as
one original agreement between Lender and the Company.
11.8 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
docu-
mentary stock transfer stamps, if any, to be affixed to the certificates representing the
Common Stock to be sold.
11.9 Entire Agreement. This Agreement and the Common Stock 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.
11.10 Authority; Enforceability. The Lender 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 Lender, this Agreement shall be enforceable against the Lender in
accordance with its terms.
11.11 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, by fax, by certified or registered mail,
return-receipt
requested, postage prepaid, by U. S. Express Mail service, by private
overnight mail service (e.g., Federal Express) or by e-mail. Any such notice shall be
14
deemed
to have been given (a) on the business day actually received if given by hand,
by fax, or e-mail, (b) on the business
day immediately subsequent to mailing, if sent by
U.S. Express Mail service or private overnight mail service, or (c) five 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 11.11:
If to the Company: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Perma-Fix Environmental Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with copies simultaneously ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
by like means to: ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, A Professional Corporation
One Leadership Square, Suite 1700
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
If
to the Lender:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital Bank - ▇▇▇▇▇ Gruppe ▇▇
▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
Fax No.: 011-43-316-8072 ext. 392
E-Mail:
▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇
11.12 No Third Party Beneficiaries. This Agreement and the rights, benefits, privileges,
interests, duties, and obligations contained or referenced herein shall be solely for the
benefit of the parties hereto, and no third party shall have any rights or benefits
hereunder as a third party
beneficiary or otherwise hereunder. Nothing contained in
this paragraph 11.12 shall prohibit the Lender from entering into this Agreement as
agent for, and on behalf of, certain of its investors.
11.13 Public Announcements. Neither Lender nor any officer, director, stockholder,
employee, affiliate, or affiliated person or entity of Lender, 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.
15
11.14 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 Lender have each duly executed this Agreement effective as of July 9, 2001.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
CAPITAL BANK - ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
By /s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
;Headtrader
K:\PESI\RBB Restructure\Debt Exchange.Ag10 - FINAL.doc
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