false
0000891532
PERMA FIX ENVIRONMENTAL SERVICES INC
0000891532
2024-05-21
2024-05-21
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d) of The Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported)
May 21, 2024
PERMA-FIXENVIRONMENTAL SERVICES, INC.
(Exactname of registrant as specified in its charter)
Delaware 1-11596 58-1954497
. .
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8302 Dunwoody Place 30350
,
Suite 250
,
Atlanta
,
Georgia
(Address of principal executive offices) (Zip Code)
Registrant'stelephone number, including area code:
(770)
587-9898
Notapplicable
(Formername or former address, if changed since last report)
Checkthe appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant underany of the
following provisions:
Written communications pursuant to Rule 425 under the Securities Act
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Securitiesregistered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, par value $0.001 per share PESI The
Nasdaq
Capital Market
Indicateby check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2of the
Securities Exchange Act of 1934.
Emerginggrowth company
Ifan emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complyingwith any new or
revised financial accounting standards provided pursuant to Section 13(a) of
the Exchange Act.
Item1.01 - Entry into a Material Definitive Agreement.
OnMay 21, 2024, Perma-Fix Environmental Services, Inc. (the "Company") entered
into a Securities Purchase Agreement (the "SecuritiesPurchase Agreement") with
certain institutional and retail investors (the "Purchasers"), pursuant to
which the Companyagreed to sell and issue, in a registered direct offering, an
aggregate of 2,051,282 shares (the "Shares") of the Company'scommon stock, par
value $0.001 per share (the "Common Stock"), at a negotiated purchase price
per share of $9.75 (the "Shares"),for aggregate gross proceeds to the Company
of approximately $20 million, before deducting fees payable to the placement
agents and otherestimated offering expenses payable by the Company (the
"Offering"). The Company currently intends to use the net proceedsfrom the
Offering to fund (i) continued R&D and business development relating to the
Company's patent-pending process for thedestruction of PFAS, as well as the
cost of installing at least one commercial treatment unit; (ii) ongoing
facility cap-ex and maintenancecosts; and (iii) general corporate and working
capital purposes. The issuance of the Shares purchased in the Offering is
expected tooccur no later than May 24, 2024.
TheShares were offered and sold by the Company pursuant to an effective shelf
registration statement on Form S-3, which was previously filedwith the U.S.
Securities and Exchange Commission (the "SEC") on May 19, 2023 and
subsequently declared effective on June1, 2023 (File No. 333-272074) (the
"Registration Statement"), and the base prospectus dated as of June 1, 2023
containedtherein. On May 23, 2024, the Company filed with the SEC a prospectus
supplement to the Registration Statement, which together with theaccompanying
base prospectus was used in connection with the offer and sale of the Shares.
Craig-HallumCapital Group LLC ("Craig-Hallum") and Wellington Shields & Co.
LLC ("Wellington Shields" and, togetherwith Craig-Hallum, the "Placement
Agents") served as the exclusive placement agents in connection with the
Offering, pursuantto a placement agency agreement dated as of May 21, 2024
(the "Placement Agency Agreement"), between the Company and thePlacement
Agents. The Company has agreed to pay the Placement Agents a cash fee of 6.00%
of the aggregate gross proceeds in the Offering.The Company has also agreed to
reimburse the Placement Agents Wellington for certain expenses in connection
with the Offering in an aggregateamount not to exceed $90,000. As additional
compensation to the Placement Agent, in connection with the Offering, the
Company will issueto the Placement Agents or their designees warrants (the
"Placement Agents' Warrants") to purchase an aggregate of61,538 shares of
Common Stock (the "Warrant Shares"), such number of shares equal to three
percent (3.0%) of the number ofShares sold in the registered direct offering,
at an exercise price per share equal to $12.19, which is equal to
approximately 125% ofthe price per share of the Shares sold in the Offering.
Neither the offer and sale of the Placement Agents' Warrants nor the offerand
sale of the Warrants Shares have been registered under the Registration
Statement or otherwise. The Placement Agents' Warrantshave a term of five
years, are exercisable at any time and from time to time, in whole or in part,
during the four and one-half (4 1/2)year period commencing 180 days from the
last date of closing of the Offering, and are exercisable via "cashless
exercise"in certain circumstances.
Theforegoing descriptions of the Securities Purchase Agreement, the Placement
Agency Agreement, and the Placement Agents' Warrants,are not complete and are
qualified in their entirety by reference to the full text of the Securities
Purchase Agreement, the form ofwhich is filed as Exhibit 10.1 to this Form
8-K; the Placement Agency Agreement, a copy of which is filed as Exhibit 10.2
to this Form8-K, and the Placement Agents' Warrants, the form of which is
filed as Exhibit 10.3 to this Form 8-K, and which are incorporatedherein in
their entirety by reference.
Acopy of the opinion of Steptoe & Johnson PLLC relating to the validity of the
Shares issued in the Offering is filed as Exhibit 5.1to this Current Report on
Form 8-K.
Forward-LookingStatements
ThisCurrent Report on Form 8-K contains forward-looking statements that
involve risks and uncertainties, such as statements related to theexpected use
of the proceeds from the Offering. The risks and uncertainties involved
include the Company's financial position,market conditions and other risks
detailed from time to time in the Company's periodic reports and other filings
with the SEC.You are cautioned not to place undue reliance on forward-looking
statements, which are based on the Company's current expectationsand
assumptions and speak only as of the date of this Current Report on Form 8-K.
The Company does not intend to revise or update anyforward-looking statement
in this Current Report on Form 8-K as a result of new information, future
events or otherwise, except as requiredby law.
Item3.02 Unregistered Sales of Equity Securities.
Thedisclosures in Item 1.01 of this Current Report regarding the Placement
Agents' Warrants and the Warrant Shares are incorporatedby reference into this
Item 3.02.
Item7.01 Regulation FD Disclosure.
OnMay 22, 2024, the Company issued a press release announcing the Offering. A
copy of the press release is attached as Exhibit 99.1 tothis Current Report on
Form 8-K and is incorporated in this Item 7.01 by reference.
Thepress release shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the Sharesin any state in
which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under applicablesecurities laws.
Inaccordance with General Instruction B.2 of Form 8-K, the information in this
Item 7.01, including Exhibit 99.1 attached hereto, shallbe deemed "furnished"
and shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Actof 1934, as amended (the "Exchange Act"), nor shall such
information be deemed incorporated by reference in any filing underthe
Securities Act of 1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Item9.01 - Financial Statements and Exhibits
(d) Exhibits
Exhibit Number Description
5.1 Opinion of Steptoe & Johnson PLLC
.
10.1 Form of Securities Purchase Agreement, dated May 21, 2024,
by and between the Company and the purchasers party thereto.
10.2 Placement Agency Agreement, dated as of May 21, 2024, by and between the
Company and Craig-Hallum Capital Group LLC and Wellington Shields & Co., LLC.
10.3 Form of Placement Agents' Warrants.
23.1 Consent of Steptoe & Johnson
PLLC (contained in Exhibit 5.1)
99.1 Press release, dated May 22, 2024.
104 Cover Page Interactive Data File (embedded
within the Inline XBRL document).
SIGNATURES
Pursuantto the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by
theundersigned hereunto duly authorized.
Dated:May 24, 2024
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Ben Naccarato
Ben Naccarato
Executive Vice President and Chief Financial Officer
Exhibit5.1
210 Park Avenue, Suite 2300
Oklahoma City, OK 73102
405-930-5151
Fax: 405-212-5843
http://www.steptoe-johnson.com
May23, 2024
Perma-FixEnvironmental Services, Inc.
8302 Dunwoody Place, Suite 250
Atlanta, Georgia
30350
Re: Issuance of 2,051,382 shares of Common Stock of Perma-Fix EnvironmentalServices, Inc., pursuant to Registration
Statement on Form S-3, File No. 333-27204, and prospectus supplement thereunder dated; May 21,2024
Ladiesand Gentlemen:
Wehave acted as counsel to Perma-Fix Environmental Services Inc., a Delaware
corporation (the "
Company
") in connectionwith the issuance and sale of 2,051,382 shares (the "
Shares
") of the Company's common stock, par value $0.001per share (the "
Common Stock
"), pursuant to the Securities Purchase Agreement, dated as of May 21, 2024
(the "
SecuritiesPurchase Agreement
") between the Company and the purchasers parties thereto (collectively, the "
Purchasers
")
Inconnection with the opinion expressed herein, we have examined such
documents, records and matters of law as we have deemed relevantor necessary
for purposes of such opinion. Based on the foregoing, and subject to the
further limitations, qualifications and assumptionsset forth herein, we are of
the opinion that the Shares, when issued and delivered to the Purchasers
pursuant to the terms of the SecuritiesPurchase Agreement against payment of
the consideration therefor as provided therein, will be validly issued, fully
paid and non-assessable.
Theopinion expressed herein is limited to the Delaware General Corporation Law
of the State of Delaware, as currently in effect, and weexpress no opinion as
to the effect of the law of any other jurisdiction.
Wehereby consent to the filing of this opinion as Exhibit 5.1 to the Current
Report on Form 8-K dated May 21, 2024, filed by the Companyand incorporated by
reference into the Registration Statement on Form S-3 (Registration No.
333-272074) (the "
Registration Statement
"),filed by the Company to effect the registration of the Shares under the
Securities Act of 1933, as amended (the "
Act
"),and to the reference to Steptoe and Johnson, PLLC under the caption "Legal
Matters" in the prospectus supplement dated May21, 2024 constituting a part of
such Registration Statement. In giving such consent, we do not thereby admit
that we are included inthe category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Securities and
ExchangeCommission or promulgated thereunder.
Regards,
/s/ Steptoe & Johnson_PLLC
Steptoe & Johnson PLLC
WestVirginia Ohio Kentucky Pennsylvania Texas Colorado Oklahoma
Exhibit10.1
SECURITIESPURCHASE AGREEMENT
ThisSecurities Purchase Agreement (this "
Agreement
") is dated as of May 21, 2024 and is between Perma-Fix EnvironmentalServices,
Inc., a Delaware corporation (the "
Company
"), and each purchaser identified on the signature pages hereto(each,
including its successors and assigns, a "
Purchaser
" and collectively the "
Purchasers
").
WHEREAS
,subject to the terms and conditions set forth in this Agreement and pursuant
to an effective registration statement under the SecuritiesAct (as defined
below) as to the Shares (as defined below), the Company desires to issue and
sell to each Purchaser, and each Purchaser,severally and not jointly, desires
to purchase from the Company, securities of the Company as more fully
described in this Agreement.
NOW,THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and
valuable consideration thereceipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser agree as follows:
ARTICLEI
DEFINITIONS
1.1.
Definitions
.In addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meaningsset forth in
this
Section 1.1
:
"
Affiliate
"means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common controlwith a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.
"
Authorization
"shall have the meaning ascribed to such term in
Section 3.1(mm)
.
"
Boardof Directors
" means the board of directors of the Company.
"
BusinessDay
" means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorizedor required by law to remain
closed;
provided
,
however
, for clarification, commercial banks shall not bedeemed to be authorized or
required by law to remain closed due to "stay at home", "shelter-in-place",
"non-essentialemployee" or any other similar orders or restrictions or the
closure of any physical branch locations at the direction of any governmentalaut
hority so long as the electronic funds transfer systems (including for wire
transfers) of commercial banks in The City of New Yorkgenerally are open for
use by customers on such day.
"
Closing
"means the closing of the purchase and sale of the Securities pursuant to
Section 2.1
.
"
ClosingDate
" shall have the meaning ascribed to such term in
Section 2.1
.
"
Commission
"means the United States Securities and Exchange Commission.
"
CommonStock
" means the shares of common stock of the Company, $0.001 par value per share,
and any other class of securities intowhich such securities may hereafter be
reclassified or changed.
"
CommonStock Equivalents
" means any securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquireat any time Common Stock, including, without
limitation, any debt, preferred stock, right, option, warrant or other
instrument that isat any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.
"
CompanyCounsel
" means Steptoe & Johnson PLLC.
"
EDGAR
"means the Commission's Electronic Data Gathering, Analysis and Retrieval
System.
"
EnvironmentalLaw
" means any federal, state or local laws now or hereafter in effect relating
to pollution or protection of the environmentor emissions, discharges, spills,
releases or threatened releases of any Hazardous Materials into the
environment (including withoutlimitation indoor air, ambient air, surface
water, ground water or land), including without limitation, the Resource
Conservation andRecovery Act, 42 U.S.C. (s)(s) 6901 et seq., as amended, the
Comprehensive Environmental Response, Compensation and Liability Act("CERCLA"),
42 U.S.C. (s)(s) 9601 et seq., as amended, the Hazardous Materials
Transportation Act, 49 U.S.C. (s)(s)1801 et seq., as amended, the Clean Water
Act, 33 U.S.C. (s)(s) 1251 et seq., as amended, the Clean Air Act, 42 U.S.C.
(s)(s)7401 et seq., as amended, the Toxic Substance Control Act, 15 U.S.C.
(s)(s) 2601 et seq., as amended, and any rules and regulationsnow or hereafter
promulgated under any of such acts.
"
EvaluationDate
" shall have the meaning ascribed to such term in
Section 3.1(t)
.
"
ExchangeAct
" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
"
ExemptIssuance
" means the issuance of (a) shares of Common Stock or options to employees,
officers or directors of the Company pursuantto any stock or option plan duly
adopted for such purpose, by (i) a majority of the non-employee members of the
Board of Directors, (ii)a majority of the members of a committee of
non-employee directors established for such purpose for services rendered to
the Companyor (iii) the shareholders of the Company; (b) securities upon the
exercise, exchange of or conversion of any Securities issued hereunderand/or
other securities that are exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding onthe date of this Agreement,
provided that such securities have not been amended since the date of this
Agreement to increase the numberof such securities or to decrease the exercise
price, exchange price or conversion price of such securities (other than in
connectionwith stock splits or combinations) or to extend the term of such
securities; and (c) securities issued pursuant to acquisitions or
strategictransactions approved by a majority of the disinterested directors of
the Company,
provided
that such securities are issuedas "restricted securities" (as defined in Rule
144) and carry no registration rights that require or permit the filing ofany
registration statement in connection therewith during the prohibition period in
Section 4.12
herein, and, provided that anysuch issuance shall only be to a Person (or to
the equity holders of a Person) which is, itself or through its subsidiaries,
an operatingcompany or an owner of an asset in a business synergistic with the
business of the Company and shall provide to the Company additionalbenefits in
addition to the investment of funds, but shall not include a transaction in
which the Company is issuing securities primarilyfor the purpose of raising
capital or to an entity whose primary business is investing in securities.
"
FCPA
"means the Foreign Corrupt Practices Act of 1977, as amended, and the rules
and regulations thereunder.
"
GAAP
"shall have the meaning ascribed to such term in
Section 3.1(j)
.
"
HazardousSubstances
" means and refers to any "hazardous waste" or "hazardous substance," as such
terms are setforth in, under or pursuant to the Environmental Laws, oil or
petroleum products or their derivatives, polychlorinated biphenyls,
asbestos,radioactive materials or waste, per- and polyfluoroalkyl substances
("PFAS"), and any other toxic, ignitable, reactive, corrosive,explosive,
contaminating or polluting materials which are now or in the future subject to
governmental regulation.
2
"
IntellectualProperty Rights
" shall have the meaning ascribed to such term in
Section 3.1(r)
.
"
IssuerFree Writing Prospectus
" shall have the meaning ascribed to such term in
Section 3.1(f)(ii)
.
"
ITSystems
" shall have the meaning ascribed to such term in
Section 3.1(jj)
.
"
Lien
"means a lien, charge, mortgage, pledge, security interest, claim, right of
first refusal, pre-emptive right, restriction or other encumbranceof any kind
whatsoever.
"
Lock-UpAgreement
" means the Lock-Up Agreements, each dated as of the Closing Date, by and
between the Company and (i) the membersof the Board of Directors and (ii) the
executive officers of the Company.
"
MaterialAdverse Effect
" shall have the meaning assigned to such term in
Section 3.1(b)
.
"
MaterialPermits
" shall have the meaning assigned to such term in
Section 3.1(q)
.
"
MoneyLaundering Laws
" shall have the meaning assigned to such term in
Section 3.1(ii)
.
"
Offering
"means the offering of the Securities hereunder.
"
Person
"means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liabilitycompany, joint
stock company, government (or an agency or subdivision thereof) or other
entity of any kind.
"
PersonalData
" shall have the meaning ascribed to such term in
Section 3.1(jj)
.
"
PerShare Purchase Price
" equals $9.75, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinationsand other transactions of the Common Stock
that occur after the date of this Agreement.
"
PlacementAgents
" means, collectively, Wellington Shields & Co. LLC and Craig-Hallum Capital
Group LLC.
"
Proceeding
"means an action, claim, suit, investigation or proceeding (including, without
limitation, an informal investigation or partial proceeding,such as a
deposition) pending or, to the Company's knowledge, threatened in writing
against or affecting the Company, any Subsidiaryor any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority(federal, state, county, local or foreign).
"
Prospectus
"means the final base prospectus filed as part of the Registration Statement.
"
ProspectusSupplement
" means the supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with theCommission and delivered by the Company
to each Purchaser at the Closing.
"
PurchaserParty
" shall have the meaning ascribed to such term in
Section 4.7
.
3
"
RegistrationStatement
" shall have the meaning ascribed to such term in
Section 3.1(f)(ii)
.
"
RequiredApprovals
" shall have the meaning ascribed to such term in
Section 3.1(e)
.
"
Sanctions
"shall have the meaning ascribed to such term in
Section 3.1(gg)
.
"
SECReports
" shall have the meaning ascribed to such term in
Section 3.1(j)
.
"
Securities
"means for each Purchaser, the Shares.
"
SecuritiesAct
" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
"
Shares
"means the shares of Common Stock issued or issuable to each Purchaser
pursuant to this Agreement.
"
ShortSales
" means all "short sales" as defined in Rule 200 of Regulation SHO under the
Exchange Act (but shall not bedeemed to include locating and/or borrowing
shares of Common Stock).
"
SubscriptionAmount
" means, as to each Purchaser, the aggregate amount to be paid for Shares
purchased hereunder as specified below suchPurchaser's name on the signature
page of this Agreement and next to the heading "Subscription Amount," in
United Statesdollars and in immediately available funds.
"
Subsidiary
"and "
Subsidiaries
" shall have the meanings ascribed to such terms in
Section 3.1(a)
.
"
TradingDay
" means a day on which the Trading Market is open for trading.
"
TradingMarket
" means the Nasdaq Capital Market (or any nationally recognized successor
thereto);
provided
,
however
,that in the event the Company's Common Stock is ever listed or traded on The
Nasdaq Global Market, The Nasdaq Global Select Market,the New York Stock
Exchange, the NYSE American, the NYSE Arca, the OTC Pink Market, or the OTCQX
or the OTCQB operated by the OTC MarketsGroup, Inc. (or any nationally
recognized successor to any of the foregoing), then the "Trading Market" shall
mean such othermarket or exchange on which the Company's Common Stock is then
listed or traded.
"
TransactionDocuments
" means this Agreement, the Lock-Up Agreements and the Placement Agency
Agreement dated on or about the date hereofbetween the Placement Agents and
the Company, all exhibits and schedules thereto and hereto and any other
documents or agreements executedin connection with the transactions
contemplated hereunder.
"
TransferAgent
" means Continental Stock Transfer & Trust Company, the current transfer agent
of the Company, with offices at 1 StateStreet, 30th Floor, New York, New York
10004, and any successor transfer agent of the Company.
4
ARTICLEII
PURCHASEAND SALE
2.1.
Closing
.On the second Business Day following the execution of this Agreement, or the
third Business Day if this Agreement is executed after onor after 4:30 p.m.,
Eastern Time (the "
Closing Date
"), upon satisfaction of the covenants and conditions set forthin
Sections 2.2
and
2.3
, upon the terms and subject to the conditions set forth herein, the Company
agrees to sell, andthe Purchasers, severally and not jointly, agree to
purchase, up to an aggregate of $19,999,999.50 of Shares, at the Per Share and
PurchasePrice. The Company shall deliver to each Purchaser its respective
Shares, as determined pursuant to
Section 2.2(a)
and the Companyand each Purchaser shall deliver the other items set forth in
Section 2.2
deliverable at the Closing. Upon satisfaction of thecovenants and conditions
set forth in
Sections 2.2
and
2.3
, the Closing shall occur at the offices of Troutman Pepper HamiltonSanders
LLP, 301 S College Street, Suite 3400, Charlotte, NC 28202, or such other
location as the parties shall mutually agree or byelectronic exchange of
executed documents. On or prior to the Closing Date, each Purchaser shall
deliver such Purchaser's SubscriptionAmount as set forth on the signature page
hereto either (i) to the Company, by wire transfer in immediately available
funds, or (ii)for settlement via "Delivery versus Payment" ("
DVP
") (i.e., on the Closing Date, the Company shall issuethe Shares registered in
the Purchasers' names and addresses and released by the Company's transfer
agent directly to theaccount(s) at the applicable Placement Agent identified
by such Purchaser; upon receipt of such Shares, the applicable Placement
Agentshall promptly electronically deliver such Shares to the applicable
Holder, and payment therefor shall be made by the Placement Agent(or its
clearing firm) by wire transfer to the Company). At Closing, subject to
Sections 2.2
and
2.3
hereof, the Companyshall deliver the Shares in book-entry form either through
the facilities of the Depository Trust Company or otherwise on the books
andrecords of the Transfer Agent, and for those Purchasers closing via DVP,
payment for the Shares shall be made via DVP settlement, lessthe agreed-upon
amounts payable to the Placement Agents for their fees and expenses, which
amounts may be released directly to such persons.The Shares shall be
registered in such name or names and in such authorized denominations as
indicated by the Purchasers in the signaturepages to this Agreement.
2.2.
Deliveries
.
(a) Onor prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) thisAgreement, duly executed by the Company;
(ii) alegal opinion of Company Counsel, in a form reasonably acceptable to the
Placement Agents;
(iii) theCompany's wire instructions, on Company letterhead and executed by
the Chief Executive Officer or Chief Financial Officer of theCompany;
(iv) acopy of the irrevocable instructions to the Transfer Agent instructing
the Transfer Agent to deliver on an expedited basis via The DepositoryTrust
Company Deposit or Withdrawal at Custodian system (DWAC), or otherwise on the
books and records of the Transfer Agent, Shares equalto such Purchaser's
Subscription Amount
divided
by the Per Share Purchase Price, registered in the name of such Purchaser;
(v) Lock-upAgreements, in substantially the form attached as
Exhibit A
hereto, executed by (x) the members of the Board of Directors, and(y) the
executive officers of the Company and countersigned by the Company;
(vi) anOfficer's Certificate, in form and substance satisfactory to the
Placement Agents;
(vii) aSecretary's Certificate, in form and substance satisfactory to the
Placement Agents;
5
(viii) acomfort letter, addressed to the Placement Agent and the Purchasers,
in form and substance reasonably satisfactory to the Placement Agents,from
Grant Thornton, LLP; and
(ix) theProspectus and Prospectus Supplement (which may be delivered in
accordance with Rule 172 under the Securities Act).
(b) Onor prior to the Closing Date, each Purchaser shall deliver or cause to
be delivered to the Company the following:
(i) thisAgreement, duly executed by such Purchaser; and
(ii) suchPurchaser's Subscription Amount, which shall be delivered by wire
transfer in immediately available funds for settlement via DVP.
2.3.
ClosingConditions
.
(a) Theobligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
(i) theaccuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect,in all
respects) when made and on the Closing Date of the representations and
warranties of the Purchasers contained herein (except tothe extent a
representation or warranty speaks as of a specific date, in which case such
representation or warranty shall be accurateas of such date);
(ii) allobligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed;
(iii) allRequired Approvals shall have been obtained; and
(iv) thedelivery by each Purchaser of the items set forth in
Section 2.2(b)
of this Agreement.
(b) Therespective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:
(i) theaccuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect,in all
respects) when made and on the Closing Date of the representations and
warranties of the Company contained herein (except to theextent a
representation or warranty speaks as of a specific date, in which case such
representation or warranty shall be accurate asof such date);
(ii) allobligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
(iii) thedelivery by the Company of the items set forth in
Section 2.2(a)
of this Agreement;
(iv) thereshall have been no Material Adverse Effect with respect to the
Company since the date hereof;
6
(v) fromthe date hereof and to the Closing Date, trading in the Common Stock
shall not have been suspended by the Commission or the Trading Market,at any
time prior to the Closing and, at any time prior to the Closing Date, trading
in securities generally as reported by BloombergL.P. shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reportedby such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States
or New YorkState authorities nor shall there have occurred any material
outbreak or escalation of hostilities or other national or internationalcalamity
of such magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in the reasonablejudgment of the
Placement Agents, makes it impracticable or inadvisable to purchase the
Securities at the Closing; and
(vi) thereshall have been no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment filed underthe
Securities Act.
ARTICLEIII
REPRESENTATIONSAND WARRANTIES
3.1.
Representationsand Warranties of the Company
. The Company hereby makes the following representations and warranties to
each Purchaser:
(a)
Subsidiaries
.All of the direct and indirect subsidiaries of the Company are set forth on
Exhibit 21 to the Company's most recently filed AnnualReport on Form 10-K
(each entity, a "
Subsidiary
", and collectively, the "
Subsidiaries
"). Exceptas otherwise disclosed in the SEC Reports, the Company owns,
directly or indirectly, all of the capital stock or other equity interestsof
each Subsidiary free and clear of any Liens, and all of the issued and
outstanding shares of capital stock of each Subsidiary arevalidly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.There are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to,or securities, rights or obligations convertible into
or exercisable or exchangeable for, or giving any Person any right to
subscribefor or acquire, any capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which any Subsidiaryis or may
become bound to issue capital stock, except as otherwise disclosed in the SEC
Reports.
(b)
Organizationand Qualification
. The Company and each of the Subsidiaries has been duly organized and validly
exists as a corporation, limitedpartnership or company in good standing (or
the foreign equivalent thereof, if any) under the laws of its jurisdiction of
incorporationor organization. The Company and each of the Subsidiaries is duly
qualified to do business and is in good standing as a foreign or extra-provincia
lcorporation, partnership, company or limited liability company in each
jurisdiction in which the character or location of its properties(owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures tobe so qualified or in
good standing which (individually and in the aggregate) would not have a
Material Adverse Effect. To the knowledgeof the Company, no Proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limitor curtail such power and authority or qualification.
Neither the Company nor any Subsidiary is in violation or default of any of
theprovisions of its certificate or articles of incorporation, bylaws or other
organizational or charter documents. For purposes of thisAgreement, "
Material Adverse Effect
" means an effect, change, event or occurrence that, alone or in conjunction
withany other or others: (i) has or would reasonably be expected to have a
material adverse effect on the business, general affairs, management,condition
(financial or otherwise), results of operations, stockholders' equity,
properties or prospects of the Company and theSubsidiaries, taken as a whole
or (ii) the Company's ability to perform in any material respect on a timely
basis its obligationsunder any Transaction Document;
provided
that a change in the market price or trading volume of the Common Stock
aloneshall not be deemed, in and of itself, to constitute a Material Adverse
Effect.
7
(c)
Authorization;Enforcement
. The Company has the requisite corporate power and authority to enter into
and to consummate the transactions contemplatedby this Agreement and each of
the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. Theexecution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the consummation by it
of thetransactions contemplated hereby and thereby have been duly authorized
by all necessary action on the part of the Company and no furtheraction is
required by the Company, the Board of Directors or the Company's stockholders
in connection herewith or therewith otherthan in connection with the Required
Approvals. This Agreement and each other Transaction Document to which the
Company is a party hasbeen (or upon delivery will have been) duly executed by
the Company and, when delivered in accordance with the terms hereof and
thereof,will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except:(i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of generalapplication affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating
to the availability of specificperformance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limitedby applicable law.
(d)
NoConflicts
. The execution, delivery and performance by the Company of this Agreement and
the other Transaction Documents to whichit is a party, the issuance and sale
of the Securities and the consummation by it of the transactions contemplated
hereby and therebydo not and will not (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or articlesof
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event thatwith notice or lapse
of time or both would become a default) under, result in the creation of any
Lien upon any of the properties orassets of the Company or any Subsidiary, or
give to others any rights of termination, amendment, anti-dilution or similar
adjustments,acceleration or cancellation (with or without notice, lapse of
time or both) of, any agreement, credit facility, debt or other instrument(evide
ncing a Company or Subsidiary debt or otherwise) or other understanding to
which the Company or any Subsidiary is a party or bywhich any property or
asset of the Company or any Subsidiary is bound or affected, or (iii) subject
to the Required Approvals, conflictwith or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court orgovernmental authority, to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations),or by
which any property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of
clauses (ii)
and
(iii)
, such as would not have or reasonably be expected to result in a Material
Adverse Effect.
(e)
Filings,Consents and Approvals
. The Company is not required to obtain any consent, waiver, authorization or
order of, give any notice to,or make any filing or registration with, any
court or other federal, state (including state blue sky laws), local or other
governmentalauthority or other Person in connection with the execution,
delivery and performance by the Company of this Agreement and the other
TransactionDocuments, including with respect to the issuance and sale of the
Securities, other than: (i) the filings required pursuant to
Section4.4
of this Agreement, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) the notice and/or application(s) toeach applicable Trading
Market for the issuance and sale of the Securities and the listing of the
Shares for trading thereon in the timeand manner required thereby, and (iv)
such filings as are required to be made under applicable state securities laws
or by the bylawsand rules of the Financial Industry Regulatory Authority
(collectively, the "
Required Approvals
").
8
(f)
Issuanceof the Shares; Qualification; Registration
.
(i) TheShares are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validlyissued,
fully paid and non-assessable, free and clear of all Liens imposed by the
Company. The Company has reserved from its duly authorizedcapital stock the
maximum number of shares of Common Stock issuable pursuant to this Agreement.
(ii) TheCompany has prepared and filed with the Commission a registration
statement under the Securities Act on Form S-3 (File No. 333-272074)providing
for the offer and sale, from time to time, of up to 2,500,000 shares of the
Company's common stock (the "
RegistrationStatement
"). The Registration Statement was declared effective under the Securities Act
on June 1, 2023. The Company was atthe time of the filing of the Registration
Statement eligible to use Form S-3. The Company is eligible to use Form S-3
under the SecuritiesAct and it meets the transaction requirements with respect
to the aggregate market value of securities being sold pursuant to this
offeringand during the twelve (12) calendar months prior to this offering, as
set forth in General Instruction I.B.1. of Form S-3. No stop orderpreventing
or suspending the effectiveness of the Registration Statement, or suspending
or preventing the use of the Prospectus or anyIssuer Free Writing Prospectus
has been issued by the Commission and no proceedings for that purpose have
been instituted or are pendingor, to the knowledge of the Company, are
contemplated by the Commission and any request on the part of the Commission
for additionalinformation has been complied with.
Any"issuer free writing prospectus" (as defined in Rule 433 under the
Securities Act) relating to the Securities is hereafterreferred to as an "
Issuer Free Writing Prospectus
". Any reference herein to the Prospectus or the Prospectus Supplementshall be
deemed to refer to and include the documents incorporated by reference therein
as of the date of filing thereof; and any referenceherein to any "amendment"
or "supplement" with respect to any of the Prospectus or the Prospectus
Supplementshall be deemed to refer to and include (i) the filing of any
document with the Commission incorporated or deemed to be incorporatedtherein
by reference after the date of filing of such Prospectus or Prospectus
Supplement and (ii) any such document so filed.
Allreferences in this Agreement to the Registration Statement, the Prospectus,
or the Prospectus Supplement, or any Issuer Free WritingProspectus, or any
amendments or supplements to any of the foregoing, or the SEC Reports
incorporated by reference therein shall be deemedto include any copy thereof
filed with the Commission on EDGAR.
(g)
SecuritiesAct Compliance
. The Registration Statement and the Prospectus comply, and the Prospectus
Supplement and any further amendments orsupplements to the Registration
Statement, the Prospectus or the Prospectus Supplement will to the Company's
knowledge comply,in all material respects with the applicable provisions of
the Securities Act. Each part of the Registration Statement, when such partwas
declared effective, did not contain an untrue statement of a material fact or
omit to state a material fact required to be statedtherein or necessary to
make the statements therein not misleading. The Prospectus and the Prospectus
Supplement and any amendments orsupplements thereto, at the time the
Prospectus, the Prospectus Supplement or any such amendment or supplement to
either of the foregoingwas issued and at the Closing Date, conformed and will
conform in all material respects to the requirements of the Securities Act,
includingthe disclosure obligations required under Item 404(a) of Regulation
S-K. The Prospectus and the Prospectus Supplement, as of their respectivefiling
dates, and any amendments or supplements thereto, did not and will not contain
an untrue statement of a material fact or omitto state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, notmisleading. The foregoing shall not apply to
statements in, or omissions from, any such document made in reliance upon, and
in conformitywith, information furnished to the Company by the Placement
Agents specifically for use in the preparation thereof.
9
(h)
Capitalization
.The equity capitalization of the Company as of the date hereof is set forth on
Schedule 3.1(h)
. All of the issued and outstandingshares of Common Stock are duly authorized,
validly issued, fully paid and non-assessable and have been duly and validly
authorized andissued in compliance with all federal and state securities laws
and not in violation of or subject to any preemptive or similar rightthat
entitles any person to acquire from the Company any Common Stock or Common
Stock Equivalent, except for such rights as may havebeen fully satisfied or
waived prior to the date hereof. Except as a result of the purchase and sale
of the Securities and as describedin the Registration Statement, the
Prospectus and the Prospectus Supplement, or in the SEC Reports, the Company
has no outstanding options,warrants, scrip rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or
obligationsconvertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any Common Stock, orcontracts,
commitments, understandings or arrangements by which the Company is or may
become bound to issue additional Common Stock orCommon Stock Equivalents. No
Person has any right of first refusal, pre-emptive right, right of
participation, or any similar right toparticipate in the transactions
contemplated by the Transaction Documents, except for which waivers in full
have been obtained by theCompany. The issuance and sale of the Securities will
not obligate the Company to issue Common Stock or other securities to any
Person(other than the Purchasers and the Placement Agents) and will not result
in a right of any holder of Company securities to adjust theexercise,
conversion, exchange or reset price under any of such securities. There are no
outstanding securities or instruments of theCompany with any provision that
adjusts the exercise, conversion, exchange or reset price of such security or
instrument upon an issuanceof securities by the Company. There are no
outstanding securities or instruments of the Company that contain any
redemption or similarprovisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeema security of the Company. The Company does not have any stock
appreciation rights or "phantom stock" plans or agreementsor any similar plan
or agreement. There are no stockholders agreements, voting agreements or other
similar agreements with respect tothe Company's capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any
of the Company'sstockholders.
(i)
SECReports
. Since March 31, 2022, the Company has filed all reports, schedules, forms,
statements and other documents requiredto be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof (theforegoing materials, including the exhibits
thereto and documents incorporated by reference therein, together with
the Prospectusand the Prospectus Supplement, being collectively referred to
herein as the "
SEC Reports
") on a timely basisor has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any
suchextension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the SecuritiesAct and the
Exchange Act, as applicable, and none of the SEC Reports when filed, contained
any untrue statement of a material fact oromitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light ofthe circumstances under which they were made, not
misleading.
(j)
FinancialStatements
. The consolidated financial statements, including the notes thereto, included
or incorporated by reference in the RegistrationStatement, the Prospectus and
the Prospectus Supplement, comply in all material respects with applicable
accounting requirements andthe rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have beenprepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods
involved("
GAAP
"), except as may be otherwise specified in such financial statements or the
notes thereto and except that unauditedfinancial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects
the financial positionof the Company and its consolidated Subsidiaries as of
and for the dates thereof and the results of operations and cash flows for
theperiods then ended, subject, in the case of unaudited statements, to
normal, immaterial, year-end audit adjustments.
10
(k)
MaterialChanges; Undisclosed Events, Liabilities or Developments
. Since the date of the latest consolidated financial statements includedin or
incorporated by reference into the Registration Statement and the Prospectus,
except as set forth in the Registration Statementand the Prospectus, (i) there
has been no event, occurrence or development that has had or that is
reasonably be expected to result ina Material Adverse Effect, (ii) neither the
Company nor any Subsidiary has incurred any liabilities (contingent or
otherwise) other than(A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilitiesnot required to be reflected in the Company's financial statements
pursuant to GAAP or disclosed in filings made with the Commission,(iii) the
Company has not altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution ofcash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capitalstock, and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to
existing Companystock option plans. Except for the issuance of the Securities
contemplated by this Agreement, to the Company's knowledge, no materialevent,
liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist withrespect to the Company
or its Subsidiaries or their respective businesses, properties, operations,
assets or financial condition thatwould be required to be disclosed by the
Company under applicable securities laws at the time this representation is
made or deemed madethat has not been publicly disclosed at least one (1)
Trading Day prior to the date that this representation is made.
(l)
Litigation
.There is no Proceeding which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documentsor the
Securities or (ii) would, if there were an unfavorable decision, have or
reasonably be expected to result in a Material AdverseEffect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has
been the subject of any Proceeding involvinga claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. The Company has disclosed,in the documents filed by the
Company pursuant to Sections 12, 13, 14 or 15 of the Exchange Act and
incorporated or deemed to be incorporatedby reference into the Prospectus, all
such information that it is required to disclose in respect of any Proceeding
pursuant to the requirementsof the Securities Act and the Exchange Act, as
applicable. There has not been, and to the knowledge of the Company, there is
not pendingor contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company.
(m)
LaborRelations
. No labor dispute exists or is imminent with respect to any of the employees
of the Company or any Subsidiary, which wouldreasonably be expected to result
in a Material Adverse Effect. Except as disclosed in the SEC Reports, none of
the Company's orits Subsidiaries' employees is a member of a labor union that
relates to such employee's relationship with the Company orsuch Subsidiary,
and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement. To the knowledgeof the Company, no executive officer of
the Company or any Subsidiary, is, or is now expected to be, in violation of
any material termof any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any
othercontract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officerdoes not
subject the Company or any of its Subsidiaries to any liability with respect
to any of the foregoing matters. The Company andits Subsidiaries are, to the
Company's knowledge, in compliance with all U.S. federal, state, local and
foreign laws and regulationsrelating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the
failure tobe in compliance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
11
(n)
Compliance
.Neither the Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waivedthat, with
notice or lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company orany Subsidiary received notice of
a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreementor any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether
or not such defaultor violation has been waived), (ii) is in violation of any
judgment, decree or order of any court, arbitrator or other governmental
authorityor (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitationall
foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product qualityand safety and
employment and labor matters, except in each case of
clauses (i)
,
(ii)
and
(iii)
as would not haveor reasonably expected to result in a Material Adverse Effect.
(o)
EnvironmentalLaw
. There has been no storage, generation, transportation, handling, use,
treatment, disposal, discharge, emission, contamination,release or other
activity involving any Hazardous Substances by, due to, on behalf of, or
caused by the Company or any Subsidiary (or,to the Company's knowledge, any
other entity for whose acts or omissions the Company is or may be liable) upon
any property nowor previously owned, operated, used or leased by the Company
or any Subsidiary, or upon any other property, which would be a violationof or
give rise to any current or future liability under any Environmental Law,
except for violations and liabilities which, individuallyor in the aggregate,
would not have a Material Adverse Effect or as disclosed in the Prospectus,
Prospectus Supplement or the SEC Reports.There has been no disposal,
discharge, emission, contamination, or other release by any party of any
Hazardous Substances at, onto orfrom any property now or previously owned,
operated, used or leased by the Company or any Subsidiary, or into the
environment surroundingany such property with respect to which the Company or
any Subsidiary has knowledge, except as would not, individually or in the
aggregate,have a Material Adverse Effect or as disclosed in the Prospectus,
Prospectus Supplement or the SEC Reports. There is no pending or, tothe best
of the Company's knowledge, threatened or likely administrative, regulatory or
judicial action, claim or notice of noncomplianceor violation, investigation
or proceedings relating to any Environmental Law against the Company or any
Subsidiary, except as would not,individually or in the aggregate, have a
Material Adverse Effect or as disclosed in the Prospectus Supplement or the
SEC Reports. Noproperty of the Company or any Subsidiary is subject to any
Lien under any Environmental Law. Except as disclosed in the SEC Reports,the
Prospectus and the Prospectus Supplement, neither the Company nor any
Subsidiary is subject to any order, decree, agreement or otherindividualized
legal requirement related to any Environmental Law, which, in any case
(individually or in the aggregate), would havea Material Adverse Effect. The
Company and each Subsidiary are in compliance with all applicable federal,
state, local and EnvironmentalLaws and each has all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliancewith their requirements, except for failures to comply or failures
to obtain permits which, individually or in the aggregate, would nothave a
Material Adverse Effect.
(p)
Titleto Assets
. The Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them and goodand marketable title in all
personal property owned by them that is material to the business of the
Company and the Subsidiaries, ineach case free and clear of all Liens, except
for (i) Liens that do not materially affect the value of such property and do
not materiallyinterfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries, (ii) Liens for the paymentof
federal, state or other taxes, for which appropriate reserves have been made
therefor in accordance with GAAP and, the payment ofwhich is neither
delinquent nor subject to penalties and (iii) Liens disclosed in the SEC
Reports. Any real property and facilities heldunder lease by the Company and
the Subsidiaries are held by them under valid, subsisting, and enforceable
leases with which the Companyand the Subsidiaries are in compliance in all
material respects.
12
(q)
RegulatoryPermits
. The Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal,state, local or foreign
regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, exceptwhere the failure to possess such permits
would not reasonably be expected to result in a Material Adverse Effect ("
MaterialPermits
"), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation ormodification of any Material Permit,
except it is understood that the permits held by the Company to conduct its
environmental businessare subject to renewal from time to time.
(r)
IntellectualProperty
. The Company and the Subsidiaries have, or have rights to use, all patents,
patent applications, trademarks, trademark applications,service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rightsnecessary or required for use in connection
with their respective businesses as described in the SEC Reports and which the
failure toso would have a Material Adverse Effect (collectively, the "
Intellectual Property Rights
"). None of, and neither theCompany nor any Subsidiary has received a notice
(written) that any of, the material Intellectual Property Rights has expired,
terminatedor been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement and
theexpiration of which would have Material Adverse Effect, except as disclosed
in the SEC Reports. Neither the Company nor any Subsidiaryhas received a
written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe uponthe rights of any Person, and neither
is aware of any facts which would form a reasonable basis for any such claim,
except as could nothave or reasonably be expected to have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual Property
Rightsare enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights. The Company and itsSubsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality,
and value of all of their intellectualproperties and to protect and maintain
their Intellectual Property Rights, except where failure to do so could not,
individually or inthe aggregate, reasonably be expected to have a Material
Adverse Effect. Except for violations that would not, individually or in
theaggregate, have or reasonably be expected to result in a Material Adverse
Effect, none of the Intellectual Property Rights used by theCompany or any of
its Subsidiaries in their respective businesses has been obtained or is being
used by the Company or such Subsidiaryin violation of any contractual
obligation binding on the Company or any of its subsidiaries in violation of
the rights of any person.The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of, or payment of,
andadditional amounts with respect to, nor require the consent of, any other
person regarding the Company's or any of its subsidiaries'right to own or use
any of the Intellectual Property Rights as owned or used in the conduct of
such party's business as currentlyconducted, the effect of which would have a
Material Adverse Effect. To the knowledge of the Company and its Subsidiaries,
no employeeof any of the Company or any of the Subsidiaries is the subject of
any pending claim or proceeding involving a violation of any termof any
employment contract, invention disclosure agreement, patent disclosure
agreement, noncompetition agreement, non-solicitation agreement,nondisclosure
agreement or restrictive covenant to or with a former employer, where the
basis of such violation relates to such employee'semployment with the Company
or the Subsidiaries or actions undertaken by the employee while employed with
the Company and its Subsidiaries,the effect of which would have a Material
Adverse Effect.
(s)
Insurance
.The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and insuch amounts as
are prudent and customary in the businesses in which the Company and the
Subsidiaries are engaged, including directors'and officers' liability
insurance coverage. Neither the Company nor any Subsidiary has any reason to
believe that it will not beable to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers asmay be necessary to continue its business without a significant
increase in cost.
13
(t)
Sarbanes-Oxley;Internal Accounting Controls
. The Company and the Subsidiaries and their respective officers and directors
are in compliance, inall material respects, with the applicable provisions of
the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable
rulesand regulations promulgated by the Commission thereunder that are
effective as of the date hereof and as of the Closing Date. The Companyand the
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactionsare executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary topermit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permittedonly in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is comparedwith
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. The Company and theSubsidiaries have
established disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15I and 15d-15(e)) for the Companyand the Subsidiaries and designed
such disclosure controls and procedures to ensure that information required to
be disclosed by theCompany in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periodsspecified in the Commission's rules and forms. The Company's certifying
officers have evaluated the effectiveness of thedisclosure controls and
procedures of the Company and the Subsidiaries as of applicable dates
specified under the Exchange Act (suchdate, the "
Evaluation Date
"). The Company presented in its most recently filed annual report on Form
10-K and mostrecently filed quarterly report on Form 10-Q the conclusions of
the certifying officers about the effectiveness of the disclosure controlsand
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internalcontrol over
financial reporting (as such term is defined in the Exchange Act) of the
Company and the Subsidiaries that have materiallyaffected, or is reasonably
likely to materially affect, the internal control over financial reporting of
the Company and the Subsidiaries.
(u)
CertainFees
. Except for fees payable to the Placement Agents or as set forth in the
Prospectus Supplement, no brokerage or finder'sfees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor
or consultant, finder, placementagent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents.
The Purchasersshall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees of a
typecontemplated in this
Section 3.1(u)
that may be due in connection with the transactions contemplated by the
Transaction Documents.
(v)
InvestmentCompany
. The Company is not, and is not an Affiliate of, and immediately after
receipt of payment for the Securities, will not be,required to register as an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. TheCompany shall conduct its business in a manner so that it will
not become an "investment company" subject to registrationunder the Investment
Company Act of 1940, as amended.
(w)
RegistrationRights
. No Person has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act ofthe public sale or resale
of any securities of the Company or any Subsidiary.
(x)
Listingand Maintenance Requirements
. The Company is subject to the reporting requirements of Section 13 of the
Exchange Act and files periodicreports with the SEC; the Common Stock is
registered with the SEC under Section 12(b) of the Exchange Act. The Company
has taken no actiondesigned to or which is likely to have the effect of
terminating the registration of its Common Stock under the Exchange Act nor
hasit received any notice from the Commission that the Commission is
contemplating terminating such registration. The Company has not, inthe twelve
(12) months preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listedor quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements
of such Trading Market. TheCompany is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such
listingand maintenance requirements. The Common Stock is currently eligible
for electronic transfer through the Depository Trust Company oranother
established clearing corporation and the Company is current in payment of the
fees to the Depository Trust Company (or such otherestablished clearing
corporation) in connection with such electronic transfer.
14
(y)
NoIntegrated Offering
. Assuming the accuracy of the Purchasers' representations and warranties set
forth in
Section 3.2
,neither the Company, nor any of its Affiliates, nor any Person acting on its
or their behalf has, directly or indirectly, made any offersor sales of any
security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securitiesto be integrated with prior
offerings by the Company for purposes of any applicable shareholder approval
provisions of any Trading Marketon which any of the securities of the Company
are listed or designated.
(z)
Solvency
.Based on the consolidated financial condition of the Company as of the
Closing Date, after giving effect to the receipt by the Companyof the proceeds
from the sale of the Securities hereunder (i) the fair saleable value of the
Company's assets exceeds the amountthat will be required to be paid on or in
respect of the Company's existing debts and other liabilities (including known
contingentliabilities) as they mature, (ii) the Company's assets do not
constitute unreasonably small capital to carry on its business asnow conducted
and as proposed to be conducted including its capital needs taking into
account the particular capital requirements ofthe business conducted by the
Company, consolidated and projected capital requirements and capital
availability thereof, and (iii) thecurrent cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, aftertaking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its liabilities whensuch
amounts are required to be paid. The Company has no knowledge of any facts or
circumstances which lead it to believe that it willfile for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the ClosingDate.
Schedule 3.1(z)
sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or anySubsidiary, or for which the Company or any
Subsidiary has commitments. For the purposes of this Agreement, "
Indebtedness
"means (x) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in theordinary course of
business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others,whether or not the same are or should be
reflected in the Company's consolidated balance sheet (or the notes thereto),
except guarantiesby endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and
(z)the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. Neitherthe Company
nor any Subsidiary is in default with respect to any Indebtedness.
(aa)
TaxStatus
. Except for matters that would not, individually or in the aggregate, have or
reasonably be expected to result in a MaterialAdverse Effect, the Company and
its Subsidiaries each (i) has made or filed all United States federal, state
and local income and allforeign tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all taxes and
othergovernmental assessments and charges that are material in amount, shown
or determined to be due on such returns, reports and declarationsand (iii) has
set aside on its books provision reasonably adequate for the payment of all
material taxes for periods subsequent to theperiods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by thetaxing authority of any jurisdiction, and the
officers of the Company or of any Subsidiary know of no basis for any such
claim.
15
(bb)
ForeignCorrupt Practices; Criminal Acts
. Neither the Company nor any Subsidiary, nor to the knowledge of the Company,
any agent or otherperson acting on behalf of the Company or any Subsidiary,
has in the past five (5) years (i) directly or indirectly, used any funds
forunlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign political activity, (ii) made any unlawfulpayment to
foreign government officials or employees or to any foreign or domestic
political parties or campaigns from corporate funds,(iii) failed to disclose
fully any contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf ofwhich the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision of
FCPA.
(cc)
Accountants
.To the knowledge and belief of the Company, the Company's independent
registered public accounting firm (i) is a registered publicaccounting firm as
required by the Exchange Act and (ii) will express its opinion with respect to
the financial statements to be includedin the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2023.
(dd)
AcknowledgmentRegarding Purchasers' Purchase of Securities
. The Company believes that each of the Purchasers is acting solely in the
capacityof an arm's length purchaser with respect to the Transaction Documents
and the transactions contemplated thereby. The Company furtheracknowledges
that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respectto the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respectiverepresentatives or agents in connection with the
Transaction Documents and the transactions contemplated thereby is merely
incidentalto the Purchasers' purchase of the Securities. The Company further
represents to each Purchaser that the Company's decisionto enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactionscontemplated hereby by the Company
and its representatives.
(ee)
AcknowledgmentRegarding Purchaser's Trading Activity
. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(exceptfor
Sections 3.2(f)
and
4.12
), it is understood and acknowledged by the Company that (i) none of the
Purchasers has beenasked by the Company to agree, nor has any Purchaser
agreed, to desist from purchasing or selling, long and/or short, securities of
theCompany, or "derivative" securities based on securities issued by the
Company or to hold the Securities for any specifiedterm; (ii) past or future
open market or other transactions by any Purchaser, specifically including,
without limitation, Short Salesor "derivative" transactions, before or after
the closing of this or future private placement transactions, may
negativelyimpact the market price of the Company's publicly-traded securities;
(iii) any Purchaser, and counter-parties in "derivative"transactions to which
any such Purchaser is a party, directly or indirectly, may presently have a
"short" position in theCommon Stock, and (iv) each Purchaser shall not be
deemed to have any affiliation with or control over any arm's length
counter-partyin any "derivative" transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engagein hedging
activities at various times during the period that the Securities are
outstanding, and (z) such hedging activities (if any)could reduce the value of
the existing stockholders' equity interests in the Company at and after the
time that the hedging activitiesare being conducted. The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any
of the TransactionDocuments.
(ff)
RegulationM Compliance
. The Company has not, and to its knowledge no one acting on its behalf has,
(i) taken, directly or indirectly, any actiondesigned to cause or to result in
the stabilization or manipulation of the price of any security of the Company
to facilitate the saleor resale of any of the Securities, (ii) sold, bid for,
purchased, or, paid any compensation for soliciting purchases of, any of
theSecurities, or (iii) paid or agreed to pay to any Person any compensation
for soliciting another to purchase any other securities ofthe Company, other
than, in the case of clauses (ii) and (iii), compensation paid to the
Placement Agents in connection with the placementof the Securities.
16
(gg)
Officeof Foreign Assets Control
. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any
director, officer, agent,employee or affiliate of the Company or any
Subsidiary is currently subject to any "
Sanctions
," which shall includebut are not limited to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department ("
OFAC
")and the Company will not, directly or indirectly, use the proceeds of this
Offering, or lend, contribute or otherwise make availablesuch proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose
of financing the activities of anyperson known by the Company to currently be
subject to any Sanctions, including U.S. sanctions administered by OFAC.
(hh)
StockOption Plans
. Each stock option granted by the Company under the Company's stock option
plan or omnibus long-term incentiveplan was granted (i) in accordance with the
terms of such plan and (ii) with an exercise price at least equal to the fair
market valueof the Common Stock on the date such stock option would be
considered granted under GAAP and applicable law. No stock option grantedunder
the Company's stock option plan or omnibus long-term incentive plan has been
backdated. The Company has not knowingly granted,and there is no and has been
no Company policy or practice to knowingly grant, stock options prior to, or
otherwise knowingly coordinatethe grant of stock options with, the release or
other public announcement of material information regarding the Company or the
Subsidiariesor their financial results or prospects.
(ii)
MoneyLaundering
. The operations of the Company and its Subsidiaries are and have been at all
times conducted in compliance with applicablefinancial record-keeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act
of 1970, as amended, applicablemoney laundering statutes and applicable rules
and regulations thereunder (collectively, the "
Money Laundering Laws
");and no action, suit or Proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Companyor any
Subsidiary with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company or any Subsidiary, threatened.
(jj)
InformationTechnology; Cybersecurity
. The Company's and the Subsidiaries' information technology assets and
equipment, computers,systems, networks, hardware, software, websites,
applications, and databases (collectively, "
IT Systems
") operateand perform in all material respects as required in connection with
the operation of the business of the Company and the Subsidiariesas currently
conducted. The Company and the Subsidiaries maintain commercially reasonable
controls, policies, procedures, and safeguardsto maintain and protect their
material confidential information and the integrity, continuous operation,
redundancy and security of allIT Systems and all personal, personally
identifiable, sensitive, confidential or regulated data ("
Personal Data
")processed and stored thereon, and to the knowledge of the Company, (i) there
have been no breaches, incidents, violations, outages, compromisesor
unauthorized uses of or accesses to any IT Systems or Personal Data, (ii) and
the Company and the Subsidiaries have not been notifiedof, and has no
knowledge of any event or condition that would reasonably be expected to
result in, any security breach or other compromiseto its IT Systems and
Personal Data. The Company and the Subsidiaries are presently in compliance in
all material respects with all applicablelaws or statutes and all applicable
judgments, orders, rules and regulations of any court or arbitrator or
governmental or regulatoryauthority, internal policies and contractual
obligations relating to the privacy and security of IT Systems and Personal
Data and tothe protection of such IT Systems and Personal Data from
unauthorized use, access, misappropriation or modification, except for any
suchnoncompliance that would not have a Material Adverse Effect. The Company
and the Subsidiaries have implemented backup and disaster recoverytechnology
consistent with industry standards and practices.
(kk)
U.S.Real Property Holding Corporation
. The Company is not and has never been a U.S. real property holding
corporation within the meaningof Section 897 of the Internal Revenue Code of
1986, as amended, and the Company shall so certify upon Purchaser's request.
17
(ll)
OtherCovered Persons
. Other than the Placement Agents, the Company is not aware of any person that
has been or will be paid (directlyor indirectly) remuneration for solicitation
of purchasers in connection with the sale of any Securities.
(mm)
Regulatory
.Except as described in the Registration Statement, the Prospectus, or the SEC
Reports, as applicable, the Company and its Subsidiaries(i) have not received
any notice from any court or arbitrator or governmental or regulatory
authority or third party alleging or assertingnoncompliance with any laws or
any licenses, exemptions, certificates, approvals, clearances, authorizations,
permits, registrationsand supplements or amendments thereto required to
conduct the Company's business as presently conducted ("
Authorizations
");(ii) possess all material Authorizations and such Authorizations are valid
and in full force and effect and are not in violation of anyterm of any such
Authorizations; (iii) have not received any written notice that any court or
arbitrator or governmental or regulatoryauthority has taken, is taking or
intends to take, action to limit, suspend, materially modify or revoke any
Authorizations nor is anysuch limitation, suspension, modification or
revocation threatened; (iv) have filed, obtained, maintained or submitted all
material reports,documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Authorizationsand
that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were completeand accurate on
the date filed (or were corrected or supplemented by a subsequent submission);
and (v) are not a party to any corporateintegrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar agreements with or
imposed by any governmentalor regulatory authority, except as would not be
reasonably expected to result in a Material Adverse Effect.
(nn)
MaterialAgreements
. The agreements and documents described in the Registration Statement or
Prospectus conform in all material respects tothe descriptions thereof
contained or incorporated by reference therein and conformed in all material
respects to the requirements ofthe Securities Act or the Exchange Act, as
applicable at the time filed, and were filed on a timely basis with the
Commission; thereare no agreements or other documents required by the
Securities Act and the rules and regulations thereunder to be described in the
Prospectusor to be filed with the Commission as exhibits to the Registration
Statement or to be incorporated by reference in the Registration Statementor
Prospectus, that have not been so described or filed or incorporated by
reference.
3.2.
Representationsand Warranties of the Purchasers
. Each Purchaser, for itself and for no other Purchaser, hereby represents and
warrants as ofthe date hereof and as of the Closing Date to the Company as
follows (unless as of a specific date therein, in which case they shallbe
accurate as of such date):
(a)
Organization;Authority
. Such Purchaser is either an individual or an entity duly incorporated or
formed, validly existing and in good standingunder the laws of the
jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability companyor similar power and authority to enter
into and to consummate the transactions contemplated by the Transaction
Documents and otherwiseto carry out its obligations hereunder and thereunder.
The execution and delivery of the Transaction Documents and performance by
suchPurchaser of the transactions contemplated by the Transaction Documents
have been duly authorized by all necessary corporate, partnership,limited
liability company or similar action, as applicable, on the part of such
Purchaser. Each Transaction Document to which it is aparty has been duly
executed by such Purchaser, and when delivered by such Purchaser in accordance
with the terms hereof or thereof,will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except:(i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of
generalapplication affecting enforcement of creditors' rights generally; (ii)
as limited by laws relating to the availability of specificperformance,
injunctive relief or other equitable remedies; and (iii) insofar as
indemnification and contribution provisions may be limitedby applicable law.
18
(b)
Understandingsor Arrangements
. Such Purchaser is acquiring the Securities as principal for its own account
and has no direct or indirect arrangementor understandings with any other
persons to distribute or regarding the distribution of such Securities (this
representation and warrantynot limiting such Purchaser's right to sell the
Securities pursuant to the Registration Statement or otherwise in compliance
withapplicable federal and state securities laws). Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.Such Purchaser
is acquiring such Securities as principal for his, her or its own account and
not with a view to or for distributing orreselling such Securities or any part
thereof in violation of the Securities Act or any applicable state securities
law, has no presentintention of distributing any of such Securities in
violation of the Securities Act or any applicable state securities law and has
nodirect or indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securitiesin violation of the
Securities Act or any applicable state securities law (this representation and
warranty not limiting such Purchaser'sright to sell such Securities pursuant
to a registration statement or otherwise in compliance with applicable federal
and state securitieslaws).
(c)
PurchaserStatus
. At the time such Purchaser was offered the Securities, it was, and as of the
date hereof it is, either: (i) an "accreditedinvestor" as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
"qualified institutionalbuyer" as defined in Rule 144A(a) under the Securities
Act.
(d)
Experienceof Such Purchaser
. Such Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experiencein business and financial matters so
as to be capable of evaluating the merits and risks of the prospective
investment in the Securities,and has so evaluated the merits and risks of such
investment. Such Purchaser is able to bear the economic risk of an investment
in theSecurities and, at the present time, is able to afford a complete loss
of such investment.
(e)
Accessto Information
. Such Purchaser acknowledges that it has had the opportunity to review the
Transaction Documents (including all exhibitsand schedules thereto) and the
reports filed with the Commission and has been afforded: (i) the opportunity
to ask such questions asit has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of
the offeringof the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its financialcondit
ion, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment;and (iii) the opportunity
to obtain such additional information that the Company possesses or can
acquire without unreasonable effortor expense that is necessary to make an
informed investment decision with respect to the investment. Such Purchaser
acknowledges andagrees that neither Placement Agent, nor any of their
respective Affiliates, has provided such Purchaser with any information or
advicewith respect to the Securities nor is such information or advice
necessary or desired. Neither Placement Agent nor any of their respectiveAffilia
tes has made or makes any representation as to the Company or the quality of
the Securities and the Placement Agents and theirrespective Affiliates may
have acquired non-public information with respect to the Company which such
Purchaser agrees need not be providedto it. In connection with the issuance of
the Securities to such Purchaser, neither Placement Agent nor any of their
respective Affiliateshas acted as a financial advisor or fiduciary to such
Purchaser.
19
(f)
CertainTransactions and Confidentiality
. Other than consummating the transactions contemplated hereunder, such
Purchaser has not, nor hasany Person acting on behalf of or pursuant to any
understanding with such Purchaser, directly or indirectly executed any
purchases orsales, including Short Sales, of the securities of the Company
during the period commencing as of the time that such Purchaser firstreceived
a term sheet (written or oral) from the Placement Agents, the Company or any
other Person representing the Company setting forththe material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof. Notwithstanding theforegoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers
manage separateportions of such Purchaser's assets and the portfolio managers
have no direct knowledge of the investment decisions made by theportfolio
managers managing other portions of such Purchaser's assets, the representation
set forth above shall only apply withrespect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the
Securities coveredby this Agreement. Other than to other Persons party to this
Agreement or to such Purchaser's representatives, including, withoutlimitation,
its officers, directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintainedthe confidentiality of all
disclosures made to it in connection with this transaction (including the
existence and terms of this transaction).Notwithstanding the foregoing, for
the avoidance of doubt, nothing contained herein shall constitute a
representation or warranty against,or preclude any actions with respect to the
borrowing of, arrangement to borrow, identification of the availability of,
and/or securingof, securities of the Company in order for such Purchaser (or
its broker or other financial representative) to effect Short Sales orsimilar
transactions in the future.
(g)
GeneralSolicitation
. Such Purchaser is not purchasing the Securities as a result of any
advertisement, article, notice or other communicationregarding the Securities
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented atany seminar or, to the knowledge of such
Purchaser, any other general solicitation or general advertisement.
TheCompany acknowledges and agrees that the representations contained in this
Section 3.2
shall not modify, amend or affect suchPurchaser's right to rely on the
Company's representations and warranties contained in this Agreement or any
representationsand warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connectionwith
this Agreement or the consummation of the transactions contemplated hereby.
Notwithstanding the foregoing, for the avoidance ofdoubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions,
with respect to locating or borrowingshares in order to effect Short Sales or
similar transactions in the future.
ARTICLEIV
OTHERAGREEMENTS OF THE PARTIES
4.1.
Legends
.The Shares shall be issued free of restrictive legends.
4.2.
Acknowledgmentof Dilution
. The Company acknowledges that the issuance of the Securities may result in
dilution of the outstanding shares ofCommon Stock, which dilution may be
substantial under certain market conditions. The Company further acknowledges
that its obligationsunder the Transaction Documents are unconditional and
absolute and not subject to any right of set off, counterclaim, delay or
reduction,regardless of the effect of any such dilution or any claim the
Company may have against any Purchaser and regardless of the dilutiveeffect
that such issuance may have on the ownership of the other stockholders of the
Company.
4.3.
Integration
.The Company shall not sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined inSection 2 of the
Securities Act) that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulationsof any Trading Market such
that it would require stockholder approval prior to the closing of such other
transaction unless stockholderapproval is obtained before the closing of such
subsequent transaction.
20
4.4.
SecuritiesLaws Disclosure; Publicity
. On or before 9:00 a.m. on the date following the date hereof, the Company
shall issue a press releaseand/or file with the Commission a Current Report on
Form 8-K, including the required Transaction Documents as exhibits thereto,
disclosingall material terms of the transactions contemplated hereunder. From
and after the date of such release or filing, the Company representsto the
Purchasers that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by theCompany or any of its
Subsidiaries, or any of their respective officers, directors, employees,
Affiliates or agents, including, the PlacementAgents in connection with the
transactions contemplated by the Transaction Documents. In addition, effective
upon the date of such releaseor filing, the Company acknowledges and agrees
that any and all confidentiality or similar obligations under any agreement,
whether writtenor oral, between the Company, any of its Subsidiaries or any of
their respective officers, directors, employees, Affiliates or agents,including
the Placement Agents, on the one hand, and any of the Purchasers or any of
their Affiliates on the other hand, shall terminateand be of no further force
and effect. The Company shall not publicly disclose the name of any Purchaser,
or include the name of anyPurchaser, in any filing with the Commission or any
regulatory agency or Trading Market or in any press release, without the prior
writtenconsent of such Purchaser, except (a) as required by federal securities
law in connection with the filing of final Transaction Documentswith the
Commission, (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shallprovide the Purchasers with
prior notice of such disclosure permitted under this
clause (b)
and reasonably cooperate with cushPurchaser regarding such disclosure, (c) to
the Company's counsel and (d) to the Company's Transfer Agent as may be
requiredto issue the shares purchased hereunder by each Purchaser.
4.5.
Non-PublicInformation
. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents,which shall be disclosed pursuant to
Section 4.4
, the Company covenants and agrees that neither it, nor any of its officers,
directors,employees or Affiliates, will provide any Purchaser or any
Purchaser's agents or counsel with any information that constitutes,or the
Company reasonably believes constitutes, material non-public information,
unless prior thereto such Purchaser shall have consentedto the receipt of such
information and agreed in writing with the Company to keep such information
confidential. The Company understandsand confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in securities of
the Company. Tothe extent that the Company, any of its Subsidiaries, or any of
their respective officers, directors, agents, employees or Affiliates,delivers
any material, non-public information to a Purchaser in connection with the
transactions contemplated by the Transaction Documentswithout such Purchaser's
consent, the Company hereby covenants and agrees that such Purchaser shall not
have any duty of confidentialityto the Company, any of the Subsidiaries, or
any of their respective officers, directors, employees or Affiliates, or a
duty to the Company,any of the Subsidiaries or any of their respective
officers, directors, agents employees or Affiliates, , not to trade on the
basis of,such material, non-public information, provided that the Purchaser
shall remain subject to applicable law. To the extent that any noticeprovided
pursuant to any Transaction Document constitutes, or contains, material,
non-public information regarding the Company or anySubsidiaries, the Company
shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K. The Companyunderstands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of theCompany.
4.6.
Useof Proceeds
. The Company shall use the net proceeds from the sale of the Securities for
capital expenditures, as growth capitaland for general working capital
purposes.
21
4.7.
Indemnificationof Purchasers
. Subject to the provisions of this
Section 4.7
, the Company will indemnify and hold each Purchaserand its directors,
stockholders, members, partners, officers, employees, affiliates, and agents
(and any other Persons with a functionallyequivalent role of a Person
holding such titles notwithstanding a lack of such title or any other
title), each Person who controlssuch Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors,officers, stockholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a
Personholding such titles notwithstanding a lack of such title or any
other title) of such controlling persons (each, a "
PurchaserParty
") harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses,including all judgments,
amounts paid in settlements, court costs and reasonable attorneys' fees
and costs of investigationthat any such Purchaser Party may suffer or incur
caused by or based upon (a) any breach of any of the representations,
warrantiescovenants or agreements made by the Company in this Agreement
or in the other Transaction Documents or (b) any action institutedagainst
the Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Companywho is not an Affiliate of
such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents(unless such action is solely
based upon a material breach of such Purchaser Party's representations,
warranties or covenantsunder the Transaction Documents or any agreements
or understandings such Purchaser Party may have with any such
stockholderor any violations by such Purchaser Party of state or federal
securities laws or any conduct by such Purchaser Party which is
finallyjudicially determined to constitute fraud, gross negligence or
willful misconduct). The Company will indemnify each PurchaserParty, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs(including, without
limitation, reasonable attorneys' fees) and expenses, as incurred, caused
by or based upon (i) any untrueor alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereto, any
Issuer FreeWriting Prospectus, the Prospectus, the Prospectus Supplement
or any amendment or supplement thereto, or caused by or based uponany
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (inthe case of any prospectus
or supplement thereto, in the light of the circumstances under which they
were made) not misleading,except to the extent, but only to the extent,
that such untrue statements or omissions are based solely upon information
regardingsuch Purchaser Party furnished in writing to the Company by such
Purchaser Party expressly for use therein, or (ii) any violationor
alleged violation by the Company of the Securities Act, the Exchange Act
or any state securities law, or any rule or regulationthereunder in
connection therewith. If any action shall be brought against any
Purchaser Party in respect of which indemnitymay be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall assumethe defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have theright to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such
counselshall be at the expense of such Purchaser Party except to the extent
that (x) the employment thereof has been specifically authorizedby the Company
in writing, (y) the Company has failed after a reasonable period of time to
assume such defense and to employ counselor (z) in such action there is, in
the reasonable opinion of counsel, a material conflict on any material issue
between the positionof the Company and the position of such Purchaser Party,
in which case the Company shall be responsible for the reasonable fees and
expensesof no more than one such separate counsel. The Company will not be
liable to any Purchaser Party under this Agreement (1) for any settlementby a
Purchaser Party effected without the Company's prior written consent, which
shall not be unreasonably withheld or delayed;or (2) to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party's
breach of any of the representations,warranties, covenants or agreements made
by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnificationrequired by this
Section 4.7
shall be made by periodic payments of the amount thereof during the course of
the investigation ordefense, as and when bills are received or are incurred.
The indemnity agreements contained herein shall be in addition to any causeof
action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuantto law.
22
4.8.
Listingof Common Stock
. The Company hereby agrees to use best efforts to maintain the listing or
quotation of the Common Stock on theNasdaq Capital Market, and prior to the
Closing, the Company shall apply to list or quote all of the Shares on the
Nasdaq Capital Marketand promptly secure the listing of all of the Shares on
the Nasdaq Capital Market. The Company further agrees, if the Company
appliesto have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Shares and will takesuch other
action as is necessary to cause all of the Shares and to be listed or quoted
on such other Trading Market as promptly as possible.The Company will then
take all action reasonably necessary to continue the listing and trading of
its Common Stock on a Trading Marketand will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the TradingMarket. The Company agrees to use commercially reasonable efforts
to maintain the eligibility of the Common Stock for electronic transferthrough
the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment offees to the Depository
Trust Company or such other established clearing corporation in connection
with such electronic transfer.
4.9.
Lock-Up
.The Company shall not amend, modify, waive or terminate any provision of any
of the Lock-Up Agreements without obtaining the prior consentof the Placement
Agents, except to extend the term of the lock-up period and shall enforce the
provisions of each Lock-Up Agreement inaccordance with its terms. If any party
to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the
Company shall promptlyuse its commercially reasonable efforts to seek specific
performance of the terms of such Lock-Up Agreement.
4.10.
SubsequentEquity Sales
.
(a) Fromthe date hereof until 90 days following the Closing Date, neither the
Company nor any Subsidiary shall (i) issue, enter into any agreementto issue
or announce the issuance or proposed issuance of any Common Stock or Common
Stock Equivalents or (ii) file any registrationstatement or any amendment or
supplement thereto, including any prospectus supplements, relating to the
offering of any shares of capitalstock of the Company or any securities
convertible into or exercisable or exchangeable for shares of capital stock of
the Company (otherthan a registration statement on Form S-8), in each case
other than as contemplated by this Agreement.
(b) Fromthe date hereof until 180 days after the Closing Date, the Company
shall be prohibited from effecting or entering into an agreement toeffect any
issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents (or a combination of unitsthereof) involving a Variable Rate
Transaction. "
Variable Rate Transaction
" means a transaction in which the Company(i) issues or sells any debt or
equity securities that are convertible into, exchangeable or exercisable for,
or include the right toreceive, additional shares of Common Stock either (A)
at a conversion price, exercise price or exchange rate or other price that is
basedupon, and/or varies with, the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance ofsuch debt or
equity securities or (B) with a conversion, exercise or exchange price that is
subject to being reset at some future dateafter the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent
events directly or indirectlyrelated to the business of the Company or the
market for the Common Stock or (ii) enters into, or effects a transaction
under, any agreement,including, but not limited to, an equity line of credit
or an "at-the-market offering", whereby the Company may issue securitiesat a
future determined price regardless of whether shares pursuant to such
agreement have actually been issued and regardless of whethersuch agreement is
subsequently canceled. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to precludeany such issuance, which remedy shall be
in addition to any right to collect damages.
(c) Notwithstandingthe foregoing,
Section 4.10(a)
and
(b)
shall not apply in respect of:
(i) anExempt Issuance (except that no Variable Rate Transaction shall be an
Exempt Issuance); or
23
(ii) anyoffering of Common Stock and/or Common Stock Equivalents in which any
Placement Agent is acting as lead or joint placement agent or underwriter.
4.11.
EqualTreatment of Purchasers
. No consideration (including any modification of any Transaction Document)
shall be offered or paid toany Person to amend or consent to a waiver or
modification of any provision of the Transaction Documents unless the same
considerationis also offered to all of the parties to such Transaction
Documents. For clarification purposes, (a) this provision constitutes a
separateright granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treatthe
Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to thepurchase, disposition or
voting of Securities or otherwise and (b) participation in future offerings
shall not be considered considerationunder this
Section 4.11
.
4.12.
CertainTransactions and Confidentiality
. Each Purchaser, severally and not jointly with the other Purchasers,
covenants that neitherit nor any Affiliate acting on its behalf or pursuant to
any understanding with it will execute any purchases or sales, including
ShortSales of any of the Company's securities during the period commencing
with the execution of this Agreement and ending at such timethat the
transactions contemplated by this Agreement are first publicly disclosed as
described in
Section 4.4
. Each Purchaser,severally and not jointly with the other Purchasers,
covenants that until such time as the transactions contemplated by this
Agreementare publicly disclosed by the Company as described in
Section 4.4
, such Purchaser will maintain the confidentiality of the existenceand terms
of this transaction and the information included in this Agreement, including
the schedules hereto. Notwithstanding the foregoing,and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchasermakes any representation,
warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Companyafter the time that the transactions
contemplated by this Agreement are first publicly disclosed as described in
Section 4.4
,(ii) no Purchaser shall be restricted or prohibited from effecting any
transactions in any securities of the Company in accordance withapplicable
securities laws from and after the time that the transactions contemplated by
this Agreement are first publicly disclosedas described in
Section 4.4
and (iii) no Purchaser shall have any duty of confidentiality or duty not to
trade in the securitiesof the Company to the Company or the Subsidiaries, or
any of their respective officers, directors, employees, Affiliates or agents,
includingthe Placement Agents, after the transactions contemplated by this
Agreement are first publicly disclosed as described in
Section 4.4
.Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managersmanage
separate portions of such Purchaser's assets and the portfolio managers have
no direct knowledge of the investment decisionsmade by the portfolio managers
managing other portions of such Purchaser's assets, the covenant set forth
above shall only applywith respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities
coveredby this Agreement.
ARTICLEV
MISCELLANEOUS
5.1.
Termination
.This Agreement may be terminated by any Purchaser, as to such Purchaser's
obligations hereunder only and without any effect whatsoeveron the obligations
between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not beenconsummated on or before the fifth (5
th
) Trading Day following the date hereof;
provided
,
however
,that no such termination will affect the right of any party to sue for any
breach by any other party (or parties).
24
5.2.
Feesand Expenses
. Except as expressly set forth in the Transaction Documents to the contrary,
each party shall pay the fees and expensesof its advisers, counsel,
accountants, and other experts, if any, and all other expenses incurred by
such party incident to the negotiation,preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, withoutlimitation, any fees required for same-day processing of
any instruction letter delivered by the Company), stamp taxes and other
taxesand duties levied in connection with the delivery of any Securities to
the Purchasers.
5.3.
EntireAgreement
. The Transaction Documents, together with the exhibits, schedules and
documents incorporated by reference thereto containthe entire understanding of
the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements andunderstandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
such documents, exhibitsand schedules.
5.4.
Notices
.Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shallbe deemed
given and effective on the earliest of: (a) the time of transmission, if such
notice or communication is delivered via emailattachment at the email address
as set forth on the signature pages attached hereto at or prior to 5:30 p.m.
(New York City time) ona Trading Day, (b) the next Trading Day after the time
of transmission, if such notice or communication is delivered via email
attachmentat the email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (NewYork
City time) on any Trading Day, (c) the second (2nd) Trading Day following the
date of mailing, if sent by U.S. nationally recognizedovernight courier
service or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such noticesand communications shall be
as set forth on the signature pages attached hereto. To the extent that any
notice provided pursuant to anyTransaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries,
the Companyshall simultaneously disclose such information in accordance with
applicable law and file such notice with the Commission pursuant toa Current
Report on Form 8-K.
5.5.
Amendments;Waivers
. No provision of this Agreement may be waived, modified, supplemented or
amended except in a written instrument signed,in the case of an amendment, by
the Company and Purchasers who at such time hold at least 50.1% in interest of
the Securities based onthe initial Subscription Amounts hereunder or, in the
case of a waiver, by the party against whom enforcement of any such waived
provisionis sought, provided that if any amendment, modification or waiver
disproportionately and adversely impacts a Purchaser (or group of
Purchasers),the consent of such disproportionately impacted Purchaser (or at
least 50.1% in interest of such group of Purchasers) shall also be required.No
waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuingwaiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shallany delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. Any
amendmenteffected in accordance with this
Section 5.5
shall be binding upon each Purchaser and holder of Securities and the Company.
5.6.
Headings
.The headings herein are for convenience only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect anyof the provisions
hereof.
5.7.
Successorsand Assigns
. This Agreement shall be binding upon and inure to the benefit of the parties
and their successors and permittedassigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser(other than by merger). Any Purchaser may assign any
or all of its rights under this Agreement to any Person to whom such Purchaser
assignsor transfers any Securities, provided that such transferee agrees in
writing to be bound, with respect to the transferred Securities,by the
provisions of the Transaction Documents that apply to the "Purchasers."
25
5.8.
NoThird-Party Beneficiaries
. The Placement Agents shall be the third-party beneficiaries of the
representations and warrantiesof the Company in
Section 3.1
and the representations and warranties of the Purchasers in
Section 3.2
. This Agreement isintended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of,
normay any provision hereof be enforced by, any other Person, except as
otherwise set forth in
Section 4.7
and this
Section 5.8
.
5.9.
GoverningLaw
. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall begoverned by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principlesof conflicts of law thereof. Each party agrees
that all legal Proceedings concerning the interpretations, enforcement and
defense ofthe transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its
respectiveaffiliates, directors, officers, stockholders, partners, members,
employees or agents) shall be commenced exclusively in the state andfederal
courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state andfederal courts sitting in the
City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewithor with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
TransactionDocuments), and hereby irrevocably waives, and agrees not to assert
in any action or Proceeding, any claim that it is not personallysubject to the
jurisdiction of any such court, that such action or Proceeding is improper or
is an inconvenient venue for such Proceeding.Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such action or Proceedingby mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
addressin effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of processand notice
thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any other manner permittedby law. If any party shall
commence an action or Proceeding to enforce any provisions of the Transaction
Documents, then, in additionto the obligations of the Company under
Section 4.7
, the prevailing party in such action or Proceeding shall be reimbursed bythe
non-prevailing party for its reasonable attorneys' fees and other costs and
expenses incurred with the investigation, preparationand prosecution of such
action or Proceeding.
5.10.
Survival
.The representations and warranties contained herein shall survive the Closing
and the delivery of the Securities for a period of two(2) years from the
Closing.
5.11.
Execution
.This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreementand shall become
effective when counterparts have been signed by each party and delivered to
each other party, it being understood thatthe parties need not sign the same
counterpart. In the event that any signature is delivered by e-mail delivery
(including any electronicsignature covered by the U.S. federal ESIGN Act of
2000, Uniform Electronic Transactions Act, the Electronic Signatures and
Records Actor other applicable law, e.g., www.docusign.com) or other
transmission method, such signature shall be deemed to have been duly and
validlydelivered and shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) withthe same force
and effect as if such signature page were an original thereof.
5.12.
Severability
.If any term, provision, covenant or restriction of this Agreement is held by
a court of competent jurisdiction to be invalid, illegal,void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full forceand effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable effortsto find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term,
provision,covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remainingterms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void orunenforceable.
26
5.13.
Rescissionand Withdrawal Right
. Notwithstanding anything to the contrary contained in (and without limiting
any similar provisions of)any of the other Transaction Documents, whenever any
Purchaser exercises a right, election, demand or option under a Transaction
Documentand the Company does not timely perform its related obligations within
the periods therein provided, then such Purchaser may rescindor withdraw, in
its sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election inwhole or in part without prejudice to
its future actions and rights.
5.14.
Replacementof Securities
. If any certificate or instrument evidencing any Securities is mutilated,
lost, stolen or destroyed, the Companyshall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof (in the case of
mutilation), or in lieuof and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Companyof such loss, theft or destruction. The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonablethird-party
costs (including customary indemnity) associated with the issuance of such
replacement Securities.
5.15.
Remedies
.In addition to being entitled to exercise all rights provided herein or
granted by law, including recovery of damages, each of the Purchasersand the
Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages maynot be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents andhereby agree to waive and not to
assert in any action for specific performance of any such obligation the
defense that a remedy at lawwould be adequate.
5.16.
IndependentNature of Purchasers' Obligations and Rights
. The obligations of each Purchaser under any Transaction Document are
severaland not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document.
Nothing contained herein or in any other Transaction Document,and no action
taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association,a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a groupwith respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser shall
be entitled to independentlyprotect and enforce its rights including, without
limitation, the rights arising out of this Agreement or out of the other
TransactionDocuments, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any Proceeding for such purpose.Each
Purchaser has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents or hasfreely elected not to be
represented by counsel after having been advised of the desirability to engage
such counsel. For reasons ofadministrative convenience only, each Purchaser
and its respective counsel have chosen to communicate with the Company through
TroutmanPepper Hamilton Sanders LLP ("
Troutman Pepper
"). Troutman Pepper does not represent any of the Purchasers and onlyrepresents
the Placement Agents. The Company has elected to provide all Purchasers with
the same terms and Transaction Documents forthe convenience of the Company and
not because it was required or requested to do so by any of the Purchasers. It
is expressly understoodand agreed that each provision contained in this
Agreement and in each other Transaction Document is between the Company and a
Purchaser,solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.
5.17.
LiquidatedDamages
. The Company's obligation, if any, to pay any partial liquidated damages or
other amounts owing under the TransactionDocuments is a continuing obligation
of the Company and shall not terminate until all unpaid partial liquidated
damages and other amountshave been paid notwithstanding the fact that the
instrument or security pursuant to which such partial liquidated damages or
other amountsare due and payable shall have been canceled.
5.18.
Saturdays,Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration
of any right required orgranted herein shall not be a Business Day, then such
action may be taken or such right may be exercised on the next succeeding
BusinessDay.
5.19.
Currency
.Unless otherwise stated, all dollar amounts and references to "$"
in this Agreement refer to the lawful currencyof the United States.
5.20.
Construction
.The parties agree that each of them and/or their respective counsel have
reviewed and had an opportunity to revise the Transaction Documentsand,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shallnot be employed in the
interpretation of the Transaction Documents or any amendments thereto. In
addition, each and every reference toshare prices and Common Stock in any
Transaction Document shall be subject to adjustment for reverse and forward
stock splits, stockdividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.
5.21.
WAIVEROF JURY TRIAL
. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY
AGAINST ANY OTHER PARTY, THE PARTIESEACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLYAND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[
SignaturePages Follow
]
27
INWITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorizedsignatories as of
the date first indicated above.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Address for Notice:
By:
Name:
Title:
[REMAINDEROF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOR PURCHASER
FOLLOWS]
[PURCHASERSIGNATURE PAGES TO PESI SECURITIES PURCHASE AGREEMENT]
INWITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatoriesas of
the date first indicated above.
Name of Purchaser:
Signature of Authorized Signatory of
Purchaser
:
Title of Authorized Signatory
(if not a natural person)
Address for Notice to Purchaser:
EIN Number or Social Security Number of Purchaser:
DTC Participant Number (if applicable)
or other instructions for delivery of
Shares:
Maximum Subscription Amount ($): $
ExhibitA
Formof Lock-Up Agreement
[Attached]
Exhibit10.2
May21, 2024
Perma-FixEnvironmental Services, Inc.
8302Dunwoody Place, Suite 250
Atlanta,GA 30350
Attention:Mark Duff, President and Chief Executive Officer
Re: Registered Direct Offering of Common Stock
DearMr. Duff:
Thisletter (the "
Agreement
") constitutes the agreement between Craig-Hallum Capital Group LLC ("
Craig-Hallum
")and Wellington Shields & Co. LLC ("
Wellington
" and together with Craig-Hallum, the "
Placement Agents
")and Perma-Fix Environmental Services, Inc., a Delaware corporation (the "
Company
"), that the Placement Agents shallserve as the exclusive placement agents for
the Company, on a "best efforts" basis, in connection with the proposed
registereddirect offering (the "
Offering
") of shares (the "
Shares
") of the Company's common stock,par value $0.001 per share (the "
Common Stock
"). The Shares actually placed by the Placement Agents in connectionwith the
Offering are referred to herein as the "
Placement Agent Shares
." The terms of the Offering shall be mutuallyagreed upon by the Company and
the purchasers (each, a "
Purchaser
" and collectively, the "
Purchasers
"),and nothing herein grants the Placement Agents the power or authority to
bind the Company or any Purchaser, or constitutes an obligationthat the
Company will issue any Shares or complete the Offering. The Company expressly
acknowledges and agrees that the Placement Agents'obligations hereunder are on
a best efforts basis only and that the execution of this Agreement does not
constitute a commitment by thePlacement Agents to purchase the Shares and does
not ensure the successful placement of the Shares or any portion thereof or
the successof the Placement Agents with respect to securing any other
financing on behalf of the Company. Certain affiliates of the Placement
Agentsmay participate in the Offering by purchasing some of the Placement
Agent Shares. The sale of Placement Agent Shares to any Purchaserwill be
evidenced by a securities purchase agreement (the "
Purchase Agreement
") between the Company and such Purchaser,in a form reasonably acceptable to
the Company and such Purchaser. Capitalized terms that are not otherwise
defined herein have the meaningsgiven to such terms in the Purchase Agreement.
Prior to the signing of any Purchase Agreement, officers of the Company will
be availableto answer inquiries from prospective Purchasers. The Company
retains the right, in its sole discretion, to approve or reject any
potentialinvestor in the Offering and to approve or disapprove, in its sole
discretion, the final terms and conditions of the Offering.
SECTION1
.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
.
A.
Representationsof the Company in the Purchase Agreement
. With respect to the Placement Agent Shares, each of the representations and
warranties(together with any related disclosure schedules thereto) and
covenants made by the Company to the Purchasers in the Purchase Agreementin
connection with the Offering is hereby incorporated herein by reference into
this Agreement (as though fully restated herein) andis, as of the date of this
Agreement and as of the Closing Date, hereby made to, and in favor of, the
Placement Agents.
B.
FINRAAffiliation
. In addition to the foregoing, the Company represents and warrants that there
are no affiliations with any FINRA memberfirm among the Company's officers or
directors, except as set forth in the Purchase Agreement.
C.
PlacementAgent Warrants
. The Placement Agent Warrants (as defined below), when issued hereunder, will
be valid and binding obligations ofthe Company, enforceable against the
Company in accordance with their terms, except: (i) as limited by general
equitable principles andapplicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors'rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitableremedi
es and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law. The shares of Common Stockunderlying the Placement
Agent Warrants are duly authorized and, when issued and paid for in accordance
with the terms of the PlacementAgent Warrants, will be validly issued, fully
paid and non-assessable. The Company has reserved from its duly authorized
capital stockthe maximum number of shares of Common Stock issuable upon
exercise of the Placement Agent Warrants. As of the Closing, the Company
shallhave reserved from its duly authorized capital stock not less than 100%
of the maximum number of shares of Common Stock issuable uponexercise of the
Placement Agent Warrants (without taking into account any limitations on the
exercise of the Placement Agent Warrantsset forth therein).
SECTION2
.
REPRESENTATIONS OF THE PLACEMENT AGENTS
. Each Placement Agent represents and warrants that it (i) is a member in good
standingof FINRA, (ii) is registered as a broker/dealer under the Exchange
Act, (iii) is licensed as a broker/dealer under the laws of the UnitedStates
of America, applicable to the offers and sales of the Placement Agent Shares
by such Placement Agent, (iv) is and will be a corporatebody validly existing
under the laws of its place of organization, (v) has full power and authority
to enter into and perform its obligationsunder this Agreement and (vi) has not
provided, and will not provide during the pendency of the Offering, to any
potential investors,any material nonpublic information relating to the Company
other than the information contained in the Transaction Documents. Each
PlacementAgent will immediately notify the Company in writing of any change in
its status with respect to
subsections (i)
through
(vi)
above. Each Placement Agent covenants that it will use its reasonable best
efforts to conduct the Offering hereunder in compliancewith the provisions of
this Agreement and the requirements of applicable law.
SECTION3
.
COMPENSATION
.
A. Inconsideration of the services to be provided for hereunder, the Company
shall pay to the Placement Agents and/or their respective designeesa cash fee
(the "
Cash Fee
") of 6.0% of the aggregate gross proceeds raised from the sale of the
Placement Agent Sharesat the Closing. The fee payable to each of Craig-Hallum
and Wellington for acting as co-placement agents in connection with the
Offeringshall be 50% of the Cash Fee. The Cash Fee shall be paid on the
Closing Date.
B. Infurther consideration of the services to be provided for hereunder, the
Company shall reimburse the Placement Agents for all reasonablelegal, due
diligence, travel and other transaction fees incurred, including (a) the fees
and expenses of counsel to the Placement Agentsin an amount not to exceed
$80,000, (b) all fees, expenses and disbursements relating to background
checks of the Company's officers,directors and related entities in an amount
not to exceed $5,000 in the aggregate, (c) the filing fees and expenses
associated with thereview of the Offering by FINRA, and (d) up to $5,000 for
other accountable expenses. The Company will make all filings required
underthe "Blue Sky" laws of those jurisdictions as may be requested by the
Placement Agents, and pay all related expenses. Ifthe offering of the
Placement Agent Shares and/or the engagement of the Placement Agents as
placement agents for the offering of thePlacement Agent Shares is terminated
before the Closing, then upon such termination, the Company agrees to
reimburse the Placement Agentsfor, and otherwise pay and bear, the full amount
of the Placement Agents' actual accountable "out-of-pocket" expensesvalidly
and actually incurred in connection with the Offering up to the date of
termination, in an amount not to exceed $60,000.
2
C. Asadditional compensation for the Placement Agents' services hereunder, the
Company shall issue to the Placement Agents or theirrespective designees
unregistered warrants ("
Placement Agent Warrants
") to purchase that number of shares of CommonStock equal to 3% of the
aggregate number of Shares sold in the Offering. Each of Craig-Hallum and
Wellington (or their respective designees)shall be issued 50% of the Placement
Agent Warrants for acting as co-placement agents in connection with the
Offering. The PlacementAgent Warrants will be exercisable at any time and from
time to time, in whole or in part, during the four and one-half (4 1/2)
yearperiod commencing 180 days from the last date of Closing of the Offering
at a price per share equal to 125% of the offering price perShare sold to
Purchasers in the Offering.
D. TheCompany shall pay the compensation set forth in
Section 3(A)
above, calculated in the manner set forth herein, with respect toany public or
private offering of securities or securities convertible into, or exchangeable
for, equity securities, or other financing(excluding borrowings by the Company
under any credit or lending facility with a bank or other lender) or equity
capital-rising transactionof any kind (such transaction, a "
Tail Financing
") to the extent that such financing or capital is provided to theCompany by
investors whom the Placement Agents had contacted, other than officers,
directors, and employees of the Company, during theEngagement Period and
identified in writing provided to the Company at or prior to the Closing, if
such Tail Financing is consummatedat any time during the 6-month period
following the expiration or termination of this Agreement.
E. Providedthat the Shares are sold in accordance with the terms of this
Agreement, the Placement Agents shall have an irrevocable right of
firstrefusal (the "
Right of First Refusal
"), from the closing date of the Offering through the date that is six (6)
monthsafter such date (the "
ROFR Period
"), to act as sole and exclusive investment bankers, sole and exclusive
book-runners,sole and exclusive financial advisors, sole and exclusive
underwriters and/or sole and exclusive placement agents, at the Placement
Agents'sole and exclusive discretion, for each and every future public and
private equity and debt offering, including all equity-linked financings(each,
a "
Subject Transaction
"), during the ROFR Period, of the Company, or any successor to or subsidiary
of theCompany, on terms and conditions customary to the Placement Agents for
such Subject Transactions,
provided
, that for clarity,this Right of First Refusal shall not apply to Company
transactions with strategic partners or other sources of non-dilutive
funding,including government agencies and private foundations or for which no
broker-dealer is proposed to be engaged by the Company, includingofferings of
securities by persons other than the Company or equity offerings pursuant to
the Company's equity incentive plans.For the avoidance of any doubt, the
Company shall not retain, engage or solicit any additional investment banker,
book-runner, financialadvisor, underwriter and/or placement agents in a
Subject Transaction during the ROFR Period without the express written consent
of thePlacement Agents. The Company shall notify the Placement Agents of its
intention to pursue a Subject Transaction, including the materialterms
thereof, by providing written notice thereof by e-mail (with confirmation of
receipt), registered mail or overnight courier serviceaddressed to the
Placement Agents. If the Placement Agents fail to exercise the Right of First
Refusal with respect to any Subject Transactionwithin ten (10) business days
after the sending of such written notice, then the Placement Agents shall have
no further claim or rightwith respect to the Subject Transaction. The
Placement Agents may elect, in their sole and absolute discretion, not to
exercise the Rightof First Refusal with respect to any Subject Transaction;
provided
, that any such election by the Placement Agents shallnot adversely affect the
Right of First Refusal with respect to any other Subject Transaction during
the ROFR Period agreed to above.
F. ThePlacement Agents reserve the right to reduce any item of compensation or
adjust the terms thereof as specified herein in the event thata determination
shall be made by FINRA to the effect that the Placement Agents' aggregate
compensation is in excess of FINRA Rulesor that the terms thereof require
adjustment.
3
G. TheCompany represents that except for the commissions payable to the
Placement Agents hereunder, there are no commissions or finder'sfees payable
by the Company to any other person in connection with the Offering and that
the Company shall pay, and hold the PlacementAgents harmless against, any
liability, loss, or expense (including, without limitation, attorneys' fees
and out-of-pocket expenses)arising in connection with any claim for finder's
fees in connection therewith.
SECTION4
.
INDEMNIFICATION
.
A. TheCompany agrees to indemnify and hold harmless the Placement Agents and
their respective affiliates (as defined in Rule 405 under theSecurities Act of
1933, as amended) and their respective directors, officers, members, managers,
employees, agents and controlling persons(the Placement Agents and each such
person being an "
Indemnified Party
") from and against all losses, claims, damagesand liabilities (or actions,
including shareholder actions, in respect thereof), joint or several, to which
such Indemnified Party maybecome subject under any applicable federal or state
law, or otherwise, which result from the performance by the Placement Agents
ofthe services contemplated by or the engagement of the Placement Agents
pursuant to, this Agreement and will promptly reimburse any IndemnifiedParty
for all reasonable expenses (including reasonable counsel fees and expenses,
subject to the limitations contain in Section 4(B)hereof) as they are incurred
in connection with the investigation of, preparation for or defense arising
from any threatened or pendingclaim, whether or not such Indemnified Party is
a party in the pending action or proceeding. The Company will not be liable to
any IndemnifiedParty under the foregoing indemnification and reimbursement
provisions, (i) for any settlement by an Indemnified Party effected withoutits
prior written consent (not to be unreasonably withheld); or (ii) to the extent
that any loss, claim, damage or liability is foundin a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from the
Placement Agents' willful misconduct,fraud, bad faith or gross negligence. The
Company also agrees that no Indemnified Party shall have any liability
(whether direct or indirect,in contract or tort or otherwise) to the Company
or its security holders or creditors related to or arising out of the
engagement ofthe Placement Agents pursuant to, or the performance by the
Placement Agents of the services contemplated by, this Agreement except tothe
extent that any loss, claim, damage or liability is found in a final,
non-appealable judgment by a court of competent jurisdictionto have resulted
primarily from the Placement Agents' willful misconduct, fraud, bad faith or
gross negligence.
B. Promptlyafter receipt by an Indemnified Party of notice of any intention or
threat to commence an action, suit or proceeding or notice of thecommencement
of any action, suit or proceeding, such Indemnified Party will, if a claim for
indemnity in respect thereof is to be madeagainst the Company pursuant hereto,
promptly notify the Company in writing of the same. In case any such action is
brought against anyIndemnified Party and such Indemnified Party notifies the
Company of the commencement thereof, the Company shall assume the defense
thereof,with counsel reasonably satisfactory to such Indemnified Party, and an
Indemnified Party may employ counsel to participate in the defenseof any such
action provided, that the employment of such counsel shall be at the
Indemnified Party's own expense, unless (i) theemployment of such counsel has
been authorized in writing by the Company, (ii) the Indemnified Party has
reasonably concluded (basedupon the written advice of counsel to the
Indemnified Party) that there are legal defenses available to it that are
different from orin addition to those available to the Company, or that a
conflict or potential conflict exists (based upon the written advice of
counselto the Indemnified Party) between the Indemnified Party and the Company
that makes it impossible for counsel to the Company to conductthe defense of
both the Company and the Indemnified Party (in which case the Company will not
have the right to direct the defense ofsuch action on behalf of the
Indemnified Party), or (iii) the Company has not in fact employed counsel
reasonably satisfactory to theIndemnified Party to assume the defense of such
action within a reasonable time after receiving notice of the action, suit or
proceeding,in each of which cases the reasonable fees, disbursements and other
charges of such counsel will be at the expense of the Company;
provided
,
further
, that in no event shall the Company be required to pay fees and expenses for
more than one firm of attorneys representingIndemnified Parties unless, in the
reasonable written opinion of counsel, the defense of one Indemnified Party is
unique or separatefrom that of another Indemnified Party subject to the same
claim or action, and in such event, all of the other Indemnified Parties
shalluse the same firm of attorneys in connection with such claim or action.
Any failure or delay by an Indemnified Party to give the noticereferred to in
this paragraph shall not affect such Indemnified Party's right to be
indemnified hereunder, except to the extentthat such failure or delay causes
actual harm to the Company, or prejudices its ability to defend such action,
suit or proceeding onbehalf of such Indemnified Party.
4
C. Ifthe indemnification provided for in this Agreement is held unenforceable
by or unavailable to an Indemnified Party (except if it is determinedby a
court of competent jurisdiction in a final non-appealable judgment to have
resulted from such Indemnified Party's misconduct,fraud, bad faith or gross
negligence), the Company agrees to contribute to the losses, claims, damages
and liabilities for which suchindemnification is held unenforceable or
unavailable (i) in such proportion as is appropriate to reflect the relative
benefits to theCompany, on the one hand, and the Placement Agents on the other
hand, of the Offering as contemplated whether or not the Offering
isconsummated or, (ii) if (but only if) the allocation provided for in clause
(i) is for any reason unenforceable or unavailable, in suchproportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Company,on the one hand and the
Placement Agents, on the other hand, as well as any other relevant equitable
considerations. The Company agreesthat for the purposes of this paragraph the
relative benefits to the Company and the Placement Agents of the Offering as
contemplatedshall be deemed to be in the same proportion that the total value
received or contemplated to be received by the Company or its shareholders,as
the case may be, as a result of or in connection with the Offering bear to the
fees paid or to be paid to the Placement Agents underthis Agreement.
Notwithstanding the foregoing, the Company expressly agrees that the Placement
Agents shall not be required to contributeany amount in excess of the amount
by which fees paid the Placement Agents hereunder (excluding reimbursable
expenses) exceeds the amountof any damages which the Placement Agents have
otherwise been required to pay.
D. TheCompany will not settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceedingin respect of
which indemnification or contribution could be sought under the provisions of
this Agreement, if any Indemnified Partyis an actual or potential party to
such claim, action or proceeding, without the Placement Agents' prior written
consent, whichconsent shall not be unreasonably withheld in the case of any
claim, action or proceeding involving the payment of money damages, unlesssuch
settlement, compromise or consent (i) includes an unconditional release of
each Indemnified Party from all liability in any wayrelated to or arising out
of such claim, action or proceeding and (ii) does not impose any actual or
potential liability upon any IndemnifiedParty and does not contain any factual
or legal admission by or with respect to any Indemnified Party or any adverse
statement with respectto the character, professionalism, due care, loyalty,
expertise or reputation of any Indemnified Party or any action or inaction by
anyIndemnified Party. The Company's recourse with respect to any liability or
obligation of the Placement Agents hereunder shall belimited to the assets of
the Placement Agents, and the Company shall have no recourse against, and
expressly waives its right to bringany claim against, any other Indemnified
Party or any of their assets.
E. Inthe event that an Indemnified Party is requested, authorized by the
Company, or required to appear as a witness in any action broughtby or on
behalf of or against the Company for which the Indemnified Party is entitled
to reimbursement in which such Indemnified Partyis not named as a defendant,
the Company agrees to promptly reimburse the Placement Agents on a monthly
basis for all reasonable anddocumented out-of-pocket expenses incurred by it
in connection with such Indemnified Party's appearing and preparing to
appearas such a witness, including, without limitation, the reasonable fees
and disbursements of its legal counsel.
5
F. Ifmultiple claims are brought, at least one for which indemnification is
permitted under applicable law and provided for under this Agreement,the
Company agrees that any judgment or arbitration award shall be conclusively
deemed to be based on claims as to which indemnificationis permitted and
provided for, except to the extent the judgment or arbitration award expressly
states that it, or any portion thereof,is based solely on a claim as to which
indemnification is not available.
G. Theforegoing provisions of this
Section 4
are in addition to rights the Placement Agents may have at common law or
otherwise, shallinure to the benefit of the Indemnified Parties and their
respective successors and assigns and shall be binding on any successor
orassign of the Company and successors or assigns to the Company's business or
assets. These indemnification provisions shall remainin full force and effect
whether or not the transaction contemplated by this Agreement is completed and
shall survive the terminationof this Agreement, and shall be in addition to
any liability that the Company might otherwise have to any indemnified party
under thisAgreement or otherwise.
SECTION5
.
ENGAGEMENT TERM
. The Placement Agents' engagement hereunder will commence on the date hereof
and terminate on theearlier of (i) July 30, 2024 and (ii) the Closing Date
(such period, the "
Engagement Term
"). Notwithstanding anythingto the contrary contained herein, the Company
agrees that the provisions relating to the Company's obligation to pay any
fees earnedpursuant to
Section 3
hereof, to pay expenses pursuant to
Section 3
hereof, and the provisions relating to indemnificationand contribution,
confidentiality, conflicts, independent contractor and waiver of the right to
trial by jury will survive any terminationof this Agreement. The Company
agrees that during the Placement Agents' engagement hereunder, all inquiries,
whether direct orindirect, from prospective investors will be referred to the
Placement Agents.
Thedate of termination of this Agreement is referred to herein as the "
Termination Date
." In the event, however, in thecourse of the Placement Agents' performance of
due diligence it deems it necessary to terminate the engagement, the Placement
Agentsmay do so prior to the Termination Date upon delivering written notice
to the Company. The Company may elect to terminate the engagementhereunder for
any reason prior to the Termination Date but will remain responsible for fees
actually earned and expenses actually incurredpursuant to
Section 3
hereof and fees with respect to the Placement Agent Shares if sold in the
Offering or in one or more transactionsto which
Section 3(C)
applies. If this Agreement is terminated prior to the completion of the
Offering, all fees and expensesdue to the Placement Agents shall be paid by
the Company to the Placement Agents on or before the Termination Date (in the
event suchfees are earned or owed as of the Termination Date).
SECTION6
.
COMPANY AND PLACEMENT AGENTS INFORMATION
. The Placement Agents agree not to use any confidential information
concerningthe Company provided to the Placement Agents by the Company for any
purposes other than those contemplated under this Agreement. TheCompany agrees
that any information or advice rendered by the Placement Agents in connection
with this engagement is for the confidentialuse of the Company only in their
evaluation of the Offering and, except as otherwise required by law, the
Company will not disclose orotherwise refer to the advice or information in
any manner without the Placement Agents' prior written consent;
provided
,
however
, that the Company may disclose a copy of this Agreement to (i) its employees,
officers, managers and members and (ii)to any investor or prospective investor
in the Offering, any acquiror or prospective acquiror of the Company or any
underwriter or prospectiveunderwriter, in each case provided that the Company
takes reasonable measures to ensure that the recipient of such information
treatssuch information as confidential.
SECTION7
.
NO FIDUCIARY RELATIONSHIP
. This Agreement does not create, and shall not be construed as creating
rights enforceable byany person or entity not a party hereto, except those
entitled hereto by virtue of the indemnification provisions hereof. The
Companyacknowledges and agrees that the Placement Agents are not and shall not
be construed as fiduciaries of the Company and shall have noduties or
liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retentionof the Placement Agents
hereunder, all of which are hereby expressly waived.
6
SECTION8
.
CLOSING
. The obligations of the Placement Agents, and the closing of the sale of the
Placement Agent Shares hereunder,are subject to the accuracy in all material
respects (or, to the extent representations or warranties are qualified by
materiality orMaterial Adverse Effect, in all respects), on the Closing Date,
of the representations and warranties on the part of the Company containedherein
and in the Purchase Agreement (except to the extent a representation or
warranty speaks as of a specific date, in which case theysuch representation
or warranty shall be accurate as of such date), to the performance by the
Company of its obligations hereunder andin the Purchase Agreement, and to each
of the following additional terms and conditions, except as otherwise
disclosed to and acknowledgedand waived by the Placement Agents:
A. Allcorporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this
Agreement,the Placement Agent Shares, and all other legal matters relating to
this Agreement and the transactions contemplated hereby with respectto the
Placement Agent Share shall be reasonably satisfactory in all material
respects to the Placement Agents.
B.The Placement Agents shall have received a legal opinion and negative
assurances letter from counsel to the Company, dated the ClosingDate, in the
forms reasonably acceptable to the Placement Agents.
C. ThePlacement Agents shall have received a comfort letter, addressed to the
Placement Agents and the Purchasers, in form and substance reasonablysatisfactor
y to the Placement Agents, from Grant Thornton, LLP.
D. ThePlacement Agents shall be entitled to rely on the certificates of the
Company's officers as set forth in Section 2.2 of the PurchaseAgreement.
E. Ifapplicable, FINRA shall have raised no objection to the fairness and
reasonableness of the terms and arrangements of this Agreement.In addition,
the Company shall, if requested by the Placement Agents, make or authorize
Placement Agents' counsel to make on theCompany's behalf, any filing with the
FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect
to the Offeringand pay all filing fees required in connection therewith.
Ifany of the conditions specified in this
Section 8
shall not have been fulfilled when and as required by this Agreement, all
obligationsof the Placement Agents hereunder may be cancelled by the Placement
Agents on, or at any time prior to, the Closing Date. Notice of suchcancellation
shall be given to the Company in writing or orally. Any such oral notice
shall be confirmed promptly thereafter in writing.
SECTION9
.
GOVERNING LAW
. This Agreement will be governed by, and construed in accordance with, the
laws of the State of New Yorkapplicable to agreements made and to be performed
entirely in such State. This Agreement may not be assigned by either party
withoutthe prior written consent of the other party. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, andtheir
respective successors and permitted assigns. Any right to trial by jury with
respect to any dispute arising under this Agreementor any transaction or
conduct in connection herewith is waived. Any dispute arising under this
Agreement may be brought into the courtsof the State of New York or into the
Federal Court located in New York, New York and, by execution and delivery of
this Agreement, theCompany hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of aforesaid
courts.Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such suit, actionor proceeding by
delivering a copy thereof via overnight delivery (with evidence of delivery)
to such party at the address in effectfor notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and noticethereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. If
eitherparty shall commence an action or proceeding to enforce any provisions
of this Agreement, then the prevailing party in such action orproceeding shall
be reimbursed by the other party for its reasonable and documented
out-of-pocket attorney's fees and other costsand expenses incurred in
connection with the investigation, preparation and prosecution of such action
or proceeding.
7
SECTION10
.
ENTIRE AGREEMENT/MISCELLANEOUS
. This Agreement embodies the entire agreement and understanding between the
parties hereto,and supersedes all prior agreements and understandings,
relating to the subject matter hereof, including the engagement letter,
datedMay 1, 2024, by and between the Company and Wellington, as supplemented
by that certain engagement letter, dated May 1, 2024, by andamong the Company,
Wellington and Craig-Hallum. If any provision of this Agreement is determined
to be invalid or unenforceable in anyrespect, such determination will not
affect such provision in any other respect or any other provision of this
Agreement, which willremain in full force and effect. This Agreement may not
be amended or otherwise modified or waived except by an instrument in
writingsigned by the Placement Agents and the Company. This Agreement may be
executed in two or more counterparts, all of which when taken togethershall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and deliveredto the other party,
it being understood that both parties need not sign the same counterpart. In
the event that any signature is deliveredby facsimile transmission or a .pdf
format file, such signature shall create a valid and binding obligation of the
party executing (oron whose behalf such signature is executed) with the same
force and effect as if such facsimile or .pdf signature page were an
originalthereof.
SECTION12
.
NOTICES
. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shallbe in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communicationis sent to the email address specified on the signature
pages attached hereto prior to 6:30 p.m. (New York City time) on a business
day,(b) the next business day after the date of transmission, if such notice
or communication is sent to the email address on the signaturepages attached
hereto on a day that is not a business day or later than 6:30 p.m. (New York
City time) on any business day, (c) the thirdbusiness day following the date
of mailing, if sent by U.S. internationally recognized air courier service, or
(d) upon actual receiptby the party to whom such notice is required to be
given. The address for such notices and communications shall be as set forth
on thesignature pages hereto.
SECTION13
.
Press Announcements
. The Company agrees that each Placement Agent shall,on and after the Closing
Date, have the right to reference the Offering and such Placement Agent's role
in connection therewithin such Placement Agent's marketing materials and on
its website and to place advertisements in financial and other newspapersand
journals, in each case at its own expense, subject to the Company's prior
written consent, which will not be unreasonably withheld.
[
Theremainder of this page has been intentionally left blank.
]
8
Pleaseconfirm that the foregoing correctly sets forth our agreement by signing
and returning to the Placement Agents the enclosed copy of thisAgreement.
Very truly yours,
CRAIG-HALLUM CAPITAL GROUP LLC
By: /s/ Rick Hartfiel
Name: Rick Hartfiel
Title: Head of Investment Banking
Address for notice:
222 South Ninth Street, Suite 350
Minneapolis, MN 55402
WELLINGTON SHIELDS & CO. LLC
By: /s/ David V. Shields
Name David V. Shields
:
Title: Chairman
Address for notice:
140 Broadway
New York, New York 10005
Accepted and Agreed to as of
the date first written above:
Perma-Fix Environmental
Services, Inc.
By: /s/ Mark Duff
Name: Mark Duff
Title: Presidentand
Chief Executive Officer
Addressfor notice
:
Perma-FixEnvironmental Services, Inc.
8302Dunwoody Place, Suite 250
Atlanta,GA 30350
Attention:Mark Duff, Chief Executive Officer
[
SignaturePage to Placement Agent Agreement
]
Exhibit10.3
PlacementAgent's Warrant
NEITHERTHIS PURCHASE WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS
AMENDED (THE "SECURITIES ACT"), OR ANY OTHER SECURITIES LAWS. THE REGISTERED
HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCEHEREOF, AGREES THAT IT WILL
NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENTCOVERING THIS PURCHASE WARRANT OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
THISPURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO NOVEMBER 20, 2024. VOID AFTER
5:00 P.M., EASTERN TIME, MAY 20, 2029.
COMMONSTOCK PURCHASE WARRANT
PERMA-FIXENVIRONMENTAL SERVICES, Inc.
Warrant Shares: 15,384 Initial Issue Date:
May 24, 2024
Initial Exercise Date:
November 20, 2024
THISCOMMON STOCK PURCHASE WARRANT (the "
Warrant
") certifies that, for value received, [•] or its assigns (the "
Holder
")is entitled, upon the terms and subject to the limitations on exercise and
the conditions hereinafter set forth, at any time on or afterNovember 20, 2024
(the "
Initial Exercise Date
") and, in accordance with FINRA Rule 5110(f)(2)(G)(i), prior to 5:00p.m. (New
York City time) on May 20, 2029 (the "
Termination Date
") but not thereafter, to subscribe for and purchasefrom Perma-fix
Environmental Services, Inc., a company incorporated under the laws of the
State of Delaware (the "
Company
"),up to 15,384 shares of Common Stock (as subject to adjustment hereunder,
the "
Warrant Shares
"). The purchase priceof one share of Common Stock under this Warrant shall be
equal to the Exercise Price, as defined in
Section 2(b)
.
Section1
.
Definitions
. In addition to the terms defined elsewhere in this Warrant, the following
terms have the meanings indicatedin this
Section 1
:
"
Affiliate
"means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common controlwith a
Person, as such terms are used in and construed under Rule 405 under the
Securities Act.
"
BidPrice
" means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stockis then listed or quoted on a
Trading Market, the bid price of the Common Stock for the time in question (or
the nearest preceding date)on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day
from 9:30a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if
OTCQB or OTCQX is not a Trading Market, the volume weighted averageprice of
the Common Stock for such date (or the nearest preceding date) on OTCQB or
OTCQX as applicable, (c) if the Common Stock is notthen listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported
on the Pink Open Market (ora similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share of the
CommonStock so reported, or (d) in all other cases, the fair market value of a
share of Common Stock as determined in good faith by an independentappraiser
selected in good faith by the Board of Directors of the Company, the fees and
expenses of which shall be paid by the Company.
"
BusinessDay
" means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorizedor required by law to remain
closed;
provided
,
however
, for clarification, commercial banks shall not be deemed to be authorizedor
required by law to remain closed due to "stay at home", "shelter-in-place",
"non-essential employee"or any other similar orders or restrictions or the
closure of any physical branch locations at the direction of any governmental
authorityso long as the electronic funds transfer systems (including for wire
transfers) of commercial banks in The City of New York generallyare open for
use by customers on such day.
"
Commission
"means the United States Securities and Exchange Commission.
"
CommonStock
" means the common stock of the Company, par value $0.001 per share, and any
other class of securities into which suchsecurities may hereafter be
reclassified or changed.
"
CommonStock Equivalents
" means any securities of the Company or the Subsidiaries which would entitle
the holder thereof to acquireat any time Common Stock, including, without
limitation, any debt, preferred stock, right, option, warrant or other
instrument that isat any time convertible into or exercisable or exchangeable
for, or otherwise entitles the holder thereof to receive, Common Stock.
"
ExchangeAct
" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
"
Person
"means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liabilitycompany, joint
stock company, government (or an agency or subdivision thereof) or other
entity of any kind.
"
Rule144
" means Rule 144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpretedfrom time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially
the same purpose and effectas such Rule.
"
SecuritiesAct
" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
"
TradingDay
" means a day on which the Common Stock is traded on a Trading Market.
"
TradingMarket
" means any of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the datein question: the NYSE American, the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the New York StockExchange, OTCQB or OTCQX (or any successors to any
of the foregoing).
"
TransferAgent
" means Continental Stock Transfer & Trust Company, the current transfer agent
of the Company.
"
PlacementAgency Agreement
" means the placement agency agreement, dated as of May 21, 2024, among the
Company, Craig-Hallum Capital GroupLLC and Wellington Shields & Co. LLC, as
amended, modified or supplemented from time to time in accordance with its
terms.
"
VWAP
"means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listedor quoted on a
Trading Market, the daily volume weighted average price per share of the
Common Stock for such date (or the nearest precedingdate) on the Trading
Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Dayfrom 9:30 a.m. (New York City time) to
4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weightedaverage price per share of the Common Stock for
such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c)
if theCommon Stock is not then listed or quoted for trading on OTCQB or OTCQX
and if prices for the Common Stock are then reported on the PinkOpen Market
(or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per shareof the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as
determined by an independentappraiser selected in good faith by the holders of
a majority in interest of the Warrants then outstanding and reasonably
acceptableto the Company, the fees and expenses of which shall be paid by the
Company.
"
Warrants
"means this Warrant and other Common Stock purchase warrants issued by the
Company as placement agent compensation pursuant to the PlacementAgency
Agreement.
Section2
.
Exercise
.
a)
Exercise of Warrant
. Subject to the provisions of
Section 2(e)
herein, exercise of the purchase rights represented by thisWarrant may be
made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the TerminationDate by delivery to the Company
(or such other office or agency of the Company as it may designate by notice
in writing to the registeredHolder at the address of the Holder appearing on
the books of the Company) of a duly executed facsimile copy or PDF copy
submitted bye-mail (or e-mail attachment) of the Notice of Exercise in the
form annexed hereto (the "
Notice of Exercise
"), and,unless the cashless exercise procedure specified in
Section 2(c)
below is specified in the applicable Notice of Exercise, deliveryof the
aggregate Exercise Price of the Warrant Shares specified in the applicable
Notice of Exercise as specified in this
Section2(a)
. Within the earlier of (i) two (2) Trading Days and (ii) the number of
Trading Days comprising the Standard Settlement Period(as defined in
Section 2(d)(i)
herein) following the date of exercise as aforesaid, the Holder shall deliver
the aggregate ExercisePrice for the Warrant Shares specified in the applicable
Notice of Exercise by wire transfer of immediately available funds or
cashier'scheck drawn on a United States bank unless the cashless exercise
procedure specified in
Section 2(c)
below is specified in theapplicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other
typeof guarantee or notarization) of any Notice of Exercise be required.
Notwithstanding anything herein to the contrary, the Holder shallnot be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares availablehereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellationwithin three (3) Trading Days of the date on
which the final Notice of Exercise is delivered to the Company. Partial
exercises of thisWarrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of
loweringthe outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.The Company
shall maintain records showing the number of Warrant Shares purchased and the
date of such purchases. The Company shall deliverany objection to any Notice
of Exercise within one (1) Business Day of receipt of such notice.
The Holder and any assignee, by acceptanceof this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of theWarrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amountstated on the face hereof
.
b)/
Exercise Price
. The exercise price per share of Common Stock under this Warrant shall be
$12.19, subject to adjustmenthereunder (the "
Exercise Price
").
c)
Cashless Exercise
. This Warrant may be exercised, in whole or in part, at such time by means of
a "cashless exercise"in which the Holder shall be entitled to receive a number
of Warrant Shares equal to the quotient obtained by dividing ((A-B)(X)) by(A),
where:
(A) = as applicable: (i) the
VWAP on the Trading Day
immediatelypreceding the
date of the applicable
Notice of Exercise if
such Notice of Exercise
is (1) both executed and
delivered pursuant to
Section2(a)
hereof on a day that is not a Trading Day or
(2) both executed and delivered pursuant to
Section 2(a)
hereof on a TradingDay prior to the opening of "regular trading hours" (as defined in Rule
600(b)(68) of Regulation NMS promulgated under thefederal securities laws) on such Trading Day,
(ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately precedingthe
date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the
principal Trading Market as reported byBloomberg L.P. as of the time of the Holder's execution
of the applicable Notice of Exercise if such Notice of Exercise is executedduring "regular
trading hours" on a Trading Day and is delivered within two (2) hours thereafter (including
until two (2)hours after the close of "regular trading hours" on a Trading Day) pursuant to
Section 2(a)
hereof or (iii) the VWAPon
the date of the applicable
Notice of Exercise if
the date of such Notice
of Exercise is a Trading
Day and such Notice of
Exerciseis both executed
and delivered pursuant to
Section 2(a)
hereof after the close of "regular
trading hours" on suchTrading Day;
(B) = the Exercise Price of this
Warrant, as adjusted hereunder;and
(X) = the number of Warrant Shares that would be issuable uponexercise of this Warrant in accordance with the
terms of this Warrant if such exercise were by means of a cash exercise rather than acashless exercise.
IfWarrant Shares are issued in such a cashless exercise, the parties
acknowledge and agree that in accordance with Section 3(a)(9) of theSecurities
Act, the Warrant Shares shall take on the registered characteristics of the
Warrants being exercised. The Company agrees notto take any position contrary
to this
Section 2(c)
.
Notwithstandinganything herein to the contrary, this Warrant shall be
automatically exercised via cashless exercise pursuant to this
Section 2(c)
on the Termination Date.
d)
Mechanics of Exercise
.
i.
Deliveryof Warrant Shares Upon Exercise
. The Company shall cause the Warrant Shares purchased hereunder to be
transmitted by the TransferAgent to the Holder by crediting the account of the
Holder's or its designee's balance account with The Depository TrustCompany
through its Deposit or Withdrawal at Custodian system ("
DWAC
") if the Company's transfer agent is thena participant in such system and
either (A) there is an effective registration statement permitting the
issuance of the Warrant Sharesto or resale of the Warrant Shares by Holder or
(B) the Warrant Shares are eligible for resale by the Holder without volume or
manner-of-salelimitations pursuant to Rule 144, and otherwise by physical
delivery of a certificate, registered in the Company's share registerin the
name of the Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exerciseto the address specified by
the Holder in the Notice of Exercise by the date that is the earliest of (i)
two (2) Trading Days after thedelivery to the Company of the Notice of
Exercise and (ii) the number of Trading Days comprising the Standard
Settlement Period afterthe delivery to the Company of the Notice of Exercise
(such date, the "
Warrant Share Delivery Date
"). Upon deliveryof the Notice of Exercise, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant
Shareswith respect to which this Warrant has been exercised, irrespective of
the date of delivery of the Warrant Shares, provided that paymentof the
aggregate Exercise Price (other than in the case of a cashless exercise) is
received within the earlier of (i) two (2) TradingDays and (ii) the number of
Trading Days comprising the Standard Settlement Period following delivery of
the Notice of Exercise. If theCompany fails for any reason to deliver to the
Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share
DeliveryDate, then the Company shall pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of Warrant Sharessubject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable
Notice of Exercise), $10 per Trading Day(increasing to $20 per Trading Day on
the fifth Trading Day after the Warrant Share Delivery Date) for each Trading
Day after such WarrantShare Delivery Date until such Warrant Shares are
delivered or Holder rescinds such exercise. The Company agrees to maintain a
transferagent that is a participant in the FAST program so long as this
Warrant remains outstanding and exercisable. As used herein, "
StandardSettlement Period
" means the standard settlement period, expressed in a number of Trading Days,
on the Company's primaryTrading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of Exercise.
ii.
Deliveryof New Warrants Upon Exercise
. If this Warrant shall have been exercised in part, the Company shall, at the
request of a Holder andupon surrender of this Warrant certificate, at the time
of delivery of the Warrant Shares, deliver to the Holder a new Warrant
evidencingthe rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all otherrespects be
identical with this Warrant.
iii.
RescissionRights
. If the Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares pursuant to
Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to
rescind such exercise by delivering written notice tothe Company at any time
prior to the delivery of such Warrant Shares (in which case, any liquidated
damages payable under
Section2(d)(i)
shall cease to accrue).
iv.
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon
Exercise
. In addition to any other rights available tothe Holder, if the Company fails
to cause the Transfer Agent to transmit to the Holder the Warrant Shares in
accordance with the provisionsof
Section 2(d)(i)
above pursuant to an exercise on or before the Warrant Share Delivery Date,
and if after such date the Holderis required by its broker to purchase (in an
open market transaction or otherwise) or the Holder's brokerage firm otherwise
purchases,shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receivingupon such
exercise (a "
Buy-In
"), then the Company shall (A) pay in cash to the Holder the amount, if any,
by which(x) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds(y)
the amount obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connectionwith the exercise
at issue times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B)at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of Warrant Shares
for which such exercisewas not honored (in which case such exercise shall be
deemed rescinded) or deliver to the Holder the number of shares of Common
Stockthat would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if theHolder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise of sharesof Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (A) of the immediatelypreceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicatingthe amounts payable to the Holder in respect of the Buy-In and, upon
request of the Company, evidence of the amount of such loss. Nothingherein
shall limit a Holder's right to pursue any other remedies available to it
hereunder, at law or in equity including, withoutlimitation, a decree of
specific performance and/or injunctive relief with respect to the Company's
failure to timely deliver sharesof Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
v.
NoFractional Shares or Scrip
. No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of thisWarrant. As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise, the Company
shall,at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by theExercise Price
or round up to the next whole share.
vi.
Charges,Taxes and Expenses
. Issuance of Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or otherincidental expense in respect of the
issuance of such Warrant Shares, all of which taxes and expenses shall be paid
by the Company, andsuch Warrant Shares shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder;
provided
,
however
, that in the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrantwhen surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Companymay require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto. The
Companyshall pay all Transfer Agent fees required for same-day processing of
any Notice of Exercise and all fees to the Depository Trust Company(or another
established clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.
vi.
Closingof Books
. The Company will not close its stockholder books or records in any manner
which prevents the timely exercise of this Warrant,pursuant to the terms
hereof.
viii.
Signature
.This
Section 2
and the exercise form attached hereto set forth the totality of the procedures
required of the Holder in orderto exercise this Warrant. Without limiting the
preceding sentences, no ink-original exercise form shall be required, nor
shall any medallionguarantee (or other type of guarantee or notarization) of
any exercise form be required in order to exercise this Warrant. No
additionallegal opinion, other information or instructions shall be required
of the Holder to exercise this Warrant. The Company shall honor exercisesof
this Warrant and shall deliver Shares underlying this Warrant in accordance
with the terms, conditions and time periods set forthherein.
e)
Holder'sExercise Limitations
. The Company shall not effect any exercise of this Warrant, and a Holder
shall not have the right to exerciseany portion of this Warrant, pursuant to
Section 2
or otherwise, to the extent that after giving effect to such issuance
afterexercise as set forth on the applicable Notice of Exercise, the Holder
(together with the Holder's Affiliates, and any other Personsacting as a group
together with the Holder or any of the Holder's Affiliates (such Persons, "
Attribution Parties
")),would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below). For purposes of the foregoing sentence, thenumber of
shares of Common Stock beneficially owned by the Holder and its Affiliates and
Attribution Parties shall include the numberof shares of Common Stock issuable
upon exercise of this Warrant with respect to which such determination is
being made, but shall excludethe number of shares of Common Stock which would
be issuable upon (i) exercise of the remaining, nonexercised portion of this
Warrantbeneficially owned by the Holder or any of its Affiliates or
Attribution Parties and (ii) exercise or conversion of the unexercised
ornonconverted portion of any other securities of the Company (including,
without limitation, any other Common Stock Equivalents) subjectto a limitation
on conversion or exercise analogous to the limitation contained herein
beneficially owned by the Holder or any of itsAffiliates or Attribution
Parties to the extent such issuance would exceed such limitation. Except as
set forth in the preceding sentence,for purposes of this
Section 2(e)
, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Exchange Actand the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to theHolder
that such calculation is in compliance with Section 13(d) of the Exchange Act
and the Holder is solely responsible for any schedulesrequired to be filed in
accordance therewith. To the extent that the limitation contained in this
Section 2(e)
applies, the determinationof whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and
AttributionParties) and of which portion of this Warrant is exercisable shall
be in the sole discretion of the Holder, and the submission of a Noticeof
Exercise shall be deemed to be the Holder's determination of whether this
Warrant is exercisable (in relation to other securitiesowned by the Holder
together with any Affiliates and Attribution Parties) and of which portion of
this Warrant is exercisable, in eachcase subject to the Beneficial Ownership
Limitation, and the Company shall not have any obligation to verify or confirm
the accuracyof such determination and neither of them shall have any liability
for any error made by the Holder or any other Person. In addition,a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Actand the rules and
regulations promulgated thereunder. For purposes of this
Section 2(e)
, in determining the number of outstandingshares of Common Stock, a Holder may
rely on the number of outstanding shares of Common Stock as reflected in (A)
the Company'smost recent periodic or annual report filed with the Commission,
as the case may be, (B) a more recent public announcement by the Companyor (C)
a more recent written notice by the Company or the Transfer Agent setting
forth the number of shares of Common Stock outstanding.Upon the written or
oral request of a Holder, the Company shall within one Trading Day confirm
orally and in writing to the Holder thenumber of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock
shall be determinedafter giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliatesor Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The "
BeneficialOwnership Limitation
" shall be 4.99% (or, upon election by a Holder prior to the issuance of any
Warrants, 9.99%) of the numberof shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock
issuable upon exerciseof this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation provisions of this
Section 2(e)
, provided that the Beneficial Ownership Limitation in no event exceeds 9.99%
of the number of shares of the CommonStock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant held by theHolder and the provisions of this
Section 2(e)
shall continue to apply. Any increase in the Beneficial Ownership Limitation
willnot be effective until the 61
st
day after such notice is delivered to the Company. The provisions of this
paragraph shallbe construed and implemented in a manner otherwise than in
strict conformity with the terms of this
Section 2(e)
to correct thisparagraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation herein
containedor to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in thisparagraph
shall apply to a successor holder of this Warrant.
Section3
.
Certain Adjustments
.
a)
StockDividends and Splits
. If the Company, at any time while this Warrant is outstanding: (i) pays a
stock dividend or otherwise makesa distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities payable
in shares ofCommon Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon exercise of thisWarrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of
shares, (iii) combines (including by way of reversestock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of theCommon Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of whichthe numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such
eventand of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event, and the number ofshares
issuable upon exercise of this Warrant shall be proportionately adjusted such
that the aggregate Exercise Price of this Warrantshall remain unchanged. Any
adjustment made pursuant to this
Section 3(a)
shall become effective immediately after the recorddate for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately afterthe effective date in the case of a
subdivision, combination or re-classification.
b)
SubsequentRights Offerings
. In addition to any adjustments pursuant to
Section 3(a)
above, if at any time while this Warrant is outstandingthe Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock,
warrants, securities or other propertypro rata to the record holders of any
class of shares of Common Stock (the "
Purchase Rights
"), then the Holder willbe entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could
haveacquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regardto any
limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the dateon which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of whichthe record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights;
provided
,
however
, to the extent that the Holder's right to participate in any such Purchase
Right would result in the Holderexceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to
such extent(or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right tosuch extent
shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceedingthe Beneficial Ownership
Limitation.
c)
ProRata Distributions
. During such time as this Warrant is outstanding, if the Company shall
declare or make any dividend (other thancash dividends) or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way ofreturn of capital or otherwise (including, without limitation,
any distribution of stock or other securities, property or options byway of a
dividend, spin off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a "
Distribution
"),at any time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distributionto the same
extent that the Holder would have participated therein if the Holder had held
the number of shares of Common Stock acquirableupon complete exercise of this
Warrant (without regard to any limitations on exercise hereof, including
without limitation, the BeneficialOwnership Limitation) immediately before the
date of which a record is taken for such Distribution, or, if no such record
is taken, thedate as of which the record holders of shares of Common Stock are
to be determined for the participation in such Distribution (
provided
,
however
, to the extent that the Holder's right to participate in any such
Distribution would result in the Holderexceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent(or in the beneficial ownership of any shares of
Common Stock as a result of such Distribution to such extent) and the portion
of suchDistribution shall be held in abeyance for the benefit of the Holder
until such time, if ever, as its right thereto would not resultin the Holder
exceeding the Beneficial Ownership Limitation).
d)
FundamentalTransaction
. If, at any time while this Warrant is outstanding, (i) the Company, directly
or indirectly, in one or more related transactionseffects any merger or
consolidation of the Company with or into another Person (other than for the
purpose of changing the Company'sname and /or the jurisdiction of
incorporation of the Company or a holding company of the Company), (ii) the
Company, directly or indirectly,effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets inone or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by
theCompany or another Person) is completed pursuant to which holders of Common
Stock are permitted to sell, tender or exchange their sharesfor other
securities, cash or property and has been accepted by the holders of 50% or
more of the outstanding Common Stock or 50% ormore of the voting power of the
then outstanding common equity of the Company, (iv) the Company, directly or
indirectly, in one or morerelated transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share
exchangepursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property, or (v) the Company,directly
or indirectly, in one or more related transactions consummates a stock or
share purchase agreement or other business combination(including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of
arrangement) with another Person orgroup of Persons whereby such other Person
or group acquires more than 50% of the outstanding shares of Common Stock or
50% or more ofthe voting power of the then outstanding common equity of the
Company (not including any shares of Common Stock held by the other Personor
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchaseagreement or other
business combination) (each a "
Fundamental Transaction
"), then, upon any subsequent exercise ofthis Warrant, the Holder shall have
the right to receive, for each Warrant Share that would have been issuable
upon such exercise immediatelyprior to the occurrence of such Fundamental
Transaction (without regard to any limitation in
Section 2(e)
on the exercise of thisWarrant), the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation,and any additional consideration (together, the "
Alternate Consideration
") receivable as a result of such FundamentalTransaction by a holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such FundamentalTransaction (without regard to any
limitation in
Section 2(e)
on the exercise of this Warrant). For purposes of any such exercise,the
determination of the Exercise Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amountof Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportionthe Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value
of any different componentsof the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be
receivedin a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exerciseof this
Warrant following such Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction inwhich the Company is not the
survivor (the "
Successor Entity
") to assume in writing all of the obligations of theCompany under this
Warrant in accordance with the provisions of this
Section 3(d)
pursuant to written agreements in form and substancereasonably satisfactory to
the Company and the holders of Warrants representing at least a majority of
the shares of Common Stock underlyingthe Warrants then outstanding (the "
Required Holders
") and approved by the Required Holders (without unreasonabledelay) prior to
such Fundamental Transaction and shall deliver to the Holder in exchange for
this Warrant a security of the SuccessorEntity evidenced by a written
instrument substantially similar in form and substance to this Warrant which
is exercisable for a correspondingnumber of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common
Stock acquirableand receivable upon exercise of this Warrant (without regard
to any limitations on the exercise of this Warrant) prior to such
FundamentalTransaction, and with an exercise price which applies the exercise
price hereunder to such shares of capital stock (but taking into accountthe
relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock,such number of
shares of capital stock and such exercise price being for the purpose of
protecting the economic value of this Warrantimmediately prior to the
consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance tothe Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (sothat from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the "Company"
shallrefer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligationsof the Company
under this Warrant with the same effect as if such Successor Entity had been
named as the Company herein.
e)
Calculations
.All calculations under this
Section 3
shall be made by the Company to the nearest cent or the nearest 1/100th of a
share, as thecase may be. For purposes of this
Section 3
, the number of shares of Common Stock deemed to be issued and outstanding as
of agiven date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and outstanding.
f)
Noticeto Holder
.
i.
Adjustmentto Exercise Price
. Whenever the Exercise Price is adjusted pursuant to any provision of this
Section 3
, the Company shallpromptly deliver to the Holder by facsimile or email a
notice setting forth the Exercise Price after such adjustment and any
resultingadjustment to the number of Warrant Shares and setting forth a brief
statement of the facts requiring such adjustment.
ii.
Noticeto Allow Exercise by Holder
. If (A) the Company shall declare a dividend (or any other distribution in
whatever form) on the CommonStock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shallauthorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stockof any
class or of any rights, (D) the approval of any stockholders of the Company
shall be required in connection with any reclassificationof the Common Stock,
any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all ofthe assets of the Company, or any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property,or (E) the Company shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Company,then, in each case, the Company shall cause to be delivered by
facsimile or email to the Holder at its last facsimile number or emailaddress
as it shall appear upon the Warrant Register of the Company, at least 20
calendar days prior to the applicable record or effectivedate hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution,redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common
Stock of record tobe entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification,consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is
expectedthat holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or
otherproperty deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure todeliver such
notice or any defect therein or in the delivery thereof shall not affect the
validity of the corporate action required tobe specified in such notice. To
the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public informationregarding the Company or any of the
Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to aCurrent Report on Form 8-K. The Holder shall remain
entitled to exercise this Warrant during the period commencing on the date of
suchnotice to the effective date of the event triggering such notice except as
may otherwise be expressly set forth herein.
Section4
.
Transfer of Warrant
.
a)
Transferability
.Subject to the Securities Act and any other applicable securities laws, and
the conditions set forth in
Section 4(d)
, this Warrantand all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Companyor its
designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed bythe Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon suchsurrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assigneeor assignees, as applicable, and in the denomination
or denominations specified in such instrument of assignment, and shall issue
tothe assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. Notwithstandinganything
herein to the contrary, the Holder shall not be required to physically
surrender this Warrant to the Company unless the Holderhas assigned this
Warrant in full, in which case, the Holder shall surrender this Warrant to the
Company within three (3) Trading Daysof the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant,
if properly assignedin accordance herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued.
b)
NewWarrants
. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company,together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder orits agent or attorney. Subject to
compliance with
Section 4(a)
, as to any transfer which may be involved in such division or combination,the
Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined inaccordance with such
notice. All Warrants issued on transfers or exchanges shall be dated the
initial issuance date of this Warrant andshall be identical with this Warrant
except as to the number of Warrant Shares issuable pursuant thereto.
c)
WarrantRegister
. The Company shall register this Warrant, upon records to be maintained by
the Company for that purpose (the "
WarrantRegister
"), in the name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holderof this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all otherpurposes, absent actual notice to the contrary.
d)
Representationby the Holder
. The Holder, by the acceptance hereof, represents and warrants that it is
acquiring this Warrant and, upon any exercisehereof, will acquire the Warrant
Shares issuable upon such exercise, for its own account and not with a view to
or for distributing orreselling such Warrant Shares or any part thereof in
violation of the Securities Act or any applicable state securities law, except
pursuantto sales registered or exempted under the Securities Act.
Section5
.
Miscellaneous
.
a)
NoRights as Stockholder Until Exercise; No Settlement in Cash
. This Warrant does not entitle the Holder to any voting rights, dividendsor
other rights as a stockholder of the Company prior to the exercise hereof as
set forth in
Section 2(d)(i)
, except as expresslyset forth in
Section 3
. Without limiting any rights of a Holder to receive Warrant Shares on a
"cashless exercise"pursuant to
Section 2(c)
or to receive cash payments pursuant to
Section 2(d)(i)
and
Section 2(d)(iv)
herein, inno event shall the Company be required to net cash settle an
exercise of this Warrant.
b)
Loss,Theft, Destruction or Mutilation of Warrant
. The Company covenants that upon receipt by the Company of evidence
reasonably satisfactoryto it of the loss, theft, destruction or mutilation of
this Warrant or any stock certificate relating to the Warrant Shares, and in
caseof loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not includethe
posting of any bond), and upon surrender and cancellation of such Warrant or
stock certificate, if mutilated, the Company will makeand deliver a new
Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.
c)
Saturdays,Sundays, Holidays, etc
. If the last or appointed day for the taking of any action or the expiration
of any right required or grantedherein shall not be a Business Day, then, such
action may be taken or such right may be exercised on the next succeeding
Business Day.
d)
AuthorizedShares
.
TheCompany covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Stock asufficient number
of shares to provide for the issuance of the Warrant Shares upon the exercise
of any purchase rights under this Warrant.The Company further covenants that
its issuance of this Warrant shall constitute full authority to its officers
who are charged withthe duty of issuing the necessary Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take
allsuch reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of anyapplicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed. The Company covenantsthat all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exerciseof the purchase rights represented by this Warrant
and payment for such Warrant Shares in accordance herewith, be duly
authorized, validlyissued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the issue
thereof(other than taxes in respect of any transfer occurring contemporaneously
with such issue).
Exceptand to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amendingits
certificate of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or saleof securities or any
other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant,but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessaryor appropriate to protect the rights of Holder as set forth in
this Warrant against impairment. Without limiting the generality of
theforegoing, the Company will (i) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exerciseimmediately prior
to such increase in par value, (ii) take all such action as may be necessary
or appropriate in order that the Companymay validly and legally issue fully
paid and nonassessable Warrant Shares upon the exercise of this Warrant and
(iii) use commerciallyreasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof,as may be, necessary to enable the Company to perform its obligations
under this Warrant.
Beforetaking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in theExercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary fromany public regulatory body or bodies
having jurisdiction thereof.
e)
Jurisdiction
.All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordancewith the
provisions of the Placement Agency Agreement.
f)
Restrictions
.The Holder acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered, and the Holder does notutilize cashless
exercise, will have restrictions upon resale imposed by state and federal
securities laws.
g)
Nonwaiverand Expenses
. No course of dealing or any delay or failure to exercise any right hereunder
on the part of Holder shall operate asa waiver of such right or otherwise
prejudice the Holder's rights, powers or remedies. No provision of this
Warrant shall be construedas a waiver by the Holder of any rights that the
Holder may have under U.S. federal securities laws and the rules and
regulation of theCommission thereunder. Without limiting any other provision
of this Warrant or the Placement Agency Agreement, if the Company willfullyand
knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shallpay to the Holder such
amounts as shall be sufficient to cover any costs and expenses including, but
not limited to, reasonable attorneys'fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwiseenforcing any of its rights, powers or remedies
hereunder.
h)
Notices
.Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be deliveredin accordance with
the notice provisions of the Placement Agency Agreement.
i)
Limitationof Liability
. No provision hereof, in the absence of any affirmative action by the Holder
to exercise this Warrant to purchase WarrantShares, and no enumeration herein
of the rights or privileges of the Holder, shall give rise to any liability of
the Holder for the purchaseprice of any Common Stock or as a stockholder of
the Company, whether such liability is asserted by the Company or by creditors
of theCompany.
j)
Remedies
.The Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specificperformance of
its rights under this Warrant. The Company agrees that monetary damages would
not be adequate compensation for any lossincurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in anyaction for specific performance that a remedy at law would
be adequate.
k)
Successorsand Assigns
. Subject to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to thebenefit of and be binding upon
the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder.The provisions of this Warrant are intended to be
for the benefit of any Holder from time to time of this Warrant and shall be
enforceableby the Holder or holder of Warrant Shares.
l)
Amendment
.This Warrant may be modified or amended or the provisions hereof waived with
the written consent of the Company and the Holder.
m)
Severability
.Wherever possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law,but if any
provision of this Warrant shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to theextent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Warrant.
n)
Headings
.The headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of thisWarrant.
********************
(SignaturePage Follows)
INWITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first aboveindicated.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By:
Name:
Title:
NOTICEOF EXERCISE
TO: PERMA-FIX ENVIRONMENTAL SERVICES,inc.
_________________________
(1) Theundersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercisedin
full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.
(2) Paymentshall take the form of (check applicable box):
in lawful money of the United States; or
if permitted the cancellation of such number of Warrant Shares as is necessary,
in accordance with the formula set forth in subsection 2(c), to exercise
this Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Pleaseissue said Warrant Shares in the name of the undersigned or in such
other name as is specified below:
_______________________________
TheWarrant Shares shall be delivered to the following DWAC Account Number or
by physical delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4)
AccreditedInvestor
. If the Warrant is being exercised via cash exercise and there is no
effective registration statement registering the issueor resale of the shares
underlying the Warrant, the undersigned is an "accredited investor" as defined
in Regulation D promulgatedunder the Securities Act of 1933, as amended.
[SIGNATUREOF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:
ASSIGNMENTFORM
(Toassign the foregoing Warrant, execute this form and supply required
information. Do not use this form to purchase shares.)
FORVALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to
Name:
(Please Print)
Address:
(Please Print)
Phone Number:
Email Address:
Dated:
Holder's Signature:
Holder's Address:
Exhibit99.1
Perma-FixAnnounces Pricing of Approximately $20 Million Registered Direct
Offering
ATLANTA- May 22, 2024
- Perma-Fix Environmental Services, Inc. (Nasdaq: PESI) ("Perma-Fix" or the
"Company"),an environmental and environmental technology know-how company,
today announced that it has entered into a definitive agreement for
theissuance and sale of 2,051,282 shares of its common stock at an offering
price of $9.75 per share.
Thegross proceeds from the offering, before deducting the placement agent's
fees and other offering expenses, are expected to be approximately$20 million.
Perma-Fix expects to use the net proceeds from the offering to fund (i)
continued R&D and business development relatingto our patent-pending process
for the destruction of PFAS, as well as the cost of installing at least one
commercial treatment unit;(ii) ongoing facility cap-ex and maintenance costs;
as well as (iii) general corporate and working capital purposes.
Craig-HallumCapital Group LLC and Wellington Shields & Co. LLC are acting as
exclusive placements agent for the offering. The offering is expectedto close
on or about May 24, 2024, subject to the satisfaction of customary closing
conditions.
Thesecurities described above are being offered pursuant to a registration
statement on Form S-3 (File No. 333-272074), which was declaredeffective by
the Securities and Exchange Commission (the "SEC") on June 1, 2023. The
offering is being made only by meansof a prospectus which is a part of the
effective registration statement. A final prospectus supplement and the
accompanying prospectusrelating to the registered direct offering will be
filed with the SEC and will be available on the SEC's website at
www.sec.gov
.Additionally, when available, electronic copies of the final prospectus
supplement and the accompanying prospectus may be obtained from(i)
Craig-Hallum Capital Group LLC at 222 South Ninth Street, Suite 350,
Minneapolis, MN 55402, or by phone at (612) 334-6300 or emailat
prospectus@chlm.com
, or (ii) Wellington Shields & Co. LLC at 140 Broadway New York, NY 10005, or
by phone at 212-320-3000or email at
compliance@wellingtonshields.com
.
Thispress release does not constitute an offer to sell or a solicitation of an
offer to buy the securities in this offering, nor shall therebe any sale of
these securities in any state or other jurisdiction in which such offer,
solicitation or sale would be unlawful priorto the registration or
qualification under the securities laws of any such state or other
jurisdiction.
AboutPerma-Fix Environmental Services
Perma-FixEnvironmental Services, Inc. is a nuclear services company and
leading provider of nuclear and mixed waste management services. The
Company'snuclear waste services include management and treatment of
radioactive and mixed waste for hospitals, research labs and institutions,federa
l agencies, including the U.S. Department of Energy ("DOE"), the U.S.
Department of Defense ("DOD"), andthe commercial nuclear industry. The
Company's nuclear services group provides project management, waste
management, environmentalrestoration, decontamination and decommissioning, new
build construction, and radiological protection, safety and industrial
hygienecapability to our clients. The Company operates four nuclear waste
treatment facilities and provides nuclear services at DOE, DOD, andcommercial
facilities, nationwide.
Pleasevisit us at
http://www.perma-fix.com
.
Thispress release contains "forward-looking statements" which are based
largely on the Company's expectations and are subjectto various business risks
and uncertainties, certain of which are beyond the Company's control.
Forward-looking statements generallyare identifiable by use of the words such
as "believe", "expects", "intends", "anticipate","plan to", "estimates",
"projects", and similar expressions. Forward-looking statements include,but
are not limited to: the Company's ability to satisfy the closing conditions
related to the registered direct offering transactionand the overall timing
and completion of such closing and the use of the net proceeds of the
offering; accepting commercial waste fordestruction before the end of the
year; well positioned; treatment of effluent from DFLAW facility; and
cost-effective solution for Hanfordsite tank waste. While the Company believes
the expectations reflected in this news release are reasonable, it can give no
assurancesuch expectations will prove to be correct. There are a variety of
factors which could cause future outcomes to differ materially fromthose
described in this release, including, without limitation, future economic
conditions; industry conditions; competitive pressures;our ability to apply
and market our new technologies; the government or such other party to a
contract granted to us fails to abide byor comply with the contract or to
deliver waste as anticipated under the contract or terminates existing
contracts; Congress fails toprovides funding for the DOD's and DOE's
remediation projects; inability to obtain new foreign and domestic remediation
contracts;and the additional factors referred to under "Risk Factors" and
"Special Note Regarding Forward-Looking Statements"of our 2023 Form 10-K and
Form 10-Q for quarter ended March 31, 2024. The Company makes no commitment to
disclose any revisions to forward-lookingstatements, or any facts, events or
circumstances after the date hereof that bear upon forward-looking statements.
Contacts:
DavidK. Waldman-US Investor Relations
CrescendoCommunications, LLC
(212)671-1021
HerbertStrauss-European Investor Relations
herbert@eu-ir.com
+43316 296 316
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}
{graphic omitted}