Attached files
| file | filename |
|---|---|
| EX-3.1 - Pure Earth, Inc. | v168194_ex3-1.htm |
| EX-4.5 - Pure Earth, Inc. | v168194_ex4-5.htm |
| EX-4.4 - Pure Earth, Inc. | v168194_ex4-4.htm |
| EX-4.1 - Pure Earth, Inc. | v168194_ex4-1.htm |
| EX-4.2 - Pure Earth, Inc. | v168194_ex4-2.htm |
| EX-4.3 - Pure Earth, Inc. | v168194_ex4-3.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): November 30,
2009
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Pure Earth, Inc.
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(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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000-53287
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84-1385335
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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One Neshaminy Interplex, Suite 201, Trevose,
Pennsylvania
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19053
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (215)
639-8755
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Not
Applicable
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(Former
name or former address, if changed since last
report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see
General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On
November 30, 2009, Pure Earth, Inc. (the “Company”), closed on a private
placement (the “Private Placement”) of its Series C Convertible Preferred Stock
(the “Series C Preferred Stock”). In connection with the Private Placement, the
Company entered into a Subscription Agreement and a Registration Rights
Agreement with each of the investors purchasing Series C Preferred Stock,
pursuant to which the Company sold and issued an aggregate of 126,600 shares of
Series C Preferred Stock at a purchase price of $10.00 per share, and received
aggregate gross proceeds therefor of $1,266,000. Included among the investors
purchasing Series C Preferred Stock in the Private Placement were: Mark
Alsentzer, the Company’s President and Chief Executive Officer and Class I
director; Joseph T. Kotrosits, the Company’s Senior Vice President –
Transportation Services; Charles M. Hallinan, the Company’s Class II director;
and Fidus Mezzanine Capital, L.P. (“Fidus”), the holder of the Company’s
existing Series B Preferred Stock (the “Series B Preferred Stock”) and related
common stock purchase warrants.
Summary
of the Material Terms of the Series C Preferred Stock
On
November 18, 2009, the Board of Directors of the Company approved the
designation of 260,000 shares of the Company’s preferred stock as Series C
Convertible Preferred Stock. A summary of the powers, designations,
preferences, rights and qualifications of the Series C Preferred Stock is set
forth below. Such summary is qualified in its entirety by the
Certificate of Designations, Preferences and Rights of Series C Convertible
Preferred Stock (the “Series C Designations”), a copy of which has been filed as
Exhibit 3.1 hereto, and the terms of which are incorporated by reference in this
Item 1.01.
Ranking
With
respect to rights to dividends and other distributions prior to liquidation, and
with respect to rights to dividends and distributions upon a liquidation,
dissolution or winding up, the rights of the holders of the Series C Preferred
Stock shall rank (a) senior to and prior to (i) all classes or series of the
Company’s common stock, and (ii) any class or series of the Company’s preferred
stock which by its terms is subordinated or junior to the Series C Preferred
Stock (collectively, the “Junior Securities”); (b) junior to the Series B
Preferred Stock and any other class or series of the Company’s preferred stock
which by its terms is senior or prior to the Series C Preferred Stock
(collectively, the “Senior Securities”); and
(c) pari passu and at parity with any class or series of the Company’s preferred
stock which by its terms is neither senior nor junior to the Series C Preferred
Stock.
Dividends
Subject
to the rights of, and limitations imposed in respect of, Senior Securities, each
holder of a share of Series C Preferred Stock shall be entitled to receive,
when, as and if declared by the Company’s Board of Directors out of funds
legally available therefor, cumulative dividends, payable in cash, in shares of
Series C Preferred Stock, or in the Company’s common stock upon conversion, at
the rate of (i) 10% per year from the original issue date of such share of
Series C Preferred Stock (the “Series C Original Issue Date”) through (but not
including) the first anniversary of the Series C Original Issue Date, and (ii)
15% per year from (and including) the first anniversary of the Series C Original
Issue Date through (but not including) that date on which such share of Series C
Preferred Stock is retired. If the Company elects to satisfy
dividends by delivering additional shares of Series C Preferred Stock, the
Series C Preferred Stock will be valued for this purpose at $10.00 per
share. To the extent not paid in cash or Series C Preferred Stock,
accrued and unpaid dividends on the Series C Preferred Stock shall be (i)
compounded quarterly on each March 1, June 1, September 1 and December 1,
commencing March 1, 2010, (ii) computed on the basis of $10.00 per share, plus
any accrued and unpaid dividend amounts which are compounded as provided above,
and (iii) computed on the basis of a 360-day year consisting of twelve 30-day
months.
No
dividends (other than dividends payable solely in shares of Series C Preferred
Stock, the Company’s common stock or other Junior Securities) shall be paid, or
declared and set apart for payment by the Company unless and until all accrued
and unpaid dividends on the Senior Securities shall have been paid or declared
and set apart for payment and unless such payment is permitted by the terms of
the Senior Securities. No dividends shall be paid or declared and set
apart for payment on any class or series of the Company’s preferred stock
ranking, as to dividends, on a parity with the Series C Preferred Stock for any
period unless cumulative dividends have been, or contemporaneously are, paid or
declared and set apart for payment on the Series C Preferred Stock for all
dividend payment periods terminating on or prior to the date of payment of such
dividends. No dividends shall be paid or declared and set apart for
payment on the Series C Preferred Stock for any period unless cumulative
dividends have been, or contemporaneously are, paid or declared and set apart
for payment on the Company’s preferred stock ranking, as to dividends, on a
parity with the Series C Preferred Stock for all dividend periods terminating on
or prior to the date of payment of such dividends.
2
Liquidation,
Dissolution or Winding Up
In the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, after any payment or distribution of the assets of the
Company is made to or set apart for the holders of the Series B Preferred Stock
in accordance with the terms thereof, but before any payment or distribution of
the assets of the Company shall be made to or set apart for the holders of
Junior Securities, the holder of a share of Series C Preferred Stock shall be
entitled to receive an amount in cash equal to (i) $10.00 (as adjusted for stock
splits, stock combinations and similar changes), plus (ii) the sum of all
accrued and unpaid dividends on such share (such sum, the “Liquidation
Value”). After payment is made in full to the holders of the Series C
Preferred Stock, the other series or class or classes of the Company’s capital
stock shall be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series C Preferred Stock shall not be
entitled to share therein.
Optional
Conversion
Each
share of Series C Preferred Stock shall be convertible, at the option of the
holder thereof, at any time and from time to time, and without the payment of
additional consideration by the holder thereof, into such number of fully paid
and nonassessable shares of the Company’s common stock as is determined by
dividing the Liquidation Value by the Series C Conversion Price (as defined
below) in effect at the time of conversion. The “Series C Conversion
Price” shall initially be equal to $0.40, subject to adjustment as provided in
the Series C Designations for (i) any dividend paid or distribution made on the
Company’s common stock in shares of such common stock, (ii) any subdivision of
the Company’s outstanding common stock; (iii) any combination of the outstanding
shares of the Company’s common stock; or (iv) any reorganization,
recapitalization, reclassification, consolidation or merger involving the
Company in which its common stock (but not the Series C Preferred Stock) is
converted into or exchanged for securities, cash or other property.
In the
event of a notice of redemption of any shares of Series C Preferred Stock, the
conversion rights of the shares of Series C Preferred Stock designated for
redemption will terminate at the close of business on the last full day
preceding the date fixed for redemption, unless the redemption price is not
fully paid on such redemption date, in which case the conversion rights for such
shares will continue until such price is paid in full. In the event
of a liquidation, dissolution or winding up of the Company, the conversion
rights will terminate at the close of business on the last full day preceding
the date fixed for the payment of any such amounts distributable on such event
to the holders of Series C Preferred Stock.
So long
as the Series C Preferred Stock is outstanding, the Company must reserve and
keep available out of its authorized but unissued capital stock, for the purpose
of effecting the conversion of the Series C Preferred Stock, such number of its
duly authorized shares of common stock as shall from time to time be sufficient
to effect the conversion of all outstanding Series C Preferred
Stock. If at any time the number of authorized but unissued shares of
the Company’s common stock shall not be sufficient to effect the conversion of
all then outstanding shares of the Series C Preferred Stock, the Company will
take such corporate action as may be necessary to increase its authorized but
unissued shares of common stock to such number of shares as shall be sufficient
for such purposes, including, without limitation, engaging in best efforts to
obtain the requisite stockholder approval of any necessary amendment to the
Company’s Amended and Restated Certificate of Incorporation.
Mandatory
Conversion
All
outstanding shares of Series C Preferred Stock may be converted at the election
of the Company, into shares of Common Stock, at the then effective Series C
Conversion Price:
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·
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at
the election of the Company in the event that, at any time, (x) the 30-day
average closing price per share of its common stock is greater than $1.00
per share for any 30 day period, and (y) the
30-day average daily trading volume of the common stock for such period is
greater than 250,000 shares; or
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·
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upon
the consummation of one or more public offerings of the Company’s common
stock pursuant to an effective registration statement (other than on Form
S-4 or Form S-8) under the Securities Act of 1933, as amended, (1) in each
case underwritten by a regionally or nationally recognized investment bank
pursuant to which the Company receives gross cash proceeds (before
reduction for underwriting commissions, registration fees and expense and
other costs and expenses relating to the offering) of at least $20.0
million and (2) that alone or in the aggregate for all such offerings
described in the immediately preceding clause (1) have gross cash proceeds
(before reduction for underwriting commissions, registration fees and
expenses and other costs and expenses relating to such offerings) of at
least $50.0 million (a “Qualified Public
Offering”).
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3
The Board
of Directors shall have the sole and exclusive authority to determine whether
the average prices and trading volumes satisfy the foregoing thresholds for
conversion at the Company’s election. However, the Company has agreed
with Fidus that the foregoing mandatory conversion provisions shall not apply to
Fidus to the extent that the application of such provisions would cause Fidus to
own more than 4.9% of the Company’s common stock.
Redemption
Subject
to the rights of, and limitations imposed in respect of, Senior Securities, the
Company may redeem the Series C Preferred Stock, at its election, in each of the
following circumstances.
Provided
that there has been no Qualified Public Offering since the Series C Original
Issue Date of the first issued shares of Series C Preferred Stock, the Company
may redeem all or any portion of the Series C Preferred Stock at redemption
price per share equal to (i) the number of shares of its common stock into which
a share of Series C Preferred Stock is then convertible, multiplied by (ii) the
greater of (a) two times the then current Series C Conversion Price, or (b) the
then current 30-day average market closing price per share of the common stock
for the 30-day period immediately preceding the date of the redemption
notice.
In the
event that the Company becomes party to a transaction that constitutes a Sale of
the Corporation (as defined in the Series C Designations), the Company may
redeem all or any portion of the Series C Preferred Stock, at or prior to the
consummation of the Sale of the Corporation, at a redemption price equal to the
greater of (i) the Liquidation Value of such shares, or (ii) such amount as
would have been payable to on account of a share of Series C Preferred Stock had
all such shares of Series C Preferred Stock been converted into common stock
immediately prior to the Sale of the Corporation.
Protective
Provisions
Except
where the vote or written consent of the holders of a greater number of shares
is required by law, without first obtaining the affirmative vote or written
consent of the holders of Series C Preferred Stock representing greater than 50%
of the aggregate Liquidation Value of all outstanding Series C Preferred Stock,
voting as a separate class, the Company shall not amend or alter any rights,
preferences or privileges of the Series C Preferred Stock. No such
amendment or alternation that adversely impacts the rights, preferences or
privileges of one or more holders of Series C Preferred Stock may be made
without the consent of each such holder.
Voting
Rights
Holders
of the Series C Preferred Stock have no voting rights as a stockholder of the
Company other than those required under applicable law.
Summary
of the Material Terms of the Registration Rights Agreement
If the
Company proposes to register any of its securities under the Securities Act in
connection with the public offering of such securities (other than certain
excluded registrations), then the Company shall, upon the request of any holder
of registration rights under this Registration Rights Agreement (a “Holder”),
and, subject to the provisions of the Registration Rights Agreement, use
reasonable efforts to cause to be registered all of the shares of common stock
underlying the Series C Preferred Stock that any Holder has requested to be
included in such registration. In connection with any offering
involving an underwriting of shares of the Company’s capital stock, if the total
number of securities, including registrable securities, requested by Holders to
be included in such offering exceeds the number of securities to be sold (other
than by the Company) that the underwriters in their reasonable discretion
determine is compatible with the success of the offering, then the Company shall
be required to include in the offering only that number of such securities,
including registrable securities, which the underwriters and the Company in
their sole discretion determine will not jeopardize the success of the offering,
in the following order: (i) first, the securities the Company proposes to sell;
(ii) second, the securities that each other security holder proposes to sell by
virtue of registration rights granted by the Company prior to the date of the
Registration Rights Agreement; and (iii) third, the securities that each Holder
and any other person with registration rights granted by the Company proposes to
sell.
4
With
respect to any registration statement required under the Registration Rights
Agreement, the Company must prepare and file with the Securities and Exchange
Commission a registration statement with respect to such registrable securities
and use its commercially reasonable efforts to cause such registration statement
to become effective and keep such registration statement effective for a period
of up to 60 days or, if earlier, until the distribution contemplated in the
registration statement has been completed; provided, however, that such 60 day
period shall be extended for a period of time equal to the period any Holder
refrains from selling any such securities under the registration statement at
the request of an underwriter of common stock (or other securities) of the
Company or upon receiving a notice from the Company that prevents the Holder
from selling any securities included in such registration.
Consents
and Approvals
The
Company obtained the consent of Fidus and Wells Fargo Bank, National
Association, its senior lender, with respect to the issuance and sale of the
Series C Preferred Stock and the transactions contemplated by the Subscription
Agreement, the Registration Rights Agreement and the Series C
Designations.
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Item
3.02.
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Unregistered
Sales of Equity Securities.
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The information reported under Item
1.01 herein is incorporated by reference in response to this Item
3.02.
Sales of the Series C Preferred Stock
in the Private Placement occurred on November 30, 2009 and December 3,
2009. No underwriting discounts or commissions were paid in
connection with the Private Placement. The Company offered and sold
the Series C Preferred Stock in reliance upon Rule 506 under the Securities
Act. The Company believes that the offer and sale of the Series C
Preferred Stock was so exempt for the following reasons:
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·
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The
Company complied with the applicable information requirements of Rule
502(b) at a reasonable time prior to sale with respect to all purchasers
who were not accredited investors.
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·
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The
Company made available to each purchaser a reasonable time prior to his or
her purchase the opportunity to ask questions and receive answers
concerning the terms and conditions of the Private Placement and to obtain
any additional information that the Company possessed or was able to
acquire without unreasonable effort or expense that was necessary to
verify the accuracy of information furnished under Rule
502(b)(2)(ii).
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·
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Neither
the Company nor any person acting on its behalf offered or sold the Series
C Preferred Stock by any form of general solicitation or general
advertising.
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·
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The
Company exercised reasonable care to assure that the purchasers of the
Series C Preferred Stock were not underwriters within the meaning of
Section 2(a)(11) of the Securities
Act.
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·
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There
were no more than 35 purchasers of Series C Preferred Stock, as determined
in accordance with Rule 501(e).
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·
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The
Company had reason to believe that each purchaser who was not an
accredited investor either alone or with his or her purchaser
representative(s) had such knowledge and experience in financial and
business matters that he or she was capable of evaluating the merits and
risks of an investment in the Series C Preferred
Stock.
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·
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The
Company filed a notice on Form D no later than 15 calendar days after the
first sale of the Series C Preferred
Stock.
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Item
3.03 Material Modification to Rights of Security Holders.
(a)
The information reported under Item 1.01 herein is incorporated by reference in
response to this Item 3.03(a).
(b)
The information reported under Item 1.01 herein is incorporated by reference in
response to this Item 3.03(b).
5
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Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
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(a) The
information reported under Item 1.01 herein is incorporated by reference in
response to this Item 5.03(a).
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Item
9.01.
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Financial
Statements and Exhibits.
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(d)
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Exhibit No.
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Description
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3.1
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Certificate
of Designations, Preferences and Rights of Series C Convertible Preferred
Stock
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4.1
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Form
of Registration Rights Agreement
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4.2
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Specimen
Series C Preferred Stock Certificate
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4.3
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Form
of Subscription Agreement for Purchase of Series C Convertible Preferred
Stock
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4.4
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Side
Letter, dated November 24, 2009, between the Company and Fidus, with
respect to the mandatory conversion of the Series C Convertible Preferred
Stock
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4.5
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Consent
of
Fidus
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6
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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PURE
EARTH, INC.
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Date:
December 3, 2009
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By:
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/s/ Brent Kopenhaver
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Brent
Kopenhaver
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Chairman,
Executive Vice President,
Chief
Financial Officer and
Treasurer
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7
EXHIBIT
INDEX
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Exhibit No.
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Description
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3.1
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Certificate
of Designations, Preferences and Rights of Series C Convertible Preferred
Stock
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4.1
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Form
of Registration Rights Agreement
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4.2
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Specimen
Series C Preferred Stock Certificate
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4.3
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Form
of Subscription Agreement for Purchase of Series C Convertible Preferred
Stock
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4.4
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Side
Letter, dated November 24, 2009, between the Company and Fidus, with
respect to the mandatory conversion of the Series C Convertible Preferred
Stock
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4.5
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Consent
of
Fidus
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8