Perma-Fix Environmental Services, Inc.
Dear Xx. Xxxxxxx:
This letter agreement ("Letter Agreement@) is to
provide the terms and conditions under which RBB Bank
Aktiengesellschaft, a bank organized under the laws of
Austria ("RBB Bank") as agent for certain of its clients,
shall loan $3,000,000 to Perma-Fix Environmental Services,
Inc., a Delaware corporation ("PESI").
Loan.
_____
Subject to and upon the terms and conditions contained
herein, RBB Bank agrees to make a term loan (the "Loan") to
PESI in the aggregate principal amount of $3,000,000. RBB
Bank shall deliver to PESI $3,000,000 in cash on or before
Tuesday, August 29, 2000 (the "Closing Date"). The terms of
the loan shall be as set forth in the Promissory Note, dated
the Closing Date, executed by PESI (the "Note").
Loan Fee.
________
In order to induce RBB Bank into granting the Loan,
PESI has agreed to pay RBB Bank a fee of $15,000, which
shall be deducted from the proceeds of the Loan prior to
delivery of such proceeds to PESI.
Warrants.
________
Initial Warrants. In order to induce RBB Bank into
granting the Loan, PESI has agreed to issue to RBB Bank
certain warrants, having a term of three (3) years, allowing
the purchase of up to 150,000 shares of PESI Common Stock,
par value $.001 per share (the "Common Stock"), at an
exercise price of $1.50 per share and containing a cashless
exercise provision.
Two Month Warrants. If all principal and accrued and
unpaid interest under the Loan is not paid in full by 5:00
p.m. New York time on October 30, 2000, then PESI shall
issue to RBB Bank certain warrants, having a term of three
(3) years, allowing the purchase of up to an additional
5,000 shares of Common Stock for each $100,000 of principal
remaining unpaid under the Note at 5:00 p.m. New York time
on October 30, 2000, or a maximum of 150,000 shares of
Common Stock if no principal has been repaid under the Note,
at an exercise price equal to the closing market price of
the Common Stock on the National Association of Securities
Dealers Automated Quotation System SmallCap Market
("NASDAQ") on October 30, 2000.
Collectively, the warrants are hereinafter referred to
as the "Warrants," the shares of Common Stock which may be
issued upon exercise of such Warrants are hereinafter
referred to as the "Warrant Shares."
Common Stock.
____________
If all principal and accrued and unpaid interest under
the Loan is not paid in full by 5:00 p.m. New York time on
November 29, 2000, then PESI shall issue to RBB Bank a
certain number of shares of Common Stock, with the number of
shares determined by dividing $300,000 by the closing market
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price of the Common Stock on the NASDAQ on such date, if
shares of Common Stock have been traded on the NASDAQ on
such date, or on the most recent trading date, if shares of
Common Stock have not been traded on the NASDAQ on such
date.
If all principal and accrued and unpaid interest under
the Loan is not paid in full by 5:00 p.m. New York time on
the 29th day of each month thereafter, then PESI shall issue
to RBB Bank a certain additional number of shares of Common
Stock, with the number of shares determined by dividing
$300,000 by the closing market price of the Common Stock on
the NASDAQ on such date, if shares of Common Stock have been
traded on the NASDAQ on such date, or on the most recent
trading date, if shares of Common Stock have not been traded
on the NASDAQ on such date.
Collectively, the shares of Common Stock which may be
issued under this "Common Stock" Section are hereinafter
referred to as the "Issuable Shares."
The Warrants shall be executed by both PESI and RBB
Bank and shall contain appropriate investment
representations, warranties and covenants. The issuance of
the Warrants, Warrant Shares and Issuable Shares are subject
to appropriate corporate, NASDAQ and regulatory authority
approval.
Use of Proceeds.
________________
PESI may use the proceeds of the Loan for the
acquisition of Diversified Scientific Services, Inc. and for
any other purposes which it deems appropriate in the best
interest of PESI.
Reporting Company.
_________________
Although the Warrants, the Warrant Shares and the
Issuable Shares (collectively, the "Securities") shall not
be registered under federal or state securities laws or any
rules or regulations promulgated thereunder. PESI is a
reporting company under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and has filed with the
Securities and Exchange Commission (the "SEC") all reports
required to be filed by PESI under Section 13 or 15(d) of
the Exchange Act. RBB Bank has had the opportunity to
review, and has reviewed, all such reports and information
which RBB Bank deemed material to an investment decision
regarding the purchase of the Securities.
Restrictive Legends.
___________________
RBB Bank agrees that, subject to the provisions herein,
all certificates representing the Securities shall bear a
restrictive legend 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 of 1933, as amended (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 PESI with respect
thereto, or an opinion from counsel for RBB Bank, which
opinion is satisfactory to PESI, to the effect that
registration under the Securities Act is not required in
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connection with such sale or transfer and the reasons
therefor. The legend on all such certificates shall make
reference to the registration rights set forth herein.
Representations, Warranties and Covenants of RBB Bank.
______________________________________________________
RBB Bank hereby represents, warrants and covenants to
PESI as follows:
Investment Intent.
_________________
RBB Bank represents and warrants that the
Securities are being purchased or acquired solely
to be held by RBB Bank as agent for certain of its
clients who have provided to RBB Bank the
$3,000,000 described in this Letter Agreement.
RBB Bank=s own account, for investment purposes
only and not with a view toward the distribution
or resale to others. RBB Bank 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 RBB Bank=s representations as to
investment invention, investor status, and related
and other matters set forth herein.
Certain Risk.
_____________
RBB Bank recognizes that the purchase of the
Securities involves a high degree of risk in that
(a) PESI has sustained losses from its operations,
and may require substantial funds in addition to
the proceeds of this private placement; (b) that
PESI has a substantial accumulated deficit; (c) an
investment in PESI is highly speculative and only
investors who can afford the loss of their entire
investment should consider investing in PESI and
the Securities; (d) an investor may not be able to
liquidate his investment; (e) transferability of
the Securities is extremely limited; (f) in the
event of a disposition an investor could sustain
the loss of his entire investment; (g) the
Warrants represent the right to exercise and
purchase shares of voting equity securities in a
corporate entity that has an accumulated deficit;
(h) no return on investment, whether through
distributions, appreciation, transferability or
otherwise, and no performance by, through or of
PESI, has been promised, assured, represented or
warranted by PESI, 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 RBB Bank is a beneficiary of certain
registration rights provided herein, the
Securities subscribed for and that are purchased
under this Letter Agreement (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
Securities subscribed for and that are to be
purchased under this Letter Agreement are not
quoted, traded or listed for trading or quotation
on the NASDAQ, or any other organized market or
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quotation system, and there is therefore no
present public or other market for the Securities,
nor can there be any assurance that the Common
Stock of PESI 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.
Prior Investment Experience.
____________________________
RBB Bank 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 PESI 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.
No Review by the SEC.
____________________
RBB Bank hereby acknowledges that this offering of
the Securities has not been reviewed by the SEC
because this private placement is intended to be a
nonpublic offering pursuant to Sections 4(2)
and/or 3(b) of the Securities Act and/or
Regulation D promulgated under the Securities Act.
Not Registered.
_______________
RBB Bank understands 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 part, upon RBB
Bank's investment intention. In this connection,
RBB Bank 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.
No Public Market.
________________
RBB Bank understands that there is no public
market for the Warrants. RBB Bank understands
that although there is presently a public market
for the Common Stock, including the Warrant Shares
and the Issuable 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. RBB Bank
understands that PESI 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
PESI, as is required by the Rule as one of the
conditions of its availability. RBB Bank
understands and hereby acknowledges that PESI is
under no obligation to register the Securities or
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under the Securities Act, except as set forth
herein. RBB Bank agrees to hold PESI 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 RBB Bank contained
herein or any sale or distribution by RBB Bank in
violation of the Securities Act or any applicable
state securities or "blue sky" laws (collectively,
"Securities Laws").
Sophisticated Investor.
______________________
RBB Bank hereby acknowledges and asserts that (a)
RBB Bank has adequate means of providing for RBB
Bank's current financial needs and possible
contingencies and has no need for liquidity of RBB
Bank's investment in the Securities; (b) RBB Bank
is able to bear the economic risks inherent in an
investment in the Securities and that an important
consideration bearing on its ability to bear the
economic risk of the purchase of Securities is
whether RBB Bank can afford a complete loss of RBB
Bank's investment in the Securities and RBB Bank
represents and warrants that RBB Bank can afford
such a complete loss; and (c) RBB Bank 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 RBB Bank is
capable of evaluating the merits, risks and
advisability of an investment in the Securities.
Tax Consequences.
_________________
RBB Bank acknowledges that PESI has made no
representation regarding the potential or actual
tax consequences for RBB Bank which will result
from entering into and consummating the Letter
Agreement. RBB Bank acknowledges that it bears
complete responsibility for obtaining adequate tax
advice regarding the Letter Agreement.
SEC Filing.
__________
RBB Bank 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 RBB Bank a reasonable time prior to
the date hereof: (a) PESI's Form 10-K for the year
ended December 31, 1999, (b) PESI's Form 10-Q for
the quarter ended March 31, 2000, and (c) PESI's
Form 10-Q for the quarter ended June 30, 2000.
Documents, Information and Access.
__________________________________
RBB Bank's decision to purchase the Securities is
not based on any promotional, marketing or sales
materials, and RBB Bank and its representatives
have been afforded, prior to purchase thereof, the
opportunity to ask questions of, and to receive
answers from, PESI and its management, and has had
access to all documents and information which RBB
Bank deems material to an investment decision with
respect to the purchase of Securities hereunder.
No Registration, Review or Approval
____________________________________
RBB Bank acknowledges and understands that
the private offering and sale of Securities
pursuant to this Letter 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. RBB
Bank acknowledges, understands and agrees that the
Shares are being offered and exchanged hereunder
pursuant to a private placement exemption to the
registration provisions of the Securities Act
pursuant to Section 3(b) and/or Section 4(2) of
such Securities Act and/or Regulation D
promulgated under the Securities Act.
Transfer Restrictions.
_____________________
RBB Bank will not transfer any Securities
purchased under this Letter Agreement unless such
Securities are registered under the Securities
Laws, or unless an exemption is available under
such Securities Laws, and PESI may, if it chooses,
where an exemption from registration is claimed by
RBB Bank, condition any transfer of Securities out
of RBB Bank's name upon an opinion of PESI'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 RBB Bank, which opinion is satisfactory
to PESI, to the effect that registration under the
Securities Act is not required in connection with
such sale or transfer and the reasons therefor.
Reliance.
_________
RBB Bank understands and acknowledges that PESI is
relying upon all of the representations,
warranties, covenants, understandings,
acknowledgments and agreements contained in this
Letter Agreement in determining whether to accept
this subscription and to sell and issue the
Securities to RBB Bank.
Accuracy or Representations and Warranties.
___________________________________________
All of the representations, warranties,
understandings and acknowledgments that RBB Bank
has made herein are true and correct in all
material respects as of the date of execution
hereof. RBB Bank will perform and comply fully in
all material respects with all covenants and
agreements set forth herein, and RBB Bank
covenants and agrees that until the acceptance of
this Letter Agreement by PESI, RBB Bank shall
inform PESI immediately in writing of any changes
in any of the representations or warranties
provided or contained herein.
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Indemnity.
__________
RBB Bank hereby agrees to indemnify and hold
harmless PESI, and its 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 RBB
Bank of any representations, warranty, covenant or
agreement made by RBB Bank in this Letter
Agreement. Such right to indemnification shall be
in addition to any and all other rights of PESI
under this Letter Agreement or otherwise, at law
or in equity.
Survival.
________
RBB Bank expressly acknowledges and agrees that
all of its representations, warranties, agreements
and covenants set forth in this Letter Agreement
shall be of the essence hereof and shall survive
the execution, delivery and closing of this Letter
Agreement, the sale and purchase of the
Securities, the exercise of the Warrants, and the
sale of the Warrant Shares.
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 Warrants, Warrant Shares, and issuable
shares as indicated:
Warrant Legends
_______________
NEITHER THIS WARRANT NOR ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF THIS WARRANT, HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE
STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON
STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AND QUALIFICATION IN EFFECT WITH RESPECT
THERETO UNDER THE SECURITIES ACT AND UNDER ANY
APPLICABLE STATE SECURITIES LAW OR WITHOUT THE PRIOR
WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL SERVICES,
INC. (THE ACOMPANY@) AND AN OPINION OF THE COMPANY=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.
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NOTWITHSTANDING THE FOREGOING, THE SHARES ISSUABLE UPON
EXERCISE ARE SUBJECT TO THE TERMS SET FORTH IN THAT
CERTAIN LETTER AGREEMENT BETWEEN RBB BANK
AKTIENGESELLSCHAFT AND THE COMPANY, DATED AS OF OCTOBER
29, 2000, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
Warrant Shares and Issuable Shares Legends
__________________________________________
THESE SHARES OF COMMON STOCK, 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. (THE ACOMPANY@)
AND AN OPINION OF THE COMPANY=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, THESE SHARES OF COMMON
STOCK ARE SUBJECT TO THE TERMS SET FORTH IN THAT
CERTAIN LETTER AGREEMENT BETWEEN RBB BANK
AKTIENGESELLSCHAFT AND THE COMPANY, DATED AS OF OCTOBER
29, 2000, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
Miscellaneous.
_____________
a. Amendment; Waiver. Neither this Letter 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 Letter 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 Letter Agreement or the
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.
b. Binding Effect; Assignment. Except as stated in
this Section, neither this Letter Agreement nor
the Warrants, nor any rights or obligations
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hereunder or thereunder, are assignable by RBB
Bank. It is understood and acknowledged by PESI
that the Securities shall be held by RBB Bank as
agent for certain of its clients who have provided
to RBB Bank the $3,000,000 described in this
Letter Agreement. Therefore, the Securities may
be proportionately assigned to such clients who
qualify as an accredited investor as defined in
Rule 501 of Regulation D under the Securities Act
of 1933, as amended.
c. Governing Law; Litigation Costs. This Letter
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.
d. Counterparts. This Letter 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 RBB Bank to
PESI, which in turn is executed and delivered by
PESI, this Letter Agreement shall be binding as
one original agreement between RBB Bank and PESI.
e. Entire Agreement. This Letter Agreement, along
with the Warrants, 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.
f. No Third Party Beneficiaries. This Letter
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.
THE NEXT PAGE IS THE SIGNATURE PAGE
THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK
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PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Xxxxx Xxxxxxxxxx
______________________________
Xx. Xxxxx X. Xxxxxxxxxx
Chief Executive Officer
Accepted and agreed to by RBB Bank this 29th day of August,
2000.
RBB BANK AKTIENGESELLSCHAFT
By /s/ Xxxxxxx Xxxxxxx
______________________________
Xxxxxxx Xxxxxxx
Headtrader
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