SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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) July 7, 1997
__________________
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-11596 58-1954497
______________ _______________ __________________
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1940 N.W. 67th Place, Suite A, Gainesville, FL 32653
______________________________________________ _________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (352) 373-4200
_______________
Not applicable
____________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
Sale of Series 5 Class E Convertible Preferred Stock.
On or about July 14, 1997, Perma-Fix Environmental Services,
Inc. (the "Company") issued to the Infinity Fund, L.P. ("Infinity"),
350 shares of newly-created Series 5 Class E Convertible Preferred
Stock, par value $.001 per share ("Series 5 Preferred"), at a price
of $1,000 per share, for an aggregate sales price of $350,000. The
sale to Infinity was made in a private placement under Rule 506 of
Regulation D under the Securities Acts of 1933, as amended, pursuant
to the terms of a Subscription and Purchase Agreement, dated July 7,
1997, between the Company and Infinity ("Subscription Agreement").
The Company intends to utilize the proceeds received on the sale of
Series 5 Preferred for the payment of debt and general working
capital.
The Series 5 Preferred has a liquidation preference over the
Company's common stock, par value $.001 per share ("Common Stock"),
equal to $1,000 consideration per outstanding share of Series 5
Preferred (the "Liquidation Value"), plus an amount equal to all
unpaid dividends accrued thereon. The Series 5 Preferred accrues
dividends on a cumulative basis at a rate of four percent (4%) per
annum of the Liquidation Value ("Dividend Rate"), and is payable
semi-annually when and as declared by the Board of Directors. No
dividends or other distributions may be paid or declared or set
aside for payment on the Company's Common Stock until all accrued
and unpaid dividends on all outstanding shares of Series 5 Preferred
have been paid or set aside for payment. Dividends may be paid, at
the option of the Company, in the form of cash or Common Stock of
the Company. If the Company pays dividends in Common Stock, such
is payable in the number of shares of Common Stock equal to the
product of (a) the quotient of (i) the Dividend Rate divided by (ii)
the average of the closing bid quotation of the Common Stock as
reported on the NASDAQ for the five trading days immediately prior to
the date the dividend is declared, multiplied by (b) a fraction,
the numerator of which is the number of days elapsed during the
period for which the dividend is to be paid and the denominator of
which is 365.
The holder of the Series 5 Preferred may convert into Common
Stock up to 175 shares of the Series 5 Preferred on and after
November 3, 1997, and the remaining 175 shares of the Series 5
Preferred on and after December 3, 1997. The conversion price per
share is the lesser of (a) the product of the average closing bid
quotation for the five (5) trading days immediately preceding the
conversion date multiplied by 80% or (b) $1.6875. The minimum
conversion price is $.75, which minimum will be eliminated from and
after September 6, 1998. If the average closing bid quotation for the
five trading days immediately preceding the conversion of the Series 5
Preferred equals or exceeds $2.11, the holder will have the right to
convert the Series 5 Preferred into approximately 207,400 shares of
Common Stock. The Company will have the option to redeem the shares
of Series 5 Preferred (a) between July 14, 1998, and July 13, 2001,
at a redemption price of $1,300 per share if at any time the average
closing bid price of the Common Stock for ten consecutive trading days
is in excess of $4.00, and (b) after July 13, 2001, at a redemption
price of $1,000 per share. The holder of the Series 5 Preferred will
have the option to convert the Series 5 Preferred prior to redemption
by the Company.
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<PAGE>
On June 30, 1997, the Company entered into a Stock Purchase
Agreement ("Centofanti Agreement") with Dr. Louis F. Centofanti,
currently the President, Chief Executive Officer, Chairman of the
Board, and Director of the Company, whereby the Company sold, and
Dr. Centofanti purchased, 24,381 shares of the Company's Common
Stock. The sale to Dr. Centofanti was made in a private placement
under Rule 506 of Regulation D under the Securities Act of 1933,
as amended. The purchase price was $1.6406 per share representing
75% of the $2.1875 closing bid price of the Common Stock as quoted
on the NASDAQ on the date that Dr. Centofanti notified the Company
of his desire to purchase such shares. Pursuant to the terms of the
Centofanti Agreement, Dr. Centofanti paid the Company the aggregate
purchase price of $40,000 for the 24,381 shares of Common Stock. The
sale of the 24,381 shares and the terms of the Centofanti Agreement
were authorized by the Company's Board of Directors.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
4.1 Subscription and Purchase Agreement, dated July 7,
1997, between the Company and The Infinity Fund,
L.P.
4.2 Certificate of Designations of Series 5 Class E
Convertible Preferred Stock, dated July 14, 1997.
4.3 Specimen copy of Series 5 Class E Convertible
Preferred Stock certificate.
4.4 Stock Purchase Agreement, dated June 30, 1997,
between the Company and Dr. Louis F. Centofanti.
4.5 Stock Purchase Agreement, dated June 30, 1997,
between the Company and Steve Gorlin.
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.
Dated: July 25, 1997.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By: /s/ Richard T. Kelecy
____________________________
Richard T. Kelecy
Chief Financial Officer
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MBEN:\N-P\PESI\8K\797\8K797.EDG
SUBSCRIPTION AND PURCHASE AGREEMENT
for
350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
July 7, 1997
<PAGE>
TABLE OF CONTENTS
Page
1. Subscription for Purchase of Series 5 Preferred Stock . . . . . . . 2
1.1 Sale and Purchase. . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Reporting Company. . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Terms of the Series 5 Preferred Stock. . . . . . . . . . . . . 3
2. Payment of Purchase Price; Delivery of Securities . . . . . . . . . 3
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Purchase Price and Payment . . . . . . . . . . . . . . . . . . 3
2.3 Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . 3
3. Representations, Warranties and Covenants of Subscriber . . . . . . 3
3.1 Investment Intent. . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Certain Risk . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Prior Investment Experience. . . . . . . . . . . . . . . . . . 5
3.4 No Review by the SEC . . . . . . . . . . . . . . . . . . . . . 5
3.5 Not Registered . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 No Public Market . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Sophisticated Investor . . . . . . . . . . . . . . . . . . . . 6
3.8 SEC Filing . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9 Documents, Information and Access. . . . . . . . . . . . . . . 6
3.10 No Registration, Review or Approval. . . . . . . . . . . . . . 7
3.11 Transfer Restrictions. . . . . . . . . . . . . . . . . . . . . 7
3.12 Trading Activity . . . . . . . . . . . . . . . . . . . . . . . 7
3.13 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Accuracy or Representations and Warranties . . . . . . . . . . 8
3.15 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.16 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Representations, Warranties and Covenants of the
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Organization, Authority, Qualification . . . . . . . . . . . . 9
4.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Ownership of, and Title to, Securities . . . . . . . . . . . . 9
4.4 Exemption from Registration. . . . . . . . . . . . . . . . . . 9
4.5 Use of Proceeds from this Offering . . . . . . . . . . . . . . 9
5. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 Registration . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Current Registration Statement . . . . . . . . . . . . . . . . 10
5.3 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . 11
5.4 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
6. Indemnification.. . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 By the Company . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 By the Subscriber. . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Securities Legends and Notices. . . . . . . . . . . . . . . . . . . 13
8. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Amendment; Waiver. . . . . . . . . . . . . . . . . . . . . . . 14
8.2 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . 14
8.3 Governing Law; Litigation Costs. . . . . . . . . . . . . . . . 14
8.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . 15
8.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 15
8.9 Authority; Enforceability. . . . . . . . . . . . . . . . . . . 15
8.10 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.11 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . 16
8.12 Public Announcements . . . . . . . . . . . . . . . . . . . . . 16
Exhibit "A" - Certificate of Designations
-ii-
<PAGE>
SUBSCRIPTION AND PURCHASE AGREEMENT
for
350 SHARES OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK,
PAR VALUE $.001 PER SHARE
of
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(a Delaware corporation)
THIS SUBSCRIPTION AND PURCHASE AGREEMENT (the "Agreement") is
dated as of the 3rd day of July, 1997, by and between PERMA-FIX
ENVIRONMENTAL SERVICES, INC., a Delaware corporation, having offices
at 1940 Northwest 67th Place, Gainesville, Florida 32653 (the
"Company"), and THE INFINITY FUND, L.P., a Georgia limited
partnership, and having its principal offices at 3 Piedmont Center,
Suite 210, Atlanta, Georgia 30305 (the "Subscriber").
W I T N E S S E T H:
WHEREAS, the Subscriber and the Company have arranged for the
Agreement to provide for the subscription and, if such subscription
as set forth in this Agreement is accepted by the Company, the
purchase by the Subscriber, on the terms and subject to the
conditions set forth in this Agreement, of an aggregate of 350
shares of a new series of convertible preferred stock, par value
$.001 per share, to be designated by the Company's Board of
Directors as "Series 5 Class E Convertible Preferred Stock" (the
"Series 5 Preferred Stock"), with such Series 5 Preferred Stock
containing such terms, conditions, restrictions and provisions as
set forth in the Certificate of Designations attached hereto as
Exhibit "A;"
WHEREAS, the Company's Common Stock is listed for trading on
the Boston Stock Exchange and the National Association of Securities
Dealers Automated Quotation system ("NASDAQ"), and the Company is
subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
has been subject to such filing requirements for the past ninety
(90) days;
WHEREAS, the Subscriber is an "accredited investor" as such
term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the principal place of business of the Subscriber is
located in Atlanta, Georgia;
<PAGE>
WHEREAS, in order to induce the Subscriber to enter into this
Agreement and to subscribe for and purchase the Securities on the
terms and subject to the conditions hereof, the Company is granting
certain registration rights under the Agreement with respect to the
Common Stock issuable upon the conversion of the Series 5 Preferred
Stock;
WHEREAS, in reliance upon the representations made by the
Subscriber in this Agreement, the transactions contemplated by this
Agreement are such that the offer and sale of the Series 5
Preferred Stock by the Company hereunder will be exempt from
registration under applicable federal and state (U. S.) securities
laws since this is a private placement and intended to be a
nonpublic offering pursuant to Sections 4(2) and/or 3(b) of the
Securities Act and/or Regulation D promulgated under the Securities
Act; and,
WHEREAS, the Series 5 Preferred Stock to be sold in accordance
with this Agreement will not be quoted or listed for trading on any
securities exchange, organized market or quotation system at the
time of acquisition hereunder.
NOW, THEREFORE, for and in consideration of the premises, and
the mutual representations, warranties, covenants and agreements set
forth herein, and for other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereto agree as
follows:
1. Subscription for Purchase of Series 5 Preferred Stock.
1.1 Sale and Purchase. On the basis of the representations,
warranties, covenants and agreements, and subject to the
terms and conditions set forth herein, on the Closing
Date, the Company agrees to sell, transfer, convey and
deliver to the Subscriber, and the Subscriber agrees to
purchase, acquire and accept delivery from the Company,
three hundred fifty (350) shares of the Series 5
Preferred Stock for an aggregate purchase price of Three
Hundred Fifty Thousand Dollars ($350,000) ("Purchase
Price").
1.2 Reporting Company. Although the Series 5 Preferred Stock
and the shares of Common Stock issuable upon conversion
of the Series 5 Preferred Stock (the "Conversion Shares")
shall not be registered as of the Closing under federal
or state securities laws or any rules or regulations
promulgated thereunder, the Company is a reporting
company under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and has filed with the
Securities and Exchange Commission (the "SEC") all
reports required to be filed by the Company under Section
13 or 15(d) of the Exchange Act. The Subscriber has had
the opportunity to review, and has reviewed, all such
reports and information which the Subscriber deemed
material to an investment decision regarding the purchase
of the Securities.
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<PAGE>
1.3 Terms of the Series 5 Preferred Stock. The Series 5
Preferred Stock shall contain and be subject to the
terms, conditions, preferences and restrictions set forth
in the Certificate of Designations attached hereto as
Exhibit "A" ("Certificate of Designations").
2. Payment of Purchase Price; Delivery of Securities.
2.1 Closing. The consummation of this Agreement (the
"Closing") will occur on July 3, 1997 (the "Closing
Date"), at the offices of the Company or at such other
mutually convenient time or at such other mutually
convenient place as agreed upon by the parties.
2.2 Purchase Price and Payment. At the Closing, the
Subscriber shall deliver to the Company the Purchase
Price, in cash by wire transfer. Upon receipt by the
Company of the Purchase Price, the Company shall cause to
be delivered: (a) to the Subscriber, c/o Bear Stearns &
Co., 55 Water Street, Third Floor, Concourse Level, South
Building, New York, New York 10040-0082, a certificate or
certificates representing the 350 shares of Series 5
Preferred Stock purchased by the Subscriber, in such
denominations as Subscriber requests in writing, and (b)
to the Subscriber, written evidence from the Secretary of
State of the State of Delaware that the Certificate of
Designations has been filed in the Office of the
Secretary of State of the State of Delaware on or before
the Closing Date.
2.3 Restrictive Legends. Subscriber agrees that, subject to
the provisions of Section 5 below, all certificates
representing the Series 5 Preferred Stock shall bear the
restrictive legend substantially in the form set forth in
Section 7 below which shall include, but not be limited
to, a legend to the effect that (a) the Series 5
Preferred Stock represented by such certificate has not
been registered under the Securities Act, and (b) unless
there is an effective registration statement relating to
the Series 5 Preferred Stock and the Conversion Shares,
neither the Series 5 Preferred Stock nor the Conversion
Shares may be offered, sold, transferred, mortgaged,
pledged or hypothecated without an exemption from
registration and an opinion of counsel to the Company
with respect thereto, or an opinion from counsel for the
Subscriber, which opinion is satisfactory to the Company,
to the effect that registration under the Act is not
required in connection with such sale or transfer and the
reasons therefor. The legend on all such certificates
shall make reference to the registration rights set forth
in Section 5 hereof.
3. Representations, Warranties and Covenants of Subscriber. The
Subscriber hereby represents, warrants and covenants to the Company
as follows:
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<PAGE>
3.1 Investment Intent. The Subscriber represents and
warrants that the Series 5 Preferred Stock is being, and
any underlying Conversion Shares will be, purchased or
acquired solely for the Subscriber's own account, for
investment purposes only and not with a view toward the
distribution or resale to others. The Subscriber
acknowledges, understands and appreciates that the Series
5 Preferred Stock has not been registered under the
Securities Act by reason of a claimed exemption under the
provisions of the Securities Act which depends, in large
part, upon the Subscriber's representations as to
investment invention, investor status, and related and
other matters set forth herein. Subscriber understands
that, in the view of the United States Securities and
Exchange Commission (the "SEC"), among other things, a
purchase now with an intent to distribute or resell would
represent a purchase and acquisition with an intent
inconsistent with its representation to the Company, and
the SEC might regard such a transfer as a deferred sale
for which the registration exemption is not available.
3.2 Certain Risk. The Subscriber recognizes that the
purchase of the Series 5 Preferred Stock involves a high
degree of risk in that (a) the Company has sustained
losses through March 31, 1997, from its operations, and
may require substantial funds in addition to the proceeds
of this private placement; (b) that the Company has a
substantial accumulated deficit; (c) an investment in the
Company is highly speculative and only investors who can
afford the loss of their entire investment should
consider investing in the Company and the Series 5
Preferred Stock; (d) an investor may not be able to
liquidate his investment; (e) transferability of the
Series 5 Preferred Stock is extremely limited; (f) in the
event of a disposition an investor could sustain the loss
of his entire investment; (g) the Series 5 Preferred
Stock represents non-voting equity securities, and the
right to convert into and purchase shares of voting
equity securities in a corporate entity that has an
accumulated deficit; (h) no return on investment, whether
through distributions, appreciation, transferability or
otherwise, and no performance by, through or of the
Company, has been promised, assured, represented or
warranted by the Company, or by any director, officer,
employee, agent or representative thereof; and, (i) while
the Common Stock is presently quoted and traded on the
Boston Stock Exchange and the Nasdaq SmallCap Market and
while the Subscriber is a beneficiary of certain
registration rights provided herein, the Series 5
Preferred Stock subscribed for and that is purchased
under this Agreement and the Conversion Shares (i) are
not registered under applicable federal or state
securities laws, and thus may not be sold, conveyed,
assigned or transferred unless registered under such laws
or unless an exemption from registration is available
under such laws, as more fully described herein, and (ii)
the Series 5 Preferred Stock subscribed for and that is
to be purchased under this Agreement is not quoted,
-4-
<PAGE>
traded or listed for trading or quotation on the NASDAQ,
or any other organized market or quotation system, and
there is therefore no present public or other market for
the Series 5 Preferred Stock, nor can there be any
assurance that the Common Stock of the Company will
continue to be quoted, traded or listed for trading or
quotation on the Boston Stock Exchange or the Nasdaq
SmallCap Market or on any other organized market or
quotation system.
3.3 Prior Investment Experience. The Subscriber acknowledges
that it has prior investment experience, including
investment in non-listed and non-registered securities,
or has employed the services of an investment advisor,
attorney or accountant to read all of the documents
furnished or made available by the Company to it and to
evaluate the merits and risks of such an investment on
its behalf, and that it recognizes the highly speculative
nature of this investment.
3.4 No Review by the SEC. The Subscriber hereby acknowledges
that this offering of the Series 5 Preferred Stock has
not been reviewed by the SEC because this private
placement is intended to be a nonpublic offering pursuant
to Sections 4(2) and/or 3(b) of the Securities Act and/or
Regulation D promulgated under the Securities Act.
3.5 Not Registered. The Subscriber understands that the
Series 5 Preferred Stock and the Conversion Shares have
not been registered under the Securities Act by reason of
a claimed exemption under the provisions of the
Securities Act which depends, in part, upon the
Subscriber's investment intention. In this connection,
the Subscriber understands that it is the position of the
SEC that the statutory basis for such exemption would not
be present if its representation merely meant that its
present intention was to hold such securities for a short
period, such as the capital gains period of tax statutes,
for a deferred sale, for a market rise (assuming that a
market develops), or for any other fixed period.
3.6 No Public Market. The Subscriber understands that there
is no public market for the Series 5 Preferred Stock.
The Subscriber understands that although there is
presently a public market for the Common Stock, including
the Common Stock issuable upon conversion of the Series
5 Preferred Stock, Rule 144 (the "Rule") promulgated
under the Securities Act requires, among other
conditions, a one-year holding period following full
payment of the consideration therefor prior to the resale
(in limited amounts) of securities acquired in a
nonpublic offering without having to satisfy the
registration requirements under the Securities Act. The
Subscriber understands that the Company makes no
representation or warranty regarding its fulfillment in
the future of any reporting requirements under the
Exchange Act, or its dissemination to the public of any
current financial or other information concerning the
Company, as is required by the Rule as one of the
conditions of its availability. The Subscriber
-5-
<PAGE>
understands and hereby acknowledges that the Company is
under no obligation to register the Series 5 Preferred
Stock or the Conversion Shares under the Securities Act,
except as set forth in Section 5 hereof. The Subscriber
agrees to hold the Company and its directors, officers
and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and
expenses incurred by them as a result of any
misrepresentation made by the Subscriber contained herein
or any sale or distribution by the Subscriber in
violation of the Securities Act or any applicable state
securities or "blue sky" laws (collectively, "Securities
Laws").
3.7 Sophisticated Investor. That (a) the Subscriber is an
"accredited investor," as such term is defined in Rule
501 of Regulation D promulgated under the Securities Act,
and has total assets in excess of $5,000,000; (b) the
Subscriber has adequate means of providing for the
Subscriber's current financial needs and possible
contingencies and has no need for liquidity of the
Subscriber's investment in the Series 5 Preferred Stock;
(c) the Subscriber is able to bear the economic risks
inherent in an investment in the Series 5 Preferred Stock
and that an important consideration bearing on its
ability to bear the economic risk of the purchase of
Series 5 Preferred Stock is whether the Subscriber can
afford a complete loss of the Subscriber's investment in
the Series 5 Preferred Stock and the Subscriber
represents and warrants that the Subscriber can afford
such a complete loss; and (d) the Subscriber has such
knowledge and experience in business, financial,
investment and banking matters (including, but not
limited to, investments in restricted, non-listed and
non-registered securities) that the Subscriber is capable
of evaluating the merits, risks and advisability of an
investment in the Series 5 Preferred Stock.
3.8 SEC Filing. The Subscriber acknowledges that it has been
previously furnished with true and complete copies of the
following documents which have been filed with the SEC
pursuant to Sections 13(a), 14(a), 14(c) or 15(d) of the
Exchange Act since January 1, 1997, and that such have
been furnished to the Subscriber a reasonable time prior
to the date hereof: (a) the Company's Form 10-K for the
year ended December 31, 1996; (b) the Company's Form 10-Q
for the quarter ended March 31, 1997, and (c) the
Company's Form 8-K, date of event reported: June 11,
1997, as amended by the Company's Form 8-K/A, dated
June 25, 1997.
3.9 Documents, Information and Access. The Subscriber's
decision to purchase the Series 5 Preferred Stock is not
based on any promotional, marketing or sales materials,
and the Subscriber and its representatives have been
afforded, prior to purchase thereof, the opportunity to
ask questions of, and to receive answers from, the
Company and its management, and has had access to all
-6-
<PAGE>
documents and information which Subscriber deems material
to an investment decision with respect to the purchase of
Series 5 Preferred Stock hereunder.
3.10 No Registration, Review or Approval. The Subscriber
acknowledges and understands that the private offering
and sale of Series 5 Preferred Stock pursuant to this
Agreement has not been reviewed or approved by the SEC or
by any state securities commission, authority or agency,
and is not registered under the Securities Laws. The
Subscriber acknowledges, understands and agrees that the
Series 5 Preferred Stock is being offered and sold
hereunder pursuant to (i) a private placement exemption
to the registration provisions of the Securities Act
pursuant to Section 3(b) and/or Section 4(2) of such
Securities Act and/or Regulation D promulgated under the
Securities Act) and (ii) a similar exemption to the
registration provisions of applicable state securities
laws.
3.11 Transfer Restrictions. That Subscriber will not transfer
any Series 5 Preferred Stock purchased under this
Agreement or any Conversion Shares acquired upon
conversion of the Series 5 Preferred Stock unless such
Series 5 Preferred Stock or the Conversion Shares,
whichever is applicable, is registered under the
Securities Laws, or unless an exemption is available
under such Securities Laws, and the Company may, if it
chooses, where an exemption from registration is claimed
by such Subscriber, condition any transfer of Series 5
Preferred Stock or Conversion Shares out of the
Subscriber's name on an opinion of the Company's counsel,
to the effect that the proposed transfer is being
effected in accordance with, and does not violate, an
applicable exemption from registration under the
Securities Laws, or an opinion of counsel to the
Subscriber, which opinion is satisfactory to the Company,
to the effect that registration under the Securities Act
is not required in connection with such sale or transfer
and the reasons therefor.
3.12 Trading Activity. The Subscriber expressly agrees that
until such time that it has sold all of the Series 5
Preferred Stock and/or all of the Conversion Shares that
it shall not, directly or indirectly, through an
affiliate (as that term is defined under Rule 405
promulgated under the Securities Act) or by, with or
through an unrelated third party or entity, whether or
not pursuant to a written or oral understanding,
agreement, arrangement, scheme, or artifice of nature
whatsoever, engage in the short selling of the Company's
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<PAGE>
Common Stock or any other equity securities of the
Company, whether now existing or hereafter issued, or
engage in any other activity of any nature whatsoever
that has the same effect as a short sale, or is a de
facto or de jure short sale, of the Company's Common
Stock or any other equity security of the Company,
whether now existing or hereafter issued, including, but
not limited to, the sale of any rights pursuant to any
understanding, agreement, arrangement, scheme or artifice
of any nature whatsoever, whether oral or in writing,
relative to the Company's Common Stock or any other
equity securities of the Company whether now existing or
hereafter created. The Subscriber agrees that it will
not engage, and will cause its affiliates not to engage,
in any activity designed to reduce the price of the
Company's Common Stock, as quoted on the Boston Stock
Exchange or the NASDAQ, in connection with the
Subscriber's conversion of any of the Series 5 Preferred
Stock. The Subscriber agrees to refrain, and cause its
affiliates to refrain, from engaging in, or inducing
others to engage in, any activity relating to the Company
or Common Stock of the Company that is proscribed under
Regulation M promulgated under the Exchange Act.
3.13 Reliance. The Subscriber understands and acknowledges
that the Company is relying upon all of the
representations, warranties, covenants, understandings,
acknowledgements and agreements contained in this
Agreement in determining whether to accept this
subscription and to sell and issue the Series 5 Preferred
Stock to the Subscriber.
3.14 Accuracy or Representations and Warranties. All of the
representations, warranties, understandings and
acknowledgments that Subscriber has made herein are true
and correct in all material respects as of the date of
execution hereof. The Subscriber will perform and comply
fully in all material respects with all covenants and
agreements set forth herein, and the Subscriber covenants
and agrees that until the acceptance of this Agreement by
the Company, the Subscriber shall inform the Company
immediately in writing of any changes in any of the
representations or warranties provided or contained
herein.
3.15 Indemnity. The Subscriber hereby agrees to indemnify and
hold harmless the Company, and the Company's successors
and assigns, from, against and in all respects of any
demands, claims, actions or causes of action,
assessments, liabilities, losses, costs, damages,
penalties, charges, fines or expenses (including, without
limitation, interest, penalties, and attorney and
accountants' fees, disbursements and expenses), arising
out of or relating to any breach by Subscriber of any
representations, warranty, covenant or agreement made by
Subscriber in this Agreement. Such right to
indemnification shall be in addition to any and all other
rights of the Company under this Agreement or otherwise,
at law or in equity.
3.16 Survival. The Subscriber expressly acknowledges and
agrees that all of its representations, warranties,
agreements and covenants set forth in this Agreement
shall be of the essence hereof and shall survive the
execution, delivery and Closing of this Agreement, the
sale and purchase of the Series 5 Preferred Stock, the
conversion of the Series 5 Preferred Stock, and the sale
of the Conversion Shares.
-8-
<PAGE>
4. Representations, Warranties and Covenants of the Company. In
order to induce Subscriber to enter into this Agreement and to
purchase the Series 5 Preferred Stock, the Company hereby
represents, warrants and covenants to Subscriber as follows:
4.1 Organization, Authority, Qualification. The Company is
a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware.
The Company has full corporate power and authority to own
and operate its properties and assets and to conduct and
carry on its business as it is now being conducted and
operated.
4.2 Authorization. The Company has full power and authority
to execute and deliver this Agreement and to perform its
obligations under and consummate the transactions
contemplated by this Agreement. Upon the execution of
this Agreement by the Company and delivery of the Series
5 Preferred Stock, this Agreement shall have been duly
and validly executed and delivered by the Company and
shall constitute the legal, valid and binding obligation
of the Company, enforceable against the Company in
accordance with its terms.
4.3 Ownership of, and Title to, Securities. The Series 5
Preferred Stock to be purchased by the Subscriber is, and
all Conversion Shares, when issued, will be, duly
authorized, validly issued, fully paid and nonassessable
shares of the capital stock of the Company, free of
personal liability. Upon consummation of the purchase of
the Series 5 Preferred Stock (and upon the conversion of
the Series 5 Preferred Stock, in whole or in part)
pursuant to this Agreement, the Subscriber will own and
acquire title to the Series 5 Preferred Stock (and the
Conversion Shares) free and clear of any and all proxies,
voting trusts, pledges, options, restrictions, or other
legal or equitable encumbrance of any nature whatsoever
(other than the restrictions on transfer due to
Securities Laws or as otherwise provided for in this
Agreement or the Certificate of Designation).
4.4 Exemption from Registration. The offer and sale of
Series 5 Preferred Stock to the Subscriber in accordance
with the terms and provisions of this Agreement is being
effected in accordance with the Securities Act, pursuant
to a private placement exemption to the registration
provisions of the Act pursuant to Section 3(b) and/or
4(2) of such Act and/or Regulation D promulgated under
such Act, based on the representations, warranties and
covenants made by the Subscriber contained in this
Agreement.
4.5 Use of Proceeds from this Offering. The net proceeds
from the sale of the Series 5 Preferred Stock are
estimated to be approximately $345,000 after payment of
legal fees and expenses of approximately $5,000, but
prior to any fees and expenses relating to the
registration of the Conversion Shares pursuant to the
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terms of Section 5 hereof. The Company intends to
utilize the net proceeds to reduce outstanding debt and
for general working capital.
5. Registration Rights. In order to induce the Subscriber to
enter into this Agreement and purchase the Series 5 Preferred Stock,
the Company hereby covenants and agrees to grant to the Subscriber
the rights set forth in this Section 5 with respect to the
registration of the Conversion Shares.
5.1 Registration. Subject to the terms of Section 5 hereof,
the Company agrees that within thirty (30) days after the
Closing Date, it shall prepare and file with the SEC, a
registration statement on Form S-3 or equivalent form
(the "Registration Statement") and such other documents,
including a prospectus, as may be necessary in the
opinion of counsel for the Company in order to comply
with the provisions of the Securities Act, so as to
permit a public offering and sale by the Subscriber of up
to 200,000 shares of Common Stock issuable upon
conversion of the Series 5 Preferred Stock, plus up to
36,000 shares of Common Stock, if any, issuable as
payment of dividends on the Series 5 Preferred Stock
pursuant to the terms of the Series 5 Preferred Stock.
The Company shall use its reasonable efforts to cause
such Registration Statement to become effective at the
earliest possible date after filing. In connection with
the offering of such Common Stock registered pursuant to
this Section 5, the Company shall take such reasonable
actions, as it deems necessary, to qualify the Common
Stock issuable upon conversion of the Series 5 Preferred
Stock, plus the Common Stock issuable as payment of
dividends on the Series 5 Preferred Stock, covered by
such Registration Statement under such "blue sky" or
other state securities laws for offer and sale as shall
be reasonably necessary to permit the public offering and
sale of such shares of Common Stock covered by such
Registration Statement; provided, however, that the
Company shall not be required (a) to qualify generally to
do business in any jurisdiction where it would not
otherwise be required to qualify but for this
subparagraph, (b) to subject itself to taxation in any
such jurisdiction, or (c) to consent to general service
of process in any such jurisdiction. It is expressly
agreed that in no event are any registration rights being
granted to the Series 5 Preferred Stock itself, but only
with respect to up to 200,000 shares of the underlying
Conversion Shares issuable upon exercise of the Series 5
Preferred Stock, plus up to 36,000 shares of Common Stock
that the Company may issue in payment of dividends on the
Series 5 Preferred Stock.
5.2 Current Registration Statement. Once effective, the
Company shall use its reasonable efforts to cause such
Registration Statement filed hereunder to remain current
and effective for a period of two (2) years or until the
Conversion Shares covered by such Registration Statement
are sold by the Subscriber, whichever is sooner. The
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<PAGE>
Subscriber shall promptly provide all such information
and materials and take all such action as may be required
in order to permit the Company to comply with all
applicable requirements of the SEC and to obtain any
desired acceleration of the effective date of such
registration statement.
5.3 Other Provisions. In connection with the offering of any
Conversion Shares registered pursuant to this Section 5,
the Company shall furnish to the Subscriber such number
of copies of any final prospectus as it may reasonably
request in order to effect the offering and sale of the
Conversion Shares to be offered and sold under such
Registration Statement. In connection with any offering
of Conversion Shares registered pursuant to this Section
5, the Company shall (a) furnish to the underwriters (if
any), at the Company's expense, unlegended certificates
representing ownership of the Conversion Shares sold
under such Registration Statement in such denominations
as requested and (b) instruct any transfer agent and
registrar of the Conversion Shares sold under such
Registration Statement to release immediately any stop
transfer order, and to remove any restrictive legend,
with respect to such Conversion Shares included in any
registration becoming effective pursuant to this
Agreement upon the sale of such shares by the Subscriber.
5.4 Costs. Subject to the immediately following sentence,
the Company shall in all events pay and be responsible
for all fees, expenses, costs and disbursements
associated with the Registration Statement relating to
the Conversion Shares under this Section 5, including
filing fees, fees, costs and disbursements of any
counsel, accountants and other consultants representing
the Company in connection therewith. Notwithstanding
anything set forth herein to the contrary, Subscriber
shall be responsible for and pay any and all underwriting
discounts and commissions in connection with the sale of
the Conversion Shares pursuant hereto or the Registration
Statement and all fees of its legal counsel and other
advisors retained in connection with reviewing such
Registration Statement.
5.5 Successors. The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all
of the business, properties, stock or assets of the
Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such
succession had taken place.
6. Indemnification.
6.1 By the Company. Subject to the terms of this Section 6,
the Company will indemnify and hold harmless the
Subscriber, its directors and officers, and any
underwriter (as defined in the Securities Act) for the
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<PAGE>
Subscriber and each person, if any, who controls the
Subscriber or such underwriter within the meaning of the
Act, from and against, and will reimburse the Subscriber
and each such underwriter and controlling person with
respect to, any and all loss, damage, liability, cost and
expense to which such holder or any such underwriter or
controlling person may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained
in the Registration Statement filed with the SEC pursuant
to Section 5, any prospectus contained therein or any
amendment or supplement thereto, or arise out of, or are
based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made not misleading;
provided, however, that the Company will not be liable in
any such case to the extent that any such loss, damage,
liability, cost or expense arises out of, or is based
upon, an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with
information furnished by the Subscriber, such underwriter
or such controlling person in writing specifically for
use in the preparation thereof.
6.2 By the Subscriber. Subject to the terms of this Section
6, the Subscriber will indemnify and hold harmless the
Company, its directors and officers, any controlling
person and any underwriter from and against, and will
reimburse the Company, its directors and officers, any
controlling person and any underwriter with respect to,
any and all loss, damage, liability, cost or expense to
which the Company or any controlling person and/or any
underwriter may become subject under the Securities Act
or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue
statement or alleged untrue statement of any material
fact contained in such Registration Statement filed with
the SEC pursuant to Section 5, any prospectus contained
therein or any amendment or supplement thereto, or arise
out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances in which they were
made, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was so
made in reliance upon, and in strict conformity with,
written information furnished by, or on behalf of, the
Subscriber specifically for use in the preparation
thereof.
6.3 Procedure. Promptly after receipt by an indemnified
party pursuant to the provisions of Section 6.1 or 6.2 of
notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions,
such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the
provisions of Section 6.1 or 6.2, promptly notify the
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<PAGE>
indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not
relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any
indemnified party and the indemnified party notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate
in, and, to the extent that it may wish, assume the
defense thereof; or, if there is a conflict of interest
which would prevent counsel for the indemnifying party
from also representing the indemnified party, the
indemnified parties have the right to select only one (1)
separate counsel to participate in the defense of such
action on behalf of all such indemnified parties. After
notice from the indemnifying parties to such indemnified
party of the indemnifying parties' election so to assume
the defense thereof, the indemnifying parties will not be
liable to such indemnified parties pursuant to the
provisions of said Section 6.1 or 6.2 for any legal or
other expense subsequently incurred by such indemnified
parties in connection with the defense thereof, other
than reasonable costs of investigation, unless (a) the
indemnified parties shall have employed counsel in
accordance with the provisions of the preceding sentence;
(b) the indemnifying parties shall not have employed
counsel satisfactory to the indemnified parties to
represent the indemnified parties within a reasonable
time after the notice of the commencement of the action
or (c) the indemnifying party has authorized the
employment of counsel for the indemnified party at the
expense of the indemnifying parties.
7. Securities Legends and Notices. Subscriber represents and
warrants that it has read, considered and understood the following
legends, and agrees that such legends, substantially in the form and
substance set forth below, shall be placed on all of the
certificates representing the Series 5 Preferred Stock:
Series 5 Preferred Stock Legends
NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON
STOCK ISSUABLE UPON THE CONVERSION OF THIS PREFERRED
STOCK HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. THIS PREFERRED
STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH RESPECT THERETO UNDER THE SECURITIES ACT AND
UNDER ANY APPLICABLE STATE SECURITIES LAW OR WITHOUT THE
PRIOR WRITTEN CONSENT OF PERMA-FIX ENVIRONMENTAL
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SERVICES, INC. AND AN OPINION OF PERMA-FIX ENVIRONMENTAL
SERVICES, INC.'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED UNDER APPLICABLE FEDERAL AND STATE SECURITIES
LAWS OR AN EXEMPTION THEREFROM.
NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS PREFERRED STOCK ARE ALSO
SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN THAT
CERTAIN SUBSCRIPTION AND PURCHASE AGREEMENT BY AND
BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED JULY 7,
1997, A COPY OF WHICH IS ON FILE AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICE.
8. Miscellaneous.
8.1 Amendment; Waiver. This Agreement shall not be changed,
modified or amended in any respect except by the mutual
written agreement of the parties hereto. Any provision
of this Agreement may be waived in writing by the party
which is entitled to the benefits thereof. No waiver of
any provision of this Agreement shall be deemed to, or
shall constitute a waiver of, any other provision hereof
or thereof (whether or not similar), nor shall nay such
waiver constitute a continuing waiver.
8.2 Binding Effect; Assignment. Neither this Agreement nor
any rights or obligations hereunder are assignable by the
Subscriber.
8.3 Governing Law; Litigation Costs. This Agreement and its
validity, construction and performance shall be governed
in all respects by the internal laws of the State of
Delaware without giving effect to such State's conflicts
of laws provisions. Each of the Company and the
Subscriber expressly and irrevocably consent to the
jurisdiction and venue of the federal courts located in
Wilmington, Delaware. Each of the parties agrees that in
the event either party brings an action to enforce any of
the provisions of this Agreement or to recovery for an
alleged breach of any of the provisions of this
Agreement, each party shall be responsible for its own
legal costs and disbursements during the pendency of any
such action; provided, however, that after any such
action has been reduced to a final, unappealable
judgment, the prevailing party shall be entitled to
recover from the other party all reasonable, documented
attorneys' fees and disbursements and court costs from
the other party.
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<PAGE>
8.4 Severability. Any term or provisions of this Agreement
which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction only, be ineffective only
to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof
affecting the validity or enforceability of such
provision in any other jurisdiction.
8.5 Headings. The captions, headings and titles preceding
the text of each or any Section, subsection or paragraph
hereof are for convenience of reference only and shall
not affect the construction, meaning or interpretation of
this Agreement or any term or provisions hereof.
8.6 Counterparts. This Agreement may be executed in one or
more original or facsimile counterparts, each of which
shall be deemed an original and all of which shall be
considered one and the same agreement, binding on all of
the parties hereto, notwithstanding that all parties are
not signatories to the same counterpart. Upon delivery
of an executed counterpart by the undersigned Subscriber
to the Company, which in turn is executed and delivered
by the Company, this Agreement shall be binding as one
original agreement between Subscriber and the Company.
8.7 Transfer Taxes. Each party hereto shall pay all such
sales, transfer, use, gross receipts, registration and
similar taxes arising out of, or in connection with, the
transactions contemplated by this Agreement
(collectively, the "Transfer Taxes") as are payable by
such party under applicable law, and the Company shall
pay the cost of any documentary stock transfer stamps, if
any, to be affixed to the certificates representing the
Series 5 Preferred Stock to be sold.
8.8 Entire Agreement. This Agreement, along with the
Certificate of Designations, merges and supersedes any
and all prior agreements, understandings, discussions,
assurances, promises, representations or warranties among
the parties with respect to the subject matter hereof,
and contains the entire agreement among the parties with
respect to the subject matter set forth herein and
therein.
8.9 Authority; Enforceability. The Subscriber is duly
authorized to enter into this Agreement and to perform
all of its obligations hereunder. Upon the execution and
delivery of this Agreement by the Subscriber, this
Agreement shall be enforceable against the Subscriber in
accordance with its terms.
8.10 Notices. Except as otherwise specified herein to the
contrary, all notices, requests, demands and other
communications required or desired to be given hereunder
shall only be effective if given in writing, by hand or
by fax, by certified or registered mail, return receipt
requested, postage prepaid, or by U. S. Express Mail
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<PAGE>
service, or by private overnight mail service (e.g.,
Federal Express). Any such notice shall be deemed to
have been given (i) on the business day actually received
if given by hand or by fax, (ii) on the business day
immediately subsequent to mailing, if sent by U.S.
Express Mail service or private overnight mail service,
or (iii) five (5) business days following the mailing
thereof, if mailed by certified or registered mail,
postage prepaid, return receipt requested, and all such
notices shall be sent to the following addresses (or to
such other address or addresses as a party may have
advised the other in the manner provided in this Section
8.11:
If to the Company: Dr. Louis F. Centofanti
Perma-Fix Environmental
Services, Inc.
1940 Northwest 67th Place
Gainesville, Florida 32653
Fax No.: (352) 373-0040
with copies Irwin H. Steinhorn, Esquire
simultaneously Conner & Winters
by like means to: One Leadership Square, Suite 1700
211 North Robinson
Oklahoma City, Oklahoma 73102
Fax No.: (405) 232-2695
If to the The Infinity Fund, L.P.
Subscriber: 3 Piedmont Center, Suite 210
Atlanta, Georgia 30305
Attention: Mr. Barry Pearl
Fax No.: (404) 231-1375
8.11 No Third Party Beneficiaries. This Agreement and the
rights, benefits, privileges, interests, duties and
obligations contained or referred to herein shall be
solely for the benefit of the parties hereto and no third
party shall have any rights or benefits hereunder as a
third party beneficiary or otherwise hereunder.
8.12 Public Announcements. Neither Subscriber nor any
officer, director, stockholder, employee, affiliate or
affiliated person or entity of Subscriber, shall make or
issue any press releases or otherwise make any public
statements or make any disclosures to any third person or
entity with respect to the transactions contemplated
herein and will not make or issue any press releases or
otherwise make any public statements of any nature
whatsoever with respect to the Company without the
express prior approval of the Company.
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<PAGE>
IN WITNESS WHEREOF, the Company and the undersigned Subscriber
have each duly executed this Agreement as of this 7th day of July,
1997.
PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
______________________________
Dr. Louis F. Centofanti
Chief Executive Officer
THE INFINITY FUND, L.P.
By /s/ Mark Scott
______________________________
Name: Mark Scott
_______________________
Title: Executive Director
______________________
\N-P\PESI\8K\797\EXHIB4.1
State of Delaware
Office of the Secretary of State Page 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY
OF THE CERTIFICATE OF DESIGNATION OF "PERMA-FIX ENVIRONMENTAL
SERVICES, INC." FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF JULY,
A.D. 1997, AT 11:15 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
_______________________________
Edward J. Freel,
Secretary of State
Authentication: 8556371
2249849 8100 Date: 07-14-97
971232152
<PAGE>
CERTIFICATE OF DESIGNATIONS
OF SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK
OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Perma-Fix Environmental Services, Inc. (the "Corporation"), a
corporation organized and existing under the General Corporation
Law of the State of Delaware, does hereby certify:
That, pursuant to authority conferred upon by the Board of
Directors by the Corporation's Restated Certificate of
Incorporation, as amended, and pursuant to the provisions of
Section 151 of the Delaware Corporation Law, the Board of Directors
of the Corporation has adopted resolutions, a copy of which is
attached hereto, establishing and providing for the issuance of a
series of Preferred Stock designated as Series 5 Class E
Convertible Preferred Stock and has established and fixed the
voting powers, designations, preferences and relative
participating, optional and other special rights and
qualifications, limitations and restrictions of such Series 5 Class
E Convertible Preferred Stock as set forth in the attached
resolutions.
Dated: July 3, 1997 PERMA-FIX ENVIRONMENTAL
SERVICES, INC.
By /s/ Louis Centofanti
__________________________________
Dr. Louis F. Centofanti
Chairman of the Board
ATTEST:
/s/ Richard T. Kelecy
______________________________
Richard T. Kelecy, Secretary
<PAGE>
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(the "Corporation")
RESOLUTION OF THE BOARD OF DIRECTORS
FIXING THE NUMBER AND DESIGNATING THE RIGHTS, PRIVILEGES,
RESTRICTIONS AND CONDITIONS ATTACHING TO THE
SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK
WHEREAS, the Corporation's capital includes preferred stock,
par value $.001 per share ("Preferred Stock"), which Preferred
Stock may be issued in one or more series by resolutions adopted by
the directors, and with the directors being entitled by resolution
to fix the number of shares in each series and to designate the
rights, designations, preferences and relative, participating,
optional or other special rights and privileges, and
qualifications, limitations or restrictions attaching to the shares
of each such series;
WHEREAS, it is in the best interests of the Corporation for
the Board to create a new series from the Preferred Stock
designated as the Series 5 Class E Convertible Preferred Stock, par
value $.001 per share ("Series 5 Class E Preferred Stock");
NOW, THEREFORE, BE IT RESOLVED, that the Series 5 Class E
Convertible Preferred Stock, par value $.001 (the "Series 5 Class
E Preferred Stock") of the Corporation shall consist of three
hundred fifty (350) shares and no more and shall be designated as
the Series 5 Class E Convertible Preferred Stock, and the
preferences, rights, privileges, restrictions and conditions
attaching to the Series 5 Class E Preferred Stock shall be as
follows:
Part 1 - Voting and Preemptive Rights.
1.1 Voting Rights. Except as otherwise provided in Section
242(b)(2) of the General Corporation Law of the State of Delaware
(the "GCL"), the holders of the Series 5 Class E Preferred Stock
shall have no voting rights whatsoever. To the extent that under
Section 242(b)(2) of the GCL the vote of the holders of the Series
5 Class E Preferred Stock, voting separately as a class or series
as applicable, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the holders of at
least a majority of the shares of the Series 5 Class E Preferred
Stock represented at a duly held meeting at which a quorum is
present or by written consent of a majority of the shares of Series
5 Class E Preferred Stock (except as otherwise may be required
under the GCL) shall constitute the approval of such action by the
series. To the extent that under Section 242(b)(2) of the GCL the
holders of the Series 5 Class E Preferred Stock are entitled to
vote on a matter, each share of the Series 5 Class E Preferred
Stock shall be entitled one (1) vote for each outstanding share of
Series 5 Class E Preferred Stock. Holders of the Series 5 Class E
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<PAGE>
Preferred Stock shall be entitled to notice of (and copies of proxy
materials and other information sent to stockholders) for all
shareholder meetings or written consents with respect to which they
would be entitled to vote, which notice would be provided pursuant
to the Corporation's bylaws and applicable statutes. If the
holders of the Series 5 Class E Preferred Stock are required to
vote under Section 242(b)(2) of the GCL as a result of the number
of authorized shares of any such class or classes of stock being
increased or decreased, the number of authorized shares of any of
such class or classes of stock may be increased or decreased (but
not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon, irrespective of the
provisions of Section 242(b)(2) of the GCL.
1.2 No Preemptive Rights. The Series 5 Class E Preferred Stock
shall not give its holders any preemptive rights to acquire any
other securities issued by the Corporation at any time in the
future.
Part 2 - Liquidation Rights.
2.1 Liquidation. If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up at any time when
any shares of the Series 5 Class E Preferred Stock shall be
outstanding, the holders of the then outstanding Series 5 Class E
Preferred Stock shall be entitled to receive out of the assets of
the Corporation available for distribution to shareholders an
amount equal to $1,000 consideration per outstanding share of
Series 5 Class E Preferred Stock, and no more, plus an amount equal
to all unpaid dividends accrued thereon to the date of payment of
such distribution ("Liquidation Preference"), whether or not
declared by the Board of Directors, before any payment shall be
made or any assets distributed to the holders of the Corporation's
Common Stock.
2.2 Payment of Liquidation Preferences. Subject to the provisions
of Part 6 hereof, all amounts to be paid as Liquidation Preference
to the holders of Series 5 Class E Preferred Stock, as provided in
this Part 2, shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the
distribution of any of the Corporation's property to the holders of
the Corporation's Common Stock, whether now or hereafter
authorized, in connection with such liquidation, dissolution or
winding up.
2.3 No Rights After Payment. After the payment to the holders of
the shares of the Series 5 Class E Preferred Stock of the full
Liquidation Preference amounts provided for in this Part 2, the
holders of the Series 5 Class E Preferred Stock as such shall have
no right or claim to any of the remaining assets of the
Corporation.
2.4 Assets Insufficient to Pay Full Liquidation Preference. In
the event that the assets of the Corporation available for
distribution to the holders of shares of the Series 5 Class E
Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be
-3-
<PAGE>
insufficient to pay in full all amounts to which such holders are
entitled pursuant to this Part 2, no such distribution shall be
made on account of any shares of any other class or series of
Preferred Stock ranking on a parity with the shares of this Series
5 Class E Preferred Stock upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid
on account of the shares of this Series 5 Class E Preferred Stock
and shares of such other class or series ranking on a parity with
the shares of this Series 5 Class E Preferred Stock, ratably, in
proportion to the full distributable amounts for which holders of
all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
Part 3 - Dividends.
3.1 The holders of the Series 5 Class E Preferred Stock are
entitled to receive if, when and as declared by the Board of
Directors of the Corporation (the "Board") out of funds legally
available therefor, cumulative annual dividends, payable in cash or
Common Stock of the Corporation, par value $.001 per share (the
"Common Stock"), or any combination thereof, at the Corporation's
election, at the rate of four percent (4%) per annum of the
Liquidation Value (as defined below) of each issued and outstanding
share of Series 5 Class E Preferred Stock (the "Dividend Rate").
The Liquidation Value of the Series 5 Class E Preferred Stock shall
be $1,000 per outstanding share of the Series 5 Class E Preferred
Stock (the "Liquidation Value"). The dividend is payable semi-
annually within seven (7) business days after each of December 31
and June 30 of each year, commencing December 31, 1997 (each, a
"Dividend Declaration Date"). Dividends shall be paid only with
respect to shares of Series 5 Class E Preferred Stock actually
issued and outstanding on a Dividend Declaration Date and to
holders of record of the Series 5 Class E Preferred Stock as of the
Dividend Declaration Date. Dividends shall accrue from the first
day of the semi-annual period in which such dividend may be
payable, except with respect to the first semi-annual dividend
which shall accrue from the date of issuance of the Series 5 Class
E Preferred Stock. In the event that the Corporation elects to pay
the accrued dividends due as of a Dividend Declaration Date on an
outstanding share of the Series 5 Class E Preferred Stock in Common
Stock of the Corporation, the holder of such share shall receive
that number of shares of Common Stock of the Corporation equal to
the product of (a) the quotient of (i) the Dividend Rate divided by
(ii) the average of the closing bid quotation of the Corporation's
Common Stock as reported on the National Association of Securities
Dealers Automated Quotation system ("NASDAQ"), or the average
closing sale price if listed on a national securities exchange, for
the five (5) trading days immediately prior to the Dividend
Declaration Date (the "Stock Dividend Price"), times (b) a
fraction, the numerator of which is the number of days elapsed
during the period for which the dividend is to be paid, and the
denominator of which is 365. Dividends on the Series 5 Class E
Preferred Stock shall be cumulative, and no dividends or other
distributions shall be paid or declared or set aside for payment on
the Corporation's Common Stock until all accrued and unpaid
dividends on all outstanding shares of Series 5 Class E Preferred
Stock shall have been paid or declared and set aside for payment.
-4-
<PAGE>
Part 4 - Conversion. The holders of the Series 5 Class E Preferred
Stock shall have rights to convert the shares of Series 5 Class E
Preferred Stock into shares of the Corporation's Common Stock, as
follows (the "Conversion Rights"):
4.1 Right to Convert. The Series 5 Class E Preferred Stock shall
be convertible into shares of Common Stock, as follows:
4.1.1 Up to one hundred seventy-five (175) shares of
Series 5 Class E Preferred Stock may be converted
at the Conversion Price (as that term is defined in
Section 4.2 below) at any time on or after November
3, 1997; and,
4.1.2 Up to an additional one hundred seventy-five (175)
shares of Series 5 Class E Preferred Stock may be
converted at the Conversion Price at any time on or
after December 3, 1997.
4.2 Conversion Price. Subject to the terms hereof, as used
herein, the term Conversion Price per outstanding share of
Series 5 Class E Preferred Stock shall be the product of the
lesser of (i) the average closing bid quotation of the Common
Stock as reported on the over-the-counter market, or the
closing sale price if listed on a national securities
exchange, for the five (5) trading days immediately preceding
the date of the Conversion Notice referred to in Section 4.3
below multiplied by eighty percent (80%) or (ii) U.S. $1.6875.
Notwithstanding the foregoing, the Conversion Price shall not
be less than a minimum of $.75 per share ("Minimum Conversion
Price"), which Minimum Conversion Price shall be eliminated
from and after September 6, 1998. If any of the outstanding
shares of Series 5 Class E Preferred Stock are converted, in
whole or in part, into Common Stock pursuant to the terms of
this Part 4, the number of shares of whole Common Stock to be
issued to the holder as a result of such conversion shall be
determined by dividing (a) the aggregate Liquidation Value of
the Series 5 Class E Preferred Stock so surrendered for
conversion by (b) the Conversion Price in effect at the date
of the conversion. At the time of conversion of shares of the
Series 5 Class E Preferred Stock, the Corporation shall pay in
cash to the holder thereof an amount equal to all unpaid and
accrued dividends, if any, accrued thereon to the date of
conversion, or, at the Corporation's option, in lieu of paying
cash for the accrued and unpaid dividends, issue that number
of shares of whole Common Stock which is equal to the quotient
of the amount of such unpaid and accrued dividends to the date
of conversion on the shares of Series 5 Class E Preferred
Stock so converted divided by the Stock Dividend Price, as
defined in Section 3.1 hereof, in effect at the date of
conversion.
4.3 Mechanics of Conversion. Any holder of the Series 5 Class E
Preferred Stock who wishes to exercise its Conversion Rights
pursuant to Section 4.1 of this Part 4 must surrender the
certificate therefor at the principal executive office of the
Corporation, and give written notice, which may be via
-5-
<PAGE>
facsimile transmission, to the Corporation at such office that
it elects to convert the same (the "Conversion Notice"). No
Conversion Notice with respect to any shares of Series 5 Class
E Preferred Stock can be given prior to the time such shares
of Series 5 Class E Preferred Stock are eligible for
conversion in accordance with the provision of Section 4.1
above, except as provided in Section 4.4. Any such premature
Conversion Notice shall automatically be null and void. The
Corporation shall, within seven (7) business days after
receipt of an appropriate and timely Conversion Notice (and
certificate, if necessary), issue to such holder of Series 5
Class E Preferred Stock or its agent a certificate for the
number of shares of Common Stock to which he shall be
entitled; it being expressly agreed that until and unless the
holder delivers written notice to the Corporation to the
contrary, all shares of Common Stock issuable upon conversion
of the Series 5 Class E Preferred Stock hereunder are to be
delivered by the Corporation to a party designated in writing
by the holder in the Conversion Notice for the account of the
holder and such shall be deemed valid delivery to the holder
of such shares of Common Stock. Such conversion shall be
deemed to have been made only after both the certificate for
the shares of Series 5 Class E Preferred Stock to be converted
have been surrendered and the Conversion Notice is received by
the Corporation (the "Conversion Documents"), and the person
or entity whose name is noted on the certificate evidencing
such shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such
shares of Common Stock at and after such time. In the event
that the Conversion Notice is sent via facsimile transmission,
the Corporation shall be deemed to have received such
Conversion Notice on the first business day on which such
facsimile Conversion Notice is actually received.
4.4 Merger or Consolidation. In case of either (a) any merger or
consolidation to which the Corporation is a party
(collectively, the "Merger"), other than a Merger in which the
Corporation is the surviving or continuing corporation, or (b)
any sale or conveyance to another corporation of all, or
substantially all, of the assets of the Corporation
(collectively, the "Sale"), and such Merger or Sale becomes
effective (x) while any shares of Series 5 Class E Preferred
Stock are outstanding and prior to the date that the
Corporation's Registration Statement covering up to 200,000
shares of Common Stock issuable upon the conversion of the
Series 5 Class E Preferred Stock is declared effective by the
U. S. Securities and Exchange Commission or (y) prior to the
end of the restriction periods in Section 4.1, then, in such
event, the Corporation or such successor corporation, as the
case may be, shall make appropriate provision so that the
holder of each share of Series 5 Class E Preferred Stock then
outstanding shall have the right to convert such share of
Series 5 Class E Preferred Stock into the kind and amount of
shares of stock or other securities and property receivable
upon such Merger or Sale by a holder of the number of shares
of Common Stock into which such shares of Series 5 Class E
Preferred Stock could have been converted into immediately
prior to such Merger or Sale, subject to adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Part 4.
-6-
<PAGE>
4.4 Adjustments to Conversion Price for Stock Dividends and for
Combinations or Subdivisions of Common Stock. If the
Corporation at any time or from time to time while shares of
Series 5 Class E Preferred Stock are issued and outstanding
shall declare or pay, without consideration, any dividend on
the Common Stock payable in Common Stock, or shall effect a
subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split,
reclassification or otherwise than by payment of a dividend in
Common Stock or in any right to acquire Common Stock), or if
the outstanding shares of Common Stock shall be combined or
consolidated, by reclassification or otherwise, into a lesser
number of shares of Common Stock, then the Conversion Price in
effect immediately before such event shall, concurrently with
the effectiveness of such event, be proportionately decreased
or increased, as appropriate.
4.5. Adjustments for Reclassification and Reorganization. If the
Common Stock issuable upon conversion of the Series 5 Class E
Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares
provided for in Section 4.4 hereof), the Conversion Price then
in effect shall, concurrently with the effectiveness of such
reorganization or reclassification, be proportionately
adjusted so that the Series 5 Class E Preferred Stock shall be
convertible into, in lieu of the number of shares of Common
Stock which the holders of Series 5 Class E Preferred Stock
would otherwise have been entitled to receive, a number of
shares of such other class or classes of stock equivalent to
the number of shares of Common Stock that would have been
subject to receipt by the holders upon conversion of the
Series 5 Class E Preferred Stock immediately before that
change.
4.6 Common Stock Duly Issued. All Common Stock which may be
issued upon conversion of Series 5 Class E Preferred Stock
will, upon issuance, be duly issued, fully paid and
nonassessable and free from all taxes, liens, and charges with
respect to the issue thereof.
4.7 Notice of Adjustments. Upon the occurrence of each adjustment
or readjustment of any Conversion Price pursuant to this Part
4, the Corporation, at its expense, within a reasonable period
of time, shall compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to
each holder of Series 5 Class E Preferred Stock a notice
setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment is based.
4.8 Issue Taxes. The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of the Series
5 Class E Preferred Stock pursuant thereto; provided, however,
that the Corporation shall not be obligated to pay any
transfer taxes resulting from any transfer requested by any
holder of Series 5 Class E Preferred Stock in connection with
such conversion.
-7-
<PAGE>
4.9 Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of the shares of
the Series 5 Class E Preferred Stock, such number of its
shares of Common Stock as shall, from time to time, be
sufficient to effect the conversion of all outstanding shares
of the Series 5 Class E Preferred stock, and, if at any time,
the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of the Series 5 Class E Preferred Stock,
the Corporation 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
reasonable efforts to obtain the requisite stockholder
approval of any necessary amendment to its Certificate of
Incorporation.
4.10 Fractional Shares. No fractional shares shall be issued upon
the conversion of any share or shares of Series 5 Class E
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series 5 Class E Preferred Stock by a holder thereof
shall be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional
share. If, after the aforementioned aggregation, the
conversion would result in the issuance of a fractional share
of Common Stock, such fractional share shall be rounded up to
the nearest whole share.
4.11 Notices. Any notices required by the provisions of this Part
4 to be given to the holders of shares of Series 5 Class E
Preferred Stock shall be deemed given if deposited in the
United States mail, postage prepaid, and addressed to each
holder of record at his address appearing on the books of the
Corporation.
4.12 Business Day. As used herein, the term "business day" shall
mean any day other than a Saturday, Sunday or a day when the
federal and state banks located in the State of New York are
required or is permitted to close.
Part 5 - Redemption.
5.1 Redemption at Corporation's Option. Except as otherwise
provided in this Section 5.1, at any time, and from time to
time, after the expiration of one (1) year from the date of
the first issuance of the Series 5 Class E Preferred Stock,
the Corporation may, at its sole option, but shall not be
obligated to, redeem, in whole or in part, at any time, and
from time to time, the then outstanding Series 5 Class E
Preferred Stock at the following cash redemption prices per
share (the "Redemption Price") if redeemed during the
following periods: (a) within four (4) years from the date of
the first issuance of Series 5 Class E Preferred Stock -
$1,300 per share, if at any time during such four (4) year
period the average of the closing bid price of the Common
Stock for ten (10) consecutive trading days shall be in excess
-8-
<PAGE>
of Four U.S. Dollars ($4.00) per share, and (b) after four (4)
years from the date of the first issuance of Series 5 Class E
Preferred Stock - $1,000 per share.
5.3 Mechanics of Redemption. Thirty (30) days prior to any date
stipulated by the Corporation for the redemption of Series 5
Class E Preferred Stock (the "Redemption Date"), written
notice (the "Redemption Notice") shall be mailed to each
holder of record on such notice date of the Series 5 Class E
Preferred Stock. The Redemption Notice shall state: (i) the
Redemption Date of such shares, (ii) the number of Series 5
Class E Preferred Stock to be redeemed from the holder to whom
the Redemption Notice is addressed, (iii) instructions for
surrender to the Corporation, in the manner and at the place
designated, of a share certificate or share certificates
representing the number of Series 5 Class E Preferred Stock to
be redeemed from such holder, and (iv) instructions as to how
to specify to the Corporation the number of Series 5 Class E
Preferred Stock to be redeemed as provided in this Part 5.
5.4 Rights of Conversion Upon Redemption. If the redemption
occurs after the first one hundred eighty (180) days after the
first issuance of Series 5 Class E Preferred Stock, then, upon
receipt of the Redemption Notice, any holder of Series 5 Class
E Preferred Stock shall have the option, at its sole election,
to specify what portion of its Series 5 Class E Preferred
Stock called for redemption in the Redemption Notice shall be
redeemed as provided in this Part 5 or converted into Common
Stock in the manner provided in Part 4 hereof.
5.5 Surrender of Certificates. On or before the Redemption Date
in respect of any Series 5 Class E Preferred Stock, each
holder of such shares shall surrender the required certificate
or certificates representing such shares to the Corporation in
the manner and at the place designated in the Redemption
Notice, and upon the Redemption Date, the Redemption Price for
such shares shall be made payable, in the manner provided in
Section 5.6 hereof, to the order of the person whose name
appears on such certificate or certificates as the owner
thereof. If a share certificate is surrendered and all the
shares evidenced thereby are not being redeemed (as described
below), the Corporation shall cause the Series 5 Class E
Preferred Stock which are not being redeemed to be registered
in the names of the persons or entity whose names appear as
the owners on the respective surrendered share certificates
and deliver such certificate to such person.
5.6 Payment. On the Redemption Date in respect of any Series 5
Class E Preferred Stock or prior thereto, the Corporation
shall deposit with any bank or trust company having a capital
and surplus of at least U. S. $50,000,000, as a trust fund, a
sum equal to the aggregate Redemption Price of all such shares
called from redemption (less the aggregate Redemption Price
for those Series 5 Class E Preferred Stock in respect of which
the Corporation has received notice from the holder thereof of
-9-
<PAGE>
its election to convert Series 5 Class E Preferred Stock into
Common Stock), with irrevocable instructions and authority to
the bank or trust company to pay, on or after the Redemption
Date, the Redemption Price to the respective holders upon the
surrender of their share certificates. The deposit shall
constitute full payment for the shares to their holders, and
from and after the date of the deposit the redeemed shares
shall be deemed to be no longer outstanding, and holders
thereof shall cease to be shareholders with respect to such
shares and shall have no rights with respect thereto except
the rights to receive from the bank or trust company payments
of the Redemption Price of the shares, without interest, upon
surrender of their certificates thereof. Any funds so
deposited and unclaimed at the end of one year following the
Redemption Date shall be released or repaid to the
Corporation, after which the former holders of shares called
for redemption shall be entitled to receive payment of the
Redemption Price in respect of their shares only from the
Corporation.
Part 6 - Parity with Other Shares of Series 5 Class E Preferred
Stock and Priority.
6.1 Rateable Participation. If any cumulative dividends or return
of capital in respect of Series 5 Class E Preferred Stock are
not paid in full, the owners of all series of outstanding
Preferred Stock shall participate rateably in respect of
accumulated dividends and return of capital.
6.2 Ranking. For purposes of this resolution, any stock of any
class or series of the Corporation shall be deemed to rank:
6.2.1 Prior or senior to the shares of this Series 5
Class E Preferred Stock either as to dividends
or upon liquidation, if the holders of such
class or classes shall be entitled to the
receipt of dividends or of amounts
distributable upon dissolution, liquidation or
winding up of the Corporation, whether
voluntary or involuntary, as the case may be,
in preference or priority to the holders of
shares of this Series 5 Class E Preferred
Stock;
6.2.2 On a parity with, or equal to, shares of this
Series 5 Class E Preferred Stock, either as to
dividends or upon liquidation, whether or not
the dividend rates, dividend payment dates, or
redemption or liquidation prices per share or
sinking fund provisions, if any, are different
from those of this Series 5 Class E Preferred
Stock, if the holders of such stock are
entitled to the receipt of dividends or of
amounts distributable upon dissolution,
liquidation or winding up of the Corporation,
whether voluntary or involuntary, in
proportion to their respective dividend rates
or liquidation prices, without preference or
priority, one over the other, as between the
holders of such stock and over the other, as
between the holders of such stock and the
holders of shares of this Series 5 Class E
Preferred Stock; and,
-10-
<PAGE>
6.2.3 Junior to shares of this Series 5 Class E
Preferred Stock, either as to dividends or
upon liquidation, if such class or series
shall be Common Stock or if the holders of
shares of this Series 5 Class E Preferred
Stock shall be entitled to receipt of
dividends or of amounts distributable upon
dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary,
as the case may be, in preference or priority
to the holders of shares of such class or
series.
Part 7 - Reissue.
7.1 Authorized. Any shares of Series 5 Class E Preferred
Stock acquired by the Corporation by reason of purchase,
conversion, redemption or otherwise shall be retired and
shall become authorized but unissued shares of Preferred
Stock, which may be reissued as part of a new series of
Preferred Stock hereafter created.
-11-
MBEN:\N-P\PESI\S3\1997\EXHIB3.1
SEE RESTRICTIVE LEGEND ON REVERSE SIDE
INCORPORATED UNDER THE LAWS OF
DELAWARE
No. - *** - Shares ***
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK
Par Value $.001 Per Share
THIS CERTIFIES THAT S P E C I M E N is the owner of *****
*************** (*****) shares of Series 5 Class E Convertible
Preferred Stock of
Perma-Fix Environmental Services, Inc.
transferrable only on the books of the Corporation by the holder
hereof in person or by attorney upon surrender of this Certificate
properly endorsed.
In Witness Whereof, the said Corporation has caused this
Certificate to be signed by its duly authorized officers and to be
sealed with the Seal of the Corporation this _____ day of July,
1997.
/s/ Richard T. Kelecy /s/ Louis Centofanti
__________________________ __________________________
Secretary President
SHARES $.001 EACH
<PAGE>
NEITHER THIS PREFERRED STOCK NOR ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THIS PREFERRED STOCK HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR QUALIFIED UNDER APPLICABLE STATE SECURITIES
LAWS. THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS PREFERRED STOCK MAY NOT BE OFFERED, SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN EFFECT WITH
RESPECT THERETO UNDER THE SECURITIES ACT AND UNDER ANY APPLICABLE
STATE SECURITIES LAW OR WITHOUT THE PRIOR WRITTEN CONSENT OF
PERMA-FIX ENVIRONMENTAL SERVICES, INC. (THE "COMPANY") AND AN
OPINION OF THE COMPANY'S COUNSEL, OR AN OPINION FROM COUNSEL FOR
THE HOLDER HEREOF, WHICH OPINION IS SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED UNDER
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM.
NOTWITHSTANDING THE FOREGOING, THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION ARE ALSO SUBJECT TO THE REGISTRATION
RIGHTS SET FORTH IN THAT CERTAIN SUBSCRIPTION AND PURCHASE
AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND THE COMPANY, DATED
JULY 7, 1997, A COPY OF WHICH IS ON FILE AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICE.
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER
WHO SO REQUESTS, THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF THE
SERIES 5 CLASS E CONVERTIBLE PREFERRED STOCK AND THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES
AND/OR RIGHTS.
*******************
CERTIFICATE
FOR
****
SHARES
of the
CAPITAL STOCK
of
Perma-Fix Environmental Services, Inc.
Series 5 Class E Convertible Preferred Stock
Par Value $.001 Per Share
ISSUED TO
S P E C I M E N
DATED
July ___, 1997
*******************
For Value Received, __________ hereby sell, assign and
transfer unto __________________________________________________
___________________ Shares of the Capital Stock represented by the
within Certificate, and do hereby irrevocably constitute and
appoint _________________________________________ to transfer the
said Stock on the books of the within named Corporation with full
power of substitution in the premises.
Dated __________________, 19______.
In presence of ________________________________________
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into
this 30th day of June, 1997, by and between PERMA-FIX ENVIRONMENTAL
SERVICES, INC., a Delaware corporation ("PESI"), and DR. LOUIS F.
CENTOFANTI, an individual ("Centofanti").
W I T N E S S E T H:
WHEREAS, Centofanti is the Chairman of the Board and President
of PESI; and
WHEREAS, Centofanti and PESI have negotiated this Agreement in
which Centofanti would acquire 24,381 shares of PESI Common Stock
for $40,000, which is seventy-five percent (75%) of the closing bid
price of each share of PESI Common Stock as quoted on the NASDAQ on
the date hereof; and
WHEREAS, the closing bid price of the PESI Common Stock was
$2.1875, as reported on the NASDAQ as of June 30, 1997; and
WHEREAS, Centofanti desires to purchase Twenty-four Thousand
Three Hundred Eighty-one (24,381) shares of PESI Common Stock, par
value $.001 per share, and PESI desires to sell to Centofanti such
shares of Common Stock, upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises and the
respective covenants and agreements contained herein, the parties
hereto agree as follows:
1. Purchase and Sale.
1.1 Purchase of Shares. Subject to the terms and
conditions of this Agreement, Centofanti hereby
purchases Twenty-four Thousand Three Hundred Eight-one
(24,381) shares of PESI Common Stock (the "Shares"),
and PESI hereby issues and delivers the Shares to
Centofanti.
1.2 Purchase Price; Payment of Purchase Price. The per
share purchase price of the Shares shall be $1.6406,
calculated at seventy-five percent (75%) of $2.1875
(the closing bid price of the Common Stock on June 30,
1997, as reported on the National Association of
Securities Dealers Automated Quotation System
("NASDAQ")). In consideration for the Shares,
Centofanti hereby tenders to the Company Forty Thousand
Dollars ($40,000.00).
<PAGE>
2. Representations and Warranties of Centofanti. Centofanti
represents and warrants as follows:
2.1 Purchase for Investment. Centofanti is acquiring, or
will acquire, the Shares to hold for investment, with
no present intention of dividing Centofanti's
participation with others or reselling or otherwise
participating, directly or indirectly, in a
distribution thereof, and not with a view to or for
sale in connection with any distribution thereof,
except pursuant to a registration statement under the
Securities Act of 1933, as amended (the "Securities
Act"), and any applicable state securities laws, or a
transaction exempt from registration thereunder, and
shall not make any sale, transfer or other disposition
of the Shares in violation of any applicable state
securities laws, including in each instance any
applicable rules and regulations promulgated
thereunder, or in violation of the Securities Act or
the rules and regulations promulgated thereunder by the
Securities and Exchange Commission (the "SEC").
2.2 No Registration. Centofanti acknowledges that the
Shares are not being registered under any state
securities laws, and are not being registered under the
Securities Act on the ground that this transaction is
exempt from registration under Section 3(b) and/or 4(2)
of the Securities Act, and that reliance by PESI on
such exemptions is predicated in part on Centofanti's
representations set forth herein.
2.3 Restricted Transfer. Centofanti agrees that PESI may
refuse to permit the sale, transfer or disposition of
any of the Shares received by Centofanti unless there
is in effect a registration statement under the Secur-
ities Act and any applicable state securities law
covering such transfer or Centofanti furnishes an
opinion of counsel or other evidence, reasonably
satisfactory to counsel for PESI, to the effect that
such registration is not required.
2.4 Legend. Centofanti understands and agrees that stop
transfer instructions will be given to PESI's transfer
agent and that there will be placed on the certificate
or certificates for any of the Shares received by
Centofanti, any substitutions therefor and any certif-
icates for any additional shares which might be dis-
tributed with respect to such Shares, a legend stating
in substance:
"The shares of stock evidenced by this
certificate have been acquired for investment and
have not been registered under the Securities Act
of 1933, as amended (the Securities Act"). These
shares may not be sold or transferred except
pursuant to an effective registration statement
under the Securities Act and any applicable state
securities laws unless there is furnished to the
issuer an opinion of counsel or other evidence,
reasonably satisfactory to the issuer's counsel,
to the effect that such registration is not
required."
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<PAGE>
2.5 Indefinite Holding Period. Centofanti understands that
under the Securities Act, the Shares received by
Centofanti must be held indefinitely unless they are
subsequently registered under the Securities Act or
unless an exemption from such registration is available
with respect to any proposed transfer or disposition of
such shares.
2.6 Rule 144 Compliance. Centofanti understands that PESI
is required to file periodic reports with the SEC and
that certain sales of the Shares received by Centofanti
may be exempt from registration under the Securities
Act by virtue of Rule 144 promulgated by the SEC under
the Securities Act, provided that such sales are made
in accordance with all of the terms and conditions of
that Rule including compliance with the required two-
year holding period. Centofanti further understands
that if Rule 144 is not available for sales of the
Shares received by Centofanti, such Shares may not be
sold without registration under the Securities Act or
compliance with some other exemption from such
registration, and that PESI has no obligation to
register the Shares received by Centofanti or take any
other action necessary in order to make compliance with
an exemption from registration available.
2.7 Sophisticated Investor. Centofanti, as President and
Chairman of the Board of PESI, possesses extensive
knowledge as to the business and operation of PESI and
has such knowledge and experience in financial and
business matters that he is capable of evaluating the
merits and risks of the acquisition of the Shares.
3. Representations and Warranties of PESI. PESI represents and
warrants as follows:
3.1 Organization and Standing. PESI is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware.
3.2 Power, Authority and Validity. PESI has full right,
power and corporate authority to enter into this
Agreement and to perform the transactions contemplated
hereby, and this Agreement is valid and binding upon
and enforceable against PESI in accordance with its
terms. The execution, delivery and the performance of
this Agreement by PESI has been duly and validly
authorized and approved by all requisite action on the
part of PESI and Buyer.
3.3 Status of PESI Common Stock. The PESI Common Stock to
be issued pursuant to this Agreement, when so issued,
will be duly and validly authorized and issued, fully
paid and nonassessable.
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<PAGE>
4. Miscellaneous.
4.1 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing
and shall be deemed to have been duly given if
delivered or mailed, first-class postage prepaid, to
the following at the addresses indicated:
To PESI: Perma-Fix Environmental
Services, Inc.
c/o Chief Financial Officer
1940 Northwest 67th Place
Gainesville, Florida 32653
To Centofanti: Dr. Louis F. Centofanti
Perma-Fix Environmental
Services, Inc.
6075 Roswell, Suite 602
Atlanta, Georgia 30328
or to any other address that PESI or Centofanti shall
designate in writing.
4.2 Brokers. Each party represents and warrants that all
negotiations related to this Agreement have been
carried on by the parties without the intervention of
any broker. Each party agrees to indemnify, and hold
the other party harmless against any claims for fees or
commissions employed or alleged to have been employed
by such party.
4.3 Amendment. This Agreement shall not be amended,
altered or terminated except by a writing executed by
each party.
4.4 Governing Law. This Agreement shall be governed in all
respects by the law of the State of Delaware.
4.5 Headings. The paragraph headings used in this
Agreement are included solely for convenience, and
shall not in any way affect the meaning or
interpretation of this Agreement.
4.6 Entire Agreement. This Agreement sets forth the entire
understanding of the parties; further, this Agreement
shall supersede and/or replace any oral or written
Agreements relating to this subject matter entered into
by the parties before the date of this Agreement.
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<PAGE>
4.7 Binding Effect. This Agreement shall be binding on and
inure to the benefit of, and be enforceable by, the
respective heirs, legal representatives, successors,
and assigns of the parties pursuant to its terms.
PESI and Centofanti have executed this Agreement as of
the 30th day of June, 1997.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By:____________________________________
RICHARD T. KELECY
Chief Financial Officer
________________________________________
DR. LOUIS F. CENTOFANTI, individually
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